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Introduction
This is the review of a minimum term imposed on a person convicted of murder who was under 18 at the time of the offence and who was sentenced to detention during Her Majesty's pleasure. The House of Lords in R (Smith) v Secretary of State for the Home Department [2005] UKHL 51; [2006] 1 AC 159, held that the tariff for a person sentenced to detention during her Majesty's Pleasure may be reduced on reconsideration if there is clear evidence of exceptional and unforeseen progress.
Background
The applicant in this case, Paul Michael Scott, was convicted of murder in the Crown Court at Hull on 20 February 2009. The Recorder of Hull, HH Judge Mettyear, ordered that he be detained at Her Majesty's pleasure. He specified eleven years less 266 days spent on remand as the minimum term to be spent in custody. At the time of the murder Paul Scott was 17 years old, having been born on 19 November 1990. His co-accused, Adam Robert Parker, was given the same sentence, although his minimum term was the eleven years less 266 days spent on remand.
The background to the murder was this. The victim, Anthony (Tony) McKenna was homeless and generally slept outdoors or at friends' houses. On a night in early May 2008 he slept for a period at a friend's house but due to his intoxicated state he was asked to leave just after midnight to avoid the children there seeing him in the morning.
Just prior to midnight, Mr Scott, along with the co-accused Mr Parker and a third young man, left the home of the latter's mother in Scunthorpe to meet a friend of hers in the car park of a nearby supermarket. En route they encountered Mr McKenna, who was lying against the fence of a property at the junction of two roads. In sentencing Mr Scott and Mr Parker, the judge described what happened:
"You had been drinking and probably both of you taking drugs. You came across the drunken Tony McKenna who was laid out on the floor, unable to put up any sort of defence for the attack that was to follow. He was causing no-one any problems at all. So far as your story, Adam Parker, is concerned, that you told to the police and to the jury about him attacking you, I utterly reject that.
This was a wholly unprovoked and cowardly attack by two of you on this drunken man. You set about him punching, head butting, stamping, jumping. He sustained terrible injuries including 13 broken ribs, they being to either side of his body, awful injuries to his face and his head as a result of the kicks that he sustained. He suffered a punctured lung. About three weeks later, having spent a painful time in hospital, he died as a result of the injuries to his chest."
Apparently, after meeting the mother's friend, the group returned the same way and found Mr McKenna lying where he had been left, with blood surrounding his head. An ambulance was called by the third young man and all four waited for the paramedics to arrive before leaving.
When Mr McKenna was taken to Scunthorpe General Hospital, although it seems somewhat strange, it was not realised that the injuries had resulted from an assault because he had been hospitalised on a number of occasions with alcohol-related injuries. Eventually, however, as a result of inquiries by Mr McKenna's sister, the three were arrested for murder on 29 May 2008. In interview, Mr Scott stated that Mr Parker was the main party in the assault, but also stated that the third young man had jumped on Mr McKenna. Mr Scott admitted that he had kicked Mr McKenna once to the face. Later it was decided that there was no evidence against the third young man.
Mr Scott had appeared before the Juvenile and Magistrates Courts on four occasions for seven offences, six of them being offences associated with motor vehicles and the last involving having a knife in a public place.
In sentencing Mr Scott and Mr Parker, the judge said this:
"You have been jointly convicted and it is not appropriate to distinguish between you in any way. The starting point laid down by Parliament for people of your age for the minimum term, is a starting point of twelve years. To that I must consider what aggravating factors there are and what mitigating factors there are.
This was a wholly disgraceful attack, unprovoked, on a helpless and vulnerable man and it was on the public streets of Scunthorpe. I recognise that there is some mitigation. This was not planned, I accept that it was on the spur of the moment and started by you, Parker. I also accept that it is mitigation that the Crown has accepted, as I accept, that your intention was not to kill, it was an intention to do really serious bodily injury."
Exceptional progress
Mr. Scott's case is that his tariff should be reduced on the basis of his behaviour in prison and the exceptional progress he has made while there. Indicative of exceptional progress is if a person demonstrates an exemplary work and disciplinary record in prison; displays genuine remorse and accepts an appropriate level of responsibility for the part played in the offence; shows the ability to build and maintain successful relationships with fellow prisoners and prison staff; and successfully engages in work (including offending behaviour/offence-related courses) with a resulting substantial reduction in areas of risk. All of these should, ideally, have been sustained over a lengthy period and in more than one prison. The presence of one or all of these factors is not conclusive of exceptional progress having been made in any individual case. To reach the threshold of exceptional progress there needs to be some extra element to show that the detainee has assumed responsibility in showing himself to be trustworthy when given such responsibility. Such characteristics may well be demonstrated by the detainee having done good works for the benefit of others. Again, ideally, there would need to be evidence of sustained involvement in at least two prisons over a lengthy period.
Evidence of Mr Scott's progress
In a post-sentence report dated 2 June 2009, Mr Scott maintained that he only kicked Mr McKenna once. When at HMP Hull, Mr Scott's OASys found that he posed a high risk of serious harm to the public and also to a known adult. In the first Sentencing, Planning and Review report on Mr Scott when he was at HMP/YOI Moorlands, the responsible officer opined that, since Mr Scott had no previous convictions of violence before the murder, it was more appropriate to view him as posing only a high risk to the public since there was no information to suggest a known adult was at risk. That report noted that Mr Scott had four prison adjudications – in August 2008 for theft, in early January 2009 for having a mobile telephone and a pair of scissors in his possession, in February 2009 for having fermenting liquid in his possession and in July 2009, for disobeying an order in relation to a tattoo. The report noted his motivation to address his sentencing plan targets. There had been a remand planning meeting on the 27 June 2008 where concern was expressed about his behaviour.
In December 2010, Mr Scott completed the Thinking Skills programme. The summary of his progress was that it had been "good" and that he had developed a number of skills, including demonstrating a good understanding of problem-solving steps and the application of skills to the potential problems he might encounter. The report noted that he contributed to group discussion, that he was able to consider his thoughts, emotions and situations in the build up to the offence and that he had, as his red flags, matters such as boredom. At that time he was on the enhanced wing, which demonstrated that he was able to maintain self-control and stay out of prison. He had commented during the programme that he had to say "no" to fights because it would have an impact on his sentence. In one of his own comments, Mr Scott said that he was working hard in prison since it was a bad place and that it had taken hard work to behave. The report noted that Mr Scott's OASys indicated that he had significant problems with being easily influenced by criminal associates. During the programme he was able to identify "red flag" persons in his social circle.
Mr Scott completed the CALM programme in December 2011 (an anger and emotional management programme). During the course, an area of risk for him was identified as a desire to fit in with his peers and a history of feeling excited and getting carried away. He addressed those issues during the course of the programme. The programme report stated that he supported other group members and made valuable contributions during discussions. His coursework was to a good standard. During the course it was considered that he showed a good level of motivation to change. He was able to offer counter-arguments to situations, such as using aggression against those aggressive to him. He had a good understanding of the triggers to anger.
"Overall Mr Scott has made good progress, he was a valuable member of the group who contributed very well to group discussions, skills practices and sub-group work. … It is considered that his areas of his strength are his open-minded willingness to consider the many different facets of the programme, reflect on his past behaviour and assess what he has learned to benefit himself in the future. … In terms of development it is recommended that Mr Scott practice recognition, challenging and replacement of distorted thinking and consider future situations that he may come across, which may test his CALM skills, particularly as he plans for relocation to another prison."
In February 2012, Mr Scott transferred to HMP Lindholme. A Sentencing, Planning and Review meeting at HMP Lindholme in August 2012 noted that Mr Scott had no adjudications, worked in the bakery and had made good progress so far. His OASys assessment was by then reduced to a medium risk to the public. The Sentencing, Planning and Review meeting the following year, in October, noted that he had good case notes, had met many of his targets, had no adjudications since 2009 and was an enhanced prisoner. He had been removed from his kitchen job but the reason was unknown. His offending manager and offending supervisor were pleased with his progress and acknowledged that he had dealt with many situations with maturity.
Reports for Mr Scott's tariff assessment report were prepared from mid-2014. A clinical matron, with minimal experience of young lifers, reported that Mr Scott had had a dip in mood associated with his tariff assessment. There was a high risk of self harm. He now appreciated the catastrophic results of his actions. All his sentence plan targets had been met; he had progressed as far as he could at that point and appeared insightful.
Mr Scott worked in the prison kitchen between September 2013 and May 2014, i.e. 8 months until he was sacked. The catering manager reported:
"I do not think there was any improvement in his maturity during the period he worked for us. We had to constantly move him from job to job to get anything out of him and he was constantly told off for trying to pinch food."
From October 2012, Mr Scott had the one offender supervisor, who had met him on six occasions. In her report of 19 June 2014 she noted that his perspective on his role in the murder had not changed, since he still maintained to her that hit Mr McKenna only once to the head. Although he asserted that he had developed emotionally, he stated to her and his offender manager that he occasionally contemplated where he would be now if he had denied any involvement. He presented to her as articulate. He was at that point on enhanced level. He had demonstrated a generally positive pattern of behaviour, but his case notes recorded two warnings and these reports:
20/7/2011: "Since Michael has come back to the bakery after losing his job in the segregation unit his attitude has been appalling… He walks off jobs and [is] generally being lazy…"
14/5/2014: "Was caught eating cake that was not his without asking permission. [He] has been warned about his before so has been partly removed from kitchens."
There was also one intelligence report on his security file that he was in debt.
There was a change in Mr Scott's offender manager from May 2013, so his current offender manager acknowledges in her report of 24 June 2014 that she cannot comment extensively given that she had only seen him twice. But he did not seem to have changed his account of his role in the murder from that he told her colleague in 2009, although he did accept that he was responsible for Mr McKenna's death and had many regrets about what happened. Although he had felt hard done by with the sentence after it was imposed, he had now come to terms with it. Mr Scott explained that he no longer felt the need to impress others. He did not want to become involved in conflict. He had begun to read and wanted to leave prison with skills. There was no evidence that continued detention would damage or put at risk his continued development. He remained a high risk to the public, which was not to undermine the progress made in custody. He engaged with staff. Reports from the wing were that he was polite, quiet and did what was required of him. One of his jobs involved a considerable amount of trust in terms of having to account for tool kits.
Mr Scott's case
In submissions on Mr Scott's behalf his solicitors, Tates contend that he has made the exceptional progress necessary for a reduction in tariff. At the time of the offending he was an immature 17 year old but he has come a long way since. He now has a new attitude to life and is full of remorse. He has a good appreciation of the impact of the murder on Mr McKenna's family. He comes from a good family and knows that he has hurt them. He does not like the person he was, with his bad attitude, and has made every effort to become a better person while in prison. His offender manager and offender supervisor have commended him for his extreme maturity. He has had an exemplary record in both HMP Moorlands and his current prison. He has undertaken offender behaviour work, because he wants to address his thinking and behaviour. With the CALM program, his area of strength was to reflect on his past behaviour and assess what he has learned to benefit himself in the future. He has completed vocational and educational courses. He had been a "listener" since 2011, a wing representative for the previous 3 months and a lifer representative for 6 months (there is a letter from the Samaritans confirming Mr Scott's position as a "listener"). There have been no adjudications since July 2009, and he now resides in a part of the prison for the most trusted and well-behaved prisoners.
As to the security entry in September 2013, Tates report that Mr Scott has no idea about its basis and submit that it is completely unsubstantiated and should be ignored. On his account, he was not sacked from his job in catering in 2014: he was moved. If he had been sacked he would not have been able to apply for another job as he did, almost immediately. As to stealing food, he was following what the others did in taking lunch and thought it was acceptable. Tates submit that the catering manager's comments about maturity should be discounted since he had only known him for seven months. The reported dip in mood by the clinical nurse was explained by his reflections on what he did and a death in the family. The report on eating cake that was not his was again because he was doing what others did. His reported childish behaviour was because he sometimes feels it is difficult to assert himself with older prisoners. He has held a number of positions of trust, such as working in the kitchens. He has never tested positive for drugs. All this constituted exceptional progress, Tates submitted, sustained over a significant period.
Views of Mr McKenna's relatives
Mr McKenna's daughter and sister describe the impact of his death on their lives and are against a reduction in tariff.
Conclusion
I have come to the regretful conclusion that Mr Scott has not made the exceptional progress to enable me to recommend a reduction in tariff. There is no doubt that he has made real progress in prison, compared with the person he was when he entered custody. He is a much changed man in terms of his maturity. His successful completion of courses, including educational courses, is to be applauded. There is also a greater acceptance of what he did, whereas immediately after his incarceration in 2009 he was attempting to minimise his role and to avoid responsibility. I accept that he now displays greater remorse. His offender manager's report of June 2014 is quite positive. All of this will go a considerable way with the Parole Board when they come to assess him for release.
In my view, however, Mr Scott has not surmounted the high threshold of exceptional progress. I accept that there is no need for the presence of all of the factors I mentioned earlier to demonstrate this. But there are just too many concerns. He still does not take full responsibility for the part he played in the murder. Just assume that I were to disregard the catering manager's assessment, Mr Scott's removal from the kitchen, his earlier behaviour in the bakery and the incident with the cakes, so that he could be regarded as having an exemplary work and disciplinary record. The fact is that those incidents and the perception of the catering manager would still demonstrate an inability on Mr Scott's part to build and maintain a successful relationship with prison staff and other inmates. The catering manager's assessments are devastating, given Mr Scott was in the kitchen for the substantial period of 7 months. Mr Scott's own explanations for these incidents through his solicitors indicate a willingness to follow the wrong paths of others. Moreover, the explanation for what has been characterised as his childish behaviour is an admission on his part that he finds it difficult to deal with older prisoners; that is not the hallmark of exceptional progress. He has been a "listener" for three years, and that certainly demonstrates good works for the benefit of others. However, I cannot find that he has always been succeeded when given responsibility.
For the reasons I have given I cannot conclude that any reduction of tariff is justified in this case. |
Mr Justice Wilkie :
Introduction
By order dated 19th December 2014, judgment was entered for Mr Siegel, the Claimant, against Mr Pummell, the Defendant. That order, amongst other things, provided that the Defendant should pay the Claimant's costs on the standard basis to be assessed if not agreed. It further provided, by paragraph 5, as follows:
"The following issues be listed to be dealt with at a hearing on the first open date after 2nd January 2015 with a time estimate of one half day …
i) The Claimant's entitlement to indemnity costs from 4th September 2014 inclusive;
ii) The Claimant's entitlement to an additional sum of £75,000 pursuant to CPR 36.14(3)(d);
iii) The costs reserved by Master Leslie on 17th October 2014."
The order also provided that the Defendant's time for seeking permission from the Trial Judge to appeal the judgment be extended until that further hearing and the time to appeal, pursuant to CPR Part 52.4, should be extended to run from the date of that hearing.
Provision was also made for the Defendant and the Claimant to file evidence and submissions on the issue of the application for indemnity costs.
At the hearing of argument on these applications, the Claimant did not pursue his claim for an additional sum of £75,000. The Defendant indicated that it was not seeking permission to appeal the judgment of 19th December 2014.
Accordingly, the issues now to be determined are: the Claimant's application for indemnity costs from 9th September 2014 and the costs reserved by Master Leslie on 17th October 2014.
The legal principles applicable to indemnity costs
Costs are governed by CPR 44. CPR 44.2(1) gives the court a discretion as to whether costs are payable by one party to the other. Sub-rules (4) and (5) provide:
"(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances including, -
(a) the conduct of all the parties …
(5) The conduct of the parties includes –
…
b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
d) whether a Claimant has succeeded in the claim (in all or in part) exaggerated its claim."
CPR 44.3 deals with the basis of assessment as being either on the standard or indemnity basis; the default position is the standard basis (44.3(4)).
The effect of an order requiring payment of costs on the indemnity basis is to disapply the requirement that, in addition to costs being reasonably incurred, they should also be proportionate to the sums and issues at stake in the litigation and that, in the event of the assessment Judge having a doubt as to whether or not an item of cost has been incurred reasonably, the benefit of such doubt should go to the receiving rather than the paying party.
The Court of Appeal has declined to define the circumstances in which a court could or should make an order for costs on the indemnity basis. In Excelsior Commercial and Industrial Holdings v Salisbury Hamer Aspden and Johnson [2002] EWCA Civ 879 Lord Woolf, the then Lord Chief Justice, at paragraph 30, cited a judgment of Simon Brown LJ in Kiam v MGN Limited (No. 2) [2002] 2 All ER 242 who, at paragraph 12, had said:
"I for my part, understand the court there to have been deciding no more than that conduct, albeit falling short of misconduct deserving of moral condemnation, can be so unreasonable as to justify an order for indemnity costs. With that I respectfully agree. To my mind, however, such conduct would need to be unreasonable to a high degree; unreasonable in this context certainly does not mean merely wrong or misguided in hindsight. An indemnity costs order made under Part 44 (unlike one made under Part 36) does I think carry at least some stigma. It is of its nature penal rather than exhortatory. …"
Lord Woolf at paragraph 32 said, in addition, as follows:
"… there is an infinite variety of situations that can come before the courts and which justify the making of an indemnity order. … I do not respond to Mr Davidson's submission that this court should give assistance to lower courts as to the circumstances where indemnity orders should be made and circumstances where they should not. … This court can do no more than draw attention to the width of the discretion of the trial judge and re-emphasise the point that has already been made that, before an indemnity order can be made, there must be some conduct or some circumstance which takes the case out of the norm. That is the critical requirement."
In the same case, at paragraph 39, Lord Justice Waller said:
"The question will always be: is there something in the conduct of the action or the circumstances of the case which takes the case out of the norm in a way which justifies an order for indemnity costs?"
In Fitzpatrick Contractors Limited v Tyco Fire and Integrated Solutions (UK) Limited [2008] EWHC 1391 (TCC) Mr Justice Coulson, at paragraph 3 subparagraph iv, said as follows:
"Examples of conduct that have led to such an order for indemnity costs include the use of litigation for ulterior commercial purposes … and the making of an unjustified personal attack on one party by the other …"
Submissions and conclusions:
Personal attack on Ms Levett
The Claimant cites conduct of the Defendant under four principal headings which, individually or cumulatively, he says should persuade me to make the orders sought from the 9th September 2014, which is the date when it is said the inappropriate conduct of the Defendant began.
The first two headings concern the conduct of Professor Trimble, an expert witness called by the Defendant. It is said that his conduct should persuade me to make an order for costs on an indemnity basis arising out of two linked strands of conduct, namely his engaging in personal attacks against the Claimant's medical legal experts, particularly against Ms Levett, and his failing to engage with the medical issues and, in particular, deliberately frustrating the process of open litigation by obfuscating these issues and withdrawing from the joint statement process.
In my judgment, at paragraph 550, I recorded my concern that Professor Trimble in his evidence was combative and dismissive of that of other medical professionals who were not specialists in the same field as himself. I averted to particular problems he had with Ms Levett to which I will return.
There were three strands to the comments made by Professor Trimble, directed at Ms Levett and her professionalism, to which my attention has been drawn. They were: the propriety, or otherwise, of her continuing to act as an expert witness for the Claimant whilst being his treating psychotherapist providing services for which she was charging him; the assertion by Professor Trimble that Ms Levett expressed opinions as an expert witness which went beyond the ambit of her professional expertise as a clinical psychologist; and the fact that, as is a matter of record, from the first of November 2013 her name had been struck off the Health and Care Professions Council Register of Practitioner Psychologists.
I have been taken through the extensive correspondence between the parties' legal advisors and reports and letters written by Professor Trimble relating to the court ordered joint statement process involving Ms Levett and Professor Trimble. The Claimant contends that the fact that this process was unsuccessful and that Master Leslie, on 17th October 2014, made an order dispensing with the requirement for such a joint statement, could be laid at the door of Professor Trimble and his obstructive attitude towards engaging in, or completing, that joint statement process.
As a third issue, the Claimant contends that the way in which Professor Trimble presented his written evidence and gave his oral evidence at trial necessitated the court requesting him, in the course of his evidence, to provide a written document setting out the gist of his evidence which required the Claimant to recall one of his expert witnesses, Dr Allder, to respond, should also persuade me to make an order for indemnity costs.
I was critical of certain aspects of the way that Professor Trimble prepared and gave his evidence. It was apparent during the trial that there was a degree of animus between Professor Trimble and Ms Levett. The matters of concern, however, which Professor Trimble raised concerning Ms Levett were matters which, in my judgment, were properly available to be raised by the Defendant, whether or not it was appropriate for Professor Trimble to take the lead in raising them. In dealing with Ms Levett's evidence I expressed the need for particular caution by reason of, in particular, the decision of the HCPC. Her being a treating psychotherapist of the Claimant and an expert witness called by the Claimant in relation to the same symptoms is unusual and it was something to which I was obliged to have regard when considering the reliance upon which I could put on Ms Levett's evidence as an expert. I was also careful to ensure that, as with any expert witness, the opinions she was expressing were properly expressed by her, within the ambit of her expertise.
In my judgment, whilst there was an unpleasant edge to the proceedings by virtue of the attitude, principally of Professor Trimble towards Ms Levett, in my judgment, it fell significantly short of conduct which was out of the norm in a way which, on its own, would justify an order for indemnity costs.
The Joint Statement process
It is clear from the extensive correspondence that there was a series of obstacles and difficulties being presented by both sides in relation to that process. It is, however, also the case that the two experts did engage with one another in an attempt to pursue that process to a successful conclusion. They had a four hour long face-to-face meeting following which Ms Levett produced a first draft of a joint statement which was extensive in length. There then followed a written response by Professor Trimble which did not complete the process. By the 17th October 2014 both parties were seeking the assistance of the court as to how that process might be completed or whether, by that stage, it had become counter-productive and disproportionate in terms of costs and effort expended in the light of the apparent inability of the two experts to reach agreement on the joint statement. It was no surprise that Master Leslie considered that the joint statement process should be abandoned and ordered accordingly.
In my judgment, the solicitors on both sides were genuinely trying to advance the process but were hamstrung by, on each side, the attitude of, respectively, Professor Trimble and Ms Levett who were incapable of approaching the exercise in anything like the cooperative spirit which it requires. In those circumstances I am not prepared to conclude that the conduct of the Defendant was such that it should be visited by an order for indemnity costs in favour of the Claimant.
Improperly alleging dishonesty
The third piece of conduct relied on by the Claimant is the contention that the Defendant made allegations of dishonesty against Mr Seigel without having properly pleaded them and without proper evidence to do so.
The Defendant had made a Part 36 offer of £55,000 on 22nd April 2013. The Claimant, for his part, made a Part 36 offer of £1.25 million on 20th October 2014. On the same day, the Defendant made a further Part 36 offer of £550,000. On 17th November 2014, after the conclusion of his evidence, the Claimant withdrew his Part 36 offer. The Claimant has contended that he was obliged to do so because, by that stage, the Defendant was making allegations of dishonesty against him, in particular during cross-examination, and that he required a judgment from the Court to clear his name.
The Defendant contends that at no stage did he make any allegation of dishonesty against the Claimant. There was never any evidence upon which it would have been proper for him to do so. At its highest, Professor Swash, one of the Defendant's experts had indicated that, in the light of certain answers given by the Claimant to Professor Swash when he was examined by him, a question might have to be determined whether his description of his symptoms was "factitious" that is to say false.
In my judgment, the Defendant never did make any allegation that the Claimant was seeking to mislead the court or was lying in his accounts given to the court. There were moments during the cross-examination of the Claimant by Mr Leighton Williams QC when I saw fit to seek clarification from the Defendant whether or not he was alleging that claims being made by the Claimant were fraudulent. Mr Leighton Williams was very clear in the answer which he gave to my enquiry, namely that it was not being suggested that the Claimant was being dishonest. He was suggesting that the symptoms of which the Claimant was complaining were genuine but the suggestion that they were due to brain injury rather than psychological causes had been induced by the fact that he had been told that he might have a brain injury by his medical experts (the iatrogenic effect). It was also being said that as part of his personality the Claimant was prone to exaggerate, but it was not being put that he was dishonest.
In my judgment, there was nothing in the conduct of Mr Leighton Williams QC in putting the Defendant's case in this respect which was improper or was out of the norm. I do not accept that this head of complaint gives rise to any argument for awarding costs on an indemnity basis.
Serving late evidence and late witness statements in unsatisfactory circumstances
This complaint focuses on witnesses called by the Defendant who were, or had been, employed by Hewlett Packard, namely Mr Waterfield, Ms Ben Fredj and Mr Parry.
I have considered the evidence of Mr Wright, solicitor for the Defendant, and Mr Dickinson, solicitor for the Claimant in this respect. The Claimant had been in litigation with Hewlett Packard in the United States which was settled on 12th December 2013. Prior to that, it was clear that this litigation, in the United States, had resulted in those employees of Hewlett Packard deciding not to cooperate in the current proceedings and, on 9th December 2013, the court, on the Defendant's application, gave the Defendant permission to serve a witness summary in relation to four witnesses who had been employed by Hewlett Packard. In addition, on 28th Janaury 2014, the Defendant issued witness summonses in relation to those three witnesses and a fourth Hewlett Packard employee, Andrew Guile, which were duly served.
I accept the evidence of Mr Wright that, as a result of email exchanges between him and Ms Ben Fredj, he legitimately formed the view that he would get no cooperation from the Hewlett Packard witnesses, but that, shortly before the trial, on 21st October 2014, he again contacted Hewlett Packard to see whether such cooperation might now be forthcoming. Once again cooperation was limited and Mr Wright had to obtain a fresh witness summons, on 29th October 2014, requiring Ms Ben Fredj to produce relevant documentation, which she did on 4th November 2014.
That documentation was disclosed to the Claimant's solicitors on 5th November 2014.
Arising out of these events, witness statements were produced by Ms Ben Fredj and Mr Waterfield which were served at the outset of, or shortly after the outset of, the trial. The third witness, Mr Parry, did not contact the Defendant's solicitors until 10th November, the date the trial had been listed to commence. As a result a witness statement was prepared with him and it was served on 13th November, by which time the Claimant was giving evidence.
Of the four witnesses from Hewlett Packard one of them, Mr Guile, was called by the Claimant. The Defendant had decided not to call him. His evidence was, I concluded, important.
In my judgment, in the context of this case, Mr Wright cannot properly be criticised for serving these witness statements as close to the trial as he did. No objection was taken by the Claimant to any of the witnesses giving their evidence and the Claimant had the benefit of seeing their witness statements before they started giving their evidence.
In the course of my judgment I had certain criticisms to make of Ms Ben Fredj concerning the documentation upon which she initially focussed in her witness statement, but none of that was, in my judgment, the fault of Mr Wright.
Accordingly, in my judgment, this complaint is not a proper basis for an order for indemnity costs.
Professor Trimble's final written statement
In my judgment, however, the fact that the court was obliged to ask Professor Trimble, in the middle of his evidence, to provide a written statement as to what exactly his evidence was and the basis upon which he was saying that the Claimant's continuing symptoms were psychogenic did arise from serious shortcomings in the way in which Professor Trimble approached the giving of his evidence. It was helpful to the court to have that material but it was necessary for the Claimant to recall Dr Allder to deal with this new basis upon which Professor Trimble was finally presenting his evidence.
In my judgment, that conduct on the part of Professor Trimble was so out of the norm that it justifies an order for indemnity costs.
Accordingly, I order that the costs of the recall of Dr Allder, occasioned by the production by Professor Trimble of the final written statement of his position shall be awarded on an indemnity basis. I make an order for indemnity costs but limited in that way.
The reserved costs of 17th October 2014
Master Leslie, when he ordered dispensing with the joint statement on 17th October 2014, reserved the costs of that application to the trial judge. I have indicated that, by that stage, it was obvious that the joint statement process was no longer contributing to an effective and proportionate disposal of the litigation. That circumstance had arisen out of the mutual intransigence and disrespect between Professor Trimble and Ms Levett and their mutual unwillingness to cooperate with one another. In my judgment, therefore, the costs reserved to the trial judge on that issue should reflect the outcome of the litigation and, accordingly, I award the costs of that application to the Claimant, to be added to the costs of the litigation, and to be assessed on the standard basis, if not agreed. |
Mr Justice Warby:
INTRODUCTION
This is a franchise dispute in which the claimant franchisee claims sums in excess of €2 million against the two defendants. The claims against the first defendant are for damages for misrepresentation under the Misrepresentation Act 1967, damages for breach of contract, and restitution. These claims arise from and in connection with two International Master Franchise Agreements ("IMFAs") entered into in November 2006. The claims against the second defendant are for damages for breach of three Master Licence Agreements ("MLAs") entered into in May 2010.
The claim form was issued on 1 August 2013. The Defence served on 30 September 2013 admitted a claim for unpaid fees, which have now been paid, but denied all other claims. A defence of limitation was pleaded in answer to a majority of the claims against the first defendant. On 14 November 2013 the defendants issued an application seeking summary judgement for the first defendant or the striking out of the claims against it, and security for the costs of both defendants. The hearing of those applications has been much delayed due to other developments, most notably an attempt by the claimant to amend to add a claim in deceit.
On 20 November 2013 the claimant served draft Amended Particulars of Claim seeking to add such a claim. An application notice for permission to do so was issued on 16 January 2014. The application was heard on 8 May 2014 by Deputy Master Nussey, who gave a draft judgment granting permission on 29 May 2014. Due to illness of the Deputy Master the order formally granting permission was made on 6 October 2014, by Master Kay QC. In the meantime, in June 2014 the defendants served a draft Amended Defence which, among other things, sought to withdraw an admission previously made by the first defendant, that the IMFA had been executed as a deed. In July 2014 the claimant served a Reply seeking to meet the limitation points taken by the defendants.
In January 2015 the claimant served draft Amended Particulars of Claim, and on 3 February 2015 a draft Amended Reply taking fresh points on limitation. The statements of case before me are, in consequence, all in draft amended form.
ISSUES
The following matters are before the court:
i) The first defendant's appeal against the order of 6 October 2014 granting permission to amend the Particulars of Claim, and the consequential costs orders. Permission to appeal was granted by Master Kay QC without opposition. The claimant concedes that the appeal should be allowed and the Master's order reversed. The claimant also accepts that the costs orders should be reversed. There is a dispute over the interim payment on account of costs which is claimed by the first defendant.
ii) The first defendant's application dated 29 January 2015 to withdraw an admission. The claimant consents to this application, subject to the court's approval.
iii) The first defendant's summary judgment and strike-out application, issued 15 months ago in November 2013. This is resisted in its entirety by the claimant. The future shape of the statements of case will depend on the outcome of this application, as well as those at (i) and (ii) above.
iv) The defendants' application for security for costs. This also is resisted. If any order is appropriate its nature depends on, among other things, the outcome of the summary judgment application.
At a hearing on 13 February 2015 I allowed the appeal, gave permission to withdraw the admission, granted the application for summary judgment, and announced that I would make an order for security for costs. I held that security should be provided in stages. This judgment gives the reasons for those decisions, and sets out my conclusions on the quantum of the security that should be given.
FACTUAL BACKGROUND
The claimant is an Irish company formerly named Highland Estates (Dun Laoghaire) Limited, then Energie Fitness Clubs Ireland Limited, and now named Startwell Limited. The first defendant is an English company, formerly named Energie Fitness Clubs Limited. The first defendant was the owner of the franchise for the Energie Fitness Clubs business and operated three brands (i) Energie Fitness Clubs, (ii) Energie Fitness for Women, (iii) Fit4less. The premier brand was Energie Fitness Clubs. The second defendant is an English company 100% beneficially owned by the first defendant. It was the owner and/or licence holder of the method and system under which the Energie Fitness Clubs business model was operated when the MLAs were entered into in May 2010.
In and between May and November 2006 contractual discussions took place between the claimant and the first defendant with a view to the claimant taking a master franchise for one or more Energie brands within Ireland. During the same period, the claimant alleges, significant due diligence was undertaken by it on the first defendant.
During this period, on 14 June 2006, the first defendant entered into a franchise purchase agreement ("FPA") with a Mr Alphie Rodgers. On 22 June 2006 Mr Rodgers and the first defendant entered into a side letter ("the Rodgers Side Letter") granting Mr Rodgers exclusive rights to set up an Energie Fitness Club franchise in a territory extending from "a minimum of a one-hour drive time" from Ennis, Ireland. It is common ground that this curious wording is to be treated as meaning a maximum, or radius, of a one hour drive from Ennis. The claimant was aware of the FPA, but maintains that it was unaware of the Rodgers Side Letter and the extent of the territory granted to Mr Rodgers.
In November 2006 the claimant and the first defendant entered into an IMFA ("the EFW IMFA") relating to the Energie Fitness for Women brand, and covering the territory of the Republic of Ireland. It was dated and came into effect on 1 November 2006. At the same time the parties signed three documents intended to give effect to a second franchise agreement, relating to the Energie Fitness Clubs brand, and to the whole of the island of Ireland. One of these documents was an IMFA ("the IMFA"). A second document was a side letter which amended the IMFA in certain respects ("the IMFA Side Letter"). Sean Ormonde, Mike Ormonde, and John Hannaford were also parties to the IMFA Side Letter. The third document was an option agreement, by which the claimant had the option to bring the Energie Fitness Clubs IMFA into force ("the Option Agreement").
The option period was 12 months. However, a shorter period could be triggered if the first defendant gave notice that it had entered into a sub-franchise agreement, and received the relevant fee from the sub-franchisee. In that case, the claimant was to have 30 days in which to exercise the option. It is common ground that the effect of these arrangements was that the IMFA, though executed, was to be held in abeyance until the claimant exercised its option to commence performance.
On 26 January 2007 the first defendant entered into a sub-franchise agreement with a Mr Johnny Heywood, based in Belfast. On 1 February 2007 Jan Spaticchia on behalf of the first defendant emailed the claimant with a letter of the same date stating that the first defendant had entered into such a franchise agreement, and that this triggered the 30 day period under the Option Agreement, which it was said would lapse on 25 February 2007. Appended to the letter was an "Irish Master Completion Statement" which referred to a "Franchise fee of £30,000 received by" the first defendant. In early to mid-February 2007 (the precise date is unclear, and does not matter for present purposes) the claimant exercised the option and began performance of the IMFA.
The fee of £30,000 referred to was the fee payable by Mr Heywood, which was to be and was in fact credited to the first defendant's account with the claimant. However, by a side letter with Mr Heywood dated 26 January 2007 ("the Heywood side letter"), the first defendant had agreed to accept a down payment of £10,000 from Mr Heywood, with the balance to follow. It is said by the first defendant that this was because Mr Heywood was awaiting receipt by him of a redundancy payment he was due from the Army.
The claimant alleges that it did not become aware that the full £30,000 had not been paid by Mr Heywood until September 2007. In an e-mail of 26 September 2007 to Sean Ormonde and John Hannaford, Jan Spaticchia of the first defendant referred to having been offended by "the suggestion that we had acted in anything but good faith in the completion of the franchise purchase agreement with Johnny Heywood and the subsequent triggering of the option…" Mr Spaticchia attached to his email a copy of the agreement with Mr Heywood and the side letter. He asserted that "we netted off the whole £30k of the completion statement for the option trigger therefore meaning that we took the risk on the £20k not you." He denied the suggestion that had evidently been made, that Mr Heywood was an inappropriate franchisee. No claim was then made by the claimant, nor were steps taken to pursue this complaint further at that time, it appears.
The claimant contends that it first discovered the extent of the territory that had been granted to Mr Rodgers in 2008, when it sought to open a club in Galway and Mr Rodgers objected on the basis of the rights he had been granted by the first defendant. No claim was advanced at that time. According to the claimant, it sought to mitigate its loss by means of a new arrangement with the first defendant and Mr Rodgers, by which Mr Rodgers became a director of the claimant, invested €50,000, and waived all claims over the territory.
Both the IMFAs were terminated by agreement in May 2010. The claimant entered into three Master Licence Agreements dated 24 May 2010 ("MLA"s) with the second defendant. The then current directors of the claimant, Sean Ormonde, Michael Ormonde, John Hannaford, and Alphie Rogers were parties, as guarantors. By clause 27 of the MLAs the claimant and guarantors warranted that the Owners of the claimant were as set out in a Schedule to the MLAs, and to ensure that there were no changes to the Owners or to the rights of any of these (including any changes in shareholding) without the second defendant's prior written consent.
Changes to the directors and shareholders of the claimant did take place thereafter, and it is alleged by the second defendant that this occurred without its consent. On 31 May 2013 the second defendant gave notice of termination of the MLAs, in reliance on the rights under cl 27. On 1 August 2013 the claim form in this action was issued.
THE ACTION
The Particulars of Claim, as originally framed, allege that the first defendant's letter of 1 February 2007 and the attached completion statement contained three representations on behalf of the first defendant: (a) that by the time of completion on 26 January 2007, a franchise fee had been received from Mr Heywood in the sum of £30,000; (b) that the relevant franchise fee for Mr Heywood's territory had been received by the first defendant, and the conditions in clause 3.1 of the option agreement had been met; and (c) that the option period would accordingly expire on 25 February 2007.
It is alleged that these representations ("the Option Notice representations") were made with the intention of inducing the claimant to exercise the option, and that the claimant exercised the option in reliance upon them. Paragraph 20 of the Particulars of Claim pleads that "the representations negligently made on behalf of the First Defendant" in the 1 February 2007 letter and Completion Statement were false, because the first defendant had not received the £30,000 and the 30 day option period had not, therefore, been triggered. Paragraph 24 alleges that "As a result of the misrepresentations negligently made by the first defendant the claimant was induced to enter into the IMFA…"
The claimant further alleges that the first defendant failed to inform it of the extent of the territory granted to Mr Rodgers by the Rodgers Side Letter and that this amounted in context to an implied misrepresentation that there were no other franchisees operating in the territory covered by the IMFAs. In support of that contention it is alleged that it was the first defendant's practice to grant far more limited territories, and that this is what the claimant expected. It is alleged that the claimant would not have entered into the IMFAs or exercised the option if it had known of the existence of the Rodgers Side Letter.
It is clear, and common ground, that the misrepresentation claims advanced in the Particulars of Claim are claims made pursuant to the Misrepresentation Act 1967. The short title of the 1967 Act explains its purpose: "to amend the law relating to innocent misrepresentations". "Innocent" representations for this purpose are those made otherwise than fraudulently.
The primary claim for damages which is advanced in reliance on these causes of action is for damages in the form of wasted expenditure of £180,000, by way of the franchise fee for the IMFA, and €579,000, said to have been incurred in establishing and running clubs. The alternative claim is for lost profit of €515,000. The claimant's complaints about non-disclosure of the Heywood and Rodgers side letters are also pleaded as involving breaches of duties of express or implied terms of the IMFA and Option Agreement requiring good faith and disclosure. Other additional contractual claims are advanced against the first defendant, which include failures to perform "initial obligations", including providing a business plan, and training and support. The damages claimed in this regard are a minimum of £392,420. Further, the claimant claims against the first defendant some £15,000 as money paid under a mistake of fact and/or law.
Against the second defendant the claimant claims damages for failures of a nature similar to those complained of against the first defendant, namely failures to provide training, support, guidance and consultation; for breaches of its exclusive territory rights under the MLAs; and for wrongful termination. Unspecified but evidently substantial sums are claimed by way of damages for the alleged breaches during the term of the MLAs. The claim for wrongful termination gives rise to a claim for loss of profit over the remaining term of the MLAs which is estimated at €1.4 million. A small claim is made for failures to pay fees (failures which have been, as mentioned above, admitted and remedied by the second defendant).
The Defence denied the allegations of negligence, as well as other elements of the claims, and pleaded limitation as a defence to the misrepresentation claims and the claims for breaches of contract occurring before 1 August 2007. The claimant's application for permission to amend followed, as I have noted. The application notice gave this explanation of why the application was being made: "Further information has come to light since the claim was issued that allows the claimant to plead fraudulent misrepresentation as well as negligent misrepresentation against the defendants."
The second witness statement of Mr Philpot of the claimant's solicitors, made in support of the application also contained assertions that information had "come to light" which "illustrated" that the representations were made knowingly, or without belief in their truth, or recklessly as to the truth. This new approach was reflected in a proposed amendment to paragraph 24 which, after the reference to misrepresentations "negligently made", sought to add this: "Further, the Claimant avers that the Option Notice representations were made fraudulently …" It was then alleged that Mr Spitacchia had known they were untrue, or made them recklessly.
The initial skeleton argument for the amendment application filed on behalf of the claimant by Counsel then instructed submitted that "the proposed amendments at paragraphs 24(b) and (c) go further by categorising the Option Notice Representations as fraudulent". It said, however, that whilst the amendments "cloak the existing allegations in fraud [they] do not add or substitute a new cause of action" or, if they did, they arose from the same or substantially the same facts as the existing claim. Before the hearing took place Mr Buttimore, who now appears for the claimant, was instructed in place of previous Counsel. He filed a supplemental skeleton argument in which it was "accepted that now raising fraudulent misrepresentation gives rise to a new claim, namely one in deceit", but submitted that it arose out of the same or substantially the same facts. The Master rejected these submissions.
THE APPEAL
As already noted, this is not opposed but conceded. However, an appeal court will not normally allow an appeal unless satisfied that the decision of the lower court was wrong: PD52A 6.4. The appeal turns on a short point of limitation law, in relation to which I consider the Master clearly fell into error. I am therefore satisfied that the appeal should be allowed. I should explain why.
The proposed claim in deceit relates to representations allegedly made on 1 February 2007, and relied on by the claimant shortly thereafter. That is more than 6 years before the issue of the claim form. There is no dispute that the relevant primary limitation period is 6 years. By s 32(1)(a) of the Limitation Act 1980, however, it is provided that the limitation period for a claim based on the fraud of the defendant does not begin to run until the claimant has discovered the fraud or could with reasonable diligence have done so. (Section 32 is set out in this judgment below). If the claimant is right to say that it did not discover the fraud until shortly before Mr Spaticchia's email of 26 September 2007, the 6 year limitation period did not start to run until then, and continued to run until 25 September 2013. That was after the issue of the claim form. However, it was nearly 2 months before an intention to make a claim in deceit was first intimated, 4 months before the application to amend was issued, 8 months before it was heard and over a year before the order granting permission.
By s 35(1) of the Limitation Act a "new claim" made by amendment is deemed to have been commenced on the same date as the original action – the doctrine of "relation back". Consequently, if the claim in deceit amounts to a "new claim" the grant of permission to amend would have the effect of defeating a limitation defence that would have been available to the defendant if the claim had been brought by a separate action when it was first put forward in November 2013, or at any later time. The grant of permission which would achieve that result is controlled by s 35(3) of the Limitation Act 1980 and CPR 17.4(2). These prohibit the court from granting permission to add a "new claim" after the limitation period has expired, unless the new claim arises out of the same or substantially the same facts as a claim in respect of which the applicant has already claimed a remedy in the proceedings. The term "new claim" is defined so as to include one that involves the addition of a cause of action. Section 35 provides for rules of court to be made to govern the grant of permission in cases within its scope. The current rule is CPR 17.4.
Here, the Deputy Master held that the claim in deceit was a "new claim" for the purposes of the Act, and that it did not arise out of the same or substantially the same facts as the existing claims. In my judgment he was plainly right to do so. As he noted at [6], "… Paragon Finance plc v D B Thackerar & Co [1999] 1 All ER 400 confirms the long standing rule that a claim in deceit does not arise out of the same or substantially the same facts as a claim in negligent misrepresentation since the element of intention required in deceit is not an element of negligent misrepresentation."
The Deputy Master held, however, that the claim in deceit was not statute-barred, because the relevant date for determining whether that was so was the date of issue of the claim form; and since that was within 6 years of the date when the claimant arguably became aware of the fraud for the first time, the amendment should be permitted. That was an error of law. The effect of s 35 of the Limitation Act is that permission to amend cannot be given if the limitation period has expired at the time the court is considering the matter; the new claim is not made until the pleading is actually amended: Welsh Development Agency v Redpath Dorman Long [1994] 1 WLR 1409 (CA), 1419F-G, 1421C-D. The wording of CPR 17.4(1) also makes clear that the relevant question is whether a limitation period has expired at the time the application to amend is made. If so, the grant of permission is prohibited unless the case meets the "same or substantially the same facts" requirement, which is not met here.
Here, on the claimant's own factual case, the limitation period in respect of the deceit claim had expired well before the application for permission was heard by the Deputy Master. Indeed, it had expired before the claimant first intimated an intention to amend to plead a claim in deceit. For these reasons I allowed the appeal with costs here and below.
The general rule is that I should make a summary assessment: PD44 9.2(b). However, the defendants did not press for a summary assessment and I did not think it appropriate. The complex procedural history of the application and appeal has led to a number of relevant costs schedules, with potential overlap between those schedules, and between the issues they cover and other issues. If the court orders detailed assessment, as I did, it should make an order for a payment on account of those costs "unless there is good reason not to do so": CPR 44.2(8). I saw no good reason not to and accordingly I ordered the claimant to make an interim payment, in the sum of £20,000. This was less than half the total set out in the statements of costs relied on, which I considered to be on their face excessive.
WITHDRAWAL OF ADMISSIONS
The Particulars of Claim allege that the IMFAs and Option Agreement were executed and delivered as deeds. This was admitted in the Defence served in September 2013. In mid-2014, however, the first defendant changed its position on the issue. Paragraph 10 of its draft Amended Defence struck out the admission, and substituted a denial of that allegation and an averment that the Guarantee and Indemnity provisions of the IMFAs were executed as deeds but the IMFAs as simple contracts. The first defendant now, by an application notice issued on 15 January 2015, seeks permission to withdraw the admission. It is said that it was wrong, and was made by mistake. The claimant consents to the withdrawal of the admission, subject to the court's approval and costs.
As with an appeal, so with an application to withdraw an admission, the court should not make an order blindly, simply because the parties agree. The court's power to permit the withdrawal of admissions is governed by PD14 7.2, which provides that the court will have regard to all the circumstances of the case, including eight specific matters which can for present purposes be summarised: (a) the grounds for seeking to withdraw the admission; (b) the conduct of the parties; any prejudice caused by (c) withdrawal of the admission or (d) refusal of the application; (e) the stage in the action at which the application is made; (f) the effect on the prospects of success of the claim in respect of which the admission was made; and (g) the interests of the administration of justice.
There is another and stronger reason to examine this issue closely. The limitation period for a claim on a deed is 12 years: Limitation Act 1980, s 8. If the IMFAs were deeds, therefore, the limitation period in respect of claims for breach has not expired even now. If the IMFAs are simple contracts then, as Mr Buttimore accepts, the claimant has no answer to the defendants' pleaded case that claims for breaches prior to 1 August 2007 are statute-barred. There would remain an issue as to whether some of the breaches alleged are continuing, so that claims in respect of them would survive. I have not heard argument on that issue as yet.
The first defendant's case now is that not only were the IMFAs not deeds, there is no real prospect that a court would conclude that they were, and it should have summary judgment on that issue. It is convenient to examine that issue at this point in this judgment. I do so by reference to the summary judgment principles which I summarise below, considering whether the claimant has a real prospect of success on the issue or there is "some other compelling reason" for a trial in respect of it.
Mr Buttimore has submitted that the claimant does have a real prospect of success; or alternatively that there is another compelling reason for a trial because there are oddities about the documents, and the first defendant's case ought not to be accepted before disclosure, especially when the honesty of those in charge of the first defendant's business has been impugned.
A third statement of Mr Anderson was made on behalf of the first defendant on 30 January 2015 in support of the application to withdraw the admission, and the summary judgment application. The statement refers to "the IMFA documents", plural, and describes their format in some detail. Mr Anderson gives references to a copy of the EFW IMFA which was exhibited to his first statement, made in November 2013. However, what he says appears on its face to relate to both IMFAs. I am therefore unimpressed by Mr Buttimore's argument that the claimant's evidence is deficient, because the other IMFA is not exhibited. This was an especially unattractive argument when it emerged that – as one would expect - the claimant had a copy of that IMFA, and had enclosed it with the letter of claim. A copy of the first defendant's copy of the IMFA which was produced at the hearing in response to Mr Buttimore's argument confirmed that it is substantially identical to the EFW IMFA in the material respects. This was in my judgment sufficiently stated on the face of the evidence anyway.
Mr Anderson's third statement points out, and it is clear, that the form of the IMFAs is unusual. I shall describe the EFW IMFA and then note the small differences between it and the IMFA. As is common, there is a form of agreement followed by a number of Schedules. The main agreement begins, at what is stated to be page 1 of 76, thus: "This Master Franchise Agreement is made on 3 November 2006". One would normally expect the execution clause and signatures to appear at the end of the agreement, and before the Schedules. At the end of the main agreement, on page 55 of 76, there do appear the words "As witness the hands of the parties hereto the day and year first before written". However, there are no signatures there, or on the next page. On the next page, page 56 of 76, the Schedules begin.
On the pages numbered 56 of 76 to 58 of 76 appear "The First Schedule – Guarantee and Indemnity". By it, Sean and Mike Ormonde and John Hannaford, defined collectively as the "Principal", agree with the first defendant as Master Franchisor to guarantee the claimant's performance of the IMFA and to indemnify the first defendant against losses incurred by reason of any breach by the claimant of the IMFA. The Schedule begins: "This Deed is made the 3rd day of November 2006". The recitals state that "this agreement is supplemental to [the EFW IMFA]". The Schedule concludes, "In witness whereof the parties have duly executed this Deed the day and year first above written".
Below this appear signatures of or on behalf of the Master Franchisor and the individuals defined as Principal, each opposite the words "Executed as a deed by". Below the claimant company's name appear these words: "acting by two directors or a director and the Secretary". There are two signatures, which are witnessed, and the signature, name, address and occupation of the witness appear. The Second Schedule is entitled "Confidentiality Undertaking" and the document also provides for it to be "executed as a deed", though copy in the hearing papers has no signatures. This is plainly because this is a template for deeds to be executed by employees of the claimant.
There then follow the Third, Fourth and Fifth schedules, which end at page 73 of 76. None of these is stated to be a deed, nor does any of them contain any provision for a signature, or any signature. There is no page 74 or 75. At the very end of the document there come two pages with an execution clause and signatures, witnessed. These are numbered 1 of 76 and 2 of 76. The signatures are witnessed in the same way as the First Schedule, but the names and signatures of the individuals signing each appear opposite the words "Signed for and on behalf of" or ""Signed by". The signatures are for the Master Franchisor, the Sub-Franchisor and the Principal, that is to say the parties to the IMFA. The word Deed does not appear.
The Energie Fitness Clubs IMFA follows the same form as described above, except that (i) the pages are numbered "X of 75", not 76; (ii) after the Fifth Schedule there is a table numbered 1 of 75, setting out services to be provided, which is absent from the EFW IMFA, and (iii) the signature pages are numbered 1 and 2 of 75.
The question whether an instrument is a deed is governed by section 1 of the Law of Property (Miscellaneous Provisions) Act 1989, as amended by the Regulatory Reform (Execution of Deeds and Documents) Order 2005/1906 art 7(3) (15 Sept 2005) ("the 1989 Act"). Section 1 of the 1989 Act provides, so far as relevant:
"(2) An instrument shall not be a deed unless—
(a) it makes it clear on its face that it is intended to be a deed by the person making it or, as the case may be, by the parties to it (whether by describing itself as a deed or expressing itself to be executed or signed as a deed or otherwise); and
(b) it is validly executed as a deed [—]
(i) by that person or a person authorised to execute it in the name or on behalf of that person, or
(ii) by one or more of those parties or a person authorised to execute it in the name or on behalf of one or more of those parties.
…
(3) An instrument is validly executed as a deed by an individual if, and only if—
(a) it is signed—
(i) by him in the presence of a witness who attests the signature; or
(ii) at his direction and in his presence and the presence of two witnesses who each attest the signature; and
(b) it is delivered as a deed [...]."
Mr Buttimore refers to the statement of truth on the Particulars of Claim, verifying the claimant's belief in the allegation that the IMFAs and Option Agreement were deeds. Although I have not been shown the statement of truth I accept there is one. Mr Buttimore relies also on the witness statement of his instructing solicitor Mr Philpot, made in response to that of Mr Anderson. That statement contains the following: "The claimant's position remains as stated in the Amended Particulars of Claim, that the IMFA was executed as a deed (at the same time as the other documents) and that this took place in the office of Mr Sean Ormonde's solicitor, Ken Cunningham. Mr Sean Ormonde is a solicitor and understands the formalities required of a deed." Mr Buttimore submits that something has plainly gone awry with the documents presented, and in particular it appears that the execution pages have become detached from the body of the agreement. An explanation for the form of the documents may be that there is a further "signed as a deed" page or pages missing. Disclosure may throw up some further documentation that would support that case, he suggests. He relies also on the fact that other documents executed at this time, including the Option Agreement, were executed as deeds.
It seems to me that on examination of the documents before me the first defendant is plainly correct to submit that the IMFAs are not deeds but simple contracts. They begin and end with words which are not apt for a deed. The only sensible, indeed the only possible interpretation of the documents, taken as a whole, is that the signature pages at the very end were intended to relate to the IMFA and its schedules. The wording that professes to execute a document as a deed was clearly intended to relate, and to relate only, to the schedules in which that wording appears. As pointed out on behalf of the defendants, there is a sensible reason for executing the First and Second Schedules as Deeds: to obviate the need for consideration. Even bearing in mind that the Option Agreement and others were executed as deeds, I cannot see a real prospect of a court concluding that the IMFAs were so executed.
I can see no purpose to the signatures that appear at the end of the documents other than to attest to the parties' agreement to the terms of the IMFAs. No other purpose has been suggested. If that is the purpose of those signatures then, so far as the IMFAs are concerned, the requirements of s 1 of the 1989 Act are not met, because there is nothing on the face of the instrument to make clear or even indicate that it is intended to be a deed, and the signatures do not attest to the contract being signed as a deed. The fact that there is a witness to the contract is not of itself enough to satisfy what Mr Lewis called the "face value requirement" of section 1. The execution of the First Schedules as deeds does not affect the status of the IMFAs, for two reasons. First, the Schedules are on their face instruments separate from the IMFAs; secondly, they are expressly stated to be supplemental to the IMFA.
If I am right to conclude that the execution page that forms part of the First Schedules is not intended to relate to the IMFA there is a further reason why the IMFAs cannot rank as deeds: the formalities required for the execution of a deed by a company are not present. At the present time a company can execute a deed by the signature of a single director in the presence of a witness: Companies Act 2006, s 44(2). However, that provision did not come into force until 6 April 2008, after this instrument was signed.
At the time a company could execute a deed, if not under seal, in the manner provided for by the Companies Act 1985, s 36A(1) and (4)-(5) (as inserted by the Companies Act 1989, s 130(2)). Section 36A provided that a document signed by a director and the secretary, or by two directors, and expressed (in whatever form of words) to be executed by the company had the same effect as if executed under the common seal of the company. The First Schedule to the IMFA complies with these requirements; it is signed by a Director and a Director/Secretary. The two pages that appear at the very end of the agreement contain provision for only one signatory on behalf of the claimant and one on behalf of the first defendant.
The claimant's suggestion that something might turn up on disclosure or otherwise to show that contrary to all present appearances the IMFAs were executed as deeds is in my view fanciful. I see no compelling reason why the resolution of this issue should await a trial. I attach importance in this context to the following: (i) the fact that this issue has been live for many months, allowing ample opportunity for searches to be made for any missing documents; (ii) the somewhat bare nature of the claimant's case on the issue; (iii) the fact that the hypothesis floated by Mr Buttimore would not explain the signature pages that do appear within the documents before the court; (iv) the fact that the claimant's evidence comes from the solicitor acting for it in this action and not from the individual, Mr Sean Ormonde, who is said to have been present at the execution of the documents, or from the solicitor, Mr Cunningham, at whose offices the execution is said to have taken place. Mr Ormonde has made a witness statement since the application to withdraw admissions was made, but it deals only with security for costs and not this issue. No good reason is apparent.
In these circumstances I have concluded, having had regard to the matters identified in PD14 para 7.2, that the application to withdraw the admission should be granted. That will prejudice the claimant by enabling the first defendant to maintain a limitation argument which would otherwise be unavailable. Moreover, given my conclusions above, it will enable the first defendant to obtain summary judgment on that argument, to the extent that the breaches of the IMFA complained of took place before 1 August 2007. However, both points cut both ways. I can see no good reason to hold the defendants to the admission, which would clearly create a greater injustice than the claimant would suffer if it was withdrawn. The claimant does not oppose the application, so long as the first defendant pays the costs of and caused by the admission and its withdrawal, which is plainly the right order and is conceded by the first defendant. At the claimant's request those costs will be subject to detailed assessment if not agreed.
SUMMARY JUDGMENT OR STRIKING OUT
The claims in respect of which these remedies are sought by the first defendant are the breach of contract claims relating to breaches before 1 August 2007, and the claims for misrepresentation. An application was initially made for summary judgment in respect of the restitution claims, but was not pursued.
Principles
The court may grant summary judgement against a claimant on a claim or issue if it considers that the claimant has no real prospect of succeeding on the claim or issue, and there is no compelling reason why the case or issue should be disposed of at a trial: CPR 24.2. In Easyair Ltd v Opal Telecom Limited [2009] EWHC 339 (Ch) at [15] Lewison J, as he then was, summarised the correct approach:
"The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 2 All ER 91;
ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]
iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman;
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10];
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.
CPR 3.4 (2) provides that the court may strike out a statement of case, or part of one, if it appears to the court (a) that it "discloses no reasonable grounds for bringing … the claim", or "(b) is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings; or (c) that there has been a failure to comply with a … practice direction". Permission will not be given to amend in a way which would offend any of these principles.
The claims in contract
I have concluded that there is no real prospect of the claimant establishing that the IMFAs were deeds rather than simple contracts; the contrary is plain; and there is no other compelling reason for that issue to be tried. It follows that the ordinary 6 year limitation period applies in respect of any claim for breach of their provisions. The first defendant sought a declaration that the claims which relate to breaches occurring before 1 August 2007 are statute-barred. I will grant that declaration. The precise impact on the pleaded claims will remain to be worked out.
Express misrepresentation: the Option Notice Representations
Limitation
This is the primary ground relied on as an unanswerable defence to all the claims for misrepresentation. On the face of things, it is indeed unanswerable. I shall deal first with the Option Notice Representations. These, as stated above, were made in February 2007 and are said to have been relied on then to the detriment of the claimant. The limitation period for such claims is 6 years. The claim form was not issued until August 2013, over 5 months after that period expired. Limitation was pleaded immediately, in September 2013. No answer was offered by way of Reply at that time. The claimant's substantive response consisted instead of the application to amend to claim in deceit. The first defendant's summary judgment application followed in November 2013.
The answer to the limitation defence which is now offered on behalf of the claimant is one that seems to have emerged for the first time in late May 2014, in the supplemental skeleton argument of Mr Buttimore for the hearing before Deputy Master Nussey. At the very end of that skeleton argument it was suggested that "in relation to both the MA 1967 misrepresentation claim and the deceit claim if allowed, C will be entitled to rely on s 32(1)(b) [of the Limitation Act 1980] since the key fact that the full franchise fee of £30,000 had not been [paid] was not discovered until September 2007".
Section 32 of the Limitation Act provides, so far as relevant, as follows:
"32.— Postponement of limitation period in case of fraud, concealment or mistake.
(1) Subject to subsections (3) and (4A) below, where in the case of any action for which a period of limitation is prescribed by this Act, either—
(a) the action is based upon the fraud of the defendant; or
(b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or
(c) the action is for relief from the consequences of a mistake;
the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.
References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent.
(2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty."
As is clear from the drafting, the kind of case identified in s 32(2) is a subset of the class of case described in s 32(1)(b). The claimant's proposed case is now fleshed out in the draft Amended Reply. This pleads that facts relevant to the claimant's right of action have been deliberately concealed from it by the first defendant and/or the first defendant's conduct amounted to a deliberate breach of duty. The case in support of those contentions is put in this way in the particulars under paragraph 3A:
"Whilst no claim in deceit is presently relied upon as a cause of action in these proceedings, the Claimant avers that the Option Notice representations were made fraudulently in that Jan Spaticchia (whose knowledge is to be imputed to the First Defendant) knew that they were untrue or made them recklessly (i.e. not caring whether they were true of false) with a view to inducing the Claimant to enter into the IMFA and by reason of the Option Notice representations the Claimant exercised its option and entered into the IMFA. The Claimant will contend that this conduct by the First Defendant amounted to a deliberate breach of duty within the meaning of s.32(2) of the Limitation Act 1980, being a deliberate misrepresentation under the Misrepresentation Act 1967.
….
C. Further or alternatively the claimant will rely on the foregoing in support of its plea of deliberate concealment … "
At the same time, amendments are proposed to the Particulars of Claim which seek to modify the presentation of the claimant's case by qualifying the allegation that the first defendant "negligently misrepresented" the true position. It is proposed to add the following (at paragraph 20): "for the avoidance of doubt, references to negligent misrepresentation herein are references to the cause of action based on s 2(1) of Misrepresentation Act 1967".
Section 2(1) of the Misrepresentation Act 1967 provides as follows:
"2.— Damages for misrepresentation.
(1) Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made the facts represented were true.
For the first defendant Mr Lewis objects to the proposed amendment and submits that there is in reality no answer to the limitation defence. He argues that the premise of the claimant's argument is fundamentally flawed, and that the pleaded case is bad in law and an abuse. Mr Lewis refers to the solicitors' negligence case of Cave v Robinson Jarvis & Rolf (A Firm) [2002] UKHL 18, [2003] 1 AC 384, and in particular paragraph [25] of the speech of Lord Millett, where he held that:
"section 32 deprives a defendant of a limitation defence in two situations: (i) where he takes active steps to conceal his own breach of duty after he has become aware of it; and (ii) where he is guilty of deliberate wrongdoing (deliberate commission of a breach of duty) and conceals or fails to disclose it in circumstances where it is unlikely to be discovered for some time. But it does not deprive a defendant of a limitation defence where he is charged with negligence if, being unaware of his error or that he has failed to take proper care, there has been nothing for him to disclose."
Here, submits Mr Lewis, the starting point is that the claimant has chosen to advance in the Particulars of Claim allegations of negligence, that is to say, inadvertent error. Such a case cannot be brought within the scope of s 32. Negligence is by definition not deliberate wrongdoing (Lord Millett's second situation). And it is not alleged here that the defendant later realised its negligent error and took active steps to conceal it (Lord Millett's first situation). The claimant, recognising that mere negligence will not get it home under s 32, has sought to amend to plead a claim in deceit, says Mr Lewis. Finding the way barred by the provisions of s 35(3) of the Act, the claimant now seeks to achieve the same result by advancing the same allegations in the Reply. That is an abuse.
I understood Mr Lewis to say that this was so for three reasons. First, it is an abuse to seek to circumvent the provisions of the Limitation Act, when these have been held to bar a claim in deceit for the reasons I have given. Secondly, the pleaded case, if amended in the way proposed, would invite the court to make two inconsistent findings of fact: one of negligence and the other of fraud. That is an impossibility. Thirdly, the CPR prohibit a party from advancing two inconsistent cases. Mr Lewis refers first to PD16 9.2: "A subsequent statement of case must not contradict or be inconsistent with an earlier one. For example a reply to a defence must not bring in a new claim." In support of his contention that the new case would be inconsistent with the existing case Mr Lewis points to the terms of s 2 of the Misrepresentation Act, which make plain that the cause of action is for representations which are not made fraudulently.
Mr Buttimore submits that it is important to identify the relevant principles. He says Mr Lewis's submissions involve some ill-defined abuse arguments whereas the primary question of relevance is whether the proposed amendment to the Reply would offend the prohibition in s 35 of the 1980 Act on the pleading of "new claim" after the limitation period in respect of such a claim has expired. He submits that it would not, and that there is no other reason to deny his client the opportunity to argue that the limitation defence can be overcome by proof of what he calls "deliberate misrepresentation under the 1967 Act". The proposed Reply is not inconsistent with the Particulars so as to offend the principle in PD16 9.2, he submits, as a claim under the Act does not involve an averment of negligence. The Act casts the burden of proving a reasonable belief in the truth of what was said on the defendant. The term "negligent misrepresentation" is merely a label used by Chitty on Contracts for a 1967 Act claim, and its use in the Particulars of Claim is no more than a way of indicating that the claim is made under the Act. Hence what he would describe as a clarification in paragraph 20 of the draft Amended Particulars of Claim.
Mr Buttimore seeks to draw support for these submissions from the decision of the Court of Appeal in D&G Cars Limited v Essex Police Authority [2013] EWCA Civ 514. This was the decision, it seems, that led to the introduction of PD16 9.2, Briggs LJ having found it "perhaps unfortunate" that this important principle did not then find expression in the Practice Direction as opposed to the notes in the White Book: see [70]. The case involved a claim for breach of the Public Contracts Regulations 2006. Such claims are subject to a special three month limitation period under Reg 47(7)(a). The claimant sought to add allegations of intentional wrongdoing and bad faith after the expiry of that period. The Court of Appeal, upholding the Master and the judge, held that this was impermissible, as it involved a new claim that did not arise from the same or substantially the same facts as were already in issue. A question was raised as to whether some at least of the same allegations might properly be introduced by way of reply to the police authority's defence under Reg 23(4)(e). The judge had declined to address the issue, leaving the parties to make an application to the Master. The Court of Appeal upheld that decision also. Two members of the court (Leveson and Briggs LJJ) expressed the view, however, that such a course should be left open.
Mr Buttimore's submissions are creative and ingenious, but in my judgment the claimant is not entitled to rely on s 32, and has no answer to the limitation defence in respect of this misrepresentation claim. I consider it quite clear that the case presently pleaded in the Particulars of Claim is, and was intended to be, a case that the first defendant negligently misrepresented the true position in relation to the sub-franchise it had entered into with Mr Heywood. It is true that it is not necessary to plead negligence in order to state a tenable case under the 1967 Act, because the onus of proof lies on the defendant. However, the Act does not prohibit a claimant from assuming a burden of proof, or from specifying the nature of its factual case. Here, negligence has been expressly pleaded. The terms of the claimant's application to amend of January 2014, and those of the witness statement and the initial skeleton argument in support, make it quite clear that the allegations of negligence meant what they said. They were not merely a convenient label for what was meant to be a case of fraudulent or deliberate misrepresentation.
The proposed Amended Reply explicitly alleges that the option notice representations were made fraudulently. That is clearly a new and distinctly different factual case from the one that is presently pleaded. That is why the Deputy Master and I have both concluded that the intended claim in deceit did not arise from the same or substantially the same facts as the existing claim. The difference between negligence and fraud is a stark one. As observed by Millet LJ, as he then was, in Paragon Finance (above) at 418 "There is in our jurisprudence no sharper dividing line than that which separates cases of fraud and dishonesty from negligence and incompetence." In this case the allegations of fraud which it is now proposed to plead in reply are in my judgment plainly inconsistent with the case of carelessness presently pleaded in the Particulars of Claim. As Mr Lewis submits, the claimant would be inviting two inconsistent findings of fact. Further, the inconsistency would mean that the Amended Reply would contravene the principle stated in PD16 9.2. For these reasons, permission could not properly be granted to make these amendments, if the Particulars of Claim remained as they stand.
I do not consider that the proposed amendment of the Particulars of Claim would resolve the difficulty. The amendment would not remove, but merely qualify the averment that the alleged misrepresentations were made "negligently". The qualification would not in my judgment alter the substance of the case. It would remain one in which the claimant made an averment of carelessness, which is denied in the Defence. The factual issue to which the Particulars of Claim and Defence give rise would remain the same. The Amended Reply, if allowed, would still introduce a new and inconsistent allegation.
I would go further and accept that even the removal of the express averment of negligence would not, if such an amendment were sought, save the proposed Amended Reply. I acknowledge the point made by Briggs LJ in D&G Cars at [70], that "nothing which is pleaded solely in Reply can amount to a new claim". For my own part, however, I am inclined to the view that amendments to Particulars of Claim and Reply which, taken collectively, transform a case which is expressly pleaded as one of negligence into one which no longer makes such an allegation but avers misrepresentation coupled with a fraudulent state of mind might well involve a "new claim" within s 35 of the Limitation Act. The factual case advanced by the claimant in order to sustain a claim to a remedy would appear indistinguishable from the factual case required to establish a claim in deceit. It would seem at least arguable that this would involve a new "cause of action" within the meaning of s 35. However, this is not how Mr Lewis put the case in his argument on behalf of the first defendant, and I do not base my conclusion on that point.
Rather, it seems to me that whether or not a claimant assumes the burden of proof as the claimant has here, Mr Lewis is clearly right to submit that a case of fraudulent misrepresentation is inconsistent with a claim under the 1967 Act. Mr Buttimore's notion of a "deliberate misrepresentation under the 1967 Act" is a contradiction in terms. The Act created a statutory tort, designed to fill gaps in the existing law relating to representations which were negligent or otherwise not fraudulent. Chitty, using the term "negligent misrepresentation" to characterise the statutory tort, acknowledges that in some respects this may not be strictly accurate (see the 31st edition at 6-073). It does not suggest, and in my judgment it is not the case, that the tort extends to fraudulent misrepresentations. The short title of the Act and the terms of s 2 make clear that the remedy is made available for non-fraudulent representations. The cause of action for fraudulent misrepresentations is the common law tort of deceit.
Estoppel
The defendant pleads that reliance on the alleged misrepresentations is in any event precluded by contract, in the form of clause 23 of the IMFAs. Clause 23.1 is a standard commercial "entire agreement" clause which provides that "no representations warranties inducements or promises made by" the first defendant "shall add to or vary this agreement or be of any force or effect." It further provides by cl 23.1.1 and 23.1.2 that "if there are any … representations which the claimant considers have been made to it which have induced it to enter into the agreement, it is obliged to submit a written statement of them to the Master Franchisor", and that unless an agreed form of such statement is annexed to the agreement the claimant "shall be deemed not to have relied upon any representation ... made or given by" the claimant.
The legal principle relied upon by the defendant is "contractual estoppel" of the kind held to exist in Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd [2006] EWCA Civ 386, [2006] 2 Lloyds Rep 511, where Moore-Bick LJ held at [57] that:
"It is common to include in certain kinds of contract an express acknowledgment by each of the parties that they have not been induced to enter into the contract by any representations other than those contained in the contract itself…. I can see no reason why it should not be possible for parties to an agreement to give up any right to assert that they were induced to enter into it by misrepresentation, provided that they make their intention clear, or why a clause of that kind, if properly drafted should not give rise to a contractual estoppel …"
These observations, though not part of the ratio of Peekay, were considered and expressly approved by the Court of Appeal in Springwell Navigation Corporation v JP Morgan Chase Bank [2010] EWCA Civ 1221, [169] (Aikens LJ), and regarded as good law by Rix LJ in Axa Sun-Life Services Plc v Campbell Martin Ltd [2-11] EWCA Civ 133, [95]. The principle is not disputed by the claimant. The claimant advances three answers. First, the draft Amended Reply asserts that on its true construction cl 23 does not extend to or have the effect of precluding reliance on the misrepresentations complained of. That in my judgment is untenable, and it was not pressed by Mr Buttimore in his skeleton or oral arguments.
Secondly, Mr Buttimore submits that "the clause needs to be read in the context of the IMFA being subject to the Option [Agreement] and so any representations which post-date the Option [Agreement] are not caught by the non-reliance clause". That submission is clearly inconsistent with the agreed position, that the IMFA was held in abeyance until after the option was exercised. It is inconsistent also with the case pleaded by the claimant in paragraphs 16 and 24 of the Particulars of Claim, that the "[IMFA] agreement did not come into effect until February" and that the claimant was "induced to enter into the IMFA" by the representations complained of.
Thirdly, the claimant says that in the absence of clear words the clause cannot protect against a fraudulent representation. That in turn is not disputed by the first defendant. However, the proposed averment of fraud is inconsistent with the case pleaded in the Particulars of Claim, the inconsistency is not avoided by the proposed amendment to those Particulars, and the position cannot be rescued, for the reasons given above. This, therefore, is in my judgment a separate and additional ground for granting the first defendant summary judgment on the Option Notice misrepresentation claim.
Waiver/acquiescence
Paragraph 35 of the Defence pleads that despite knowing of its claim since September 2007 (according to the claimant) it did not raise the alleged misrepresentation until 2013 and in those circumstances "the claimant waived its right to rely on the allegations, alternatively acquiesced by reason of laches." Mr Lewis relied on this in support of the summary judgment application, submitting that it was plain that the claimant had allowed the first defendant to believe, reasonably, that the claimant was waiving its right to claim misrepresentation and damages, and that there was an estoppel. These various bases for summary judgment were not, however, advanced in the application notice or in either of the supporting witness statements, and reliance on them was objected to on those grounds. I accept that for those reasons it would be inappropriate to find against the claimant on any of these bases. I was left unpersuaded by the submissions of Mr Lewis in any event.
The Rodgers Side Letter misrepresentation claim
The first defendant advances five grounds for granting summary judgment on, or striking out this claim. Three are common to this and the Option Notice misrepresentation claim: limitation, contractual estoppel, and waiver/acquiescence/estoppel. The fourth ground is that mere non-disclosure cannot give rise to a claim in misrepresentation. The fifth is that the pleaded basis for the implied misrepresentation is in any event untenable. I shall not address the third ground, for the reasons given above. I have concluded, however, that each of the other grounds is made out.
The claimant's case is one of misrepresentation by non-disclosure. "The general rule is that mere non-disclosure does not constitute misrepresentation, as there is no duty on the parties to a contract to disclose material facts to one another, however dishonest such non-disclosure may be in particular circumstances": Chitty, op cit, 6-017. Doubtless in recognition of this general rule, it has been pleaded on behalf of the claimant that the first defendant was under a duty to disclose the existence of the Rodgers Side Letter. The duty to disclose is said to have arisen "In the light of the express and implied terms of the IMFA and Option Agreement". The first defendant is alleged to have acted in breach of duty by failing to disclose "the Rodgers Side Letter before execution of the IMFAs, notwithstanding the extensive due diligence undertaken by the claimant." The failure to disclose, in breach of this duty, is said to have amounted to a representation "that there were no other franchisees operating in the territory covered by the IMFA". The claimant's case is that had it known of the Rodgers Side Letter it "would not have entered into the IMFAs and/or exercised the option." Given the claimant's case as to when the IMFAs were entered into, I take this to be an averment of reliance on the misrepresentation at the time the option was exercised, and the IMFA entered into.
Having read and re-read the proposed amended case and listened carefully to Mr Buttimore's submissions I am left with my initial response to this pleaded case: that it cannot possibly succeed. First, I cannot identify any tenable basis for the allegation that a relevant duty of disclosure existed prior to the alleged breach of that duty. In paragraph 28 of the draft Amended Particulars it is alleged that the IMFA or Option Agreement contained an implied term that the first defendant would inform the claimant if it had granted rights in competition with those granted to the claimant. Even if the existence of such a term is accepted, it is the claimant's own case (in paragraph 31 of the Particulars) that it was aware that Mr Rodgers had been granted rights in respect of territory in the Republic of Ireland. What the claimant needs to establish but has not pleaded is a duty to disclose the extent of the territory granted to Mr Rodgers. Secondly, the duty being an implied term of the contract it would not have existed at the time of the alleged breach which is said to give rise to or amount to a misrepresentation. That is sufficient to dispose of the case as it stands, though I add that it also seems to me questionable whether an implied representation arising from non-disclosure is one that is "made" within s 2(1) of the 1967 Act.
The claimant seeks, by amendments to paragraphs 29, 33, 35 and 37 of the Particulars, to plead a new case. In these amendments it is alleged that the Option agreement and IMFA both contained express or alternatively implied terms obliging the claimant to act in good faith in entering into and/or during the currency of the Option Agreement and IMFA; and that these terms gave rise to a duty to disclose the existence of the Rodgers Side Letter. The basis for the alleged duty of good faith is found in paragraph 23 of the IMFA Side Letter, by which the parties agreed to add to the IMFA a clause 32.24 providing as follows:-
"Both parties recognise that this Agreement has been entered into in good faith and relates to a new and uncertain market. Nothing in the agreement shall be interpreted so as to penalise either party where best endeavours have been utilised to achieve the spirit of the Agreement. Both parties agree that unilateral termination should only occur where there is a substantial breach of contract or duty, breach of good faith, breach of trust or commission of an illegal act by either Party".
This provides an arguable basis for an allegation that the IMFA contained an express or implied duty to act in good faith during its currency, but otherwise appears to me to amount to an anti-technicality clause. I would not read the acknowledgment in the first sentence as amounting to a warranty by either party that it had acted in good faith in entering into the contract. However that may be, I do not consider it arguable that the alleged warranty or duty of good faith was incorporated or implied into the Option Agreement. The IMFA Side Letter is the sole pleaded basis for that contention. The express purpose of that letter is however to add terms to the IMFA, and the implication of such a term into the Option Agreement is not alleged to be necessary, nor is it in my judgment arguably necessary to give that agreement business efficacy. It follows that the duty alleged is, if anything, a term of the IMFA which the claimant alleges it entered into as a result of the misrepresentation. Such a term cannot be relied on as giving rise to a duty to disclose "before execution of the IMFAs".
In my judgment this claim is in any event barred by limitation. Again, the claimant seeks to avoid the operation of the 6 year limitation period by reliance on s 32(1)(b) and 32(2) of the Limitation Act. The attempt is the more remarkable in the case of this claim, as the claimant has never previously sought to allege fraud in this respect. The application to amend to plead deceit related only to the Option Notice Representations. The existing pleaded case in respect of the Rodgers Side Letter is a bare case of misrepresentation by non-disclosure in breach of an implied contractual duty to disclose the existence of a competing franchise. Now, it is proposed to expand the claim to add the new duty of good faith and to plead a breach of that duty; and new allegations are advanced in the draft Amended Reply that the existence and terms of the Rodgers Side Letter were "deliberately concealed", and that the breach of the duty of good faith was a "deliberate breach of duty" within s 32(2). There is no explanation of the change of stance.
In my judgment the allegations of deliberate concealment and deliberate bad faith which are set out in the draft Amended Reply are not just different from but inconsistent with the case presently pleaded under the 1967 Act, for reasons given above: the claim under the Act is necessarily for non-fraudulent misrepresentation, yet the Reply in substance alleges fraud. It may be that the inconsistency would be resolved if the Particulars of Claim were amended in the way the claimant seeks, or some similar way; but if so that could only be because such amendments would introduce a "new claim" for deliberate misrepresentation, ie fraud. For the reasons I have given in disposing of the first defendant's appeal, that course is barred by the s 35 criteria which Mr Buttimore himself suggests provide the only relevant test.
I also conclude that the misrepresentation claim in respect of the Rodgers Side Letter is barred by contractual estoppel by virtue of cl 23.1 of the IMFAs, for the same reasons as I have given above.
SECURITY FOR COSTS
The application is made pursuant to CPR 25.13(2)(c) on the grounds that the claimant is a company or other body (whether incorporated in or outside Great Britain) and there is reason to believe that it will be unable to pay the defendants' costs if ordered to do so. The claimant is not trading and accepts that this threshold condition is satisfied. The dispute is as to whether the discretion which is triggered by satisfaction of this condition should be exercised so as to grant an order for security. The discretion to do so exists if the court "is satisfied, having regard to all the circumstances of the case, that it is just to make such an order": r 25.13(1)(a).
Principles
The factors to be taken into account in determining whether and if so how to exercise the discretion include the following:-
"(1) Whether the claimant's claim is bona fide and not a sham;
(2) Whether the claimant has reasonably good prospect of success;
...
(5) Whether the application for security was being used oppressively, e.g. so as to stifle a genuine claim;
(6) Whether the claimant's want of means has been brought about by any conduct by the defendant, such as delay in payment or in doing their part of any work…"
Sir Lindsay Parkinson & Co v Triplan Ltd [1973] QB 609 (Lord Denning MR).
As to factors (1) and (2), it is settled law that the court should not attempt to go into the merits of the case unless it can clearly be demonstrated one way or another that there is a high degree of probability of success or failure: Porzelack Kg v Porzelack (UK) Ltd [1987] 1 WLR 420.
The onus of establishing factor (5) lies on the respondent. A claimant must adduce satisfactory evidence that (i) he does not have the means to provide security and (ii) that he cannot obtain appropriate assistance to do so from any third party, including a relative or friend, who might reasonably be expected to provide such assistance if they could, litigation funding, (iii) that the claim would be stifled and (iv) that the claim would be unfairly stifled.
Before the court refuses to order security on the ground that it would unfairly stifle a valid claim the court must be satisfied that, in all the circumstances, it is probable that a claim would be stifled: Keary Developments v Tarmac Construction [1995] 1 All ER 534, 540 (Peter Gibson LJ). If the court is so satisfied it will undertake a balancing exercise, weighing the injustice to the claimant if prevented from pursuing a proper claim by an order for security against the injustice to the defendant if no security is ordered. The court will be concerned not to allow an impecunious company to use its inability to pay costs as a means of putting unfair pressure on the more prosperous company: Pearson v Naydler [1977] 1 WLR 899, 906.
In considering the amount of security that might be ordered the court should bear in mind that it can order any amount up to the full amount claimed by way of security, provided it is more than a merely nominal amount: Keary Developments Ltd v Tarmac Construction Ltd [1995] 3 ALL ER 534, 540. It is also, in my judgment, a matter to be borne in mind that security may be ordered in stages so that the claimant is not required to post a large capital sum at one go but only to secure its opponents costs as those costs are incurred. This may be an important power, given the need to maintain a level playing field and to control costs.
As to factor (6), the issue cannot be approached on a basis that would involve pre-judging a substantive issue in the case: Automotive Latch Systems Limited v Honeywell International Inc [2006] EWHC 2340 (Comm).
Facts
The application was issued on 14 November 2013. In May 2014 the claimant offered, via Sean Ormonde, to put up security of £90,000 via "the directors". This was said to be the "absolute maximum" that they could afford. That offer is no longer on the table. It is said that it was to be borrowed from Mike Ormonde but that he is no longer in a position to lend it. The claimant relies instead on witness statements of Mr Hannaford, Sean Ormonde, Pat Walsh, Mike Ormonde, and Alphie Rodgers to show that they do not have and are unable to raise from third parties the necessary funds and that, as the statements assert, an order for security would make it "highly unlikely" that the claimant would be able to continue with this claim. Mr Hannaford's evidence, supplemented by a further statement produced at the hearing, is that the five I have named are the only current shareholders of the claimant, with shareholdings of, respectively, 45.2%, 21.4%, 12%, 11.4% and 10%.
I am satisfied that Mr Rodgers could not raise funds to secure the defendants' costs. His statement shows convincingly that he has negative net assets, and that 70% of his income is dedicated to paying debts. He reports that, unsurprisingly, he has been advised by his bank manager that he is unable to borrow further under those circumstances. Mike Ormonde explains that he is heavily indebted and currently engaging with his creditors to resolve his debts. He exhibits a statement of affairs showing his net worth as -€31.3 million. He has a substantial property portfolio, but his evidence is that all the properties are in negative equity and that his annual income from the properties is exceeded by the interest payments by some €237,000. He has borrowings of nearly €9m with Vanguard Property Finance Ltd who are suing him for recovery. It seems obvious, if his account of things is true, that he will not be able to raise funds to secure the defendants' costs.
Sean Ormonde also has negative net assets, with his family home in negative equity, and a guarantee liability of €200,000 with Vanguard which is presently being pursued against him. He produces a copy of a summary judgment application for this sum dated last October. He has a modest income after tax, according to the evidence, of some €38,000. He claims to be unable to contribute to any security. This I would accept. However, as Mr Lewis points out, both Patrick Walsh and Mr Hannaford are in somewhat better financial positions, according to their statements.
Mr Walsh, with 12% of the claimant company, has a half share in equity of €355,000 in two properties. He discloses an income of €9,000 per annum in rent from one of those properties, but says nothing of other sources of income. The bank statement he exhibits as evidence that he has no surplus income shows credits of over €60,000 in March and April (two deposits of €30,000 each) which are not explained in his statement. Mr Hannaford, with over 45% shareholding in the claimant company, has liabilities of some €90,000 and is unemployed, but he has a Dublin property worth €750,000 which he is renting at €21,000 per annum, and a spouse earning some €38,000 per annum. His evidence is that he has enquired of his bank about obtaining a loan on the house but has been turned down on the basis he would be unable to service the loan.
I also note the following: (i) the fact that the claimant company has, on its own account of things, been able to fund its own legal representatives so far without the benefit of a conditional fee agreement; the incurred costs to date on the claimant's side are substantial; according to the Precedent H form they were some £42,000 excluding VAT up to the CMC; (ii) the fact that the offer of £90,000 was made in May 2014, when the factor which is said to have made Mike Ormonde unable to lend that sum – the claim against him by Vanguard – was already in existence; (iii) the lack of any explanation from Sean or Mike Ormonde of the basis on which it was believed in May 2014 that Mike Ormonde could lend the company £90,000.
Discussion
Mr Lewis and Mr Buttimore have each sought to persuade me that I should approach the question of security for costs on the footing that the merits of his clients' case are strong. I have upheld Mr Lewis's contentions in respect of the claims which were the subject of the summary judgment application, but by definition those are no longer relevant to the issue of security which can only relate to the future. I am not persuaded that I am in any position to make a reliable assessment of the merits of the claims that remain in issue, save to treat them as bona fide claims which are not a sham, but have reasonable prospects.
This means that I cannot reach a reliable conclusion on whether or not the claimant's want of means has been brought about by any wrongful conduct on the defendant's part. The early termination of the MLAs is said to have caused very substantial loss. On the face of it, that may be so. It appears that the terms of cl 27 of the MLAs were satisfied on the face of it but I cannot make an assessment of the strength of the claimant's case that the breaches were known about and consented to or waived by the second defendant.
The key issues seem to me therefore to be whether the grant or refusal of an order for security would involve injustice to the claimant, by unfairly stifling the claim, or injustice to the defendants, by forcing them to defend with no prospect of recovering their costs of doing so. I agree with Mr Lewis that the form of the statements provided by the shareholders is not wholly satisfactory as evidence of efforts to raise finance but I accept that overall, reasonably diligent efforts have been made. I have thus concluded that the claimant has demonstrated that three of its shareholders are in no position to assist in posting security for costs, and that it has made reasonable efforts to obtain outside finance to help provide such security. It has not however demonstrated that it cannot reasonably be expected to put up any security at all for the defendants' costs.
The claimant's ability to fund the claim so far, the offer of £90,000, and the scale of the equity held by Mr Walsh and, in particular, Mr Hannaford make it improbable in my judgment that no finance could be raised. The scale of the claims – even after the grant of summary judgment on some of the claims against the first defendant – and the professed belief of these witnesses in the merits of the claims, makes it reasonable to suppose that substantial shareholders such as they would assist in funding such claims. In my judgment it is not likely that the claim would be stifled by making any order at all for security, regardless of its scale. But I do, on the present evidence, consider it likely that the claimant would be unable to satisfy an immediate order in the sum sought. That sum is £170,000, the sum approved by the Master for the rest of this litigation.
I therefore concluded that an order for security should be made, but that its amount should be moderated. Having reached that conclusion, I decided that the costs of the application should be paid by the claimant. Mr Buttimore submitted that the defendants should have accepted the offer of £90,000 made in May 2014. I concluded that it was reasonable for the defendants to press on with their application, as the evidence then put forward as to the defendants' inability to raise funds was weak. It was not until shortly before the hearing that the defendants served the statements on which they ultimately relied.
In making an assessment of what is appropriate I bear in mind my power to set the level of security ordered below the full amount that would be likely to be recovered, and the costs orders I have made in respect of the applications for summary judgment and security for costs (a further order for a payment on account of £20,000). I also bear in mind a factor which Mr Lewis rightly acknowledged in his skeleton argument: that the level of security it is appropriate to order is dependent upon the outcome of the summary judgment application. The success of that application necessarily reduces the sums that would otherwise have been appropriate.
It is for that reason alone inappropriate to accept Mr Lewis's invitation to order security in the full amount of the future costs in the budget approved by the Master. Moreover, the approved budget figures relate to the position as at 30 May 2014 and include five contingencies, the total unincurred costs of which were some £30,000. Contingent cost A is summary judgment/strike out/security for costs and application to amend. Those are now incurred costs, and the subject of orders made by me. The other contingencies may never happen. If they become likely, a further application for security can be made in advance. I therefore leave out of account all the contingencies.
I have concluded that an order for security in stages in the following amounts would strike a fair balance between the parties. The stages correspond with phases of the litigation identified in the costs budget, and I have had regard to the approved figures. The sums exclude VAT, which should be added if applicable (which I doubt). A stay will be imposed pending the provision of the initial tranche, with similar provision in respect of subsequent tranches. The timing of the tranches will be the subject of agreement or a determination by me.
Disclosure and exchange of witness statements £16,000
Expert reports £10,000
PTR £3,000
Trial preparation £16,000
Trial £35,000 |
Mrs Justice Andrews:
This is a claim for clinical negligence arising from the admittedly inappropriate treatment of a patient with an unstable 3 column fracture of the spine which was initially misdiagnosed as stable.
In the early hours of the morning on Boxing Day 2010, the Claimant, Mrs Susan Sumner (then aged 68) fell down a flight of stairs at her daughter's home in Surrey where she had been staying over the Christmas period. The notes taken by the paramedics state that she lost her balance and fell down 13+ steps head first, landing on her head. According to the notes taken at the time of her admission to the A&E department of the Royal Surrey County Hospital at 2.45 am, she fell "from top to bottom of the stairs whilst going up". That is the only factual evidence before the court as to the mechanism of her fall. Although the fall was witnessed by her daughter Maureen Sumner-Smith, who gave evidence at the trial, she was asked no questions about it. Mrs Sumner herself has no recollection of the accident or its aftermath.
Mrs Sumner initially complained of pain in her neck and upper back, and what was recorded by the paramedics as pain in her left arm and left shoulder. When the ambulance arrived around 15 minutes after the accident, she had full mobility in all four limbs, no pins and needles, and no neurological deficit. However, in order to move her to the A&E department she was (correctly) long boarded, with a collar and head blocks in order to protect her spine in case she had suffered a spinal injury. When she arrived in A&E she was fully alert, and complaining of arm pain and pain in her right shoulder (which it later transpired came from a fracture to her humerus). She was examined by a doctor at 3.55am who recorded that she had pain in her neck and in her upper limbs, that she was "weak on hands", and had pain in her shoulder (presumably the right, though it does not say which) and arms. The collar and blocks were on, but she was still moving her head and neck. Her legs were functioning normally (motor power 5/5 on the ASIA scale, which ranges from 0/5 (no power) to 5/5 (full power)).
Mrs Sumner was rolled over and the doctor examined her back; she complained of pain in the C5, 6 and 7 area. The doctor formed the view that she had suffered an injury to her cervical spine and drew a diagram illustrating the reduced power in her arms; upper limbs 4/5 bilateral, lower limbs 5/5. An X-ray and CT scan were requested. The CT scan was taken at around 6am. The report stated:
"The cervical lordosis is maintained. There is some degenerative change seen at C5/6 with loss of the disc space and anterior and posterior osteophytes. There is very minor anterior subluxation of C6 on C7 and note is made of a fracture through the facet joint and pars intra-articularis on the left at C7 and a fracture through the right foramen transverse area at the same level. There also appears to be subluxation at the C6/7 facet joint on the right." (emphasis added).
Subluxation means a slippage out of position. It was common ground that the subluxation at the right facet joint noted on the right hand side in the final sentence of the report would have had no impact on the spinal cord.
Mrs Sumner was seen again by a doctor at 8am. She was recorded as mainly complaining of her right arm/elbow/wrist. The spinal fracture shown by the CT scan was noted. The records show she was complaining of a loss of sensation in the left arm. However muscle power was still assessed as grade 4/5 bilaterally, believed to be secondary to pain, with no lower limb symptoms. She was appropriately treated at that juncture, by being kept immobile in bed with the head collar and neck blocks, and her spine in line. The plan at that stage was to discuss her case with the neurology team at St George's Hospital to determine if the C6/7 fracture was stable and whether it was necessary to operate. Such an operation is designed to hold the spine in place so as to ensure that it is kept in line and stable, to enable the fracture to heal without the danger of further trauma to the spinal cord being caused by movement. The most important factor which causes damage to a spinal cord after injury is lack of oxygen, because the central nervous neurones cannot survive on anything other than the oxygen supplied. Thus it is vital to protect against anything that might cause a further interruption to the oxygen supply.
The principles of sound management of spinal cord injuries are set out in the British Orthopaedic Association Guidelines published in January 2006, which were adopted in full by the National Spinal Cord Injury Strategy Board ("NSCISB") in a paper entitled "The Initial Management of Adults with Spinal Cord Injuries" published on 18 May 2012. The NSCISB has since been replaced by a different body, but the Claimant's spinal expert, Mr Gardner, explained that the new body consists of the same people, and it and its predecessor are part of the corpus in the English NHS which governs appropriate management of spinal cord injuries.
The Guidelines provide that at the site of cord injury there will be a zone of critical ischaemia. This zone may expand with poor oxygen saturation or poor perfusion. Acute spinal injury must be nursed flat, (emphasis as in the original). In the acute phase of spinal cord injury management, where the spine has not been stabilised, and it is necessary to move the patient, the patient should be log rolled (by five persons). That is how the First Defendant managed Mrs Sumner until the mistake was made of assuming that the fracture was stable, and mobilisation was permitted. The Guidelines make no distinction between the management of flexion injuries and hyperextension injuries. Hyperextension of the spine occurs when the head is thrown back; flexion is when it moves forward. The question whether Mrs Sumner's injury was a flexion or hyperextension injury assumed a central importance in the course of the trial, for reasons that will become apparent.
At 5.30pm on 26 December, the neurology team at St George's discussed Mrs Sumner's case and noted that the fracture extended from the lamina into the facet. They concluded that the fracture was likely to be stable, and therefore it was decided to put her in a hard collar for six weeks and mobilise as pain allowed. That was an error: the fracture was unstable, and the conclusion that it was stable could not be safely drawn on the basis of the CT scan alone. She should have had an MRI scan. An unstable fracture should not be treated simply by putting the patient in a hard collar, because the collar still allows enough movement of the head and neck to cause damage to the spine.
On 27 December Mrs Sumner was admitted to the ward, where a risk assessment was completed by the orthopaedic physiotherapist at 1pm. The hard collar fitted by A&E was found to be fitting inadequately and was changed. Mrs Sumner had been complaining of intermittent sensations similar to electric shocks in the left upper arm, and difficulty in pressing the call bell, but no additional neurological symptoms were observed after the collar change. The physiotherapist noted that Mrs Sumner had been sitting up at 30 degrees in the morning. She was returned to flat bed rest. Prior to the collar change, the power in her upper limbs was tested; the left side was now much weaker (muscle power recorded at 2/5 and 3/5 at C6-C8) but the muscle power remained at 4/5 on the right. She also had reduced sensation in the C6/7 dermatome on the left (the same side as the fracture). Her lower limbs were still normal (5/5) at that stage. The physiotherapist noted a clinical impression of deteriorating neurology in the C6/C7 dermatome/myotomes since admission, queried why this should be, and indicated that there should be an urgent review by a senior orthopod prior to further mobilisation.
In the period from then up to and including 29 December, Mrs Sumner was kept flat and "log rolled" in accordance with the guidance. The neurological examination on the morning of 28 December has similar test results to that taken at 1pm the previous day in respect of the motor power in her arms: left 2/5, right 4/5. The ASIA chart taken in between those two readings, at 6 pm on 27 December, appears to indicate a considerable improvement in power in her left arm, but the most likely explanation for this is assessment error. Mr Gardner accepted that the recorded level of improvement was unlikely to have occurred in that short timescale.
Meanwhile, the neurosurgical registrar at St George's had recommended a CT head scan to exclude any intracranial pathology, but reiterated that no surgical intervention was required for left radiculopathy and that the doctors should keep a watch for any further deterioration. The only symptoms of deterioration recorded in this period were a report by Mrs Sumner on 28 December that she now had difficulty pressing the call bell with her right hand as well as with the left; but the neurological examination following that report assessed the motor power on the right side (and indeed on the left) as being no different from the previous day.
On 29 December, a CT scan was carried out on Mrs Sumner's thoracic spine, which was undamaged, and repeated X-rays of her shoulder. A possible fracture to the right humeral head was spotted. This was confirmed on further imaging as a minimally displaced fracture through the right neck of the humerus. This was appropriately treated by a right arm collar and cuff. (That fracture probably explained some of the pain and discomfort that she was suffering; she made a good recovery from it, and it caused no lasting disability). The record of the ward round at 1pm (written up at 3.30pm) shows no worsening of her neurology so far as the spinal injury was concerned. Indeed the ASIA chart shows an improvement to 3/5 on the left arm and restoration of full motor power to 5/5 on the right.
On 30 December Mrs Sumner was seen again by the physiotherapist in the morning. She had been suffering hallucinations overnight, and was confused on and off in the morning; it was decided to try and avoid giving her morphine. No attempt was made to mobilise her until a plan was in place. However at 4.15pm, the doctor instructed that she be tilted to 30 degrees from flat and mobilised as able with the physiotherapist the following morning.
On 31 December the confusion was continuing, and apparently getting worse. However, when Mrs Sumner was examined on the ward round at 9am there was no progression of her neurological signs – the results recorded on the ASIA chart are essentially the same as on the previous chart taken at 1pm on 29 December (3/5 on the left arm, 5/5 on the right) though the doctors were unable to take a reading at C7, which was refused because of pain. Later that morning, Mrs Sumner was mobilised out of bed. She complained of pins and needles throughout her left upper arm when seated. On neurological examination by the physiotherapist at 11am the neurology of her upper limbs on both sides was apparently getting worse. The ASIA chart shows Grade 3/5 power in the left arm at C6, but now 2/5 at C7 and C8. The power in the right arm had also deteriorated to 4/5 at C6, and 3/5 at C7 and C8. There was decreased sensation in the C6/C7 dermatome bilaterally, left worse than right. That record does not necessarily mean the decrease had occurred since the last examination, but simply that sensation was reduced in that area (as it had been for some days). The notes state "? Changing neurology as a result of mobilisation". Thus the physiotherapist made a connection at the time between movement and deterioration in the patient's neurology.
The physiotherapist thought it inappropriate to continue with further rehabilitation at present, and decided to liaise with the orthopaedic team regarding possible neurological changes in the left upper arm when the patient was sitting up. If a patient with an unstable spinal cord injury sits up, this may cause "postural hypotension", i.e. a lowering of their blood pressure, which may in turn disturb the circulation and cause spinal cord ischaemia. However, the charts show that Mrs Sumner's blood pressure at that time was within a normal range. Mrs Sumner was returned to bed but left sitting up at an angle of 50 degrees, and reported a decrease in the pins and needles thereafter.
The physiotherapist reported her concerns to the registrar at 2.30pm, who advised a review by the on call registrar. When the doctors examined Mrs Sumner at 3.45pm they thought she looked hot and sweaty (it transpired that she had a chest infection, which later developed into pneumonia). She was still confused. At that point she was lying in bed at 40 degrees; she did not complain of pain or discomfort but said her left arm had been painful. Despite this, motor power in her upper limbs appeared to be deteriorating on both sides; she now had no power in her fingers on the left and very little power in her fingers on the right. However, there was still full power in her legs.
Apart from the diagnosis of the chest infection, nothing of note is recorded on 1 January 2011. Mrs Sumner remained confused but her son reported that she was more lucid. There were no tests of her motor power on that date. On 2 January, the physiotherapist recorded at 1100 that Mrs Sumner was in bed and poorly positioned (there is no description of how), although the hard collar was fitting appropriately. Mrs Sumner said that she felt "awful", that she was unable to open her bowels (though it transpired that she had not done so since the accident), and that she could not move her right leg. This is the first record of any problems with her lower limbs. She was repositioned at an angle of 50 degrees (it appears that this was because of the chest infection), and complained of pain and pins and needles in her left arm during repositioning. There was again a record of decreased sensation at C6/7 bilaterally, left worse than right. There was no movement in the left hand and reduced movement in the right. The physiotherapist decided to liaise with the doctors prior to further mobilisation.
When the physiotherapist returned to see her at 3pm on 2 January, Mrs Sumner was drifting in and out of sleep. She reported that she was now unable to move both lower limbs. The physiotherapist had difficulty in assessing her lower limb neurology because Mrs Sumner was so sleepy. No sensory deficit was noted in the lower limbs. She was able to move her right ankle but not the left. At 4pm the on-call doctor was summoned to examine her. The notes record that the patient reported a loss of sensation and mobility to her legs "since last night." She also complained of pins and needles in the left arm with rolling. The motor power to her legs was assessed at zero bilaterally, save for some distal power on the left. By this time she had also developed urinary retention.
Discussions about this situation with the surgeons at St George's resulted in a recommendation to carry out a further CT of the cervical spine. The notes record that they "did not suggest any precautions for cervical spine". They indicate that the doctors believed that she may have had a cardiovascular arrest or cord compression (indicating that they believed the likely cause of the degeneration in her muscle power to have been an interruption to the flow of oxygen). The first of these hypotheses was ruled out after a CT scan of the head. The further CT scan of the spine was reported as demonstrating a stable C6/C7 fracture. No new fractures were identified, and the overall cervical spinal alignment was unchanged. Of course, when she was positioned in the scanner, Mrs Sumner was lying spine in line. On receipt of the results, one of the doctors, Dr Saxena, still thought that the patient was likely to have a (spinal) cord compression, and that the CT of her neck needed to be reviewed.
The following morning, 3 January, Mrs Sumner was seen by the physiotherapist at 11.20am. She was still complaining of loss of movement in her legs. Essentially there was no change from the previous day. When the physiotherapist returned at 2.30pm, Mrs Sumner was in bed supine with her head at 90 degrees. The hard collar was fitting adequately and in a good position. There had been no medical review and no results from St George's as yet. Her family became very concerned, and spoke to the senior house officer about the fact that she had no movement or sensation in her legs. Eventually, at 9.20pm, St George's contacted the registrar on duty to say that Mrs Sumner was booked in for an MRI scan the following day. The registrar's notes record slightly worsening neurology of the lower limbs, but much the same neurology in the upper limbs (though by now she had no movement in either hand).
On the morning of 4 January 2011 the physiotherapist spoke to a Dr Leong about a management plan whilst awaiting MRI in view of the further deterioration in neurology. He advised strict bed rest, flat lying and 5 person log-rolling. Although the physiotherapist explained that Mrs Sumner was at a high risk of respiratory deterioration whilst lying flat, the doctor said that a plan for Mrs Sumner would be established by the end of the day. His recommendations were passed on to the nursing and clinical staff on the ward.
The MRI scan revealed a significant unstable fracture. The notes state that the C7 fractures were better demonstrated on CT. However there was considerable oedema (swelling) surrounding the postural elements at C6/7 and high signal was also seen within the C6/7 disc, indicating anterior and middle column injury as well as the known posterior column disruption. In addition, at this level, there was a significant narrowing of the spinal canal with focal cervical cord oedema and a fragment of bone projected into the spinal canal on the left side. If a person suffers a trauma of any sort to the spine, and oedema is shown on the spinal cord on an MRI scan, then one would expect the patient to have neurological deficit, but as Mr Gardner explained, it is the injury that causes the oedema, not vice versa. One cannot draw a conclusion as to what the injury was merely from the presence of oedema, because one always sees swelling if there has been an injury.
The first entry on the medical records after the MRI results were verbally reported, which was made at 3.10 pm, describes "significant abnormality at C6/7 level" and states "oedema probably also signifies significant ligamentous injury". The correct advice was given to take neuro precautions – immobilise and log roll. That advice was followed.
No complaint is made about Mrs Sumner's treatment by the Defendants after the MRI scan was taken. Mrs Sumner was transferred to St George's Hospital the same evening, where despite her chest infection she underwent surgery (posterior stabilisation at C6/7) in the course of the following day, 5 January. She was then transferred to the Intensive Care Unit to manage her pneumonia. Thereafter her condition slowly improved. On 29 January she was transferred to Kingston Hospital, where by all accounts she had a most unhappy experience, largely because her diabetes was poorly controlled. However on 4 March 2011 she was transferred to the National Spinal Injuries Centre ("NSIC") at Stoke Mandeville. A further MRI scan was carried out on 7 March. It showed C6/C7 subluxation with canal narrowing. There is spinal compression, and a bit of disc protruding back into the cord. There were also indicators of a unifacet dislocation at C6/7 on the left hand side, which had not been seen on the pre-operative MRI image taken on 4 January.
A further surgical procedure was carried out at Stoke Mandeville on 15 March 2011 which involved anterior decompression of the disc between C6 and C7 with insertion of a plate and a cage. After rehabilitation (which was prolonged by the development of a deep vein thrombosis, leading to a prescription of warfarin) Mrs Sumner was discharged from the NSIC on 26 October 2011. Thereafter, her condition continued to improve.
It is common ground between the spinal experts that Mrs Sumner has made a good recovery. She has tetraparesis at the average to good end of the ASIA/Frankel D range, with the last normal sensory level being C7. That means that the large majority of her spinal cord is now functioning once more. Prior to the operation to stabilise her spine she was two grades worse, ASIA/Frankel B. The extent of her improvement was better than might have been expected at the time when she was tetraplegic. However she has still been left with significant permanent disabilities, and she needs the assistance of carers. Her mobility is impaired and she is catheterised. Although she can walk with the use of a stick, she uses both a manual and electric wheelchair to travel any significant distance. Her condition will deteriorate as she gets older and it is now common ground that she will need increased care in the last three years of her life. Her life expectancy is agreed to age 81 (she is now 72).
The Claimant's case on liability is that there was a negligent failure to carry out an MRI scan by 27 December at the latest, or at any time prior to 4 January 2011. If Mrs Sumner had undergone an MRI scan by 27 December 2010 or thereafter, it would have shown that the fracture was unstable. She would and should have been immobilised and undergone emergency stabilisation of C6/7.
By a pre-action protocol letter of response from their solicitors dated 16 July 2012, the Defendants admitted that "there was a delay in diagnosing the unstable fracture and that this subsequently resulted in there being a delay in carrying out surgery to fix the spine. It is the Defendants' case that the latest time that it was reasonable for surgery to have been carried out was 29 December [2010]" (the letter says 2011 but that is an obvious typing error). ("Admission 1").
The letter went on to say this:
"It is further admitted that whilst the Claimant is likely to have been left with some neurological deficit in any event, on the balance of probabilities, had surgery taken place at the time that it should have the Claimant would have made a substantial recovery and regained her mobility" ("Admission 2")
It continued:
"In the light of the admissions set out above the Defendants do not intend to dispute liability and will consent to Judgment being entered for damages to be assessed. The extent of the Claimant's injury, loss and damage is not admitted and will need to be established by further investigations". (Emphasis added).
By the time that letter was written, it was known that Mrs Sumner had already recovered and regained her mobility to the extent described in paragraph 26.
The claim form was issued on 22 March 2013 and the Particulars of Claim pleaded Admission 1 to the breach of duty (in paragraph 22). Under the heading "Causation and Injury" it was pleaded that if she had undergone timely stabilisation of the C6/7 fracture, Mrs Sumner would have been an in-patient for about 3 weeks and she would have retained normal power in both her legs and in her right upper arm; however there would have been some marginal residual weakness in her left upper limb which would have marginally restricted her activities of daily living. Her mobility would have been normal, as would her bladder and bowel function, and she would have been able to drive and live a normal life (paragraph 25).
In paragraph 26 of the Particulars of Claim, Admission 2 is set out and characterised as an admission of causation. In my judgment that characterisation is correct: on a natural reading of the letter of 16 July 2012, the Defendants were accepting that if she had been operated upon to stabilise her spine by 29 December, Mrs Sumner's recovery would have been better than it turned out to be, although (as is common ground) she would have suffered some neurological deficit come what may. It is clear that they also accepted that she had suffered some further injury to her spine. She was put to proof of the extent of her injury, loss and damage, i.e. the extent to which her condition was made worse as a result of their admitted negligence.
If a defendant accepts liability in a negligence case, he must be accepting that some loss was caused by the negligence, because causation and loss are two of the four essential ingredients of the tort (the others being duty of care and breach of duty). Of course it remains for the claimant to prove the damage he or she alleges was suffered in consequence of the negligence, and to that extent the defendant may challenge whether a particular head of damage was caused (or materially contributed to) by the breach of duty. However if a defendant's case is that despite the breach of duty the claimant has suffered no loss at all, but would have ended up in precisely the same state regardless, he should not be admitting liability, but rather, admitting the breach of duty and denying causation. That was not what the Defendants did in this case.
Mr Skelton submitted that liability was accepted in 2012 because at that stage the Defendants accepted that Mrs Sumner's recovery must have been delayed to some extent by the delay in undergoing surgery. He said that she has made a substantial recovery and she has regained her mobility, and that is what admission 2 said she would have done if the surgery had been performed by 29 December. However that is not the natural interpretation of admission 2. If it had been the Defendants' case at that time that if the operation had taken place earlier, Mrs Sumner would have recovered to precisely the same extent but sooner, the letter would have been expressed very differently, and admission 2 would not have been couched as an admission. An admission necessarily involves accepting as correct a state of affairs alleged by the opposing party that would otherwise have been contentious.
The Claimant's solicitors, quite understandably, did not interpret the admission in the way that Mr Skelton submitted it should be interpreted. The Particulars of Claim go on to plead particulars of Mrs Sumner's injuries, commencing with the general plea that as a result of the delayed management of her unifacet instability at C6/7 she suffered avoidable pain and deterioration in her neurological condition. No Defence was served, although in due course the Defendants served a Counter-Schedule. On 28 August 2013, judgment was entered for the Claimant with damages to be assessed, and interim damages of £60,000 were directed to be paid within 28 days. The Master's order on entry of judgment records that the nature and extent of the Claimant's injuries and provisional damages remained in dispute. The order does not record that causation is in issue, or that it is the defence case that no injury was suffered by reason of the failure to operate on her by 29 December.
Subsequently expert evidence was directed in respect of "condition, prognosis and quantification of damages". Mr Skelton submitted that any practitioner in this field would understand that quantification of damages would include causation. That may well be right as a general proposition, but it begs the question whether, and if so to what extent, causation is a live issue between the parties or precluded by prior admissions or by the terms of the judgment.
It was against that background that spinal experts came to be instructed by both parties to examine Mrs Sumner. Both the experts are well qualified to express an opinion on the issues upon which they have been asked to assist the Court.
Mr Brian Gardner is a Fellow of the Royal College of Physicians both in London and Edinburgh. He is now an Emeritus Consultant in spinal cord injuries at the NSIC. In fact he was the treating Consultant at the time of Mrs Sumner's admission to Stoke Mandeville in March 2011, though he retired in July that year. He was a consultant in spinal cord injuries at Stoke Mandeville from 1985-2011, acting as the Clinical Director of the NSIC from 1988-1999, and the Lead Clinician from 1999-2003. He has a neurosurgical background, but although he had a regular surgical list at the time when Mrs Sumner was admitted to the NSIC, he was not then a spinal surgeon but was predominantly dealing with pressure sores and neurological care. Since his retirement he has been in private practice for spinal cord injury patients. It was readily apparent that he is not out of touch with modern clinical practice or developments in his field of expertise.
Mr Gardner has held overseas lectureships or professorships or clinics in 10 different overseas jurisdictions ranging from the United States to China. He was Chairman of the British Association of Spinal Cord Injury Specialists from 2008-2011, and has done an extensive amount of teaching of medical students (undergraduate and postgraduate) and others within or connected with the medical profession. He was spinal tutor at the Department of Medical Education in NSIC from 1991-1998. He is a regular lecturer both to those within the medical profession and to lawyers. He has been working with the National Institute of Clinical Excellence since 2013 to establish guidelines on the management of spinal trauma, and has published over 100 publications, the vast majority of which relate to spinal injury.
The Defendant's expert, Mr Firas Jamil, is a consultant spinal surgeon in the Mid Yorkshire NHS Trust. He deals with spinal trauma and also runs the Yorkshire Regional Spine Injuries Centre, which deals with people from the Yorkshire region with spinal cord injury. They have 120-130 patients a year, but he also receives all spinal trauma patients, with or without neurological deficit, from the Mid Yorkshire region. He is a senior lecturer at the University of Leeds teaching medical students and postgraduates about spinal trauma, and like Mr Gardner he has a background in neurosurgery. He is a Fellow of the Royal College of Surgeons in London and Edinburgh and has an MSc in surgery from University College London. His CV does not state how many publications he has published, but he states that most of them involve neurological trauma, including co-authoring two chapters in the latest edition of "The ABC of Spinal Cord Injury".
Mr Gardner stated in his first report that he had been requested to comment on causation, condition and prognosis. Under the heading "Medical causation" he said that Mrs Sumner's spinal cord function was mildly impaired when the admitted breach of duty occurred. The large majority of her spinal cord was still working normally. As a result of the admitted breach of duty her spinal cord suffered severe further damage, and the large majority of her spinal cord ceased to function. She has since improved, so that the large majority of her spinal cord is now functioning once more. The relative mildness of her initial spinal cord damage, the very severe damage that occurred, and the very good recovery in spite of this severe damage all point to her spinal cord being either normal or almost normal now, had the severe additional damage not occurred. Based upon what happened in her case, it is likely that the small minority of nerves that were not working normally at the time the breach of duty occurred would have recovered, probably fully. His conclusion was that if the breach of duty had not occurred she would probably now be in the same state as she was pre-injury. Mr Gardner did not elaborate upon how the "severe further damage" to the spine occurred, because that was not something that appeared to be in issue.
Mr Jamil stated that he was required to report on Mrs Sumner's "pre-existing medical condition, the description of her current medical and physical functional status, and her prognosis". However in his report, served on 25 July 2014, Mr Jamil expressed the opinion that "on balance, Mrs Sumner's neurological deterioration had very little to do with her spinal instability and the way she was managed and more to do with the natural progression of her spinal cord damage as a result of secondary trauma related changes." He said that regardless of any breach of duty or the timing of the surgery, Mrs Sumner would still have been left with a residual weakness in her upper limbs and suffered from bladder and bowel problems and residual disability in her neck "directly as a result of the trauma to the spinal cord caused by her fall" (Emphasis added). It was Mr Jamil's view that there was little or no further damage to the spine and that Mrs Sumner's neurological deterioration was a direct consequence of the original injury sustained in the fall.
Mr Jamil maintained his stance in the Joint Statement and in his evidence at trial, when he developed his reasoning in a way which was not set out in his Report or referred to in any detail in the Joint Statement. This meant that Mr Wilson-Smith had to recall Mr Gardner to give further evidence, and the evidence of both experts continued to develop right through to the end of the fourth day of trial.
It is Mr Jamil's opinion that Mrs Sumner fell within the small minority of patients who would have suffered severe neurological degeneration regardless of whether her spine was kept stable or not, because she suffered from "central cord syndrome" ("CCS"). The characteristics of CCS are summarised in Kirshblum's Spinal Cord Medicine (2nd Edn 2011). It occurs when a person with a narrowed spinal canal, which could be due to spondylosis, suffers hyperextension of the spine which causes the osteophyte (the degenerative change) to hit the spinal cord powerfully. In such a case the stability or instability of the spine following the fall is irrelevant to the damage. The initial injury causes oedema which progressively worsens over a period of days or even weeks, with associated neurological deficit. Mr Jamil likened this in his oral evidence to a smouldering fire which gathers momentum and eventually ignites. There is little that can be done by way of treatment, save to let nature take its course, though steroids may be prescribed. The prognosis is generally favourable, with the lower extremities being the first to recover, though Dr Kirschblum's writings indicate that there is often residual upper extremity motor weakness. Mr Jamil said that on average, 50 per cent of patients with an incomplete central cord injury could regain some function or return to some sort of functionality. Mrs Sumner fell within that group.
It is important to note that it was common ground between the experts that CCS would only have arisen in this case if the injury were a hyperextension injury. The suggestion that the injury was a hyperextension injury was made for the first time by Mr Jamil in the witness box.
I am in no doubt that the Defendants' attempt to resile from their admission of causation arose as a direct consequence of these views expressed by their expert, which of course post-dated the admissions. It led to some argument at the start of the trial, with Mr Wilson-Smith QC contending that the permission of the Court was required to withdraw Admission 2, and Mr Skelton contending that he did not need permission because causation was always in issue, and that if the Claimant's legal representatives believed the Defendants to be reneging on the admissions, the appropriate course would have been for them to have applied to strike out those parts of the Counter-Schedule that were said to be inconsistent with them.
Mr Skelton submitted that in any event, the Claimant's legal team had had Mr Jamil's report since July 2014 and Mr Gardner had recently produced a second expert report commenting upon Mr Jamil's thesis as to the cause of Mrs Sumner's deteriorating neurology in hospital, so there was no prejudice. Whilst it was true that Mr Gardner had produced such a report, he does not address CCS specifically in it (because Mr Jamil had not yet made it sufficiently clear that that was the foundation of his theory). Mr Gardner said in his second report, "there is no robust published evidence that shows that, in patients with an acute traumatic cervical spinal cord injury who are treated appropriately, such catastrophic deterioration occurs at this delayed stage after acute traumatic cervical spinal cord injury, other than if there is prolonged low blood pressure or a vertebral arterial injury. Neither of the latter applied in this case." He referred in that report to the initial injury as "an unstable C6/7 flexion cervical spinal injury" and said that Mrs Sumner "sustained mild damage to her spinal cord at this time."
In support of his submission that causation was a live issue, Mr Skelton referred to the case of Symes v St George's Healthcare NHS Trust [2014] EWHC 2505 in which a decision of Master Roberts that judgment in default was to be regarded as conclusive on the issues of breach of duty and causation pleaded by the claimant in a clinical negligence case was overturned on appeal. Symes also concerned a delayed operation, in that case an urgent superficial parotidectomy on a lump on the claimant's face which was suspected to be malignant. The claimant alleged that the delay resulted in metastasis of a tumour to his lungs and invasion of the facial nerve, meaning that by the time of diagnosis his lung cancer was inoperable and that he only had a short time to live.
The judge in that case, Mr Simon Picken QC, held that both he and the Master were bound by authority, in particular by the decision of the Court of Appeal in Lunnon v Singh [1999] CPLR 587, (following and approving its earlier decision in Turner v Toleman (1999) unreported, 15 January) to find that questions of causation in relation to the particular heads of loss claimed by the claimant remained open to the defendants at the damages hearing, notwithstanding that judgment on liability had been entered in default.
It is noteworthy that in Lunnon, when considering the effect of the default judgment, Clarke LJ (as he then was) cited with approval a passage in the judgment of Sir Richard Scott VC in Maes Finance Ltd and another v A Phillips & Co (1997) The Times, 25 March:
"The defendant cannot thereafter contend that his acts or omissions were not causative of any loss to the plaintiff [my emphasis]. But he may still be able to argue, on the assessment, that they were not causative of any particular items of alleged loss."
Mr Picken QC expressly accepted in Symes at paragraph [58] that in all three of these earlier cases, Turner, Lunnon and Maes Finance, the defendants were precluded by the judgment from being able to argue that no loss at all was sustained, because that would be inconsistent with a judgment on liability. Beyond that, however, they were permitted to take issue with causation of specific heads of damage. Thus the court in each case drew precisely the same distinction that I have drawn above.
It is also worth noting that Lunnon and Symes were only concerned with the effect of a default judgment, and not with the extent or effect of a defendant's express admissions. In Symes the defendants had admitted that the delay in operating caused some damage, but the claimant was put to strict proof of the nature and extent of damage, injury and loss said to arise from their admitted negligence. However, in contrast to this case, there was no express admission as to what would have happened had the patient undergone surgery at the recommended time instead of months later. There was a further significant difference, in that the claimant's solicitors in the Symes case knew all along that the defendant intended running a causation case like that set out in their Counter-Schedule. Therefore, as the judge said, it was not some kind of unexpected ambush.
In principle defendants should not be permitted to run a positive case on causation that contradicts both their admission of liability and (more importantly) a judgment entered on liability by consent. I was therefore inclined to the view that it was not open to these Defendants to contend that the Claimant had suffered no loss at all. Nevertheless there was a potential for injustice if the deterioration in Mrs Sumner's condition was indeed unrelated to the failure to stabilise her spine before 29 December 2010. It seemed to me that if that view had been expressed by their expert, perhaps unexpectedly, on review of the available evidence, it might be unfair to the Defendants if the issue could not be explored at trial. It appeared at that stage that the Claimant's legal team and Mr Gardner had been able to answer Mr Jamil's thesis (at least as it then appeared) and there was no apparent prejudice to them. It was not then anticipated that Mr Jamil would elaborate on his evidence in the way that he did. I therefore left over the question of whether permission should be granted, and heard the evidence of the two spinal experts de bene esse.
In the event, I reached the view that even if the Defendants had not made Admission 2, and had pleaded from the outset that the Claimant was unable to prove that their negligence caused her any loss, or that her current state of health would have been exactly the same if she had had the operation sooner, it would have made no difference to the outcome of the case. It has therefore been unnecessary for me to make any ruling on the admissions.
Mrs Sumner's condition prior to the accident
Mrs Sumner was widowed in 1998. She lived alone in a third-floor flat in Putney served by a single lift. She drove a Honda car, and was completely independent. She is an insulin-dependent diabetic but her diabetes was (and is) well-controlled. Her bladder and bowel functioning was normal. She had breast cancer in 2009 which was caught and treated at an early stage and which has not affected her life expectancy. She was (and is) on statin medication for cholesterol, and on medication for raised blood pressure, which keeps both conditions under control. She also takes a Vitamin D supplement.
Mrs Summer also suffered from age-related cervical spondylosis. This had caused progressively worsening pain in her left arm over a period of around six months in the summer of 2006, which became so bad that it disturbed her sleep. The pain radiated down in what the spinal and orthopaedic surgeon to whom she was initially referred described as "a very classical C6 dermatomal distribution". His notes record that for about 60 per cent of the time she was in "absolute agony". While she had no weakness, she had a very obvious stenosis at C5 on the left side. She underwent a foramenotomy for C6 radiculopathy by a neurosurgeon, Mr Johnstone, in February 2007, after which her evidence was that the pain disappeared (though the post-operative notes suggest that it had gone down to around 30% of the pre-operative level, which was easily tolerable, but the neurosurgeon was sure the symptoms would settle down over the coming weeks). Mrs Sumner told the court that it was like a miracle, and that she was so delighted that she could move her arm without any pain that she gave the surgeon a kiss when she came out of recovery.
I note from a letter from a Dr Phillips, an oncologist, relating to Mrs Sumner's treatment for breast cancer, that in January 2010 she had a chest x-ray which confirmed "minor degenerative change in the left shoulder, and she has been having some pain in this area for the past three months radiating down the left arm". This was three years after the foramenotomy, to which reference is expressly made in the letter. Thus there was a predisposition to pain in the left shoulder and radiating down her left arm which related to the spondylosis, and had nothing to do with the spinal injury suffered in the accident, let alone its treatment.
Mr Gardner readily accepted that the ongoing neck pain from which Mrs Sumner is now suffering was likely to be related to the injury she suffered in the fall, and not to the way in which it was treated by the Defendants, although he made the fair point that her spinal cord injury and reduced mobility makes that pain more difficult for her to deal with. Likewise, the stiffness that she experiences in both shoulders is something that she is likely to have suffered from in any event. The pain in her coccyx is also attributable to her fall rather than to her treatment.
In the early 1990s Mrs Sumner's medical records show that she had a problem with epigastric pain and what was described as "fairly profuse vomiting", which was episodic. She now has no recollection of this, which is understandable, as it occurred over 20 years ago. In March 1992 a GP, Dr Barnardo, recorded "intermittent attacks of lower abdominal discomfort, nausea and retching of uncertain causation". Different medication was prescribed, which did not cure the problem, though it appears to have abated by the autumn of 1993.
The reason why this is significant is that there is a condition associated with diabetes called gastroparesis whose symptoms include nausea, vomiting, and abdominal bloating. Mrs Sumner developed all those symptoms after her spinal injury. There was associated weight loss. She saw a consultant gastroenterologist named Dr Emmanuel in 2012, who was fairly convinced that her symptoms were primarily related to diabetic gastroparesis. Dr Emmanuel had not seen the records pertaining to her episodic vomiting in the early 1990s and thought Mrs Sumner had suffered no complications from her diabetes earlier in her history. She may not have done - the cause of her nausea 20 years earlier remained uncertain, and gastroparesis was just one possibility that was considered. It was not diagnosed. In March 1993 a Dr Dayan, who was a senior registrar in the Department of Endocrinology at Charing Cross Hospital, wrote to Mrs Sumner's GP about her episodic vomiting and expressed concern about her associated weight loss. He stated that "the pattern of vomiting seems typical of diabetic gastroparesis although surprising in view of lack of other complications." He then refers to various stress factors that were affecting Mrs Sumner at the time, including the fact that her husband had been severely ill and undergone 10 operations, and said that he was sure that there was a psychogenic element to her vomiting.
In the absence of evidence from an expert endocrinologist or gastroenterologist it is impossible for the court to infer on the balance of probabilities that the gastroparesis with which Mrs Sumner has now been diagnosed by Dr Emmanuel was brought about by the Defendants' negligence, regardless of whether that was what she was suffering from in the early 1990s or whether it was something else, as seems more likely in view of the fact that the symptoms disappeared for 20 years. The gastroparesis appears to be a complication arising from her diabetic condition, and whilst she may only have developed it after her fall, there is no evidence before the Court to indicate that she would not have developed it if she had had spine stabilising surgery by 29 December 2010.
CAUSATION
The key question that the Court has to determine is what would have been the prognosis for Mrs Sumner if the unstable nature of the spinal fracture had been diagnosed in the first 72 hours, and she had undergone the stabilisation surgery by no later than 29 December 2010. It is for the Claimant to prove on the balance of probabilities that if she had undergone the operation then, she would not have suffered the marked neurological deterioration that occurred thereafter leading to tetraplegia, or alternatively, if there was more than one cause of the deterioration, that the failure to operate made a more than negligible contribution to it. The Defendant's case is that an earlier operation would have made no difference.
I start by assessing the reliability of the two spinal experts. This has to be judged not only on the manner in which they presented their evidence, but also on how their opinions fit with the inherent probabilities, the medical records, and any published literature on which they relied.
Mr Gardner was an impressive, manifestly impartial witness. Although he had been in charge of Mrs Sumner's treatment on her admission to Stoke Mandeville, Mr Gardner has had no responsibility for her care since July 2011, and he was never retained as a liability expert. He made it clear that he would have accepted instructions to give expert evidence for the defence on quantum had he been asked to do so. He gave his evidence in a considered and measured manner, referred to literature in support of his opinions where such literature was available, gave explanations of why his views accorded with the physiology of the patient and her symptoms, and paid meticulous attention to the medical chronology and radiological evidence. The only material evidence he did fail to consider was the blood pressure charts, which eventually made it clear that postural hypotension was not a cause of the loss of muscle power to Mrs Sumner's legs, but that was not a matter raised by Mr Jamil, but by Mr Skelton.
Mr Gardner was careful never to over-state his position. If a particular feature was neutral, or as consistent with Mr Jamil's opinion as with his differing opinion, Mr Gardner said so without hesitation, and often without being asked. There were a number of instances of Mr Gardner making concessions which were unhelpful to the Claimant's case, the most striking of which was his ready acceptance that if Mr Jamil's theory about CCS were correct, Mrs Sumner would not have recovered any more quickly than she did even if she had undergone surgery a few days sooner.
I have no doubt that Mr Jamil's views were honestly held and that he was doing his level best to assist the Court. However, he was far less reliable as a witness, largely because he was so wedded to his own opinion that he refused to acknowledge that he might be mistaken. This confidence that he was right and that anyone who disagreed with him was wrong pervaded his evidence, and there were occasions where in consequence he appeared to me to lack the necessary objectivity. For example, he refused to consider how his views might differ if the injury were a flexion injury, whereas Mr Gardner considered the question why Mrs Sumner's condition deteriorated both on the hypothesis that it was a flexion injury and on the hypothesis that it was a hyperextension injury. Mr Gardner was prepared to accept that in the latter case, it was possible that the deterioration was indeed due to CCS, but he considered it was improbable for the reasons that he adumbrated.
When the BOA Guidelines put to him, Mr Jamil took issue with the emphasized statement that acute spinal injury must be nursed flat. To the extent that he was making the point that the Guidelines represent "best practice" and one has to make allowances for clinical judgment if the patient is experiencing extreme discomfort or becoming distressed in that position, or if the patient develops a respiratory problem, or if there are insurmountable resource difficulties, e.g. insufficient nursing staff to do the log rolling, his caveats were fair. What was far less impressive was his dismissive description of the BOA Guidelines as being produced by "just a group of people … most of [whom] have not even cared for spinal cord injury patients". He said the study had not been commissioned by the Royal College of Surgeons or Department of Health, criticized the validity of the statistics referred to, and at one point said that he "disregarded it". Mr Jamil seemed to have been unaware of the fact that the Guidelines were adopted, with some passages reproduced verbatim, by the NSCISB. When that was shown to him by Mr Wilson-Smith QC, Mr Jamil's initial response was to point out that the author of the NSCISB paper was the chairman of the working party that had produced the BOA booklet.
Around half the patients that Mr Jamil sees have hyperextension injuries. He is of the view that in such a case it is acceptable practice to incline the bed slightly to make the patient more comfortable, and that a head collar is sufficient to protect against further potentially damaging movement even if the spine is unstable. Mr Gardner was visibly shocked by Mr Jamil's assertion that a head collar would afford sufficient protection against movement where the spine was known to be unstable. Treating the patient with a head collar alone, whatever the type of injury, would be contrary to accepted standard practice.
Mr Gardner's evidence was that if the patient had a stable fracture with minimal neurological deficit, it would be acceptable to raise them to 30 degrees, but unless there were some very pressing reasons to do it, it would be wrong in principle to treat a patient with an unstable fracture in that way (he used the word "awful"). He explained it in this way: the moment you cease to keep a person spine in line, you are permitting the spine to move in an uncontrolled manner, and whilst a collar will help with stability it will not suffice, because the patient can still move the neck to some extent and that can cause further damage. He pointed out that if a head collar were sufficient protection, it would be a huge waste of resources to carry out log rolling. In my judgment, it is one thing to say that in the real world one has to manage as best one can with inadequate human or other resources, and to deal with each patient as they present; it is quite another to deprecate the guidance as if it were a counsel of perfection dreamed up by theoreticians, serving no useful purpose, which appeared to be Mr Jamil's approach.
Mr Jamil accepted that if the patient had a flexion injury it would "not be ideal" to treat them with just a collar, because then there would be a greater range of movement which could cause injury. He said that whilst the collar would protect by 65-70%, it would still allow enough movement to potentially cause further damage. However he said categorically that could not have happened in the present case. Such an injury would show up straight away because the spinal cord would be crushed and the patient would immediately become tetraplegic. However, he had never seen a patient in a head collar who had suffered tetraplegia as a result of movement, and he was unable to refer to any literature in support of his evidence that tetraplegia would be immediate.
Unlike Mr Gardner, Mr Jamil had not gone carefully through the medical notes and assessed whether there was any correlation of the deterioration in Mrs Sumner's neurological condition with any specific events recorded in them, such as any movement that might have caused a further injury or loss of oxygen to the spinal neurones. Had he done so, he would have appreciated that both on 27 December and on 31 December 2010 the physiotherapist had expressly queried whether the noted neurological deterioration was linked to the patient's prior mobilisation, and that after the initial left arm deterioration on 27 November until 11.00 on 31 December, Mrs Sumner's muscle power in her upper limbs had appeared to be either stable or improving, depending on how much reliance can be placed on the ASIA charts including, most importantly, the assessment carried out at 9am on 31 December, shortly before she was mobilised out of bed. When he was taken through the notes by Mr Wilson-Smith and it was put to him that they showed a correlation between mobilisation and deterioration, Mr Jamil's response was that correlation was not the same as causation. Whilst that is true, he was signally failing to engage with any material that might support a different conclusion from his own. When shown the physiotherapist's concerns on 27 December that mobilisation might have brought on the deterioration, Mr Jamil was keen to criticize her for suggesting that the patient be returned to flat bed rest on the basis that this was outside her remit, but seemed disinterested in considering whether her concerns might be justified.
In his expert report Mr Jamil repeatedly asserted, with no evidential foundation, that Mrs Sumner had been "thrashing around". He was unable to give any satisfactory explanation for this, though he apologised and withdrew those remarks when he gave his evidence in chief. It appears that he had drawn that conclusion purely from the fact that she was said to have been confused. This is indicative of a lack of care and attention to detail, in marked contrast to the approach of Mr Gardner.
It is true that at the time of her accident Mrs Sumner was 68 and already had problems due to cervical spondylosis, and so she fell within the category of patients who might be susceptible to CCS. In my judgment Mr Jamil jumped to a conclusion that this was a case of CCS because (a) she fell into that category, (b) there was a high level of oedema shown on the March 2011 MRI scans, despite the surgery two months earlier, and (c) she made a better than expected recovery. He also relied on the fact that the initial deterioration was in her hands and arms and progressed to the legs, bowels and bladder, which was consistent with her suffering damage to the central cord and, according to Mr Jamil, consistent with a natural progression caused by increased swelling. Having reached that conclusion, Mr Jamil refused to engage with the possibility that it might be wrong.
However Mr Jamil accepted that even if a patient presented with CCS, care would still have to be taken to manage an unstable spine to prevent further damage occurring from movement in that spine. It follows that even if there was an inevitable worsening in her neurological symptoms due to spreading oedema from the original trauma (which might have caused the initial deterioration in the left arm, for example), there could still have been a further deterioration caused by the movement of the unstable fracture at the site of injury.
It was common ground that if damage occurs in the cervical cord region and affects the inner grey matter of the spinal cord, the predominant injury is going to be to the arms, sensory and motor, and to the hands in particular. If the damage is to the outside of the spinal cord, then the arms would be affected to some extent but the damage would be predominantly to the lower limbs. However it is common ground that this was a three column fracture. Mr Gardner said that no conclusions could be drawn merely from the fact that the neurological symptoms began with the upper limbs. There was insufficient information in the records to suggest that there was a real problem with motor power in the hands, other than the mention of weakness there in the notes upon admission.
The published literature relied upon by Mr Gardner shows that spontaneous improvement is the norm in incomplete spinal cord injury cases when they are managed appropriately. The level of improvement of course depends on the nature and extent of the injury, and other factors such as the age of the patient. Spontaneous deterioration occurs in a very small minority of cases: on Mr Gardner's evidence (supported by the literature) between 0.8% and 5%. Even Mr Jamil's evidence on the statistical likelihood of spontaneous neurological deterioration put the likelihood of it happening at no more than 8.1%, and that was based on a paper by Tator and others in Canada relating to spontaneous deterioration occurring during traction. The authors of that paper said that information was not available regarding the severity of that deterioration and whether the deficits were temporary or permanent. Mrs Sumner did not undergo traction.
By contrast, in cases of missed unstable fractures, there is a greater likelihood of neurological deterioration. Mr Gardner relied upon an article entitled "Missed and Mismanaged Injuries of the Spinal Cord" by Poonnoose and others, published in the Journal of Trauma, Injury infection and Critical care, which showed that the diagnosis of unstable fracture was missed in 52 out of 569 spinal cord injury patients admitted into the Regional Spinal Cord Injury Unit in Sheffield over a period of 10 years from 1989. In 50% of those patients, the paper states there was neurological deterioration due to mismanagement. Mr Jamil was highly dismissive of this paper because it was not published in a specialist journal such as Spine, Spinal Cord, or Spinal Cord Medicine. He said it failed to explain what the alleged mismanagement was, or what criteria were used to produce the statistics, and that it was "poorly regarded". Mr Jamil apparently overlooked the fact that the Poonnoose paper is quoted in the BOA booklet with apparent approval on internal page 4 under the heading "Think Spinal Injury", a passage which is reproduced verbatim in the NSCISB paper. Therefore, although it is poorly regarded by him, those charged with giving guidance to clinicians in this field take a different view.
Statistically, therefore, it is more likely than not that Mrs Sumner's condition would not have deteriorated to the extent of developing tetraplegia had she had an operation to stabilise the spine on or before 29 December.
There has to be a good reason why it is the received wisdom that patients with an acute spinal cord injury that is unstable should be kept flat with spine in line and log-rolled. That reason is plainly to avoid the risk of a further deterioration in their neurology due to further movement of the spine where it is unstable. It follows that if a patient with an undiagnosed unstable fracture is not managed in that way and their condition does deteriorate, then in the absence of an intervening factor such as a cardiac arrest, the likely explanation for that deterioration must be that the risk has eventuated and movement has caused further damage to the spine. It is not impossible, but far less likely, that the patient falls within the very small percentage of patients whose condition would have deteriorated come what may.
It is against that starting point that I have to evaluate the rival theories of causation. If the initial injury to the spine was a flexion injury, as Mr Gardner believed to be the case, then it is agreed that Mr Jamil's thesis of CCS cannot be right, because it is common ground that that syndrome almost exclusively arises in hyperextension injuries. Mr Gardner said that he generally saw it in elderly patients who had fallen down and banged their foreheads. If it was a flexion injury, the further damage to the spine which caused the neurological deterioration resulting in loss of power to the lower limbs is therefore more likely than not to have been caused by further movement at or around the site of the initial injury.
If the initial injury was a hyperextension injury, then the fact that the profound deterioration in Mrs Sumner's neurological condition followed almost immediately upon her mobilisation on 31 December 2010 has to have been pure coincidence if Mr Jamil's thesis is right, and it would have occurred even if she had been kept spine in line throughout. Moreover, the apparent signs of improvement in her arms on both sides recorded in the ASIA charts not only on the afternoon of 29 December but also (to the extent that muscle power was able to be tested) at 9am on 31 December, which indicated a fully functional right arm, would have to be due to erroneous, but consistent, recording of muscle power by different doctors – Dr Jacob on 29 December, and Drs Buckle and Sharma on 31 December. Muscle power in that arm, which had been fine up till then, went down by two whole grades on the ASIA scale within a very short period on 31 December.
Mr Gardner explained that the movement required to produce further spinal cord damage can be relatively mild, and depends on the configuration of the injury. In this case there was a bony intrusion into the canal on the left. A drop in blood pressure on sitting could have caused further damage (though in this case there appears to have been no recorded drop in blood pressure during the key period leading to tetraplegia). Further neck flexion would narrow the spinal canal and potentially cause impingement on the cord.
When you get a fracture through the facet, as happened here, it is no longer held in place and it can therefore move forwards. The fracture can act like a dislocation, because it can move forward as a whole. On the other hand, if the facet is locked and stable, it cannot drift backwards and forwards. Mr Gardner demonstrated this with the aid of a spinal model, which showed that as the facet moved forward it rotated towards the side of the injury.
Mr Gardner's evidence was that Mrs Sumner was managed inappropriately to different degrees at different times. At any time that the care was inappropriate she could have sustained minor or major incremental spinal cord damage – because she was not immobile. His best explanation for how the further damage occurred was that with forward movement, the fractured facet on the left was intruding intermittently into the canal, interrupting the blood supply to the spinal cord, probably intermittently impacting on the cord as well (especially if there was further neck flexion) and then returning into position when the patient returned to being spine in line, causing incremental damage which finally resulted in the damage causing loss of power to the lower limbs. This thesis applied regardless of whether the initial injury was a flexion or a hyperextension injury.
Since the movement required to produce serious injury could be disproportionately mild, especially with incremental damage, Mr Gardner rejected Mr Jamil's objection that ischaemic damage sufficient to cause tetraplegia would have been clearly visible on the cord on the MRI scan. The only evidence that it would came from Mr Jamil, and I am not prepared to accept such an unequivocal assertion made by him if Mr Gardner, who I regarded as both more reliable and more objective, disagreed with it. As for the progression of the oedema shown on the MRI scans, Mr Gardner said it could be swelling due to such further incremental damage as he described; it could not be assumed that it was a progression of swelling due to CCS.
Mr Gardner relied on a paper by Xiong, entitled "Manipulation for cervical spinal dislocation under general anaesthesia" which shows that in the study that was carried out, unilateral facet dislocations resulted in no complete injuries, with the majority resulting in minimal impairment. This could be contrasted with Mr Jamil's assertion, without any published literature to support it, that unilateral facet dislocation in flexion injuries results in 40% of patients becoming tetraplegic. Mr Gardner explained that on admission, Mrs Sumner fitted exactly into the category of unifacet dislocations which had minimal damage. The facet fracture that she suffered was identical to those considered by Xiong, except that it was not dislocated. It was fractured, but acting like a dislocation because it was unstable and could move forwards. Thus inappropriate movement forwards into the spinal canal would cause further incremental damage. He said that if the constant movement forward had happened in someone who had no neurology, it might not have hurt them, but in someone who had a delicate spinal cord, it would.
When it was suggested to Mr Gardner that it was implausible that the facet moved sufficiently forward to cause a sufficient degree of ischaemia to the spinal cord to cause tetraplegia, Mr Gardner disagreed. I found his explanation persuasive. Mr Skelton submitted that there was no published medical literature that ischaemia caused by this mechanism can cause tetraplegia. However, the absence of such literature is hardly surprising: gathering data would be difficult. Hopefully it would rarely be the case that an unstable fracture of this particular nature would be misdiagnosed in the first place and then mismanaged. That does not mean that Mr Gardner's thesis is incorrect or medically implausible.
As for the point that Mrs Sumner would not have made the recovery that she did from tetraplegia, if it had been caused by further incremental damage to the spine, Mr Gardner said that one could not make that assumption; when a neurone is damaged such that it does not work then, whatever the cause of the damage, it either remains non-functional, it partially recovers or it fully recovers. One cannot draw assumptions about the likelihood of recovery from tetraplegia which occurs through degeneration in the condition of a patient with an incomplete injury, from studies relating to patients who initially present with complete injuries.
Flexion injury or hyperextension injury?
Mr Gardner's view that the injury was a flexion injury was partly based on what he saw on the MRI scans and partly on a clinical deduction drawn from the fact that the accident had affected mostly one arm (the left) which he explained often happens when you get a unifacet dislocation, because it impacts or can cause a contrecoup impact of the spinal cord so you can get an injury predominant to one side (here, the left). When it was put to him in cross-examination that if Mrs Sumner fell head first, landing on her head, it was more likely than not to have caused a hyperextension injury, Mr Gardner disagreed. He explained that commonly a person with a hyperextension injury and an associated central cord lesion will have fallen striking their forehead, forcing their head backwards; but if you hit the back of the head, it is typically that blow which forces the head forward. If there is a degree of rotation, i.e. you hit one or other side of the head, it will then force it in that direction, which is why you will tend to get a unifacet dislocation as opposed to a dislocation on both sides.
Mr Gardner was taken to the notes made by the paramedics. He was not taken to the notes taken on Mrs Sumner's admission to A&E, which record that she slipped and fell whilst ascending the stairs, so in order to have gone down head first and landed on her head, she must have fallen backwards. This means that the part of her head that she struck on impact at the bottom of the stairs would have been either the back or the side of it, not the front. The mechanism of her fall is therefore more likely to have caused a flexion injury than a hyperextension injury, just as Mr Gardner said.
Mr Jamil seemed to me to be alive to this problem, because at the end of his evidence in chief he volunteered a new theory that because there was no scalp laceration or "egg head", and because she would have been relatively flaccid because she had consumed a quantity of alcohol, Mrs Sumner fell on her chin over her arm, which is what broke her right humerus, and this is what extended her neck. I did not find that explanation remotely persuasive; it appeared to me to be a very unlikely way for her to have landed if she fell backwards.
It was common ground between the experts that if the head is thrown back there may be no fracture to the spine at all. If there is one, the commonest fracture in Mr Gardner's experience is to the spinous process. This happens when the two spinous processes, which are like the T of a T bone, and are almost parallel, come together, and one of them breaks. There was no such fracture here. However, Mr Gardner accepted that when the head is thrown back there could be a fracture to the lamina. Mr Jamil acknowledged that with hyperextension injuries you do not often see soft tissue disruption or a fracture in the place where it actually occurred in Mrs Sumner's case. His explanation was that it was a severe form of hyperextension injury and said that the location of the fracture was inconsistent with it being a flexion injury, though I did not follow his reasoning as to why that was, and Mr Gardner disagreed, for the reasons that he gave.
Either type of injury could cause damage to the anterior longitudinal ligaments, although Mr Gardner said he would not expect to see it in a hyperextension injury, but would not be surprised to see it in a flexion injury. He very fairly accepted that damage to the anterior longitudinal ligament and posterial longitudinal ligament could be consistent with either a hyperextension or a flexion injury. Damage to both ligaments occurred in this case. With a flexion injury, both experts accepted there could be a fracture of the vertebrae because of the pressure on the front of the spine. Mr Jamil's evidence was that this was "virtually inevitable" but there was no such fracture in Mrs Sumner's case. However more commonly, according to Mr Gardner, depending on how the force is applied, there would be a dislocation or slipping forward of the facets, as happened here. Mr Gardner also drew support from the fact that there was damage to the facets on both sides, as mentioned in the report from the first CT scan, which he said was more likely to occur with a flexion injury.
So far as the MRI scans were concerned, the pre-operative MRI image shows the spine in alignment. However the post-operative MRI images of 4 March 2011 show that the spinal column at C6 and above has dislocated forwards because the fractured facet (on the left hand side) has been allowed to fall forward. Mr Gardner said that was consistent with a flexion injury. Although the post-operative images show that the spinal cord was being squeezed, the patient gradually improved after the operation. Mr Gardner said that this was because the spine was now fixed in position, which also fitted his theory as to how the damage occurred. Mr Gardner said that although the facet joint is not visible on the MRI scans, what is seen in the movement of the spine at C6 and C7 is exactly what you see in almost every case of a facet dislocation. Mr Jamil did not disagree with that proposition, but he said that the dislocation visible at C6 and C7 could be due to an over-correction in surgery. Although that was a perfectly fair point, and he could well be right, his evidence in this regard again displayed a lack of objectivity, because he refused to countenance the possibility that it could have been due to anything else.
In my judgment, on the balance of probabilities, the injury sustained by Mrs Sumner was a flexion injury for the reasons stated by Mr Gardner, whose evidence in this regard I prefer (even if the dislocation seen on the March 2011 MRI image is discounted as being the possible result of surgery). In any event, and regardless of the mechanism of her injury, she had mild neurological impairment on her admission to hospital. Up to 31 December only the left arm ever appeared to be getting worse. There was some history of problems with the left arm, and that was also the side of the fracture. However the first sign of significant deterioration in muscle power in that arm came after Mrs Sumner was mobilised out of bed on 27 December. After she was returned to flat bed rest, it remained stable and even showed signs of improvement.
The evidence in the medical notes points much more towards deterioration associated with movement/mobilisation rather than to a gradual downward progression associated with spreading oedema. The clinicians and the physiotherapists treating Mrs Sumner at the time when she became tetraplegic all believed that there had been an interruption to the oxygen supply from some new cause. The doctors mentioned spinal compression. They did not consider the possibility of injury through movement, presumably because they thought the spine was stable. None of them seems to have considered CCS. The physiotherapists, on the other hand, did query the correlation between mobilisation and neurological deterioration at the time. There was no reliable evidence of deterioration in her neurology whilst she was being kept spine in line. When she was kept flat she was either stable or improving. That also accords with the statistical probabilities.
At 0900 on 31 December 2010 Mrs Sumner appeared to be regaining strength in her upper arms, the muscle power in her right arm was back to normal (and had been for over a day) and there were no problems with her legs. There was a rapid loss in muscle power in the upper limbs after she was mobilised, consistent with further spinal damage. After that, and after the sudden deterioration in her condition, in marked contrast to what happened after her mobilisation on 27 December, Mrs Sumner was not kept flat with her spine in line. It is far more likely that her worsening neurology after she was mobilised on 31 December was due to further spinal injury caused by movement, as Mr Gardner believes, than to progression of the oedema caused by the initial trauma.
In my judgment, therefore, had she had an operation to stabilise her spine on or before 29 December, the anticipated prognosis for Mrs Sumner's recovery would have been at least as good as her neurological condition at 72 hours post-accident, i.e. on that date. It is highly unlikely that her condition would have deteriorated after her spine was stable. The Claimant has proved causation on the balance of probabilities. Kirschblum suggests that an examination after 72 hours is a more reliable indicator of prognosis than examination upon admission. Mr Jamil did not disagree with that. I must take account of the pre-existing weakness on the left side due to the spondylosis, but in view of the good recovery that she did make from complete tetraplegia, I would expect that after the surgery Mrs Sumner would have continued to have full use of her legs and right arm and hand. There would have been some residual weakness in the left hand, possibly similar to its current condition. She would have had normal mobility and no impairment to her bladder or bowels.
Outcome
Mrs Sumner has a number of significant permanent disabilities which I find, on the balance of probabilities, were caused by the failure to operate to stabilise her spine on or before 29 December 2010:
i) She has impaired mobility, though she is able to walk quite quickly. Her walking distance was impaired to approximately 100 yards in two 50 yard stages, but that is deteriorating. There is some weakness in power. Sensation is slightly impaired in both legs. She can walk around indoors with no further aid than a stick; she occasionally uses her manual wheelchair indoors, but that is often because she finds it more comfortable to sit in, and easier to use as a chair when she is with visitors. Outdoors and in the lift, she generally uses a wheelchair although she occasionally takes a short walk around the block of flats where she lives. She uses the electric wheelchair for travelling longer distances.
ii) Mrs Sumner's condition will deteriorate within her shortened life expectancy which would have been avoided. Although she will never be fully wheelchair dependent, her reliance on it will increase, both indoors and outdoors.
iii) Her right arm function is good, but she cannot pick up heavy items and the ends of her fingers are now numb, which means that a carer has to inject her insulin as she can no longer manage this by herself. Her left arm is slightly weaker than the right; on the balance of probabilities I consider that outcome was likely come what may. However it is unlikely that she would have had the same weakness and loss of sensation in the fingertips that she now experiences.
iv) She has bladder impairment which would have been avoided and there is agreement between the experts that she requires suprapubic catheterisation in the long term. Likewise she has an irregular bowel habit which has the symptoms described in the Joint Statement.
v) She suffers from sleep disturbance and debilitating fatigue.
vi) She requires some help with transfers now, and will need increasing help with transfers as she gets older.
vii) She has a lifetime risk of syringomyelia of 0.3% which may develop in a need for more help and equipment. In Kotula v EDF Energy Networks Ltd [2011] EWHC 1546 (QB) Irwin J ordered that the claimant was entitled to treat the lump sum award as provisional and that periodical payments could be varied if he went on to develop a syrinx. It seems to me that this would be the sensible course to adopt in the present case, and Mr Skelton told me that the Defendants have consented to an order for provisional damages that will cater for that possibility, unlikely though it is to materialise.
viii) It is agreed that she will require a more intense support package in the last three years of life.
As I have already indicated, I am not persuaded that there is a causal link between the Defendants' negligence and the development of gastroparesis. Her neck and coccyx pain are also due to the original injury and/or natural degeneration, but as Mr Gardner pointed out, pain management is easier when one is fully mobile.
General damages have been agreed at £135,000 inclusive of interest. So far as special damages are concerned, the parties have agreed the quantum on many of the items claimed; there are a few remaining matters in issue on which I have been invited to make a ruling in principle, and then Counsel have offered to carry out the final computations to put in the order. I was provided with a Scott Schedule which indicates the areas of disagreement.
PAST LOSS
According to Mrs Sumner-Smith, the level of family care provided to her mother prior to her admission to Stoke Mandeville was far greater than the care provided afterwards, which reduced to around 2 hours per week. The claim starts at 1 February 2011 (just under a month after the initial stabilisation operation) but Mrs Sumner would probably have required the second operation in any event and thus would have been in hospital for at least part of this period. Doing the best I can, I will allow 10 hours per week for the period from 1 February to 2 March 2011, and 2 hours per week for gratuitous family care during the remainder of Mrs Sumner's period in Stoke Mandeville. I hope that the parties are going to be able to agree the figures for gratuitous family care from the end of March 2012, which I would reduce to 1½ hours per week. In terms of gratuitous family case management, which largely covers Maureen Sumner-Smith's help with her mother's finances, I shall allow the claim in full. The parties agree that the total is to be reduced by a 25% Housecroft discount.
Mrs Sumner has returned to, and stayed in her flat throughout. It is clear that she requires on-going care. On her initial discharge from Stoke Mandeville she engaged a specialist care agency, Active Assistance, to provide her with care. This is agreed to have been reasonable given that they specialise in caring for people with spinal injuries and Mrs Sumner was still recovering and required more assistance then. Subsequently as her condition improved, in October 2012 she moved to a private care regime which is provided by self-employed carers from South Africa who operate on a rota and who are managed by a lady named Pam. Mrs Sumner is very happy with that arrangement, although her daughter and some of the expert witnesses expressed some concern about it because of uncertainty as to how long it may be able to continue. I shall revert to that concern when assessing future care costs.
So far as past costs are concerned, I allow all the claimed costs for Active Assistance and for the care incurred and paid for since October 2012, in full, including the Bank Holiday double pay evidenced by the invoices. Accommodation is agreed at £9,480. So far as household expenses are concerned, clothing is agreed at £850. I accept the sum of £50 per week estimated by the Claimant for the carers' food. The claim for heating costs relates to the estimated cost of the use of electric heaters to supplement the central heating. Since the heaters would only be used during the colder months of the year the Claimant's estimate seems rather high. I will allow a total figure of £700.
In terms of travel and transport the cost of Mrs Sumner's family's travel to hospital and the carer's use of public transport are agreed; the only contentious item is the taxi fares incurred for transport to and from physiotherapy sessions after the physiotherapist stopped visiting Mrs Sumner at home in mid-2012. On the basis that these are all supported by invoices, and would not have been incurred in any event, I see no reason to disallow them. I note that there is no evidence that Mrs Sumner would have managed to get to the hospital in Roehampton on public transport or that she could have been driven there instead. According to Mrs Sumner the intensive physiotherapy she received was responsible for the marked improvement in her physical condition.
On the evidence I heard, although a professional case manager was engaged to assist Mrs Sumner he did not do (or perhaps more fairly, was not permitted to do) as much as he might have done in that regard, save for the assistance he provided in the purchase of a new car. Most of the assistance she received that might have been provided by a case manager was provided by her two daughters, particularly Maureen, who gave particular help with matters such as her tax return. Mrs Sumner is mentally alert and capable of dealing with many matters herself, and she understandably prefers to keep matters such as her personal finances private. The claim for past professional case management has been reduced to the invoiced sum of £4,515.60. I consider a reasonable sum to be £2,000.
The pleaded claim for medical expenses is £3,404 and it is now said that this is an error and the real total should be £5,954 because some physiotherapy costs were overlooked in the calculations. It is claimed that Mrs Sumner has undergone hydrotherapy at a cost of £3,204. The Defendants' physiotherapy expert Ms Edmundson supports a claim for three initial sessions and 50 group sessions per year at Parkside Hospital, and that was based on recommendations made by the Claimant's physiotherapist, Ms Filson after June 2013 when Mrs Sumner had already been attending some hydrotherapy sessions, although not once a week. The cost estimated by Ms Edmundson for three further 1:1 sessions at £73 per session and 50 weekly group sessions at £15 per session, when rounded up, came to £969 (not £819 as stated by the Defendants). I have looked at the Claimant's invoices said to fall under this category, only one of which specifically relates to a "hydroclass" and is for £16. The remaining invoices are for "physiotherapy" at what appears to be a cost of £26 per session (though they often involve 3 or 4 sessions per invoice). Some pre-date Ms Edmundson's visit.
I am prepared to allow the weekly group sessions at £16 rather than £15, and the three 1:1 sessions at £73 each. It is difficult to assess how much to allow as a reasonable sum for hydrotherapy undertaken prior to June 2013 but I would have been willing to allow for another three 1:1 sessions at £73, bringing the total for hydrotherapy up to £1238.
When it comes to the physiotherapy, it is accepted in principle by the Defendants that some allowance should be made for physiotherapy to provide pain relief, but I have to bear in mind the fact that Mrs Sumner would have been in pain from her neck come what may. On the other hand, the Defendants' figure of £1,200 only relates to the period from March 2014, which is too short. So far as dental hygiene is concerned, Mrs Sumner said she would have visited the hygienist in any event but not quite so often. I am not persuaded that it is reasonable to allow for an extra session every three months as claimed.
If I were to add £1238 for the hydrotherapy to £2,550 claimed for the physiotherapy sessions that would exceed the sum that is pleaded under this head. It seems to me that the fairest approach is to allow the Claimant £3,500 in total, a little more than she originally claimed, on the basis that there is sufficient evidence to support the reasonable expenditure of at least that sum, her actual expenditure has been higher, and no application has been made for permission to amend the Particulars of Claim.
In terms of past aids and equipment, although Mrs Sumner spent over £3,000 on a top of the range riser recliner chair, I accept the evidence of Mrs Ho that a reasonable sum for such a chair would have been in the order of £1,500. The remaining costs are agreed at £996. The parties have agreed the rate of interest on past losses at 1.02%.
FUTURE LOSSES.
For the future, there will have to be adaptations to the flat, among other things to allow greater accessibility to all the rooms using a wheelchair. The experts are agreed that some alterations will need to be made to the existing (sole) lift by putting in buttons that are more accessible at a cost of some £9,000. Mr Wethers, the Claimant's expert on accommodation, drew some detailed plans to support his proposals. The Defendants' expert, Mr Pile, agreed that this plan was reasonable, and in the end the issue between the parties turned on the reasonableness of the costing for Mr Wethers' plan.
In general terms I considered the budget set by Mr Wethers for the works, bearing in mind that the flat is in London, where workmen's costs are higher than elsewhere, was generally reasonable. Whilst it seemed to me that it ought to be possible to obtain a better idea of the cost of replacement windows from the local council's preferred supplier, Govette, the estimate for such replacement seemed modest in the light of how much the samples cost.
There will be no need to replace the internal central heating, and I also felt that perhaps Mr Wethers had over-budgeted for the electrical work (which, as Mr Pile said, allowed for more than enough money to re-wire the entire flat), and for the cost of supervising the installation of specialist equipment given that the majority of this work will be undertaken by the occupational therapist. I will therefore allow a total of £250,000 for adaptations to the flat instead of the £283,706 budgeted for by Mr Wethers.
So far as the household costs are concerned, the Defendants are right in principle about there being no allowance for window cleaning which would be carried out anyway. Whilst I accept that Mrs Sumner is now more reliant on a mobile phone than she was prior to her accident, that may have been the case in any event; I shall allow half the sum claimed under this head (£180 per annum). Subject to those adjustments the Claimant's figures are accepted.
In terms of travel and transport I allow the revised claim for the VW Caddy as calculated by the Claimant. Regardless of who does the driving, Mrs Sumner plainly needed a new car adapted to meet her needs; she could not fit the model recommended for her in the garage, but she appears to get by with the smaller car even though it will not accommodate her electric wheelchair.
So far as medical expenses are concerned, despite my general confidence in the opinions expressed by Mr Gardner, I consider that Mrs Sumner's pain management can be reasonably dealt with on the NHS at Stoke Mandeville. It is reasonable in principle for her to have access to private treatment for her bladder and bowels, and the amount allowed by the joint expert Mr Reynard is agreed to be reasonable in those circumstances. The future physiotherapy and orthotic costs have now been agreed. I consider that Mrs Sumner should be allowed 20 sessions of OT at £120 per hour; as Mrs Ho said, that is a modest figure over the whole of her remaining lifetime.
So far as future care to the first periodical payment is concerned, I accept the Claimant's revised figure for the current care regime to include the cost of food for the carers and the bank holiday supplement (£36,170). In terms of future commercial case management I am not persuaded by Mrs Sargent's evidence that Mrs Sumner will need anything like 50 hours of such assistance per year. I will make an allowance for 26 hours per annum at the agreed hourly rate of £98 (the equivalent of an hour's help per fortnight). The figure for travel will have to be adjusted accordingly. The parties should be able to work out the appropriate multiplier, which the Claimant has now reduced to 0.88.
For the period from 15 December 2015 to age 78 the parties have assumed a replacement of the current care regime with a commercial carer. I am far from convinced that will happen. I consider that it is far more likely that the existing arrangements will continue for the foreseeable future. They suit Mrs Sumner and I consider the anticipated problems over visas are unlikely to materialise. However, I agree that the contingency of a change in regime should be provided for. Mr Boyle has costed the matter on the basis of a non-specialist spinal care provider. Although in principle I agree that Mrs Sumner will not need an agency such as Active Assistance and it would be unreasonable to expect the Defendants to pay for care at their more expensive rates, his figures still seem to me to be on the low side. I would allow a weekly rate of £750 and the rates for food and travel claimed by the Claimant. I will allow the same provision for case management as before, namely, 26 hours per annum.
In terms of care for the final three years, there is not a great deal between the parties in terms of the enhanced care costs, the difference largely being based upon whether a specialist provider such as Active Assistance is engaged. Once again, I consider Mr Boyle's rates are on the low side even though it would be inappropriate to engage Active Assistance; the costs of care are bound to increase over time. I shall allow £900 per week for the live in care and £600 for sleep in care, £50 per week for the carers' food expenses, and £225 for agency break cover. It also seems prudent to make an allowance of £60 for travel expenses, as the Claimant has claimed. There may be a requirement for greater case management during this period and I shall provide for the 60 hours that Mrs Sargent recommends.
In terms of future equipment, agreement has been reached on many of the items claimed. As to the manual wheelchair, Mrs Ho has recommended a very lightweight model at a cost of £4,700. Mr Boyle's recommended model, also lightweight, is said to be almost as light, but costs a fraction of the price. Mr Boyle has made no allowance for a replacement. I do not understand there to be anything inherently unsuitable about the model recommended by Mr Boyle other than the fact that it is (slightly) heavier, but the disparity in cost is enormous. Bearing in mind that Mrs Sumner will have a very good electric wheelchair, I shall allow the sum suggested by Mr Boyle, but also build in the cost of one replacement.
I also consider the Claimant is right in principle to allow for the cost of maintenance of equipment. I would be surprised if the electric wheelchair requires replacing in so short a time as 2 years; I should allow for replacement after three years. It is best to err on the side of caution in terms of the costs of recharging especially as electricity is not getting any cheaper, so I accept the Claimant's estimated figure for that.
Although Mrs Sumner said that she would enjoy having a power scooter because she would be able to travel further in it, I do not consider it reasonable for the Defendants to have to pay for one. I have very considerable doubts as to whether Mrs Sumner would use it, and even if she did whether it would be safe for her to do so. In order to look to her left and right she would need to rotate her body from the waist because of stiffness in her shoulders. She no longer drives her car because she does not feel sufficiently confident to look right and left. In any event she needs to be accompanied by a carer when she goes out on a trip of any distance. In my judgment she should be able to manage well enough with the electric wheelchair and being taken out in the car if she needs to travel longer distances.
I accept the evidence of Mrs Ho that it would be reasonable for Mrs Sumner to replace her existing bed with a specialist profiling bed at a cost of £3,500. She spends a lot of time resting in bed and it is reasonable for her to have a bed which is comfortable and aethestically pleasing. However I am not persuaded that there is a need for a portable hoist to cater for the possibility of falls.
Although on her discharge from hospital and when she was feeling much more poorly, Mrs Sumner consented to her bathroom being turned into a wet room with only a shower (as she was not confident about getting into a bath even with a special chair lift provided by her local authority) she told me that she really misses having a bath. Mrs Ho accepted that she has no medical need for a bath, but felt that it would be therapeutic for her, and I agree that it might help to alleviate some of the stiffness and pain and fatigue from which she currently suffers. It would be reasonable for a suitable model of Gainsborough bath to be purchased which enables access by means of a chair or equivalent – a step-in bath may be unsuitable because of the length of time that Mrs Sumner would have to sit in it waiting for it to fill and then drain, not to mention the hazard created by the step itself.
I am persuaded that it would be reasonable for Mrs Sumner to purchase an après shower dryer for all the reasons given by Mrs Ho. However I agree with Mr Boyle that it is reasonable to expect Mrs Sumner to manage with a Mowbray toilet rather than the Clos-o-Mat model recommended by Mrs Ho. She has no apparent problem in using such a toilet at present, and whatever model is supplied, she will still have to cope with rails and have the same problems in balancing.
Finally, I turn to the contentious issue of future holidays. Mrs Sumner has a close connection with Brazil, where she lived for over 15 years and where many of her close friends still reside. Prior to her accident she was a regular traveller to that country, every two years or so, and she would dearly love to return there at least once more. I was satisfied on the medical evidence that it would be possible for Mrs Sumner to travel to Brazil and to manage the long-haul journey in safety on the plane if she travelled in business class with her carer; the journey would have to be carefully planned and, as Mrs Sargent said, the logistical problems are likely to arise more at either end than during the plane journey itself. I was also satisfied that Mrs Sumner really wants to go.
I did have some doubts as to whether she would ever pluck up the courage to make that journey, bearing in mind that she has had the financial resources to do so since she recovered to her current level of health and yet she has made no attempt to go. Indeed she told Mr Boyle last year that she doubted whether, realistically, she would ever venture the journey again. However, having taken Mrs Sumner's evidence and that of her daughter into account, I take the view that an allowance should be made for one more trip, with a carer travelling in business class with her.
I believe that I have now dealt with all the contentious issues on the Claimant's schedule. I therefore leave it to the good offices of Counsel to make the necessary calculations and provide the figures to go into the final order. |
Mr Justice Lewis:
INTRODUCTION
This is a claim by Evan Gwyn Williams for damages for wrongful termination of his contract of employment with Leeds United Football Club Ltd. ("the Club"). In brief, the Claimant was employed under a contract which required 12 months notice of termination. He was given notice of termination on 23 July 2013. Had circumstances not changed, the contract would have terminated at the end of that 12 month notice period and he would have been entitled him to receive his salary which amounted to £200,000 and certain other benefits payable during the notice period. However, on 30 July 2013, he was summarily dismissed, that is the contract of employment was brought to an end immediately and without notice, for gross misconduct. The Claimant contends that that dismissal was wrongful and claims compensation for the balance of the salary and contractual benefits that would have been paid during the notice period if the contract had not been terminated on 30 July 2013.
The Club contends that, after notice of termination was given, it discovered that the Claimant had used the Club's e-mail system on 28 March 2008 to forward an e-mail together with pornographic images to a male friend at another football club. They dismissed the Claimant on 30 July 2013. Furthermore, some months after the dismissal they discovered that the Claimant had also forwarded the e-mail and the pornographic images to a junior female employee and another male friend at another football club on 28 March 2008. The Club contends that the conduct, taken as a whole, amounted to gross misconduct entitling the Club to dismiss the Claimant summarily on 30 July 2013. They also contend that, in so far as they discovered some of the acts of misconduct after the dismissal, they are still entitled to rely upon those acts to justify the summary dismissal, relying on the principles established in Boston Deep Sea Fishing and Ice Company v Ansell (1888) 39 Ch. D. Consequently, they contend that they are not liable to pay damages for the salary and other contractual benefits that would otherwise have been payable during the notice period if the contract had not been terminated on 30 July 2013.
In response, the Claimant contends that the conduct complained of, whilst inappropriate and not best practice, did not amount to a breach of contract, or at least did not amount to a sufficiently serious breach such as would entitle the Club to treat the conduct as a repudiation by him of the contract of employment enabling them to terminate the contract without notice. He contends, therefore, that he is entitled to the unpaid balance of his salary and certain other benefits that would have been payable during the notice period.
I heard evidence from the Claimant and from Ms Greer who has been employed by the Club as a finance controller since January 2008. Many of the facts are no longer in dispute. Where they are in dispute, I set out my findings of fact and the reasons for them below.
THE FACTS
The Contract of Employment and the Claimant's Work
The Claimant has worked in professional football for about 35 years. Prior to August 2006, he was employed to work for Chelsea Football Club. That employment came to an end. He was then offered a job as Technical Director of Leeds United Association Football Club by the chairman, Mr Ken Bates. The offer was accepted. The terms and conditions were agreed orally and neither a written contract of employment nor any written statement of the particulars of employment were prepared.
The terms of the contract were that the Claimant would be employed from 1 August 2006 on a salary of £200,000 per annum, terminable on 12 months notice, and would be entitled to pension contributions, death-in-service benefits and use of a mobile phone for personal purposes. Leeds United Association Football Club Ltd. went into administration. The undertaking (essentially the football club) was transferred to the Club. The Claimant's contract of employment continued with the Club on the same terms. The role of Technical Director was a senior management role. The most senior management role was that of chairman and then the chief executive officer and the Claimant was on a par with, or possibly just below, the chief executive officer in terms of seniority.
Among the Claimant's duties were identifying and nurturing young talent. The Club had an Academy with students from as young as 8 to the age of 21. Some of the students between the age of 17 and 21 would become part of the first team. The Claimant would oversee the training of the first team and the other students. He accepted that his role involved offering guidance and acting as an example or role model to these young persons and children. Training would take place at Thorp Arch training ground, a Club facility at Weatherby. The first team and about 14 students would train in the day time. The other students (about 80), aged from about 8 to 16, would train on certain evenings.
The Claimant gave evidence, which I accept, that sponsorship is very important in the modern football game. He accepted that the Club had sponsors who were companies which were household names. He accepted that sponsors would be cautious about associating with a football club if that might risk damaging their own reputation. The Claimant also gave evidence, which I accept, that the media would always be interested in news stories involving football clubs and that good media coverage can attract supporters and sponsors and bad media coverage could drive away supporters and sponsors.
The Claimant's Dismissal
In about the summer of 2013, the Club began considering a restructuring of its operations. That restructuring potentially involved the deletion of the Claimant's post. He was, therefore, identified as being at risk of redundancy. Meetings were held to discuss the position on 10 July 2013 and again on 22 July 2013. By letter dated 23 July 2013, the Claimant was given written notice of the termination of his employment by reason of redundancy. The Claimant accepted that the Club was entitled to terminate his contract on that ground. The difficulty at that stage concerned the notice period. The Claimant contended that he was entitled to 12 months notice of termination by reason of the oral contract agreed between him and Mr Bates. The Club was contending that that contract had ended after 5 years (that is, in August 2011) and, from that date, the Claimant was employed on the terms of the Club's standard senior management contract which provided for a notice period of 3 months. The Club now accepts, as appears from its skeleton argument dated 5 February 2015, that the Claimant was entitled under the terms of his contract of employment to 12 months notice of termination (unless the contract was terminated earlier by reason of gross misconduct).
Following the giving of notice of termination, the Club discovered that the Claimant had received and forwarded (via his work e-mail account) an e-mail and attachments to a friend, Mr Dennis Wise, who was employed to work for another football team, Newcastle United. The e-mail was received by the Claimant at 9.55 a.m. on 28 March 2008. It was forwarded by him to Mr Wise at 13.02 on that day.
The message in the e-mail said simply "Looks like dirty Leeds!!". Attached to the e–mail was a series of power points setting out a spoof employment offer, involving training and caring for a soccer team in Europe. There then followed a number of photographs. The first set of photographs are entitled "the fans" and are pictures of groups of women or individual women, some with their breasts exposed. The next set of three photographs are entitled "pictures from the club house, the shower". Two photographs show a group of naked women showering. The second of these depict the genitalia of the women in the photograph. The third is a close-up photograph of a woman's genitalia. The next set of five photographs follow on from a reference to a massage session. They include pictures of women displaying breasts and genitalia and engaged in simulated sexual contact with each other.
The Claimant described the photographs as vulgar and accepted that the images were not innocuous and went beyond being harmless or inoffensive. He accepted that the three photographs of the women in the shower were obscene and were not photographs you would see in, for example, a newspaper. He accepted that they would be likely to offend. He described the five photographs of women in acts suggestive of sexual activity as obscene. I agree. In my judgment, the photographs, taken as a whole, can properly be characterised as obscene and pornographic. The Claimant gave evidence, which I accept, that the imagery seen in the photographs attached to the e-mail that he forwarded in March 2008 was not common in professional football at the time. He also gave evidence that such images were not commonly in circulation at the Club (although the Claimant produced one e-mail, sent in September 2010, by one male employee to a small group of other male employees at the Club with a photograph attached of one woman with her breasts exposed).
On 24 July 2013, David Haigh, the then Managing Director, acting on behalf of the Club, wrote to the Claimant informing him that he was required to attend a disciplinary hearing on 29 July 2013 to consider two allegations of gross misconduct. The first was storing pornographic material using computer equipment belonging to the Club and forwarding that material to a person outside the Club (namely Mr Wise) on 28 March 2008. The second allegation related to the forwarding of allegedly confidential information to his personal e-mail account. A request by the Claimant for an adjournment was refused. He did not attend the hearing. By letter dated 30 July 2013, the Claimant was informed that he had been found guilty of both allegations. The letter said:
"I am writing to inform you that I have considered the Allegations and supporting evidence and have decided to dismiss you summarily and without notice with immediate effect on the grounds that I believe you have committed a fundamental breach of your duties to Leeds United and that your actions constitute gross misconduct. Accordingly, today will be your last day of employment with Leeds United. You will be paid up to today's date in the usual way and will receive pay in lieu of any accrued untaken holiday entitlement that you have as of today's date. You will receive no further compensation in connection with your employment or its termination."
In relation to the allegation involving the e-mail, the letter said this:
"The email which you received from David Currie on 28 March 2008 with the message "Looks like dirty Leeds" and then chose to forward on to Dennis Wise later that same day contains obscene pornographic images which are capable of causing great offence to anyone who sees them and, were they to be seen by employees at Leeds United, could give rise to a complaint of sexual harassment for which Leeds United could be liable. Furthermore, by forwarding the email together with the attachment using your Leeds United email address, you risked bringing the name of Leeds United into disrepute.
Your actions clearly contravene the Code and which provides that:
"(a) Email must only be used in the reasonable conduct of the firm's business.
(n) No information must be transmitted which could bring the Company into disrepute or which contravenes laws and conventions on … sexual grounds. Information is understood to include text, images and sound.
(o) An employee may not use the e-mail to transmit:-
Words or pictures, which are obscene, lewd or pornographic;
Words or pictures, which could amount to harassment of the recipient or any other individual (be that harassment sexual, racial or otherwise)."
Even were you unaware of your obligations under the code, it should have been obvious to you as a senior member of management at Leeds United in a role of responsibility in relation to young and impressionable players that you should have deleted the email upon receipt and not forwarded it on to anyone inside or outside Leeds United.
In the circumstances, I consider that this allegation is proven and that your actions in forwarding the email and attachment constituted: (i) a blatant misuse of the Company's computer equipment; (ii) a fundamental breach of your duties to Leeds United and Gross misconduct; and (iii) destroyed the relationship of trust and confidence between you and Leeds United."
The Claimant appealed, as he was entitled to, to Mr Paul Hunt, then the acting chief executive officer of the Club. In an e-mail dated 10 August 2013, he set out his version of events. In relation to the e-mail to Mr Wise, he said this:
"I have known Dennis Wise for 33 years, as a schoolboy, neighbour, professional player, captain of the successful cup winning teams at Chelsea (6 trophies), England full international player and latterly as Manager of Leeds United. He had recently left the club to join Newcastle United and, at the time was under pressure from their supporters. This email had been sent to me earlier in the day and, given the pressure Dennis was under at the time, I thought it might bring a smile to his face. So I forwarded it to him. I knew it would not offend Dennis. I did not send it to anyone else. I am not in the habit of forwarding emails of this nature or indeed, of trawling the internet for such material or of storing the same in my P.C. I note that only one such email has been provided by way of evidence against me. I dispute that by forwarding this email to Dennis, I have breached any of my duties to the club (whether fiduciary or otherwise)."
An appeal hearing was held on 13 August 2013. By letter dated 27 August 2013, the acting chief executive stated that he had treated the appeal as a complete re-hearing as the Claimant had not attended the disciplinary hearing. He upheld the appeal in relation to the second allegation, as the material was not confidential. He did not uphold the appeal in relation to the allegation involving the e-mail to Mr Wise. He said this:
"I take on board what you have said about the circumstances in which you forwarded the email to Dennis Wise and your relationship with him. I accept that you did not intend to cause him offence by sending him the email and I accept that Dennis may not have been offended by it. I also accept that you may never have received a copy of the internal and internet email code of practice. Nevertheless, it should have been obvious to you, as a member of the senior management team of the club and someone to whom our youngest players and prospects looked up to as an authority figure, that your actions were wholly unacceptable. You associated your own name and the name of Leeds United Football Club with an obscene email which could (and indeed may well) have been forwarded to others. You risked bringing your own name and the Club's name into disrepute. In the circumstances, I agree with David that this allegation is proven and that your actions in forwarding the email and attachment constituted: (i) a blatant misuse of the Company's computer equipment; (ii) a fundamental breach of your duties to Leeds United and gross misconduct; and (iii) destroyed the relationship of trust and confidence between you and Leeds United."
The acting chief executive officer concluded that Mr Haigh was entitled to dismiss the Claimant summarily in relation to the e-mail to Mr Wise. He therefore upheld the decision to dismiss the Claimant summarily for gross misconduct. Mr Haigh and Mr Hunt are not now employed by the Club and did not give evidence.
The Subsequent Discoveries
It subsequently transpired that the Claimant had, in fact, forwarded the e-mail, together with the photographs attached, to two other persons. It is accepted that he had forgotten that he had done so at the time of the disciplinary hearing and appeal, and at the time that the particulars of claim were issued. The chronology is as follows.
At 9.55 a.m. on 28 March 2008, the Claimant received the e-mail with the photographs attached. At 11.02 a.m., he forwarded the e-mail and photographs first to Ms Carol Lamb, a junior employee of the Club. At 13.02 .p.m, the Claimant forwarded the e-mail and attached photographs to Mr Dennis Wise. At 13.13 p.m., the Claimant forwarded the e-mail and attached photographs to a third person, Mr Gus Poyet, of Tottenham Hotspur. On each occasion, the Claimant used his work e-mail address which had the words "leedsunited" in the address. He accepted in evidence that any person would have been able to connect the e-mail with the Club.
Ms Lamb was, at the material time in March 2008, a receptionist employed by the Club at the Thorp Arch training ground. She was one of the most junior of the staff of approximately 15 employed at the training ground. She was 33 or 34 years old, that is, approximately ½ the age of the Claimant. Ms Lamb performed work for the Claimant as part of her job although she did not report to him. The Claimant accepted that, as far as Ms Lamb was concerned, he was in a senior management position and was a close friend of the chairman of the Club. He accepted that he was in a position of power and seniority as compared with Ms Lamb. The Claimant accepted that he knew that Ms Lamb needed the job she had as she was a single mother. The e-mail would have been sent to her work computer which was at the reception area at Thorp Arch training ground.
The Claimant accepted that he had not sent the e-mail to any other member of staff. He accepted that he had not sent any similar e-mail to Ms Lamb or any other member of staff. He accepted that it was not common practice for senior management to send e-mails of this nature to junior staff.
He said that he sent the e-mail to Ms Lamb as she was a particularly keen Leeds United fan and would appreciate the play on words in the e-mail. That, said the Claimant, involved the reference to "dirty Leeds". The Claimant explained that, ever since the 1970 Chelsea-Leeds FA cup final, Leeds had had a reputation for dirty playing, in the sense of a lot of hard tackling. The reference to dirty Leeds, as he said in evidence, was a play on words, referring to the footballing reputation of Leeds United and also referring to the muddy women having a shower in the photographs. He gave evidence that he thought that Ms Lamb would appreciate the photographs and would, as he said in evidence, "have a giggle". I do not believe the Claimant's explanation is the true explanation for him sending the photographs to Ms Lamb. The photographs do more than depict a group of muddy women showering. They involve displays of female genitalia and breasts and scenes of simulated sexual activity between women. It is also difficult to understand why, if forwarding the e-mail and attachments was intended to do no more than share a verbal joke about Leeds, he should choose to send the e-mail to only one employee, a junior female employee. The Claimant accepted that other employees, even though not as keen a fan as Ms Lamb, and less ready to attend away matches, would readily have understood the verbal pun that he says was the reason for sending the e-mail. The explanation given was, frankly, not credible. The true reasons for forwarding the e-mail to Ms Lamb were never established.
The Claimant similarly said that he sent the e-mail to his two male friends as they would appreciate the play on the words "dirty Leeds". Again, I do not accept that that explanation is the true explanation for forwarding the e-mails and attachments to his two friends. The photographs go far beyond a play on the words "dirty Leeds". It is far more likely, as the Claimant implied in his first statement, that he considered, rightly or wrongly, that Mr Wise (and I infer Mr Poyet) would appreciate being sent such material.
The Club's State of Knowledge as at the date of the Dismissal on 22 July 2013 and Disclosures During the Hearing
There was dispute as to what was the state of knowledge of the Claimant's use of the e-mail and attachments forming the subject matter of these proceedings at the time that they first gave him notice of termination of his contract on 23 July 2013. There was also a dispute as to whether the Club had already taken a decision not to pay the Claimant salary payable during the notice period before notice of termination was given on 23 July 2013 and whether the Club were actively seeking reasons to dismiss staff, including the Claimant, on grounds of misconduct.
Shortly before the conclusion of closing submissions, the Claimant's solicitors indicated that they had received a communication and documents from Mr Haigh, the former managing director of the Club, which might relate to those matters. I adjourned the hearing until 12 p.m. the next day, 11 February 2015, to enable the parties to consider the position. On 11 February 2015, I granted permission to the Claimant to adduce further evidence in the form of approximately 25 pages of documents comprising primarily copies of e-mails. I granted the Defendant permission to adduce a witness statement of Mark Broadly dated 11 February 2015 dealing with the response to a request for disclosure made by the Claimant's solicitors following the hearing on 10 February 2015. I heard submissions from counsel for both parties on the further evidence. I granted a further short adjournment to enable the Claimant to consider whether or not he wished to consider an application for a further adjournment, in particular, to consider if further applications for disclosure were considered appropriate. It was made clear that if no adjournment was sought, then the case would be determined on the evidence that had been adduced, including that adduced on 11 February 2015. Counsel for the Claimant confirmed that no further adjournment was sought and the Claimant was content for the case to be decided on the basis of the evidence adduced. Counsel for the Defendant also indicated that the Defendant did not wish any further adjournment.
On the basis of all the evidence, I find as a fact that a decision was taken on or before the 22 July 2013 not to make any payments of salary to the Claimant during his notice period. Further, the managing Director, Mr Haigh, and, the acting chief executive officer, Mr Hunt, both knew on 22 July 2013 that such a decision had been taken and that that decision involved a breach by the Club of the Claimant's contract. That follows from, amongst other things, the e-mail dated 22 July 2013 from Mr Haigh to Mr Hunt which says:
"As discussed Hisham has instructed us to terminate all payments of salary and otherwise to the above. This is a breach of contract. Please can you handle."
Further, I find as a fact that managing officers at the Club had already decided by at least 18 June 2013 that they would start investigations in relation to a number of senior managers at the Club to see if evidence could be discovered to justify dismissing them on grounds of gross misconduct. That appears from, amongst other sources of evidence, e-mails of 18 and 20 June 2013 from an employee of a firm of forensic investigators employed to carry out that investigation. The investigation included the Claimant. Certainly by no later than 20 July 2013, and in my judgment, probably as early as mid to late June 2013, the Club were actively seeking to find evidence which they could use to justify dismissal of the Claimant on the grounds of misconduct. That appears from a memo attached to an e-mail sent to Mr Haigh on 20 July 2013. The memo says:
"I am as agreed performing the same action on [a particular senior manager] as for [the Claimant] in order that we find a reason to terminate him for gross misconduct."
The Claimant further invites me to infer that managers at the Club, including Mr Haigh, knew of the fact that the Claimant had forwarded the e-mail to Mr Wise before the decision had been taken to give notice of the termination of the Claimant's contract. In my judgment, the evidence does not support such a finding and, on the evidence before me, I find as a fact that neither Mr Haigh nor any other person involved in the decision to give notice of termination of the Claimant's contract on 23 July 2013 knew at that time of the 28 March 2008 e-mail from the Claimant to Mr Wise before notice of termination was given on 23 July 2013. I reach that conclusion for the following reasons.
First, there is no evidence, either written or oral, which indicates that the relevant personnel were actually aware of the existence of the 28 March 2008 e-mail at the time of the termination of the Claimant's contract. Mr Barnett for the Claimant invites me to infer from the e-mails that there was some evidence of misconduct available and, possibly, a list of allegations had been prepared (Mr Haigh was certainly instructed to prepare such a list late in the morning on 23 July 2013: see the e-mail of 11.23 of 23 July 2013 from Mr Alrayes). There is no positive evidence that any list had been produced or, more importantly, that if it had, it included any allegation relating to the forwarding of the e-mail on 28 March 2008.
Secondly, it is clear that the relevant managers at the Club were actively seeking evidence of gross misconduct at this time. If they had had that evidence on 23 July 2013, the likelihood is that they would have used it then rather than writing on 23 July 2013 to give notice of termination and waiting until 24 July 2013 before sending a letter setting out the disciplinary allegations. The more likely sequence of events, in my judgment, is that the Club had decided to give notice of termination to the Claimant on grounds of redundancy with three months notice; they had decided that they would not pay him any salary in any event; and they were actively looking for reasons to dismiss him on grounds of gross misconduct, and shortly after giving notice of termination, the managers saw the e-mail and wrote the letter dated 24 July 2013 making disciplinary allegations against the Claimant. In my judgment, if the managers at the Club thought that they had had evidence of misconduct, they would have used it to dismiss the Claimant immediately rather than write the letter of 23 July 2013 giving notice of termination and then writing again on 24 July 2013 making the allegations of misconduct.
The Claimant also relied on one further aspect of the evidence as leading to the inference that Mr Haigh knew of the 28 March 2008 e-mail from the Claimant to Mr Wise before he sent his letter of 23 July 2013. That was said to arise out of the oral evidence of Ms Greer. In fact, Ms Greer's evidence was that, so far as she was aware, the decision not to pay salary for any notice period was taken after discovery of the e-mail to Mr Wise. In re-examination, Ms Greer confirmed that she did not know by whom, or on what basis, the decision to take the Claimant's salary out of the predicted cash flows had been taken. I found Ms Greer to be an honest witness. I accept her evidence. The evidence of Ms Greer does not support any inference that the managers at the Club knew of the Claimant's e-mail to Mr Wise before they sent the notice of termination on 23 July 2013.
In my judgment, on a balance of probabilities, Mr Haigh had not seen the e-mail of 28 March 2008 from the Claimant to Mr Wise when he wrote on 23 July 2013 giving notice of termination of the Claimant's contract of employment on grounds of redundancy (nor was any one else involved in the decision to terminate the Claimant's contract aware of that fact). Mr Haigh only saw that e-mail afterwards and he then wrote setting out the disciplinary allegations on 24 July 2013.
Following the conclusion of the hearing, a copy of one further e-mail was provided to the Court as that e-mail might have particular relevance to the question of affirmation. I received brief written submissions from both counsel as to the significance of that e-mail. The e-mail is timed at 17.17 on 24 July 2013 (that is, the day after the notice of termination had been sent) and is from the forensic investigators to Mr Haigh. That e-mail states that "following our conversation yesterday on further searches through [the Claimant's] emails", the forensic investigators had analysed some 6,000 images attached to the Claimant's e-mails and conducted targeted keyword searches for potentially offensive language. As a result of that analysis, they had identified one e-mail as containing lewd images and being received by him on 28 March 2008 and forwarded on that day. The e-mail attached the 28 March 2008 e-mail and said that, before Mr Haigh opened the attachment, the investigators cautioned him that it contained lewd images. That e-mail is consistent, in my judgment, with the analysis that the managers did not know of the forwarding of the e-mail on 28 March 2008 to Mr Wise until after they had sent notice of termination on 23 July 2013. Indeed, the e-mail of 24 July 2013, indicates that it was not until 24 July 2013 that Mr Haigh saw the e-mail.
Finally, there is no evidence, in my judgment, that any of the managers at the Club knew of the fact that the Claimant had also sent the e-mail and attached photographs to Ms Lamb and Mr Poyet until after the proceedings had started and shortly before the Club applied to amend its defence. There is no documentary evidence to suggest that any manager in the Club knew of the existence of the e-mails to Ms Lamb or Mr Poyet in the period before notice of termination was first given on 23 July 2013 or, indeed, at any stage up to and including the Claimant's appeal against dismissal. It is inconceivable, in my judgment, that the managers at the Club would not have sought to make use of those e-mails during that period if they were aware of them, given that they were actively seeking to find a reason for dismissing the Claimant and, further, that they did make the sending of the e-mail to Mr Wise a basis of one of the disciplinary allegations against the Claimant.
Ancillary Matters
The Club had a policy entitled "Internal and Internet E-Mail: Code of Practice". There were different versions in force. At the material times, the provisions included the following:
"(o) An employee may not use the e-mail to transmit:
Words or pictures, which are obscene, lewd or pornographic;
Words or pictures, which could amount to harassment of the recipient or any other individual (be that harassment sexual, racial or otherwise)."
Paragraph 4 of that policy provided:
"4. DISCIPLINARY PROCEDURES
Abusing the electronic mail facility, or failing to abide by the e-mail code of practice may harm the Company's reputation or compromise its professionalism. Any such actions will be considered serious disciplinary matters and you will therefore be dealt with in accordance with the Company's disciplinary procedure."
There is a Club Handbook. That sets out a non-exhaustive guide of the sorts of conduct that may result in disciplinary action. There is a set of examples of "Misconduct". There is then a set of examples of "Serious Misconduct" where normally a written warning would be given for a first offence. There is finally a set of examples of "Gross Misconduct" where the employee would be dismissed without notice or warnings.
I find as a fact that the Claimant was not provided with, and did not see, a copy of the internal and internet e–mail policy or the handbook during his employment with the Club.
The Pleadings
On 10 December 2013 the Claimant issued his claim form, claiming damages for wrongful termination. He claimed unpaid salary, unpaid pension and damages for the loss of other contractual benefits including the use of a mobile phone for personal purposes, and death-in-service benefits for the balance of his notice period (that is, 51 weeks) and a statutory redundancy payment. He also sought damages for the amount of tax that he would be liable for in relation to any damages that he was awarded.
On 23 January 2014, the Defendant filed its defence. It contended, amongst other things, that it was an implied term of the Claimant's contract:
"6.1. that he would not, without reasonable and proper cause, act in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence which should exist between employer and employee ("the trust and confidence term")."
The Defendant contended that the forwarding of the e-mail to Mr Wise involved a breach of that implied term. On discovery of the fact that the e-mail had been forwarded to Ms Lamb and Mr Poyet, the Defendant amended the defence on 23 June 2014 to contend that the forwarding of the e-mails to them was also a breach of that implied term. The Defendant contended that they were entitled to dismiss the Claimant without notice on grounds of gross misconduct on 30 July 2013 and no further payments of salary or other benefits were due to the Claimant after that date.
The Claimant accepted that he was subject to the implied term of mutual trust and confidence pleaded. He contended, however, that even if the forwarding of the e-mails involved a breach of that contract, it was not a sufficiently serious breach to entitle the Defendant to treat the contract as repudiated and to dismiss him summarily.
The Defendant alleged that the Claimant's contract included other implied terms including a term that he would comply with the Defendant's policies and expected standards of conduct. The Claimant accepted that that was an implied term of his contract subject to those policies and standards first being brought to his attention.
The Defendant also alleged, and the Claimant admitted subject to caveats, that the Claimant's contract included an obligation that the Claimant
"would act in the interests of the Defendant and not act in a manner likely to bring the Defendant into disrepute [and] that he would not abuse the Defendant's computer or email systems by storing or transmitting images which are obscene, lewd or pornographic"
In the event, in submissions, counsel for the Defendant accepted that the defence was based upon the contention that the communication of the e-mails to Ms Lamb, Mr Wise and Mr Poyet amounted to a sufficiently serious breach of the implied term of trust and confidence entitling the Club to treat the contract as repudiated and to bring it to an end without notice. Counsel for the Defendant accepted that if the conduct did not justify termination without notice on the basis of breach of the implied term of mutual trust and confidence, it would not be possible to demonstrate that the conduct was a sufficiently serious breach of any other implied term such as to amount to repudiation.
For completeness, the Defendant originally relied upon further implied terms but, by the time of the hearing, ceased to rely upon those matters. They had been said to be implied on the basis that they were set out in the internal and internet e-mail code of practice. The Defendant accepted that the Claimant had not been provided with a copy of that policy prior to his dismissal. They did not at trial seek to rely upon observance of the policy, or its terms, as a contractual term of the Claimant's contract of employment but indicated that the policy may be relevant, as a matter of context, in setting the standards considered acceptable in terms of the use of an employer's computer equipment for the dissemination of obscene or pornographic images by e-mail.
The Loss
In terms of the damages claimed by the Claimant, the Defendant accepted that, if there was a wrongful dismissal, and subject to the question of mitigation, the Defendant would be liable for (1) £121,519 being the equivalent to 51 weeks salary net (2) £17,105 being equivalent to 51 weeks' employer's pension contributions (3) £696 for payment of the mobile telephone bills for personal expenses for 51 weeks and (4) a figure representing the amount of tax payable on any damages awarded in excess of £30,000.
The Defendant denied liability for the death-in service benefit and the statutory redundancy payment, even if there were a wrongful dismissal, but agreed that £3,295 would be the sum needed to purchase an insurance policy providing for payments equivalent to the death-in-service benefits to which the Claimant was entitled under the terms of his contract and the amount of £4,725 would represent the statutory redundancy payment to which the Claimant would have been entitled if he had been dismissed with notice on the grounds of redundancy. The Defendant contended that the Claimant had failed to take reasonable steps to mitigate his loss.
THE ISSUES
Against that background, the issues that arise are, in my judgment, these:
(1) did the forwarding of the e-mail and photographs to Ms Lamb, Mr Wise, and Mr Poyet on 28 March 2008 amount to a sufficiently serious breach of the implied duty of mutual trust and confidence so as to amount to a repudiation of the contract entitling the Club to dismiss the Claimant without notice on 30 July 2013?
(2) if not, and if the Club were not entitled to terminate the Claimant's contract without notice, what loss has the Claimant suffered by reason of any wrongful dismissal?
THE FIRST ISSUE
An employer may terminate an employee's contract of employment without notice in circumstances where the employee's conduct amounts to a sufficiently serious breach of a term of the contract of employment such that the conduct amounts to a repudiation of the contract. Further, the employer may justify summary dismissal by reference to such conduct even if the conduct was not known to the employer at the time of termination but was discovered only subsequently: see Boston Deep Sea Fishing and Ice Company v Ansell (1888) 39 ChD 339 and Cavenagh v William Evans Ltd. [2013] 1 WLR 238 at paragraph 5. In the present case, the Club relies partly upon conduct they knew about on the date of dismissal, 30 July 2013, and partly upon conduct they discovered after the dismissal.
The relevant term here is the implied term of mutual trust and confidence. The content of that obligation is that neither the employer nor the employee will:
"without reasonable and proper cause conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee"
See, generally, Malik v Bank of Credit and Commerce International S.A. [1998] AC 20 at 45E-G
The parties in the present case accept that that formed an implied term of the Claimant's contract of employment. It is a fundamental term of the contract. The essential issue is whether the conduct of the Claimant, viewed objectively, was a breach of that implied term and if so, was it sufficiently serious to amount to a repudiatory breach which entitled the Club to terminate the Claimant's contract of employment immediately and without notice on 30 July 2013?
In general terms, in assessing the seriousness of any breach, it is necessary to consider all the relevant circumstances including the nature of the contract and the relationship it creates, the nature of the contractual term that has been breached, the nature and degree of the breach and the consequences of the breach (see, in a different context, Valilas v Januzaj [2014] EWCA Civ 436 at paras. 31,53 and 60 to 61). In the context of contracts of employment, relevant circumstances include "the nature of the business and the position held by the employee": see Jupiter General Insurance Co. Ltd. v Shroff [1937] 3 All E.R. 67 per Lord Maugham. The opinion of the Privy Council in that case recognises that immediate dismissal is, as Lord Maugham expressed it, a "strong measure" and there needs to be careful consideration of the evidence to determine whether the conduct is such as to amount to a repudiatory breach entitling the employer to dismiss the employee without notice.
In the present case, it is appropriate first to identify the conduct said to amount to a breach of the implied term of mutual trust and confidence. Here, it is the fact that the Claimant used his work e-mail to send a junior female employee an e-mail with an attachment containing a number of obscene and pornographic photographs on the morning of 28 March 2008. Then, two hours later, he used his work e-mail to forward the e-mail and attachments to a male friend employed at another football club. Then, 11 minutes later, he used his work e-mail to forward the e-mail and attachments to a third person, another male friend employed at a different football club.
Viewed objectively, in my judgment, that conduct on the facts of this case does amount to a breach of the term of trust and confidence implied in the contract of employment. Such conduct was likely seriously to damage the relationship of confidence and trust between the Club and the Claimant. It was a sufficiently serious breach as to amount to repudiation of the contract by the Claimant. I reach that conclusion for the following reasons.
First, the Claimant occupied a very senior management post at the Club. Secondly, there is the nature of the images involved. The images were, viewed objectively and, indeed, by the Claimant's own admission, pornographic and obscene. The Claimant accepted that the material went beyond images that were harmless and inoffensive and were capable of causing offence. The images were not the sort of images that were common in professional football at the time. They were not the sort of images that were in circulation in the work environment at the Club.
Thirdly, the sending of these images to a junior, female employee, by a senior manager with significant influence over her career, might well have caused offence and would have left the Club vulnerable to a claim for harassment under section 4 of the Sex Discrimination Act 1975.
Fourthly, there is the nature of the Club's business and the potential consequences of conduct of this nature. The Club's reputation is important in terms of securing and retaining sponsors and supporters. The dissemination of the images was readily identified with the Club. They were sent via an e-mail address which had the phrase "leedsunited" in the address. The accompanying text in the e-mail itself referred to dirty Leeds. The media were likely to be interested in stories involving the distribution of such material within the world of professional football. If the fact that a senior manager had sent such images to a junior female member of staff became known, particularly if it led to a claim for harassment, the media might well have been interested in publicising those events. More generally, the sending of pornographic images by a senior manager at the Club to relatively well known persons active in professional football might itself have led to media interest and possibly publication of potentially negative press coverage. That, in turn, might well adversely affect the reputation of the Club and, in turn, might well affect its ability to find or retain sponsors or supporters.
For the reasons given above, no reasonable explanation at all has been provided to justify or explain the forwarding of the e-mail. In relation to Ms Lamb, I do not accept that the Claimant's explanation that he thought that the employee would appreciate a play on the words "dirty Leeds", or have a giggle at the photographs because she was a keen Leeds supporter is true. No other reason has been advanced to justify the conduct. Indeed, it is difficult to imagine what reason could justify a senior manager using the internal e-mail system to send pornographic images to a much more junior, female employee. In relation to Mr Wise and Mr Poyet, and even assuming that the Claimant considered that some of his football colleagues might wish to receive electronic copies of the images, there is no reasonable explanation for using the Club's e-mail system for the purpose of sending pornographic images to friends.
Viewed objectively, the use of the Club's e-mail system to send obscene and
pornographic images to a junior female employee, and then to two other male colleagues employed in the world of professional football, is simply incompatible with the role and duties of the Claimant as a senior manager at the Club. The Claimant's conduct in forwarding those e-mails on the three occasions on 28 March 2008 was a very serious breach of the implied duty of trust and confidence and was likely to destroy the confidence that the Club had in its senior manager. The conduct was sufficiently serious to amount to a repudiation of the contract of employment and the Club was entitled to treat that conduct as justifying summary dismissal. Put simply, the conduct amounted to gross misconduct and the Club would were entitled to rely upon that conduct as justifying the summary dismissal of the Claimant.
Furthermore, the conduct of the Claimant in forwarding the e-mail to Ms Lamb was, in my judgment, sufficiently serious in itself (irrespective of the fact that it was sent to two other people) to constitute a sufficiently serious breach of the contract of employment as to amount to repudiation. The sending by a senior manager of obscene and pornographic images to a female, junior employee using the Club's internal e-mail is simply not compatible, viewed objectively, with the role that the Claimant was employed to carry out at the Club. There is no reasonable explanation for that conduct. Put simply, for a senior manager to send these images to a junior female employee in the circumstances of this case amounted to gross misconduct and the Club would be entitled to rely upon that conduct as justifying the summary dismissal of the Claimant.
It would be artificial to seek to separate out the sending of the e-mail to Mr Wise and then, 11 minutes later, to Mr Poyet and to assess whether each of those incidents in isolation (and without regard to the sending of the e-mail to Ms Lamb earlier that day) amounted to a repudiatory breach by the Claimant justifying the summary dismissal. Nor is it necessary to do so in the particular circumstances of this case.
I turn then to the principal submissions advanced on behalf of the Claimant as to why the conduct was not a breach of the implied term of the contract, or, as a minimum, was not sufficiently serious to amount to a repudiatory breach. I also consider the submissions relating to the affirmation of the contract of employment.
First, Mr Barnett submits that the images were not hard-core pornography. It is true that there are gradations of images. There will be cases involving more extreme images or images with additional features which increase their offensive nature. That is not, however, the issue. The issue is did the conduct of the Claimant, in forwarding these particular images to a junior female employee and to two male friends employed in other clubs, amount to a repudiatory breach. The submission that the images were innocuous was abandoned in the light of the Claimant's own evidence. Viewed objectively, and indeed, on the Claimant's own admission, these images were obscene and pornographic involving the display of female genitalia and breasts and acts of simulated sexual activity between women. They were not images common to football. They were not images commonly sent to employees at the Club. Viewed objectively, the forwarding of these particular images in the circumstances of the case and using the Club's e-mail system was a sufficiently serious breach of the implied term of mutual trust and confidence to amount to a repudiatory breach.
Secondly, Mr Barnett submitted that the Claimant had not been provided with the Club's internet policy. That is correct. However, it should have been obvious in March 2008, certainly to a person in a senior management position such as the Claimant, that the Club's e-mail system should not be used to send obscene and pornographic images. In my judgment, the position here is similar in this regard to that in Henderson v London Borough of Hackney [2011] EWCA Civ 1518 where a submission was made that receiving and watching even more extreme pornographic images during school time was not gross misconduct because there was no written policy or rule prohibiting such conduct. Pill L.J. observed at paragraph 28 that:
"It did not make the conduct any less grave or gross because it had not been spelt out. Spelling out should not have been required to a person in the applicant's position"
Thirdly, Mr Barnett submitted that under the Club's own internet policy such matters were referred to as "serious disciplinary matters" and it was, therefore, more appropriate to regard the conduct as "serious misconduct" not gross misconduct and, under the Club's own disciplinary rules set out in the Handbook, serious misconduct would not normally result in summary dismissal. The internet policy and the Handbook were never provided to the Claimant and Mr Barnett was not seeking to suggest that there was a breach of the contractual disciplinary process. Rather, he was submitting that, if the conduct would not be gross misconduct if the rules were part of a contract of employment, it would not be appropriate to characterise such conduct as gross misconduct more generally.
In my judgment, that argument proceeds on a mistaken understanding of paragraph 4 of the Club's internet policy. That provides that abusing the electronic mail facility or failing to comply with the code of practice are "serious disciplinary matters" and the employee will "be dealt with in accordance with the Company's disciplinary policy". The internet policy is simply saying that abuse is a serious disciplinary issue and then directs that it be dealt with in accordance with the disciplinary rules. Whether the conduct amounts to misconduct, serious misconduct, or gross misconduct will depend upon the application of the disciplinary rules. The fact that the internet policy says abuses are "serious disciplinary matters" is not to be equated with, or seen as an attempt to define the scope of, "serious misconduct" under the rules. Ultimately, the question will be whether the conduct constitutes gross misconduct, that is, whether it constitutes a repudiatory breach of contact entitling the Club to terminate the contract without notice.
Fourthly, Mr Barnett submitted that it was appropriate to consider the events with the benefit of hindsight and that, in fact, the Claimant had worked at the Club for almost a further 5 and ½ years after he forwarded the e-mails. He submitted that that meant that the discovery of the e-mails would not have been likely to destroy the relationship of trust and confidence and the relationship was sufficiently robust to survive. In my judgment, the question is whether, viewed objectively, the conduct complained of was such as would have entitled the Club to dismiss the Claimant when they discovered it (see Boston Deep Sea Fishing and Ice Company v Ansell) (1888) 39 ChD 339 at page 358). For the reasons given, the conduct would have entitled the Club to dismiss the Claimant without notice.
Fifthly, Mr Barnett submits that there was no realistic prospect of any of the children (or any other young footballer) seeing the image on Ms Lamb's computer. The children under 17 came to the Thorp Arch training ground after Ms Lamb finished work. Those aged 17 to 21 in the first team came in the day time but Ms Lamb's computer was on her desk behind a partition. I accept that it is unlikely that any child or young footballer would be likely to see the images on that computer. The existence of such a risk is not, however, the basis for my finding that the conduct amounted to gross misconduct. For completeness, I would, however, note that sending obscene and pornographic images to a female employee (and male friends) via the Club's e-mail system is not compatible with the duties of the Claimant and his role of providing advice and guidance, and acting as an example, to those young persons and children whose football career he was nurturing. That is not the reason for my conclusion that the conduct amounted to gross misconduct although it is a factor that reinforces that conclusion.
Sixthly, Mr Barnett submitted that if the Club knew that the Claimant had forwarded the e-mails to Mr Wise, Ms Lamb and Mr Poyet prior to deciding to dismiss then the letter of 23 July 2013 affirmed the existence of the contract. I accept that if those who took the decision did know those facts prior to the decision to terminate the contract, then the letter of 23 July 2013 would amount to an affirmation of the contract of employment and that the Club could not thereafter rely on those facts as justifying dismissal.
I have set out above my findings of fact that neither Mr Haigh, nor any one else involved with the decision to terminate the Claimant's contract of employment on 23 July 2013, knew prior to that decision, of the e-mail to Mr Wise. For that reason, the question of affirmation does not arise. Even if (contrary to the findings that I have made) Mr Haigh or some other person involved in the dismissal did know of the e-mail to Mr Wise prior to the decision to terminate the contract, it is clear in my judgment, that they did not know then that the e-mail had also been forwarded to Ms Lamb. For the reasons given above, the forwarding of the e-mail and attached images to Ms Lamb would, of itself, be a sufficiently serious breach of the contract of employment to amount to repudiation of the contract by the Claimant. That was not known about by those involved in the decision to give notice of termination on 23 July 2013, and there is no question, in my judgment, of the contract being affirmed subsequently. Consequently, irrespective of the position in relation to the forwarding of the e-mail to Mr Wise, there was no affirmation of the contract after the discovery of the forwarding of the e-mail and attached images to Ms Lamb and that conduct, alone, would have entitled the Club to dismiss the Claimant without notice.
Mr Barnett also made two submissions on the law as to why the Club were not entitled to refuse to compensate the Claimant for salary payable during the notice period. First, he submitted that that salary was an accrued debt, that is a debt that had accrued prior to the dismissal on 30 July 2013, and remained owing notwithstanding that dismissal. This was put in two ways. It was submitted that the letter of 23 July 2013 amounted to an acceptance that the Claimant was entitled to 3 months notice and that, therefore, at least money equivalent to 3 months salary became an accrued debt. Mr Barnett relied on the decision of the Court of Appeal in Cavenagh v William Evans Ltd. [2013] 1 WLR 238. Alternatively, it was submitted that if the contract had been affirmed because the Club knew of the e-mail from the Claimant to Mr Wise before the notice of termination was given, then the salary accrued from month to month and was an accrued debt. Mr Barnett submitted that in those circumstances, the principle identified in the Boston Deep Sea Fishing case did not apply.
First, the letter of 23 July 2013 did not convert money payable under the contract of employment into an accrued debt. It gave notice that the contract would terminate on the expiry of the notice period. During the notice period, the contract would remain in existence and salary and other benefits would be payable under the contract. If, however, the employer terminates the contract without notice during that period, no salary or benefits would be payable after the summary dismissal and immediate termination of the contract.
That was the position in Boston Deep Sea Fishing itself. The relevant facts in the case are these. Mr Ansell was appointed on a contract which, from 1 January 1886, entitled him to a salary of £800 a year, payable quarterly. He was dismissed on 2 October 1886. He brought a counter-claim for damages for wrongful dismissal for the quarter up to 1 October 1886.The Court of Appeal held that the employer was entitled to rely upon facts not known at the time to justify the dismissal. They, therefore, considered that damages for wrongful dismissal would not be payable in respect of the period after 2 October 1886. They further held that, on a proper construction of the contract, the salary was an annual salary and no entitlement to any salary accrued prior to the end of the year. Consequently, the claimant was not entitled to claim the £200 for the quarter prior to his dismissal on 2 October 1886. The general position is put by Bowen L.J. in the following terms at page 355:
"As regards his current salary, it is clear and established beyond all doubt by authorities which we should not be justified in overruling, even if we desired to do so, that the servant who is dismissed for wrongful behaviour cannot recover his current salary, that is to say, he cannot recover salary which is not due and payable at the time of his dismissal, but which is only to accrue due and become payable at some later date ….."
That dictum dealt with the salary in the period after dismissal. The only question remaining was whether the salary in the quarter prior to dismissal on 2 October 1886 was salary which had already accrued. The Court held that "on a true view of the facts no portion of the salary in this case had accrued before the dismissal …he was to be paid an annual salary" (see per Bowen L.J. at pages 365 to 366). Consequently, salary referable to a period prior to dismissal, but not yet accrued, was not recoverable.
That general position is not altered by the decision of the Court of Appeal in Cavenagh v Williams Evans Ltd. [2013] 1 WLR 238. There, the employer terminated the contract by exercising an express contractual right to terminate the appointment without notice on payment of salary and the value of other benefits in lieu of notice (see paragraphs 12 and 14 of the judgment). The exercise of that specific contractual right did give rise to an accrued debt and the Court of Appeal held that the principle in Boston Deep Sea Fishing did not provide the employer with a defence to a claim for payment of an accrued debt. The termination of the contract had already triggered the liability to pay in lieu of notice. That position is to be contrasted with a position where there had been a summary dismissal of the employee and, subsequently, the employer acquired knowledge which would have entitled the employer to terminate the contract without notice. In the latter circumstances, the principle in Boston Deep Sea Fishing did apply and did entitle the employer to rely on that misconduct, discovered subsequently, to justify the dismissal and resist the claim for damages for wrongful dismissal. See paragraphs 37 to 39 and 50 and 55 of the decision in Cavenagh.
The position in the present case is that the Claimant is bringing a claim for damages alleging wrongful termination. He is contending that the contract could only terminate at the end of the notice period and that he should be entitled to the salary and the value of the contractual benefits that would have been payable during the notice period. He is not seeking to enforce any accrued debt. The Club, however, dismissed him summarily during the notice period. Provided that that summary dismissal was justified, the Claimant is not entitled to claim the balance of the salary and other contractual benefits that would have been payable during the notice period if the contract had not been terminated summarily. In justifying the dismissal, the Club is entitled to rely upon the acts it knew about on 30 July 2013 and the acts it learnt about subsequently. Therefore, the position in Boston Deep Sea Fishing is applicable to the claim in the present case. The fact that the Club said in its letter of 23 July 2013 that the Claimant was entitled to 3 months notice does not have the consequence that the salary payable during the period between the 23 July 2013 and the end of that notice became an accrued debt. The letter simply gives notice of termination and provides that the contract would expire at the end of the notice period said (erroneously) to be 3 months. The letter does not convert the salary that would be payable under the contract during the notice period into an accrued debt. The position is, therefore, different from that in Cavenagh where the employer did exercise a contractual right so that the contract terminated immediately and the salary and contractual benefits otherwise owing was converted into an accrued debt. In the event, the contract of employment was terminated on 30 July 2013 and no salary was payable after that date.
Secondly, in relation to the argument on affirmation, I have found as a fact that the Club did not know about the forwarding of the e-mail to Mr Wise prior to termination and the Club did not affirm the contract. But, even if that were wrong, the Club subsequently learned that the Claimant had forwarded the e-mail to Ms Lamb on 28 March 2008. That conduct, of itself, amounted to a repudiatory breach and the Club were entitled to rely on that as justifying the dismissal on 30 July 2013 and would not therefore be liable to pay salary payable in respect of the remainder of the notice period. That salary had not become an accrued debt, any more than the salary in Boston Deep Sea Fishing had become an accrued debt. Just as the employer in that case could rely on knowledge acquired eighteen months after the dismissal to resist a claim for damages for wrongful dismissal, so here would the Club have been entitled in any event to rely upon the gross misconduct, discovered in 2014, as justifying the summary dismissal on 30 July 2013.
Mr Barnett next seeks to contend that the Club decided before 22 July 2013 not to pay the Claimant any salary for the notice period to which he was entitled. The Club also refused to accept that the actual notice period was 12 months rather than three months right up to the point when it lodged its skeleton argument in February 2015. The Club was also actively seeking to find evidence to justify dismissal without notice. Mr Barnett describes that conduct as unfair or as involving bad faith and submits that the rule in Boston Deep Sea Fishing should not apply in such circumstances and the court should decline to allow the Club to justify termination of the Claimant's contract without notice by reference to the subsequently acquired knowledge of the Claimant's repudiatory breach.
The proper contractual analysis is this. In relation to contracts of employment, if an employer gives notice to terminate, the contract will, in normal circumstances, end at the expiry of that notice period. The employer would be liable for salary payable during that period of notice and until the end of the contract. If, however, the employer dismisses the employee summarily during the notice period, that dismissal will bring the contract to an end immediately and the employer will not, after that dismissal, be liable for any further salary. Furthermore, if the employer subsequently discovers that, prior to the summary dismissal, the employee had engaged in conduct amounting to a repudiatory breach, the employer is entitled to rely upon that conduct as justifying the summary dismissal and as enabling it to resist a claim for damages for wrongful dismissal, that is for the salary that would otherwise have become payable during the notice period: see Boston Deep Sea Fishing 1888 (39) Ch D. 339 at page 364 and Cavenagh v William Evans Ltd. [2013] 1 WLR 238 at paragraph 5.
Here, on 23 July 2013, the Club gave notice to terminate the Claimant's contract of employment. Unless circumstances changed, that contract would have expired at the end of the 12 month notice period, that is on 22 July 2014. The Claimant would be liable to be paid salary due during that period. However, on 30 July 2013, the Club dismissed the Claimant summarily and brought the contract to an end on that date. Provided that the Club can demonstrate that the Claimant had engaged in conduct amounting to a repudiatory breach prior to the dismissal, the Club would be entitled to justify dismissal without having to give notice. Furthermore, the Club can rely upon conduct discovered after the dismissal to justify the dismissal.
The fact that the Club committed an anticipatory breach of contract on 22 July 2013 when it decided not to pay any further salary under the contract or committed breaches of the contract by failing to pay the salary due before the contract had been brought to an end on 30 July 2013 does not prevent the Club dismissing the Claimant summarily when it discovered the misconduct (nor does it prevent the Club from relying on misconduct discovered after the dismissal in order to justify it).
Similarly if, viewed objectively, the conduct does amount to a repudiatory breach by the employee, then the employer is entitled to rely upon that repudiatory breach as justifying the dismissal irrespective of the employer's motives or reasons for wishing to do so. Consequently, the fact that the Club were motivated by consideration of their own financial and commercial interests, and wished to find a reason, and indeed were actively looking for evidence, to justify the Claimant's dismissal, does not prevent the Club from relying upon conduct amounting to a repudiatory breach as justifying the dismissal on 30 July 2013. Nor does the fact that the Club were unprepared until recently to accept that the notice period was 12 months, rather than three, prevent them from relying upon conduct amounting to a repudiatory breach as justifying termination of the contract without notice.
Consequently, where, as here, there is a repudiatory breach of the contract of employment by the employee, and there has been no affirmation or waiver of the repudiatory breach, the employer is not prevented from relying on that breach as justifying summary dismissal because it had itself decided to breach its contractual obligations or was looking for a reason to justify dismissal or was motivated by its own financial interests. There is no basis for concluding that it is "unfair or "unjust" to allow the Defendant to rely upon the Claimant's anticipatory conduct to resist a claim for wrongful dismissal in such circumstances.
That approach is also consistent with Glencore Rotterdam BV v Lebanese Organisation for International Commerce [1997] 4 All ER 514. There the Court of Appeal re-affirmed the basic rule in the law of contract that a person who terminates a contract, and subsequently discovers conduct which would have entitled him to terminate the contract, is entitled to rely upon that later conduct to resist a claim for damages for breach. That rule was subject to certain specified exceptions such as, for example, estoppel or waiver, where the facts "justify a finding that there was an unequivocal representation made by one party, by conduct or otherwise, which was acted upon by the other" but
"Without such a representation, no such estoppel or waiver can arise, and there is no general rule that what the court or tribunal may perceive as 'unfairness or injustice' has the same effect"
see Glencore [1997] 4 All E.R. at pages 530j to 531c.
I recognise that the Court of Appeal in Glencore was not dealing with a situation where the contracting party had indicated its intention to breach the contract. However, the authority is consistent with the view that such matters should be determined in accordance with the contractual position subject to certain specific exceptions.
For completeness, I note that a number of other points were referred to by counsel in their skeleton arguments, oral submissions and closing submissions. I have sought in this judgment to deal with what I consider to be the principal points raised, and the principal evidence relating to those matters. The Claimant and the Club can be assured however, that I have carefully considered all the other points and all the evidence given and all the documents relied upon.
THE SECOND ISSUE – THE AMOUNT OF DAMAGES
In the circumstances, the Club is entitled to rely upon the Claimant's conduct on 28 March 2008 as a repudiatory breach which justified the termination without notice on 30 July 2013. The Club is therefore not liable to pay damages for wrongful termination comprising the salary and other contractual benefits that would otherwise have been payable during the notice period.
In those circumstances, it is not necessary to deal with quantum in detail. For completeness, I note that the figures in dispute are agreed although liability on certain issues is disputed. Mr Campbell, for the Defendant, contended that even if there had been wrongful dismissal, damages related to death in service benefits would be payable only if either the Claimant had purchased alternative insurance cover or if he had died before the contract had terminated at the end of the notice period. The Claimant had not purchased alternative cover and, fortunately, had not died. Consequently, he submitted, the Claimant had not suffered any loss in respect of those matters. He relied in that regard upon the decision Knapton v ECC Card Clothing Ltd [2006] ICR 1084, and submitted that the decision in Fox v British Airways plc [2013] ICR 1257, properly analysed, is consistent with that decision. In relation to the redundancy payment, Mr Campbell submitted that damages for wrongful dismissal are payable only for losses arising out of obligations arising under the contract relying on Lavarack v Woods of Colchester Ltd. [1967] QB 278. He submitted that a redundancy payment is a statutory right, not a right arising out of the contract, and is enforceable via a claim in an employment tribunal not by means of a claim for wrongful dismissal at common law. There is considerable force in Mr Campbell's submissions but it is not necessary for me to reach a decision on those matters of law in the present case.
In relation to the question of mitigation, I set out my conclusions briefly. The burden is on the Defendant to show that the Claimant has failed to take reasonable steps to mitigate the loss so that he is not able to recover damages for loss which he could have avoided. I accept the Claimant's evidence that, in his line of work, recruitment is done by word of mouth rather than the preparation and circulation of written job proposals or curriculum vitae. I accept that the Claimant did take reasonable steps during the period after 23 July 2013 to find alternative employment but was unable to do so. When he was able to find employment that was not until September 2014 and was at a much lower salary. I do not accept the Club's submission that, in effect, the Claimant simply did little or nothing between termination in July 2013 and September 2014, choosing instead to bring a claim for wrongful dismissal. I note that the Club produced no evidence of employment opportunities that were available or were taken up by others during the period from 23 July 2013 to the 22 July 2014. If the Claimant had been wrongfully dismissed, I would not have restricted his damages on the basis that he had failed to take reasonable steps to mitigate his loss.
CONCLUSION
The conduct of the Claimant on 28 March 2008 in sending obscene and pornographic e-mails via the Club's e-mail system to a junior, female employee and two male friends at other clubs was a sufficiently serious breach of the duty of implied trust and confidence as to amount to a repudiation of the contract. The Club was entitled to rely upon that conduct as justifying the summary dismissal of the Claimant on 30 July 2013. The claim is therefore dismissed. |
The Honourable Mr Justice Blake:
Introduction
On 5 July 2000 at 10.45 am children from the Whitmore Junior School were attending their weekly swimming lesson held at the Gloucester Park pool Basildon. The children were divided into three groups that I will call beginners, intermediate and advanced. The beginner's group was conducted in a learner pool away from the main pool. The intermediate and advanced groups had their lessons in the main pool. Annie Woodland, the claimant, was one of the children in the advanced group. She was 10 years old and the other members of her group were a similar age.
Shortly after she entered the water, Annie was observed by Paula Burlinson, the swimming teacher of the advanced group, floating vertically in the water on the left hand side of the pool (taking directions from an observer at the deep end facing the shallow end). Annie did not respond to questioning or a physical touch. Ms Burlinson shouted for assistance. Another of the swimming teachers, Zoe Dean, responded to this call and the two teachers lifted her out of the water. She was assessed to be still breathing and placed in the recovery position. A few moments later the pool manager, Frank Palmer, attended at the poolside. Annie's breathing was seen to be erratic or fading. Mouth to mouth and cardio-pulmonary resuscitation was administered.
Someone from Mr Palmer's office called the emergency services; the call was logged by the ambulance service as having been made at 10.54. The ambulance arrived at 10.57 and had left by 11.07, arriving at Basildon Hospital at 11.10. The claimant had suffered cardiac arrest and a serious brain injury caused through lack of oxygen. She has made a remarkable recovery but the episode has left serious brain injuries.
This is the trial of her claim that her injuries were caused as a result of negligence. I heard evidence from the following: for the claimant: Kayleigh Iyalla formerly Teeboon (and her parents), Ashleigh Staines, Katie Witham and Professor Perkins. I heard from Debbie Maxwell, Frank Palmer, Zoe Dean and Dr Pearson for the second defendant and Paula Burlinson and Susan Holt for the third defendant. Other statements were read. I will refer to Annie's former classmates as children and identify them by their first names, although they are now grown women, some with families of their own and in Kayleigh Iyalla's case pursuing a career as a primary school teacher.
The proceedings
There has been a complex procedural history that explains why it is nearly fifteen years after the accident that a court is determining the primary facts on which the negligence claim depends.
In 2001 all parties had different legal teams. A claim was instituted against the Swimming Teachers Association (STA). All of the teachers conducting or supervising the lessons on 5 July 2000 had been engaged by Beryl Stopford who was a former swimming teacher who ran an organisation called Direct Swimming Services (DSS). Mrs Stopford, Ms. Dean, Julie Martin (the teacher conducting the 10.45 class in the learner pool) and Debbie Maxwell (who was performing the role of lifeguard at the material time) were members of the STA. As it happens Paula Burlinson was not a member at this time, although Mrs Stopford thought she was. DSS had a contract with various schools in Basildon including Whitmore Junior School to supply swimming classes as part of the physical education curriculum. All the swimming teachers supplied by DSS were either currently or formerly employed by Basildon as swimming teachers and had familiarity with Basildon's operating and emergency procedures. STA had no responsibility for the organisation of the lessons but provided insurance cover for its members.
Once the position was clarified, the claim was amended to name Mrs Stopford and Ms Maxwell as defendants. Paula Burlinson was never a defendant as she was not an STA member and not insured for this activity. At some point an admission of liability was made on behalf of some of the defendants, but when the claim was transferred to the present solicitors for Ms Maxwell, the matter was reinvestigated and a successful application was made to withdraw it.
These events are background only but explain why some draft witness statements were produced in 2001, and why a statement was made in April 2010 by Ms Sell-Peters, the second defendant's solicitor, explaining the instructions she had received from Mrs Stopford and Ms Maxwell. An amended defence was filed on behalf of both of them. In late 2014 Mrs Stopford's insurer decided that she was not covered for any negligence as an employer or provider of swimming teachers, and she was left without legal representation.
In the course of the proceedings the claimant had joined the local education authority, Essex County Council, as the third defendant on the basis that it owed the claimant a non-delegable duty to take care of her in school swimming lessons. This claim was struck out by the High Court and the decision was upheld by the Court of Appeal, but the Supreme Court reversed it in October 2013 [2013] UKSC 66. The claimant is thus able to sue the third defendant on the basis that either the second defendant, as lifeguard, or Paula Burlinson, as teacher, (or indeed both), failed to discharge the duty of care owed to her. In those circumstances, the claimant discontinued the claim against Mrs Stopford. The third defendant's claim for a contribution against the first and second defendant was adjourned to a further hearing (if necessary) in the light of the court's primary findings of fact.
Investigations
Within moments of the accident occurring, Frank Palmer had called all the swimming teachers on duty to his office to have a brief discussion as to what had happened and then asked them to make written statements that were typed up. The statements of the three swimming teachers are set out at Appendix A to this judgment.
The Health and Safety Executive (HSE) reviewed this material, and obtained some further statements from the teachers but not from Annie's fellow pupils. A first report was produced making a number of recommendations.
Whitmore Junior School does not appear to have conducted an investigation of its own. Susan Holt, the head of Physical Education and the lead teacher who attended the swimming pool on 5 July, began to obtain information from the children as they were waiting to board the bus to return to school after the incident. On 7 July she wrote a letter recording information that she obtained from Ashleigh Staines (Appendix B).
Meanwhile, another pupil in the pool, Kayleigh Teeboon, told her parents what had happened at school when she returned home. Her parents were so concerned at what they heard that they invited her to write down her experience that night. She did so and produced a neater version of the same account the following day (Appendix C). She also prepared a detailed sketch plan of Annie's whereabouts in the pool.
Other children also recorded what they remembered in the weeks and months after the accident. The children's statements led to a further HSE review and a second report that reached more critical conclusions as to the safety procedures adopted. Unfortunately, if the first investigation was defective in that it did not take into account the views of the children, the second seems to have been conducted without exploring with the DSS teachers what the children were saying.
As a consequence of all this there are gaps in the evidential picture. There is no scaled plan of the pool (that was demolished in 2011). Each of the witnesses who gave evidence has had the disadvantage of recollecting events that happened within minutes many years ago.
The routine for the swimming lesson
The Gloucester Park pool was a conventionally shaped swimming pool with a deep end and a shallow end 33.3 metres long and 12.5 metres wide. Access to the main pool was through a passageway flanked by the changing rooms.
Debbie Maxwell, Zoe Dean and Paula Burlinson were all trained as swimming teachers and had extensive experience of taking lessons in this pool. Debbie Maxwell and Zoe Dean were, in addition, trained as lifeguards. The roles of swimming teacher in the main and learning pool and lifeguard rotated throughout the day, but Ms Burlinson never undertook lifeguard duties as she had no training in rescue and resuscitation.
Although the classes were billed as starting 15 minutes past and before the hour, the lessons would not start precisely at these times. The whistle had to be blown from the previous session. All the children had to leave the pool and be escorted away by their accompanying school teacher. The next class was waiting in an area by the shallow end while the pool was cleared. They were then placed in the charge of the DSS teacher, moved to the deep end, were briefed on the lesson and entered the water when instructed.
The children had been taught at the start of the term that they should not dive in, even if they had the skills to do so. They should only enter the water by jumping or lowering themselves in. Ms Burlinson's class was using a double lane on the left of the pool, just over two metres in width. The pupils would line up in three to four lines. The plan that Kayleigh completed on the night of the incident showed four lines of pupils. There was little disagreement with its accuracy on that point. The pupils would then jump into the water in 'waves' swim to the end of the pool, exit, walk back to the deep end and then jump in for a second length. Each wave was separated by a suitable distance adjudged by the teacher. The pupils waited for her command to jump in. Ms Burlinson told the court that once the first two waves were in the pool it was her practice to walk from the deep end along the left hand side to a point approximately mid way down the pool between the five and six foot depth markers, where she could keep the whole class under observation. She would signal to the next wave to enter from this more distant position and the children would also know when it was safe to jump in by a marker on the pool indicating an appropriate distance. She said that she had another reason to move down the poolside that day which was to remonstrate with some pupils who had left the pool using steps at the side rather than swimming a full length.
From information supplied in 2000 by the head teacher, it seems that 50 pupils were swimming in the main pool that day, with three school teachers accompanying them Mrs Holt, Mrs Beecham and Mrs Tabbard, a supply teacher attending the school for the day. The role of the school staff was to supervise pupils in the changing room and on the pool side and to escort them to and from the pool. There was no information as to whether the groups were evenly divided between intermediate and advanced and there may have been between 20 and 30 pupils in Mrs Burlinson's class.
Although the recommended ratios were one teacher for every 20 pupils, it was not suggested that it was negligent for each swimming teacher to have a larger class. There were two swimming teachers and one lifeguard to oversee the swimming and in addition there were the three school teachers in attendance at the pool side. However, the class size emphasises the importance of the lifeguard function as an independent observer.
Basildon's Normal and Emergency Operating plan reached 21 editions and the version dating from 2010 was all that was available at trial. It is common ground that the same core safety procedures were found in the earlier edition applicable in July 2000. Paragraph 3.1 provides:
"Within the overall safety procedures for any complex that incorporates a swimming pool the role of the lifeguard is paramount. It is this person's observation, awareness, vigilance, control, training, responses and risk appreciation that ensures a safe leisure environment."
There were several lifeguard chairs around the main pool. It is common ground amongst the experts that generally the best place for a lifeguard to observe swimmers is from the raised height of a chair. This did not mean that a lifeguard must always stay in the chair. Problems with sun glare on the surface of the pool, water quality or blind spots may make it reasonable to observe from elsewhere, including the sides of the pool.
In his witness statement, Mr Palmer put it thus:
"During the school swimming programme, the lifeguard in place would have had to constantly assess the activity and the risks posed. I would not have expected him or her to remain in the chair at all times as there may have been areas of the pool which required particular attention during certain times and the light conditions at times may have meant that there was a more suitable place than the chair for the lifeguard to take up his or her position."
I accept that evidence. In the HSE follow up to this incident, there was a recommendation that the lifeguard should always be installed in the chair before the swimming lesson began. Subject to Mr Palmer's views that the chair was not always the best place to assess the activity, it appears that this recommendation was not a new one but emphasised previous best practice. There had been occasions before July 2000 when DSS lessons had started without a lifeguard in place and Mr Palmer had informed Mrs Stopford that this was not acceptable practice. Ms Maxwell was aware of this. Ms Burlinson said it was her practice not to start a lesson before the lifeguard was in place, but it was not part of her training so to do.
Mr Mills was the safety expert instructed by the second defendant. In November 2011 he prepared a report indicating that the basic principle in lifeguarding is the 10: 20 scan, where a lifeguard scans all of their area in 10 seconds and is able to get to a casualty in a further 20 seconds. This principle had been communicated in the lifeguarding qualification since 1993.
The factual issues relevant to liability
The claimant's case is that Paula Burlinson as swimmer teacher and/or Debbie Maxwell as lifeguard failed to exercise reasonable care in the performance of their duties on the day of the accident, in that each failed to keep pupils under observation when in the water and failed within a reasonable period of time to observe that Annie was in difficulties, raise the alarm and effect a rescue. Timing was, therefore, the critical issue. Her treatment after she had been removed from the water was not an issue at this trial.
The opinion of the medical expert, Professor Perkins, was that the rescuers had been mistaken in concluding that Annie was still breathing when taken from the pool, and they had been misled by agonal breathing. Agonal breathing is terminal breaths, taken as a reflex in the first few minutes after the heart has stopped (i.e. after the person is in cardiac arrest). However, if this were the case they were not negligent in their responses on the basis of knowledge and practice at the time and the fact that they placed in the recovery position when CPR was appropriate it was not a further basis for liability.
The evidence of Professor Perkins was to the effect that the process of drowning was a continuum from the first submersion of the airways in water, through to the stopping of the heart. When the body no longer received oxygen the lips would turn blue and hypoxic deficit occurred. The period of time needed to reach this condition varied from a minimum of 30 seconds, with a rising degree of confidence until a period of 90 seconds or more had been reached. The combination of hospital findings of severe impairment of oxygenation (as indicated in arterial blood gas measurement), pulmonary oedema, Frank Palmer's description of laboured breathing (consistent with agonal breathing), and the evidence of some of the children that Annie had blue lips (consistent with central cyanosis) led him to conclude that Annie was in cardiac arrest when pulled from the water. He did not think that a report that she had a pulse was inconsistent with that conclusion as experience showed that reports of a pulse by people who were not trained clinicians was no longer regarded as reliable evidence of heart function.
At one stage there was a medical issue between the medical experts as to whether the claimant had suffered a primary cardiac event before taking in water. This hypothesis was based on a subsequent report from the ambulance crew of their recollections of the electrocardiographic trace on the journey to hospital. The trace records were no longer available for analysis. By the end of the trial, there was consensus that this data was too fragile to afford a reliable basis for a finding that a cardiac event was an alternative to near drowning as the primary cause of her injuries. This hypothesis can therefore be discarded. Annie's injuries were the consequence of a near drowning episode, and the probability is that if she had been spotted and rescued earlier, she would not have suffered the injury that she did.
It was common ground that Ms Burlinson encountered Annie and sought assistance to retrieve her from the water at about the half way mark of the pool. Kayleigh said that as a good swimmer she could swim a length inside a minute. Annie was reputed to be one of the strongest swimmers in the pool, although it subsequently transpired that Ms Burlinson's assessment derived from the fact that she was in the advanced group. She might well have swum the 16-17 metres of the half length in about 20-30 seconds before stopping. It is then necessary to add some time for her to have got into difficulties and then progress through the continuum as described by Professor Perkins. If she was indeed in a state of cardiac arrest when first pulled from the water as Professor Perkins considered to be likely the she would have been in the water for a minimum of some 50 seconds, and may well have been there for longer.
The claimant relied on the contemporaneous accounts of Kayleigh, Ashleigh and Katie that they had seen Annie in difficulties in the water, and variously described her bobbing up and down, with a white face and blue lips. Two of them had tried to effect a rescue and had brought her body to the edge of the pool. Kayleigh's sketch plan had placed Annie at the third position of the four spaces in the two metre double lane when about to enter the water. If this was right and she had been swimming straight ahead for the first 16 metres, she had somehow moved one and half metres towards the poolside when Ms Burlinson saw her. All of this would have added an un-quantified further period of time before Ms Burlinson came upon her. Kayleigh and Ashleigh claim that they had shouted and otherwise unsuccessfully sought to attract her attention. Kayleigh said that the lifeguard (which in context meant Ms Burlinson the swimming teacher) had not responded because she was deep in conversation with another adult. Ashleigh said that no one heard because it was noisy in the pool.
Ms Burlinson disputes that the children ever rescued Annie or were shouting to attract her attention or that she was in conversation with another adult. In her 2000 statement she stated that the lesson got under way by 10.48. She thought that Annie was in the third wave to enter the water and was in the water only 10 to 15 seconds when she spotted her approximately halfway down the pool. In her evidence she said Annie was in the water for seconds, and she adhered to the assessment of 15 seconds. She reached this conclusion by inference from where Annie was when she encountered her. When she obtained no response from Annie, she lifted her chin onto the 'scumline' on the pool perimeter and with her free hand blew her whistle three times. After a pause for a response she shouted across the pool to Zoe Dean. Zoe Dean walked from midway on the right hand side round the shallow end of the pool Ms Burlinson (approximately 44 metres). Ms Dean was a number of months pregnant at this time and estimated the journey took about 40 seconds. A few moments later Frank Palmer attended and CPR was administered. It seemed likely that whilst this was going on a member of his staff had called for the ambulance.
It was common ground that Debbie Maxwell never mounted the lifeguard chair that session. In the May 2011 defence filed on her behalf, it was contended:-
i. No lifeguard was required at all as this was a programmed teaching session and not a general public session.
ii. Sufficient supervision could be afforded by the swimming teacher.
iii. At 10.45am the sun was high in the sky making it difficult to see in to the water. The temperature on the chair was oppressively hot. For both reasons it was reasonable for the lifeguard to mitigate the effect of the sun by patrolling on the poolside.
iv. At the time of the accident Ms Maxwell was on the (right hand) side of the pool scanning when a teaching assistant alerted her to the area where Paula Burlinson was and inquired if there was a problem.
At the start of the trial Ms Maxwell's team tendered a further witness statement from her that gave rather a different picture. She now stated that she was not in the main pool when Ms Burlinson's class started. She had been the teacher at the learner pool at the 10.15 am session and she had waited for Julie Martin to relieve her before entering the main pool through the corridor. As she came into the main pool area, she was aware that pupils from Ms Burlinson's class were already in the water. She started scanning the pool from the shallow end, which was not the best observation place, and she walked to the lifeguard's chair on the right hand side of the pool intending to mount it. She had not had time to do so before her attention was drawn to the incident on the other side of the pool.
Conclusions
By reference to Professor Perkins opinion set out in [29] above, I am satisfied that Annie was in the water for at least 50 seconds and was in difficulty taking in water for at least 30 seconds. I recognise that this in part depends on the reliability of the children's accounts to be considered below, but once a primary cardiac event is discounted as the reason why she stopped swimming and got into difficulties, lack of oxygen caused by taking in water and failing to breathe is the only other explanation of her injuries. The continuum described by Professor Perkins will take some seconds to progress through, whatever point was reached by the time Ms Burlinson held her airway above the water.
The stark fact is that this was not noticed by Ms Burlinson, who was apparently teaching her group only a few feet away, or by Ms Maxwell who was on lifeguard duty that day and whose role in scanning the pool to ensure that children were safe was paramount.
On any basis, I conclude that Ms Burlinson was wrong in her estimate, that Annie had only been in the water for 15 seconds. I recognise that as a swimming teacher she has to keep her eyes on some 25 children in all: some of whom were waiting to enter the water; some were swimming and some getting out at the end of the pool. She may well have had to deal with children leaving the pool prematurely. However, whilst all this might explain some modest delay in identifying a child in difficulties, she offers no explanation of why she failed to spot Annie for as long as 20-30 seconds.
Equally, I can identify no reasonable explanation why Ms Maxwell failed to spot that Annie was in difficulties during this same period. If she is right that Zoe Dean's class had not started when she first entered the pool, her attention would have been focused on Ms Burlinson's class. She says she saw that some children were in the water. She walked the 26 odd metres from the passageway on the poolside to the lifeguard's chair on the right; this would probably have taken 20 seconds. If a scan is supposed to be completed in 10 seconds she could have made two such scans in this time.
Her suggestion that Ms Burlinson's class had started before she entered the pool is a novel one. It is not mentioned in her July 2000 statement given to Mr Palmer; her September 2000 statement to the HSE inquiry; her signed and corrected statement made in October 2001 in response to the claim brought against the STA; her April 2010 account given to Ms Sell-Peters; her detailed witness statement for trial made in September 2010; or her May 2011 defence.
She can identify some support for this contention from Zoe Dean, who agreed with it when cross examined. However, Ms Dean had similarly never mentioned anything to this effect before from 2000 to 2011 when she gave her account. I cannot accept their explanation that both were merely confining themselves to questions asked of them and did not consider the late arrival of the lifeguard/premature start of the lesson, something to be volunteered either as relevant to the issues being investigated by Mr Palmer and the HSE or those arising in this claim.
Ms Maxwell accepted that she was aware that lessons had started before a lifeguard arrived on occasions before July 2000 and Mr Palmer had raised this as a practice that should not continue. Further, both would have been aware by the time they made their statements that the first HSE inquiry made a recommendation that lessons should not start before the lifeguard was in the chair.
I conclude that there has been a remarkable departure from the second defendant's pleaded case as set out at [34] above. Of the four points, the first two have been abandoned as flagrantly contrary to the operating procedure at this pool as described by Frank Palmer. The third point was abandoned in the account given by Ms Maxwell in her evidence. She told me that she was walking to the lifeguard chair intending to sit on it as the best point to observe the children in the pool. It was not, therefore, contended that either glare from the summer sun or oppressive heat made the chair unsuitable as the vantage point for scanning on that day. The consensus between the defence experts and Mr Palmer, that the lifeguard did not need to be remain in the chair the whole time, has thus been overtaken by this new account of events. In substance, Ms Maxwell now says that she was not deciding to scan from the poolside because she thought that was the best place on the day, but because she had not had time to get to the chair.
I cannot accept that Ms Maxwell was prevented from adequately performing her duties as lifeguard because the class had started early when she was not present. If that had been her case, she should and would have spelt this out to others, not least her legal team, many years before hand. I am satisfied that the shift in her account is not explained by some recent jog of her memory, but the recognition that the timing evidence made her previous account untenable.
Ms Burlinson disputes the assertion that she started her lesson prematurely and says she did not permit the children to enter the water until Ms Maxwell had entered the pool but did so as soon as she entered. Ms Maxwell may well be right that she was at the shallow end of the pool and not by the lifeguard chair when this lesson started. Scanning from this position may have been less effective than from half way down the length of the pool; however there is nothing in the evidence to suggest it was not possible.
If she had considered that she could not effectively scan when moving from the shallow end to the preferred point half way down the right hand side of the pool's length, she could have said so on the day or shortly after. I do not accept that she was powerless to do anything about a premature start to the lesson once she became aware that the lesson had started before she reached the chair. Her responsibilities would have entitled her to blow her whistle to stop more children getting into the water until she was in the most effective position to scan the water. She was the designated lifeguard and had the relevant training whilst she knew Ms Burlinson did not. She may not have been the team leader on the day but she accepted that she was the informal coordinator on safety issues and the safe procedure laid down by Basildon. She signed the Accident Form on 6 July 2000 as 'the person involved in the incident' although the contents of the form were populated by Mr Palmer from the information obtained from the DSS teachers.
In any event, if the children only entered the water when Ms Maxwell was at the shallow end of the pool, and it took 20 seconds for her to walk to the chair, she would have arrived there by the time that the claimant had swum the 17 metres to the point half way down the pool where she started to have difficulties. An experienced lifeguard like Ms Maxwell would have had ample time to scan effectively from the poolside or the chair during the 30 seconds during which the near drowning process was underway.
Further, I am satisfied that Annie's fellow pupils did encounter her in the water in an advanced state of difficulties and attempted to rescue her and consequently she had stopped swimming for longer than the minimum period of 30 seconds. I reach this conclusion for the following reasons:-
i. Mrs Holt received an account of attempted rescue and taking Annie to the side of the pool shortly after 11.00 of the morning of the incident (Appendix B).
ii. The triage notes in the Accident and Emergency Department of Basildon Hospital were completed at 11.10. They record:
'swimming for 5-6 minutes when she suddenly stopped. Friend swimming i/c her said her head (?) started to shake and then she went white .. blue lips. Help was called for.'
We do not know who gave this information. Annie was unconscious. The children were being taken back to school. It is possible that a school teacher may have attended hospital and supplied this information. It suggests that very early on a child was referring to blue lips. A very similar version is recorded in the triage notes at 11.50:
'according to friend head started shaking and face went white and lips went blue. Friend called for help'
iii. The medical records also disclosed a note prepared by Dr Khalifa the Paediatric Registrar at Basildon Hospital (untimed) in which he records a conversation he had with Mr Palmer. Some of the information is derived from the statements he obtained from the swimming teachers but he is also recorded as saying:
'10 seconds swimming shaking and head going forward, the friend behind called the swimming teacher who took her out of the water in less than 10 seconds.'
Mr Palmer recalled the conversation but could not say who provided the information quoted that does not appear in the statements. He would have no knowledge of his own, and had not spoken to the children. The overwhelming inference is that this information emerged from the initial collective conversation he said he had with staff before the Appendix A statements were written up.
iv. Annie's position when observed by Ms Burlinson, and her starting point as recorded by Kayleigh, indicates that she had moved one and a half metres (over four feet) to the poolside. Such movement cannot be explained by Ms Burlinson but is consistent with the children having brought Annie to the side of the pool as Ashleigh told Mrs Holt and Kayleigh recorded in her statement that evening
v. Kayleigh's contemporary statement records Annie's face under water as being white with her lips black. Ashleigh's statement made somewhat later in July 2000 records 'Annie did not seem right and her lips went blue and her face was very white'. Katie in her statement made in 2000 records 'her head was bobbing up and down then I saw going under and deeper in the water'. Professor Perkins regards these as pertinent descriptions of the near drowning process and lack of oxygen. It is improbable that the children invented these descriptions.
vi. Other children made written statements to their parents or others supporting parts of these accounts. There are also differences.
vii. Understandably Ashleigh and Katie could add little to their statements when they gave evidence. Kayleigh was firm in her recollection of core details and the reasons why she recorded them so promptly.
Taken together this is an impressive body of contemporaneous or near contemporaneous evidence of the children having witnessed a school friend in difficulties and attempted to rescue her.
There are other aspects of Kayleigh's account that do not have the same degree of support. At first blush it does seem improbable that she and Ashleigh could have dived back into the pool to rescue Annie when diving was prohibited and none of the adults in the pool noticed this. Equally, it seems inconceivable that an experienced swimming teacher could have ignored repeated loud cries for help, or would have told the children off for interrupting her conversation with another adult. This would amount to evidence of a gross dereliction of duty by Ms Burlinson. I cannot reach a conclusion to the requisite degree of satisfaction that these events did occur, although they may have done.
As the trial progressed my confidence in the reliability of the basic narrative of the children's accounts strengthened. Each of their accounts seemed to me to have been a conscientious attempt to recollect what was, undoubtedly, a traumatic event. By contrast, the reliability of the evidence of three DSS teachers diminished. All three added details that were not previously mentioned. In my view, each gave some implausible explanations for omissions in previous statements. Ms Burlinson made assertions of fact that, when explored, transpired were based on debatable assumptions.
There are a number of matters on which no conclusions can be reached: how many lengths had any of the children swam in the pool before the alarm was raised and whether Ms Burlinson blew her whistle (unremembered by anyone else) before shouting to Ms Dean. It seems likely that Mrs Beecham was the school teacher who drew Ms Maxwell's attention to the incident on the other side of the pool. The supply teacher Mrs Tabbard may have been at the shallow end or could have walked up to the left hand side of the pool, but in the absence of a witness statement from her, there can be no sufficient clarity for a finding that she was talking to Ms Burlinson at the time when Annie got into difficulties.
The question then is whether, on these primary findings of fact, the actions and omissions of either Ms Burlinson or Ms Maxwell fell below that which could reasonably be expected of them as teacher and lifeguard responsible for the school swimming lesson of a group of 10 year olds?
I accept the timing is tight and those supervising swimming lessons cannot be expected to spot every incident and respond instantly. The children did not enter the water until after 10.45 and Ms Burlinson may well be right in her original estimate of 10.48. I was unimpressed by her evidence that the timing of 10.48 was intended to refer to when the children were waiting for the lesson to begin at the shallow end of the pool. The note is clear that this was when the children were instructed to enter the water.
Working backwards from when the ambulance was called at 10.54, it is likely that the rescue had begun and Annie was out of the water, two minutes or so earlier. It is possible that she was in the water for three to four minutes, and she could not have been in the water for longer than six minutes, even making due allowance for potential uncertainties in the assessment of the chronology. However, this time range can accommodate all the events described above: a 20 second swim, a 30 second period of taking in water and the onset of hypoxia, some seconds for an attempted child rescue, Ms Burlinson identifying Annie in the water, lifting her chin and then calling for help.
I am driven to the conclusion that for her to fail to notice a pupil in difficulties in the water for more than 30 seconds, falls below the standard of care reasonably to be expected of a teacher. Apart from possibly having to remonstrate with some pupils who exited the pool too early, she had no legitimate distractions to explain this period of time. Her estimate of how long Annie was in the water overall is seriously adrift of the realities of the situation. It is not possible to determine why her attention was deflected from her pupils who were in the water and the one pupil who was in difficulties there, but I am satisfied that it was deflected and the opportunity for an earlier response was missed.
Debbie Maxwell was considerably further away from Annie. If she was at the shallow end of the pool when Ms Burlinson's group entered the water, this is not the best place for a lifeguard to scan the entry into the water of the pupils. She then moved half way down the right side of the pool, which would be a better place to keep the pool under observation overall. Once Zoe Dean's class had started, as her pupils were the less strong swimmers, it would be reasonable for the lifeguard to be situated on that side of the pool and give those pupils particular attention.
However, the lifeguard is there to keep an eye on all pool users, and one might have expected the deep end of the pool to be the place where observation needed to be maintained. It was common ground that entry to the water is a particular time of danger for children. There was sufficient time available for her to have performed her functions effectively despite the distance away. There was some urgency in the situation when she realised that the children had entered the water before she climbed the lifeguard chair. A lifeguard needs to remain alert to dangers, focused on the users of the pool, and keeping constant observation and intervening if necessary. If a rescue is to be effected she is the person who is trained to undertake it and whose role it is to do so. I am satisfied that her failure to observe Annie until her attention was drawn to her by Mrs Beecham, either at the same time as or shortly before Zoe Dean reached Ms Burlinson, is indicative of a failure to perform her role to the reasonable standard to be expected. Although I cannot be sure that Ms Burlinson blew her whistle as she claims, she certainly shouted across the pool to Ms. Dean. This was not heard or noticed by Ms Maxwell. All in all, I conclude that she was not paying sufficient attention to users in the water on the other side of the pool at the material time.
If she had spotted Annie within seconds of her getting into difficulties, she could have raised the alarm and started the rescue process even if Ms Burlinson's attention was distracted elsewhere. The lifeguard's duties are an additional safety feature intended to be distinct from the responsibilities arising from taking a class. Her failure therefore significantly contributed to the passage of time before Annie was seen and rescue effected.
In the event I find that both Debbie Maxwell and Paula Burlinson were negligent and as a consequence the third defendant is liable for their negligence. The claimant therefore succeeds on this trial of liability as these failures of the duty of care caused or materially contributed to Annie's injuries.
.
Appendix A reports made by the swimming teachers for Frank Palmer 5 July 2000
Report From: - Debbie Maxwell. Direct Swimming Services
I was walking towards the deep end of the pool on the left hand side. I was overseeing the children in the water when a teacher said "is there a problem over there". I looked across and saw Zoe Dean heading to help Paula who was bent over the side of the pool holding a child. I ran round the pool to assist.
The children were then told to sit on pool side with their teacher. I ask the teachers to obtain the child's medical records by phoning the school and also asked the teacher if the child suffered from asthma or epilepsy because she was having difficulty in breathing. The teacher then went to the phone the school and returned to say that there were no known medical problems with that child. The child was already in the recovery position, I noticed her breathing was heavy, then Frank Palmer arrived shortly after me and took over the care of the child. We monitored her breathing and circulation which then started to fail and then Frank commence resuscitation procedures, she then began to breath again and was once again put into the recovery position. Then the child's vital signs once again failed and Frank Palmer commenced CPR whiles Zoe began mouth – mouth, shortly after the paramedics arrived.
Report from – Zoe Dean Direct Swimming Services
I was walking towards the shallow end from the deep when I heard Paula call the children had just entered the water I looked across the pool and saw Paula holding a child's chin and arm I went to assist. We turned the child around and she started to cough, she was responsive (groaning) but her eyes were slightly open and rolling, my first thought was that she was having a fit. Paula spoke to her asking if she could hear and she nodded yes, she began to pull against us. She was then pulled out and during this manoeuvre she began limp. She was put in a semi recovery position; her breathing was being monitored but was laboured. Frank palmer approached us and asked if we had a pulse. Just after this her breathing stopped and Frank Palmer began resuscitation. Her pulse was checked again there was no pulse |I began resuscitation and Frank Palmer started CPR, she began to breath again and was put into the recovery position. During this time her pulse stopped and resuscitation was started after which she began to breath again. Whilst monitoring her her pulse remained and her breathing stopped. Frank palmer continued resuscitation and the ambulance arrived.
Report from Paula Burlington (misspelt in the original) Direct Swimming Services
While teaching Whitmore School at approximately 10:48am, the children was instructed to enter the deep and, they entered with a jump and swam front crawl. The child in question is one of the strongest swimmers in the school, swimming in the top group. I began walking towards the shallow end between the 5 and 6 ft area I noticed a child face down to the wall she had only been in the water for less than 15 seconds, I thought she had stopped to look for goggles and bent down to lift her head up. I pulled off her goggles and spoke to her but her was unresponsive. I then blew my whistle I saw Zoe and shouted for her, Zoe and myself turned her around and spoke to her. I kept her airway open whilst talking to her she pulled her onto the side she became responsive and was breathing for approx 5 seconds. Her breathing became laboured and she became unresponsive again. She was put into the recovery position as she was breathing but unresponsive.
Debbie Maxwell arrived followed by Frank Palmer and I went to instruct the children to sit on the poolside.
Appendix B Susan Holt letter
Dated 7 July 2000
Re: Incident at Gloucester Park Swimming Pool Wednesday 5 July
During weekly organised swimming lesson session the swimming group I was attached to had swum one warm up length and some were on their second, when a child came to me to say a teacher was needed across at the other side of the pool. I looked over to see the swimming instructor kneeling at the side of the pool holding Annie in the water at the edge of the pool. I went over. By the time I got there two instructors were holding Annie in the water speaking to her. They pulled her out safely and laid her in the recovery position, talking to her all the time.
The rest of the children had been taken out of the water and we asked them to sit at the area at the deep end.
Other pool representatives came through to help. I felt I needed to phone school to tell them what was happening and to ask them to get in touch with Annie's parent's. I also requested if it was possible for Mr North to come to Gloucester Park. (An ambulance had been called.)
When I returned I was asked if Annie suffered from asthma or any other like ailment due to her breathing pattern. I re-phoned the school. Records were checked – there were no ailments listed. I told this to the people attending to Annie. They asked if it was possible to check with other children in her class. Went to ask the girls sin Class 7. They said they did not think Annie had asthma or any similar ailment. One did say that Annie had a cyst on her head from something when she had been younger. I went back to relay this information to the pool staff.
The paramedics and ambulance arrived promptly. Tlhere was not enough room in the ambulance to allow a school staff member to accompany Annie to Basildon Hospital.
When the rest of the children were outside, I asked for any children who saw what happened to come across. Ashleigh and a few others came to me. (Mr. North had arrived at the pool.) Ashleigh said that she had been swimming behind Annie when she saw Annie shake her head several times (as if to get hat properly wet?) Annie then went under water and Ashleigh realised something might be wrong. Ashleigh caught hold of Annie and managed to bring her to the surface. She said Annie was very heavy. She got Annie over to the wall (which they were close to). Ashleigh, Kayleigh and Nicola were there shouting for the swimming instructor who came down to where they were. (What followed is as above.)
SM Holt (Mrs)
Teacher
Appendix C
The neat version of handwritten statement of Kayleigh Beeboon written out 6 July but based on an earlier version 5 July made at her home. Original spelling retained.
Annie dived in and was swimming fine. Me and Ashleigh dived in and swam length. When we were at the end (Ashleigh said I thought I saw someone in the water drowning, but I said they were; probably just wetting their hair. Me and Ashleigh walked back and saw Annie under the water with her eyes closed and her lips were black and her face was white. I dived in and then Ashleigh dived in. Me and Ashleigh both pulled her up out of the water we swam to the side. We both tried to push her up from the water but it wasn't working, then I climbed out while Ashleigh was pushing her I was pulling her up on the side. I held on to Annie whiles Ashley climbed out. We pulled her halfway up onto the side. Me and Ashley was shouting for help. The lifeguard told us to shut up, but we kept saying Help! Help! someone's drowning Help! But the life guard wasn't listening to us because she was talking to another life guard. We shouted 10 or 11 times. In end Ashleigh slapped her legs. The life guard turned around and was just about to have a go at us when she saw us struggling to hold A(nnie) out of the water. The life guard pushed us out of the way so Annie fell back into the water. She pulled Annie out by the hat and her hat fell off. Annie fell back in again. The lifeguard pulled her out by her neck and her arm. Another life guard done a kiss of life but Annie wasn't respond The other life guard sent everyone to go back to get changed.
Statement of Kayleigh Teeboon
Of incedent at Glouster Park Swimming Pool
On Wednesday 5th July
KM Teeboon
6/7/00
date of statement. |
Mr Justice Warby:
The claimant ("Mr Yeo") is an MP. He sues Times Newspapers Limited ("TNL") for libel in articles published in hard copy on the front page and on pages 6-7 of The Sunday Times for 9 June 2013, and a further article published two weeks later on 23 June 2013. All three articles have also been published on TNL's website, with some modifications, since June 2013.
The general subject-matter of the articles is indicated by the front page headline of 9 June 2013: "Top Tory in new Lobbygate row". The articles followed undercover investigation by two journalists from TNL's "Insight" team, posing as representatives of a consultancy ("CGG") to a Far Eastern solar company. The articles were largely though not exclusively based on exchanges between the journalists and Mr Yeo over a lunch on 21 May 2013, which was covertly filmed.
This is the second case management conference ("CMC"), and the first costs management conference. After the first CMC, in a judgment handed down on 20 August 2014 ([2014] EWHC 2853 (QB)), I ruled against an application by TNL for trial by jury and determined as preliminary issues what defamatory meanings the articles complained of bore, and whether those meanings were factual or comment. I found that the articles of 9 June 2013 bore two defamatory meanings, one factual and the other exclusively comment. I found that the article of 23 June 2013 bore a single defamatory factual meaning.
Because these meanings were different from those complained of by Mr Yeo, and different from those which were then defended by TNL as true or fair comment, I gave Mr Yeo permission to amend the Particulars of Claim to complain of the meanings I had found the articles to bear, and struck out TNL's defences of justification and fair comment, as they were then pleaded.[1]
Mr Yeo having amended his Particulars of Claim TNL re-pleaded its Defence so as to justify the defamatory factual meanings of both articles, and to defend as fair comment the defamatory comment contained in the articles of 9 June 2013. The Amended Defence also retains in their original form defences of Reynolds privilege, asserting that the articles were "on a subject of strong public interest, were responsibly published and were expression protected by Article 10.1 of the Convention".
On 3 October 2014 Mr Yeo served a Reply. This addresses in some detail the particulars relied on in support of justification, fair comment, and Reynolds privilege, and further alleges that the words complained of were published maliciously.
Two issues arise for decision:-
i) Whether Mr Yeo's plea of malice should be struck out.
ii) To what extent the parties' costs budgets should be approved.
The plea of malice
TNL's attack on Mr Yeo's pleaded case of malice is double-barrelled. One criticism is that the malice plea, as it stands, is equally consistent with the absence of malice as with its presence and is therefore non-compliant with well-established pleading principles and falls foul of the Part 53 Practice Direction.
TNL's other criticism is that the plea is misdirected. It fails to make the only relevant allegation, namely that someone for whose conduct TNL is responsible published the defamatory comment without an honest belief in it. Instead, it alleges that the journalists did not believe in the truth of the narrow factual allegation contained in the articles of 9 June 2013, which is not a sufficient basis for alleging malice.
To assess these points it is convenient to begin by examining the plea of malice in its context within the statements of case overall. In relation to the articles of 9 June 2013, the Defence pleads the defences of justification, fair comment and Reynolds in that order. This is sensible, as the Reynolds defence is put forward as an answer to both the defamatory meanings of the articles, and the statutory public interest defence explicitly protects opinion as well as fact: Defamation Act 2013, s 4(5). In relation to the article of 23 June 2013, which bore only a factual meaning, the Defence pleads justification and Reynolds. As there was no comment, there is no room for any defence of fair comment.
The Reply pleads to the particulars of justification in paragraph 5, which contains numerous sub-paragraphs in which each particular is addressed and responded to in turn. Paragraph 6 addresses the plea of fair comment as follows:
"Save that it is admitted that the standard of behaviour of a Member of Parliament and Select Committee Chair is a matter of public interest, paragraph 34 is denied. The Defendant cannot demonstrate any (or any sufficient) factual support for the defence of fair comment/honest opinion. The facts reported in the article were not true. Paragraph 5 is repeated."
Specific paragraphs of the particulars of facts relied on in support of the fair comment plea are then addressed. If this plea were made good, the defence of fair comment would fall short of meeting the objective test of fair comment: that the comment is one that an honest person could have made on the basis of the facts.
Paragraph 7 of the Reply deals with the Reynolds defence. The body of that paragraph states that the plea of Reynolds privilege is denied, and explains the basis for that denial: "the Defendant (principally through the actions of the two journalists) did not act responsibly or in the public interest in publishing the Articles." Details of Mr Yeo's case in this respect follow, over 38 sub-paragraphs.
These sub-paragraphs identify a number of respects in which the Defendant's conduct is explicitly said to have been irresponsible or not responsible. For example, paragraph 7.16 alleges that in making reference in the articles to a House of Commons rule "The Defendant failed to act responsibly in that it did not make clear to readers that the Rule related specifically to bribes." At paragraph 7.18 it is alleged that statements in the article describing the initial contact made with Mr Yeo by the journalists were false and "particularly irresponsible", for certain stated reasons. Paragraph 7.27 describes the journalists' activities as a "blatant fishing expedition [which] was utterly inconsistent with the tenets of responsible journalism". Paragraph 7.29 complains that "The Defendant's decision to place the Claimant's denial at the end of the Front Page and Inside Page Articles, when the allegation appeared so prominently, was irresponsible."
The particulars also contain, however, a number of explicit allegations of deliberate misconduct. For example, paragraph 7.17 alleges that "The Defendant deliberately misrepresented the initial approach made in its email, …". Paragraph 7.23 alleges that "The Defendant deliberately distorted the Claimant's crucial caveat …", and paragraph 7.24 that "The Defendant thereby deliberately distorted the Claimant's clear statement that he could not act as a public advocate …"
There are also allegations which clearly imply deliberate misconduct even if they do not use the word "deliberate". At paragraph 7.15, for example, it is alleged that "by the time they came to write the Articles, Ms Blake and Mr Calvert must have appreciated that any indication by the Claimant of a willingness to provide advisory services was not a breach of the rules." In paragraph 7.32 it is alleged that "The video footage contained highly selective quotes designed to mislead and give a false impression of what the Claimant had said."
Other sub-paragraphs of Mr Yeo's case on Reynolds privilege contain allegations that are consistent with, and could be taken to imply, a case of deliberate misconduct, but are in my judgment equivocal. One example is paragraph 7.14, which says this:
"The Defendant had access to the full recording of the Meeting. The decision to deprive readers of the same access meant that it was incumbent on the Defendant to ensure that it presented an accurate and fair account of what had been said. Instead, the Defendant presented a grossly misleading account supplemented by a highly selective and misleading extract of video footage."
The language here does not include any allegation of deliberate wrongdoing. The nub of the criticism here could be viewed as a failure to discharge a duty incumbent on a responsible journalist to present an accurate and fair account, without an imputation of dishonesty. Certainly, there is no clear allegation of dishonesty. Yet there is some loaded language implying a state of mind ("decision to deprive", "selective").
Other instances of allegations which are equivocal in their presentation are the allegation that "The Defendant" had no sufficient basis on which to justify the use of subterfuge against the Claimant for the purposes of the PCC Code (Reply 7.9-7.13); and the allegation that paragraph [26] in the Inside Article ('Asked by the reporters if he would be able "to guide us through that process", Yeo replied "Yes"') was highly misleading (Reply 7.20).
A further, and prime example of an equivocal plea is what I shall call "the joke point". It arises from paragraph 7.29 of the Reply, in which the pleaders deal with an episode described in the first six paragraphs of the article published on the inside pages of The Sunday Times of 9 June 2013. That article referred to the appearance before the Energy and Climate Change Select Committee of John Smith, Managing Director of GB Railfreight. That company was described as "a company owned by Eurotunnel, of which Yeo himself is a paid director and shareholder, so he could not be seen to help Smith push its commercial interests before the committee." The article continued:
"[5] But Yeo had devised another way to ensure his colleagues got the right message. He would later reveal how before the hearing he had tutored the executive on what he needed to say to win over his fellow MPs.
[6] At a lunch immediately after the hearing with two strangers offering him a new job as their parliamentary advocate and adviser, Yeo could not resist boasting about what he had done. As he explained what he was willing to do for them behind the scenes, he confided: "This morning I had a case, in front of the committee we had a company called Great British Railfreight who have big contracts for moving coal and biomass around the country. And I said, because GB Railfreight is a subsidiary of Eurotunnel, I could not ask this guy any questions in public because it would look as though I might be biased about that. But what I do for him in private is another matter altogether, obviously."
[7] Asked to elaborate, he leant forward: "I was able to tell him in advance what he should say," he confided, before rolling back in his chair in a gust of laughter."
At paragraph 7.29 of the Reply the following is alleged:
"It would have been immediately obvious to any responsible journalist that the Claimant had not given them what they wanted during the Meeting. Instead of dropping the story, or treating it responsibly, the Defendant chose to focus on a joke made by the claimant which they presented as an admission by the Claimant that he had "coached" a witness, choosing this as the sub-headline to the Front Page Article, and the words "I told him in advance what to say, Ha ha" as the headline to the Inside Article…"
This is equivocal because terminology appropriate to a case of irresponsible journalism is used, but so is language (such as "obvious", "chose", "presented") which is suggestive of a case of knowing falsehood.
Another feature of the particulars of Mr Yeo's case in response to the Reynolds defence will be apparent from the passages I have quoted: it generally directs its allegations at "the Defendant" but on one occasion makes an allegation of knowledge against the journalists by name, and on another refers to "any responsible journalist". As already noted, the wording in the body of paragraph 7, which introduces these sub-paragraphs, alleges that TNL was irresponsible "principally through" the two named journalists. It is not made clear which other employees or agents of TNL are implicated.
I come now to the plea of malice which appears in paragraph 14, after paragraphs which deal with the defences of justification and Reynolds privilege in respect of the article of 23 June 2013. The plea is in these terms:
"MALICE
14. If and insofar as is necessary the Claimant will contend that the words complained of were published maliciously.
PARTICULARS OF MALICE
14.1 The Defendant is vicariously liable for the actions and state of mind of the journalists.
14.2 For the reasons set out above, and by reason of their attendance at the Meeting, the journalists knew that the Claimant had not acted in the way alleged in the Articles; he was not prepared to act, and had not offered himself as willing to act in a way that was in breach of the Code of Conduct of the House of Commons by acting as a paid Parliamentary advocate in the manner alleged. Such allegations were known to the journalists to be false.
14.3 Therefore, the journalists could not and did not honestly believe that the Claimant had acted scandalously and/or that he shown himself willing to abuse his position in Parliament to further his own financial and business interests in preference to the public interest".
TNL complained in correspondence and then subsequent application notice that this was plainly an inadequate pleading on the grounds that it provided no proper particulars of the facts relied on in support of a serious allegation of malice. This was met dismissively by Mr Yeo's solicitors. In a letter of 15 January 2015 they cited paragraph 7.14 of the Reply, which I have quoted at paragraph 17 above. They went on:
"The subsequent paragraphs contain particulars of the journalists' deliberate misrepresentation of the rules, deliberate misrepresentation of the basis on which our client agreed to meet the journalists and deliberate misrepresentation of our client's conduct during the meeting, such misrepresentation being not merely irresponsible but deliberate and knowingly false.
…
Paragraph 14.2 of the plea of malice contains an averment that "for the reasons set out above" the journalists knew (i) that our client had not acted in the way alleged in the Articles; and (ii) that the allegations were false. It is perfectly obvious that the "reasons" referred to in 14.2 are those set out in the lengthy Reply to the responsible journalism defence. We are surprised that you required this explanation but trust that your client will now withdraw this application."
Despite this attempted brush-off TNL has, through Mr Millar, persisted in its complaint about the failure adequately to particularise the allegation of malice, and it is clear, in my judgment, that TNL's complaint cannot be so readily dismissed.
The only reasonable interpretation of paragraph 14 of the Reply is that it makes an allegation of dishonesty against each of the journalists. That would be clear enough on the face of the Reply itself. Paragraph 14 says that malice is pleaded "if and in so far as may be necessary". The plain and natural interpretation is that malice is alleged to defeat the defence of fair comment. This is and always has been the effect of proof of malice in a fair comment case, and it is the only reason one would expect to see a plea of malice in this Reply. Although the Reynolds defence is a species of privilege it is not the practice to plead malice in answer to a Reynolds defence because, as Lord Hoffmann explained in Jameel v Wall Street Journal sprl [2007] 1 AC 35 [35] "There is no question of the privilege being defeated by proof of malice because the propriety of the conduct of the defendant is built into the conditions under which the material is privileged."
An allegation of malice in the context of a fair comment defence is an allegation that the person concerned dishonestly expressed an opinion which they did not hold. As Lord Nicholls, sitting in the Court of Final Appeal of Hong Kong, put it in Tse Wai Chun v Cheng [2001] EMLR 77 [24], summarising the effect of the English authorities:
"… malice covers the case of the defendant who does not genuinely hold the view he expressed. In other words, when making the defamatory comment the defendant acted dishonestly. He put forward as his view something which, in truth, was not his view. It was a pretence."
This approach has become accepted in this jurisdiction, as indicated by Lord Phillips in Spiller v Joseph [2011] 1 AC 852, [108]. For publication in and after 2014, s 3(5) of the Defamation Act 2013 applies, and is to the same effect. Mr Yeo's solicitors' letter of 15 January 2015 merely assists, if this was necessary, by re-confirming that Mr Yeo's case is one of dishonesty on the part of the journalists and each of them.
Sometimes malice is pleaded in aggravation of damages, and Mr Browne sought on behalf of Mr Yeo to defend paragraph 14 as permissible on this basis. However, it is not presented in that way; it does not appear to me that this is why it was pleaded; nor do I accept that such a plea (even assuming it to be legitimate) would properly belong in the Reply. Any such allegation would belong in the Particulars of Claim. These do in fact contain a plea in aggravation of damages, but not one that encompasses allegations of malice. In any event, Mr Browne did not submit that paragraph 14 was to be regarded as pleaded solely in aggravation of damages, and his submission would not meet (and in fairness was not presented as meeting) TNL's complaint that the plea is an allegation of dishonesty which is lacking in proper particularity.
That complaint is advanced on the basis of CPR 3.4(2)(a) and (c) and PD 53 2.9. The former provides that the court may strike out a statement of case on the basis that it discloses no reasonable basis for bringing a claim or that it fails to comply with a Practice Direction. PD53 2.9 provides: "If the defendant contends that any of the words or matters are honest opinion, or were published on a privileged occasion, and the claimant intends to allege that the defendant acted with malice, the claimant must serve a reply giving details of the facts or matters relied on." Implicit in this is that the details given must comply with the relevant principles of pleading.
Clarity and precision are always required in statements of case, but never more so than when an allegation of dishonesty is being made. This is axiomatic. One reason is the obvious one that the ordinary requirements of fairness dictate that a person accused of acting dishonestly must be given a clear statement of the case against him, so that he can prepare to meet it.
Clarity and precision are also required in order that the party accused and the court can police the making of allegations of dishonesty, and weed out those which do not deserve to go to trial because the case cannot attain the high standard required.
The approach to be taken to the pleading and proof of allegations of dishonesty was considered by Lord Hobhouse in Three Rivers District Council v Bank of England [2003] 2 AC 1 at [161]. His observations were made in the context of a summary judgment application in a claim for misfeasance in public office, but are of general application:
"The law quite rightly requires that questions of dishonesty be approached more rigorously than other questions of fault. The burden of proof remains the civil burden—the balance of probabilities—but the assessment of the evidence has to take account of the seriousness of the allegations and, if that be the case, any unlikelihood that the person accused of dishonesty would have acted in that way. Dishonesty is not to be inferred from evidence which is equally consistent with mere negligence. At the pleading stage the party making the allegation of dishonesty has to be prepared to particularise it and, if he is unable to do so, his allegation will be struck out...It is normally to be assumed that a party's pleaded case is the best case he can make (or wishes to make). Therefore, in the present case, the particulars given provide a true guide to the nature of the case being made by the plaintiffs (claimants)... "
Applied to a plea of malice in a defamation case these principles have the consequences spelled out at paragraph 28.6 of Gatley on Libel and Slander (12th Ed):
"The plea must be more consistent with the presence of malice than with its absence; if it is not, it is liable to be struck out. Generalised or formulaic statements will not be permitted. The plea of malice must focus upon what the defendant did or said or knew. The court will be sceptical about pleas of malice in which the claimant pitches the meaning high and then asserts that the defendant did not or could not believe that high meaning to be true, and so is malicious. The claimant must allege specific facts from which it is alleged the inference is to be drawn."
Here, the plea of malice as it stands does not clearly or distinctly allege that the defendant knew the words complained of contained the defamatory comment. That is something that Mr Yeo's legal team have offered to put right by spelling it out in an amendment. Another linked and well-established point should be made, however. Where the defendant is a company as is the case in this action, the plea of malice must set out a case of dishonesty on the part of one or more identifiable individuals for whose conduct the company is responsible. It is not good enough to allege generally that the company was malicious, still less to aggregate pieces of knowledge or conduct of several individuals.
The court must be vigilant in ensuring that the principles I have identified are adhered to. They represent an important safeguard for freedom of expression, as Eady J pointed out in Henderson v London Borough of Hackney [2010] EWHC 1651 (QB) [35]:
"It is not appropriate merely to plead … absence of honest belief …. Unsupported by relevant factual averments, those are merely formulaic assertions. It is certainly not right that a judge should presume such assertions to be provable at trial. Otherwise, every plea of malice, however vague or optimistic, would survive to trial. It would be plainly inappropriate to move towards such an unbalanced regime, since it would tend to undermine the rights of defendants protected under Article 10 of the European Convention on Human Rights."
It would not be fair to characterise Mr Yeo's plea of malice in this case as "merely formulaic". In my judgment, however, it fails to comply with the principles stated above.
The most obvious flaw is that the Reply fails to plead clearly and distinctly the factual case relied on to establish dishonesty on the part of the two journalists. It does not make clear what are the "reasons set out above" that are referred to in paragraph 14.2. It is not good enough for Mr Yeo's solicitors to say that this is a reference to the entirety of the plea in paragraph 7 in response to the Reynolds defence. That plea is explicitly directed at establishing that the defendant's conduct failed to meet the objective standard of responsible journalism. That is a very different thing from an allegation of dishonesty. Moreover, whilst the case of malice is explicitly directed at "the journalists" the case of irresponsible journalism is directed at "the Defendant (principally through the actions of the two journalists)".
Furthermore, as illustrated above, although paragraph 7 contains some explicit allegations of deliberate wrongdoing, it also contains a number of allegations which go no further than imputing irresponsibility, and some allegations which as presently pleaded are equivocal. If the words "reasons set out above" are a compendious reference to paragraph 7 it is left unclear how the allegations of irresponsibility are supposed to contribute to the case of dishonesty. On the face of it, an allegation of irresponsible journalism cannot serve that function.
Mr Browne has submitted that it would be disproportionate and unnecessary to require Mr Yeo's case to be further particularised. It is, he submits, sufficiently clear already. He has taken me on a tour of the Reply to illustrate this point. This took some time, which rather undermined his proportionality point, and aspects of the exercise seem to me to have underlined the unsatisfactory nature of the malice plea. It is enough to give three illustrative examples.
Mr Browne has explained that the crux of Mr Yeo's case on justification and fair comment is the allegation of willingness to abuse his position. His case is that he only ever indicated a willingness to consider a consultancy position, which was not in breach of any rule, and that the journalists knew this, yet published what they did nonetheless. The parts of Mr Yeo's Reply referred to by Mr Browne in explaining how this case was pleaded were, in this order, paragraphs 5.5, 7.15, 7.35(2), 5.52, 5.9, 7.8, 7.17 and 5.16. It will be obvious from this that the paragraphs relied on are not limited to particulars pleaded under paragraph 7, in answer to the Reynolds defence, but extend to sub-paragraphs of the reply to justification. The mere fact that such a tour was thought necessary in order to explain Mr Yeo's case to me is an indication that the statement of case is unsatisfactory.
When Mr Browne's account of Mr Yeo's case came to the joke point he referred to paragraph 5.31 of the Reply. This pleads that when asked if he had been able to ask Mr Smith of GB Rail Freight questions after the Select Committee hearing "the Claimant responded as a joke" with the words about telling him in advance what to say. This was contrasted with the way this episode is treated in the Defence, which presents Mr Yeo's remark as a true account of what had taken place. Given the content of paragraph 7.29 of the Reply, which I have described above as a prime example of an equivocal plea, I asked whether it was Mr Yeo's case that the journalists knew that those words were a joke. Mr Browne's response was that this in itself as currently pleaded is not a particular of malice.
In my judgment, if the journalists are to be accused of malice they and TNL are entitled to a much clearer and more precise statement, in writing, of the exact case that it is intended to advance against them than the one contained in the Reply as it stands. It is now plain that what was said in Carter-Ruck's letter of 15 January 2015 was wrong or misleading: the facts relied on in support of the case of malice are not all contained in paragraph 7 of the Reply, nor are all the facts alleged in paragraph 7 relied on in support of that case. Mr Browne has made clear in his oral submissions that all the allegations in paragraph 7 are made against the journalists, even if they may also apply to other personnel of the defendant. That too would need to be made clear, in order for the Reply to comply with PD53 2.9, if particulars pleaded under paragraph 7 are to be relied on in support of the malice plea.
Mr Browne invited me, if I concluded that the pleading was lacking in the necessary clarity and precision, to refrain from striking it out but to allow a chance to reformulate. I have however concluded that the better approach is to strike out paragraph 14 as it stands, without prejudice to an application to amend to add a plea of malice, if one can be properly formulated. That is for three reasons. The first is that given what has happened so far the onus should in my judgment be firmly on Mr Yeo to persuade the court to allow in a plea of malice.
Secondly, I see a real risk that an attempt to reformulate which starts with the present form of paragraph 14 would produce something unsatisfactory; it would be better to start with a clean sheet. Thirdly, this approach seems to me likely to make it easier to test whether the plea of malice meets the requirement that it should state facts which are more consistent with malice than the absence of malice, and to evaluate whether TNL's second complaint about the malice plea is sound.
That complaint, as indicated earlier, is that the plea is directed at the wrong meaning. The meanings I have found the articles complained of to bear are that Mr Yeo:
i) was prepared to act, and had offered himself as willing to act in a way that was in breach of the Code of Conduct of the House of Commons by acting as a paid Parliamentary advocate who would:
a. push for new laws to benefit the business of a client for a fee of £7,000 a day; and
b. approach Ministers, civil servants and other MPs to promote a client's private agenda in return for cash;
ii) by behaving in the manner referred to in the articles, had acted scandalously and shown willing to abuse his position in Parliament to further his own financial and business interests in Parliament.
The first meaning is factual and the second is pure comment. Paragraph 14.2 of the Reply alleges that the journalists knew the first of these meanings was false. Paragraph 14.3 alleges that "Accordingly" they could not and did not honestly believe the second meaning. Mr Millar submits that this is a non-sequitur, because the first meaning is a narrow factual meaning and the comment is far broader. The reference to "behaving in the manner referred to in the articles" encompasses a great deal more than Mr Yeo's alleged willingness to act in a way that was in breach of the Code of Conduct by acting as a paid Parliamentary advocate.
The articles of 9 June 2013 did indeed refer to a lot more than Mr Yeo's alleged willingness to act as a paid advocate. There was reference to Mr Yeo's role as chair of the Energy and Climate Change Select Committee, to his resulting prominence in green politics, to roles he had played in, and sums he had earned from, private firms since taking over as Committee chair, and to shares and options he held as a result of such work.
At paragraph [108] of my August 2014 judgment I found that these references contributed to the defamatory comment. All these matters are pleaded as facts relied on in support of the defence of fair comment. Reference is also made to statements Mr Yeo made at the lunch about his parliamentary and business roles, which were reported in the article but are not relied on as part of the plea of justification. These include his account of telling a witness what he should say in evidence to the ECCSC.
Though that is said by Mr Yeo to have been a joke, Mr Yeo's Reply admits much of what is pleaded by TNL in the way of additional factual material in support of the comment. Paragraph 6 of the Reply, which responds to that factual case, does not contain anything approaching an allegation that the journalists knew any of these other facts to be untrue. Nor has Mr Browne included in his account of Mr Yeo's case any reference to paragraph 6 of the Reply.
Mr Millar submits that a plea of malice must contain something from which the court at trial could rationally infer malice on the part of the journalists in expressing the opinion in issue; a rational assessment would necessarily have to include consideration of all the facts relied on and (as Lord Hobhouse observed in Three Rivers) would have to take account of inherent probabilities; thus, the plea of malice contains a fundamental flaw and should be struck out on that basis also. Mr Browne's reply to this is to maintain that the factual allegation of willingness to act as a paid advocate was so central and so prominent in the articles that an allegation that the opinion was expressed in the knowledge that this central charge was false is sufficient, at the pleading stage, to pass muster.
It seems to me that Mr Millar is clearly right as to the principle but also right to say that this ground of objection does not turn so much on the principle as on the particular facts of the case. Since I have concluded that the plea of malice should be struck out for other reasons in any event it is unnecessary to reach a conclusion on this separate argument. It is also undesirable. If the plea of malice re-emerges, it will be pleaded in different terms, which should be addressed if and when they are formulated.
Costs budgeting
Costs budgeting is a major plank of the Jackson reforms. It was introduced by Part II of CPR rule 3 from 1 April 2013 for all multi-track cases with a value of less than £10 million. It is governed by CPR 3.12 to 3.18 and PD3E. One feature of the regime is that the notice of allocation served under CPR 26.3(1) will normally require the parties to file costs budgets by a specified date. That date will be not less than 28 days after service of the notice: r 26.3(6)(b)(ii). The parties must file and exchange budgets by the specified date or, if none is specified, 7 days before the first CMC: CPR 3.13.
The court may then make a costs management order in respect of costs "to be incurred by any party in the proceedings": CPR 3.15. It will do so unless satisfied that the litigation can be conducted "justly and at proportionate cost in accordance with the overriding objective" without such an order (CPR 3.15(2)), which will not generally be the case: see PD3E 7.1. To the extent that a party's budget is agreed, that will be recorded by the court: CPR 3.15(1). In respect of budgets or parts of budgets that are not agreed the court will record its "approval after making appropriate revisions": r 3.15(2).
Where a costs management order is made, the last agreed or approved budget of the receiving party for each phase of the proceedings is the starting point for assessment of costs on the standard basis. Rule 3.18 provides that in making such an assessment the court will have regard to and "not depart from such approved or agreed budget unless satisfied that there is good reason to do so". The process of agreement or approval therefore has the potential to be a powerful tool for controlling costs.
Here, the parties filed and exchanged budgets after service of the Defence, on 22 July 2014. That was just over 7 days before the substantial CMC hearing at which I determined the issue of mode of trial and defamatory meaning. There was no costs management order made before, at, or after that CMC. Nor was any agreement reached. My order of 20 August 2014 gave the parties permission to restore for further directions and costs budgeting, which Mr Yeo eventually did on 8 December 2014. It was some two weeks later that TNL issued its application to strike out paragraph 14 of the Reply.
For the purposes of this further CMC each party produced a revised costs budget, dated 16 January 2015. Neither was agreed by the other party. The issues were debated at some length in correspondence, which I read before the hearing. There were then two hours of oral argument. In the result, I have approved budget figures for costs to be incurred on future phases of this litigation by each party, in sums which are set out in Appendices to this judgment.
I reserved my decision because, although costs budgeting has now been in place for over 20 months, the detailed implementation of the scheme is still relatively untested, the argument on this application addressed issues of methodology, and the case throws up some other issues of general importance for costs budgeting in publication cases. For those reasons only I thought it useful to give this judgment highlighting particular issues that arise, and offering some guidance for the future, with particular reference to publication cases. As will be seen, it is very far from being my view that a costs management conference should ordinarily involve lengthy oral argument and a reserved judgment.
(i) Hearing or no hearing
"Where practicable, costs management conferences should be conducted by telephone or in writing": CPR 3.16(2). In this case the parties' rival contentions were set out very fully in correspondence, and each party treated its letters as a substitute for a skeleton argument on the issue. That was entirely appropriate. An oral hearing was justified because of the points of more general importance that arose. I do not consider that the detailed oral debate which took place over rates, hours, and proportionality would have justified a hearing.
Rulings without a hearing take up judicial resources, but save time and costs for the parties. The recoverable costs of budgeting are capped at 1% of the approved budget for completing Precedent H and 2% of that budget for all other costs, save in exceptional circumstances: PD3E 7.2. For these reasons it is to be hoped that as the system becomes a firmly established and well-understood feature of multi-track litigation parties will propose and agree to this method of dealing with costs management.
(ii) Incurred costs
These are not subject to the approval process. This means that under the default procedure substantial costs may already have been incurred, without any budgetary control, by the time a decision is taken at a CMC. The parties' costs figures in this case illustrate the point. The total incurred by the time of my budgeting decision was over £200,000 (£110,000 on the claimant's side and £94,000 on the defendant's). In a case that goes to trial the successful party's costs incurred before approval of a budget will normally need detailed assessment, in the absence of agreement.
However, if by the time the costs management process takes place substantial costs have been incurred, one thing the court may do is to "record its comments on those costs": see PD3E 7.4. What the court will do is to "take those costs into account when considering the reasonableness and proportionality of all subsequent costs": ibid. The court may reduce a budget for reasons which apply equally to incurred costs, or for reasons which have a bearing on what should be recoverable in that respect, for instance, that so much had been spent before the action began that the budgeted cost of preparing witness statements is excessive. If so, it is likely to help the parties reach agreement without detailed assessment later on if these reasons are briefly recorded at the time the budget is approved. I make some comments of this kind below.
(iii) The approach to approval
"The court's approval will relate only to the total figures for each phase of the proceedings": PD3E 7.3. The figures may conveniently be set out in the form of a table such as the Appendices to this judgment. However, such a table need only include the approved figures. I have included the parties' figures for incurred and estimated future costs, and contingencies, for the purposes of illustrating some of the points made in this judgment.
Mr Browne submitted that in determining what was an appropriate figure for each phase the court should focus primarily on the proportionality of the costs, applying the test prescribed by CPR 44.3(5). It was not appropriate to conduct the kind of debate that had been undertaken on behalf of TNL in correspondence. The process was intended to be one conducted swiftly and economically, and of necessity had to be something of an impressionistic exercise. He submitted that this is a matter of substantial non-monetary value to both sides, complex, and raising issues of reputation and public importance on both sides of the case.
In support of these submissions Mr Browne referred to a speech given by the Senior Costs Judge, Master Gordon-Saker, to the Commercial Litigation Association on 1 October 2014. This emphasised that costs management is not a prospective detailed assessment, and described the training given to judges on these issues as having suggested they should not look at hourly rates or hours but rather at overall reasonableness and proportionality. That may be so, but I note first of all that the Master recorded that the most common question raised by Judges was how they could approach the overall question without reference to hours and rates.
Secondly, I note that whilst PD3E 7.3 states that "When reviewing budgets, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs" it also states that "in the course of its review the court may have regard to the constituent elements of each total figure."
Thirdly, Precedent H allows the court to review hourly rates and estimated hours by requiring these to be stated on the form. It seems to me that whilst the question of whether the totals are reasonable and proportionate will always be the overall criterion, the court's may need to consider rates and estimated hours. The approach will need to be tailored to the case before the court.
On one view, the costs of libel, privacy and some harassment cases typically become disproportionate at an early stage, before the ordinary time for costs budgeting has arrived. Such cases do in any event involve rights and interests that cannot be measured simply in money. In a case involving costs that run to six or even seven figures in total it is in my judgment appropriate to have regard not only to the factors listed in CPR 44.3(5) but also to the hours and rates, as would be done upon a summary assessment of costs at the end of an interim hearing. That is not the same as conducting a detailed assessment.
(iv) Contingencies and revision
By PD3E 6 a budget must be in the form of Precedent H, which has a section for contingencies. This has caused difficulty in this case, as appears from the Appendices to this judgment. The parties between them identified six contingencies. Not one was common to the parties. The guidance notes on Precedent H state at paragraph 3 that this section of the Precedent should be used "for anticipated costs which do not fall within the main categories set out in this form … Costs which are not anticipated but which become necessary later are dealt with in paragraph [7.6] of the Practice Direction."
PD3E 7.6 provides that "Each party shall revise its budget in respect of future costs upwards or downwards, if significant developments in the litigation warrant such revisions", and sets out a procedure for doing so. The provisions of PD3E 7.9 are also relevant. This provides that "If interim applications are made which, reasonably, were not included in a budget, then the costs of such interim applications shall be treated as additional to the approved budgets."
The first point to make about contingencies is that they must involve work that does not fall within the main categories on Precedent H. Secondly, in order for work to qualify as a contingency it must be possible to identify to the opposite party and the court what that work would be. Otherwise it would be impossible to determine whether the work falls within or outside a specified category, and it is hard to see how any assessment could be made of what its cost would be. Thirdly, there is the important issue of how likely it needs to be that the work will be required, before it can properly be included as a contingency. Mr Browne submitted that the test should be whether the work was "reasonably likely" at the time the budget was approved.
In my judgment work should be included as a contingency only if it is foreseen as more likely than not to be required. This seems to me a clear criterion that provides a practical solution, consistent with PD3E 7.4 and 7.9. If work that falls outside one of the main categories is not thought probable, it can reasonably and should be excluded from the budget. The time and costs involved in estimating how much work would cost are not easily justified if the work is no more than a possibility or is unlikely. If work identified as a contingency is included in a budget but not considered probable by the court no budget for it should be approved. If the improbable occurs, in the form of an unexpected interim application, the costs will be added to the budget pursuant to PD3E 7.9, unless the matter involves a "significant development" within para 7.4 in which case, if time permits, a revised budget should be prepared and agreed or approved.
Mr Yeo's budget
I marked the first three items on this budget N/A because the costs involved had all been incurred by the time I came to review them. I reduced all the other figures because I considered the solicitors' hourly rates to be too high by 20-25%, and in some instances excessive partner time had been provided for. The disclosure exercise is likely to be more onerous and costly for the defendant than the claimant, and I reduced the claimant's estimate accordingly. Mr Yeo will have at most one additional witness and very substantial cost was incurred before the action started and on the pleadings, which makes it appropriate to keep his witness statement costs well below the estimate.
I consider that excessive preparation time was provided for in respect of the PTR. The trial preparation estimate is very considerably cut in my schedule, but this is because the estimated figure includes Counsel's brief fees. The guidance notes make clear that these should be included in trial costs, which is what TNL have done. It is important that the schedules compare like with like, and departure from the guidance will only tend to confuse. I have therefore transferred what I consider appropriate for brief fees to the trial phase. I consider that the main sections allow enough for "strategy review and consultation" which is not a separate contingency. "Possible further work" meets none of the three criteria for a contingency that I have identified above. It is for these reasons that I have marked both Mr Yeo's contingencies as not applicable.
TNL's budget
I have approved the majority of this budget, and there is little call for comment. I should however explain why I have marked three of the four contingencies N/A. This is because, on the basis of the evidence and argument I have seen and heard in this case to date I do not consider any of those three eventualities as more likely than not. Contingency A seems to me very unlikely. Contingency B is possible but no more. Contingency C was not understood by Mr Browne, nor by me. I have allowed Contingent cost D on the basis that it does not exceed the cap of 3% of approved costs to which I have referred above, and the costs of budgeting in this case will have been more significant than they ordinarily would be.
Timing
I add some short observations about timing which are prompted by but do not apply to the present case. The court has power to give directions for the filing and exchange of budgets at an earlier stage than the CMC. This is so as part of its general powers of management but is reflected in CPR 3.13, which requires parties other than litigants in person to "file and exchange budgets as required by the rules or as the court otherwise directs". If that power is exercised the general rule will apply, that the court will make a costs management order. An early costs budgeting process may be initiated by the court or by one of the parties.
Libel and other publication cases are rarely undefended, and will all but inevitably be assigned to the multi-track. They therefore represent a class of case in which early intervention may be merited. I am far from saying that this should be routine; the standard process will be apt for many cases. But the fact that rights of freedom of expression are engaged is relevant, and there may be cases that are particularly apt for earlier intervention. One example would be a case in which there is a wide disparity in the parties' resources, and a need to control costs as a means of ensuring equality of arms.
If a budget is required at an early stage it need not be for the entire litigation: "In substantial cases, the court may direct that budgets be limited initially to part only of the proceedings and subsequently extended to cover the whole proceedings": PD3E 6.
APPROVED BUDGET FOR THE CLAIMANT
Work done/to be done Incurred Estimated Approved
Pre-action costs 27,334.25 0.00 N/A
Issue/statements of case 50,305.75 0.00 N/A
CMC 22,609.00 28,725 N/A
Disclosure 10,055.00 22,650 17,000
Witness statements 0 45,175 26,000
Expert reports 0 0 N/A
PTR 0 39,210 30,000
Trial preparation 0 217,000 56,000
Trial 0 128,515 223,000
ADR/Settlement discussions 0 28,340 18,000
Contingent cost A: Strategy Review and consultation 0 18,350 N/A
Contingent cost B: Possible further work 0 31,950 N/A
TOTALS 110,304 559,915 370,000
APPROVED BUDGET FOR THE DEFENDANT
Work done/to be done Incurred Estimated Approved
Pre-action costs 5,230 0.00 N/A
Issue/statements of case 39,457.85 0.00 N/A
CMC 47,225.48 19,851.50 N/A
Disclosure 982.50 20,292.50 20,000
Witness statements 0 35,000.00 35,000
Expert reports 0 0 N/A
PTR 0 21,125.00 21,125
Trial preparation 0 39,800.00 39,800
Trial 0 208,900.00 205,000
ADR/Settlement discussions 0 17,175.00 17,175
Contingent cost A:
App. to s/o honest opinion 0 15,125.00 N/A
Contingent cost B:
App for specific disclosure 0 15,125.00 N/A
Contingent cost C:
App for 3rd party disclosure 0 15,125.00 N/A
Contingent cost D: Costs associated with costs budgeting 1,368.50 8,453.50 8,453.50
TOTALS 94,264.33 415,972.50 346,553.50
Note 1 This judgment uses the terminology of the common law, which applies to publication in hard copy and online up to the end of December 2013. Publication online from 1 January 2014 is subject to the Defamation Act 2013, and the defences under ss 2-4 of that Act are relied on. Nothing turns on this, however, so references to the common law defences should be read as encompassing their statutory counterparts. [Back] |
Mrs Justice Patterson:
Introduction
On 6 November 2014 William Davis J ordered that there be a trial to determine the following preliminary issues. Those issues are whether, if the claimant proves the facts pleaded:
a) There was a breach of the statutory duty set out in paragraph 28 of the particulars of claim which give rise to an actual claim in damages for breach of EU law and, in particular, whether the relevant EU law directives were intended to confer rights on individuals;
b) Any breach by the defendant of those duties was sufficiently serious to give rise to a claim for damages;
c) There was a causal link between any such breach and the loss and damage suffered by the claimant.
The questions arise because, at paragraph 28 of his particulars of claim, the claimant alleges that from the time he claimed asylum on 13 January 2008 the defendant had a number of statutory duties to him under section 2(1) of the European Communities Act 1972. They included the following :
a) when assessing an application for refugee status or subsidiary protection status, to take into account "all relevant facts as they relate to the country of origin at the time of taking the decision on the application: including laws and regulations of the country of origin and the manner in which they are applied";
b) to apply the "safe country of origin concept" in respect of an asylum seeker only if the person "has not submitted any serious grounds for considering the country not to be a safe country of origin in his/her particular circumstances";
c) to grant refugee status to him if he qualified as a refugee;
d) to grant subsidiary protection status to him if he was eligible for such status, such a person being eligible if there were substantial grounds for believing that, if he returned to his country of nationality, he would face a real risk of suffering serious harm. Serious harm includes "torture or inhuman or degrading treatment or punishment of an applicant in the country of origin";
e) to respect the principle of non refoulement.
At the hearing it was contended that, by reason of those failures, there were breaches of:
i) Council Directive 2004/83/EC of 29 April 2004 on minimum standards for the qualification and status of third-country nationals or stateless persons as refugees or as persons who otherwise need international protection and the content of the protection granted (the Qualification Directive); and
ii) Council Directive 2005/85/EC of 1 December 2005 on minimum standards on procedures in member states for granting or withdrawing refugee status (the Procedures Directive).
If the matter is resolved in the claimant's favour then the matter will proceed to a trial of the factual issues and any remaining issues of law within a trial window starting on 27 April 2015.
The Factual Background
The following facts are taken, as it is agreed that I should for this hearing, from the particulars of claim and the contemporaneous documents.
The claimant is a Mongolian citizen who arrived in the United Kingdom on a false passport in 2004. On 13 January 2008 he was arrested by the police. The following day he claimed asylum. He was detained and transferred to the Oakington Immigration Removal Centre for his asylum claim to be processed under the detained fast track.
The claimant was interviewed about his asylum claim on 19 January 2008. He said in his interview that he had been a monk belonging to a minority Buddhist sect in Mongolia. Members of his sect were beaten and tortured by other monks because they wanted the claimant and other members of his sect to change their religious beliefs.
The claimant said that he had been repeatedly beaten by members of the majority sects because of his refusal to join them. He had been forced to eat chewing tobacco and beaten if he refused to do so. He was forced to drink large quantities of fatty soup and beaten and tied to a tree if he refused. He had been sexually assaulted by a group of monks from the majority sect in front of some children whom he was teaching. That treatment continued until he left the monastery in February 2003.
The claimant had been reported to the police by members of the majority sect for stealing some antique religious statues from the monastery. He received a summons to attend Bayangol police station in June 2003 as a result of the investigation into the alleged crime. Later, he received a summons to attend court but did not do so. He was innocent of the allegation but five or six members of the majority sect had signed statements saying that he was responsible for the theft. The claimant was afraid that he would be sentenced to a long term of imprisonment.
On 26 January 2008 the claimant's legal representatives, the Immigration Advisory Service, submitted further representations to the defendant enclosing documents received from Mongolia, namely, a press report relating to the theft of the statues and a court summons dated 19 August 2003.
On 27 January 2008 the defendant rejected the asylum claim and set directions for the removal of the claimant to Mongolia by a scheduled flight on 3 February 2008.
The reasons for refusal letter of 27 January 2008 concluded that the claimant was not at risk of persecution for a Convention reason in Mongolia for the following reasons (the references in brackets are to the relevant paragraphs in the decision letter):
i) The evidence suggested that there was a general freedom of religion [22];
ii) The claimant had not experienced any problems from different monastic sects once he had left the monastery in February 2003 [22];
iii) The claimant could have sought protection from the Mongolian authorities but had failed to report the beatings to the police until after he had left the monastery in February 2003 since when he had failed to follow up his complaints [24 to 26];
iv) There is an effective police force within Mongolia and any problems within the police are the result of failures in supervision and discipline rather than any concerted policy [29];
v) The claimant had never been arrested in connection with the alleged theft of the statues and he was able to leave Mongolia using his own national passport without any problem [45];
vi) The claimant's fear was of prosecution and not persecution. If there were charges outstanding against him then he could expect a fair trial under an independent and properly constituted judiciary [46 and 47];
vii) The claimant could relocate within Mongolia if he felt at risk on his return [48];
viii) There were other parts of Mongolia to which he could go where he did not have a well founded fear of persecution and to which it was reasonable to expect him to go [54];
ix) Even if the claimant was found to be guilty after a trial and had to serve a prison sentence it was not considered that the prison conditions in Mongolia would constitute a breach of Article 3 of the European Convention on Human Rights (ECHR) [56];
x) The claimant's asylum claim was one to which section 94(3) of the Nationality, Immigration and Asylum Act 2002 applied. As a result the defendant certified that the claim was clearly unfounded.
On 29 January 2008 the Immigration Advisory Service requested the defendant to defer removal of the claimant to enable a medical report to be obtained from the Medical Foundation for the Care of Victims of Torture (an appointment was made for 16 February 2008) and to enable the Immigration Advisory Service to obtain translations of, and instructions on, documents which the claimant had received from Mongolia showing that he was now being actively pursued on criminal charges.
On 30 January 2008 the defendant refused the request. In a letter of that date the defendant said that it was accepted in the decision letter that the claimant was under investigation by the Mongolian authorities and the fact that charges had been laid did not alter the decision to refuse the claimant's asylum. It merely supported the decision to accept the core of the claimant's case at its highest. The defendant accepted the claimant's account at its highest of the treatment he had suffered prior to leaving his monastery in February 2003. The fact that he had an appointment for an assessment by the Medical Foundation did not advance his case further as it was not part of the claimant's case that he experienced further problems after leaving the monastery in February 2003. Further, the letter noted that the claimant had left Mongolia using his national passport containing a Russian visa which was checked at the Russian/Mongolian border where he experienced no difficulties. He had used an agent to facilitate his entry into the UK which he had entered using a false passport and used verbal and documentary deception. He had made no attempt to claim asylum until one day after he was arrested by the police.
On 3 February 2008 the defendant removed the claimant to Mongolia. He was arrested on arrival in connection with the outstanding criminal charges. He was detained at Gants Hudag Detention Centre in Ulaanbataar in pre-trial detention until 22 April 2009. During the pre-trial detention the claimant was interrogated about the theft of the statues, he was frequently kicked, beaten and strangulation attempted, he was forced to eat two mice on one occasion and forced to kill dogs which was contrary to his religious beliefs. The claimant was twice raped by another prisoner. He was placed in that prisoner's cell by a guard who knew that rape was the likely consequence.
On 22 April 2009 the claimant was convicted after a trial lasting twenty to thirty minutes and sentenced to imprisonment for twelve years for theft of the statues and three years for escaping from Mongolia.
The claimant was transferred to Tahir Soyot Prison to serve his sentence. He says that the conditions in that prison were inhuman and degrading. As a result the claimant suffered from poor physical health including tuberculosis. Since returning to the United Kingdom he has been diagnosed with severe chronic post traumatic stress disorder, a major depressive episode and alcohol dependency syndrome attributed to his experiences in Mongolia.
On 7 January 2010 the claimant escaped from prison and made his way back to the United Kingdom where he arrived on 12 January. He claimed asylum for a second time. The basis for his claim was mistreatment in prison in Mongolia. That application was refused by the defendant on 17 May 2011.
The claimant appealed. On 3 November 2011 the First-Tier Tribunal accepted the claimant's account of his experiences and said:
"He faces a risk of future persecution because the previous events and harm is an indicator of future risk of ill-treatment and harm, and the authorities have records of him, arrested on arrival in February 2008 and the punishment is punitive and the prison authorities will not protect him from ill-treatment by other prisoners, and the police themselves are capable of ill-treating inmates." [34]
The defendant recognised the claimant as a refugee and has granted him refugee status and leave to remain in the United Kingdom until 31 October 2016.
Legal Framework
1. The Charter of Fundamental Rights of the European Union
The UK is bound to act in accordance with the rights protected by the charter whenever it acts within the scope of EU law: Article 6(1) TEU.
Article 18 provides that:
"The right to asylum shall be guaranteed with due respect for the rules of the Geneva Convention on 28 July 1951 and the Protocol of 31 January 1967 relating to the status of refugees and in accordance with the Treaty of the European Union and the Treaty on the Functioning of the European Union (hereafter referred to as the treaties)."
Article 19(2) states:
"No one may be removed, expelled or extradited to a State where there is a serious risk that he or she would be subjected to the death penalty, torture or other inhuman or degrading treatment or punishment."
2. Qualification Directive
The Qualification Directive was implemented into UK law by a combination of the Refugee or Person in Need of International Protection (Qualification) Regulation 2006 and part 11 of the Immigration Rules. The recitals to the Directive and general principles of EU law make it clear that the Qualification Directive must be interpreted in a manner consistent with the Refugee Convention. Chapter 2 lays down rules on the assessment of applications for international protection (meaning either refugee status or subsidiary protection). Article 4(3)(a) states:
"The assessment of an application for international protection is to be carried out on an individual basis and includes taking into account:
a) all relevant facts as they relate to the country of origin at the time of taking a decision on the application; including laws and regulations of the country of origin and the manner in which they are applied."
Chapter 3 lays down rules on qualification for refugee status. Article 13 provides:
"Member states shall grant refugee status to a third-country national or stateless person who qualifies as a refugee in accordance with chapter II and III."
Chapter 5 lays down rules on qualification for subsidiary protection. A person eligible for subsidiary protection is defined in Article 2(e) as:
"A third-country national…who does not qualify as a refugee but in respect of whom substantial grounds have been shown for believing that the person concerned, if returned to his or her country of origin, …would face a real risk of suffering serious harm as defined in Article 15 and to whom Article 17(1) and (2) do not apply, and is unable, or owing to such risk, unwilling to avail himself or herself of the protection of that country."
Article 15 defines serious harm as including, "torture or inhuman or degrading treatment or punishment of an applicant in the country of origin."
Article 18 in chapter 6 provides that:
"Member states shall grant subsidiary protection status to a third-country national or a stateless person eligible for subsidiary protection in accordance with chapters 2 and 5."
Chapter 7 lays down rules, without prejudice to the application of the Refugee Convention, as to the content of international protection, including:
a) A duty to respect the principle of non refoulement (Article 21);
b) Rights for those granted refugee status or subsidiary protection status to:
i) A residence permit;
ii) A travel document;
iii) Access to employment;
iv) Access to education;
v) Social assistance;
vi) Access to healthcare.
3. The Procedures Directive
Its recitals include (at recital 17) that a key consideration for "the well-foundedness of an asylum application is the safety of the applicant in his/her country of origin. Where a third country can be regarded as a safe country of origin, member states should be able to designate it as safe and presume its safety for a particular applicant, unless he/she presents serious counter-indications."
Recital 21 continues:
"Designation of a third country as a safe country of origin for the purposes of the Directive cannot establish an absolute guarantee of safety for nationals of that country."
Article 8 sets out the requirements for the examination of applications. Article 8(2) requires decisions on applications for asylum to be taken after an "appropriate examination." Article 8 (2)(a) requires the decision to be taken "individually, objectively and impartially" and by virtue of Article 8(2)(b) on the basis of precise and up to date information obtained from various sources such as the United Nations High Commissioner for Refugees (UNHCR) as to the general situation prevailing in the countries of origin.
Article 30 permits member states to retain or introduce a list of designated safe third countries to which Article 31 applies.
Article 31(1) states that:
"A third country designated as a safe country of origin in accordance with either Article 29 or 30 may, after an individual examination of the application, be considered the safe country of origin for a particular applicant for asylum only if:
a) he/she has the nationality of that country; or
b) he/she is a stateless person and was formally habitually resident in that country and he/she has not submitted any serious grounds for considering the country not to be a safe country of origin in his/her circumstances and in terms of his/her qualification as a refugee in accordance with Direction 2004/83/EC."
Article 39 of the Directive requires that asylum applicants have the right to an effective remedy before a court or tribunal against a decision to reject an asylum application. The question of whether that remedy has suspensive effect is to be determined by national rules "in accordance with member states' international obligations."
4. Non-Suspensive Appeals in UK Law
In general, a person who has made an asylum or human rights claim in the UK has a right of appeal to an independent tribunal against a decision to reject that claim prior to removal from the UK and the person appealing may not be removed for as long as that appeal is pending: section 92(4) and section 78 of the Nationality, Immigration and Asylum Act 2002 (the 2002 Act).
Under section 94(2) of the 2002 Act where the Secretary of State certifies an asylum or human rights claim is clearly unfounded, the right of appeal may only be exercised after removal from the UK. Section 94(3) provides that:
"If the Secretary of State is satisfied that an asylum seeker…is entitled to reside in a State listed in subsection (4) he shall certify the claim under subsection (2) unless satisfied that it is not clearly unfounded."
Mongolia is listed in section 94(4) of the 2002 Act. It was added to the list on 2 December 2005. Section 94(5) required the Secretary of State, before adding a country to the list, to be satisfied there was no general risk of persecution there, and that removal there would not be in general breach of the Human Rights Convention.
5. Claims for Damages for Breaches of EU Law
The conditions for a claim for damages for breach of EU law were summarised by Carnwath LJ (as he then was) in Byrne v Motor Insurers Bureau [2009] QB 66 at [32]:
"It is clear from the case-law of the Court (see para 20 above) that three conditions must be satisfied for a Member State to be required to make reparation for loss and damage caused to individuals as a result of breaches of Community law for which the State can be held responsible:
i) the rule of law infringed must have been intended to confer rights on individuals;
ii) the breach must be sufficiently serious; and
iii) there must be a direct causal link between the breach of the obligation resting on the State and the loss or damage sustained by the injured parties."
According to case law a breach of Community law was sufficiently serious if a Member State, in the exercise of its rule making powers, manifestly and grossly disregarded the limits on those powers. A failure to take any measures to transpose a Directive in order to achieve the result prescribed within the period laid down for that purpose constituted per se a serious breach of Community law and consequently gave rise to a right of reparation for individuals suffering injury if the result prescribed by the Directive entailed a grant to individuals of rights whose content was identifiable and a causal link existed between the breach of the State's obligations and the loss and damage suffered. The assessment of the seriousness of a breach might include consideration of factors such as the clarity and precision of the rule breached: see R (Negassi) v Secretary of State for the Home Department [2013] EWCA Civ 151. Within the multi factorial test no single factor is necessarily decisive. As has recently been held in Delaney v Secretary of State for Transport [2014] EWHC 1785 (QB) at [85]:
"Context is all: in a situation where the Member State's discretion is minimal or non-existent, a material breach of clearly worded provisions of Community law with significant consequences for individuals will often constitute a sufficiently serious breach for these purposes, and (as a corollary, but no more) a manifest and grave disregard of the relevant obligation."
In Byrne, holding that liability was established in principle, Carnwath LJ said:
"The "sufficiently serious" criterion laid down by the European Court of Justice for Francovich liability is not a hard-edged test. It requires a value judgment by the national court, taking account of the various factors summarised by the court in Evans. In the present case the important points to my mind are three-fold: the relative precision of the requirement, following Evans; the serious consequences of failure to comply; and the clear warning given in Evans of the need to make the comparison."
Submissions
The claimant submits that the defendant was in breach of her duties under the Qualification Directive and the Procedures Directive because the claimant had a well founded fear of persecution as evidenced by the findings of the First-Tier Tribunal on 3 November 2011. The defendant had a duty to recognise the claimant as a refugee and not to refoul him. The question for determination at this stage is, therefore, whether the defendant's breaches give rise, on the claimant's case taken at its highest, to an actionable claim for damages. That exercise involves an analysis of the three Francovich conditions (Francovich v Republic of Italy [1995] ECR 1995 I-3843), set out in paragraph 1 of this judgement.
Condition (i): Do the Directives Confer Rights on the Individual?
The claimant submits that this issue needs to be considered by reference not only to the articles in the Directive but to the recitals. In the Qualification Directive recitals 6 and 10 show that what is conferred are rights to individuals. Article 4 provides for the assessment of facts and circumstances in an application for international protection. Article 4(1) is clear in its wording that what is imposed is a shared duty with the applicant. It reads:
"Member States may consider it the duty of the applicant to submit as soon as possible all elements needed to substantiate the application for international protection. In cooperation with the applicant it is the duty of the Member State to assess the relevant elements of the application."
Article 4(3) is also clear in that it provides for the assessment to be carried out on an individual basis. Article 4(4) shows the caution that the defendant has to exercise when the claimant puts forward evidence of a real risk of suffering serious harm. Article 13 imposes a duty on the defendant to grant refugee status if the criteria are satisfied: there is no discretion. Article 18 confers a right on an individual to be granted subsidiary protection. Article 21 imposes a duty to protect the claimant from refoulement.
Under the Procedures Directive the relevant recitals are 8, 10, 11, 19 and 21. The relevant Articles are 8, 30 and 31.
The claimant submits that the language of the Directives is clear. They confer rights on individuals. Those rights are to protect the individuals, as the recitals make clear. There have been decisions of the ECJ, for example, HN v Minister of Justice, Equality and Law Reform Ireland [2014] WLR (D) 190 which make it clear that rights are conferred on the applicants for their protection. Further examples are set out in the claimant's skeleton argument, and it is of note that in Negassi (supra) although the claim failed, the Secretary of State did not contest the first condition.
The Secretary of State has fallen into error in her argument because she has conflated the domestic test for breach of statutory duty with the first limb in Francovich. The domestic law test is very strict but is not the right enquiry under the European framework. The cases of X v Bedfordshire County Council [1995] 2 AC 63 and W v Home Office [1997] Imm AR 302 are both inapposite. The latter was dealing with the issue of negligence which was not necessary under the Francovich approach. The difference between the domestic and EU approaches is seen in the case of Barco de Vapor v Thanet District Council [2014] EWHC 490 (Ch) where a claim was brought on the basis of a breach of statutory duty and for damages against the State on the basis of Francovich when the defendant had imposed a short temporal ban on the importation of livestock. The claims for breach of statutory duty were rejected by the Court and the claim for Francovich damages dealt with separately.
The defendant submits that there is little difference, if any, between the two tests. The Qualification Directive itself draws the distinction between rights and obligations on the State for decision making. The first condition in relation to an EU provision is that the provision is intended to confer rights on individuals. That is distinct from rights which apply to the public at large. The test is the same that domestic courts have to undertake when seeking to establish whether a statutory duty gives rise to private or public law rights.
The claimant has cited no authority on the difference between EU law and domestic law on this issue. It is accepted that there is a difference in approach to Francovich damages but not on the first condition. If there was an intention to distinguish, one would expect to see a right of a type which particularly related to an individual.
In the case of R (Kuchiey) v Secretary of State for the Home Department [2012] EWHC 3596 (Admin) the claimant sought damages on the basis that he had been a refugee since 2009 when he had arrived in the UK and claimed to be a minor. His claim for refugee status had been refused. He had appealed that decision and been successful. Ultimately, on 1 November 2011, the defendant had granted him leave to remain and backdated his status as a refugee to 13 January 2009. Subsequently, the defendant resiled from backdating but the claimant sought damages on the basis that he had been a refugee since that date. It was submitted that the defendant's failure to grant backdated refugee status breached Article 13 of the Qualification Directive. Singh J accepted the submissions of the Secretary of State that to so find would involve reading into the Directive words and obligations that were not there. Recognition as a refugee was a declaratory act in the sense that it was founded on facts which substantiated the claim for asylum. It did not help to establish what the claimant needed for his damages claim which was what Article 13 required for the Secretary of State to backdate the grant of refugee status.
There is an important distinction which arises between administrative provisions and private law as is evidenced in W v Home Office (supra). There, the Court of Appeal considered whether a duty of care and negligence could be crafted out of the statutory scheme governing immigration and dealt with how one could distinguish between private law and decisions which govern the administrative decision making process. It would be a startling development if the claimant was right and damages could be claimed each time a First-Tier Tribunal decided the defendant had omitted a relevant factor.
Discussion
The first question is whether the provisions of the Directives confer rights on the individual? In my judgment the Qualification Directive does confer the right on an individual to be granted refugee status under Article 13 if the criteria are met. There is no discretion about that determination.
The main purpose of the Directive is to provide minimum standards for the qualification and status of third country nationals as refugees or as people who need international protection and for the content of the protection granted. It also sets common criteria for such administrative decision making amongst member states whilst securing a minimum level of benefits is available for such persons (see recital 6).
Article 4(3) sets out matters to be taken into account in the decision making process for the assessment of applications for international protection. It provides for the assessment of the application on an individual basis including all relevant facts as they relate to the country of origin at the date of the application, the relevant statements and documents supplied by the applicant including whether he has or may have been subject to persecution or serious harm. If he has already been subject to persecution or serious harm or direct threat of the same that is a serious indication of the applicant's well founded fear of persecution or real risk of suffering serious harm. The applicant, therefore, has a right to expect that his assessment will be carried out in the manner prescribed by the Article.
Individual rights are conferred also by Article 18, for subsidiary protection status where the criteria are met for the grant of such protection. Article 21 creates a duty on the Member State to respect the principle of non refoulement.
That much is clear, in my judgment, from the natural meaning of the words used in the Directive interpreted in accordance with the recitals.
However, in addition both parties have referred to a body of case law.
In the case of R (Kuchiey) Singh J was clear that the claim failed because there was nothing in Article 13 of the Qualification Directive which conferred a right to backdate the claimant's grant of refugee status. He determined that the nature of the right was declaratory and prospective. As a result the claim for damages was outwith the right conferred.
In R (Negassi) the claim for damages failed but that was because of a failure to demonstrate that the breach was "sufficiently serious" using the multi-factorial test.
In AB & Anor v Home Office [2012] EWHC 226 (QB) Richard Salter QC, sitting as a Deputy High Court Judge, dealt with a case about the delay that the Home Office had taken to issue an EEA residence card to the second claimant. The claimant contended that the Home Office should have issued the card promptly, upon application, and that prolonged failure to do so had caused substantial and unlawful interference in the lives of the claimants and their daughter. The residence card had been applied for on 20 March 2008 and was granted on 5 November 2010. The Judge found that there was no breach of EU law provisions relied upon because the provisions did not apply to someone in the second claimant's position (she was the unmarried partner of the first claimant). The entitlement granted under the Directive was not intended to confer rights on individuals such as the second claimant. The Judge was not saying that the Directives did not confer rights at all. Further, the case is interesting as it involved a claim of four causes of action; some on a domestic basis and some on an EU basis. Although the conclusion on each was the same, namely, that the claim failed, it is clear from the judgment that the reasoning was different (see paragraphs 114 and 117).
The defendant relies on X v Bedfordshire County Council (supra) and W v Home Office (supra) but neither were dealing with a claim for damages under the Francovich test. X v Bedfordshire County Council sets the domestic test for a private law cause of action for damages which will arise if the statutory duty was imposed for a limited class of the public whom parliament intended to have a private right of action for breach of duty. In W v Home Office the Court of Appeal considered whether a duty of care in negligence could be crafted out of the statutory scheme governing immigration. It was held that, in gathering information for an immigration decision and in taking that information into account, the defendant was acting pursuant to his statutory powers and was within that area of his discretion where only deliberate abuse would provide a private law remedy. Whilst there are similarities between those cases and the issues here the reality is that context is all, and the context here, is of interpretation of the two EU Directives which neither case deals with.
Two other cases were referred to in argument, namely, Barco de Vapor v Thanet District Council [2014] EWHC 490 (Ch) and R v Ministry of Agriculture, Fisheries and Food ex parte Hedley Lomas [1997] QB 139. In my judgment neither takes the issue on the first condition any further.
The fundamental question is whether, on the claimant's case, the EU law infringed was intended to confer rights on individuals. I have answered that in the affirmative under Articles 4, 13 and 18 for the reasons given above.
Condition (ii): Was the Breach Sufficiently Serious?
Introduction
In considering this condition it should be recalled that I am being asked to consider the claimant's case at its highest. That may or may not be the case at trial. To that extent I have to record that I regard the exercise here as artificial. I have real doubts as to its utility, divorced, as it is, from full evidence on the facts. Inevitably, a finding under this limb is fact sensitive.
I am reinforced in that view by the comments of Lord Clyde in R v Secretary of State for Transport ex p Factortame Ltd ( No 5) [2000] 1 AC pp 554 to 556 where he identified some of the factors that could be taken into consideration. He favoured a broad approach and said, "moreover the application of the test laid down by the court comes eventually to be a matter of fact and circumstance." That encapsulates the difficulty in the current exercise. Indeed, I observe that the claimant submitted, in reply, that for the breach to be sufficiently serious is always going to be dependant on case-sensitive factors. In my judgment those case-sensitive factors can only be adjudicated upon in the light of all of the evidence.
I note also that in the case of Delaney v Secretary of State for Transport [2014] EWHC 1785 Jay J set out the principles to follow and then, in conventional fashion, turned to the evidence. That seems to me to be the right approach.
Nevertheless, I have been asked to consider matters on a certain basis. I proceed on the exercise as far as I think that I can go with my reservations clearly expressed.
Submissions
The claimant contends that the breaches are four-fold.
First, there is a breach by the removal of the claimant to Mongolia contrary to the right under Article 21 of the Qualification Directive not to be refouled.
Second, the certification by the defendant that the claim was clearly unfounded breached Article 31 of the Procedures Directive. In the circumstances, it is contended that it was wrong to apply the safe country of origin approach.
Third, it is contended that there was a breach of Article 4(3)(a) of the Qualification Directive.
Fourth, the refusal of the claimant's claim for asylum and his removal breached his rights to asylum and subsidiary protection under Articles 13 and 18. That is evidently the case because of what has happened subsequently with the First-Tier Tribunal on 3 November 2011.
In assessing whether the breach is sufficiently serious it is necessary to apply the multi-factorial test. Here the claimant relies on six factors as follows:
i) This is not a case where the defendant has any discretion. That is clear from the wording of the Directives. There needs to be an evaluative judgment.
ii) The importance of the principles which have breached. The principle of non refoulement could not be of greater importance.
iii) The clarity and precision of the rules that have been breached. The provisions are entirely unambiguous. If the claimant met the criteria he was entitled to be recognised as a refugee. He cannot be refouled. The situation is analogous to that in Ogieriakhi v Minister for Justice and Equality & Ors (No. 2) [2014] IEHC 582 at [48]:
"So far as the criteria of the clarity and precision of the rule breached and the measure of discretion left by that rule to the national or Community authorities, it has to be said that the terms of both Article 16(1) and Article 16(2) of the 2004 Directive are absolutely unambiguous and are both couched in unambiguous language ("..shall have the right of permanent residence…"… "shall also apply to family members who are not nationals of a Member State"). Assuming the conditions of Article 16(2) apply, Member States enjoy no discretion in the manner."
iv) The consequences of the breach to the individual. The claimant relies on the case of Delaney v Secretary of State for Transport (supra) where Jay J said at [84]:
"As is well-known, Lord Clyde set out in his opinion a non-exhaustive series of factors which fall to be weighed in the balance. I will be considering these subsequently. What it is important to recognise at this stage is that (i) the test is objective (544D) (if a government acts in bad faith that is an additional factor which falls objectively to be considered), (ii) the weight to be given to these various factors will vary from case to case, and no single factor is necessarily decisive, and (iii) the seriousness of the breach will always be an important factor. Although not expressly mentioned by Lord Clyde, I would add that in a minimal/no discretion type of case it will be easier for the claimant to prove the requisite degree of seriousness."
Here, on the basis of the particulars of claim, the claimant was removed to Mongolia on 3 February 2008 and arrested on his arrival there. He was in pre-trial detention until 22 April 2009 and sentenced to fifteen years imprisonment. Post-conviction he was detained in conditions that were inhuman and degrading. The claimant suffered ill health and tuberculosis. That continued until his escape to the UK on 7 January 2010. Those amount to clear breaches of Article 3 of the ECHR.
v) It was plainly inappropriate for the defendant to certify the case as clearly unfounded and to deny the claimant an in-country right of appeal. The officer approving the removal recorded:
"The claimant also claims to be at risk on return because he is suspected of stealing statues from his monastery, that is prosecution not persecution. On return the subject would receive a fair trial, as in the refusal letter. Problem Certification Guide has been consulted regarding prison conditions – they do not normally engage Article 3."
The Problem Certification Guide says, in relation to prison conditions in Mongolia:
"Prison conditions are unlikely to meet the Article 3 threshold. However, the individual factors of each case should be considered to determine whether detention will cause a particular individual in his particular circumstances to suffer treatment contrary to Article 3. Relevant factors include the likely length of detention, the likely type of detention facility and the claimant's age and state of health. Only where it is unarguable that a person will face treatment which reaches the Article 3 threshold should a claim of this kind be certified."
The claimant submits that a higher threshold has been set. All he has to do is show an arguable case that his human rights were infringed. He had adduced evidence that he had suffered human rights abuses. He had produced the court summons as evidence of him being actively pursued by the authorities which stated that if he deliberately avoided attending court he would be liable to a fine or punishment with seven to fourteen days imprisonment.
As is evident from the defendant's letter from 30 January 2008 the defendant was operating on the basis that the claimant's claim was true. There was clear evidence before him that the claimant had an arguable case. In particular, reference was made to the Operational Guidance Note (OGN) with which the amended defence says the defendant probably engaged. Within the OGN the relevant paragraphs on prison conditions say:
"3.13.2. The guidance in this section is concerned solely with whether prison conditions are such that they breach Article 3 of ECHR and warrant a grant of Humanitarian Protection. If imprisonment would be for a Refugee Convention reason, or in cases where for a Convention reason a prison sentence is extended above the norm, the claim should be considered as a whole but it is not necessary for prison conditions to breach Article 3 in order to justify a grant of asylum.
…
3.13.5. Amnesty International reported that during 2005 prisoners held in police stations, pre-trial detention facilities and on death row were at risk of torture or ill-treatment in harsh living conditions. …
3.13.6. Regarding ordinary prison conditions, Amnesty International has stated that in 2005 detention conditions remained harsh with prisoners typically suffering from overcrowding, a high incidence of tuberculosis, inadequate nutrition and extremes of hot and cold temperatures in cells.
…
3.13.9. There is a risk of ill-treatment or torture of those in pre-trial detention in Mongolia and conditions for prisoners facing special 30 year isolation sentences or those on death row are very severe and may in some cases be inhuman or degrading. Where individual claimants are able to demonstrate a real risk of ill-treatment or torture in pre-trial detention or of being sentenced to 30 years isolation or death on return to Mongolia and exclusion is not justified, a grant of Humanitarian Protection will be appropriate.
3.13.10. In general, conditions for prisoners in ordinary prisons while poor are unlikely to reach the Article 3 threshold. Therefore, even where claimants can demonstrate a real risk of imprisonment on return to Mongolia a grant of Humanitarian Protection will not generally be appropriate. However, the individual factors of each case should be considered to determine whether detention will cause a particular individual in his particular circumstances to suffer treatment contrary to Article 3, relevant factors being the likely length of detention, the likely type of detention facility, and the individual's age and state of health. Where in an individual case treatment does reach the Article 3 threshold a grant of Humanitarian Protection will be appropriate. Only where it cannot be argued that an individual will face treatment which reaches the Article 3 threshold should a claim of this kind be certified."
The claimant submits that the defendant failed to meet the test set out in the OGN and, because he is relying on a Convention ground, the defendant had to take a cautious approach to certification.
vi) The defendant refused the claimant permission to adduce further evidence. In the fax of 29 January 2008 the claimant wanted to submit further medical evidence. He had an appointment with the Medical Foundation so that it was appropriate to stay the removal directions pending that examination. It was the claimant's case that the further medical evidence and documentary evidence would be sufficient to amount to a renewed application for asylum which would be capable of succeeding before an immigration judge, if not the defendant. The defendant accepted, in her response of 30 January 2008, that there was further evidence on the criminal charges but not sufficient to alter the decision. The claimant submits that is not good enough. There was evidence about pre-trial detention in the OGN and in the United States Department of State Country Report on Human Rights Practices 2006 – Mongolia. Within that it was said:
"Conditions in pre-trial detention and prison facilities were poor. Insufficient food, heat and medical care threaten the health and life of inmates. The NHRC annual report declared that no detention facility met the country's own standards and found little or no progress since a 2004 inspection revealed severe deficiencies."
In terms of arrest and detention the report said:
"Arrest without warrant was fairly common. According to the NHRC 919 out of 978 persons detained in the main pre-trial detention centre near Ulaanbataar were arrested under 'pressing circumstances' exception to the requirement that a warrant should be obtained from a judge prior to the arrest."
The claimant's evidence that he was being actively pursued was relevant as to whether he would be held in a pre-trial facility. The defendant had a duty to investigate what the risks were. If the defendant did take the OGN into account that demonstrated that pre-trial detention facilities met the Article 3 threshold. If the claimant was to be imprisoned for a Convention reason that was not dealt with in the decision letter.
The defendant's submission that the claimant did not put pre-trial detention at the forefront of his case is not relevant given that there is a duty on the defendant to inform herself. Together, it means that the claimant had an arguable case that his claim should not have been certified.
The defendant submits that the position is as set out in paragraphs 118 and 119 in AB v Home Office:
"118. Even if I were to be wrong about that, it also seems to me that Ms C's complaint, when properly understood, could not involve a sufficiently serious breach by the United Kingdom of its obligations under Community law as to give Ms C individually any claim for damages for breach of her Community rights. As observed by the Court of Justice in Brasserie du Pêcheur,
'… the decisive test for finding that a breach of Community law is sufficiently serious is whether the Member State or the Community institution concerned manifestly and gravely disregarded the limits on its discretion.
The factors which the competent court may take into consideration include the clarity and precision of the rule breached, the measure of discretion left by that rule to the national or Community authorities, whether the infringement and the damage caused was intentional or involuntary, whether any error of law was excusable or inexcusable, the fact that the position taken by a Community institution may have contributed towards the omission, and the adoption or retention of national measures or practices contrary to Community law …'
119. To the extent (if any) that the Claimants are able to establish that the Home Office acted in deliberate bad faith, national law provides a remedy in the tort of misfeasance in public office (which I discuss below). To the extent that the Claimants' case falls short of that, their complaint is in substance simply about delay and maladministration. That would not involve any sufficient manifest and grave disregard by the Home Office of its Community law obligations as to give rise to a claim for damages."
When the seriousness of the breaches are examined one is considering the alleged failure by an official which does not reach the severity envisaged by the second limb of Francovich. What is envisaged is a more flagrant breach such as a failure to implement a Directive properly or maintain some policy which contravenes the Directive. That is very different from an individual act of maladministration which, if the decision was wrong, there was here.
Although the claimant contends that there has been a flagrant breach resulting from egregious failure to comply with the obligations imposed on the defendant by the Directives there is nothing suggested in the claimant's case of misfeasance in public office or bad faith. What was suggested at the time was the omission of a material consideration. The claimant's concern then was about a lengthy prison sentence rather than pre-trial detention. The documents which he submitted suggest a short period of imprisonment for non-compliance but say nothing about pre-trial detention. If the claimant's own solicitors did not raise the points by reference to the OGN or other publications about pre- and post-trial detentions the defendant cannot be accused of acting in a flagrant and egregious manner. The decision letter shows the defendant had regard to the principal claim of the claimant, had regard also to internal relocation, and a fair trial by reference to country guidance.
The further evidence submitted did not advance matters because the defendant had already accepted the claimant was of interest to the authorities and had been persecuted by monks. The Medical Foundation Report, likewise, would not have added materially to the decision making process. Even if the decision was wrong it was an excusable error and no higher than maladministration.
The defendant accepts that the six factors relied upon by the claimant demonstrate that the consequences of the breach were serious. However, that is not determinative as to whether the breach itself is "sufficiently serious" and gives rise to a claim for damages. That is because, here, there was a failure by an individual officer.
The defendant does not accept that Article 4 of the Qualification Directive or the Procedures Directive is of sufficient clarity. There is a set administrative procedure which urges the official to take into account all relevant matters. That does not need the same clarity as a Directive where, after the grant of refugee status, rights follow such as a residence card or employment. The defendant relies on paragraph 32 of R (Kuchiev) where Singh J said:
"For those reasons, therefore, I have come to the conclusion that the claimant cannot succeed in getting the claim for damages under EU law off the ground. This is for the reason that there is no breach of the EU right invoked by the claimant. However, even if I were wrong about that, I am not persuaded by the claimant's arguments that there was in the present case a sufficiently serious breach of EU law as required by the principles is Haim to which I have already referred. In my judgment there would be nothing out of the ordinary by holding, as I do, that the grant of refugee status takes prospective effect. As I have already said, that is conducive to the interests of legal certainty. It is also consistent with the general position adopted in our own administrative law, although I accept that this may not be true in all systems of administrative law, in particular in other Members States of the European Union. However, as I have said, there are indications in the EU Directives themselves that the timing of a decision is governed by, for example, the obligation in Article 23 of the Procedure Directive that an examination procedure should be concluded as soon as possible. There is no reason in my view why the court should take the view in the present context that the Secretary of State has committed a sufficiently serious breach in accordance with the principles of Haim to which I have already referred. In the present context, where what in fact has happened is that there was quite properly an appellate process or reconsideration process used by each party at various stages, that process eventually led to a judicial determination which, as it happened, was in favour of the claimant. The Secretary of State then recognised the claimant's refugee status and granted him a residence permit. It does not follow from any of that that there has been a sufficiently serious breach of EU law -- if there has been any breach at all -- by a failure to recognise that status from some earlier date, in particular the date of the Immigration Judge's decision of 15 January 2009."
Discussion
Whether the four breaches relied upon by claimant are in fact made out is a matter for the substantive trial. For the purposes of this exercise I assume that they are and the question is do they constitute breaches that are "sufficiently serious"?
For the purposes of that exercise the claimant relies upon the multi factorial test. I consider first whether the factors relied upon are material. I have little difficulty in accepting the first three of the factors as being material, namely, the absence of discretion, the importance of the principle breached and the clarity and precision of the Directives. They are directly consistent with those identified as possible factors identified by Lord Clyde in Factortame (supra). No single factor is necessarily determinative and one factor might, depending upon what there was on the other side of the balance, be sufficient to justify a conclusion of liability.
The fourth factor relied upon, namely, the consequences of the breach to the individual, I accept can be a relevant factor where there is a material breach of a clearly worded provision of EU law and where there is minimal or no discretion on the part of the member state. Whilst the consequences to the claimant were clearly serious to him, as illustrated in the evidence relied upon particular to his case, it has to be remembered that the test is objective, the weight to be given to the relevant factors will vary from case to case and the seriousness of the breach will be an important factor.
The fact that the First-Tier Tribunal concluded that the claimant had a subjectively genuine and objectively well-founded fear of persecution in his country at the hearing on 25 October 2011 is not determinative of the situation in 2008. The documentary evidence that was available to the First-Tier Tribunal in 2011 was not available, to a great extent, to the defendant at the time of the 2008 decision. There are clear differences in the material available in 2011, such as different asylum interviews, the availability of expert psychological reports and updated evidence as to the situation in Mongolia based upon the USSD 2010 Human Rights Reports of 8 April 2011.
Factors five and six, the inappropriateness of certification that the claim was clearly unfounded and the refusal to permit the claimant to adduce further evidence, were decisions by an individual officer on behalf of the Secretary of State. It may well be that those were wrong decisions to make in the light of the matters which the claimant relied upon and which I have set out above. However, that does not necessarily equate with a finding that the breach would be sufficiently serious as to give rise to a claim for damages. It would be a failure on the part of an individual officer, with dire consequences so far as the claimant was concerned, but taken without bad faith and without misfeasance in public office. On the claimant's case there would be an omission to have regard to a material consideration which, in the mind of the decision maker, could have been of significant weight. However, the defendant had regard to the principal claims that were made by the claimant, had regard also to the issue of internal relocation and the likelihood of a fair hearing. Although the claimant submits that the defendant had a duty to inform herself, which she did to an extent, the fact that the claimant's own solicitors (experienced in this field) did not highlight the problems of pre-trial detention and the conditions in prison in Mongolia is indicative of what matters were regarded as material at the time. It has to be observed, too, that at the time there was no emphasis within the claimant's case on pre trial detention; the concern expressed was about the length of a prison sentence after a trial.
The application to put in further evidence can be analysed in a similar way. It may well have been a failing on the part of the relevant official not to allow it to be admitted but, again, it is not necessarily determinative in a claim for damages. A remedy then would have been to have commenced proceedings for judicial review of that decision which the claimant did not do.
Where does that leave the claimant? The last three factors relied upon can be clearly material to the exercise but, taking the claimant's case at its highest, in my judgement, fall short of establishing a 'sufficiently serious' breach of EU law. On the claimant's case there were errors on the part of the individual officer but, in the circumstances, those errors were excusable, and I am not persuaded that they show that the defendant manifestly and grossly disregarded the limits on the defendant's powers.
The claimant submits further that he does not need to succeed on all of the six factors. In many cases one or two factors may be sufficient, particularly when the Secretary of State has no discretion and the consequences are extremely serious. There is considerable force in those submissions which would affect the court's approach to the first three factors.
However, as was said in Haim v Kassenzahnärztliche Vereinigung Nordrhein (Case C – 424/97) [2002] 1 CMLR 11:
"38. As regards, more particularly, the second of those conditions, the Court has held that a breach of Community law is sufficiently serious where a Member State, in the exercise of its legislative powers, has manifestly and gravely disregarded the limits on its powers and that where, at the time when it committed the infringement, the Member State in question had only considerably reduced, or even no, discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach.
…
41. It is also clear from the case law cited in paragraph 38 that a mere infringement of Community law by a Member State may, but does not necessarily, constitute a sufficiently serious breach.
42. In order to determine whether such an infringement of Community law constitutes a sufficiently serious breach, a national court hearing a claim for reparation must take account of all the factors which characterise the situation put before it.
43. Those factors include, in particular, the clarity and precision of the rule infringed, whether the infringement and the damage caused was intentional or involuntary, whether any error of law was excusable or inexcusable, and the fact that the position taken by a Community institution may have contributed towards the adoption or maintenance of national measures or practices contrary to Community law."
Stepping back and considering the breaches objectively what was being considered by the defendant, taking the claimant's case at its highest, was an infringement where the damage caused was involuntary and, even if the decision was wrong, where the decision was excusable in the circumstances of the case which I have set out above. Whilst the first three factors then are material, and in my judgement, could constitute a breach of sufficient seriousness, in the circumstances here, on the basis upon which I have to consider the case, I am not persuaded that they would result in a valid claim for reparations under EU law. The position is analogous to that in Kuchiev where what is being sought is, in effect, a backdating of damages.
Condition (iii): Was There a Direct Causal Link Between the Breaches and the Loss or Damage Sustained?
The claimant submits that the causal link is self-evident. If the breaches are proved then the claimant would not have been returned to Mongolia and the damage would not have been sustained.
The defendant submitted that even if the defendant's decision not to accede to the asylum claim was wrong that did not give rise to a breach of Articles 4, 13, 18 or 21 of the Qualification Directive or Article 31 of the Procedures Directive. Those articles were administrative in nature. Obligations arising under them arose only once the defendant had determined the refugee status or subsidiary protection issue. They did not arise when the defendant had reached the opposite conclusion even if that conclusion could be shown to be erroneous. It follows that the alleged loss or damage was not a direct consequence of any breach.
It is of note also that the claimant did not seek judicial review of the removal directions when they were issued in 2008.
Discussion
Both parties made very short submissions in relation to the third condition. In the main I prefer the submissions on the part of the defendant. Article 4 of the Qualification Directive is administrative in that it is setting out the criteria that a Member State must apply as part of its assessment of the facts and circumstances of an application for international protection. As set out an individual has the right to expect that his assessment will be carried out in accordance with the Article. Articles 13 and 18 create rights once the assessment has been carried out and the criteria for the grant of refugee status or subsidiary protection have been met. Those rights arise only when a decision has been made that the criteria for asylum or international protection have been met. In this case that did not occur until 2011.
Article 21 imposes a duty on the Member State not to refoul people in accordance with the international obligations of the Member State. That goes with Article 31 of the Procedures Directive which provides a designated safe country of origin concept if the applicant has not submitted any serious grounds for considering the country not to be such a country. Here, it is said that in the claimant's application he had shown serious grounds for the decision maker to conclude that Mongolia was not a safe country. I am not persuaded that is the case. There was evidence in the claimant's representations that could raise concern. The individual consequences for the claimant proved to be undesirable but the overall tenor of the independent documentation in 2008 was not, in my judgment, sufficient to amount to arguably serious grounds. Even if I am wrong on that, the situation would remain one of error by an individual officer which falls short of a member state manifestly and gravely disregarding the limits on its discretion.
Further, the absence of any judicial review proceedings by the claimant in 2008 affects whether there was a direct causal link between the breach and damage sustained.
Conclusion
It follows that, in my judgment, the Qualification Directive and the Procedures Directive relied upon do confer rights on the individual. Whether the breaches alleged in respect of those rights are such as to be "sufficiently serious" so as to give rise to a claim for reparation under EU law I do not find to have been made out on the basis upon which I have been asked to assess matters. If I am wrong in that conclusion, for reasons set out, I am unable to regard the breaches that are shown as being directly causative of the damage sustained.
It follows that on the preliminary issue I find against the Claimant. |
David Pittaway QC :
Introduction
This action arises out of the tragic suicide of Philip Baker sometime on the night of 27 October 2010 or the early morning of 28 October at the age of 51. The claim is brought on behalf of his widow, Pauline Baker under the Fatal Accidents Acts 1976, and on behalf of the estate under the Law Reform (Miscellaneous Provisions) Act 1934. There are also claims made by her son, Andrew Baker and daughter, Rebecca Piercy for psychiatric injury as a consequence of seeing Mr Baker's body shortly after it was discovered. Mr Baker had been referred by Dr Gee, his general practitioner, to the local mental health services, Cambridge and Peterborough NHS Foundation Trust in September 2010. Mr Baker was seen by Dr Kabacs, a speciality doctor in psychiatry on two occasions, 29 September and 26 October 2010, before she discharged him back to the care of Dr Gee. It is alleged that the treatment plan provided by Dr Kabacs on 29 September was inadequate and her decision on 26 October 2010 to discharge Mr Baker to the care of his general practitioner, caused him to take his own life.
Law
The standard of care to be applied is that of a reasonably competent psychiatrist exercising reasonable care and skill at the time. The test of whether a doctor is in breach of duty was set out by McNair J in his direction to the jury in Bolam v Friern Hospital Management [1957] 2 All ER 118, at pages 121-122, which was approved in the House of Lords in Maynard v West Midlands Regional Health Authority [1985] 1 All ER 63.
Factual Evidence
Mr Baker had suffered from bipolar affective disorder since he was a teenager which, for the most part, he tolerated without medical intervention. He had lived with Mrs Baker since 1987 and they had been married since 1990. Mrs Baker had two daughters by another relationship, whom Mr Baker treated as his own children. Together they had one son, Andrew, who was born in 1993. Mr Baker had succeeded in running his own plumbing and heating business and providing for his family. He owned his own house.
Mrs Baker and their children were used to her husband's fluctuations in mood from high to low in approximately six week cycles with occasional periods of normality in between. He had taken an overdose in 1993 at a time of marital difficulties but did not receive any medical treatment. He had sought assistance from the mental health services in 2007 when he was seen by Dr Obinwa, a staff grade psychiatrist, on two occasions. Dr Obinwa considered he was suffering from cyclothymia, a mild form of bipolar affective disorder, and recommended sodium valproate. Mr Baker did not attend a follow-up appointment or take the medication.
Mr Baker had been brought up in an unconventional family of eight children who lived with their parents in a converted Nissen hut in Harston, Cambridgeshire. His parents were, by all accounts, early eco-warriors, interested in anti-nuclear demonstrations, organic food and other environmental issues, taking their children with them on demonstrations. From his parents Mr Baker developed a circumspect view of medicine, avoiding doctors and medications where possible.
Mrs Baker also suffered from depression, which led to periodic self-harming and alcohol abuse. Sadly Andrew Baker also suffered from depression, exacerbated by bullying at school and, to a lesser extent, Rebecca Piercy also did too. Nevertheless the family loved their father and enjoyed particularly the times when he was on a high, when they described him as being great fun to be with, however, when he was low he would become uncommunicative, withdraw into himself and sometimes lie on the sofa with a cushion over his head, humming. Although Mr Baker suffered from bipolar affective disorder he was always able to work and provide for his family.
The pattern of fluctuations in high and low mood altered in May 2010 after Mr Baker had attended his niece's wedding in Cornwall. He came back ebullient in mood, which did not remit after six weeks, as usually happened, but continued at a level that became unacceptable to Mrs Baker. Her husband's mood, unfortunately, coincided with Mrs Baker suffering from a prolonged episode of depression and a period of self-harming. The atmosphere at home was clearly volatile. Mr Baker was drinking heavily and spending time in the village public house, on occasions behaving in a disinhibited fashion. After an incident in August 2010 where Mr Baker failed to collect his wife to take her to the local public house, she locked him out of the house. There had been a previous occasion or occasions when Mrs Baker had locked him out of the house. Mr Baker moved into his parents' house in the same village, which was being lived in by one of his brothers. His mother was living in a residential care home. Mrs Baker explained that she remained in contact with her husband most days, either seeing him, telephoning or texting him. He continued to keep his possessions, including his clothes, at the family home. Mrs Baker was unable to cope with him living at home in his exuberant state when she was herself unwell.
The level of concern that Mr and Mrs Baker continued to show to each other can be judged from the fact that Mr Baker contacted the family general practitioner, Dr Gee, about his wife's depression in August 2010, after he had been locked out of the house. Mrs Baker arranged to see Dr Gee on the pretext of her own health but brought Mr Baker with her in the hope that Dr Gee could persuade him to see a consultant psychiatrist. He agreed to do so and attended Dr Gee with his wife on 17 September 2010. Dr Gee sent a referral letter by fax to the local mental health services requesting "prompt advice" about Mr Baker. He also prescribed Olanzapine, 2.5 mg per day. It is not clear why an appointment was not arranged within the expected period of 5 days but on 23 September 2010 Dr Gee saw Mr Baker again and sent a further letter requesting an urgent appointment. The second letter referred to the fact that Mr Baker had told him that he was "wondering" about suicide. He had looked for rat poison but had not found it. Dr Gee wrote that Mr Baker was suffering from "intermittent suicidal thoughts chiefly when his cyclical moods are on an acutely downward trajectory". In the same letter Dr Gee queried what mental health services were available.
Mr Baker, accompanied by his wife, was seen by Dr Kabacs on 29 September 2010. Dr Kabacs trained as a doctor in Hungary before moving to the United Kingdom. At the time she saw Mr Baker, her post was that of a speciality doctor in psychiatry. She has subsequently become a locum consultant psychiatrist. In her post, as a speciality doctor, she was supervised by a consultant psychiatrist, Dr Hymas. Dr Kabacs had access to some of Mr Baker's medical history. She was aware that Mr Baker had attended Dr Obinwa in September 2007. Dr Kabacs had available three letters written by Dr Obinwa, two detailed letters following the first two consultations, and a third letter relating to his discharge in March 2008. Dr Kabacs said that she would have read Dr Gee's second referral letter and Dr Obinwa's three letters before she saw Mr Baker. She believes that she saw Mr Baker for a one hour appointment, possibly over lunchtime.
Mrs Baker is critical of the fact that she was not given an opportunity to speak as frequently as she would have liked to have done. The consultation with Dr Kabacs was with Mr Baker and there was only a limited investigation into Mrs Baker's own illness that could be undertaken. It is clear to me that Dr Kabacs was aware of Mrs Baker's illness which was why she initiated a Carer's Assessment. The assessment was designed to look at specifically Mrs Baker's ability to support her husband. This was of particular relevance where Mrs Baker was herself unwell.
Dr Kabacs took a detailed history from Mr Baker and performed a mental state examination, before reaching a diagnosis. She subsequently prepared a detailed letter for the general practitioner, which made no specific reference to the incident referred to in Dr Gee's referral letter of 23 September 2010 or to suicidal ideation. She described Mr Baker as "slightly unkempt, wearing dirty clothes and his hand was unwashed". His mood was noted to be normal subjectively and objectively; there was no psychotic symptomatology and he seemed to be insightful. She diagnosed him as suffering from bipolar affective disorder stating "currently his mood is normal, he has just recovered from his hypomanic mood". In her witness statement Dr Kabacs states that she considered that Mr Baker's risk of suicide was low as he denied suicidal thoughts, intent or plan. Mr Baker was advised by Dr Kabacs to continue taking Olanzapine at a dose of 2.5 mg per day, which he should continue to take for at least 12 months. She advised him that he should contact Relate for Marriage Guidance Counselling. She offered a Care Assessment for Mrs Baker. Dr Kabacs arranged a follow-up consultation for the following month.
Dr Kabacs did not keep any handwritten notes from the consultation but dictated the letter to the general practitioner either the same evening or following morning. It seems to me that the level of detail in the letter could only have been prepared from a handwritten note taken during the course of the consultation. I am informed that at that stage a file would not have been opened on Mr Baker into which the handwritten notes could have been placed. It is noteworthy that when Dr Kabacs' letter to Dr Gee was eventually typed on 19 October 2010, Dr Kabacs wrote across the top "green file - please".
Dr Kabacs said that she would have taken Mr Baker's case to the weekly Multi-Disciplinary Team Meeting ("MDT"), where all new patients would have been discussed. The minutes of the meeting are, unfortunately, not available. Dr Kabacs said that she discussed Mr Baker's case with her supervising consultant, Dr Hymas. She also said that as a result of the MDT she expected that a Carer's Assessment would have been organised. Nevertheless something prompted Dr Kabacs on 19 October 2010 to send an email regarding the arrangement of a Carer's Assessment. The content of the email does not disclose that it was a follow-up to a previous request. I think it is likely that Dr Kabacs discovered that request had not been made following the MDT, which prompted the request on 19 October 210. The Carer's Assessment was subsequently arranged to take place on 29 October 2010.
Mr Baker attended Dr Kabacs again on 26 October 2010 on this occasion on his own. He had seen Mrs Baker before the appointment when she had emphasised to him the importance of explaining to Dr Kabacs that he was feeling hopeless. He assured Mrs Baker that he would do so.
Once again there are no handwritten notes of the consultation available, however, Dr Kabacs says that she would have dictated the letter to the general practitioner the same evening or following morning. In the letter she said " ... that since we last met his mood had deteriorated and he has been feeling depressed and anxious". He was still working but finding it difficult to talk to customers and make decisions. He said that he had less energy and motivation than before. He had stopped daily drinking. He said that he had not been taking his prescription of Olanzapine for three weeks. He reported that his mood had started to improve and "he denies having any suicidal thoughts but tends to feel hopeless about the future". He was noted to be "... Wearing dirty clothes and was unkempt; he kept good eye contact; he appeared to have difficulties with his hearing but talked readily about himself; he described his mood as low and he appeared mildly depressed; he has some thoughts of hopelessness but denies suicidal thoughts; no perceptual abnormalities were elicited; his cognition was grossly intact; he has insight into his state". She stated that her impression was of "bipolar affective disorder, currently mild to moderate depressive symptoms". She recommended to him that he restarted Olanzapine but recorded that he preferred to stay off medication. She noted "we talked about the first signs and symptoms of mood deterioration, especially symptom of hypomania and mania. In that case I strongly suggest that he restart on Olanzapine which he agreed with." She said "I haven't offered him another outpatient appointment but will be happy to see him again if you have concerns and re-refer his case".
There was a discussion about Mr Baker's marital situation. Dr Kabacs formed the view that his primary concern related to resolving his marital difficulties, on which she was unable to provide counselling on the NHS. Having discussed matters with him, she advised that he should see a marriage counsellor together with his wife. She discharged Mr Baker back to the care of his general practitioner. The letter does not refer specifically to the Carer's Assessment but Dr Kabacs said that she believed that it would have gone ahead. She says that Mr Baker accepted the plan she had put forward. Mrs Wilkinson, a team administrator, in a witness statement recollected Mr Baker laughing and joking with the administrative staff as he left the premises.
Mr Baker visited his wife after the appointment. Mrs Baker said that he was very upset, tearful and distraught at being discharged. She says that he said he did not know what he was going to do and described his own situation as "hopeless". In her witness statement she says that he said to her that Dr Kabacs had told him that if he needed to see her again, he should go through his general practitioner. He asked his wife whether he could return to live with her at the marital home but she told him that the time was not right because of her own illness. Mrs Baker said that he was cross with her response. He collected some clothes from their bedroom and went to work to complete a contract.
The following day he saw his son, Andrew Baker, in the evening and worked with him on a motor car that they were both restoring. Andrew Baker recollects that his father was quieter than usual and at the end of their work he uncharacteristically hugged him and told him that he loved him.
On 28 October 2010 members of the family were unable to establish Mr Baker's whereabouts and reported him missing to the police. Andrew Baker attended with the police at his grandparents' house and on searching the outbuildings found his father dead with a plastic bag tied over his head. Mrs Baker was contacted, as well as her daughter, Rebecca Piercy, who drove from her home 45 minutes away to Mr Baker's parents' house. She insisted on seeing her stepfather and saw his body in the outbuilding. Mrs Baker also saw him in the mortuary, when she identified his body.
Expert Evidence
Both Dr Mayer and Dr Maganty are well qualified to give expert evidence on these matters. Dr Mayer, who retired from the NHS in 2011, practised in adult community psychiatry in Bury St Edmunds, and is familiar with the services offered by the community mental health teams. Dr Maganty is a consultant psychiatrist at the Raeside Clinic, Birmingham, a medium secure unit, who has experience of the community mental health teams for patients discharged from the clinic. He has a particular interest in the arrangements for discharge. Counsel on behalf of the Claimants sought to characterise his experience as being appropriate only to those patients who had been detained in medium secure units. I reject that criticism. I was impressed with the care with which both experts gave their evidence.
Following the joint meeting of experts, Dr Mayer for the claimants, and Dr Maganty for the defendants, there are essentially two issues remaining. First, should Dr Kabacs have taken action, following the consultation on 29 September 2010, over and beyond the action she took to involve the community mental health services, which probably would have included a home visit. Second, should Dr Kabacs have not discharged Mr Baker on 26 October 2010 and, again, organised further involvement with the community mental health services. On these two issues the experts have maintained opposing views, Dr Mayer maintaining that continued involvement with the community mental health services on both occasions was required. Dr Mangaty taking a contrary position.
Dr Mayer and Dr Maganty are agreed that Mr Baker's diagnosis was bipolar affective disorder. They disagree as to his presentation when he saw Dr Kabacs. Dr Mayer believes it was of a moderate depressive episode. Dr Maganty believes that it was a mild (later changed in oral evidence to mild to moderate) depressive episode. They are both agreed that Dr Kabacs assessment on 29 September 2010 was of a good standard. They disagree as to whether she should have involved the community mental health services after that consultation. Dr Mayer believes that a further appointment should have been made to assess his mental state and determine whether medication should be prescribed. Dr Maganty does not consider that this was reasonable within the time frame before Mr Baker's death. They are agreed that Dr Kabacs' s engagement with Mrs Baker was reasonable in the circumstances.
Dr Mayer believes that Dr Kabacs decision to discharge Mr Baker on 26 October 2010 was premature given his fluctuating mental state, including low mood, alcohol abuse and feelings of hopelessness about the future. He believes that the description he gave of his mood on 26 October represented risk factors for self-harm or suicide. They disagree as to what is described as a predictable fluctuation within a deteriorating mental state between the two assessments. Dr Maganty believes that Mr Baker could have been managed within a primary care setting as long as he did not suffer from mania or severe depression. They agree that he did not do so. Dr Maganty does not consider that it was possible for Dr Kabacs to anticipate Mr Baker's death in circumstances where she had formed the view that he did not have thoughts of self-harm. He also draws attention to the fact that Dr Kabacs was unaware of the nature or extent of Mrs Baker's own mental health problems. They are, however, agreed that there is no evidence that Mr Baker presented with an immediate risk of self-harm or suicide when he was seen on 26 October 2010. They are agreed that an adequate risk assessment was performed. They agree that there was no reason to admit him to hospital or involve the Crisis Resolution and Home Treatment Team.
Dr Mayer believes that Mr Baker took his own life whilst suffering from a moderate depressive episode of bipolar affective disorder. Dr Maganty relies upon the breakdown in Mr Baker's relationship with his wife and her refusal to allow him to return home and to a lesser extent his underlying bipolar disorder and a negative reaction to Mrs Baker's own mental health problems. They are agreed that even if a further appointment had been made it does not, on balance, follow that Mr Baker would not have taken his own life. They disagree as to whether the discharge of Mr Baker by Dr Kabacs increased the risk of him taking his own life.
Discussion
Breach of duty
It seems to me that the starting point in this case is the credibility of the evidence of Dr Kabacs, who is herself an experienced psychiatrist. She gave her evidence in fluent English and was able to explain clearly the steps she had taken after Mr Baker had been referred to her as a patient. It is unfortunate that handwritten notes of the consultations on 29 September and 26 October 2010 are not available, however, I am satisfied from the evidence that Dr Kabacs gave that she prepared handwritten notes of each consultation, which did not find their way into Mr Baker's file. Indeed, unless she dictated each of the two letters to his general practitioner during the course of the consultations, which nobody has suggested, it is difficult to see how the first, and to a lesser extent the second, letter, could have contained the level of detail which is set out. I accept Dr Kabacs' s evidence that she dictated each letter from her handwritten notes at the end of each clinic or at the latest the following morning. As such, the letters represent a near contemporaneous account of the consultation.
The content of the first letter is a detailed description of the history obtained from Mr Baker, and to a lesser extent from Mrs Baker, of his history of bipolar affective disorder. Although Dr Kabacs only had some material before her she did have the three letters written by Dr Obinwa to Mr Baker's general practitioner in 2007 and 2008 and Dr Gee's second referral letter. She accepted in evidence that she probably had not seen the first referral letter, albeit it was received by the defendant and was part of the documents disclosed. She carried out a full mental state examination of Mr Baker and concluded that he was suffering from bipolar affective disorder, which was a positive diagnosis of mental illness. Dr Obinwa had considered that Mr Baker was suffering from cyclothymia, which falls below that definition.
It was pointed out that the letter was deficient in two respects. First it does not refer specifically to that part of Dr Gee's referral letter where he said that Mr Baker had told him he was "wondering" about suicide and had searched unsuccessfully for rat poison. Second, Dr Kabacs does not express an opinion on the risk of suicide. In my view if Dr Kabacs had not considered with Mr Baker that part of Dr Gee's referral letter, the consultation would have fallen below an acceptable standard. Dr Kabacs said that she did discuss it with Mr Baker and was satisfied that he was at a low risk of suicide. She says that he denied suicidal thoughts, intent or plan. Whilst it is troubling that neither matter is referred to in the letter, I have to form a view as to whether Dr Kabacs conducted the consultation in a thorough and competent manner. Having heard her give evidence I have concluded that it is very unlikely that she would not have discussed with Mr Baker that part of Dr Gee's referral letter relating to suicide, which was the very reason she had been asked to see him urgently. I am satisfied that Dr Kabacs is a careful and competent psychiatrist, who did discuss with Mr Baker the information contained in Dr Gee's letter, and that she concluded that Mr Baker was at a low risk of suicide. Dr Mayer and Dr Maganty both agreed that Dr Kabacs had carried out a good standard of assessment.
It seems to me that, on the basis of the information that Dr Kabacs had available to her at the consultation on 29 September 2010, she was entitled to come to the conclusions that are set out in the first letter she wrote to Mr Baker's general practitioner. Mr Baker was suffering from bipolar affective disorder, as he had done for many years, but he was continuing to function satisfactorily carrying on his own business, which required technical skill and ability in its execution. He was engaging with his wife but continued to be troubled by the breakdown in their marital relationship. He was taking the medication prescribed by his GP, Olanzapine, which was beginning to stabilise his mood. I am satisfied that Dr Kabacs' conclusions that she should arrange a further consultation with Mr Baker the following month and a Carer's Assessment for Mrs Baker were to an acceptable standard on her part.
In my view there were insufficient risk factors present that would have mandated the involvement of the community mental health services at that time. I accept Dr Maganty's evidence that "there was nothing there" and accordingly reject Dr Mayer's evidence that Dr Kabacs should have involved the community mental health services. While it may well be the case that some psychiatrists may have done so at that stage, I am satisfied that a reasonably competent body of psychiatrists would not have done so. Dr Kabacs took the case to the MDT on the following Wednesday, which would have included a range of healthcare professionals. Whilst there is no minute available of the MDT meeting, I accept Dr Kabacs' evidence that she did discuss Mr Baker's case at the meeting after the first consultation and, following the discussion, no further recommendations for treatment were made. She also discussed Mr Baker's case with her supervising consultant, whom it does not appear suggested a different course of action.
There were two factors in Dr Kabacs' treatment plan, which suggest that she had properly identified the issues involved. First the reference to marriage counselling, which reflected the reality as described by Mrs Baker. Second, the reference to a Carer's Assessment, which reflected Mrs Baker's inability to support her husband because of her own depression.
It seems to me that Dr Kabacs's decision to discharge Mr Baker back to the care of his general practitioner at the second consultation on 26 October 2010 was also of an acceptable standard. Mr Baker told her that he had stopped taking Olanzapine three weeks before because it had been affecting his mood. There is an issue as to whether he had in fact done so in light of the prescription dated 19 October 2010 that Mrs Baker had obtained. At one stage it appeared that the issue might be settled when Rebecca Percy said that she had retained the packet containing Olanzapine after her step-father's death, which would have shown how many of those tablets he had taken. I asked that the packet be brought to court but was informed on the third day of the trial that Mr Piercy's recollection was that it had been destroyed.
Dr Kabacs recorded that there had been a deterioration in Mr Baker's mood since his consultation on 29 September 2010. I accept Dr Maganty's evidence that Mr Baker had followed a relapsing and remitting pattern for a number of years. Dr Maganty refers to the fact that Dr Kabacs' diagnosis of mild to moderate depression is routinely treated in primary care by general practitioners. Mr Baker had told her that he did not wish to take medication. Her plan envisaged referral by the general practitioner if there was a further deterioration in his mental health. Dr Kabacs considered that Mr Baker's principal concerns related to the issues in his marital relationship and again advised him to seek the services of a marriage counsellor. Although Dr Kabacs could have worded her letter more carefully, I have concluded that her references to "hopelessness about the future" and "some thoughts of hopelessness" were more likely to be in the context of the breakdown of his marital relationship than a more general hopelessness. Dr Kabacs advised Mr Baker to take his medication. Her recollection was that Mr Baker accepted the plan put forward including discharge back to the care of his general practitioner. The witness statement from Mrs Wilkinson is supportive of the fact that when left the premises he was laughing and joking with the administration staff.
Mrs Baker and her children, Andrew and Rebecca's, evidence about these events is particularly poignant. I am satisfied that they have done their best to explain to the court their recollection of the events surrounding Mr Baker's death. Mrs Baker's evidence is that her husband was distraught when he visited her the same day after his appointment with Dr Kabacs. She describes him as being in a distressed state, being tearful. He was disillusioned that he had been discharged by Dr Kabacs and told that there was nothing more that could be done for him. He asked Mrs Baker if he could return home but she told him that the time was not right whilst she was ill. She was not well enough to cope with him at home. At the end of their conversation he went upstairs to collect some clothes and went to complete a contract on which he was working. Mrs Baker did not see him alive again.
It is not suggested that at any time he saw Mrs Baker he discussed with her taking his own life, in particular he did not do so at their final meeting after he had seen Dr Kabacs. He appeared cross that Mrs Baker would not allow him to come home. In my view Mr Baker's main concerns at that meeting were to persuade his wife to let him come home, sadly, she was not sufficiently well to agree to his request. I am satisfied that he understood and agreed with the plan Dr Kabacs had proposed. He was aware that Dr Kabacs was prepared to see him again, through his general practitioner.
Causation
I am not satisfied that any alleged failure on the part of Dr Kabacs to involve the community mental health services in Mr Baker's case, following the consultation on 29 September 2010, was causative of Mr Baker's suicide. It is suggested by Dr Mayer that had community mental health services been involved, on the balance of probabilities, this would have averted the tragic consequences. Dr Mayer's opinion pre-supposes that community mental services could reasonably have been put in place in the period between the two appointments and, if it had been, the nature of the care provided would have made a difference. There is an absence of evidence as to what community mental health services would have been available within that period and what they would have been able to offer, beyond a home visit from a member of the team. I accept Dr Maganty's evidence on this issue that it is unlikely that a home visit could have been arranged before the second consultation. I am not satisfied that, on the balance of probabilities, had Dr Kabacs instigated further involvement from the community mental health services, Mr Baker would not have taken his own life about one month later.
The situation with the appointment on 26th October 2010 is more difficult in that it is alleged that but for Dr Kabacs decision to discharge Mr Baker to the care of his general practitioner he would not have taken his own life. I have given careful thought to this proposition and concluded that the case has not been made out. There was no indication of suicidal ideation on the part of Mr Baker at the time he saw Dr Kabacs or subsequently the same afternoon when he saw Mrs Baker. Whilst I fully accept that he was distressed when he visited his wife he did not give any indication to her that he was proposing to take his own life. On the contrary at the end of their conversation he collected clothes from his bedroom and went off to work on a contract he wished to complete. Mrs Baker's recollection is that he was cross that she had told him that she would not allow him to return home.
The following day Mr Baker appears to have gone to work and spent the evening working with his son, Andrew, on the repair of an old vehicle. Whilst Andrew Baker's recollection is that his father was quiet and hugged him telling him that he loved him, it would be too much to read into his actions that he had necessarily decided at that stage to take his own life or, if he had done so, his reasons for doing so.
In my view it would be a step too far for me to conclude that, but for Dr Kabacs' s decision to discharge him to the care of his general practitioner, Mr Baker would not have taken his own life, as opposed to any other reason at that time. There is evidence that the breakdown in his relationship with his wife was a significant stressor, Dr Maganty draws attention to the fact that his last incident of self-harm had been in the context of marital difficulties. Dr Maganty does not consider that the contact and interaction with Dr Kabacs would have caused such a profound and significant effect upon him as to take his own life. He draws attention to the fact that he broke down when went to see his wife and not when he was informed by Dr Kabacs that he was being discharged to his general practitioner. Dr Maganty believes that his decision to take his life was the breakdown of his relationship with his wife during a depressive episode, causing him to have a distorted thinking pattern, exacerbating the breakdown in his marriage. There is no evidence to indicate that had Dr Kabacs offered another outpatient appointment that would have prevented his death. I have reluctantly reached the same conclusion and prefer Dr Maganty's evidence to that of Dr Mayer on this and the other issues in the case.
There is one other matter which I should consider in the context of the case on causation. Counsel on behalf of the Claimants sought at a late stage to introduce the principles in Bailey v Ministry of Defence [2008] EWCA Civ 883 into this case. Dr Mayer's report failed to deal with the issue of causation, except for a paragraph stating the general proposition that bipolar affective disorder is a treatable condition. At a late stage Dr Mayer was asked to provide a letter stating that the alleged breaches of duty materially contributed to Mr Baker's decision to take his own life, which at the outset of the trial I admitted as evidence. Dr Mayer frankly admitted in evidence that the use of the words "material contribution" were not his own. When asked about it, Dr Mayer said that he was more comfortable with the application of the "but for" test on the facts of this case rather than "material contribution". It does not seem to me that the late formulation put forward by Counsel on behalf of the Claimants that Dr Kabacs' alleged breaches of duty materially contributed to his death adds anything in this case to the "but for" test. In my view this is not a case where medical science cannot establish the probability that "but for" an act of negligence the injury would not have happened and the "but for" test requires to be modified. As recognised by Dr Mayer, the issue is whether "but for" the alleged breaches of duty Mr Baker would have taken his own life. Each of the alleged breaches was a defining event without which Mr Baker either would or would not have taken his own life.
Turning to the individual claims made on behalf of Mrs Baker, her daughter and son, it would appear that the only remaining claim is that made by her daughter, Rebecca Piercy. Dr Mayer and Dr Maganty are agreed that Andrew Baker's grief would not amount to any separate psychiatric injury as a result of discovering his father's body. Mr Baker did not advance in his closing submissions claims on behalf of Mrs Baker or Andrew.
Rebecca Piercy attended the scene of her step-father's death approximately 45 minutes after she had been informed that he had died. She saw his body in the outhouse with a plastic bag over his head. Dr Mayer considers that she suffered from PTSD consequent upon witnessing her step father's body. Dr Maganty considers that there was mild depressive episode of a recurrent depressive disorder. The medical records disclose that Rebecca Piercy has a history of depression. The opinions in both psychiatric reports are that she made a good recovery from these tragic events. I am not satisfied that she suffered a separate psychiatric injury as a result of seeing her step-father's dead body. On balance I prefer Dr Maganty's evidence that she suffered from a mild depressive episode of a recurrent depressive disorder. The main issue, however, is whether as a matter of law she is entitled to make a claim as a secondary victim. I am reminded by Ms Power on behalf of the defendant that the circumstances in which such a claim can be made is closely defined by the "control measures" referred to in the authorities put before me. She submits that the discovery of Mr Baker's body was at a time too distant from Mr Baker's death to allow Rebecca Piercy to come within the category. If, it had been necessary for the purposes of this judgment, I had had to reach a decision on this issue I would have concluded that there was insufficient physical proximity in time and space to Mr Baker's death, Taylor v A Novo (UK) Ltd. [2013] EWCA Civ 194 applied.
In the circumstances judgment is entered in this case for the defendant.
At the conclusion of the trial I indicated that it was not necessary for counsel to attend the handing down of this judgment unless it was not possible for them to agree any consequential orders. If the parties are unable to agree an order, this matter should be relisted before me for further directions.
Finally, I am grateful for the assistance of counsel and their detailed submissions in this tragic case. |
Mr Justice Knowles :
Introduction
This short judgment concerns the hearing, listed today, of the Defendant's renewed application for permission to appeal against decisions of HH Judge Maloney QC reached on 2 May 2014.
The proceedings to date
In August 2003 the Claimant ("the Bank") commenced proceedings in the Bury St Edmunds County Court seeking possession of 59 Southgate Street ("No. 59"), which is where the Defendant (Ms Copeland") lives. The Bank holds security by way of mortgage over No 59. It claimed that as at 6 September 2013 it would be owed £121,779.87 by Ms Copeland and that that sum was secured by the mortgage.
Ms Copeland served a Defence and Counterclaim. It was of poor quality. The Bank applied to strike out that statement of case and for the Court to give judgment in favour of the Bank on the counterclaim. On 2 May 2014 Judge Maloney QC heard Counsel for both parties. He struck out the Defence and Counterclaim but allowed time for Ms Copeland to apply for permission to serve an Amended Defence, failing which, the Learned Judge ordered, the Bank could proceed to apply for judgment on its claim. As to the counterclaim, the Learned Judge gave judgment to the Bank "on the ground of limitation".
Judge Maloney QC refused permission to appeal. Acting in person, Ms Copeland sought permission to appeal from the High Court. This was refused on the papers on 26 September 2014, but the High Court Judge refusing permission extended the time allowed for Ms Copeland to apply for permission to serve an Amended Defence.
Ms Copeland sought an oral hearing of her application for permission to appeal. On 13 November 2014 this came before Mitting J who stayed the application for two months to enable Ms Copeland to seek pro bono assistance. In the event, the Court received a notice dated 5 January 2015 recording that Hines & Co, solicitors, had been instructed to act on her behalf. Later correspondence suggests that they were retained on a fee-paying basis.
By letter of 23 January 2015 Hines & Co informed the Court that an amended version of a Defence and Counterclaim was "currently being worked on". However by letter of 6 February 2015 Ms Copeland informed the Court that she had withdrawn her instructions from Hines & Co, that she felt wary of legal professionals, and that she had "no alternative but to construct my own re-pleadings, with the assistance of a lay representative".
Today's hearing
And so to today. The stay of the oral hearing of Ms Copeland's application for permission to appeal from the decisions of Judge Maloney QC has expired. That application for permission has duly been listed. Hines & Co have written to say that they are no longer instructed and are applying to come off the record. Ms Copeland has not attended, but has sent a fax asking for more time.
A Ms Elizabeth Watson (Ms Copeland's sister) has also sent a fax. This is lengthy and entitled "Affidavit". It followed an application made by her on behalf of Ms Copeland to adjourn today's hearing. That followed many, many communications sent to a wide range of people and in which Ms Watson has claimed to represent or speak for or assist Ms Copeland. The application to adjourn was refused by Mitting J on 27 March 2015.
Mitting J also ordered that at the hearing today Ms Watson would not be permitted to speak on behalf of Ms Copeland and that Ms Copeland must either be represented by solicitors or counsel or represent herself. He pointed out that Ms Watson was unsuited to represent Ms Copeland in these proceedings because she may have a conflict of interest (having regard to the alleged facts of the case) and her conduct had to date "not advanced her sister's interests one bit". From everything I have read, I respectfully agree with Mitting J. In the event Ms Watson too has not attended today.
This being the hearing of Ms Copeland's application for permission to appeal, the Bank was notified in accordance with regular practice, and in the interests of saving costs, that it was entitled (but not required) to attend but would not usually be awarded the costs of doing so. It has elected to attend, and is represented by Miss Amy Nesbitt.
Miss Nesbitt has no instructions to make submissions on the substance of the matter, but it was helpful to be able to invite any submissions from her on the question of the most appropriate procedural course to take. Understandably her submission for the Bank is that I should dismiss the application. This would leave the Bank free to enter judgment for the sum it alleges and request its order for possession of No 59 subject only to argument about questions going, in particular, to the suitability of, timing of and arrangements for possession.
In preparation for this hearing I have, as I informed Ms Nesbitt, read what was available on the Court file. There is considerable documentation. It is reasonably clear that there will be other material not on that file but served by one party on the other over the course of the proceedings. In reading I have deliberately treated separately the many communications from Ms Watson.
Decision
Having read what I have, and doing the best I can in the unusual circumstances of this case, I propose to grant permission to appeal against the decisions reached by HH Judge Maloney QC on 2 May 2014.
In so doing I emphasise that the reasoned judgment of Judge Maloney QC deserves every respect. It clearly strove to do justice to the matter as a whole. In my view justice will be furthered if I grant permission, which will have the consequence of enabling the matter to be examined on its merits with the involvement of both parties and without undue further delay.
Let me state shortly why that examination is important in this unusual case; let me identify the substantive point that, regardless of others, causes me to grant permission.
Ms Copeland appears to have borrowed two sums of money from the Bank, one to invest in a scheme ("the Scheme") and one to purchase No 59 as her new home. She granted two mortgages in favour of the Bank, the one over No 59 that is relied on in these proceedings, and the other over her former home, Lavender Cottage.
The Scheme is alleged by Ms Copeland to have been, at least by some point in time, fraudulent to the knowledge of the Bank by its relevant officer. Recognising that the matter was not at the stage of a trial, the Bank's position before HH Judge Maloney was not that Ms Copeland's allegation could be demonstrated to be wrong but that she had left it too late to advance it.
There was evidence, argued the Bank, that Ms Copeland had from as early as 2002 acquired some of the knowledge that she said pointed to fraud, had not pursued a claim then or as she learned more over subsequent years up to 2007, and was now barred by limitation. I note that Ms Watson is very bound up in the facts throughout the period, apparently as an investor herself, and as that makes her a potential witness it further emphasises her unsuitability to represent or speak for Ms Copeland.
The sums paid out by the Bank in connection with the borrowing were approximately £125,000 to the scheme in around November 2001 and £97,000 to the vendors of No 59 in around February 2002. On the documents it appears Ms Copeland alleges that the Bank received back two sums, around US$190,000 on around 10 July 2002 in connection with the scheme (this payment is emphasised at ground (e) of the Grounds of Appeal and is verified by paragraph 38 of a signed witness statement dated 3 September 2014, not before Judge Maloney QC) and around £136,000 on around 22 July 2002 as the proceeds of sale of Lavender Cottage (the mortgage being released to allow the sale).
That would leave little or no remaining debt from Ms Copeland to the Bank, regardless of the mortgages the Bank held.
However after the US$190,000 was apparently received back by the Bank it appears that a like sum may have been paid (as part of a total of about US$545,000) by the Bank to an account in Mexico and in connection with the scheme. The Bank no doubt says that this was with authority from Ms Copeland (apparently through Ms Watson) but the question is whether the Bank's authority truly extended to the situation in hand if (as alleged) the Bank knew, at least by that point in 2002 that the scheme was fraudulent. There is alleged to be some material that is alleged to show initial action by some supervisory or regulatory authorities by then in relation to third parties alleged to have some involvement in the scheme that was not honest.
The focus of Judge Maloney QC was, understandably given what seems to have been the thrust of the argument before him, on whether Ms Copeland knew of the alleged fraud and the Bank's alleged knowledge of it, at least by 2007 so as to render claims by her against the Bank too late by reason of limitation. There may well be argument on the appeal as to whether a limitation period applies in any event. However for the present, and subject to argument on the appeal itself, the essential question may be, even if limitation does affect a claim by Ms Copeland, the question whether the Bank is owed anything. Simply, what is the true state of the account between the Bank and Ms Copeland? That is a question that involves, among other things, consideration of what the Bank knew in 2002.
The question of how much (if anything) the Bank is owed is part of its claim. For all the deficiencies in the Defence and Counterclaim before Judge Maloney QC the document may have been enough to put in issue the Bank's claim to still be entitled to £121,000 (which in turn would require it to show that it was authorised to pay out US$190,000 to Mexico in 2002). And, as I believe HH Judge Maloney rightly recognised, the fact that the Bank may have dealt with matters on two accounts may not necessarily mean that when it comes to the question whether Ms Copeland is still its debtor it can focus on only one account and not the other.
Directions
I give the following directions in relation to the hearing of the appeal. It is to be listed for one day. The Bank is to prepare the hearing bundle in the event that Ms Copeland does not appoint new solicitors. The bundle is to be lodged 7 days before the hearing. All further documents, including written argument on the appeal, are to be served by one party on the other and lodged with the court 3 days before the hearing. Ms Watson may not represent Ms Copeland on the hearing, and nor may she make any application on behalf of Ms Copeland in advance of the hearing.
The forthcoming hearing of the appeal may be a crucial hearing for Ms Copeland and I strongly urge her to take independent professional advice and secure independent professional representation. I will ask Miss Nesbitt to ask her Instructing Solicitors kindly to ensure a copy of this judgment is sent to Ms Copeland. |
Mrs Justice Swift DBE :
The background
This is an application by the Applicant for interim delivery up and preservation by the First Respondent of two cars which are currently in the First Respondent's possession. I heard oral submissions on the application on 2 March 2015 and gave my decision, reserving my written reasons which I now give.
The Applicant is a limited company which specialises in childcare. The First Respondent is also a limited company dealing in, amongst other things, the manufacture, sale and supply of biodegradable fuels. Miss Claire Smith is the sole shareholder and director of the Applicant and is also a 25% shareholder and director of the First Respondent. The Second Respondent, Mr Peter Ogg, is a director of the First Respondent. The Applicant is only one of Miss Smith's business interests. She is, or has formerly been, a director of several other companies. In particular, she is or was a director of a company known as Ace Waste. The Second Respondent was, at least at one time, also a director of and a consultant to Ace Waste.
This application relates to a claim for damages made by the Applicant in the sum of £145,833.63 in respect of monies and expenses which it alleges are owed to it by the First Respondent, together with £3,506.19 said to be owed by the Second Respondent. It is contended by the Applicant that, for reasons that are unclear, Miss Smith, through the Applicant, agreed to assist the business endeavours of the First Respondent by providing it with, amongst other things, a company credit card, two loaned motor cars, a funding circle loan, direct loans to cover certain expenditure and the payment of the First Respondent's initial expenditure. The Applicant alleges that agreements to provide these facilities were made between Miss Smith, acting on its behalf, and the Second Respondent, as director of the First Respondent, and that those agreements were then breached.
The provision of the two cars
For these purposes, only one of the agreements referred to is relevant. That relates to the provision of two motor cars, a Volkswagen Touareg ("the VW") and an Audi Q7 ("the Audi") to the First Respondent. The Applicant alleges that it obtained the cars on lease, then handed them over to the First Respondent for the use of the Second Respondent and another director of the First Respondent in their capacities as directors. The Applicant alleges that the First Respondent failed to comply with its agreement that it would reimburse the Applicant for the payments made by the Applicant to VW Financial Services (VWFS) for the lease of the cars and other relevant expenses. In its Particulars of Claim, the Applicant claimed damages for £6,391.08 in respect of payments outstanding for the VW and £4,051.98 for the Audi. In their Defence, the Respondents denied that any payments were outstanding.
There is no dispute that the Applicant and the First Respondent signed two written contracts in respect of the First Respondent's use of the cars. On 20 November, 2013, Miss Smith on behalf of the Applicant and Mr Ogg and Mr Baison (another director of the First Defendant) on behalf of the First Respondent signed a document described as an "informal contract" whereby the First Respondent agreed that it would "undergo (sic) to pay against monthly invoice from the Applicant contract hire for the VW". The contract was agreed to start on 25 April 2013 and to end on 25 April 2016. The Applicant alleges that, from April 2013, the VW was provided by it to the Second Respondent for use in his capacity as director of the First Respondent. The Respondents contend that the VW was initially provided for the Second Respondent to use in connection with his directorship of Ace Waste, not the First Respondent. There appears to be agreement that, from November 2013 (when, according to the Respondents, the First Respondent started in business), the VW was transferred to the First Respondent.
Also on 20 November 2013, a contract was signed in respect of the Audi. That contract was identical to the first, save that, in the case of the Audi, it was agreed that the contract should start on 28 November 2013 and end on 28 November 2017. It is agreed that the Audi was acquired for the use of the First Respondent.
What happened thereafter is in issue. The Applicant alleges that the First Respondent did not pay the monthly invoices in full. It is alleged that there were no payments in respect of the VW during the periods from July 2013 until October 2013 or from 1 February 2014 until 1 July 2014. Thus, it is said, a total of £6,391.08 remains outstanding. In relation to the Audi, it is said that invoices totalling £4,051.98 remain outstanding, representing non-payment for the period from 1 February 2014 until 1 July 2014. The First Respondent denies that there has been any non-payment. It is common ground that, as from 1 July 2014 until the present time, the monthly payments have been made regularly.
By September 2014, it seems that the relationship between the Applicant and the Respondents had deteriorated. Solicitors were involved (certainly on the Applicant's side) and it appears that the Applicant was contemplating making a claim for defamation against the First and/or Second Respondent, as well as the claim for monies owing. In a letter from the Applicant's solicitors, McHale and Co. (McHales), to the First Respondent, dated 17 September 2014, the solicitors referred to the alleged failure by the First Respondent to make regular payments for the cars, and indicated that the Applicant was seeking payment of the outstanding monies, together with interest. They referred also to the fact that the Applicant had made previous requests for the return of the cars on account of the arrears, which had been refused.
McHales' letter dated 17 September 2014 also raised another issue, namely the terms on which the Applicant had leased the two cars. The letter stated:
"… it has become apparent, that unbeknownst to our clients, under the terms of the lease the vehicles must be used by the agents/servants/agents/employees of Bear Necessities Daycare Ltd [i.e. the Applicant] only. In light of this fact any sub-lease to Lancashire Fuels 4 U Ltd/you [i.e. the First/Second Respondent], is in breach of the agreement, and thus our clients are at risk of having legal proceedings brought against her/it for delivery up of the vehicles. In addition, under the terms of the agreement, our clients could therefore be liable for the remainder of the same once the vehicles have been recovered. "
The provisions of the leasing agreement between the Applicant and VWFS referred to in the letter were as follows:
"4 Restrictions relating to the Vehicle
4.1 You must keep this Vehicle in your possession and control and must not sell or otherwise dispose of it or attempt to do so. You must immediately pay any amount needed to remove any lien or other right another person may have over the Vehicle. You must not use the Vehicle as security for a loan or other obligation. …
…4.6 You must keep the Vehicle in good repair and condition. You will be responsible for any damage to or deterioration of the Vehicle except through fair wear and tear.
7 Our right to terminate
7.1 We may terminate the hiring by giving you written notice if any of the following happens …
7.1.9 you break any of the terms of this Agreement.
Your Liability
8.1 When the Hiring Period ends or we terminate the hiring (or accept your repudiation of this Agreement) you must return the Vehicle to us immediately, at such address as we may reasonably require, at your own expense together with everything supplied with the Vehicle (including the service book) and the registration document and any MOT certificates. If you do not return the Vehicle, we may repossess it and recover from you any expenses we incur. For this purpose you authorise us or our agents to enter any premises which you occupy or control.
8.2 If we terminate the hiring, or accept your repudiation of this Agreement, you must pay us:
all unpaid rentals and any unpaid maintenance charges and other payments due (which shall include interest, where applicable); plus
as compensation or agreed damages on our acceptance of your repudiation, or as a debt on our termination, the total amount or rentals payable during the Hiring Period (excluding VAT) less the amount of rentals paid or which have become due (excluding VAT) less also an amount (if any) equal to a rebate of rentals calculated at the rate of 4% per annum on the rentals (excluding VAT) which have not become due; …"
The Applicant's solicitors repeated their previous requests for immediate return of the cars. They indicated that, failing such return, they would make an urgent application for delivery up of the cars. After some further communications between the parties, Mr Baison made clear that, so far as the First Respondent was concerned, there were contracts in place which it intended to "see out to the finish". In other words, the First Respondent was not prepared to return the cars.
The claim
The Applicant issued a Claim Form on 3 October 2014 and Particulars of Claim some time later, on 16 October 2014. I have not seen a copy of the original pleading, but am told that it contained no claim for delivery up of the cars. As I understand the position, the Applicant claimed the monies owing to which I have already referred and also contained a claim for defamation against one or both the Respondents.
On receiving the Particulars of Claim, the First Respondent's solicitors, Clarke Willmott LLP (Clarke Willmott), had written to McHales, complaining at the lack of particularisation in the Particulars of Claim and identifying the difficulty the Respondents would have in responding in their Defence to the allegations made against them. The Applicant's solicitors replied by setting out in a letter details of the Applicant's claim in respect of the use of the credit card and of the defamation claim. They proposed that any further particularisation of the Applicant's pleadings should be dealt with by way of a Reply to the Respondents' Defence, rather than by Amended Particulars of Claim filed before the Defence was filed. They observed that, if the Respondents wished the Applicant to file Amended Particulars of Claim, they should inform the Applicant's solicitors so that a consent order giving permission to do so could be agreed. In a letter dated 6 November 2014, Clarke Willmott responded that it was a matter for the Applicant to decide whether it wished to make an application to amend its Particulars of Claim. They observed:
"The whole point of the Particulars of Claim process is so that the Defendants know the claims brought against them and can reply to those claims in the Defence. Your Particulars of Claim have failed to do this as set out in our letter of 28 October 2014 and are liable to be struck out."
The application
On 27 October 2014, despite the absence of any claim for delivery up in the Particulars of Claim, the Applicant filed an application for an interim delivery up and preservation order in respect of the two cars against both Respondents. The Applicant's application was listed for hearing on 18 November 2014. On 7 November 2014, the Respondents' solicitors were served with the application. They wrote to the Applicant's solicitors the same day, pointing out that the application for delivery up pursuant to the 1977 Act was wholly inconsistent with the contents of the Particulars of Claim which contained no such claim.
On 14 November 2014, Mr Greg Saunders, Partner of Clarke Willmott, made a witness statement in response to the application. In it, he recounted the history of the proceedings as it was then and suggested that, since the application bore no relation to the Applicant's case as pleaded in its Particulars of Claim, the application was "fundamentally flawed", did not comply with CPR25.1.24 and should therefore be dismissed.
Shortly after service of Mr Saunders' witness statement, the Applicant's solicitors sent a draft Amended Particulars of Claim to the Respondents' solicitors. That document was in wholly different terms from the Particulars of Claim originally served. The defamation claim was no longer pursued. More importantly for these purposes, however, the document now alleged wrongful detention of and/or interference with goods, contrary to the 1977 Act and sought delivery up of the cars. The claim in respect of the cars was made against the First Respondent alone and, although the Applicant's application had been directed at both Respondents, in fact the application against the Second Respondent has not been pursued.
By 18 November 2014, when the Applicant's application came before Parker J, the Applicant had still made no application for permission to amend its Particulars of Claim. It was not therefore entitled to rely on the amended pleading at that hearing. Moreover, because of the inadequacy of the original Particulars of Claim, the Respondents had not yet filed their Defence. The time for doing so had been extended by consent. In the circumstances, Parker J decided to adjourn the hearing and made the following Order:
"IT IS ORDERED THAT
1. The Applicant's application is adjourned on the terms that:
a) the Applicant do serve upon the Respondent a final draft amended Particulars of Claim by 4.00pm on 26th November 2014 seeking the Respondent's consent to the same;
b) such consent, if granted, to be provided by the Respondent by 4.00pm on 3rd December 2014;
c) in default of the consent referred to above at (b), the Applicant shall make an application to amend by 4.00pm on 10th December 2014.
3. The first Respondent do have permission to adduce, if so advised, a further witness statement with exhibits in response to the adjourned application. Such further witness evidence to be filed and served 14 days prior to the hearing of the adjourned application.
4. The Applicant has liberty to apply to adduce further evidence in response to the further witness statement from the first Respondent referred to at (3) above."
By a Consent Order dated 5 December 2014, the Applicant was given permission to rely on its Amended Particulars of Claim. The Respondents then filed a Defence dated 23 December 2014, in which they denied any liability to the Applicant.
The hearing of the Applicant's application for delivery up and preservation had been adjourned to 9 February 2015. By a Consent Order of the same date, however, the parties agreed that the hearing listed for that day should be adjourned and re-listed for 2 March 2015. It appears that the purpose of that Order was to afford the First Respondent time to adduce further evidence if it so wished. The Consent Order of 9 February 2015 provided that the First Respondent should have permission to adduce a further witness statement with exhibits and that the Applicant should have permission to adduce further evidence in response. In the event, the First Respondent did not avail itself of the opportunity to file further evidence. The Applicant had of course been given permission to file further evidence only in response to any evidence filed by the First Respondent. In the absence of evidence from the First Respondent, that opportunity was not available to the Applicant.
However, on 23 February 2015, the Applicant made an application to adduce further evidence in support of its application dated 17 October 2014. That further evidence consisted of a witness statement from Mr Bell, Director of McHales, to which was appended a copy of a bank statement showing payments in and out of a bank account belonging to the Applicant. The statement covered the period between 1 May 2013 and 30 April 2014. It showed various payments made by the Applicant in relation to the VW and the Audi. The payments included the initial deposits, monthly lease repayments and insurance payments. It was decided that the Applicant's application for permission to adduce this further evidence would also be dealt with at the hearing on 2 March 2015. The two applications therefore came before me on that date.
The application for delivery up and preservation of the cars
The grounds of the application for delivery up and preservation were stated to be that:
"1) The vehicles referred to above should be in the possession of the Applicant and the Respondent's possession of them is wrongful.
2) The Applicant was unaware, when entering into an agreement regarding the vehicles with the Respondent, that she was not able to sub-let the vehicles.
3) The Applicant has made numerous attempts to have the First Respondent return the lease vehicle but these have been unsuccessful.
4) Damages are not an adequate alternative remedy."
CPR 25.1(1) sets out the Court's power to make Orders for interim remedies. CPR 25.1(1)(c)(i) provides that the Court may grant an interim order for the detention, custody or preservation of relevant property. The Applicant seeks a preservation order under that provision. CPR 25.1(1)(e) permits the Court to grant an interim order to deliver up goods under section 4 of the Torts (Interference with Goods) Act 1977 (the 1977 Act). For these purposes, it seems appropriate to deal with the two types of relief separately. For ease, however, I shall refer to the Applicant's request merely as for "a delivery up order".
Section 4 of the 1977 Act provides:
"4. Interlocutory relief where goods are detained.
(1) In this section "proceedings" means proceedings for wrongful interference.
(2) On the application of any person in accordance with rules of court, the High Court shall, in such circumstances as may be specified in the rules, have power to make an order providing for the delivery up of any goods which are or may become the subject matter of subsequent proceedings in the court, or as to which any question may arise in proceedings.
(3) Delivery shall be, as the order may provide, to the claimant or to a person appointed by the court for the purpose, and shall be on such terms and conditions as may be specified in the order."
As to s54(3), the Applicant has indicated that it would be content for an order requiring delivery up of the cars to a third party identified by the Court as suitable for that purpose.
At the hearing before me, the Applicant relied on two factors which, it was said, made it entitled to an order for delivery up of the cars. First, it contended that the First Respondent was in breach of the contracts of 20 November 2013 because of its failure to honour its obligation to meet the monthly invoices for payments in respect of the two cars. The Applicant contended that the failure amounted to a repudiatory breach, which breach had been accepted by the Applicant. Thus, it was said, the Applicant's obligations under the lease agreement were discharged and it was no longer required to provide the cars to the First Respondent. Having refused all previous requests to return the cars, the First Respondent was, the Applicant contended, wrongly interfering with goods in breach of the 1977 Act.
The Applicant's argument relied, of course, upon its contention that the First Respondent had breached its obligations under the 20 November 2013 contracts by failing to make the monthly payments for the cars. In its Defence, the First Respondent denied that was the case. It contended that, until November 2013, the VW was used for the purposes of another company, Ace Waste, so that, during the first period when it is alleged there was non-payment (i.e. July-October 2013), it was Ace Waste, not the First Respondent, which was liable to make the monthly payments. Indeed, the First Respondent contended that it (i.e. the First Respondent) did not start operating until about November 2013, so the VW could not have been used for its purposes before that time. As for the remaining periods during which it was alleged that there was non-payment in relation to the two cars, the First Respondent averred that all contractual payments had been made.
In support of its contention that there had been a breach of contract, the Applicant sought to rely on the evidence provided by Mr Bell. In his witness statement, Mr Bell made assertions about factual matters relating to the payment and non-payment of monies by the First Respondent. These are not matters within his personal knowledge and, if evidence of this kind were to be provided, it would have been more appropriate for it to have come from Miss Smith, as director and sole shareholder of the Applicant. Attached to Mr Bell's witness statement was the Applicant's bank statement. Counsel for the Applicant, Mr Taskeen, argued that the transactions shown on the bank statement demonstrated that the Applicant had paid the expenses associated with the lease of the two cars. He suggested that, since the First Respondent had chosen not to produce any documentary evidence of payments made for the purposes of the application, I could properly infer that it had no defence to the Applicant's case in relation to the cars. I could not accept that contention. The case is not as straightforward as was suggested. It is clear that the financial arrangements between Miss Smith, the Second Respondent and the various companies with which the two of them were involved were somewhat unusual, not entirely clear and probably quite complex. An example of this is the transfer of the VW, which the First Respondent said occurred, from being used first for the purposes of Ace Waste, then later for the purposes of the First Respondent. That may or may not have happened, but it suggests that this is not necessarily a case where one can expect to see clear and direct bank transactions passing between the Application and the First Respondent. In any event, my function in determining this application is not to conduct a mini-trial. The dispute between the parties relates to whether the First Respondent paid the money it owed. It would be quite wrong of me to determine that issue at this stage of the proceedings. In the circumstances, I refused permission to rely on the evidence of Mr Bell.
Mr Taskeen submitted also that, even absent the repudiatory breach, the Applicant was entitled to possession of the cars. He acknowledged that title in the cars remains with VWF. However, he contended that it was now evident that, under the terms of its agreement with VWF, the Applicant was not entitled to sub-let the vehicles to the First Respondent. Accordingly, the First Respondent was not entitled to remain in possession of them. The Applicant, which is making the lease payments, is, he said, plainly entitled to possession. That being the case, he suggested, the First Respondent's act in refusing to return the cars must amount to a wrongful interference of goods within the meaning of s4 of the 1977 Act.
Mr Taskeen submitted that these factors would justify an order for the immediate delivery up of the cars. He argued that damages would not be an adequate remedy for the failure by the First Respondent to return them. If no order for delivery up was made, it would mean that the First Respondent would continue in possession of the cars until determination of the substantive claim or, possibly, until the expiration of the agreements, in April 2016 (the VW) and November 2017 (the Audi). During that time, the First Respondent would be deprived of their use.
Furthermore, Mr Taskeen suggested, there is the risk that VWFS might take action in relation to what he argued was a breach by the Applicant of the contract between it and VWFS. The Applicant would then be at risk of having to return the cars to VWFS and of having to pay the rental for the whole period of the contracts with the First Respondent, less the amounts already paid and other reductions. He pointed out that, if the Applicant could not return the cars on demand, it would be in danger of a wrongful interference with goods claim by VWFS. He argued that it was "patently obvious" that damages would not be an adequate remedy and that the cars must be returned to the Applicant and/or made the subject of a preservation order.
For the First Respondent, Mr Caplan argued that it had not yet been determined whether the Applicant's action in entering into an agreement with the First Respondent amounted to a breach of the Applicant's contract with VWFS. VWFS have not issued any complaint, nor have they alleged any breach of contract. Moreover, even if there has been a breach by the Applicant of its contract with VWFS, that fact would not, Mr Caplan contended, make the Applicant's contracts with the First Respondent void ab initio. It may be said that it was an implied term of the agreements between the Applicant and the First Respondent that the Applicant had the right to transfer the cars. However, such a breach would not render the agreements void ab initio. Mr Caplan argued that it would be absurd if a contractor had a right in law to determine an agreement by virtue of his own breach. Moreover, even if he had such a right, the resultant loss would be compensatable in damages without the need for interim relief.
The Applicant is seeking interim relief from the Court. The decision as to whether to grant interim relief is a matter for judicial discretion and relief is not granted save in a case where there are compelling reasons for doing so.
In this case, there is no suggestion that the First Respondent would seek to dispose of the cars. At one point during his oral submissions, Mr Taskeen appeared to suggest that there was a risk that the First Respondent might not keep the cars in good repair and condition or might cause damage to them, thus exposing the Applicant to the possibility of a breach of paragraph 4.6 of its contract with VWFS. However, there is no evidence at all that the First Respondent has failed to care for the cars properly in the past, or that it would do so in the future.
It is true, as Mr Taskeen pointed out, that, in the case of Howard E. Perry & Co Ltd v British Railways Board [1980] 2 All E R 579, Sir Robert Megarry, V-C, made clear that the fact there was no danger that goods would be disposed of, lost or destroyed was not necessarily a bar to the making of an order for delivery up. However, the facts of that case were very specific and the observation does not affect the usual position that a risk of disposal, destruction or damage will be necessary before such an order will be made. In the present case, no such risk has been demonstrated and the Applicant does not appear to have had any fears about the safety of the cars at the time of drafting its Particulars of Claim, when no delivery up was sought. It is difficult to see what made it change its mind. It is accepted that the First Respondent is making monthly payments regularly and it is not suggested that those payments are likely to cease in the future.
Moreover, in the present case, it is difficult to see how the Applicant's position will be materially disadvantaged by the cars remaining with the First Respondent. The Applicant does not appear to intend to inform VWFS of the fact that it sub-let the cars. It has evinced its willingness to have the cars delivered up to a third party of the Court's own choosing, so presumably does not intend to make use of the cars itself. It will still be obliged to make the lease payments, but will no longer be reimbursed by the First Respondent. I am satisfied that, insofar as any loss is caused to the Applicant as a result of the First Respondent's continued possession of the cars, it can be fully compensated by damages. By contrast, the Respondent would plainly be disadvantaged by the loss of the cars. It would have to find substitute vehicles and, depending on its financial position, that may not be a straightforward matter. Furthermore, if the Applicant decided to inform VWFS what had occurred, the cars might be re-possessed by VWFS. Then, even if the Respondent succeeded at the trial, it would have lost the benefit of its contracts with the Applicant.
It is true that, if the cars remain with the First Respondent, the Applicant will be under the continuing risk of the VWFS seeking their delivery up. However, the contracts between VWFS and the Applicant have been in existence for more that a year and no such event has yet occurred. The reality is that the breach of its contract with VWFS (if such a breach has indeed occurred) is the fault of the Applicant and I cannot accept that it would be just or proportionate to make an order for delivery up, and thus deprive the First Respondent of the benefit of the contracts made between it and the Applicant in November 2013. I consider that the balance of convenience clearly lies in leaving the cars in the possession of the First Respondent.
The two applications are therefore dismissed.
I dealt with the summary assessment of costs at the conclusion of the hearing. The Order I made was that the Applicant should pay the First Respondent's costs of the two applications, inclusive of the costs reserved by Parker J on 19 November 2014. I summarily assessed the costs at £4,332. |
Mr Justice Warby:
Vladimiro Capano was an Italian who worked for Tesco Go SpA, an engineering and design company. He lived in Turin with his wife Daniela and their twin children, Elisa and Matteo, now 16. Between October 2010 and February 2011 Mr Capano commuted weekly from Turin to England, to work on a car project with McLaren in Woking. On the evening of 17 February 2011 he was walking home down Triggs Lane in Woking. As he crossed the road he was hit by a car driven by the defendant. He died in hospital three days later. His widow now brings this claim for damages for personal injuries and wrongful death caused by the negligence of the defendant.
The defendant has admitted that he was two thirds to blame for Mr Capano's injuries and death, and judgment for the claimant on liability was entered on 21 February 2014 by consent, subject to a deduction of 33%, with damages to be assessed. The claimant claims £481,079 on her own behalf and on behalf of the children under the Fatal Accidents Act 1976 (FAA), and £7,513 as administratrix of the deceased's estate, pursuant to the Law Reform (Miscellaneous Provisions Act) 1934 (LRMPA). There is no dispute that these claims are valid in principle, though quantum is not yet agreed and may have to be assessed.
Two further claims made by the claimant are however disputed as a matter of principle. These are described in the claimant's Schedule of Loss as "subrogated claims", and I shall use that term. The claims relate to sums paid and to be paid to the family by INAIL, the Italian Workers Compensation Authority, and a sum paid by Mr Capano's employer, Tesco Go. The subrogated claims in respect of INAIL, set out at items 7 and 8 of the Schedule of Loss, amount to £343,442. The claim in respect of Tesco Go, set out at item 9 of the Schedule of Loss, is for £65,195. The question now before me at this trial of a preliminary issue concerns the recoverability of these claims.
The question is set out in paragraph 1 of the Order dated 27 November 2014 by which Master Eastman directed this preliminary trial:
"Subject to the claimant proving that the sums claimed in paragraphs 7-9 of the Schedule of Loss have been paid and/or are to be paid to the Claimant:
'Are the claims pleaded at paragraphs 7, 8 and 9 of the Schedule of Loss dated 4th June 2014 recoverable by the Claimant, on behalf of INAIL and TESCOGO, from the Defendant?'"
That order was made at the case management conference (CMC). It was made by consent. Three further things are to be noted about the Master's order. The first is that the issue is formulated by reference to what is pleaded, and specifically to what is pleaded in those three paragraphs of the Schedule of Loss. The second is that the order reserved for determination after the preliminary issue trial the question of whether the sums claimed had or were to be paid to the claimant, but no other question. The third point is that the Master's order contained no provision for the service of any evidence. Neither party has filed or served any evidence. It follows that the court can only proceed at this trial by reference to the pleaded case and the relevant law.
The claims pleaded in the claim form and Particulars of Claim are conventional claims for damages pursuant to the LRMPA and FAA. No other cause of action is indicated in either document. No reference is made in either document to the subrogated claims. The prayer for relief in the Particulars of Claim claims relief under four headings: damages under the LRMPA, damages under the FAA, "bereavement damages", and interest. The subrogated claims first emerged, so far as the statements of case are concerned, in the Schedule of Loss dated 4 June 2014.
The Schedule of Loss is divided into three sections. The first is an Introduction, setting out basic facts about the nature of the claim and details of the dependants, as required by PD16 5.1. The second section is headed "Law Reform (Miscellaneous Provisions) Act 1934" and contains two items: 1 is general damages, and 2 is comprised of funeral expenses and damaged clothing cut off at hospital. The third section is headed "Fatal Accidents Act 1976". There are 9 heads of claim, starting again at 1. Items 1 to 6 are for bereavement, financial dependency, loss of services, and miscellaneous expenses. The subrogated claims are items 7, 8 and 9 in this section of the Schedule.
The claim in respect of INAIL is pleaded, so far as relevant, in this way:
"7 Subrogated claim (INAIL) Past Loss
The claimant has the benefit of a payment totalling €509,307.93 equivalent to £427,818.66 from an Italian insurer (INAIL) who pays a benefit to the family of the deceased if the deceased dies whilst in employment.
Under the terms of the policy the claimant is contractually obliged to seek a subrogated claim against a defendant in a civil case who has been held partially or fully liable for the death.
To date the policy has paid out €65,078.89 to the family and €1,907.24 in respect of funeral expenses. Interest on that sum to date is sought at €1,906.35; a total claim of €68,892.48.
8 Subrogated claim (INAIL) Future Loss
The remaining €442,321.80. This is paid in instalments as follows:
To the claimant at a rate of €14,406.60 p.a. for 25.4 years
To the dependent children at a rate of €5,762.64 p.a. for 6.63 years
…"
The pleaded case therefore sets out what are said to be contractual obligations of the claimant under the terms of a policy of insurance with INAIL, to "seek a subrogated claim". No reference is made to any provisions of Italian law, statutory or otherwise. The subrogated claim in respect of Tesco Go is pleaded, so far as relevant, as follows:
"9 Subrogated Claim (Deceased's Employer)
The deceased['s] employer is obliged under article 2122 of the Italian Civil Code to provide compensation to the family of a deceased who dies whilst at work. The sum payable is €77,612.90 equivalent to £65,194.84. Where a third party is at fault, the claimant is bound to seek a subrogated claim."
Again, the pleaded case asserts an obligation on the claimant to "seek a subrogated claim". The source and nature of that obligation are not clearly explained. One might surmise that the obligation derives from Article 2122, which is the only provision of Italian law referred to. That however would be speculation and, as it turns out, this is not the claimant's case. In the submissions of Ms Howells, to which I shall come, the obligation relied on is said to flow from Article 1916 of the Italian Civil Code, a provision which is also said to create the right of subrogation relied on in respect of INAIL.
English law holds, of course, that the content of foreign law is a question of fact, and if foreign law is to be relied on it must be pleaded and proved as a fact, as a rule by expert evidence: see Dicey Morris and Collins on the Conflict of Laws 15th edn Rule 25(1). Dicey's Rule 25(2) is that: "In the absence of satisfactory evidence of foreign law the Court will apply English law to such a case." This rule, commonly known as the "presumption" that foreign law is the same as English law, has recently been re-examined and endorsed by the Court of Appeal in OPO v MLA [2014] EWCA Civ 1277, [2014] EMLR 4: see [108]-[111] (Arden LJ). It is apparent that the claimant's legal team contemplated that expert evidence of Italian law would be adduced in support of the claim: the claimant's directions questionnaire of July 2014 identified an Italian law expert as a potential witness; and an application for permission was foreshadowed in the skeleton argument for the CMC submitted by counsel then instructed for the claimant. However, no application to adduce expert evidence was in the event made, then or subsequently.
The defendant's initial skeleton argument for this trial responds concisely to the case as it is pleaded on behalf of the claimant. Ms Kinsler submits that the claim is pleaded as an English law tort claim pursuant to the FAA and LRMPA; and that it is rightly so pleaded, having regard to Regulation (EC) 864/2007 on the law applicable to non-contractual obligations (Rome II). Noting that the subrogated claims are advanced under the heading of the FAA, she submits that the heads of loss recoverable in English law pursuant to the FAA are circumscribed, and confined to funeral expenses, bereavement award, and loss of dependency. There is no head of loss which is apt to include the subrogated claims. Moreover, the receipt or anticipated receipt by the claimant of any sums paid by her late husband's insurer and/or employer are disregarded in the assessment of her claim as irrelevant. Accordingly, the answer to the question raised for determination is no. To the extent that the claimant seeks to advance a case based on Italian law, warned Ms Kinsler, the defendant would object on the basis that any such claim would have to be pleaded and proved by expert evidence.
As I have indicated, the skeleton argument filed by Ms Howells on behalf of the claimant puts the case differently from the way it is stated in the Schedule of Loss, and refers to unpleaded matters of Italian law. Ms Howells accepts that the claim is governed by English law. She submits, however, that the sums claimed are recoverable by the claimant on behalf of INAIL and Tesco Go pursuant to Article 85 of Regulation (EC) No 883/2004 on the co-ordination of social security systems (the 2004 Regulation).
The 2004 Regulation, which replaced similar provision in earlier Regulations, is directly applicable in Member States. The relevant parts of Article 85 state as follows:-
"1. If a person receives benefits under the legislation of one Member State in respect of an injury resulting from events occurring in another Member State, any rights of the institution responsible for providing benefits against a third party liable to provide compensation for the injury shall be governed by the following rules:
(a) where the institution responsible for providing benefits is, under the legislation it applies, subrogated to the rights which the beneficiary has against the third party, such subrogation shall be recognised by each Member State;
(b) where the institution responsible for providing benefits has a direct right against the third party, each Member State shall recognise such rights."
Article 85 of the 2004 Regulation, submits Ms Howells, requires the United Kingdom to recognise, in proceedings brought in this jurisdiction, rights of subrogation provided to INAIL and Tesco Go in Italy. Those rights, she submits, must be given effect in this country. The claimant's argument addresses the nature and extent of the rights which arise under Italian law. It sets out, by reference to documents included in the trial bundle over the objections of the defendant, the workings of the Italian system of compulsory insurance for workers, and the role of INAIL, identifying the provision of Italian law under which it is said that INAIL has made and will make payments to the claimant (Article 85 of the Presidential Decree No 1124 of 30 June 1965, the consolidated law on compulsory insurance against accidents at work and occupational diseases). The claimant's argument goes on to assert that the payment which Tesco Go made to the family was one required of it by Articles 2122 and/or 2118 of the Italian Civil Code, which impose a duty on an employer to pay wages in lieu of notice upon the death of an employee. It is said, further, that pursuant to Article 1916 of that Code "INAIL and Tesco are subrogated to the rights of the claimant against third parties who are liable for the damage". This is the right of subrogation to which it is said that Article 85 requires the United Kingdom to give effect. In order to explain the way she puts the claimant's case, Ms Howells has taken me through all of these provisions in the course of her oral submissions. This has been a helpful exercise in enabling me to understand the way the claimant wishes to put her case.
The first question I have to resolve however is whether, as submitted by Ms Kinsler, all of this is objectionable as an illegitimate attempt to introduce in support of the subrogated claims matters which require pleading and proof, but are neither pleaded nor the subject of any evidence. That is the basis for the defendant's objection to the inclusion in the trial bundle of the material referred to by Ms Howells. Ms Howells naturally accepts on the claimant's behalf that if the claims are good in principle it would be necessary for her client to establish that she had received or would receive the sums which are the subject of the subrogated claims. That much is clear from the Master's order. Ms Howells has however also maintained that the Master's order does not provide for the determination of all the questions of law that, on her client's case, are involved. She accepts that the claim as she seeks to put it has not been fully pleaded. Her position is however that the question asked is one of "recoverability in principle", leaving it open to the claimant to plead, at the end of this hearing or subsequently, matters of Italian law which are not presently pleaded and, having done so, to adduce evidence on a later occasion to prove the content and effect of the relevant provisions, so far as they bear on this case.
In response to Ms Kinsler's objections it is said that the claimant has proceeded on the understanding or assumption that the Master's order does not require these matters to be pleaded or established by evidence at this stage. Ms Howells points out, and it is not in dispute, that the claimant's intention to rely on Article 85 was made known to the defendant a considerable time ago. That cannot be said to come as a surprise, and the defendant has suffered no prejudice. Ms Kinsler responds that the onus is on the claimant to state her case fully and clearly, and to establish it in the ordinary way. She submits that, on its true interpretation, the Master's order provided for the question of whether the subrogated claims can be recovered to be determined finally at this hearing, subject only to proof of the fact of receipt or anticipated receipt of the pleaded sums.
In my judgment, Ms Kinsler is right in these submissions. The issue identified for trial as a preliminary issue was the recoverability of the subrogated claims. That was subject to the express reservation of one question of fact: whether the pleaded sums had been or were to be paid. No other reservation or qualification was contained in or implicit in the order. All other matters in issue between the parties on this aspect of the claim were therefore for determination at this trial, and not at any later stage.
Generally speaking, the matters in issue between parties are to be identified by reference to the statements of case. Here, the order defining the issue for trial specifically referred to the pleading of the claims in items 7, 8 and 9 of the Schedule of Loss. In those paragraphs, the subrogated claims are set out as heads of damage recoverable in English law pursuant to the FAA. The pleaded basis for that is, in the case of the INAIL claim, a contractual obligation owed by the claimant to INAIL to seek a subrogated claim and, in the case of the Tesco Go claim, an obligation to seek a subrogated claim which is of an unspecified nature and origin.
The Schedule of Loss makes no reference to Article 85 of the 2004 Regulation. However the 2004 Regulation, as a directly enforceable instrument of EU law, is part of English law. It is not a general requirement of the rules of pleading as laid down by the CPR, that a party should plead matters of domestic law on which it relies. It is sometimes convenient or appropriate to do so if, for instance, the legal proposition is of an unusual kind and for that or some other reason might take the opposing party by surprise. But that is not suggested by the defendant, and it is not as such objectionable for the claimant to advance arguments based on Article 85.
But the position is different, in my judgment, when it comes to the provisions of Italian law which Ms Howells has identified as the foundation of the subrogated claims. Since Italian law is treated, like any foreign law, as a matter of fact, any averment as to the existence and content of a rule of Italian law should, like any other relevant factual averment, be pleaded. As it is, the only provision of Italian law to which express reference is made in the Schedule of Loss is Article 2122 of the Italian Civil Code, alleged to impose a duty on Tesco Go to pay the claimant what it has paid. There is no reference in the Schedule to Article 85 of the Presidential Decree of June 1965, on which reliance is placed so far as the INAIL claim is concerned, nor is there reference to Article 2118 of the Civil Code, relied on in respect of the Tesco Go claim, or to Article 1916, on which both limbs of the claimant's subrogated claims are now known to depend.
The matter goes beyond a question of pleading. The Italian law materials that the claimant placed in the trial bundle, and to which I have been referred, have enabled me to see the general shape of the claimant's case, but they are not admissible evidence of the foreign law relied on. The English court will not conduct its own researches into foreign law: Bumper Development Corporation v Commissioner of Police for the Metropolis [1991] 1 WLR 1362, CA. A practical expression of this principle is that "a court is not permitted to assess any documentary evidence of foreign law, save that which is introduced in support of expert opinion": Richard Fentiman, International Commercial Litigation, 2nd edn (OUP) para 20-30. There are some limited exceptions to this, but none that could apply in the present case.
These principles have obvious practical justifications. Even where agreed translations of foreign materials are provided – which is not the case here - an English lawyer is liable to lack an understanding of the right approach to construing the foreign statutes or other materials relied on. And there may be much room for debate between those expert in the foreign law about the true interpretation of that law.
The claimant's proposed reliance on Article 1916 of the Italian Civil Code serves as an illustration of the potential value of expert evidence. The claimant's pleaded case is that she is obliged or bound "to seek a subrogated claim" in respect of the sums received or to be received from INAIL and Tesco Go. The claimant's translation of Article 1916 is, so far as relevant, as follows:
"1916 Right of subrogation of insurer. An insurer who has paid the indemnity is subrogated, to the extent of the amount of the said indemnity, to the rights of the insured against third persons who are liable for the damage.
…
The provisions of this article also apply to workmen's compensation insurance and accident insurance."
It is not obvious that this provision supports the pleaded case. Ms Howells submitted, in another context, that the term subrogation has different meanings in different laws and may sometimes be used to designate legal principles of a different character from subrogation as understood in English law. To an English lawyer, however, Article 1916 appears to provide for conventional subrogation, by which the insurer assumes the rights of the insured, to the extent of the indemnity provided by the insurer, and not otherwise. Moreover, whilst INAIL would seem, on the face of it, to provide "workmen's compensation insurance", the term "accident insurance" is not an obvious fit for the obligation to pay wages in lieu of notice which Tesco Go is said to have had, pursuant to Articles 2122 and/or 2118 of the Italian Civil Code.
The defendant is in my opinion entitled to object to reliance by the claimant on the Italian law which has now been identified as founding her case under Article 85. The Italian law case, as now explained, is not pleaded, or not sufficiently so, and there is no admissible evidence before the court to support it. In addition, there is no or no adequate evidence before the court as to the factual context of the schemes pursuant to which the payments have been and are to be made.
I recognise that the claimant is not seeking to secure findings on these issues at this hearing, but that serves to reinforce the grounds of objection rather than to meet them. The position adopted by the claimant can properly be regarded as amounting, in substance, to a late application to adjourn the hearing of part of the preliminary issue ordered by the Master and/or or to vary the Master's order by adding a further qualification to this effect: "and subject to the claimant pleading and proving the nature and extent of any rights of subrogation conferred on INAIL and Tesco Go by Italian law". In my judgment it is not just or appropriate to deal with the preliminary issue on any more limited a basis than the one prescribed by the Master's Order.
In reaching this conclusion I have had regard to the overriding objective. Factors favouring my conclusion are the need to deal with cases at proportionate cost, saving expense, ensuring that a case is dealt with expeditiously, and that it has allotted to it an appropriate share of the court's resources. I accept that the claimant has approached this hearing on what I have found to be a false assumption or understanding as to the scope of the preliminary issue. It is not suggested, however, that the defendant caused or contributed to the making of that assumption. If I took the approach that is urged on me by Ms Howells there would be delay, and cost incurred in pleading the claimant's Italian law case and, more significantly, securing expert advice and potentially expert evidence on both sides. There would be further cost incurred in preparing evidence as to the relevant factual matters. It is hard to predict to what extent the claimant's case would be disputed, but it would be wrong to assume that everything put forward by Ms Howells would be admitted by the defendant.
In my judgment the subrogated claims as pleaded cannot succeed. Rome II applies to claims in respect of accidents, such as the one in issue here, after 11 January 2009: Case C-412-10 Homawoo, interpreting Articles 31 and 32. The general rule under Rome II is that the law applicable to a non-contractual obligation is that of "the country in which the damage occurs": Article 4(1). The relevant damage for present purposes is the damage sustained at the time and place of the accident: see Recital (17) to Rome II and Jacobs v MIB [2009] EWHC 231 (QB).
The scope of the law applicable to a tort claim is determined by Article 15 of Rome II, which provides that it shall govern, among other things, "(c) the existence, the nature and the assessment of damage or the remedy claimed … (e) the question whether a right to claim damages or a remedy may be transferred, including by inheritance; (f) persons entitled to compensation for damage sustained personally." It is therefore pursuant to Article 15(e) that the LRMPA, which provides for the deceased's estate to inherit causes of action, governs the claimant's right to sue as administratrix. It is pursuant to Article 15(f) that the claimant and her children are entitled to claim as dependants under the FAA. This is clear from the terms of the Commission Proposal for Rome II 2003/0168 which says of the draft provision which became Article 15(f) that "The law that is designated will also determine ... whether a person other than the 'direct victim' can obtain compensation for damage sustained on a 'knock-on' basis, following damage sustained by the victim [such as]… financial. … loss sustained by the children or spouse of a deceased person."
The provisions of the LRMPA and FAA are not only the sole pleaded basis for the claims advanced by the claimant, they are the only basis available to her as a matter of English law for advancing claims in respect of her husband's death. As Lord Sumption explained in Cox v Ergo Versicherung AG [2014] UKSC 22, [2014] AC 1379 at [6], at common law no claim can be made in tort for the death of a human being; the provisions of the LRMPA and FAA are the "sole legal basis on which a claim can be made for bereavement or loss of dependency in English law."
The subrogated claims are plainly not causes of action possessed by the deceased before his death, so the LRMPA is rightly not treated as applicable in the Schedule of Loss. The claims are pleaded as falling under the FAA, but they cannot be brought within its terms. Section 1 of the FAA provides a right of action for a wrongful act causing death. By s 1A, damages for bereavement can be recovered. Section 3(1) provides the basis for the recoverability of damages for loss of dependency and loss of services: it provides that the claimant may recover "such damages … as are proportioned to the injury resulting from the death to the dependants respectively". By s 3(5) damages may be awarded for funeral expenses incurred by the dependants. All of these claims are pleaded on the claimant's behalf. No other heads of damage are recoverable under the Act.
The dependants have the benefit of s 4 of the FAA which provides that "in assessing damages in respect of a person's death under this Act, benefits which have accrued or may accrue to any person from his estate or otherwise as a result of his death shall be disregarded." The intention of Parliament and the effect of this provision is that all benefits coming to a dependant as a result of death are to be left out of account; today "all that must be done is to quantify the loss of dependency"; Arnup v White Ltd [2008] EWCA Civ 447, [26] (Smith LJ). Accordingly, there can be no question of the claimant having to give credit in the assessment of damages under the FAA for any benefits received from INAIL or Tesco Go as a result of her husband's death. Such benefits fall to be ignored for the purposes of assessing the damages payable under the Act. It follows that, unless INAIL and Tesco Go can recoup from the dependants, they will recover compensation for what they have lost as dependants of Mr Capano, whilst retaining the benefits received from INAIL and Tesco Go. But that is a matter between those parties. It cannot give rise to a right on the claimant's part to recover from the defendant the amount of the benefits paid or payable.
For these reasons I agree with the defendant that the answer to the question posed by the preliminary issue is no; the claims pleaded in items 7, 8 and 9 of the Schedule of Loss dated 4th June 2014 are not recoverable by the claimant.
Ms Kinsler nonetheless invites me to consider and decide whether, assuming that the claimant did plead and prove the facts on which she now seeks to rely, the subrogated claims would succeed as a matter of law. Having heard full argument on that question it is appropriate that I should decide it. My clear conclusion is that the claims would fail in any event. Assuming that Article 85 of the 2004 Regulation is applicable to the facts of this case, on the true construction of Article 85 the issue of whether the subrogated claims can be maintained against the defendant is a matter of English law, under which the answer to the question posed is no.
The argument for the claimant relies on Article 85(1)(a), and is at one level beguilingly straightforward. It involves the following steps. (i) The dependants have "receive[d] benefits" (from INAIL and Tesco Go); (ii) they have done so "under the legislation of one Member State" (Article 85 of the Presidential Decree and Articles 2122 and/or 2118 of the Italian Civil Code); (iii) "resulting from events in another Member State" (the road accident in the UK that caused Mr Capano's injuries and death); (iv) INAIL and Tesco Go are "institution[s] responsible for providing [such] benefits"; (v) the defendant is, to the extent admitted in this action, a "third party liable to provide compensation for the injury"; (vi) Each of INAIL and Tesco Go is, under "the legislation it applies" (Article 1916 of the Civil Code) "subrogated to the rights which the beneficiary has against" the defendant; (vii) Article 85(1)(a) mandates that "such subrogation shall be recognised by" the UK as a Member State, and hence in these claims.
The defendant has reserved its position on whether the subrogated claims fall within the material scope of the 2004 Regulation. This is defined by Article 3, and Ms Kinsler observes that initial researches by her and her junior, Mr Krsljanin, have identified a considerable body of authority concerned with the scope of the 2004 Regulation, and that there is no evidence as to the detail of the schemes in question here. There could also be a question as to whether Tesco Go falls within the scope of the term "institution" for this purpose. But even leaving these points aside, and accepting each step in this argument, it still does not go as far as the claimant requires it to go in order to sustain the subrogated claims. To achieve that would require a further proposition: that the obligation to recognise the right of subrogation carries with it an obligation to recognise a substantive claim which could be advanced by a claimant under Italian law (and to which INAIL and Tesco Go would be subrogated), even if the claim is of a nature that would not be permitted in English law.
It is submitted for the claimant that European and domestic authority supports the approach adopted to this claim. Ms Howells relies on the decision of the CJEU in Deutsche Angestellen-Krankenkasse v Laerersandens Brandforsikring G/S Case C-428/92, [1994] ECR I-2259 (DAK) and a decision of HHJ B C Forster QC sitting as a Deputy Judge in Donkers & another v Storm Aviation [2014] EWHC 241 (QB), [2015] 1 All ER (Comm) 282 (Donkers). It is said that DAK demonstrates that the duty to recognise a foreign institution's domestic law right of subrogation prevails over provisions of domestic law (in that case Danish law) which prohibit a claim of a particular nature. Donkers, in which the court considered DAK and other authorities, is relied on by Ms Howells as a "recent re-emphasis of the importance of the longstanding right in Europe of institutions providing benefits to make claims across borders against third party wrongdoers in exercise of rights of action which they have acquired by way of subrogation or other operation of law in their own jurisdiction." (The emphasis is mine.)
In my judgment this argument misunderstands the nature and scope of the obligations imposed on Member States by Article 85, and the jurisprudence. Article 85(1)(a) is a choice-of-law provision by which the "home" law of the institution providing benefits in respect of an injury will govern whether the institution is subrogated to rights enjoyed by the beneficiary against the wrongdoer and, if so, the extent of the subrogation. Member States must recognise the rights of subrogation conferred on the institution by the foreign law, to the full extent provided for by that law. But Article 85(1)(a) does not require the court of the foreign Member State to apply the law of the institution's home jurisdiction to the claim against the defendant. That law has no impact on the nature and extent of the rights of the "beneficiary". Those questions are to be answered by reference to the law applicable to the tort, pursuant to private international law – and in this case, under Rome II, English law. The rights to which the institution is subrogated cannot exceed those possessed by the claimant under the applicable law.
The words that I have emphasised in the quotation in paragraph 37 above seem to me to illustrate the flaw in the claimant's argument: they assume that subrogation under Italian law confers on the institution an Italian law right of action. The jurisprudence is, on a proper understanding, clear and consistent in affirming the analysis outlined above. The relevant decisions of the CJEU are Hessische Knappschaft v Maison Singer et fils Case 44/65 [1965] ECR 965 (Singer), Case 78/72 L'Etoile-Syndicat Général v de Waal [1973] ECR 499 (de Waal), DAK, and Case C-397/96 Caisse de Pension v Kordel [1999] ECR I-5959 (Kordel). Singer was concerned with Article 52 of Regulation 3 on social security for migrant workers (OJ No 64, 5/4/1967), which was in materially identical terms to Article 85 of the 2004 Regulation. The Court held that "Article 52 of Regulation No 3 in no way modifies the creation and limits of extra-contractual liability, which remains subject solely to national law. It is limited to substituting the institution liable for payment of the beneficiary in any claims which he may have against the third party liable, in other words, to substitute a new claimant for the old."
De Waal was a case concerning a direct right of action created by the domestic law of the claimant institution, a Belgian insurer. The insured was killed on Dutch territory by Mr de Waal and the claimant sued in Holland. The question raised by the Dutch court was whether the effect of Article 52 was that the common law of Belgium was to be taken into account for the purpose of determining the claimant's rights against Mr de Waal. The Court gave a negative answer, confirming the logical next step in the argument set out in Singer. The court stated at [4] that "Since Article 52 is thus limited to the substitution of a fresh creditor for the previous one, the institution liable cannot claim from the third party responsible any payment other than that which could be claimed by the victim of the damage or his dependants." The substantive content of the right was "determined by the rule of the national law defining the source and limits of the right of compensation vested in the victim or his dependants vis-à-vis the third party responsible": [7].
In DAK the Court considered Article 93(1) of Council Regulation (EEC) No 1408/71, the successor to Article 52 of Regulation 3 and the predecessor of Article 85 of the 2004 Regulation. Again, this was in terms materially identical to those of Article 85. DAK was a German social security institution and the defendant (LB) a Danish insurance company. DAK sought to recoup from LB sums paid by DAK following an accident in Denmark to the daughter of DAK's insured, caused by a motorist insured by LB. Article 116 of the German Social Security Code (SGB X) provided for the subrogation of DAK to compensation rights in respect of damage for which it had to pay benefits. LB relied on provisions of Danish law by which the social security benefits could not form the basis of a recoupment action against the party liable for the damage. At [18] the Court said:
"Article 93(1) must thus be seen as conflict-of-laws rule, which requires the national court hearing an action for compensation brought against the party liable for the injury to apply the law of the Member State to which the institution responsible is subject, not only to determine whether that institution is subrogated by law to the rights of the injured party or has direct rights against the third party liable, but also to determine the nature and extent of the claims to which the institution responsible for benefits is subrogated or which it can bring directly against the third parties."
The Court held at [22] that provisions such as those relied on by LB:
"…which relate to the rights of recoupment of social security institutions against third parties bound to compensate for injuries as a result of which social security benefits have been paid, cannot be applied to determine whether and to what extent an institution responsible for benefits in another Member State has a right of recoupment against the party who has caused an injury in the territory of the Member State where those provisions apply."
Ms Howells relies on this decision in support of her client's case, submitting that the defendant's argument that the available claims are limited to those provided for by the FAA cannot stand with this judgment. In my view, however, DAK supports rather than undermines the argument for the defendant. The decision was concerned with the rights of the institution by way of subrogation. The argument rejected by the court was that Danish law, rather than Article 116 of the SGB X, should be applied to ascertain the existence and extent of any such rights. DAK is not authority for the proposition that the law of the institution's home country applies to determine, or that it affects in any way, the existence and extent of the rights to which the institution is subrogated. On the contrary, citing Singer and de Waal the Court expressly noted at [21] the limits on the impact of the law of the institution's home country:
"Finally, it should be noted that Article 93(1) of the regulation is intended only to ensure that the rights which the institution responsible may have by virtue of the legislation which it administers are recognized by the other Member States. Its purpose is not to alter the rules applicable for determining whether and to what extent there is non-contractual liability on the part of the third party who has caused the injury. The third party's liability remains subject to the substantive rules which are normally to be applied by the national court before which proceedings are brought by the institution responsible or by the victim, in other words, in principle the legislation of the Member State in whose territory the injury has occurred…"
The overall picture is conveniently summarised in paragraphs [15] to [17] of Kordel:
"15. …Article 93(1)(a) does not purport to alter the applicable rules for determining whether and to what extent non-contractual liability on the part of the third party who caused the injury is to be incurred. The third party's liability continues to be governed by the substantive rules which are normally to be applied by the national court before which proceedings are brought by the victim or those entitled under him, that is to say, in principle, the legislation of the Member State in whose territory the injury was sustained…
16. It follows that the rights that the victim or those entitled under him have against the person who caused the injury and the requirements to be satisfied to enable an action in damages to be brought before the courts of the Member State where the injury was sustained must be determined in accordance with the law of that State, including any applicable rules of private international law.
17. It is to such rights alone, thus determined, that the institution responsible for benefits can be subrogated. Subrogation such as that provided for in Article 93(1)(a) cannot have the effect of creating additional rights for the recipient of the benefits against third parties."
The judgment of HHJ B C Forster QC in Donkers is entirely in line with this European jurisprudence. Applying DAK and Kordel the Judge concluded at [40]:
"The national court before which a claim is brought must recognise the claim of a responsible institution in another Member State but the extent of the claim and the assessment of damages remain to be determined by the law of the national court. Where there is subrogation the claim of the institution must be recognised in all Member States but it cannot exceed the rights that the victim has against the tortfeasor. The determination of the claim that passes from the benefits recipient to the responsible institution must be determined in accordance with the law of the substantive claim."
The emphasis is mine. It had been submitted that "the Regulation exports the law of the Member State of the claiming social security benefits institution into the country where the third party is sued by the social benefits institution": [38]. At [46] the Judge rejected that submission, saying:
"It is essential that the right of claim of the responsible institution is recognised in all Member States but the interpretation suggested would lead to uncertainty and complication particularly if the Court had to consider claims arising from the same accident where Claimants were resident in different countries."
The paragraphs from Donkers that I have cited at 45 and 46 above were relied on by Ms Howells, but not the words I have emphasised. It is those words that reflect the right answer to the question posed by the preliminary issue. I do not accept Ms Howells' submission that Judge Forster's reference to whether the subrogated claim "exceeds the rights" of the victim concerns the quantum of the claim, which seems to me a misreading with no principled basis. In summary, the claims which this claimant is entitled to advance are governed by English law. She has pleaded her claims, and those of the children, to the fullest extent possible under English law. The sums claimed under items 7, 8 and 9 of the FAA section of the Schedule of Loss are not recoverable by the claimant in English law and therefore cannot be recoverable by her on behalf of INAIL or Tesco Go, whatever rights of subrogation they may enjoy under Italian law. Any such rights must fall to be exercised, if at all, in respect of the English law claims pleaded by the claimant on her own behalf and on behalf of the children under items 1 and 2 of the LRMPA section, or 1 to 7 of the FAA section, of the Schedule of Loss.
I add that if, and to the extent that, the subrogated claims fall outside the material scope of Article 85, they would in my judgment fail by reason of Articles 4 and 19 of Rome II. Article 19 is headed "Subrogation". It provides:
"Where a person (the creditor) has a non-contractual claim upon another (the debtor) and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person's duty to satisfy the creditor shall determine whether, and the extent to which, the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship."
For the purposes of Article 19, the claimant and the defendant are the creditor and debtor, and INAIL and Tesco Go are third persons. The effect of Article 19 is, therefore, that Italian law governs whether and the extent to which INAIL and Tesco Go are entitled to exercise the rights which the claimant has against the defendant under the law governing that relationship. However, the effect of Article 4 is, as already noted, that the relationship between the claimant and the defendant is governed by English law. Rome II and Article 85 of the 2004 Regulation are therefore in harmony. This is unsurprising. Recital (35) to Rome II recognises that although Community law may make special provision with regard to particular matters "a situation where conflict-of-law rules are dispersed among several instruments and where there are differences between those rules should be avoided".
For all these reasons the preliminary issue is determined in favour of the defendant. I will hear Counsel on the appropriate consequential judgment and orders. |
Sir David Eady :
This is another claim in defamation arising from internet abuse. A short trial took place before me on 3 February 2015. The second Claimant, Mr Timothy Bussey, is a lawyer practising in the state of Colorado in the United States through his law firm, which is the first Claimant and of which he is the principal. Someone posted a defamatory allegation on his Google Maps profile, alongside a number of positive reviews of his firm and the services offered, which rated them as "excellent". The offending post was not only directly defamatory of both Claimants, but also inevitably had the effect of undermining those commendations. It was in the following terms:
"A Google User received 10 months ago
Overall Poor to fair
Scumbag Tim Bussey, pays for false reviews, loses 80% of his cases.
Not a happy camper
3 out of 3 found this review helpful"
The central issue on liability was whether the Claimants could prove to the required standard that Mr Page was responsible for the original posting on 27 January 2012. He admitted that the posting had been made from his Google account. He could hardly do otherwise. This fact was originally established, at no doubt considerable expense, by Mr Bussey who had instructed a firm of California lawyers to obtain a subpoena in respect of Google's records. Mr Page's response was to advance certain hypothetical explanations as to how an unidentified third party might have posted the allegations via his account but without his knowledge. I will briefly address those theories shortly, but I must remember that I am concerned with what is the most likely explanation on a balance of probabilities.
After the commencement of proceedings, the posting was voluntarily removed about a year later. (There has never been any suggestion that the allegations were true.) The Defendant has stated that it was taken down as soon as he knew the Claimants wanted it removed, but makes the point that it would have been removed earlier if the Claimants had contacted him as soon as they became aware of his contact details on 24 April 2012. Accordingly, he argues that "nine months' worth of damages would have been avoidable". Be that as it may, the fact remains that it was there to be seen by anyone seeking information on the Claimants via Google Maps for about a year.
It was made clear at the outset of the trial that no reliance was placed on publication in England and Wales, but only that in Colorado. It is recognised that a claimant seeking a remedy in this jurisdiction regarding a defamatory publication anywhere abroad must plead, and if necessary prove, that the words in question are actionable under the lex loci delicti as well as under English law: see e.g. Gatley on Libel & Slander (12th edn) at 26.19. Mr Richmond-Coggan sought permission to remedy this omission in the course of his opening by way of a late amendment, and by relying upon the presumption that the relevant foreign law is the same as that applying in England: see e.g. University of Glasgow v The Economist (1997) EMLR 495; OPO v MLA [2014] EWCA Civ 1277, at [108]; Ames v The Spamhaus Project Ltd [2015] EWHC 127, at [109]. I naturally asked Mr Page if he wanted to have the opportunity to plead to that proposed amendment, and to seek to rebut any such presumption. He declined and expressed a preference to proceed with the trial. I then granted permission.
It was suggested in Mr Page's recently served witness statement that a third party must have hacked into his Google account in order to post the offending review. Naturally, one asks why anyone should take that step. If the objective were merely to hide the hacker's identity from the Claimants, there would be the simpler option of setting up an anonymous Google account. This would in itself render the would-be publisher untraceable, and especially if it were done from a public computer.
If such a hacker wished, nevertheless, to use someone else's account, it is not easy to see why he would choose that of the Defendant. He is based in England and it would make more sense, surely, to choose someone in or near Colorado Springs, where the Claimants practise. This would present a rather more credible scenario, if the account were traced, since their clients or potential clients are more likely to be found within easy reach.
It is necessary to have in mind how challenging it would be to hack into the Defendant's account. It is accepted that he had adopted especially sophisticated password and security arrangements. It would require great dedication and skill to circumvent them. Even if they could be overcome there is, as I have noted already, no ready explanation as to why such a hacker would need or wish to take such a difficult route.
Mr Page's primary suggestion is rather intricate. He has put forward the idea that he must himself have been the hacker's real target. The theory is that he or she might have been seeking retribution for some decision or action taken by Mr Page in his capacity as moderator of "sub-reddits" on the www.reddit.com website. In other words, this could provide an explanation why the third party wanted Mr Page to take the blame for the attack on the Claimants. This plan would still, of course, involve the third party successfully hacking into Mr Page's account in the first place and then making the (very big) assumption that the target (i.e. the Claimants) would actually go to the trouble and expense of identifying Mr Page and thereafter of pursuing him in a foreign jurisdiction. When one comes to assess the competing possibilities, it is fair to say that this somewhat obscure explanation defies probability.
Shortly before trial, Mr Page put forward evidence of IP addresses from which attempts had been made to access his account (none of them, however, on 27 January 2012). This was based on information disclosed by Google pursuant to the Claimants' subpoena. They, in response, obtained a witness statement from Mr Robert Kelso, the chief executive of an American firm of computer experts called Forensic Pursuit. This was admitted in evidence. He referred to the common practice, among experienced internet users, of resorting to proxy servers. Mr Page had mentioned an apparently successful attempt to access his account from a particular IP address. It emerged, as a result of a WHOIS search, that the proprietor of the domain within which that IP address resides is Hetzner Online AG, which offers web hosting services including anonymous proxy servers. Mr Page does not know what use of his account was made on this occasion. None of this, however, was of any great assistance in explaining how it was that his account was used on the material date.
The Claimants established that Mr Page advertised on Twitter as being willing to post "feedback" or "testimonial" (a description which corresponds to the posting complained of here) for $5 via the Fiver.com website. This would at least provide a possible motive for his targeting the Claimants, of whom he had no personal knowledge or experience. Indeed, it is difficult to know why else he would have done so. He says, however, that he was never in fact paid for any such transaction, although his Paypal records disclose substantial dollar payments between November 2011 and March 2012. He put in late supplementary evidence to show the extent of his Fiver.com activity, but after enlargement it emerged that there was an unexplained gap (an apparent deletion) covering the period between 24 January and 10 February 2012 (i.e. the period embracing the date of the relevant posting).
I have to come to a conclusion in the light of the probabilities. The likelihood is, in the absence of any convincing explanation to the contrary, that the posting from Mr Page's account was authored or authorised by him. It is extremely improbable that anyone successfully hacked into that account on 27 January 2012 with a view to posting the words complained of. There is no evidence that anyone did so on that date and, moreover, no reason why anyone with a grudge against the Claimants should attempt to go down that route in any event. Why Mr Page should himself choose to attack the Claimants is also unclear, but the most likely explanation would appear to be a purely financial one. I do not need, however, to come to a conclusion on motive since it is not essential to the Claimants' cause of action. All I need say is that the overwhelming probability is that he is responsible for the posting from his account on the date in question and for its remaining accessible thereafter. There is simply no other reasonable explanation.
The publication was calculated to cause serious harm to the Claimants and, in particular, to Mr Bussey's personal reputation and to his legal practice. It is likely to have been read by a significant number of searchers and, in particular, by potential clients checking them out. It is noted that three people are supposed to have found the comment "helpful". One cannot, however, attach too much significance to that and it is certainly possible that one person using different accounts made all three entries (as Mr Page pointed out).
It is well known that the purpose of compensatory general damages is threefold. The court must compensate (1) for hurt feelings and distress, and (2) for injury to reputation, as well as bearing in mind (3) the need to award a sum which will serve as an outward and visible sign of vindication. There is no doubt that the allegation caused Mr Bussey considerable anxiety and distress, as it reflected upon his personal integrity and his professional competence throughout the period of ready access. His evidence about the impact upon him was unchallenged. I need to take account also of the stress of having to pursue litigation both in the United States and in a foreign jurisdiction. There is also some evidence of a decline in income at the relevant time which could be, at least in part, attributable to that publication. Yet I am primarily concerned in Mr Bussey's case with the impact upon him personally and the need for clear vindication. I would assess the damages in his case at £45,000.
In so far as the firm has sued separately in its own name, I am concerned not with hurt feelings but primarily with the need to compensate for injury to reputation and for convincing vindication. I have little doubt that the posting would have adversely impacted on the practice, including financially, and I should also take into account to some extent the "grapevine effect" of such allegations: see e.g. Cairns v Modi [2013] 1 WLR 1015, at [26]; Ley v Hamilton (1935) 153 LT 384, 386. I would assess the award, conservatively, at £25,000 for the first Claimant.
The claim for damages has been capped at £50,000 and that must therefore represent the total sum to be recovered by the Claimants.
Mr Richmond-Coggan sought punitive damages in addition and, if I were satisfied that the publication took place with a view to monetary gain, however modest, such an award (of say £25,000 in addition) would be appropriate. Mr Page had no reason to believe that the allegations were true. Nevertheless, because of the voluntary cap on the damages claimed, I need go no further. The award of compensatory damages has reached (and would otherwise have exceeded) the total of £50,000. Accordingly, I make no additional award of punitive damages.
I would grant an injunction if I thought it likely that Mr Page would republish the defamatory allegations or any similar words defamatory of the Claimants, but I do not believe in the light of the evidence he has given that he will do so. |
The Hon. Mr Justice Coulson:
1. INTRODUCTION
At about 9:14 on the morning of Saturday 19 June 2010, a CASA C-212-100 Aviocar aircraft crashed into a hillside in a remote area of dense jungle in the northwest corner of the Republic of Congo. All 11 people on board were killed. They included 6 members of the Board of Directors of the second defendant, Sundance Resources Limited ("Sundance"), who had chartered the plane from Aero-Service, a Congolese charter flight company. Also killed was Mr James Cassley, a corporate financier employed by GMP Securities Europe LLP ("GMP"), together with Mr Talbot's PA; Mr Jeff Duff of Dynamiq, Sundance's logistics contractors; and the two pilots.
Sundance is an Australian mining company which had acquired the rights to mine a number of iron ore deposits in the area, including large, linked deposits at Mbalam in Cameroon and Nabeba in the Congo. Mr Cassley was there to inspect that site because GMP hoped to win the instruction to act as Sundance's representatives in the raising of finance for this major mining project.
The aircraft was flying from Yaoundé in Cameroon to an airstrip at Yangadou, over the border in the Congo, and the closest landing strip to the Mbalam/Nabeba site. It appears that the day before the flight, the Sundance directors decided that they would take the opportunity of making a relatively small detour so that they could fly over another large mine in the area near Avima, operated by a rival company (Core Mining), the rights to which Sundance were interested in acquiring. The Avima mine was in the northeast corner of Gabon. The maps and charts show that the Core Mining mine was located just beyond the Avima ridge, a continuous line of hills rising about 250 metres from the floor of the jungle and running west/east. On the morning of 19 June 2010, the area of the Avima ridge was covered in low cloud. The pilots were apparently descending and endeavouring to find the bottom of the cloud base when they flew straight into the ridge itself. This is known as a Controlled Flight Into Terrain ("CFIT").
The claimants are Mr Cassley's dependants: his widow, Hong Cassley, and his parents, Mona and Hector. Originally, they made a claim against Aero-Service, whose insurers have now paid out to them about 600,000 Euros. They also brought proceedings in the USA against the manufacturers of the GPS system on board the accident flight, although it appears that that claim has now been abandoned.
This claim is brought against Mr Cassley's employers, GMP, for breach of the duty of care owed to him. Although, as noted below, GMP admit the existence of a duty, they deny liability and, in their original defence (and as they maintained at trial) they argue that they were entitled to rely entirely on Sundance, who made all the detailed arrangements in respect of the trip as a whole, and the flight to Yaoundé in particular[1]. The claimants say that, because of GMP's case that they were entitled to rely on Sundance, and that it was Sundance who assumed any relevant responsibilities to Mr Cassley, they had no option but to join Sundance as second defendant. Sundance deny the existence of any duty of care and, if they are wrong about that, deny any breach. In addition, both defendants raise a variety of points on causation.
Pursuant to the order of Master Eastman dated 17.3.14, this trial, and therefore this Judgment, is concerned only with issues of liability (including causation). It should also be noted that, although there were contribution proceedings between GMP and Sundance, those proceedings have been resolved and I am not required to rule on them.
The Judgment is structured in this way. In Section 2 I summarise the evidence relating to Mr Cassley. In Section 3 I deal with Sundance and the Mbalam/Nabeba project. This includes a summary of the evidence relating to the earlier chartered flights that Sundance arranged in this region of Africa, and their previous attempts to exclude their liability if things went wrong. In Section 4 I deal with GMP, and in Section 5 I set out the arrangements for the visit to Mbalam/Nabeba in June 2010. This also considers the evidence relating to GMP's reaction to Sundance's attempts to exclude their liability for Mr Cassley in the event of an accident, and the late changes to the original flight arrangements. Section 6 of the Judgment is concerned with the flight on 19 June 2010. Section 7 is concerned with Aero-Service, the owners and operators of the aircraft that crashed, and goes on to address the causes of that crash.
At Section 8 I address standards and statistics. At Section 9 I summarise the issues between the parties. At Section 10 I outline some of the difficulties with the expert evidence. Thereafter, at Sections 11 and 12 below I deal, respectively, with the case against GMP and the case against Sundance, by reference to the conventional sub-headings of Law, Duty, Breach and Causation. Before embarking on any of that, I ought to express my thanks to counsel for the efficient way with which they dealt with this trial, notwithstanding the practical difficulties created by the unwieldy bundling arrangements, and to the claimants, whose dignity and fortitude throughout a distressing trial was of the highest order.
2. JAMES CASSLEY
James was the only child of Mona and Hector Cassley, the second and third claimants. He was 30 when he died. He took a BSc in Geology from Queen's University Belfast and then moved to London to pursue a career in finance. He worked first as a corporate finance executive and then in the resources sector, specifically mining. He was certified as a corporate financier by the Securities and Investment Institute. From 21 April 2009 he was employed by GMP as a corporate finance executive. He successfully completed his probationary period on 20 January 2010.
James met Hong in 2005 in the ticket queue at Wimbledon. The relationship blossomed and they married in 2007. At the time of his death they were trying for children.
Although by June 2010 he had only just completed his probationary period, it was clear that James was doing very well at GMP. The finance officer indicated that, had he continued as he was doing, he would have been offered a junior partnership with GMP within 2 to 3 years. GMP marked James death in their 2010 Accounts in this way:
"James was a very intelligent pleasant person and a joy to be around – one of a kind. He loved to travel and always did so extensively both in his personal life and for work. With an amiable personality and disposition, James was always approachable and always had time for people willing to help in any way. His infectious humour and energetic spirit will be greatly missed but not forgotten."
Mr Cassley always knew that travelling was an integral part of his work for GMP. That was because GMP were primarily involved in raising finance for mining and related start-up projects. A site visit would almost always be required as part of the necessary 'due diligence' process. It is therefore unsurprising that his widow, Hong, said at paragraph 10 of her statement that, as the most senior person in GMP's mining team in London, he travelled a lot. In the year of his death he had already travelled several times to Africa. Furthermore, he knew that these charter flights were somewhat different to routine air travel. At paragraph 11 of her statement, Hong recalls him telling her about one charter flight that he had taken in Africa on an old World War 2 Russian aircraft which "shook like it was coming apart".
Hong expressed her concerns to Mr Cassley about this and asked whether it was safe to fly in "a little aircraft like that". Mr Cassley had said that the aircraft had landed, 'so it was fine'. It is therefore clear that he knew that there were some risks attached to his job and the flying that it entailed to remote locations. On the other hand, there is nothing to suggest that he ever knew of, let alone accepted, any unnecessary risks when undertaking these flights.
3. SUNDANCE AND THE MBALAM/NABEBA PROJECT
Caveat re Sundance Documents/Evidence
This Section (and the next Sections of this Judgment) are taken primarily from the documents, principally emails which passed between the relevant parties in the first six months of 2010. I consider that these contemporaneous documents are the best source of information as to how the relevant events unfolded, particularly given the sad fact that so many of the major players (not just Mr Cassley, but Mr Lewis and Mr Carr-Gregg of Sundance and Mr Duff of Dynamiq) lost their lives in the accident.
In his closing submissions, Mr Williams issued the court with a polite warning, to the effect that, because of the difficulties created for Sundance by the accident, and the loss of so many key personnel, the court should not necessarily assume that the available documentation was 100% complete. In relation to one or two potentially important factual matters, he asked the court to infer some things that were not necessarily borne out by the documentation.
I deal in these narrative Sections with any particular inferences which Mr Williams asked me to make. It seems to me that the contemporaneous documents – particularly the emails – do appear to be broadly complete. In general, I do not draw any inferences or make any assumptions, if they are contrary to the contents of the contemporaneous documents.
On the wider question of evidence, I accept Sundance's difficulties in not being able to call Mr Lewis, Mr Carr-Gregg and Mr Duff. But, again in general terms, such was the quality of the paperwork that they left behind, that I consider that a coherent narrative, with very few gaps or queries, emerges from that documentation. This is not a case where, as a matter of justice and policy, I should avoid making findings of fact on the basis that the evidence adduced was too weak to prove anything to an appropriate standard (see Sienkiewicz v Greif (UK) [2011] UKSC 10 at paragraph 193). On the contrary, I consider that the contemporaneous material allows for clear findings of fact to be made. Those are set out in the next Sections of this Judgment.
General History
Sundance is a well-known Australian mining company which, in 2006, through its subsidiary Cam Iron, acquired exploration rights in respect of iron ore deposits at Mbalam (sometimes called Mbarga) in Cameroon. In 2008, Sundance acquired similar rights at Nabeba, in the Republic of the Congo, about 70km away from Mbalam. In October 2008, a camp was set up at Nabeba. The following year, close to Nabeba, Sundance found the site of a bush landing strip, known as Yangadou.
Drilling started at Nabeba in January 2010. The site was not nearly so advanced and it was not yet clear the extent of iron ore deposits there. However, there can be no doubt that, based on the likely projections of the overall worth of the rights at Mbalam and Nabeba, Sundance considered this to be a major project. By the start of 2010 they had already raised substantial sums by way of investment: AUS $60 million by a share placement in August 2007; AUS $15 million capital in April 2009; and AUS $90 million in December 2009. But these were modest amounts compared to the money that was going to be necessary to mine the entirety of the iron ore at Mbalam and Nabeba. The financing for the project as a whole was estimated at AUS $4-5 billion, and involved building a railway to the coast and a port facility in Cameroon.
I find that the Board of Directors of Sundance, many of whom lost their lives in the accident, were well-respected and experienced. In particular, both the CEO, Mr Don Lewis, and the non-executive board member, Mr Ken Talbot, had international reputations within the mining industry. As we shall see, the company secretary, Mr John Carr-Gregg, was a sophisticated lawyer who did not eschew the detail. I find that they were not the sort of men knowingly to expose themselves, or others, to unnecessary risk.
Travel to the Site
Travel to the Nabeba camp was usually undertaken by road. However, in 2008, Sundance undertook a detailed review of this mode of travel in West Africa and the difficulties and dangers encompassed in this mode of transport were highlighted. As early as September 2008, Sundance said that they were looking to reduce the amount of road travel "with the planning of charter flight operations to site". They engaged a logistics company, Dynamiq, to provide advice about every aspect of travel and security in this part of West Africa.
It appears that, originally, the alternative plan was to use helicopters, but in an email dated 27 November 2009 from Mr Longley, Sundance's Geology Manager and the man effectively responsible for the site, it was clear that some sort of fixed wing alternative needed to be explored. In part this was dependant on the upgrading of the Yangadou airstrip. In his response of 28 November 2009, Mr Duff of Dynamiq, Sundance's logistics contractors, gave details of a company called Jetfly, a Cameroonian charter company based in Douala, operating a Dornier 15-person aircraft. The email said that the head pilot appeared to be friendly and competent and possessed the ability and contacts to help with both the Cameroon and Congo operations, "including securing authorisation in using the Yangadou airstrip". The email made clear that all of this was dependant on an immediate reconnaissance of Yangadou itself.
The evidence was, and I find, that as charter flights became the best option of travelling to Mbalam/Nabeba:
a) Each charter flight had to be approved by Mr Don Lewis, the CEO of Sundance;
b) Both Mr Lewis and Mr Carr-Gregg were aware of the risks of air travel and addressed those risks with the potential carriers, including making enquiries about their insurance, certification and other documentation;
c) Mr Carr-Gregg arranged insurance for every flight taken.
These careful procedures can be seen in respect of the proposal to use Jetfly to undertake the first flight to Yangadou. The documentation obtained by Sundance/Dynamiq (over a period of weeks) in respect of Jetfly included their Air Worthiness Certificate, an insurance certificate, an Air Operator's Certificate ("AOC"), and specifications in respect of both operations and maintenance.
The enquiries made of Jetfly were in accordance with Sundance's Travel Policy for charter flights to the effect that:
a) Any fixed wing aircraft would be twin-engined and carry two pilots;
b) The operators would confirm they had the necessary AOC;
c) All flights would be approved by the CEO;
d) There was evidence of third party liability insurance cover of at least $10 million.
The reconnaissance flight to Yangadou using Jetfly was fixed for 22 January 2010. Mr Longley, who was not going to be on the flight, said that its purpose was to see if Yangadou could be used for a medical emergency/evacuation. He said that another purpose was to check out the potential use of Jetfly as charterers. Mr Duff of Dynamiq was going to be on board the flight.
On 16 January 2010 Mr Carr-Gregg emailed his insurance brokers seeking insurance cover for the flight. In order to make that request, Sundance reiterated that they had obtained extensive information about Jetfly (as set out in Mr Carr-Gregg's email of 15 January 2010), including the name of company, where they were registered, ownership, and where they were registered to fly; the proposed charter agreement; Jetfly's insurance details and copy policy; and detailed information about the particular trip. There was a concern as to whether the non-employees of Sundance (such as their consultants, Dynamiq) were covered by the Jetfly insurance, and indeed whether Jetfly (a Cameroonian company) would have insurance to fly into Congo at all.
The Jetfly flight was approved by Mr Lewis and took place on 22 January 2010. The flight was from Douala to Yangadou, the first time the airstrip there had been used for a flight like this. Mr Duff was on board. It was regarded as a success.
As a result of the flight on 22 January 2010, it was concluded that charter flights were appropriate for medical emergencies/evacuation from Yangadou. It also appears that Sundance were looking to set up a regular air service using Jetfly, possibly involving one or two flights every month.
In February 2010, notwithstanding this potential commitment to Jetfly, Mr Carr-Gregg emailed Ralph Kriege, Sundance's Exploration Manager, to indicate that they needed a fall-back charterer and suggesting that they try to source a contact through Marc Lour, a Congo pilot with lots of contacts, who was married to Ms Hilly-Ann Fumey, the Dutch Honorary Consul. Mr Carr-Gregg said that "I understand that Jetfly are great and are on holiday and I am not suggesting we don't continue our relationship (although it would be helpful if they could leave us contacts while they are on holiday)."
By February 2010, arrangements were progressing for a visit to the Mbalam/Nabeba site in March 2010, bringing as a guest the Cameroon Minister of Mines. On 16 February 2010 Mr Lewis emailed Mr Carr-Gregg to say this:
"…preparing for site visit will take some days to organise… Flights will need some work as well. The recent flight undertaken by Jetfly took Jeff weeks to organise and he is on R&R during the prep time for this visit. We need to do HSE reviews on the charterer. Work out flight times and the schedule etc. This really takes a lot of effort."
On 22 February 2010, it was reported that Jetfly were unavailable for the proposed trip in March 2010. Ms Fumey suggested a Congo aviation company called Aero-Service, the company who undertook the accident flight. A quotation was obtained from Aero-Service which was cheaper than that offered by Jetfly. However, there was no reference at that point to the basic documentation (such as their AOC) which had been obtained from Jetfly in November 2009.
The emails, such as the one from Mr Carr-Gregg to Mr Lewis of 10 March 2010, betray a slight whiff of panic about the forthcoming trip with the Minister of Mines. It was an important occasion for Sundance and there was a continuing debate about Jetfly's availability. Thus it was that Mr Lewis, in his response email at 9:58pm on 10 March 2010, instructed Mr Carr-Gregg to pursue the alternative charter quote from Aero-Service "but we will need copies of their insurance, maintenance records, aircraft certification etc to ensure their safety arrangements are satisfactory."
One of the most important documents of that type would have been the AOC, issued by ANAC, (the Congolese Civil Aviation Authority) to Aero-Service. The claimants' closing submissions raised two issues on the AOC: first, whether Aero-Service had such a document and, if they did, whether Sundance ever saw it. This matters because an AOC is the equivalent of a license, a formal approval of the charter flight company by the relevant aviation authority.
As to the first point, I am in no doubt that Aero-Service always had an AOC. The audits, and in particular the most recent audit of February 2010 (referred to at paragraphs 137-141 below) expressly reported that Aero-Service had an AOC. There is no suggestion in the subsequent Air Accident Investigation Report that Aero-Service did not have such a document, which would have been one of the first things that would have been checked following the accident. I consider that it is inevitable that, if Aero-Service had not had an AOC, that omission would have been identified in the Report. On the balance of probabilities, therefore, I find that Aero-Service had an AOC.
Further, I consider that, also on the balance of probabilities, it is a fair inference that Sundance saw a copy of the AOC in preparation for the March flight. I do not believe that Mr Lewis would have sanctioned the flight without sight of the AOC. However, it is not possible to say that any of the other documentation that Mr Lewis had indicated in his email of 10 March (paragraph 33 above) was provided by Aero-Service. Indeed, as noted in paragraph 110 below, the inference must be that it was not.
On 11 March 2010, Mr Carr-Gregg informed Mr Lewis that Jetfly had now confirmed their availability for the flight the following week, but stressed that the Aero-Service quote was 78% of the Jetfly price. In an apparent response to the earlier request for information about Aero-Service, Mr Carr-Gregg said that he had asked Antonie Vermaak, a pilot employed by Fugro (who were carrying out aerial surveys for Sundance) to check out the Aero-Service CASA C-212-300 Aviocar aircraft. He apparently did so and told Mr Carr-Gregg that "it was a reliable aircraft and in good nick".
Mr Carr-Gregg went on as follows:
"I know Jeff [Duff] wants to develop a relationship with Jetfly because of the concept that it is the only airline that can fly from Douala to Yangadou but:
(a) I am assured that Aero-Service (which seems to have more planes and seems to be more reliable (it is sometimes very difficult to contact Jetfly)) can fly this route with no problems;
(b) Aero-Service is cheaper;
(c) The Aero-Service plane is a Congo registered plane and given the sensitivities here, I don't think it is particularly diplomatic to carry the Congolese Minister on a Cameroon registered aircraft;
(d) Jetfly think they have a monopoly and are – frankly – ripping us off because of this. I think a bit of competition would be a good idea."
The email appeared to include some internet links to information about Aero-Service, including a Wikipedia entry. The Aero-Service website to which reference was made was apparently said to be "under construction".
Also, on 11 March 2010, Mr Carr-Gregg sought (from Ms Fumey), Aero-Service's insurance certificates, plane registration details and so on. Mr Carr-Gregg noted that Sundance had gone through "quite a vetting process" with Jetfly. Aero-Service subsequently provided an insurance certificate for their CASA C-212-300 aircraft which was accepted by Sundance's brokers, and the necessary insurance for the flight was arranged. I therefore find that the arrangements for the March flight with Aero-Service were in accordance with Sundance's Travel Policy (paragraph 25 above).
The flight on 19 March 2010 went ahead with the Congolese Minister of Mines. The documents make clear that it was a success. It flew from Douala to Yangadou, using the CASA C-212-300 aircraft. It was flown by Mr Canal and Mr Hollingsworth, the two pilots who were to lose their lives in the June 2010 accident. Also on board that flight were Ms Fumey, and Mr Carr-Gregg. Mr Fumey was accompanied by her husband, the pilot Mark Lour. I therefore accept Sundance's submission (paragraph 74 of their written closing submissions) that this was clear testament to the confidence that everyone had in Aero-Service.
However, purely coincidently (as Mr Longley confirmed to me in his evidence) on 19 March 2010 he emailed Mr Duff of Dynamiq to ask him to report on any follow-up work he had done with Aero-Service "as a possible alternative or competitive bidder to the Jetfly option". Mr Duff responded by saying that the quote from Jetfly was "pretty reasonable to be honest", and he said that he had not done any follow up with Aero-Service "except confirm they are a decent operator with a CASA aircraft." There was a reference to Mr Carr-Gregg handling that whole project. Although Mr Longley said at one stage he did not know to what that was a reference (and on another occasion said he thought that was a reference to background checks), it was clear to me that that was a reference to the flight that had actually taken place on 19 March 2010, because it was Mr Carr-Gregg alone who had obtained the quotation from Aero-Service, and the insurance documentation. It was he who had provided all the necessary information to Mr Lewis in order that he could make the decision to fly with them.
It is clear that, as a result of this successful flight, Mr Carr-Gregg was very happy with Aero-Service. On 20 March 2010 he sent them an email thanking them for their service the previous day and he also emailed Mr Lewis to describe Aero-Service as "excellent and cheap". He was very positive about the plane (the CASA C-212-300 Aviocar aircraft) and he asked Mr Lewis if he wanted him to book Aero-Service for any of the visitors "coming up". However, Mr Lewis told him "not to worry" about following up with Aero-Service, and the idea was dropped.
The third and final flight to Yangadou prior to the accident occurred on 30 March 2010. This was with Jetfly. It flew from Douala. Mr Longley and Mr Duff were aboard. Mr Longley's evidence about this third flight was therefore the only evidence that the court heard from anyone who had flown a charter flight in this region at this time.
Mr Longley explained that although they were flying to Yangadou, they also overflew the Core Iron mine at Avima. Having done that, they then turned east and flew along the west/east Avima ridge before circling Nabeba and landing at Yangadou. He said the weather was fair and there was good visibility. He said that the overfly at Avima was high enough to see buildings and vehicles but not individuals, a height which Captain Gillespie (GMP's expert) later put at about 1,000 feet. He said one of the principal purposes of the flight was to look at how Jetfly operated:
"I was sort of looking at how Jetfly operated, how professional the pilots were, the condition of the plane, what routines they went through, what maps they hold and what generally their professionality sort of regime was. I didn't have any specific concerns about their ability, No."
One other point should be made about the flight on 30 March 2010. The emails make plain that insurance cover was only sought on the day of the flight. Furthermore the Journey Management System ("JMS") identified the details of the risks associated with the journey. One of the hazards was identified as "crash": the mitigation was identified as "pray".
Waiver of Liability/Exclusions
The documents reveal that, notwithstanding the rather flippant approach to risk assessment revealed in the previous paragraph, Sundance in fact operated a much more hard-nosed approach to questions of liability. They had, in essence, sought to obtain personal waivers of liability or exclusions from all those boarding the charter flights which they organised, even if the problem with the flight stemmed from their own negligence. A brief outline of this approach is required, because of its relevance to the flight Mr Cassley was required to undertake in June 2010.
On 17 January 2010, Mr Carr-Gregg had emailed Mr Lewis to say that his concern was 'a Dornier load of people crashing' and the subsequent claims that would be made against Sundance in Australia, Cameroon and/or the Congo (where Jetfly was not insured). He was concerned that the insurance cover could be exceeded and that Sundance could face multiple claims involving millions of dollars. He therefore thought it was sensible to consider a release limiting claims to the amount of insurance actually recovered. Later the same day, Mr Carr-Gregg reiterated that Congo was an exclusion in the Jetfly insurance contract (see paragraph 27 above) and that extensions had to be obtained for landing in excluded countries.
On 20 January 2010, with the exemption (which would have allowed Jetfly to fly into Congo) still outstanding, Mr Carr-Gregg provided to Mr Lewis a release document which he wanted all passengers to sign. The release document was a personal waiver of liability and assumption of risk. It was in broadly similar terms to the exclusion of liability provision to which Sundance sought GMP's agreement in June 2010, although that was not personal but addressed to GMP generally. This version waived the right of the individual who signed it to make any claims against Sundance and also agreed to indemnify Sundance from claims as a result of flying on the Sundance organised charter.
Mr Lewis agreed to the document, unless it conflicted with the terms of Sundance's contract with Dynamiq. But Mr Longley was appalled and emailed back the same day to say:
"This would be an extraordinary circumstance and I would not allow any Sundance/Cam Iron employees under my responsibility to agree to such a waiver."
He also pointed out that Mr Moorhouse of Dynamiq would have to agree to such a waiver before considering that option for any Dynamiq employees. But Mr Moorhouse agreed with Mr Longley, saying:
"He would not ask an employee to sign and neither will I. Imagine if something happened and as a result your family couldn't get suitably compensated."
It was not only those involved in this story that reacted with outrage at Sundance's attempts to avoid liability. In May 2010, representatives at Vizag Steel were asked by Sundance to sign similar waivers in respect of travel to the project. Their response was in these terms:
"…it is understood that there is a risk of travel to the representatives of [Vizag Steel] who will be visiting the site either in connection with data collection or for any other due diligence afterwards. It is not the question of who bears the insurance cover for the representatives of [Vizag Steel], it is a question of safety that is underlying in the reply given by you.
[Vizag Steel] is concerned about the safety of its representatives who may visit the site in connection with the data collection/due diligence of the project. In this connection, from your side, how do you resolve the issue of safety if [Vizag Steel] representatives."
The collective reactions of Mr Longley, Mr Moorhouse and the representatives of Vizag Steel (with their emphasis on 'the issue of safety') should be contrasted with the reaction of GMP to Sundance's attempt to get them to sign a similar waiver. That is dealt with in Section 5.2 below.
4. GMP
GMP is a bank providing corporate finance and investment services in the mining, oil and gas sectors. It is the London arm of the GMP Capital Inc based in Toronto. It is a substantial worldwide concern with a net income of USD $43 million and total assets of USD $1.1 billion.
It is clear that the London part of the GMP business, which began in 2006, was relatively modest, but has since grown to about 25 people. There are three main business areas within the firm: corporate finance, independent research and a trading desk. There were the usual 'Chinese walls' as between the corporate finance department and the independent research department.
In 2010, the principal partner in London was Mr Simon Catt. Mr Cassley reported to him. He signed a number of the relevant documents. He was not called to give evidence at the trial. Instead, the only senior representative of GMP who gave evidence was Mr Butterworth, whose role in the relevant events was peripheral (although whether or not he should have been so disconnected lies at the heart of the allegations of breach against GMP). He was the only lawyer at GMP and, although not a designated member of the firm, was responsible for legal matters and compliance. In that connection, he was responsible for health and safety.
Prior to the accident, Mr Butterworth said that he had not had any health and safety training. He said that GMP did not have a specific health and safety budget. He could not remember if he had seen or was aware of the Management and Health and Safety at Work Regulations 1999 prior to the accident. He said he thought that he was the competent person appointed under Regulation 7, although he did not remember any decision to that effect, and he had not satisfied himself that he was in fact the relevant person. He said that whilst it was a reasonable assumption that he had the "sufficient training and experience or knowledge and other qualities" to enable him to fulfil that role in practice, having had no training, experience or knowledge of these matters, he accepted that he was reliant on outside consultants, Modus, to whom he effectively sub-contracted his health and safety responsibilities.
The GMP Health and Safety documentation, and Mr Butterworth's evidence in respect of it, was not, in consequence, very illuminating. There was a Health and Safety Induction document dated 12 November 2008 but Mr Butterworth did not know if that document was in force at the time of the accident. Similarly, the Office Risk Assessment dated 1 November 2008, signed by Mr Slatter from Modus, was not a document that Mr Butterworth could say with certainty was in force at the time of the accident. In addition, there was a document entitled 'Risk, Legal and Compliance Report' which may have been useful but had been almost entirely redacted, so that the surviving version in the court bundle was completely useless. I have said before, and can only now repeat, that the redaction of a document like this, in a claim where serious allegations are made against GMP, does not help to alleviate the court's suspicion that the redactor may have something to hide. This is particularly so when one of the headings in the document (it is the headings, save for one paragraph, which are the only survivors of the redaction process) is 'Overseas Jurisdictions'.
There is a document entitled Office Risk Assessment, again dating from November 2008. Under the heading 'Those at Risk' it says this:
"Individuals or groups at risk due to the hazard will be considered. This will include employees, the self-employed and any other person. If vulnerable persons, such as young people, pregnant women, nursing mothers, those with disabilities, lone staff and those working out-of-hours or at remote locations etc are likely to be exposed, additional consideration will be given."
That last sentence plainly related to Mr Cassley in June 2010, although Mr Butterworth's oral evidence indicated that he did not make that connection at the time.
There is a further document dating from February 2009 entitled 'Policy Arrangements'. Mr Butterworth was able to confirm that this was in force at the time of the accident. It referred to the Designated Safety Officer (who was Mr Butterworth) and dealt at the start of the document with his responsibilities. It stated that he was "committed to health and safety, will provide leadership and will ensure that health and safety is taken into account when business decisions are taken."
The document included a section dealing with risk assessments. It repeated the same words as in the previous paragraph in respect of those at risk. It also contained the following passages:
"Arrangements for Securing the Health and Safety of Staff.
Elimination of Hazards.
The firm will ensure all hazards will be eliminated, so far as is reasonably practicable. If this is not possible, the remaining risks will either be avoided or reduced to an acceptable level. The measures introduced to achieve this will follow the principles of prevention and aim to combat risks at source.
Assessment of Risk.
If hazards cannot be eliminated or risks avoided, an assessment of the risks will be carried out by competent persons. The following factors will be considered during the assessment…"
There are then references to likelihood, severity, those at risk and so on.
Section 15 of the document is entitled 'Contractors'. It contains these passages:
"Policy Statement.
The site occupiers, the firm will plan, co-ordinate, control and monitor the activities of contract companies to effectively minimise the risk presented to employees, other persons on-site and the public.
Approved Contractors.
The firm will only use contractors who proved able to discharge their primary responsibilities to safeguard their employees and other persons who may be affected by their undertaking. This will be achieved by a selection and evaluation procedure to ensure that only competent contractors are used by the firm…
Safety Rules and Procedures.
…the firm will make arrangements for the exchange of all relevant information arising from risk assessments and emergency procedures, particularly steps required to protect contractor's employees from other contractors and their employees, as well as the day-to-day activities of the employee's workplace."
There was also a Health and Safety Policy dated 3 February 2009. That began with this paragraph:
"GMP Securities Europe LLP (the "Firm") considers the health, safety and welfare of its employees and others who may be affected by its activities to be of primary importance to the success of the Firm."
In addition, under paragraph 5.14, entitled Firm Travel, it provides as follows:
"GMP Securities Europe LLP may require employees to travel extensively. We recognise that the health and safety of staff and contractors is put at risk by travelling and we are concerned to do all that is reasonably practicable to minimise these risks.
We are aware that it is safer, mile for mile, for staff to travel by rail or air rather than road. Therefore where practicable trains can be used for longer journeys or air travel where authorised."
5. THE JUNE VISIT TO MBALAM/NABEBA
The Preparations
On 25 February 2010, Mr Andrew Young, a colleague of Mr Cassley's at GMP, sent Mr Lewis of Sundance an email offering to meet him the next time he was in London. It was a sales pitch. It was not until 16 April 2010 that Mr Lewis responded, by which time he was in London. He had a meeting with Mr Young at this time, although Mr Young did not deal with that meeting in his witness statement. Both Mr Cassley and Mr Fernley, from GMP's research department, were also present. By this stage, as an earlier email that Mr Lewis sent to Mr Duff on 11 March 2010 made plain, the Sundance Board was planning a mid-June board meeting in Cameroon, including a site visit to Mbalam/Nabeba. This proposal was subsequently confirmed in the Sundance board minutes of 29 April 2010.
The reason for holding the Board meeting there was that high grade ore had been identified at both Nabeba and Mbalam. The Congolese permits from Nabeba were due for renewal in early August and Sundance were anxious to demonstrate their commitment to the project and, in particular, to secure the renewal of the permits. Linked to that, of course, was the issue of how further investment funds might be raised.
Following the meeting between the GMP representatives and Mr Lewis, it became plain that it would be in everyone's interests for a representative of GMP to visit the site at the same time. Originally, Sundance envisaged that Mr Fernley would attend because of his research papers on iron ore deposits in that area of West Africa. However, Mr Fernley declined to make the trip because, as someone in the research department, he would have had a conflict of interest and would have been unable to sign the usual confidentiality agreement. It was in those circumstances that Mr Cassley – who was going to Canada in June and was not very keen to go to Africa immediately afterwards – was identified as the representative of GMP who would make the trip.
All the arrangements for the site visit were made by Sundance. On 5 May 2010, Mr Carr-Gregg emailed Jetfly to see whether the Dornier was available to fly from Yaoundé to Yangadou on Saturday 19 June 2010 and return to Yaoundé on the Sunday. Mr Steele of Sundance indicated that, if there was a problem, he had contact with South African pilots (a company called Solenta, see Section 5.3 below) who might be able to help. However, by 18 May 2010, it was looking likely that Jetfly were available to undertake the trip.
On 18 May, Messrs Cassley, Young and Fernley met with Mr De Nardi of Sundance in London. Thereafter, Mr De Nardi, who was based in Perth, was GMP's point of contact in respect of all the arrangements concerning the trip to Mbalam/Nabeba. On 28 May 2010, Mr De Nardi sent Mr Cassley an overview of the planned trip. The relevant part of the written itinerary was:
"19 June depart 8:00 charter flight Yaoundé to Nabeba
Inspect Nabeba mine site/camp
Inspect Mbarga mine site/camp
Overnight in Mbarga campsite
20 June depart Mbarga for 9:30 charter flight Nabeba to Yaoundé
Arrive 11:.. Yaoundé"
The itinerary also made plain that Mr Cassley would be flown from Paris to Yaoundé in the private jet belonging to Mr Talbot, a Non-Executive Director of Sundance and a big figure in the mining world. The email said that "all internal Cameroon flights will be booked by Sundance". It also said:
"You will be able to see part of the rail corridor from the plane and when you're on the ground at Mbarga."
On 1 June 2010, Mr De Nardi told Mr Cassley in an email that the flight from Yaoundé to Congo and the return was "on a Jetfly charter flight". That was the only reference to any carrier in any of the information provided to GMP by Sundance. At no time did GMP seek any further information about Jetfly from Sundance, nor did they undertake any researches of their own.
Also on 1 June 2010, Mr Cassley sent Ms Champion, GMP's Office Manager in London, details of the trip, because he needed the relevant visas. In respect of the site visit he said that that was "via chartered plane (company has arranged). Morning will be site visit in Cameroon, afternoon will be Congo (company arranging visa). Overnight at the Congo mine camp."
In early June 2010, it became apparent that there might be a problem with Jetfly undertaking the flights to and from Yangadou. ANAC had indicated that Jetfly might not be permitted to land at Yangadou because they were not a Congolese registered carrier. Initially, Mr Carr-Gregg seemed relaxed about that and on 8 June 2010 he emailed Mr Duff at Dynamiq to say:
"There may be a bit of turbulence in relation to the proposed flight but please press on – we do not need helicopter backup – if the flight can't go for any reason the Board will cancel Yangadou."
At the same time he asked Mr Steele to follow up with ANAC to see if the problem could be resolved. Mr Steele said he had already seen ANAC three times on the same subject.
Mr Steele's researches into the potential difficulties with the Jetfly flight to Yangadou make plain that the problems were wider than just a question of the national registration of the carrier. ANAC had given Mr Steel technical reasons why the landing strip may be unsafe; they had raised concerns about the absence there of police, customs and immigration control; they said that Souanke, the nearby strip, was already ratified for international flights (and was therefore a better alternative); and they also claimed that the Jetfly flight in March 2010 had been refused landing.
Eventually, these negotiations caused Mr Carr-Gregg to become exasperated with the attitude of ANAC. He pointed out in an email to Mr Steele, copied to Mr Lewis, and dated 10 June 2010, that the Yangadou airstrip had been expressly approved by ANAC for the Minister of Mines to land on it. He denied that the airstrip had been created without authorisation, noting that Sundance had graded and improved an existing airstrip. He said he had never heard of a refusal to provide permission to use the strip but he went on:
"This now a matter of urgency as we are going to have to cancel the directors visit to site if we do not have approval to land in Yangadou."
None of these difficulties were shared with GMP. Instead, during the middle part of June 2010, the correspondence between GMP and Sundance was almost entirely taken up with Sundance's desire to ensure that GMP waived any rights that they might otherwise have in the event of injury or death during the visit. I deal with those exchanges in Section 5.2 below.
On 10 June 2010, Mr Steele emailed Mr Carr-Gregg in connection with the ongoing problems with the proposed use of Yangadou. He said that the Board flight on 19/20 June 2010 would be authorised if Sundance agreed to the Souanke option. He said that if that did not happen, the threat was that any planes which landed at Yangadou would be seized. The following day, on 11 June 2010, Mr Carr-Gregg emailed Mr Duff to tell him to explore the use of Aero-Service for the flight, which he described as "likely to be more expensive but potentially acceptable to ANAC (as it uses Congolese aircraft)."
Mr Steele sought a quotation that day. Aero-Service responded through one of the pilots, Frederick Canal, who was to lose his life in the accident. This set out a proposal for the programme, identifying various hour blocks between Friday and Sunday 18- 20 June 2010. As Mr Steele made plain, there were no difficulties with that programme but the real question was the cost. Aero-Service did not quote for the cost of the flight until 14 June 12010. The quotation was in the sum of 18.5 million CFA Francs. No other information was provided.
On the same day, 14 June 2010, Mr Steele emailed Mr Lewis to say that, with 90% certainty, "the only flight authorised to land at Yangadou was the one with the Minister. We face fines for any others that they can prove to have occurred, along with penalties for operating an unauthorised airstrip." The email went on to say that he did not believe that ANAC would ratify the Yangadou airstrip. He proposed a solution which involved upgrading the airport at Souanke; using whenever reasonable a Congolese based carrier; and agreeing to use for the short term Souanke for all but VIP payload and medevac missions.
Mr Lewis responded in detail on 14 June 2010 noting that "the preferential use of a Congolese carrier is a big restriction and cost impact. I would accept on this special occasion (subject to cost) but our aim should be to negotiate a regularised arrangement for both alternatives – international flights from Cameroon to either Souanke or Yangadou and internal flights from Congo." He went on to say that:
"In summary, I only want to negotiate the minimum arrangement at this stage to secure the Board trip. That is, a minor upgrading of the Souanke strip plus possible use of a Congolese air charter. The rest should be there for discussion when I am in Brazzaville with ANAC advised that any such discussions will be much more difficult if I can't get to site next week to analyse the situation first hand."
Mr Steele responded later that day in relatively gloomy terms, saying that he did not believe that the ANAC would ratify the airstrip at Yangadou for use. He proposed, amongst other things, using a Congolese-based carrier "whenever reasonable". He also proposed that Souanke be upgraded at Sundance's expense and used in the short term for all but VIP, heavy load and medevac missions. Mr Carr-Gregg pointed out that it would be more embarrassing paying ANAC fines when they arrived at Yangadou than cancelling the trip to site. He said "the Congo is not Cameroon, and it is quite possible that all of this communication leads to a blackmail attempt of some sort in relation to our departure." He proposed cancelling the flight unless a guarantee could be given that everything was fixed. Mr Lewis replied that the Sundance Board "will make a very clear decision if they tried this sort of stunt". There the documentary trail turns cold. However it appears clear that, at some point on 15 June at the latest, authorisation was given to fly to Yangadou. The inescapable inference in that this authorisation was directly linked to the switch from Jetfly to Aero-Service, a Congolese company. That switch is dealt with in greater detail in section 5.4.1 below.
On 15 June 2010, Mr De Nardi sent Anna Roberts at Sundance (with a copy to Ms Champion at GMP in London), a detailed itinerary for the visit. That referred to the charter flight from Yaoundé to Yangadou on 19 June 2010 but did not refer to the name of any particular carrier. Another internal Sundance document of the same day still refers to Jetfly. The evidence is that Mr De Nardi, based in Perth, never knew of the switch from Jetfly to Aero-Service. In consequence, no-one at Sundance ever told GMP about that switch.
The Exclusion of Liability
On Friday 11 June 2010, Mr De Nardi of Sundance, sent to Mr Fernley at GMP, a Confidentiality Agreement for GMP to sign. It was also copied to Mr Cassley and Mr Young. The covering email said that its purpose was to "allow the Board to speak freely with James on site".
The document was actually entitled a 'Confidentiality and Waiver of Liability Deed'. Although much of it was indeed concerned with confidentiality, clause 14 was an entirely different type of provision. It provided as follows:
"14. EXCLUSION OF LIABILITY
14.1 In order to give effect to the Purpose, the Recipient or Representatives of the Recipient and/or and Affiliate of the Recipient may travel to and from Cameroon, Congo and the Project Area.
14.2 The Recipient acknowledges that:
(a) Any travel to and from Cameroon, Congo and the Project Area and
(b) Being on location Cameroon, Congo and the Project Area,
involves an element of risk and danger and may result in property damage, illness or bodily injury and/or death.
14.3 The Recipient agrees that it will undertake its own investigations regarding the risks and dangers involved with:
(a) Any travel to and from Cameroon, Congo and the Project Area and
(b) Being on location Cameroon, Congo and the Project Area,
shortly before each time any such travel is planned and will advise all its Representatives travelling to Cameroon, Congo and the Project Area of such risks and dangers.
14.4 The Recipient agrees to indemnify and hold harmless the Disclosing party and each of the Disclosing Party's Affiliates and Representatives (together the 'Indemnified Party') from and against all claims, liability, damage, loss, costs and expenses (including attorney fees) arising out of the death or injury to the Recipient, its Affiliates and Representatives ('indemnifier') and the damage to any property of the Indemnifier if the said injury, death or damage results from the acts or omissions, negligent or otherwise, of the Indemnified Party."
Clause 17, which dealt with notices, referred to GMP but the details of addresses and individuals were left blank. The execution of the document was proposed to be by GMP 'by authority of its directors'.
Mr Young sent the document on to Mr Butterworth, as GMP's Head of Legal and Compliance.
On 15 June 2010, Mr De Nardi sent to Mr Cassley a revised deed (version 2). There was no change to clause 14. However, clause 17 had been filled in to refer to GMP Securities Europe LLP, and to include an express reference to Mr Cassley. The execution page also now referred to GMP Securities Europe LLP and the signature of "a duly authorised member". The evidence was that these changes were made by Mr Carr-Gregg.
At about midday of 15 June 2010, Mr Butterworth sent to Mr Young and Mr Morgan (a member of the GMP Partnership), with a copy to Mr Cassley, his own amended version of the original deed (version 3). Mr Butterworth had made some amendments. The first was to identify GMP Securities Europe LLP at clause 17(b). Secondly, instead of the notice being for the attention of Mr Cassley, it was now for the attention of 'the Designated Member, Corporate Finance'. Thirdly, he had changed the execution page to GMP Securities Europe LLP (by authority of its members, in accordance with its constitution). Two signature spaces were left, both for what were called "authorised signatories".
When sending this document on, Mr Butterworth said that it was for signature by Mr Young and Mr Morgan. He said that the deed "has been reviewed and to execution of which by GMP Europe there is no objection in my view from a legal and compliance perspective." I deal in greater detail with Mr Butterworth's explanation for this advice in paragraphs 88-96 below.
Mr Young and Mr Morgan signed this version of the deed (version 4) which was then sent back to Sundance. However, that version was never countersigned by Sundance and so never came into effect. It would appear from the documents that the reason that version 4 was not signed by Sundance was that, when Mr Carr-Gregg came to review the documents, he saw that version 2, with its express reference to Mr Cassley and the need for it to be signed by a GMP Member, had not been followed through. The blank copy of the deed that accompanied his email to Mr Lewis later on 16 June 2010 (the last email he sent on this point) was of version 2. I therefore conclude that this was the version which Sundance (through Mr Carr-Gregg) wanted GMP to sign, but which they never did sign. Sundance did not execute version 2 of the deed either.
Given that the deed was never signed, in any of its versions, and therefore never came into effect, it was originally unclear to me why the document mattered so much at trial. But I was persuaded that it did matter, in part because their reaction to it provided an indication of GMP's attitude to health and safety. As we have already seen, other attempts by Sundance to obtain indemnities from those travelling to this project were met with consternation and downright hostility from the proposed recipients, and those looking after their interests. Mr Longley said at paragraph 37 of his witness statement:
"I strongly felt I would not allow any Sundance or Cam Iron employees under my responsibility to agree to such a waiver."
And yet Mr Butterworth was more than happy to agree to it on behalf of GMP. How did that come about?
Mr Butterworth was cross-examined extensively about this at the trial on the afternoon of 4 February 2015 and the morning of 5 February 2015. He agreed that the clause was unusual and that he had had no previous experience of anyone trying to do this before. He knew that it related to Mr Cassley's trip to Cameroon, but he said he was comfortable with the proposed trip. When asked why, he said that his comfort was based on a conversation that he had had with Andrew Young. However, he could not remember any part of that conversation. He agreed that his evidence amounted to no more than a memory of being satisfied as a result of that conversation, but he could not now remember any particular basis for his satisfaction. Mr Young said that there was no discussion with Mr Butterworth on the practical question of Mr Cassley's safety.
In my view, this was unacceptable. At the very least, a short written note or memo should have been made of what the risks were and how and why those risks had been addressed or dealt with to Mr Butterworth's satisfaction. Such an approach is now GMP's standard practice: I can see no reason why it should not have been their standard practice in 2010. I conclude that the conversation between the two men did not extend beyond a general and brief discussion of Sundance's good reputation as a mining company.
Mr Butterworth was also very honest as to the perceived purpose behind clause 14. He was asked if the clause told him anything about whether Sundance were prepared to accept responsibility for taking care of Mr Cassley. Mr Butterworth said that the clause told him that they were not prepared to accept responsibility for him, and agreed that clause 14 was in fact "a complete shovelling-off of responsibility". He also said that he recognised that at the time, saying that it was 'a very clever' clause, and the sign of a very professional company that was protecting its interests. He said that he recognised that it was an attempt by Sundance to shirk responsibility even in circumstances where they were careless or negligent.
Mr Butterworth sought to excuse his lack of concern about Sundance's attempt to escape liability by saying that "there were no material risks identified". It was unclear what this meant. As Mr Reeve pointed out in cross-examination, the material risks were plainly spelled out in clause 14: a heightened risk of danger, injury and death. It may be that Mr Butterworth was referring back to his conversation with Mr Young, but of course the difficulty with that was that he could not remember what was said. Furthermore Mr Butterworth accepted that this clause made GMP responsible for the risks and for the investigations into those risks. When asked what investigations he understood that he was promising to make pursuant to the clause, all Mr Butterworth could say was that he took comfort from his conversation with Mr Young.
There was then this exchange:
"Q: Mr Butterworth, you should have looked into the risks and dangers of this travel, shouldn't you?
A: In retrospect, now knowing what can be done to do further due diligence on trips, then yes, I would like very much to have had that knowledge at that time. Obviously we now do that, having improved the policy.
Q: So you are clear, I am putting a slightly different point to you, and I want you to have the opportunity to answer it. Forgetting hindsight, having received that clause and having seen the attempt to impose an obligation on you to conduct investigations, and having seen the attempt of Sundance to avoid responsibility for care in making the arrangements, you should, at the very least, have looked into those risks and dangers yourself?
A: I would have liked to, yes."
Following some further cross-examination about the circumstances in which clause 14 was sent to Mr Cassley, there were then these exchanges:
"Q: You were the senior person, you are a lawyer, you are in charge of health and safety. He is a corporate finance associate, six to nine months (after) finishing his probationary period. What on earth was he supposed to make of this?
A: I cannot answer that question.
Q: Do you agree that you and GMP failed in your duty to take reasonable care for James?
A: No.
…
Q: At the time of this email, apart from the contents of clause 14, what information did you have about Sundance's capabilities for organising the trip properly and carefully?
A: Nothing other than their reputation."
When Mr Butterworth claimed that Sundance were saying that they were not going to be liable if something went wrong, I asked him if, on the face of clause 14, it was actually saying rather more than that, because it was expressly warning GMP that they had to do their own investigations. Mr Butterworth gave this answer:
"I can describe it only as a manageable risk, knowing the reputation of Sundance, having my assurances from Andrew Young in a brief conversation that James was a guest of Sundance, I had no concerns, and particularly I had no concerns about signing clause 14, because if I had, it would have been ludicrous to sign clause 14. It was precisely because I had no concerns that I saw no objection to signing clause 14."
This answer was taken up by Mr Reeve on the following day (Day 3). He said:
"Q: I am going to suggest to you that what was critical was your conclusion from your conversation with Mr Young that there were no safety concerns of questions requiring further investigation about the safety of the trip.
A: That's right.
Q: If you had not reached that firm conclusion it would have been ludicrous to proceed as you actually did?
A: Yes.
Q: On your conclusion that there was no cause for concern or further investigation was pivotal, wasn't it?
A: Yes.
…
Q: It follows that if you had had grounds at that point to question the safety or care to be taken in the arrangements by Sundance for James, you would have come to a completely different view of the proposals from Sundance?
A: Yes.
Q: Because the safety of your employee would then be engaged, wouldn't it?
A: Yes.
Q: You would have regarded the waiver as ludicrous in those circumstances?
A: Yes.
Q: It would have been ludicrous in that event because it would have shown Sundance to be shovelling off a liability for taking care in circumstances where it might be necessary?
A: Yes.
Q: It would have been ludicrous because it would have given rise for doubting that they were a responsible person to whom care of your employees could be entrusted?
A: Yes.
Q: I suggest to you that if that had been your train of thought you would have wanted to have nothing more to do with that deed?
A: Yes. That's right.
Q: You would have been concerned that the clause focused on the wrong investigation, that is investigations by you rather than investigations by Sundance for the purposes of making the trip safe.
A: Yes."
I am anxious not to be too critical of Mr Butterworth, who was an honest and thoughtful witness, who was endeavouring to do his best to assist the court. But I have concluded that, although he realised that the wording of the proposed deed was an attempted abdication of responsibility on the part of Sundance, he never thought through the obvious consequences of that for Mr Cassley's health and safety. He was prepared to accept that his email approving clause 14 and notifying Mr Cassley of it was "a pro-forma type act". Unlike Mr Longley, Mr Moorhouse and particularly Vizag Steel (paragraphs 49-51 above), he never considered the deed from a health and safety perspective. I accept Mr Reeve's observation in his closing submissions that this may have been because Mr Butterworth, having sub-contracted responsibility for health and safety matters to Modus, was simply not used to thinking about such matters himself.
Solenta
On Wednesday 9 June 2010, Sundance received an email from Solenta Aviation. It was essentially pitching for the charter flight work that Sundance might have in the future. It was linked back to Mr Steele's email at paragraph 47 above. Parts of the Solenta email read as follows:
"We have been following your expansion in Congo and would like to offer Aviation services to you, should the need arise.
We have full Approved Maintenance Organisation (Part 145AMO) facilities in Abidjan, Côte d'Ivoire and Accra, Ghana and Line Maintenance Facilities and approval in Dakar, Niger, Lomé.
We have five B1900D's and three ATR42's presently in the region, we have over USD $1 million worth of spares and tooling situated in Dakar, Abidjan, Accra, Niamey and Lomé.
Our aircraft will be sent up with a dedicated spares pack, as well as a dedicated engineer, and would have access to our extensive spares pool based across West Africa…
Solenta is Safety and Quality Audit approved by VALE, BP, BHP Billiton, Goldfields Gold, Newmont Gold, Total Oil, Anadarko Oil, Tullow Oil, DHL, ICRC, UN, WFP, ENI/AGIP, as well as several Civil Aviation Authorities all over Africa and the Middle East."
It is noteworthy that, alone of all the charter operators involved in this case, Solenta were the only ones to refer expressly to their safety and quality audit.
This email found its way to Mr Longley of Sundance, the General Manager at the site. He sent an email on Monday 14 June 2010 to Mr Duff of Dynamiq asking him to make contact with Solenta to see if they could fly in and out of Yangadou and to obtain a "ball-park indicative pricing". In his evidence Mr Longley said that, at least at the time that he sent this email, he was thinking in terms of Sundance's longer term requirements as to charter flights, as opposed to the forthcoming flight on 19 June 2010.
However, it is clear that that intention was not shared by Mr Duff. Because of the ongoing difficulties with obtaining authorisation for a flight to land at Yangadou (see Section 5.1 above) Mr Duff said, in an email to Mr Lewis dated Monday 14 June 2010, that he had contacted Solenta specifically in connection with the forthcoming flight on 19 June 2010. He said:
"…they will be sending through their capabilities and costs today.
…they have a BEECH 1900 available in Ghana which might be able to be used…they have to look at our airstrip recce provided by MSS first as it is a much bigger craft."
The quotation from Solenta, also dated 14 June 2010, was plainly for the flight on 19 June 2010 (what Solenta called "your requested mission"). The quotation was detailed and again expressly referred to airline safety standards, and performance and safety criteria. It stressed that Solenta Aviation was OGP approved: "the very high safety and quality standard set by the Oil and Gas Producers Industry".
Although Mr Longley maintained in his evidence that he had thought that enquiries were being pursued by Solenta for general purposes, rather than for the purposes for the June flight, he acknowledged that the quotation for this particular flight from Solenta was expressly emailed on to him later on Monday 14 June 2010. He was asked if he had considered this quotation for the purposes of engaging Solenta to provide the flight on 19 June 2010. He said No, adding that "I didn't join the dots at the time". It was unclear as to whether he had done anything further in relation to this Solenta quotation. Mr Duff, on the same day, did take the matter forward because he said he liked what he was seeing and asked for a quote for his immediate need, namely the flight on 19 June 2010. Mr Longley said he was unaware of this.
The quotation from Solenta came the following day on 15 June 2010. The quote was USD $35,000. The quote made plain that the flight would be done in two rotations (namely, the passengers would be split over two flights), and it made the point that most/all aircraft would need two rotations to achieve these missions. Again the quotation was expressly based on the ways in which to achieve the result of getting the passengers to Yangadou "safely i.e. airline performance standards". Mr Longley could not remember seeing the quotation but did think that he 'remembered the numbers'.
It is very unclear what happened to this quotation. Mr Longley had originally said he could not remember any conversations in respect of it and said that Mr Kriege was dealing with the detail. He said he left everything to Mr Kriege and could not remember the specifics. Subsequently he thought that Mr Kriege had mentioned that Solenta might have had difficulty in obtaining authorisation to land at Yangadou.
On Wednesday 16 June 2010 Solenta chased Mr Duff for a response to their quotation. They made it plain that "if we don't apply for clearances by today, we may run the risk of not getting them in time to do the flights. Clearances normally take 2-3 working days…"
At some point on that Wednesday, a decision was taken by somebody at Sundance (I conclude that it must have been Mr Lewis) to reject the Solenta quotation. When Mr Duff emailed Solenta later on the Wednesday he did not say that the problem was anything to do with permits, although (because they were not a Congolese-registered carrier) Solenta would have had precisely the same difficulties as Jetfly in obtaining authorisation to land at Yangadou. I note that all three experts have subsequently agreed that, for the flight in question, it was necessary to charter a Congo-approved charter. In addition, another reason for the rejection of Solenta's quotation may well have been financial. They themselves acknowledged that their quotation was expensive because it involved two flights, although they had stressed the safety aspects of this.
The Solenta story does not quite end there. In their response, Solenta said that they quite understood the rejection, again referring to cost. They then went on to say this:
"As a service to you, and only if you want, let us know how you are going to do this charter flight (aircraft type, route, payload) so that we can check up for you if it is being offered safely and legally. Many operators operate illegally and unsafely just to win the business. We have the performance software/graphs of most aircraft to analyse. Solenta will not compromise safety to win a flight."
Even endeavouring to put all hindsight to one side, it is a striking feature of the material from Solenta that safety considerations were treated as a matter of paramount importance. The offer to undertake a safety check of the flight eventually organised was not taken up by Sundance.
Although there was no pleaded case in respect of Solenta, the suggestion in the claimants' closing submissions was that, in some way, Sundance should have chosen them as alternative carriers to Aero-Service. It is as well to deal with that allegation here. I accept Sundance's case that they had no reason to prefer Solenta, a carrier of whom they had no experience and about whom they knew very little (other than what Solenta itself had told them) over Aero-Service, a carrier they had used successfully before. In addition, I accept the proposition that, realistically, there was insufficient time between Solenta's first pitch for the business, and the date of the proposed trip, in order to allow Sundance to make the necessary enquiries in order for the June flight to go ahead with Solenta. Still further, I find that, on the balance of probabilities, even if Sundance had decided that Solenta should make the flight, because they were registered in Ghana and thus were not authorised to land at Yangadou by the Congolese authorities, Solenta would not have been permitted to make this flight anyway.
For all those reasons, therefore, to the extent that it was the claimants' case that Sundance should have used Solenta for the flight on 19 June, I reject that case as unpleaded, unrealistic, and – most importantly – contrary to the evidence. Of course I accept that, if Solenta had made their pitch for the business a month of two before, then the position might have been very different, but that is simply too speculative for the purposes of the claimants' case.
The Late Changes
The Carrier
Although, as I have said, there is no evidence as to precisely how and when the arrangement with Jetfly was cancelled, it appears that, at some point on 15 June 2010, somebody at Sundance (again, I infer that it was Mr Lewis) decided to cancel the order with Jetfly and instead to ask Aero-Service to undertake the flight. This can be seen from the email of that date to Mr Steele from Mr Lewis in which he asked Mr Steele to advise Mr Carr-Gregg and him of the plane details, so that they could advise the Board and Mr Carr-Gregg could arrange insurance. Mr Lewis went on to ask:
"Can you also check out their maintenance protocols, pilot experience, etc as I am sure that some of the Board will ask this re safety, etc."
It seems to me plain this email confirmed that, by then, the switch had been made to Aero-Service. No such request was necessary for Jetfly, as this information had long since been provided. The email also recognised that, even though Sundance had used Aero-Service before, they did not have all the formal documentation which Mr Lewis felt they needed. This request from Mr Lewis echoes his earlier request to Mr Carr-Gregg (paragraphs 33-36 above) and, in my view, makes reasonably clear that that earlier request had not been followed up in the interim.
There is nothing to suggest that Mr Steele undertook the work that Mr Lewis asked him to do. He replied to say that he thought it was the same plane and same pilot. Everyone assumed that that was a reference to the same plane and the same pilot that had undertaken the trip from Douala on 19 March 2010. On the same day, Mr Carr-Gregg emailed Mr Lewis to say that they needed to switch insurances from Jetfly "to Congo charterer in country".
After that, Mr Duff was asked to provide details about the aircraft, call-signs, flight plan and so on. Captain Gillespie, GMP's expert, agreed that this was 'pure housekeeping' and did not relate to matters of safety. He was of a similar view about the subsequent email from Mr Carr-Gregg which sought the same information and insurance details. Thus, I find that – on the balance of probabilities – the specific request that Mr Lewis made, for Aero-Service's maintenance protocols and the like, was never actioned. However, I also find that, because the evidence was that Mr Lewis had to approve every flight, it is a proper inference to draw that he approved the Aero-Service flight on 19 June 2010, based on the information which he had available at the time. He would therefore have known that he did not have the further information he had asked for, but he considered that he knew enough to sanction the use of Aero-Service for a second flight.
In the run-up to the flight, Mr Cassley was never told about the late change of carrier. He was in Canada, where he had trouble picking up or opening documents on his Blackberry. Because of those difficulties, which are clearly documented, I find that, on the balance of probabilities (and to the extent that it matters), Mr Cassley had not read clause 14 of the deed[2]. Although at one point he said that he was prepared to sign the deed himself, I find that this was because he thought that it was concerned with confidentiality. Clause 14, of course, was something very different. When eventually he received the itinerary that he had been chasing, it was no more than a copy of the previous version, which had not referred to Jetfly; the version sent to him on 16 June 2010 did not refer to Aero-Service.
The Aircraft
On 15 June 2010, when the switch to Aero-Service was made, Mr Carr-Gregg had expressly asked Mr Steele whether it was the same plane and pilots as the last time. Mr Steele had said that he thought that it was. It does not seem that this belief ever changed. Mr Steele's subsequent emails (in which he admits that he was "starting to fall a bit behind on the program") do not indicate otherwise. Indeed, it appears that this was precisely what Aero-Service were telling him. Their email on 16 June 2010 said that "the aircraft that will carry out the flight is the same one that you have already used recently."
But a closer reading of this same email from Aero-Service shows that it referred to the type of plane as a CASA C-212-100. That was not the plane that had flown to Yangadou in March 2010. Accordingly it appears that, although Aero-Service seemed to be saying that it was the same plane, they were actually planning to use a different plane. Moreover, the insurance details which they provided to Mr Carr-Gregg were for the CASA C-212-100, the plane that was used for the accident flight, rather than the previous flight in March. Nobody at Sundance appeared to pick up on the potential discrepancy, so it may only have been when they boarded the plane on Saturday 19 June 2010 that the Sundance representatives realised that it was a different plane to the one that had made the landing at Yangadou on 19 March 2010.
In the late afternoon of 15 June, Mr Carr-Gregg told his brokers that the carrier had changed and would now be Aero-Service, "the same carrier that we used on the Minister's flight". He sought an insurance quote and chased it again just after lunch on the following day, 16 June. At 3.46pm his brokers responded setting out the detail of the insurance for the charter flight. The insurance was in respect of the six directors and was said to be a maximum of $10 million "agg limit". The email made plain that the insurer "has confirmed cover for the charter flights in this occasion". It is plain, therefore, following the documentary trail, that there was no difficulty in Sundance obtaining the appropriate insurance for the charter flights to be performed by Aero-Service on 19 and 20 June.
The Flight Plan
The original flight plan showed a straightforward flight from Yaoundé to Yangadou at about 11,000 feet. The flight was over relatively flat, dense jungle. The only ridge that it overflew was the eastern end of the Nkout ridge which rose above 250m from the jungle floor. The flight involved Instrument Flight Rules ("IFR") with a change to Visual Flight Rules ("VFR") for the approach and descent at Yangadou. The flight plan indicated that, if the meteorological conditions at Yangadou were unsatisfactory, the flight would divert to Ouessa or, in a worst-case scenario, return to Yaoundé. This option also remained part of the amended flight plan.
Mr Longley suggested that the Sundance Board always wanted to overfly the mine at Avima. He said that, although that was owned and operated by Core Mining, Sundance were and had always been interested in acquiring the rights to that site. Be that as it may, I find that the change to the original flight path, to involve the overfly at Avima, was not made until late on 18 June 2010. Indeed, formal confirmation of it was not provided to Mr Longley, who was waiting at Yangadou, until the morning of 19 June 2010. It is not known why this change in the flight plan was made so late.
The Journey Management System ("JMS") in respect of the changed flight plan showed a flight to Avima, on a course that was a little southwest of the original flight plan, and then an easterly course to Yangadou (much like the trip that Mr Longley had taken on 30 March 2010). The flight from Yaoundé to Avima would have been very similar to the original flight plan with the plane passing over the western (and slightly lower) edge of the ridge at Nkout, rather than the eastern edge. The Avima ridge itself rose around 200m above the Avima mining site. The only significant change was that the transition from IFR to VFR would have happened earlier in the flight, so as to allow the overfly at Avima, and the flight from there to Yangadou.
I also note that a post-accident email dated 20 June indicates that Aero-Service were in contact with Jetfly prior to the accident flight in order to obtain coordinates. It is therefore reasonable to infer that Aero-Service spoke to Jetfly so that they could enquire about the flight that Jetfly had taken in March, with Mr Longley on board, to over-fly the Avima mine. In consequence of this, the Aero-Service crew pre-programmed the Avima way points into the GPS they were using for navigation. That suggests a considerable degree of care being taken by Aero-Service in connection with this late change of route.
Captain Gillespie described both the original flight plan and the modified flight plan as a 'low risk, routine flight'. Professor Ball (Sundance's expert) agreed with that description of the flights as planned. Mr Watson had a separate point to make about the absence of GPWS on the aircraft (which I deal with at paragraphs 254-266 below) but beyond that, it was unclear whether he took a different view, and if so, why? He was much too given to a hindsight analysis to address this question properly: at one point he appeared to suggest that, because the plane crashed, it must have been a high risk flight from the outset. For the avoidance of doubt, I reject that approach. In my view, there were no foreseeable risks in respect of this flight plan (either original or modified). I therefore accept Captain Gillespie's evidence and his summary, to the effect that the risks associated with this flight were very similar to the type of low-level risks faced every day by tourists on safari trips in Africa.
Consequences
The last-minute changes meant that:
(a) The flight was being operated by a company who had not been asked for all the documentation which Mr Lewis had indicated that he wanted to see, but which he had approved not once, but twice.
(b) The flight was being undertaken by an aircraft which had not landed at Yangadou before, although there is nothing in the evidence to suggest that the CASA 212-100 was not capable of undertaking the flight and landing there.
(c) The pilots on board had never flown from Yaoundé to Yangadou before, although they had flown from Douala to Yangadou in March, with the Congolese Minister of Mines.
(d) The transition from IFR to VFR would occur earlier in the flight, to allow the overfly at Avima, thereby necessitating a longer period of low-level flying.
I find that none of these changes altered the fact that the flight on which Mr Cassley embarked on 19 June 2010 remained a low risk, routine flight.
I also accept that this is one important area of the case where Sundance (and therefore to an extent, GMP) are hampered by the unhappy fact that their representatives on the ground at Yaoundé on 18/19 June 2010 were unable to give evidence at the trial. There would inevitably have been oral exchanges between the members of the Sundance Board about the new carrier and the new route. There would have also been exchanges between them and the pilots. As a matter of inference, based on what I know of the individuals involved, I accept the submissions (set out in paragraph 2.3.3 of Mr Ross QC's closing submissions) that, if Mr Lewis or any of the Sundance Board had any reservations about the carrier or the amended flight path, the flight would not have gone ahead. Although this part of the trip was not unimportant, there were other elements of the trip, including those parts which did not involve Mr Cassley (such as a meeting with the President of the Republic of Congo) which were much more significant. A visit to the Nabeba mine was not of such importance that the Sundance Board would have been prepared to take foreseeable risks in order to undertake it.
6. THE FLIGHT ON 19 JUNE 2010
The aircraft was the CASA C-212-100 Aviocar aircraft. The captain was Mr Canal and the co-pilot was Mr Hollingsworth. On board were nine passengers: six members of the Sundance Board including Mr Lewis, Mr Talbot and Mr Carr-Gregg; Mr Talbot's PA; Mr Duff of Dynamiq and Mr Cassley.
The flight took off at 8:13am on the morning of 19 June 2010 from Yaoundé. The flight was expected to last just over an hour. At 8:30am, the crew informed Yaoundé that the aircraft was stable at flight level 110 and was in contact with Brazzaville Flight Information centre. The tower controller asked them to maintain flight level 110 and to continue the flight with Brazzaville Flight Information Centre. That was their last contact with Yaoundé. The crew continued in radio contact with Brazzaville until about 8:50am.
At about 9:00am the aircraft was approaching the area of the Avima mine. That was on the southern side of the Avima ridge. The area was in cloud. The aircraft began to descend, preparatory to overflying the mine. This involved the transition to VFR.
The aircraft flew into cloud but continued to descend. At 9:15am the aircraft flew into the Avima ridge, which the pilots could not see because of the cloud. For whatever reason, the pilots did not know that the ridge was there.
At the time of the crash the aircraft was flying at full and stable power. It was in cruise control. It was flying parallel to the ground. The long trail of wreckage confirmed each of those findings.
Mr Longley was at Yangadou waiting to receive the flight. He said that there was some early morning mist but that this had cleared away by 9:00am. This contrasts with the Air Accident Report, which suggests that there was "thick fog" at Yangadou. Since Mr Longley was not challenged on his evidence that that was not the case, I find that there was no relevant cloud at Yangadou at the time of the accident, 70km west at Avima.
7. THE CAUSES OF THE CRASH
Introduction
In my view, the twin causes of the crash were pilot error: the decision to fly into the cloud when descending (a breach of VFR), and the failure to identify the proximity of the Avima Ridge. I think that these errors can, in one sense at least, be traced back to some of the details in the audits undertaken on Aero-Service by another company, MPD Congo SA ("MPD"). It is therefore appropriate to summarise those audits first before going on to deal with the Air Accident Report, even though the audits were not seen by Sundance – or any other party to this case – until after the accident.
It must also be stressed at the outset that, despite the individual failings identified in these audits, their general conclusions about Aero-Service, and the service that they provided, were extremely positive. Based on them, MPD were happy to use them to supply two flights a week to air bush strips serving their Zanaga project, over an 18 month period.
The MPD Audits
Wyvern (January 2009)
The Wyvern audit was carried out by reference to the Republic of Congo audit requirements. It identifies the following areas as needing improvement:
(a) Protracted and on-going maintenance programmes and delays in the supply of replacement parts;
(b) The flight preparation paperwork and loading procedures were described as 'scruffy' and the format needed to be redesigned;
(c) The quality, experience and training of cabin staff was not addressed and was an outstanding issue;
(d) Matters of health and safety had been given little or no consideration for some time;
(e) No annual or continuation training was provided so there were no records to be maintained; and
(f) There were no written policies in the Operations Manual.
The conclusions were:
"Aero-Service aircraft serviceability rate is poor. Under-funding for day to day needs is apparent and licensed engineering support is barely sufficient. However there are no other operators in competition with this company at present."
Three recommendations were made that were relevant to both Aero-Service and MPD:
"MPD Development plans will generate a dramatic increase in the headcount and there will be an urgent need to transport these people in and out of camp reliably and on schedule. Three recommendations are made that are relevant to both Aero-Service and to MPD Congo –
( Provision of suitable aircraft, funded, operated and maintained to recognised standards.
( A back-up aircraft availability.
A contract between the operator and MPD for shared or exclusive use of the aircraft for use on MPD travel schedule."
There was no criticism as such of any particular aspect of their health and safety regime.
FSS Audit: 3 August 2009
The conclusions of this audit were very positive:
"The standard of service provided by Aero-Service using its CASA 212 100/300 and Cessna 402/404 aircraft largely complies with the guidelines laid down in the OGP Aircraft Management Guide (considered industry best practice). Some minor exceptions are noted in the following report, but MPD Congo can be confident of a reliable and proficient service to support the camp at Lefoutou and other established routes…"
MPD were warned that ANAC was undergoing an audit by representatives of the International Civil Aviation Organisation ("ICAO") which included visits to all Congolese aviation companies. As a result few, if any, air operators, had been granted Air Operator's Certificates ("AOC") and most had been granted temporary derogation. It was anticipated that full AOCs would be issued in due course.
The audit itself found a number of areas which required improvement. These included:
(a) Aero-Service did not have a Safety Management System;
(b) No Emergency Response Plan had been developed or exercised;
(c) Aero-Service did not have a functioning quality system;
(d) The draft training manual did not specify recurrent training requirements;
(e) Aero-Service had not published a company safety policy;
(f) The draft Operations Manual did not contain guidance on the conduct of instrument approaches and other matters;
(g) Aero-Service did not conduct CFIT training; and
(h) Aero-Service did not hold approval from ANAC in respect of Operations Manual and the Maintenance Management Manual.
The audit pro-forma, which was similar to the form used and recommended by the OGP regulations, made plain that the CASA C-212-300 Aviocar aircraft had no ground proximity warning system ("GPWS"). I should add that, although there was no similar checklist done on the plane involved in the accident, it was common ground that that aircraft too did not have GPWS. This was not noted as a particular issue or problem.
FSS Audit: 11 and 12 February 2010
This audit (also carried out by reference to the OGP Regulations) is the most relevant audit because it was the closest in time to the accident. The key passages in the 'Conclusions' section were as follows:
"The core problem is that AS has been operating successfully in an informal and safe fashion for many years, and there has been little pressure from ANAC to change. However the international aviation community has developed in this time and become much more formal with a corresponding reduction in accidents. AS needs to formalise its current operating procedures and has begun to do this with a new operations manual. But more needs to be done: Safety Management, Quality assurance, Aircraft Standard Operating Procedures, Emergency response Plan are all key issues that need to be addressed. Communication within the company from management to the staff, pilots and engineers needs to be more formal to ensure vital information is transmitted correctly.
AS is recommended to go through a process of closing the gap between its current practices and those recommended by both ICAO and the OGP guidelines. Although some of these are listed in this report, an audit is only a sampling process and there may be others. These should be easily discovered if both the sound QA system is put in place and an in-depth risk assessment (requirement of a Safety Management System) is carried out. AS can then correct its own deficiencies rather than have them brought to its attention by external auditors.
The findings also indicate that AS is leaving individuals to their own devices in several ways. It should be remembered that the company has a legal responsibility to exercise control over its operations. This can be brought about by standardisation in every respect – Standard Operating Procedures for the aircraft, reliable communication to all personnel and other procedures are all ways of ensuring that the way personnel work is according to the company standard. This may have serious safety implications as standardisation reduces the chance of an error in flight, because the crew are following the same procedures and each knows what the other should be doing.
Particular areas of concern in flight operations are: the lack of an SMS, a QA system and an Emergency Response Plan…
These points aside, Aero-Service provides a good and reliable service to MPD."
Within the audit report itself, it was noted that the corrective actions required by the findings in the audit of August 2009 were still outstanding. These included the absence of a Safety Management System. Although a manual had been drafted, the safety officer had not been trained and only had a limited knowledge of what to do. In addition, there was no Aviation Safety Policy, no Emergency Response Plan, no Quality System for Flight Operations and no training for CFIT. The position was, therefore, broadly the same before. This time, the audit expressly referred to the existence of an AOC.
The audit also said that CFIT avoidance was important due to the number of accidents from that cause. The aircraft was not equipped with GPWS which was not identified as a problem itself, but the audit noted that it made this training even more important. No such training had yet been done.
The audit went on to note that the pilots had no facility for flight planning or operations. This was noted as a failing. The pilots did their planning in their own homes, but that was not subject to Aero-Service standardisation. The audit also referred to various other non-compliances. There was reference to a new flight operations manual, although the pilots had not seen it. It recommended the provision of a library, a computer and company organisation for the pilots. The aircraft checklist was again done on the CASA C-212-300 Aviocar aircraft and the same matters as before were noted.
The man who undertook the February 2010 audit was Mr Colin Sole. He produced a witness statement which explained and amplified the audit. His conclusion was at paragraph 22 of his witness statement:
"Taking all of the factors identified in my audit of Aero-Service in the round, while the operator did not meet the AMG guidelines in some respects, it was my view, in the context of factors such as the competence and experience of the pilots in bush flying, and the condition and maintenance of the aircraft, that these were not high risk factors, and that the CASA planes operated by Aero-Service were safe and suitable for use."
Mr Sole was not cross-examined on his audit or this summary.
2.4 The View of MPD
Each of the three audits referred to above were seen by Mr Colin Harris who was closely involved in the Zanaga project on behalf of MPD, and which explained their need for a reliable charter flight company. Mr Harris' witness statement (on which he was not challenged) makes plain that the audits were carefully studied and that, on the basis of the detailed findings, MPD were quite content to use Aero-Service twice a week and sometimes up to four times a week. His statement refers repeatedly to the good service provided by Aero-Service, and the experience and competence of their pilots. Mr Harris makes plain at paragraph 18 of his statement that, if MPD had not been satisfied with Aero-Service's performance as described in the audits and/or had Aero-Service failed an audit, MPD would not have used them to travel to the Zanaga project.
Mr Harris was aware that Aero-Service was on the EU blacklist, but he explained that it was his understanding that all Congolese operators were blacklisted because of difficulties with ANAC. He thought many African air charters were on the EU blacklist for the same reasons. He concluded paragraph 19 of his statement by saying:
"The fact that Aero-Service was on the EU blacklist did not, to me, (or, as far as I am aware, the auditors we instructed) indicate that Aero-Service was an unsafe operator."
It should be noted that one of the allegations against GMP and Sundance (in particular) is that, if they had undertaken proper investigations, they would have discovered that Aero-Service 'would not have passed an audit'. As is apparent from the forgoing, this allegation is wholly unfounded. Not only would Aero-Service have passed an audit, but they did in fact pass these three audits. Indeed, there is no evidence that Aero-Service ever failed an audit. What is more, it seems plain that, if Sundance had made more detailed enquiries of Aero-Service, these three audits and/or the response to these audits by MPD would have become known to Sundance. On the face of it, therefore it appears that, if Sundance had found out more information, it would have confirmed their view that Aero-Service were an appropriate company, capable of flying safely to and from the bush strip at Yangadou.
7.3 The Allegations About Aero-Service's Poor Accident Record
The claimants' pleaded case alleges that Aero-Service had a poor accident/incident record and that this should have been known to GMP and/or Sundance. It was said that the information should have been obtained via a particular web-site (www.aviation-safety.net).
There was no evidence adduced at all about these alleged accidents/incidents. Neither was there any evidence that either GMP or Sundance should have made the enquiries alleged, or discovered this purported history. In short, the claimants adduced no evidence in support of this part of their pleaded case. It was the subject of neither the written opening nor the written closing submissions. Paragraphs 11(6) and 15(1) of Mr Williams' closing submissions on behalf of Sundance said expressly that Sundance had assumed that this part of the claimants' case had been abandoned. Mr Reeve did not suggest to the contrary. I therefore dismiss this part of the claimant's pleaded case.
4 The Air Accident Report: February 2012
The Air Accident Report was dated February 2012. It made plain that it was not conducted in order to establish fault or to evaluate individual or collective responsibilities. It was produced with the assistance of an independent French organisation.
From the 'Basic Information' section of the Report I note the following observations:
"1.7 Meteorological Conditions
The crew carrying out the journey N'Simalen/Yangadou on 19 June 2010 which took off at 08:13, had not requested the weather forecast from the Bureau Meteo Principal of Yaoundé N'Simalen the day before when preparing for the flight. The airline Aero-Service indicates that its crew sometimes use meteorological information issued on the internet."
Identifying the daily weather forecast from Yaoundé airport, the report stated that "the cloud ceiling was low between 0700 and 1030."
Also in this section of the Report there was a section dealing with navigation aids. This said:
"There are no electrical radio aids for navigation in the zone where the accident happened. The aeroplane was equipped with two VOR, two ADF and one GPS. The aeroplane was not equipped with an Enhanced Ground Proximity Warning System ("EGPWS"), the crew had no aeronautical charts enabling Visual Flight Rules. In order to navigate in this zone, the crew used the MAP 496 GPS on board…no path was recorded during the occurrence of the flight. An examination of the configuration pages enable the confirmation that the saving function was not activated. The memory space dedicated to GPS points is empty."
The Report indicated that, although no aeronautical charts were found in the crashed aircraft, other documents were found, including a Google image showing a flight path and the destination and the turning point situated to the west of Avima.
The 'Analysis' section of the Report is divided between the preparation for the flight and the flight itself. In the 'Preparation' section, the following were noted:
"The Preparation of the Route:
The documents found on the aeroplane and the turning points entered in the GPS show that the aeroplane did not follow the route as written on the initial flight plan filed the day before.
Aeronautical Documentation:
There was no evidence that the crew filed aeronautical documentation showing the ground relief and peak altitudes.
The crew did not request the weather forecast.
The documents found in the aeroplane and the points on the GPS that were introduced show that the crew changed flight paths."
In the part of the Report dealing with the flight, it noted the change in the path and said:
"The proposed flight of the client found at the accident site shows that the pilot had to change his initial route in order to go through a point situated to the west of Avima and then to fly over Avima where there are mines, and then to go directly towards Yangadou situated 30nm further east…the pilots had decided to descend to overfly the mining site which is at an altitude of 3,200 feet. It is likely that during the descent, the crew was not aware of the relief [the Avima ridge] on its flight path, peaking at 3,900 feet in an area where there was dense cloud cover. On site, the analysis carried out on the wreckage as well as the spectral analyses of the cockpit voice recorder showed that the aeroplane was flying at a consistent speed."
The causes of the accident were noted as follows:
"The accident was a result of the collision of the aircraft with ground during an improvised phase of flight at a low height.
Contributions to this accident:
The late change in the route on request by the client to overfly a mining site at a low height;
The descent of the aeroplane to a low height without precise knowledge of the region's topography;
The meteorological conditions on the day which prevented the crew from being able to identify obstacles in time."
In relation to the recommendations, the following reminders were made in the Report:
"( Flights at a low altitude must be prepared with appropriate navigation maps in the zone that is being flown over;
Any change to the flight plan in the air must be as a result of information given my [by? to?] air traffic organisations."
As to security, the following were recommended:
"( Crews must make themselves aware of metrological conditions according to the meteorological centre at the departure aerodrome by going on site…
Commercial transport aeroplanes must all be equipped with an Enhanced Ground Proximity Warning System (EGPWS)."
Finally, as I have already noted, the Report can only sensibly be read as confirming the existence of both a current AOC and a current Airworthiness Certificate for the plane that was destroyed in the accident. That is also consistent with other documentation. If these documents had not existed, the Report would have said so. In addition, because the Report made no mention of any failure to comply with existing ANAC Regulations, it is reasonable to infer that the investigators did not consider that any aspect of the accident demonstrated a breach of ANAC's Regulations in force at the time. That would, of course, include the absence of a GPWS system. I revert to this topic at paragraphs 254-266 below.
Conclusions
In my judgment, the accident happened for a number of reasons.
First, there was a lack of any formal safety procedures at Aero-Service. They did not have a Safety Policy, nor an Emergency Response Plan, nor a Quality Assurance System. They had a safety officer who had not been trained and a draft manual which the pilots had not seen. There was, to use the cliché, no formal culture of safety. I should however say that I am not persuaded that the absence of an SMS was of any great significance: the evidence was that, in the UK, there are plenty of operators without a CAA approved SMS. The USA only adopted SMS as a regulatory requirement at the start of 2015.
This background had a number of links to the subsequent accident. One was the failure on the part of Aero-Service to carry out any training for the avoidance of CFIT. This accident was a Controlled Flight Into Terrain, something which the auditors had identified as being a matter in respect of which no avoidance training had been carried out. The impression given is that the pilots at Aero-Service had no particular understanding of this problem. This was not insignificant because none of the Aero-Service planes had been fitted with GPWS.
Secondly, as the audits pointed out, there was no facility for flight planning. Captain Gillespie, GMP's expert, was dismissive about this and said that this was not a problem, and that he had often planned commercial flights in hotel lobbies. With respect, I think that misses the point. If there was no facility for flight planning, it was not clear whether any proper flight planning was actually being done at all or, if it was, how it was being done. This absence of a planning facility was important for the reason noted below.
I find as a fact that there were no aeronautical charts on board the plane. No such charts were found at the crash site. Because it is clear from the Air Accident Investigation Report that other documents did survive the accident, it is not a realistic possibility that the charts were burnt or otherwise lost. Moreover, the evidence was that aeronautical charts are substantial and, if they had been on board, would have been in books in the door pockets in the cabin. The absence of such charts, and the absence of a facility for flight planning, point inexorably to the conclusion that this flight was not properly planned and that, in particular, even though they knew that they were going to overfly the Avima mine, the pilots were unaware of the precise location and dimensions of the Avima ridge. What makes this failure surprising is that, as noted in paragraph 120 above, the evidence suggests that the Aero-Service pilots had contacted their counterparts at Jetfly to obtain more information about the flight which Jetfly had undertaken in March to overfly the Avima mine.
The failure to plan the flight properly was not limited to an ignorance of the physical topography. The air accident report makes clear that the pilots had not asked for any meteorological data. Although Aero-Service say that the pilots often obtained their own information from the internet, the lack of a planning facility was again another obstacle to the pilots obtaining all relevant meteorological information. Accordingly, the pilots did not know and did not find out what the weather was going to be like at Avima.
Although the failings which I have noted came together as the flight began to descend to overfly the Avima mine, the primary cause of the accident remained pilot error. The pilots were faced with cloud which they did not expect, but they ought not to have flown into or through that cloud cover. They should have instead abandoned the overfly of the Avima ridge, and they should have continued onto Yangadou where, as I have noted, there was no cloud cover and they could have landed safely. Instead, they entered the transition to VFR, which meant that they flew into the cloud and could not see where they were going. That was a basic error. Ultimately, they struck a ridge because they did not know that it was there. That was a second basic error. The errors made were both one-off mistakes, even if they could be linked back (at least indirectly) to the inadequate culture of safety at Aero-Service. One of the central issues in this case is whether that background should have been reasonably known to either Sundance or GMP and, if so, what difference (if any) that would have made.
8. STANDARDS AND STATISTICS
8.1 General
In this case, the Amended Particulars of Claim does not put the claimants' case by reference to any published standards or written guidance concerning the assessment of travel risks for those in the position of GMP and Sundance. The experts agree that there were no standards or standard practice for the assessment of travel risks or aviation charters (see paragraphs 9-12 of their Joint Statement). Accordingly, in many ways, the standards to which reference is made below, which were identified during the evidence, are of marginal relevance to the issues in the case. However, given that they were the subject of extensive cross-examination it is necessary at least to identify them.
8.2 ICAO Annex 6
The requirements in ICAO Annex 6 are designed to make mandatory various parts of the Chicago Convention. These are standards which should be applied by State regulatory authorities. However, operators have no specific obligation to ICAO to abide by these standards and every signatory State has the right to opt out of, or modify, any individual requirement.
One of the requirements of Annex 6 was that every aircraft should have a GPWS. However, all over the world, there are plenty of aircraft in service that were manufactured without a GPWS, and where the installation of a GPWS system into an existing aircraft would be prohibitively expensive. Accordingly, some State regulators do not require GPWS and/or permit a 'difference' from the ICAO.
In the present case, the relevant regulatory body is ANAC. They have not provided a copy of their Regulations that were in operation at the time of the accident flight. It is therefore not known whether or not they required GPWS on every aircraft. However, as already explained, I find that the inference must be that they did not. I have found as a fact that Aero-Service had an AOC and I have also found as a fact that neither of their CASA aeroplanes had GPWS. The only appropriate inference to draw is that ANAC had expressly approved this 'difference', a view supported by the absence of any reference to the lack of GPWS as a breach of Regulations in the Air Accident Report.
It is important not to confuse GPWS with the Enhanced Ground Proximity Warning System ("EGPWS"), to which reference is made in the Report. That is a new and improved system of GPWS which is not mandatory under Annex 6. The Report recommended that such a system be fitted into aircraft of this type which, in its own way, is a telling point: EGPWS, because it gives greater warning of the terrain in front, as well as below, might have prevented this accident. That explains the recommendation. A standard GPWS was not recommended, presumably because the investigators concluded that it would not have prevented the accident.
The experts did not suggest that either defendant should have been aware of ICAO or Annex 6. Mr Watson expressly conceded that he did not expect Sundance to know about them. There is no reason, therefore, why GMP would have known about ICAO or Annex 6.
8.3 The ANAC Regulations
For the avoidance of doubt, I accept the defendants' submissions that it is a fair inference that Aero-Service were not in breach of any part of the ANAC Regulations at the time of the accident. That inference is based on the fact that the Air Accident Report, does not suggest, anywhere in its pages, that Aero-Service were in breach of the applicable Regulations. I accept the suggestion that it would be an extraordinary omission from the Report if some failing on the part of Aero-Service, relevant to the causes of the accident, was not identified fairly and squarely as a breach of the ANAC Regulations.
8.4 The OGP 'Aircraft Management Guidelines' ("AMG")
These guidelines were produced by oil and gas producers, who are extensive users of chartered aircraft. The AMG guidelines were therefore relevant to oil and gas producers, but were not relevant to GMP (a bank) and Sundance (a mining company). Mr Watson accepted in cross-examination that he did not consider that Sundance should have been aware of these guidelines and none of the experts expressed the view that GMP (or Sundance) should be judged by the standard of OGP members.
8.5 The Flight Safety Foundation Basic Risk Standard
This standard (known as BARS), is referred to in a number of the pleadings. However, it seems to me plain that BARS could not possibly apply to either GMP or Sundance. First, they were not produced until either December 2009 or early 2010. By June 2010 the BARS scheme could only fairly be described as being in its infancy. Secondly, they were produced by the Flight Safety Foundation and there is no evidence that either GMP or Sundance were (or should have been) aware of the Foundation or the guidelines that they have had produced. Thirdly, the BARS scheme was concerned with audits of aircraft operators and, by 2013, it became apparent that there were very few companies who either had audited or had been audited by reference of the BARS standard.
Despite his introduction of and reliance on this document, neither Mr Watson, nor any of the other experts expressed the view that either GMP or Sundance should be judged by the BARS standard.
8.6 Statistics
Although it was not a topic which featured in Mr Watson's expert report, Mr Reeve on behalf of the claimants made much, both in the cross-examination of Captain Gillespie and in his closing submissions, of the IATA statistics of 2013. It was the claimants' case that these statistics demonstrated that the accident which occurred here was one which was more likely to happen than other kinds of air accident. On the other side, the defendants argued that the statistics demonstrated that the risk of this type of accident was "very, very low". As is often the way with statistics, the IATA statistics could be said to support both propositions.
It is certainly right that the statistics demonstrated a correlation between fatal accidents and a lack of proper regulatory oversight, an absence of safety management procedures, deficiencies in the operator's training procedures, and the absence of safety equipment such as GPWS. They showed that Africa was the biggest source of IATA accidents in the world and that 74% of cases involved inadequate regulatory oversight. There was also a strong correlation between CFIT and the failure to fit GPWS.
Equally, the statistics, as explained by Captain Gillespie, demonstrated how low, in real terms, any of these risks actually were. For example, there was a risk of 0.2 CFITS accidents for every one million flights.
It was difficult to see where, ultimately, any of this went. It was not suggested by Mr Watson that the IATA safety report was one that either GMP or Sundance should have been aware of or acted upon. It was not suggested that they should have known anything of these statistics. It might have been interesting to know whether Mr Sole (the auditor who audited Aero-Service) was aware of the statistics and to have his views on whether or not it made any difference to his conclusions about Aero-Service, but he was not cross-examined at all. Ultimately it seems to me that these statistics and the evidence surrounding it demonstrated no more than the obvious: that the absence of a GPWS system gave rise to an increased risk of CFIT, compared with a baseline risk, but that both the baseline risk and the enhanced risk remained very low.
9. THE ISSUES
There is no agreed list of issues. However, broadly speaking, they break down in this way.
The Case Against GMP
As to the duty owed by GMP to Mr Cassley, what was the nature, scope and extent of that duty? To what extent, if at all, could GMP rely, without more, on Sundance's arrangements?
As to breach, what did GMP do in discharge of its duty towards Mr Cassley? Was that sufficient? If not, why not? If not, what other things should GMP have done?
Assuming that GMP were in breach of their duty, and should have made further enquiries, what further information would have become available as a result of those enquiries? What difference (if any) would that information have made? Specifically, would that further information have meant that, on the balance of probabilities, Mr Cassley would not have been on board the accident flight on the morning of 19 June 2010?
The Case Against Sundance
As to the existence or otherwise of a duty of care, did Sundance assume a responsibility to Mr Cassley or did they owe him a duty by reference to the usual touchstones of proximity, the reasonable foreseeability of damage, and the imposition of a duty being fair, just and reasonable.
If Sundance did owe Mr Cassley a duty of care, what was its nature, scope and extent? Specifically, was it a duty to take reasonable care in the appointment of Aero-Service, or was it some more onerous, non-delegable duty that made Sundance liable for the poor performance of Aero-Service's duties?
Assuming a duty of care, was there a breach? What did Sundance do in discharge of its duty towards Mr Cassley? Was that sufficient? If not, why not? If not, what other things should Sundance have done?
Assuming that Sundance were in breach of their duty, and should have made further enquiries, what further information would have become available as a result of those enquiries? What difference (if any) would that information have made? Specifically, would that further information have meant that, on the balance of probabilities, Mr Cassley would not have been on board the accident flight on the morning of 19 June 2010?
10. THE EXPERT EVIDENCE
The Directions
At the CMC before Master Eastman on 17 March 2014, there was a dispute between the parties as to the particular expertise required of the expert witnesses in this case. Some wanted aviation experts; others risk management experts. The Master resolved the debate by something of a 'fudge', by which he allowed each party could call one expert in "corporate travel risk assessment and management". That has led to a mismatch in the background and expertise of the three experts in this case, and is one of the reasons why the expert evidence has been of less help then it might have been.
There are other reasons too. In some parts of the Queen's Bench Division (notably in the Commercial Court and the Technology and Construction Court) orders in respect of expert evidence follow a particular sequence. The requirement is for the experts to meet first and to produce a Joint Statement identifying those matters on which they are agreed and those matters on which they disagree (with a short note identifying the disagreements). The experts' reports are served after that, and they are limited to those matters on which the experts disagree. Experience has shown that this is an efficient way of getting the experts to focus on the real issues between them. It also allows the court a degree of control as to the scope and extent of expert evidence.
That did not happen here. In consequence the reports are voluminous (Mr Watson, the claimant's expert, filed a report which fills two lever arch files) but each deals with different questions framed by different solicitors. There is therefore little overlap between the questions that each expert has endeavoured to answer.
These difficulties were compounded rather than resolved by the Joint Statement. That is a long and rambling document which is difficult to follow and even more difficult to analyse. It is internally contradictory. It fails to set out crisp propositions or identify which experts agree or disagree with such propositions. None of this has made the court's task any easier.
Particular Observations on the Expert Witnesses
Mr Watson
Mr Watson is a very experienced aviation consultant. His principal expertise is in aviation auditing. He possessed knowledge and technical expertise that neither GMP nor Sundance had, or could reasonably have been expected to have. On the other hand, he had no expertise in assessing health and safety risks. In consequence of this, there were times when I concluded that what he was suggesting GMP or Sundance should have done about Aero-Service was wholly unrealistic. He continued to focus on highly technical points arising out of the audits of Aero-Service which, in my view, had very little connection with what GMP or Sundance could reasonably have been expected to do prior to the June flight.
It is that issue which, so it seems to me, lies at the heart of this case. Assuming duty and assuming breach, what was it that Sundance and GMP should have done, and would have meant that, on the balance of probabilities, Mr Cassley would not have been on that Saturday morning flight. Despite the centrality of those issues in this case, Mr Watson's report dealt very sketchily with that topic. Moreover, I find that his approach to them was tainted by hindsight, working back from the accident rather than forward from the information available, pre-accident, to GMP and Sundance.
Captain Gillespie
By his own admission, Captain Gillespie, although an aviation expert, was not a consumer: he was not somebody who regularly arranged charter flights. It was therefore sometimes difficult for him to say what somebody in that position would or should have done. He did, however, have extensive expertise of undertaking flights very similar to the accident flight in this case.
Captain Gillespie was in many ways an impressive witness, and I have been persuaded by the commonsense of much of what he said. But I considered that at times he was too willing to minimise the evidence about the potential failings of ANAC and of Aero-Service, in a way that sometimes seemed strangely partisan.
Professor Ball
Professor Ball was not an aviation safety expert and much of his report was concerned with rather academic nit-picking over the technicalities of risk assessment. I did not derive any real assistance from that material. Moreover, many of Professor Ball's opinions as stated in his report were based on his version of the facts as he understood them. Some of those factual assumptions were in fact incorrect, which raised concerns as to the reliability of his conclusions (although in that he was not very different to Mr Watson).
That said, because of his risk assessment expertise, Professor Ball was well placed to give evidence about what measures and steps were reasonably required to be taken by both GMP and Sundance in the discharge of their respective duties of care. Thus his evidence about the relatively limited nature of any risk assessment required here, because of what he considered to be the absence of any significant risks identified as attaching to this trip, was of particular resonance. In addition he emphasised that not only did air travel carry the lowest level of travel risk, but that this flight was a low risk exercise because the flight was taking off from a recognised airport, going to a landing strip that had been examined by the Congolese authorities, and being piloted by qualified pilots.
Summary
For these reasons, although I found some parts of the expert evidence useful, I found other parts of it unhelpful. Furthermore, I consider that too much of the material covered by the experts in their reports and in their oral evidence actually went to questions which were matters for me, rather than for them. I make plain therefore that my analyses of breach and causation, recorded in the next two sections of this Judgment, are based largely on my own conclusions based on my findings of fact, as opposed to my reliance on any one expert view over another.
11. THE CASE AGAINST GMP
The Law
Statutory Duty
GMP owed Mr Cassley no relevant statutory duty. Although three were identified in the pleadings, by the close of the case, the claimants were not putting their claim by reference to these alleged statutory duties. I therefore deal with them briefly for completeness only.
Section 2 of the Health and Safety at Work Act 1974 provides an obligation on the part of every employer to ensure, so far as is reasonably practicable, the 'health and safety and welfare at work of all of his employees'. Section 47 of the same Act, however, excluded the imposition of civil liability for breach of section 2.
The second statutory requirement referred to was the Management of Health and Safety at Work Regulations 1999. Regulation 3 provided for a risk assessment. That only applies were there is a specific statutory duty relied on by the claimants in respect of which there is a 'need'/requirement for a risk assessment so as to ensure compliance. Again, that is not this case.
Thirdly, there is a reference to Framework Directive 89/391 (wrongly referred to as Regulation 89/391). This does not give rise to any free standing statutory duty: see Cross v Highlands and Islands Enterprise [2001] IRLR 336, OH.
Thus the claimants' case against GMP depends on the common law.
Common Law Duty
(a) General
An employer owes a duty to its employees:
a) to provide a safe place of work;
b) to take care in selecting proper and competent fellow workers and supervisors;
c) to take care to provide proper machinery and materials; and
d) to provide and maintain a safe system of work.
This is the long-accepted summary of the decision in Wilsons and Clyde Coal Co v English [1938] AC 57. It has been expressed as a duty to carry on operations in such a way "as not to subject those employed by him to unnecessary risk" (see Smith v Baker [1891] AC 325 at 362). Harris v Bright Ash Felt Contractors Limited [1953] 1 WLR 341 defined an unnecessary risk as "any risk that the employer could reasonably foresee and which he can guard against by any measures, the convenience and expense of which are not entirely disproportionate to the risk involved". In consequence of the modern obsession with acronyms, this is now referred to as ALARP: reducing risks to a level As Low As Reasonably Practicable.
This is a personal and non-delegable duty. In Cook v Square D Limited [1992] ICR 262, Farquharson LJ said that it was the employer's duty to take all reasonable steps to ensure the safety of his employees in the course of their employment, and that such a duty could not be delegated.
(b) Third Party Premises
In Smith v Austin Lifts Ltd [1959] 1 WLR 100, Lord Denning said:
"…employers who send their workmen to work on the premises of others cannot renounce all responsibility for their safety. The employers still have an overriding duty to take reasonable care not to expose their men to unnecessary risk. They must, for instance, take reasonable care to devise a safe system of work, see General Cleaning Contractors Ltd. v. Christmas [1953] AC 180; and if they know or ought to know of a danger on the premises to which they send their men, they ought to take reasonable care to safeguard them from it."
Cook, referred to above, is also authority for the proposition that the duty noted at paragraph 201 applies to those occasions when an employee is engaged on third party premises, although the nature and extent of the duty will always depend on what is reasonable in all of the circumstances. Farquharson LJ said at pages 8H-9B:
"It is clear that in determining an employer's responsibility one has to look at all the circumstances of the case, including the place where the work is to be done, the nature of the building concerned (if there is a building), the experience of the employee who is so dispatched to work at such a site, the nature of the work he is required to carry out, the degree of control the employer can reasonably exercise in the circumstances, and the employer's own knowledge of the defective state of the premises."
In Cook, an employee of a UK company was injured when he slipped on the floor of a site 8,000 miles away. Although a duty was found, there was no breach because the employer had been reasonably satisfied that the occupiers of and the general contractors working at the site in Uthmaniyah, Saudi Arabia, were reliable companies and aware of their responsibilities to those working there. The court noted that "the suggestion that the home-based employer has any responsibility for the daily events of a site in Saudi Arabia has an air of unreality".
The result in Cook is to be contrasted with that in McDermid v Nash Dredging and Reclamation Co Limited [1987] ICR 917. There the claimant was employed by the defendant as a deck hand when he was injured by mooring ropes. Although, at the time of the accident, he was working on board a tug owned by a Dutch company, and under the control of a Dutch captain employed by them, it was found that the captain and the claimant were working together in a small team of three to perform a contract which the defendant and the Dutch company were carrying out together. Accordingly, both duty and breach were found in that case. Farquharson LJ in Cook described it as a case where the duty of the employers was "much more direct" than it was in Cook. The employers could not escape responsibility because at the time of the accident it was an employee of the tug owners rather than their own employee who was actually conducting the operation. The approach in Cook was also followed by the Court of Appeal in the interim payment case of Berry v Ashtead Plant Hire Co Limited [2012] PIQR P6.
(c) Travel to and from Third Party Premises
I note that GMP admits that they owed Mr Cassley a duty "to take reasonable steps not to expose James to foreseeable unnecessary risks in the course of travel in the course of his employment". For the reasons set out below. I consider that that admission is properly made.
In Palfrey v Ark Offshore Limited (23.2.01, QBD, Deputy Judge HHJ Graham Jones – unreported) the claimant was the widow of the defendant's employee who had died from malaria after travelling twice to West Africa in order to work on an oil rig operated by Atwood, the third party. He had been bitten during an overnight stay on an island before being ferried out to the oil rig. The defendant had told the deceased that he did not need any medical protection for the trip because he would be based offshore. The judge upheld the claim against the defendant, holding that they ought to have had, but did not have, an effective policy for the provision of advice as to health precautions to be taken by an employee sent to Cameroon in the course of his employment. Because they had no such policy, they failed to give the deceased any or any appropriate advice as to such precautions and thereby endangered his safety.
In Durnford v Western Atlas International Inc [2003] EWCA Civ 306, the employee of an oil exploration company successfully claimed damages against his employer when he suffered an acute prolapse of an inter-vertebral disc due to the inadequate minibus that had been supplied for a long journey to the third party premises where he was to work. The judge found that there was a foreseeable risk of injury to a person of ordinary physical robustness as a result of the minibus journey and there was no evidence of any enquiries made regarding alternative transport. That decision was upheld by the Court of Appeal. It is an illustration of the liability of an employer for breach of its duty of care in relation to transport abroad.
The outcome in Durnford is to be contrasted with that in Hopps v Mott McDonald Limited and the Ministry of Defence [2009] EWHC 1881 (QB). In that case the claimant was injured by a roadside bomb. Christopher Clarke J (as he then was) found that a duty of care was owed by the defendant to the claimant in connection with his travelling in Basra but, for the claim to succeed, the claimant needed to demonstrate that Mott McDonald should only have allowed him to travel in an armoured vehicle, and not in any other form of transport. On the evidence, it was held that it was not unreasonable for the claimant to have been carried around Basra at the relevant time in an un-armoured vehicle.
Finally, there is a very recent decision concerned with travelling to foreign destinations in the course of employment, with some similarities to the present case. In Dusek v Stormharbour Securities LLP [2015] EWHC 37 (QB) Hamblen J upheld the claim of the dependants of Mr Dusek, who was killed when the helicopter taking him away from Cusco, in the Andes, which he had visited in the course of his employment, crashed, killing everybody on board. At paragraph 134 of his judgment, citing Palfrey, Hamblen J found that his employer, Stormharbour, owed Mr Dusek a duty "to take reasonable care to see that he was reasonably safe while travelling to and from and at his place of work abroad where he was required to go in the course of his employment". In my judgment, GMP owed a precisely similar obligation to Mr Cassley in the present case, which is why I consider the admission at paragraph 6 of the first defendant's amended defence to be appropriate.
(d) Risk Assessments
Whether or not an employer owes an obligation to perform a risk assessment in the circumstances of the case, and the nature, scope and extent of any such risk assessment will always be a matter of fact. In Hopps, and the subsequent Court of Appeal decision in Uren v Corporate Leisure (UK) Limited v Ministry of Defence [2011] EWCA Civ 66, some form of risk assessment was found to be required. As Smith LJ J put it in Uren:
"72. I do accept that what amounts to 'a suitable and sufficient' risk assessment may well vary according to circumstances. For example I can see that if an employer uses a contractor for some activity and satisfies himself that a contractor has carried out a thorough risk assessment in relation to that activity, that might well lead to the conclusion that the risk assessment carried out by the employer is suitable and sufficient even though it is not as detailed as would otherwise be required. That would be a question of fact in each individual case and it is impossible to generalise as to the standard of risk assessment which will be required of an employer. Here on the facts, it is clear that CL did not carry out a suitable or sufficient risk assessment and it could not sensibly be argued that the MOD could properly rely on it. The two defendants did not even confer about risk assessments."
That passage was cited by Hamblen J in Dusek.
(e) Actions of Third Parties
A point that was raised with some force before me, but which did not arise on the facts in Dusek, concerned an employer's liability for the actions of third parties. This arises in the present case because Mr Ross QC maintains that, because the accident that killed Mr Cassley was the result of pilot error, it was an onerous task in law for the claimants to establish that GMP was liable for the negligent acts of a third party.
He relied on two cases in particular. The first was Smith v Littlewoods Organisation Limited [1987] 1 AC 241. That was a case where an empty cinema owned by Littlewoods was set on fire by vandals and the fire spread to other buildings and caused damage. The owners of the adjoining buildings claimed damages in negligence against Littlewoods. The House of Lords rejected the claims. Lord Mackay said this:
"In approaching these rival submissions it has to be borne in mind that the damage to the neighbouring properties, upon which the claims against Littlewoods are founded, is damage by fire or otherwise resulting from vandalism in Littlewoods' premises. A duty of care to prevent this damage is the only duty incumbent upon Littlewoods relevant to this case. From this it follows that unless Littlewoods were bound reasonably to anticipate and guard against this danger, they had no duty of care, relevant to this case, requiring them to inspect their premises. Unless, therefore, Littlewoods, on taking control of these premises without any knowledge of the subsequent history of the property after they assumed control, ought reasonably to have anticipated that they would be set on fire and thus or otherwise create a substantial risk of damage to neighbouring properties if they did not take precautions, the claims must fail."
The claimants were unable to meet that high test and the appeal failed.
Similarly, in Longworth v Coppas International (UK) Limited [1985] SC 42, the widow of a petro-chemical worker who was killed following the Iranian bombing of Basra in 1980 failed in her claim because she had not set out the facts required to show that the danger from the activities from an independent third party "was very likely to happen". Lord Davidson said:
"In certain instances a pursuer had been found entitled to a remedy when, but for the act of an independent third party, the assumed fault of the defender would not have done the pursuer any harm. But in such cases, it was essential for the court to be satisfied that the intervention of the independent third party was very likely to occur. If it was not very likely to occur, then the defendant's fault was not the effective cause of the accident."
Lord Davidson went on to note the basic duty of the employer to take reasonable care that the employee is not exposed to unnecessary risks and said that, if an employer learnt that his employee's place of work had become part of a warzone and that the employee's safety was imminently threatened by the activities of the combatants, nothing would excuse the employer from the duty of assessing the risk and in appropriate circumstances of advising, exhausting, or even of enjoining his employee to quit the danger area. But he went on:
"In my opinion, the decisions and dicta in the cases cited by the defenders' counsel justify the conclusion that where the danger to be guarded against is one caused by the activities of independent third parties over whom the defenders have no control, the court should examine the pursuer's averments of fact and fault with more than usual care and caution…On considering the pursuer's averments I do not see how a court could reasonably reach the conclusion that a missile attack upon Petrochemical Complex No. 1 was not merely a possibility but was an event very likely to occur…
In my opinion for purposes of relevancy the pursuer's case of fault must be tested by reference to facts which, considered objectively, should have prompted the defenders to take one or more of the steps desiderated by the pursuer."
Duty of Care
For the reasons set out above, I find that, as Mr Cassley's employers, GMP owed him, not only the general duties identified in subsection 11.1.2(a) above, but also the duty in respect of remote third party premises referred to in subsection 11.1.2(b) and the duty in respect of the travel to those premises, as noted at subsection 11.1.2(c) above. Those duties were non-delegable. The extent to which those duties were satisfied is considered in greater detail in the next sections of this Judgment.
Breach of Duty
I find that GMP took no steps at all to satisfy their duty of care to Mr Cassley. They undertook no enquiries of any sort about the proposed trip. Although they were entitled to rely to a large extent on Sundance, they needed to satisfy themselves that the trip was reasonably safe. That was, after all, what they had undertaken to do by reference to their own health and safety policies (see paragraphs 56-61 above). Instead, they did not ask Sundance any questions about any aspect of the trip. Specifically, they did not ask any questions about the internal flights within West Africa, or about Jetfly, or about Sundance's experiences of Jetfly. I find therefore that they were in breach of their duty to Mr Cassley.
Mr Butterworth accepted that no enquiries had been made (see paragraphs 92-93 above). Although he could not remember the detail of his conversation with Mr Young, I have found that this did not extend beyond a reference by Mr Young to Sundance's good reputation as a mining company. That could not, on its own, begin to equate to any sort of proper enquiry on the part of GMP for the purposes of ensuring the health and safety of Mr Cassley: see my findings at paragraphs 88-96 above. On the contrary, such widespread omissions failed to meet GMP's own health and safety policy. And although Mr Butterworth said on a number of occasions that he did not believe that the flight presented any material risk, I find that he was only able to say this because he had not given any consideration at all to what the potential risks of the flight might be. He thought there was no material risk because he had not considered the possibility of such a risk in any meaningful way.
It is I think, unnecessary to spell out each and every way in which GMP's failure to take any action at all constituted a breach of their own health and safety policies, set out at paragraphs 56-61 above. But I find in particular:
a) They failed to ensure that all hazards would be eliminated so far as reasonably practicable or to ensure that the remaining risks would either be avoided or reduced to an acceptable level;
b) They failed to give any consideration at all, let alone additional consideration, to the risk to Mr Cassley, a vulnerable person at a remote location:
c) They failed to show any leadership or effective action in respect of health and safety;
d) They failed to conduct risk assessments as a central strand of the safety management system (a criticism with which Professor Ball expressly agreed);
e) They failed to subject contractors, whose activities might affect the health and safety of employees, to selection processes requiring them to prove their safety standards. Mr Butterworth accepted this; and
f) They failed to place Mr Cassley's health and safety at the top of all priorities.
In addition, they redacted a potentially important health and safety document (paragraph 56 above) without proper explanation.
Furthermore, if there was any remaining doubt that GMP ought to have made some enquiries of Sundance and wholly failed to do so, there are the clear words of the deed (paragraph 80 above). Even if (which I do not accept) GMP were entitled in some way to rely (without more) on Sundance, the words of clause 14, and clause 14.3 in particular, would have jolted any reader of the document out of such complacency. Clause 14 made it clear to GMP that, not only were Sundance not accepting responsibility in law for what might happen on the trip, but they were expressly telling GMP that they needed to undertake their own investigations. I do not read that as preventing GMP from making enquiries of Sundance themselves; far from it, it seems to me that Sundance were the obvious first port of call. But this was a clear warning to GMP that they needed to undertake their own investigations. To fail in those circumstances to undertake any investigations at all amounted to a clear breach to their duty to Mr Cassley.
I note that Professor Ball, the best-qualified expert to give evidence about risk assessments in these circumstances, concluded that GMP should have carried out a risk assessment, albeit on the limited material available. In his cross-examination by Mr Reeve, he agreed that the employer had to think about his own lack of expertise in these matters, and to consider seeking assistance. He too thought the obvious source of such assistance was Sundance.
What Should GMP Have Done?
(a) Employ an Aviation Consultant or Auditor?
The claimants' primary case is that GMP (and/or Sundance) should have employed an aviation consultant or auditor to consider the proposed trip to and within West Africa. The only one of the three experts who advocated this as a possibility was Mr Watson. Neither Captain Gillespie nor Professor Ball thought that this was reasonable or required.
When he was cross-examined, Mr Watson gave the surprising evidence that GMP and Sundance were not obliged to take account of a wide variety of circumstances when reaching a view as to whether they needed to engage an aviation specialist. I do not accept that, particularly since Mr Watson then went on to identify a much more limited range of matters which he took into account in reaching his conclusion that such help was required. He identified the problem associated with the permission to land at Yangadou and the previous use of both Jetfly and Aero-Service. He referred to Solenta. He referred to the fact that the Board of Sundance were very experienced and were concerned with safety. Following this ragbag of factual observations, he then went on to suggest that, because the flight was going to a bush strip, "this is all crying out, absolutely screaming, in my opinion, for an expert aviator to come and assist". The high watermark of Mr Watson's evidence in cross-examination concluded as follows:
"Q: I suggest to you that is a gross overstatement.
A: I don't believe so.
Q: So although this was screaming out for an aviation consultant, and although on your report Sundance possessed an aviation expertise above and beyond what you might have otherwise expected of a company, it seems that none of the individuals concerned who tragically died in this accident heard the scream: is that your position?
A: Yes it is. It is related to Mr Duff, responsible for the risk assessment and the chartering of the aircraft. His background is military and logistics and no doubt a very capable man, but is limited to no aviation knowledge and experience, to attempt, in my view, gaining some form of assurance but I haven't seen any conclusions of those assurances, and neither have I seen any evidence, in my view, that the people doing that assurance were in fact qualified or even doing the right things."
I consider that the sustained criticisms of these answers made by Mr Williams at paragraph 108 of his closing submissions are measured and correct. Mr Watson's denial that somebody in the position of GMP or Sundance would have had to have taken into account a wide variety of facts and circumstances was unjustified, and seemed designed to allow him to argue from a much narrower factual baseline. The individual circumstances which he identified as giving rise to the "screaming" necessity for an aviation consultant were only some of the factors relevant to GMP and Sundance. Some of those he identified (such as the experience of the Sundance Board) could only have been in favour of not getting outside help. In addition, he completely ignored many of the other factors which were relevant, such as the various personal recommendations of Aero-Service by others, and the successful flight the previous March. His singling out of Mr Duff, as opposed to Mr Lewis, who personally approved every flight, was inexplicable. I regard his overall approach to this issue as partisan and unconvincing.
In my view, the majority view of Captain Gillespie and Professor Ball on this topic is to be preferred. Their evidence made it plain that employing such a third party consultant was not common practice or was, at the very least, one on which a reasonable range of opinion existed. In R(Juntann Oy) v Bristol Magistrates Court [2003] ICR 1475, Lord Hobhouse said:
"Safety is a question of opinion. There is no such thing as absolute safety. All safety is relative. Two men can legitimately hold different opinions [as to] whether a machine is safe or unsafe. Different assessments can be and are made of the safety of a particular machine by the authorities in different countries."
The same is true in the present case as to whether or not it was necessary for health and safety purposes for an independent aviation consultant to be employed by GMP and/or Sundance. It is a matter of opinion; there is no basis for saying one view is right and the other wrong.
There was no evidence that an employer like GMP (or a user like Sundance) would, in 2010, routinely have employed such a consultant to advise on such a trip. The experts were agreed that there was no guidance or any other kind of documentation which, had they looked at it, would have led GMP to adopt such a course. There was nowhere near sufficient evidence to persuade me that such a consultant was required to advise on this particular trip, and that the failure to engage him was a breach of duty.
Furthermore, I note that there was nothing in the BARS standard – on which Mr Watson relied for other purposes – to suggest that it was normal or appropriate for an employer in the position of GMP, or a user in the position of Sundance, to obtain the advice of an aviation consultant and effectively go straight to an audit of the carrier (or even the aircraft) concerned. I agree with Mr Williams' submission that that was an unreasonable and extreme position. I reject it.
Finally, I respectfully agree with Hamblen J in Dusek, when he said that an employer was not required from the start to instruct an aviation consultant to conduct a desktop audit of the flight in question, even in circumstances (which was not this case) where the proposed journey carries with it obvious and inherent risks of danger.
Accordingly, on the evidence before me, I reject the suggestion that the failure to hire an aviation consultant was a breach of the duty owed by GMP to Mr Cassley.
(b) Enquiries to Sundance
As foreshadowed in paragraph 220 above, I consider that Sundance were the first and logical port of call for the enquiries which GMP (probably Mr Butterworth) should have made about the trip generally, and the charter flight in particular. They were the obvious source of the assistance referred to by Professor Ball, because they were the organisers of the trip. Whilst I consider GMP could not simply rely on Sundance to do everything without making their own enquiries, it was appropriate for those enquiries, at least in the first instance, to be aimed at Sundance. GMP were remote, whilst Sundance were 'on the ground' in West Africa.
In my view, GMP should have asked Sundance about the individual elements of the trip, including in particular the chartered flight to and from Yangadou since that was, on the face of it, the most unknown element of the visit, involving as it did a charter flight with a local company and a landing (and take-off) at a bush strip. I consider that my conclusion that, on the facts of this case, GMP ought to have made enquiries of Sundance as to the flight operator, the route, and how Sundance had satisfied itself that the proposed flight was safe, to be consistent with the approach of Hamblen J in Dusek at paragraph 192.
What should GMP have asked Sundance in order to perform a proper risk assessment? They should have asked for information about the carrier. Did it have an AOC? What was its insurance position? Had they been recommended and, if so, by whom and in what terms? Had Sundance used them before? Were Sundance happy with them? Was the strip at Yangadou safe? Had it been used for similar flights before?
(c) Enquiries of Others
I consider that the only independent enquiries that GMP ought to have made should have been to the Foreign and Commonwealth Office website. I note that Professor Ball was of the same view. The FCO provides guidance to those travelling to all foreign countries; it is a basic tool for those arranging such foreign travel, whether they are gap year students or those employing city financiers. It is a resource which GMP should have used.
GMP should have made those enquiries in relation to Cameroon and Congo, the two countries that Mr Cassley was visiting. As to Cameroon, it is not suggested that there would have been any relevant warning or other information. As to Congo, the warning at the time would have been in relation to two areas of the country which were not relevant to this trip. GMP would also have noticed that the FCO was saying that there was a low threat from terrorism. They would also have seen that the EU had published a list of Congolese air carriers that were subject to an operating ban or restrictions within the community, and noted the link to that material "to see whether this would affect your travel".
In my view, no other independent enquiries needed to have been made by GMP.
Causation
(a) Introduction
The principal difficulty for the claimants in their claim against GMP involves getting from what GMP should have asked, and the information which those enquiries would have revealed, to a finding by this court that the answers would have prohibited Mr Cassley from getting on board the charter flight at Yaoundé Airport on that Saturday morning. In my view, for the reasons noted below, there is a significant gap between, on the one hand, what GMP would reasonably have done based on the information they should have discovered and, on the other, a decision by GMP prohibiting Mr Cassley from getting on the accident flight with the Sundance Board. It is a causation gap which I consider to be unbridgeable.
(b) The claimants' late primary case
It may be that, in recognition of these causation difficulties, Mr Reeve chose, in his closing submissions, to advance for the first time a new and overarching case on causation by reference to clause 14 of the deed. He argued that because it was such a blatant attempt to pass responsibility onto GMP, Mr Butterworth should have realised what was going on and should have immediately said that, in consequence of the attempt alone, Mr Cassley was not to get on board the accident flight. As Mr Reeve put it at paragraph 98 of his closing submissions, if Mr Butterworth had understood the deed for what it was, "he would have had nothing more to do with the deed or the second defendant and he would not have allowed James to take the trip." Mr Reeve said that, given that Mr Butterworth's admissions (noted in full in paragraphs 92-95 above) arguably supported this case on causation, it was open to him. Both Mr Ross QC and Mr Williams complained about the unpleaded and unheralded nature of this new case on causation.
I do not consider that this new case emerges with any clarity from the claimants' pleadings. But I would be very reluctant to decide this important element of what is, on any view, a very sad case, on a pleading point. And it is unnecessary, given that, in my view, this argument must fail as a matter of principle. Of course Mr Butterworth should have been alerted to what Sundance were trying to do through the agency of clause 14 (indeed, some of his answers indicated that he was); of course Mr Butterworth ought to have realised that Mr Cassley was going to be exposed to certain risks, and should then have embarked on a proper consideration of those risks himself. But it is a complete non-sequitor to say that, in truth, his only proper response was to refuse Mr Cassley permission to get on board the Aero-Service flight.
The mere fact that Sundance were adopting a hard-nosed approach to potential injury or fatal accidents claims does not mean to say that they were not properly having regard to all issues of safety. It is perfectly possible to do both: to take every reasonable step to ensure the safety of a particular trip, but at the same time, to endeavour to avoid legal liability if something goes wrong. The attempted exclusion in law gives no indication of the steps which Sundance were taking to ensure that no accident occurred in the first place.
Furthermore, this argument must logically attach to every aspect of the trip to Cameroon. If it is right then, taken to its logical conclusion, Mr Cassley should not have been allowed on board Mr Talbot's private jet in Paris to fly to Cameroon on the first leg of the trip. That part of the trip was also covered by clause 14. But no-one suggests for a moment that it was negligent for GMP to allow Mr Cassley to fly to Cameroon in Mr Talbot's jet.
Accordingly, I reject the suggestion that, merely because Sundance wanted to exclude their legal liability for anything that might happen to Mr Cassley, GMP should automatically have refused Mr Cassley permission to make the trip. The second proposition simply does not follow from the first. Moreover, it is wholly contrary to the claimants' basic case, as advanced during the hearing, which focussed on all those things which they said GMP should have done in order to obtain further information about the visit and in particular about the carrier to Yangadou. It is therefore necessary now to turn to that aspect of the claim.
(c) Information about the Carrier
It is here that we come to the central problem for the claimants in their case against GMP. As I have said, GMP should have made the enquiries noted at paragraph 222 above (to Sundance) and the enquiries at paragraph 234 (to the FCO). And they would all have been about the Cameroonian-registered carrier, Jetfly. That is because, from the end of May until the day of the accident, GMP were always told that the carrier for this flight was going to be Jetfly. The enquiries would not have been aimed at anyone else because no other carrier was ever mentioned to them.
And if GMP had made these enquiries, Sundance would have answered them in full. They would have told GMP that Jetfly had all of the relevant documentation, including the AOC referred to at paragraph 24 above; that Sundance had used Jetfly on at least two occasions; that Jetfly had flown twice to the Yangadou airstrip (in January and again in March); and that Jetfly had appropriate insurance.
There is no evidence that Jetfly were anything other than a reliable and appropriate carrier. There is no claim that GMP would have been in breach of their duty to Mr Cassley if they had allowed him on board a Jetfly flight to Yangadou. Mr Watson confirmed that at no time had he considered or analysed the circumstances and flight safety of Jetfly. Jetfly was registered in Cameroon and there was no evidence that air transport was not properly policed and regulated by the Cameroonian authorities. Had Jetfly remained the carrier, there are no grounds for concluding that it would have been anything other than an entirely appropriate and safe carrier to convey Mr Cassley and the Sundance Board to Yangadou and back to Yaoundé. Similarly, there would have been nothing in the information from the Foreign and Commonwealth Office to cause GMP any doubt about the proposal: Jetfly were not a banned carrier and there was no EU blacklist of Cameroonian carriers.
Accordingly, but for the late switch to Aero-Service, the claimants' case against GMP would have been completely unarguable.
I accept the suggestion made by Mr Reeve that, because GMP ought to have been more pro-active, they should have conveyed to Sundance that they required detailed information about the actual carrier, even if the identity of the carrier changed, and even if that change occurred at the last minute. But let us assume that they made that clear to their point of contact at Sundance, Mr De Nardi in Perth, at the end of May, when they were first given the details of the itinerary, and that they reiterated it on a number of occasions subsequently. That would still have made no difference, because Mr De Nardi himself never knew about the change of carrier from Jetfly to Aero-Service until after the accident had occurred. Thus, even if GMP had asked Mr De Nardi to keep them informed of any change, he would not have told them because he did not know. GMP cannot be blamed for an internal communication failure within Sundance. It was a matter over which GMP had no control, and could not have reasonably achieved any control.
Accordingly, it seems to me that the claimants' case against GMP fails on causation. Although GMP were in breach of their duty, because they failed to make any enquiries of Sundance about the carrier, the enquiries that they should have made would have all been about Jetfly, and would have been the subject of satisfactory answers.
I regarded this as the 'elephant in the room' throughout the trial. It was repeatedly assumed that GMP knew (or should have known) that it was Aero-Service who would be undertaking this flight. The claimants' case against GMP, and Mr Watson's expert's report in particular, was predicated on the basis that Aero-Service was a Congolese carrier, banned by the EU, and inherently unsafe, and that GMP should have sought the necessary information so as to make themselves aware of these facts. Indeed, this can be demonstrated by paragraphs 1-3 of the claimants' closing submissions, which states that "the nub of this case" was the failure to make any enquiries into Aero-Service. I find as a fact that GMP did not know and had no reasonable way of knowing that this flight was even being undertaken by Aero-Service. Accordingly, the entire factual basis of the claimants' case on causation falls away.
(d) Enquiries in respect of Aero-Service
Now let us assume that I am wrong to conclude that GMP did not know about Aero-Service or that, in some way, GMP should have asked questions which would, before the accident flight, have identified Aero-Service as the carrier. On the balance of probabilities, would the information provided by Sundance, in answer to the questions about Aero-Service which should have been asked, have put GMP on a train of enquiry so as to lead them reasonably to conclude that Mr Cassley should not have got on that flight?
In my judgment, the answer to that question is No. In many ways, GMP would have got the same answers about Aero-Service as they would have got if they had asked about Jetfly. They would have been told that Aero-Service had been recommended to Sundance by other pilots; that there was an AOC; and that there were relevant insurance documents. Most significantly of all, they would have been told that Aero-Service had already flown Sundance to Yangadou, in the company of the Congolese Minister of Mines. GMP would have also been told that, for these reasons, the Sundance Board were themselves happy to fly with Aero-Service. There would have been nothing in any of that to put GMP on any kind of alert. On that alternative basis, therefore, the claimants' case fails on causation.
Now let us assume that that conclusion, too, is wrong and that GMP's questions should have gone deeper into Aero-Service's fitness to undertake the flight. It seems to me that such further questions would have raised, directly or indirectly, the information within the audits into Aero-Service. On this hypothesis, Sundance (prompted by GMP) would have themselves enquired of Aero-Service as to whether or not there were any recent audits which they could see. I deal with that case at paragraphs 320-327 below. I conclude that, if the question of audits had been raised (directly or indirectly) with Aero-Service, Sundance (and, on this assumption, GMP) would have discovered either the factual findings within the three audits carried out for MPD Congo or, more likely, they would have been provided with copies of those audits themselves. Those audits and their positive recommendations would have been more than sufficient to persuade Sundance, and therefore GMP, that there was no reason not to allow Aero-Service to undertake this flight. More widely, as Mr Williams pointed out at paragraph 173 of his closing submissions, there was no evidence that Aero-Service had failed any audit or that any company had ever been advised not to use Aero-Service.
In all those circumstances, it seems to me that, even if further enquiries (beyond those identified at paragraph 232 above) should have been made by GMP of Sundance about Aero-Service, the information from Sundance would have been reassuring. Any reply from the organiser of the flight would have been to the effect that the proposed carrier was established; carried an AOC; had been recently successfully audited; had been previously used by the organiser to fly the proposed destination; and that it was reasonably satisfied as to its safety. That would reasonably have been sufficient for GMP to discharge its duty to Mr Cassley and they would have concluded that the flight was safe. My analysis of the similar claim against Sundance is also relevant to this conclusion (paragraphs 312-327 below). I consider that it is consistent with paragraph 193 of the judgment of Hamblen J in Dusek.
It is impossible not to factor in additional, more prosaic considerations. GMP and Mr Cassley would have realised the commercial imperative of undertaking this flight. Visits like this were common but important. GMP would not have wanted to cancel Mr Cassley's participation any more that he would have wanted not to go to Nabeba, unless some good reason to fear for his safety had been identified. In my view, there was no such reason.
(e) GPWS
During the course of the trial, one of a number of shifts in the claimants' case involved a new emphasis, through the evidence of Mr Watson, on the alleged importance of the GPWS system, and the fact that the aircraft which undertook the accident flight did not have such a system on board. This went from a matter which was referred to in Mr Watson's expert report but not identified as amounting to a regulatory breach, on one view, to the lynch pin of the claimants' case on the facts. By the end of the trial three (linked) propositions were being advanced by the claimants:
a) GPWS was required under ICAO standards;
b) Sundance, and therefore GMP, should have discovered that the aircraft in question did not have GPWS; and
c) The absence of GPWS was the cause of the crash.
On a proper analysis of the evidence, none of these three propositions can be sustained. My reasons are set out below.
First, I note that Mr Watson's evidence in support of this new case was only advanced in his oral evidence in chief when he said that, when auditing an operator, the first relevant bar was the regulatory bar, which he described as 'the absolute minimum standard'. He said that the absence of GPWS meant that this aircraft fell below that minimum standard, a point he had not made in his written report. That suggests to me that the whole question of GPWS was something of an afterthought, alighted on by Mr Watson some time after both his report and the experts' meeting.
Secondly, whilst GPWS was required by the ICAO standards, that requirement could be waived by ANAC, as the relevant regulatory body: see paragraphs 166-168 above. I have found that, on the balance of probabilities, Aero-Service were not required by ANAC to install a GPWS in this aircraft. If they had been so required, they would not have been granted an AOC.
Thirdly, even Mr Watson conceded that he did not expect Sundance to know of ICAO and Annex 6. There could be no possible basis on which it could have been suggested that GMP should have known about ICAO and Annex 6.
The next issue is whether or not Sundance or GMP should have known about the absence of GPWS. In his oral evidence, Mr Watson said that "GPWS is so important, as a regulatory requirement, it would be unprofessional to recommend the use of that aircraft to Sundance or GMP or any other client that was asking for your professional opinion." That evidence was predicated on the assumption that an aviation consultant/auditor had been appointed to do a detailed equipment check on the aircraft, and had spotted the omission. I have already set out my reasons why I do not accept that assumption in this case. It is a further example, in my judgment, of Mr Watson answering a question from an incorrect and inappropriate starting- point.
Then there were the contents of the three audits. Although, as I have noted, the audits note that a GPWS system was not fitted to the Aero-Service aircraft, they make nothing of this. None of the audits say that the absence of a GPWS system was of any significance. They certainly do not suggest that this omission somehow made the aircraft dangerous or that Aero-Service should not be used as a carrier. On the contrary, as we have seen, the audits were very favourable to Aero-Service. In those circumstances, it is simply not possible for the court to conclude that Sundance or GMP should either have known that there was no GPWS or, even if they had noted that omission, that it was a matter of any significance or seriousness at all.
There is also the Air Accident Report. That too makes no reference to the absence of a GPWS system as being of any relevance at all.
Finally, as I have said, there is the issue of the GPWS in practice. Prior to the trial there was no suggestion from any of the experts that the absence of a GPWS had any relevance to the crash. However, in a supplementary report produced at the start of the trial, Mr Watson suggested that, if a GPWS had been fitted, the crash would not have happened. Despite the objections of Mr Ross QC, I allowed that report in, because it was quite clear that Captain Gillespie was in a position to deal with the detail of it.
Captain Gillespie demonstrated in his evidence that there were simply too many variables for any aviation expert to come to a concluded view as to whether or not the absence of a GPWS made any difference in this case at all. Those are set out at paragraphs 3.4.26-3.4.34 of Mr Ross QC's closing submissions. These included the track the aircraft was flying at the time of impact (which meant that each of Mr Watson's three hypothetical tracks could each have been incorrect); the precise GPWS unit that might have been fitted; the expected GPWS detection and warning performance; and the nature of the radio frequency reflective characteristics that would have been required for flying over this kind of terrain. I note the warning on charts published in the user's manual (which are described as merely illustrative) and that the actual behaviour of the system is highly dependable on a number of dynamic factors unique to the particular event. To be fair, Mr Watson did not seek to deny any of this, saying in cross-examination that his supplementary report was 'conjecture', for the reasons given by Captain Gillespie.
For himself, Captain Gillespie thought that GPWS probably would not have supplied a sufficiently early warning in this case to enable effective avoidance measures, given that the pilots were in breach of the standard flight rules and were descending through cloud cover. Mr Watson was unable to give a cogent contrary view. On the expert evidence, therefore, it is quite impossible for the court to conclude that the absence of the GPWS had any role at all in this accident.
I should add that I accept the point made at paragraphs 2.5.11 and 3.2.6 of the closing submissions of Mr Ross QC that, on the evidence, a GPWS system would only have engaged when the aircraft flew below a height of less than 2,500 feet above the terrain. On that basis it would only have operated when the plane arrived at the Yangadou landing strip, and it would have been automatically disconnected when the landing gear locked into position.
I also note and accept Captain Gillespie's evidence that although GPWS has had some effect in preventing accidents in the cruise phase of flight, this was very small compared to its effect on approach and landing accidents. Again that suggests that, in the present case, when the aircraft was in the cruise phase of the flight, a GPWS would have had no effect.
For all these reasons, therefore, notwithstanding its late appearance in this case, I have concluded that the absence of a GPWS on this plane was of no relevance to the accident and was of no relevance to the case against GMP or Sundance.
(f) Enquiries of Others
True it is that, if (contrary to my findings) GMP had been obliged to undertake their own separate investigations into Aero-Service by reference to the FCO, they may well have found out about the EU banned list. That would have been a negative factor (which obviously did not apply to Jetfly) against all the other positive factors to which I have already referred. For the reasons set out below, it is idle to suggest that, in those circumstances, the EU banned list would have made any meaningful difference to GMP's decision on the balance of risk.
If we assume that GMP knew, or should have known, that the carrier had been changed to Aero-Service, then they should also have been aware from the FCO information that the EU had published a list of carriers that were subject to an operating ban "within the community". Let us also assume for this purpose that they would have realised that Aero-Service was on that banned list. What difference would that have made?
In my view, it would have made none. It might have spurred GMP on to make the enquiries of Sundance to which I have referred above, but it would not have altered their reaction to the information about Aero-Service which Sundance would have provided. If Sundance were happy with Aero-Service, for the reasons which Sundance would have set out to GMP, then it is entirely unrealistic now to say that GMP would not have been satisfied with those answers just because of an EU list.
It is also right to say, as Mr Ross QC does in his closing submissions at paragraph 8.2, that the FCO advice does not caution against the use of any internal carrier in the Congo or advise against flying in the Congo. There is nothing to say that the prospective traveller should not use a carrier on the banned list. The only advice given is that their inclusion on a banned list might affect the prospective travel, but that is as high as it is put. Again it is unrealistic to think that, even if GMP had reached this point in their enquiries, they would have prevented Mr Cassley from getting on board the accident flight.
At paragraphs 31-32 of his closing submissions, Mr Reeve argued on behalf of the claimants that the fact that Aero-Service was on the banned list would have lead GMP and/or Sundance to conclude that the AOC was of no comfort to them; that it was, somehow, a worthless document. I am bound to say that I consider this argument to be nonsensical. It was not suggested to Captain Gillespie or Professor Ball during cross examination. It does not follow that, merely because Aero-Service were on the banned list, that their AOC was of no worth. There was no link made, either in the FCO documentation, or in the EU banning order, between any concerns about the Congolese regulatory authority, on the one hand, and the AOC of individual airlines on the other. It was another non-sequitor.
Finally, for completeness, I refer back to paragraph 143 above. Mr Harris of MPD Congo did know about the blacklist, and it made no difference to him. I find it would have made no difference to GMP either.
(g) The Alleged 'Unravelling'
At paragraphs 47 and 48 of his closing submissions, Mr Reeve suggested that, as the enquiries were (or should have been) made, GMP (and Sundance) would have uncovered ever-increasing grounds to be concerned about Aero-Service "as each layer of information unfurled". He made the same point at paragraph 109 where there is a reference to Mr Butterworth "lifting the stone" by initiating enquiries and that "he would never have been fully satisfied by the result".
For the reasons that I have set out, I consider that this significantly over-states the evidence. I have accepted that GMP should have made further enquiries. But it seems to me plain that the answers that they would have received to those further enquires would have been more than enough to satisfy them that Mr Cassley could safely take his place on board the accident flight. In one of the numerous authorities to which my attention was drawn, the judge observed that the claimants' case bore a striking similarity to the story of a kingdom lost for want of a nail, because of the incessant layering of individually plausible events giving rise to a wholly improbable result. I consider that the same criticism can be made of the claimants' submissions on causation in the present case.
(h) Contrast with Dusek
It is worth comparing my conclusion, that any risk assessment performed by GMP, even if it had been focussed on Aero-Service and not Jetfly, would not have led to Mr Cassley's removal from the flight, with the end result in Dusek. That is because, so it seems to me, the facts in the present case were of a completely different order to the facts there. In Dusek, Hamblen J found that the helicopter flight in question was high risk. It was an inherently dangerous flight because the planned route meant that the helicopter was working at or beyond its AOC and its density altitude limit. There was also a serious risk of operational limits being exceeded because of the cloud cover (helicopters cannot fly in cloud). Moreover, there was evidence that the proposed route was so dangerous for helicopters that there had been express warnings about that danger. Thus at paragraph 176, the judge said:
"The proposed flight raised obvious and foreseeable safety risks. The essential nature of the risk was unsafe operation or performance of the helicopter flight. Further there was a real prospect of that risk eventuating given the challenging nature of the flight."
All of that has to be contrasted with the present case. Here, both the original planned journey and the modified journey were low risk flights. There were no foreseeable risks beyond those which affect every flight over the African jungle to a bush landing strip. There were no prior warnings about this flight because there was no perceived danger. In Dusek, on the facts found by the judge, there was an accident waiting to happen; here the accident was due to pilot error, even if those errors may have indirectly had their roots in cultural failings at Aero-Service. What happened here was manifestly not the 'highly likely' consequence of the actions of an independent third party.
(i) Actions of a Third Party
For the reasons I have given, I conclude that, although GMP failed in their duty to Mr Cassley, if they had done what they should have done, he would still have been on the flight that crashed at Avima on the morning of 19 June 2010. The accident, and the causes of the accident, was not reasonably foreseeable and/or too remote in law. The claimants seek to make GMP liable for the selection of Aero-Service as the carrier for the flight, and the manner in which that flight was executed when, as Mr Ross QC rightly points out at paragraph 6.1.25 of his closing submissions, GMP was two steps removed from that decision. The manner in which the charter was executed was the responsibility of the pilots.
The above point seems to me to bring this case full square into the line of authorities concerned with damage caused by actions of a third party (paragraphs 213-215 above). There is no general liability on a defendant for the action of a third party unless what happened was a "highly likely" consequence of the actions of that third party. That is not this case: the actions of the pilots that caused the accident were not 'highly likely'. In those circumstances, the duty owed by GMP did not extend to the performance of the carrier once the flight had started: again that is consistent with the judgment of Hamblen J in Dusek. Or to put the same proposition in another way, no risk assessment performed by GMP would have identified the risk of pilot error, which was the primary cause of the accident.
For all those reasons, the claim against GMP must fail.
12. THE CLAIM AGAINST SUNDANCE
Law
The claim against Sundance is put primarily on the basis that they assumed responsibility to Mr Cassley for the making of the arrangements of the accident flight. The relevant responsibility can be assumed in the work place by a third party: see McGarthy v Eve NCI Limited [2002] EWCA Civ 374. In Lynch v Ceva Logistics Limited [2011] ICR 746 the claimant was an electrician employed by D2 and was sent to carry out an inspection at D1's warehouse, where he was injured by a forklift truck driven by one of D1's employees. The control exercisable by D1 justified a finding that D1 owed a duty of care to the claimant. Moore-Bick LJ said:
"I also agree with Jackson LJ that the first defendant owed a duty of care to the claimant at common law to take reasonable steps to ensure that he did not suffer personal injury whilst working in the warehouse. The claimant was employed by the second defendant, who might reasonably have been expected to draw the first defendant's safety requirements to his attention, if he had been made aware of them. In fact, however, the Judge's finding show that it was the practice of the first defendant to give safety briefings when contractors arrived for work and that a job of this kind it would normally require the contractor to provide a method statement describing how it proposed to carry out the work and also risk assessment. The Judge found, however, that neither was obtained in this case and that a proper safety briefing was not given either to the second defendant or to the claimant. The result was not simply that the first defendant failed to live up to its own high standards, but that the claimant was not made aware of the precautions he needed to take in order to avoid injury. In those circumstances I agree that the first defendant failed to discharge its duty of care to him. The fact that the second defendant was a reputable contractor does not affect the matter, because the first defendant failed to put him in a position to give the claimant as his employee the necessary safety instructions himself."
In any case where it is alleged that there has been an assumption of responsibility, the claimant needs to demonstrate reliance by the claimant: see most recently the judgment of Jay J in Risk v Rose Bruthard College [2013] EWHC 3869 (QB). Furthermore, the Supreme Court has recently restated the general principle that, even where there may have been a general assumption of responsibility, English law does not impose liability on a defendant for injury or damage to the person or property of a claimant caused by the conduct of a third party: see Michael v The Chief Constable of South Wales Police and another [2015] UKSC 2.
The other way in which a duty might arise is by reference to the three-pronged test in Caparo Industries PLC v Dickman [1990] 2 AC 605: loss must be reasonably foreseeable; there must be a relationship of proximity between the claimant and the defendant; and the imposition of liability must be just and reasonable.
In Perrett v Collins [1999] PNLR 77, the claim was against the defendant who negligently certified an aircraft as being in an airworthy condition. Hobhouse LJ (as he then was) considered that, as the case fell within the recognised category of liability for personal injury, the only question was whether there was sufficient foreseeability and proximity. In his view, the fact that the injury in question was caused indirectly was irrelevant to the imposition of a duty of care. However, in other cases involving indirect personal injury, the Court of Appeal has applied the full three stage test. Thus in Watson v British Board of Control Limited [2001] QB 1134, the necessary proximity requirement was satisfied because the defendant had complete control over the source of the danger and the claimant would, or would be expected to, rely on the defendant. By contrast, in Sutradhar v Natural Environment Research Council [2006] UKHL 33, such complete control was missing and the House of Lords concluded that no duty of care existed.
It is the claimants' pleaded case that Sundance owned a personal non-delegable duty to Mr Cassley to procure that reasonable care was taken in the performance of the duty by whomever the duty-holder holder might get to perform the particular obligation (in this case Aero-Service). Sundance submit that if (which it denies) it owed any duty of care at all, it was a duty to take reasonable care in the selection of Aero-Service, rather than a more onerous duty to procure the careful performance of their work. Outside of the employment relationship, a non-delegable duty only arises in certain exceptional cases: see Woodland v Swimming Teachers Association [2014] AC 537. Exceptions are those situations where the function being performed was either inherently hazardous or where there was a protective duty of care (usually involving a child, hospital patient or someone vulnerable).
A duty of care in selecting independent contractors can also be linked to the particular activities being carried out by that contractor. Thus, in Bottomley v Todmorden Cricket Club [2003] EWCA Civ 1575, the defendant had hired a two man stunt team to conduct a pyrotechnic display. The judge found that the whole operation was highly dangerous and that the stunt team was "an amateurish organisation operating in a field which required the highest degree of professionalism if danger was to be avoided". The judge ruled the defendant liable because they failed to exercise reasonable care in selecting the stunt team. The extra-hazardous nature of the activity in Bottomley can be contrasted with the tree-felling in Yates v National Trust [2014] EWHC 222 (QB) where it was held that the activity was not extra-hazardous. The claim in that case was a little unusual because the claimant was employed by the very contractors whom, it was said, the National Trust should not have appointed. The claim failed.
Duty of Care
In my view, Sundance assumed a responsibility to Mr Cassley in respect of the trip as a whole, and in particular in relation to the flight to and from Yangadou. They were the organisers of the trip, over which arrangements they had complete control. He was their guest. They assumed a responsibility to take reasonable care of him and he plainly relied upon them to take reasonable care in making the appropriate arrangements. I note that (although ultimately it is a matter for me) Professor Ball, Sundance's risk expert, assumed that they owed Mr Cassley this type of duty of care.
Absent the wording of the deed (an issue to which I revert below) I had understood that Sundance accepted the existence of a duty of care because they had complete control over the arrangements for the flight. In the course of his closing submissions, Mr Williams indicated that he did not necessarily accept the existence of the duty because Sundance did not have control over the aircraft. I have to say that I do not follow that argument. Sundance owed a duty in respect of the arrangements for the flight. That included, in particular, making proper investigations into the safety and security of Aero-Service. It patently did not extend to any control over the flight itself which is a separate point, and dealt with under the heading of 'Causation' below.
For completeness, and should it be relevant, I consider that Sundance also owed a duty of care to Mr Cassley because the three elements of Caparo were present: there was proximity; the loss if Sundance failed to take reasonable care in the selection of Aero-Service was reasonably foreseeable; and the imposition of liability on Sundance would, in all the circumstances, be just and reasonable.
It follows from this that I find that the duty owed by Sundance was a duty to take reasonable care when selecting the aviation carrier, Aero-Service. To the extent that it was suggested that Sundance owed him a more onerous, non-delegable duty, namely some sort of obligation to procure the proper performance by the carrier, then I reject such a case. This was not one of the exceptions identified in Woodland. Indeed, it seems to me that the situation in this case is precisely caught by paragraph 25(3) of the judgment of Lord Sumption:
"In the absence of negligence of their own, for example in the selection of contractors, they will not be liable for the negligence of independent contractors where on analysis their own duty is not to perform the relevant function but only to arrange for its performance."
In my view, for the reasons that I have given, Sundance owed a duty of care in connection with the selection of Aero-Service, but they were not liable for the negligence of those independent contractors.
Mr Williams argued that the existence of clause 14 of the deed demonstrated that Sundance had not assumed responsibility to Mr Cassley and/or negated the duty of care referred to above. I do not accept that submission for a number of reasons.
First, the deed was never signed. It was therefore of no legal effect. It would be a curious result if a deed that was not signed by either party somehow regulated their legal relationship.
Secondly, even if the deed had been signed, I am satisfied that Mr Ross QC is right and that it would have offended against section 2 of the Unfair Contract Terms Act 1977. It would have been an illegitimate attempt to exclude liability for personal injury or death. It would therefore have been of no effect. Again, therefore, it is difficult to see how it could at the same time be utilised to negate any liability otherwise arising on the part of Sundance.
Thirdly, clause 14 related to the relationship between Sundance and GMP. It was not and was never made personal to Mr Cassley himself. It was therefore different to the personal waiver that Sundance had endeavoured to utilise in the past (paragraphs 46-51 above). Accordingly, even if the deed had been signed, it would not have affected the duty which Sundance owed to Mr Cassley personally.
Fourthly, I reject the suggestion advanced by Mr Williams that, as a result of the words of the deed, GMP and Mr Cassley were not entitled to rely on Sundance as far as risk assessment/investigations were concerned. I accept of course that the deed made plain that GMP should undertake their own investigations but that does not of itself mean that GMP and Mr Cassley could not make enquiries of Sundance, nor rely upon their answers. In other words, the wording of the deed did not, in my view, negate Sundance's assumption of responsibility and duty of care. Mr Butterworth's evidence about the reputation of Sundance also demonstrated reliance.
Fifthly, I accept Mr Reeve's submission that the indemnity sought was predicated on the basis that a liability was otherwise owed by Sundance at least to GMP, if not Mr Cassley. That liability also reflected GMP's/Mr Cassley's reliance on Sundance, so it can fairly be said that the deed assumed their reliance rather than negating it.
Finally, I do not believe that the words of the deed could, as a matter of fact, negate the clear assumption of responsibility which Sundance, as the organisers of the trip, assumed to Mr Cassley. As a matter of fact, they were organising the trip and inviting Mr Cassley as their guest. They may have sought (ultimately unsuccessfully) to exclude their legal liability to GMP through the vehicle of clause 14, but that did not mean, as a matter of fact, that Sundance had not assumed responsibility to Mr Cassley in a way that allowed the duty of care (of the type referred to in paragraph 289 above) to arise.
Breach
The scope of the duty owed by Sundance was to take reasonable care in selecting the carrier; of undertaking an effective risk assessment of Aero-Service. What should have happened is perhaps best identified by Christopher Clarke J (as he then was) in Hopps v Mott McDonald Limited [2009] EWHC 1881 as follows:
"I accept the submission of the MOD that that involves considering: (a) the nature of the risks; (b) the likelihood of it eventuating; and (c) the likelihood of harm being sustained (and the extent of that harm) if it does. In deciding what steps had to be taken in order to deal with these risks it is relevant tot take into consideration (i) the nature and purpose of the work that the claimant was employed to perform; (ii) the priority of the risks i.e. which were the principle and which were the secondary risks; (iii) the effectiveness of various protective measures that could be taken; and (iv) the consequences of taking them."
In the present case, I find that every form of transport involves some degree of risk. The nature of the risk here was the risk of a catastrophic accident. The real issue was the likelihood of that eventuating. The appropriate protective measure was to take reasonable care in selecting a charter flight company that would discharge its obligations properly. This was a low risk routine flight. The only remaining issue was whether it was reasonable to appoint this carrier to undertake the accident flight.
Sundance had, of course, originally engaged Jetfly to carry out the flight to Yangadou. As noted already, there is no suggestion that Sundance were in breach of any duty towards James in respect of the plan to use Jetfly. Accordingly, the focus of the case against Sundance can only be in relation to the late change of carrier to Aero-Service.
Did Sundance switch to Aero-Service without having undertaken reasonable checks or given any consideration to the wisdom of using them for this flight? In my view, the answer to that question is No; on the contrary, Sundance had amassed a good deal of information about Aero-Service over the preceding months. In particular:
a) They were aware that Aero-Service were a long-established business in the Congo whose planes had undertaken numerous flights into bush strips.
b) They had originally been recommended by the Dutch Honorary Consult, Ms Fumey, whose husband Marc was himself a pilot.
c) They had had a check on Aero-Service undertaken by another pilot whom they knew and trusted, Antonie Vermaark. His report was positive (paragraph 37 above);
d) They had sufficient basic documentation (which I find must have included the AOC) to allow them to use Aero-Service for the flight in March (paragraphs 33-38 above);
e) They had eventually been able to insure the March flight by reference to Aero-Service's own insurance documentation (paragraph 39 above); and
f) They had entrusted the Congolese Minister of Mines to Aero-Service when they flew to Yangadou in March, and the trip had been such a success that Mr Carr-Gregg had wanted to use Aero-Service permanently after that (see paragraphs 40-42 above).
When they decided to change from Jetfly to Aero-Service on 15 June 2010, Sundance had all that accumulated knowledge. They were changing from one carrier which they had used successfully before to another carrier which they had used successfully before. In addition, they knew that the pilots were going to be the same experienced pilots as before, another obvious source of reassurance. Mr Lewis had to approve every flight. He was aware of safety matters: he was also aware – because he said so – that the Board might ask him about such safety matters. I find that he reasonably decided that in all the circumstances, the flight to Yangadou on 19th June 2010 could go ahead.
I accept that there were some things which Sundance had not done by the time of the flight. In particular, it does not appear that they had obtained the manuals and other information requested by Mr Lewis (paragraphs 33 and 109). Furthermore, they had not themselves undertaken detailed audits or seen detailed audits prepared by others. And they had not discovered that Aero-Service were on the EU banned list.
The first issue for me is whether, having obtained a good deal of information about and experience of Aero-Service, but not having obtained other information about them which could have been obtained, Sundance were in breach of their duty to Mr Cassley. I have concluded that, on balance, they were not.
Theirs was a duty to take reasonable care in selecting the charter flight company Aero-Service; it was not a more onerous duty. The fact that there was other information that Sundance might have obtained, but did not, does not mean that the information which they had in fact obtained was insufficient for them to discharge their duty to Mr Cassley.
In particular, it seems to me that the fact that Aero-Service had provided such a good service for the flight in March, when they had an extremely important guest on board, was the most important element in Sundance's conclusion that this flight could be entrusted again to Aero-Service. The information that they had obtained by June, and the steps that they took to satisfy themselves that Aero-Service were an appropriate carrier, were reasonable. They were therefore not in breach of their duty of care to Mr Cassley.
I reach the same conclusion by reference to the claimants' pleaded case that Sundance failed properly to recognise, assess and avoid the risks to Mr Cassley when undertaking this trip. The documents demonstrate that Sundance recognised the risks associated with all modes of travel in the region, including air travel. They concluded, rightly, that it was safer to fly than to travel by road. In addition, although they recognised the comparative safety of air travel, they made careful enquiries before each charter flight. The email exchanges in January, March and again in June 2010 before each of the relevant flights to Yangadou, make that only too clear.
As to the assessment of risks, Sundance assessed the risks of flying with Aero-Service locally through Ms Fumey and her husband, and then Mr Vermaak. Then came their careful appraisal of the flight in March. And whilst they could not avoid all risks associated with taking a chartered flight to an African bush strip, there was nothing to suggest that there was anything about the proposed trip that was particularly risky or dangerous. Far from it: the charter flight to and from Yangadou was a low risk enterprise.
In summary, I conclude that a company in the position of Sundance, who was selecting a specialist service provider for a one-off charter flight, was obliged to undertake reasonable enquiries as to that carrier. But it was under no duty or obligation to investigate the minutiae of matters such as the equipment fitted on the plane, the charts on board, the manner in which the pilots intended to execute the flight, and the extent to which the pilots might be able to deal with particular weather conditions. Sundance were obliged to identify and evaluate any particular risks associated with the proposed flight plan and to select a reputable carrier. There were no risks in relation to this flight and Aero-Service were a reputable carrier whom they had used before.
For all these reasons, I find that there was no breach of duty on the part of Sundance and the claimants' claim against them must fail.
What Should Sundance Have Done?
Now let us assume that I am wrong in concluding that the duty owed by Sundance was limited, and/or wrong in finding that, on balance, there was nothing more that Sundance ought reasonably to have done in connection with Aero-Service. In doing so, I acknowledge that each of the experts, in rather different ways and in different terms, suggested that more might have been done by Sundance. In that event, what further actions should they have taken, and what (if any) difference would those actions have made?
First, it follows from paragraphs 222-229 above that I do not consider that Sundance should have engaged an independent aviation consultant. The evidence did not support Mr Watson's exposition of this possibility. In my view, Mr Watson was essentially saying that anyone chartering a flight in the Congo was obliged to instruct an aviation consultant to undertake a full audit of the charter company, even if it was only a one-off flight, and even if the duty-holder had obtained its own information as to the reliability of the carrier. I consider that to be unrealistic.
Putting the point another way, I conclude that an aviation consultant would only have been required if Sundance should have realised, from the information available to them, that this was a high risk flight (see Dusek). However, as I have found (paragraph 121 above) this was not a high risk flight. It was a low risk flight to the African bush and there was nothing about it which should have alerted Sundance to any particular or specific risks of any kind.
In my view, the most that can be said against Sundance is that they should have followed up Mr Lewis' original (and then repeated) attempt to obtain safety manuals and the like. I think it likely that, if they had pursued this line of enquiry, Aero-Service would not only have provided the information on these issues which is apparent from the three audits, but they would have been more likely than not to provide copies of those three audits themselves. It would have been much quicker and easier for Aero-Service to provide that documentation, in one go, if they had been asked further questions about safety. In the alternative, Sundance might have asked Aero-Service whether they had been the subject of any audits and the likelihood is that the audits set out above would then have been provided to Sundance.
Accordingly, if Sundance ought to have done more, they ought to have followed up Mr Lewis' enquiries and/or asked Aero-Service directly about audits, and, if they had done so, I find that they would have received the information set out in the three audits (and in all probability the documentation too). The remaining question is what, if any, difference it would have made if that information had been provided to Sundance. I deal with that in the next section of this Judgment.
It is important here for me to say that, although there are other enquiries which it is alleged Sundance should have made, and other things they should have put in place, I reject those as being unrealistic or unreasonable. First, Sundance did not know of the EU ban: there was no evidence on which any contrary finding could be based. Moreover, I do not think that Sundance would have had any reason to make any further enquiries so as to discover the EU ban. They were an Australian company chartering a flight in West Africa. They could not readily have found out about the EU ban, but even if they had done so, they would have hardly been likely to accord it any importance (especially not compared with the local information which they had obtained). They could just have easily have noted that no Congolese carriers were banned by the US authorities. I note that both Mr Harris and Mr Sole (who undertook the February 2010 audit of Aero-Service) were aware of the ban but did not believe that this indicated that Aero-Service was an unsafe carrier.
It is also said that Sundance should have employed someone to supervise the flight has not been made out. There was no evidence that somebody in the position of Sundance should have engaged an independent flight supervisor (i.e. someone actually on board the aircraft). In any event, given the circumstances of the accident, it is impossible to see what difference any such flight supervisor would have made. He could not have been in the cockpit (the evidence was that only pilots were allowed there) so he could not have prevented the errors that caused the accident.
Finally there is the issue of the equipment fitted to the plane. Below the surface of the claimants' claim was the suggestion that the absence of a GPWS on this aircraft was a significant factor which, in some way, Sundance should have known about. But Mr Watson accepted in cross-examination that Sundance could not have been expected to consult the ICAO Annex 6, in which international standards for equipment are set out. Furthermore, this type of plane was not manufactured with GPWS and the cost of installing such a system in the plane would have been prohibitive. It was therefore unrealistic to suggest that in some ways Sundance could be linked to the absence of a GPWS on this particular aircraft. All of the conclusions about GPWS in connection with the case against GMP (at paragraphs 254-266 above) apply again in respect of the case against Sundance.
The debate about GPWS is part of a wider debate about a variety of factors, such as whether, charts, air traffic control and the like, on which the claimants rely in support of their case against Sundance. They are a mixture of risk factors and suggested control measures. As to these, I accept paragraphs 153-156 of Mr Williams' closing submissions, that these were matters which were wholly outside and beyond the capability of duty-holders such as Sundance to investigate and assess. That reality may explain why the claimants' needed a case that an independent aviation consultant was required to consider all of these factors, but that would lead, as the defendants submit, to a situation where an independent consultant was required to consider every proposed flight, which I consider to be a wholly unrealistic stance.
I also accept the submission that there is nothing in any standard or official guidance to suggest that these risk factors/control measures were matters that a duty-holder such as Sundance (or GMP for that matter) were required to investigate. They are concerned with the detail of aviation. To argue that they were matters that should have been considered sets the standard far too high for a company in the position of Sundance. They amount to a case that Sundance ought to have micro-managed every aspect of the accident flight. I again consider that to be unrealistic. In addition, it would mean, as a matter of logic, that Sundance were not entitled to rely on any information produced by third parties (such as the AOC). I accept Mr Williams' submission that the claimants' case sets the bar far too high. It is not the standard set out in Dusek.
Causation
This only arises if my conclusion in Section 12.3 above is wrong, and that Sundance ought to have undertaken the further enquiries set out in Section 12.4 above. As noted there, those further enquiries would have led to Sundance knowing what we now know, courtesy of the three audits. Would those have made any difference to Sundance's decision to fly with Aero-Service?
In my view, if the information in the audits had been made available to Sundance, it would simply have confirmed their positive views of Aero-Service: see paragraph 144 above. They would have seen that all three audits were generally positive and that, although there were things that needed to be improved, none of those things were regarded as significant or important, and none of them affected (or were recommended as affecting) the use of Aero-Service by MPD Congo. I find that Sundance would have concluded that, if Aero-Service were recommended to MPD Congo for two flights a week for 18 months, then they would have been good enough for Sundance to undertake this one off trip to Yangadou and back.
Mr Watson obviously appreciated that, on the face of it, the three audit documents did not provide the sort of damning critique of Aero-Service which was required to sustain the claimants' case. Accordingly, he gave evidence to the effect that if he, as an experienced aviation consultant, had looked at these audits, he would have disagreed with the positive views expressed by the auditors themselves, and would instead have looked between the lines and found evidence of the major failings which he said existed. He made plain in his oral evidence that he did not accept the findings of the auditors, saying at one point: "let's be blunt. I think they got it wrong." At another point in his evidence, he describes their findings as "typical audit errors".
This evidence neatly demonstrated the difficulty inherent in the claimants' case on the audits, as advanced by Mr Watson. In essence, he was advocating a contradictory case; that although Sundance (if they had seen them) would have been entitled to take the audits at face value, they would in fact have been wrong to do so, and they should instead have engaged an aviation expert, who might have given a potentially different view.
There are all kinds of difficulties with such a proposition. First, for the reasons already explained, I have found that neither GMP nor Sundance were obliged to engage an independent aviation consultant. Secondly, even if they had done, the experts were not agreed that such an expert would necessarily have taken a different view to that of the auditors. On the contrary, Captain Gillespie said that the audits were very positive and would have led him to conclude that Aero-Service were an appropriate company to undertake this flight. I conclude that this was therefore a matter on which, at the very least, different experts might reach different views.
Finally, there was Mr Watson's own admission in cross-examination that the three auditors who audited Aero-Service in 2009 and 2010 were far better placed than he was to make an informed judgment about whether or not it was safe to use Aero-Service for charter flights. That admission was clear and unqualified. It seemed to me that it negated all of Mr Watson's criticisms of those audits.
For these reasons, I conclude that Mr Watson's need to go behind these audits and to say that, if they had seen them, Sundance should have reached the opposite conclusion to that of the auditors themselves, demonstrated the insurmountable difficulties which the audits created for the claimants' case on causation. Even if Sundance should have asked for them, there was nothing on the face of these audits which should have alerted Sundance to the existence of any meaningful difficulties at Aero-Service. Mr Watson's evidence to the contrary was, in my view, unrealistic and tainted with significant amounts of hindsight.
Accordingly, even if (which I do not accept) Sundance ought to have carried out further enquiries, I find that those further enquiries would have resulted in their being provided with the information (and probably the documentation) surrounding the three audits. Armed with that information, I am in no doubt that Sundance would have confirmed the flights with Aero-Service. Accordingly, even if (which I do not accept) there had been a breach of duty on the part of Sundance, that breach was irrelevant; it was not causative of Mr Cassley being on the plane on that Saturday morning. Again, I find that the accident, and the causes of the accident, was not reasonably foreseeable and are too remote in law.
I should add for completeness that it is no part of the claimants' case that either an alternative means of transport should have been used or that, alternatively, a different carrier should have been used. Although Solenta was referred to in the evidence, it was not pleaded that the flight should have been arranged with them. That would not have got round the permit problem in any event. Although there was a suggestion in Mr Reeve's closing submissions that the flight should simply have been cancelled, I am dubious as to whether this could properly be said to have been pleaded. In any event, for the reasons that I have explained, there was nothing (and would have been nothing if further investigation had been undertaken) that would have warranted the cancellation of the flight in any event.
Although it is a point I have already made, it is again worth comparing the facts of the case against Sundance (when taken at their highest) with the decision of Hamblen J in Dusek. In that case, there was an inherently dangerous and high-risk flight which should have been the subject of a careful risk assessment and was not. Here, there was a low risk flight which did not give rise to any reasonable concerns, and a carrier had been the subject of reasonable scrutiny. The stark differences in the facts explain, in my view, the different outcomes in these two cases.
Another way of arriving at the same conclusion as to causation is to consider the twin causes of the accident: the failure to plot the route properly (and to be aware of the Avima ridge); and the failure properly to assess the weather conditions before and during the flight. These were plainly matters which were the responsibility of the pilots. Mr Watson conceded that in cross-examination. Those were not matters which Sundance could have identified or done anything about prior to the accident.
It is possible for this analysis to be presented in one final way. I have referred at paragraph 281 above to the recently re-stated principle that English law does not impose liability on a defendant for injury or damage to the personal property of a claimant caused by the conduct of a third party. Ultimately, for the reasons set out above, I have concluded that this accident occurred due to pilot error. Sundance were not liable for the errors made by the Aero-Service pilots, who were third parties. There was nothing that they could reasonably have done to have avoided those errors.
For all the reasons set out above, the claimants' claims against Sundance are also rejected.
Note 1 Although paragraph 13(d) of GMP’s Amended Defence may be slightly more nuanced than this summary, that was essentially what it said. [Back]
Note 2 I accept that there was some evidence that the text may have been pasted into the text of an email that he was sent, but I remain of the view that Mr Cassley probably did not read the detail of clause 14. [Back] |
Mr Justice Jeremy Baker :
Christian Cooper ("the claimant") is 46 years of age (DOB 7.10.68). On 21st March 2000 she gave birth to her first child, Max, who weighed 2.69kg at 40 weeks. During the course of his vaginal delivery there was some retention of the placenta which required manual removal. Therefore when the claimant gave birth to her second child, Aimee, who weighed 3.23kg at 39 weeks on 28th April 2004, she elected to do so by caesarean section.
Later on that year, the claimant again became pregnant. She was by then 36 years of age and of normal weight, with a BMI of 24.05kg/m2. The claimant was under the care of Miss Siddall at the Royal Berkshire Hospital and attended 13 antenatal visits at the hospital between the 12th and 40th weeks of her pregnancy. During these visits it was noted that there was no hypertension, no persisting proteinuria and no glycosuria. Miss Siddall saw her on three of these occasions, at the 15th, 26th and 39th week, and it is evident that discussions took place between the claimant and Miss Siddall as to the mode of delivery which was to take place. The significance of this is that although it is perfectly possible for vaginal delivery to take place after a previous caesarean section, it carries with it a risk that, during the course of the subsequent delivery, a traumatic rupture of the previous surgical scar can occur with potentially serious consequences for the health of the mother and the baby. In the event, the claimant chose to give birth to her third child by vaginal delivery.
At about 21.30 on 13th July 2005 the claimant attended at the hospital, together with her partner Julian Harrington. The claimant had by then reached the 41st and 4th day of her pregnancy, and vaginal examination confirmed the likelihood of early labour signs.
By 1.00 on 14th July 2005 the claimant was asking for assistance, she was in severe abdominal pain, and the medical records show that there was a concern that the claimant had suffered either a placental abruption or a uterine rupture. At 1.15 fetal bradychardia was noted and the claimant was transferred to theatre where, at 1.27, during the course of a caesarean section, it was found that a uterine rupture had taken place and consequently the baby, Gene, and the placenta had entered the peritoneal cavity. These complications were managed, albeit during the course of the procedure the claimant lost 1lt of blood which was replaced by way of a transfusion.
Gene had a birth weight of 3.67kg. Sadly however he was by then in a poor condition due to a hypoxic period during his birth and, despite continuous hospital care, died on 4th June of 2007.
Over the course of the following few days the claimant remained in hospital where her condition was monitored and she received medical care. Her partner Julian Harrington remained with her during this time.
At 3.00 on 14th July 2005 her blood pressure was noted to be 122/75 and as a result of the events which had taken place, 5000 units of Heparin was prescribed to be provided to her twice daily. The first dose of 5000 units being provided to the claimant at 22.00.
On the following day 15th July 2005 the medical records noted that the claimant appeared to be making a reasonable recovery, albeit no Heparin appears to have been provided to her.
On 16th July 2005 the claimant's blood pressure was noted to be 120/92. A dose of 5000 units of Heparin was provided to her at 13.15. and it may well be that a further dose was provided to her later that evening.
On 17th July 2005 it was noted that the claimant was complaining of having suffered from chills over the previous couple of nights, a matter which is confirmed by Julian Harrington in his witness statement dated 10th April 2014. It was noted that she had a slightly raised temperature and was pyrexial. Blood samples were cultured and subsequently an intravenous antibiotic was administered to her. The claimant was provided with a single dose of 5000 units of Heparin at 18.45.
At 9.00 on 18th July 2005 the claimant's blood pressure was noted to be 110/75. She was feeling low and was subsequently provided with two blood transfusions. At 18.00 her blood pressure was noted to be 120/70 and slightly later she was noted to be feeling better. No Heparin appears to have been provided to her that day.
At 4.00 on 19th July 2005 the claimant's blood pressure was noted to be 142/94. She was noted to have been vomiting and was complaining that she had been experiencing a headache over the previous 4 hours; the pain reaching from the front of her head to the back of her neck where it was more intense. In his witness statement Julian Harrington stated that the claimant had in fact been suffering from headaches over the previous few days, a matter which he had also mentioned in the interview conducted with him for the purposes of the subsequent internal review. However, he states that the claimant told him that the headache on 19th July was significantly worse than the previous ones, and Codeine Phosphate was provided to her.
The claimant's blood pressure was checked at 6.00 and 10.00 and was noted to be 135/90 and 125/90 respectively. At this latter time it was noted that the claimant had again vomited. At 10.45 it was noted that the claimant's headache was better, a matter confirmed by Julian Harrington, and her blood pressure was noted to be 130/90. This level was recorded at both 13.00 and 14.00. There were concerns that the claimant might be suffering from pre-eclampsia and the Senior House Officer, Dr Hubert, attended at 14.40 in order to take blood samples from her for analysis. According to Dr Hubert's witness statement dated 3rd August 2005, the claimant told her that she did not have a headache and was able to converse with her whilst sat on the bed. After obtaining the blood samples, Dr Hubert left the claimant's room in order to label the samples.
However, when Dr Hubert returned to the claimant's room a few minutes later at 14.45/47 she found the claimant lying face down on the floor, her skin tone was mottled blue, she had saliva around her mouth and had urinated on the floor. Immediate emergency treatment was afforded to the claimant whilst she was on the floor which included cardiopulmonary resuscitation and oxygenation through an Ambu-bag. When the crash team arrived a few minutes later at 14.55 they found that the claimant was in asystole. She was intubated and provided with adrenaline. Ventricular fibrillation was administered and sinus rhythm was restored. In view of the suspicion of eclampsia, she was provided with intravenous Magnesium Sulphate.
The claimant was taken to the intensive care unit and en route underwent a CT scan at 16.01, which was reported as normal. The claimant's care at the unit was undertaken by Dr Atul Kapila, Consultant in Intensive Care Medicine. She was admitted at 16.19 where her Glasgow Coma Score was recorded as being the lowest 3, and at 17.45 she began convulsing. The claimant was examined by the neurology team and a differential diagnosis was made, namely: a hypoxic brain injury with subsequent seizures; eclampsia with fit and subsequent collapse and cardiac arrest, or; a central nervous system infection. In due course a lumbar puncture was administered which excluded the latter possible diagnosis. Thereafter the claimant remained on artificial respiration.
Tragically, as a result of the period during which the claimant had no cardiac output she has suffered irreversible hypoxic neurological damage. The claimant has never regained consciousness, and in the intervening years she has remained minimally responsive and under continual medical care.
Understandably, since these events took place, the claimant's family have been concerned to know not only the cause of her cardiac arrest, but also whether her present condition could have been avoided. An internal review of the medical care provided to the claimant has taken place and its findings include the following observations,
"In TP's (Dr Tim Parke, Divisional Director of Clinical Support Services) view the most likely cause remains a seizure, possibly pre-eclampsia. However, the presentation would be delayed and very atypical, and RP (Mr Rick Porter, Consultant Obstetrician) did not think this likely. His personal view was that the most likely diagnosis is of a central (cerebral) venous thrombosis, which subsequently resolved."
Civil proceedings
An action has been commenced on behalf of the claimant for the recovery damages for personal injury, loss and damage from the Royal Berkshire NHS Foundation Trust ("the defendant"). In these proceedings it is alleged that the claimant's cardiac arrest and consequent hypoxic neurological damage was caused by the occurrence of a cerebral venous thrombosis ("CVT") on 19th July 2005, and that in turn this was caused or materially contributed to by the defendant's negligence. Firstly, by the lack of provision of ante-natal advice to the claimant of the risk of uterine rupture occurring during the course of vaginal delivery by a woman who has previously undergone a caesarean section, and its possible detrimental consequences for the baby and the mother; it being alleged that had such advice been provided to the claimant, she would have heeded it, elected to have a caesarean section and thereby avoided the trauma surrounding the uterine rupture which caused or materially contributed to the occurrence of the CVT. Secondly, by the lack of consistent post-natal provision of Heparin, which caused or materially contributed to the occurrence of the CVT.
The action has been defended. The defendant denies that there was any lack of reasonable ante-natal medical care or, in the event of such ante-natal or admitted post-natal lack of care, that it was causative of the claimant's cardiac arrest. Firstly, it is alleged that appropriate ante-natal advice was provided by Miss Siddall, and that the claimant, knowing of the risk of uterine rupture and its consequences, elected vaginal delivery of her third child. Secondly, that even if such advice had not been provided, although it concedes that the trauma of a uterine rupture may have materially contributed to the occurrence of a CVT, the defendant denies that the claimant suffered from this condition on 19th July 2005; rather she suffered from post-partum eclampsia ("PPE") which was unaffected by the trauma. Thirdly, although it admitted that the lack of consistent post-natal provision of Heparin amounted to a lack of reasonable medical care, this also was not causative of the claimant's cardiac arrest. Although it concedes that it may have materially contributed to the occurrence of a CVT, the defendant denies that the claimant suffered from this condition, and the PPE which she suffered was unaffected by any lack of post-natal provision of Heparin.
As it is conceded by the defendant that the lack of consistent post-natal provision of Heparin amounted to a lack of reasonable medical care of the claimant and, that if the cause of her cardiac arrest and consequential hypoxic neurological damage was a CVT, the admitted negligence would have been causative of her current condition, it is agreed that there is no purpose to be served in dealing with that aspect of the evidence relating to the ante-natal advice provided to the claimant by the defendant. Furthermore it is agreed that although there are other possible causes for the cardiac arrest and consequential hypoxic neurological damage suffered by the claimant on 19th July 2005, these are sufficiently unlikely to have been responsible; such that the only two differential causes are likely to have been the claimant suffering either a CVT or PPE. In these circumstances it is agreed that the single issue which requires to be determined in relation to liability, is whether the claimant is able to establish to the civil standard of proof that the cause of the claimant's cardiac arrest was a CVT.
Expert reports
The written evidence in this case has included medical reports from a number of experts in their respective fields.
On behalf of the claimant I have been provided with the following reports: Mr Mark Waterstone, Consultant Obstetrician and Gynaecologist, dated June 2014; Dr David Williams, Consultant Obstetric Physician, dated June 2014; Dr Brian Kendall, Consultant Neuroradiologist, dated June 2014, and; Professor David Chadwick, Emeritus Professor of Neurology, dated June 2014.
On behalf of the defendant, I have been provided with the following reports: Mr Derek Tuffnell, Consultant Gynaecologist and Obstetrician, dated June 2014; Dr Alexander Pirie, Consultant and Honorary Senior Clinical Lecturer in Obstetric and Maternal Medicine, dated June 2014; Dr Wellesley Forbes, Consultant Neuroradiologist, dated June 2014, and; Dr Guy Sawle, Consultant Neurologist, dated June 2014.
In addition I have been provided with the following joint reports: Mr Mark Waterstone and Mr Derek Tuffnell, dated 1st December 2014; Dr David Williams and Dr Alexander Pirie, dated 22nd December 2014; Dr Brian Kendall and Dr Wellesley Forbes, dated 10th December 2014 and; Professor David Chadwick and Dr Guy Sawle, dated 9th December 2014.
In his initial medical report, Mr Mark Waterstone provided his opinion upon the adequacy of medical care, in relation to both the requirement for the provision of ante-natal advice as to the risk of uterine rupture occurring during vaginal delivery after a previous caesarean section, and the lack of consistent post-natal provision of Heparin. He stated that if there was a lack of such ante-natal advice, then this would be evidence of a lack of reasonable medical care, as would the inconsistent post-natal provision of Heparin. However he did not provide any opinion upon the issue of the differential diagnosis between the occurrence of a CVT and PPE.
On the other hand, whilst Mr Tuffnell provided similar opinions upon the adequacy of the two aspects of medical care, he also provided an opinion upon the likely cause of the claimant's cardiac arrest in these terms,
"The cause of the collapse in this case is difficult to identify with certainty. However, it does seem as though there was a seizure associated with the collapse and there had been an elevation of the blood pressure just before the collapse occurred. Therefore on the balance of probability this is more likely to be an eclamptic seizure and collapse than it is to be a collapse due to any other cause."
In their joint report the two doctors were asked for their opinion as to the most probable cause of the claimant's collapse on 19th July 2005. Mr Waterstone stated that this was a matter which ought to be answered by other experts in the case, but,
"Nevertheless, I am able to state that the absence of any evidence of pre-eclampsia within 48 hours of the collapse makes the probability that this was due to eclampsia very low."
However Mr Tuffnell maintained his originally expressed opinion and explained that,
"Whatever the cause of death in this case it was due to an extremely uncommon cause. The blood pressure was elevated before the seizure and this is consistent with that seizure being due to eclampsia, which can be associated with cardiac arrest. In the absence of any features of any other condition this uncommon cause of death (eclampsia) is more likely than the other much rarer causes."
In his initial report, Dr David Williams noted that the father of the claimant's second and third child was one and the same individual, namely Julian Harrington. In these circumstances he stated that research showed that the risk of the claimant suffering from pre-eclampsia when pregnant with her third child was 1%. Of those who suffer from pre-eclampsia, the condition only develops into eclampsia in 1% of women. Moreover, only 20% will suffer post- partum eclampsia after the first 24 hours post-partum.
He stated that pre-eclampsia is usually associated with poor placental function, such that the majority of women with the condition will have children with a poor birth weight. Moreover it is only in 20% of cases where a woman has an eclamptic seizure that there is an absence of hypertension. In contrast in this case, not only did the claimant give birth on 3 successive occasions to babies with a normal birth weight, including Gene, but apart from some mild to moderate diastolic hypertension in the period leading up to the seizure, the claimant had normal systolic blood pressure.
In these circumstances Dr Williams was of the opinion that it was "….very unlikely that the cause of her presumed post partum seizure was post partum eclampsia."
In contrast he considered that a CVT was the most likely diagnosis. He stated that between 25 – 30% of all CVTs (both men and women) occur in relation to pregnancy, most commonly post-partum. The reason being that a woman's blood is more thrombotic during this period, and in the present case this pro-clotting factor would have been increased due to the loss of blood during the emergency caesarean section; hence the need to provide a thromboprophylaxis like Heparin, which was not provided to the claimant. The risk of a CVT would have been enhanced by the pyrexia which the claimant suffered during the post-partum period, and her mild hypertension is compatible with a CVT as opposed to pre-eclampsia. Moreover, the most common presenting symptom for a CVT is a headache, which the claimant suffered in the post partum-period, and a grand mal seizure occurs in 20 – 35% of those suffering from a CVT. Dr Williams accepted that there was no evidence on the CT scan of matters which would support the occurrence of a CVT. However he observed that the absence of such evidence does not necessarily negative the occurrence of such an event.
In these circumstances he was of the opinion that had the claimant been provided with the prescribed course of post-partum Heparin, it is likely that she would not have suffered a CVT and therefore would not have suffered from the seizure leading to the cardiac arrest and consequential hypoxic neurological damage.
In his initial report Dr Pirie described his approach to differential diagnosis and stressed the importance of having regard to both the correlation between the known features and symptoms relating to the individual, as compared with the characteristics of the conditions being considered, and the relative prevalence of those conditions within the relevant parts of the population.
He listed the relevant features and symptoms which had been exhibited by the claimant in the post-partum period as follows: a period of 5 days following an emergency c-section for a ruptured uterus; headache of intermittent severity; the onset of mild hypertension; sudden maternal collapse; seizure; cardiac arrest; a successful cardiovascular resuscitation with chronic neurological damage and the normal results of subsequent tests such as a CT scan, lumbar puncture, 12 lead ECG and blood tests. He concluded that all of these features and symptoms fitted the possible diagnosis of a CVT and PPE, and that none of the features or symptoms positively refuted either of them.
He then proceeded to observe that the prevalence of PPE is far commoner than CVTs by an order of at least two magnitudes, and on that basis alone would make the former diagnosis more likely than the latter. Although earlier in his report he had observed that during the ante-natal period in the present case neither the blood pressure nor urinalyses recordings disclosed evidence indicative of the existence of pre-eclampsia, he stated that there were factors which would favour a diagnosis of PPE over that of a CVT. Firstly, he considered that although a CVT can occur and fail to show features which are evident on a CT scan, where the thrombus is large enough to cause maternal collapse this is likely to show up on a CT scan. Secondly, if the post-partum headache was due to a CVT then he would have expected it to have steadily worsened after its initial onset, rather than as in this case, been intermittent and resolving.
In their joint report the two doctors agreed that whereas the lack of consistent post-natal provision of Heparin would have had no causative effect on the occurrence of PPE, it would have been likely to have reduced the risk of the claimant suffering a CVT.
They agreed that although there was a wide spectrum of possible diagnoses in this case, the most likely were PPE or a CVT.
In so far as the differential diagnosis is concerned, they agreed that the most significant factors favouring a diagnosis of PPE are: a headache; episodic post natal diastolic hypertension; the lack of signs on the CT scan and the relative prevalence of PPE over CVT in the general population, as opposed to the individual risk in the present case. This latter caveat being in parenthesis. Whereas the most significant factors tending against such a diagnosis are: the lack of any pre-eclampsia with the previous births; the lack of ante natal pre-eclampsia in this pregnancy and the fact that Gene was well developed at birth.
On the other hand the most significant factors favouring a diagnosis of a CVT are: the traumatic caesarean section; the significant loss of blood during the birth; the strong inflammatory response and the absence of regular thromboprophylaxis. Whereas the most significant factors tending against such a diagnosis are: the relative rarity of CVT compared to PPE and the lack of any sign of a CVT on the CT scan, albeit that it is acknowledged that the scan may have missed a CVT.
In his initial report Dr Kendall noted that the CT scan had been made without an injection of intravenous contrast medium and is imaged on bone and soft tissue windows. He noted that no abnormality is shown on the image, and in particular there was no evidence of any abnormal density within the intracranial vessels which may be present in intracranial thrombosis, and no evidence of any ischaemic or haemorrhagic damage, or brain swelling. However he observed that although the CT scan provided no evidence in support of the occurrence of a CVT, such scans missed cranial sinovenous thrombosis in up to 40% of cases. Moreover, a conventional CT scan performed less than 90 minutes after the occurrence of a cardiac arrest sufficient in length to cause brain damage, would be too early to show evidence of the ischaemic damage. In these circumstances he did not consider that the results of the CT scan favoured the diagnosis of PPE.
Dr Forbes, in his initial report, agreed that the CT scan shows normal appearances, and in particular there is no evidence of intracranial haemorrhage, infarction, brain swelling or mass lesion. He was of the opinion that the results of the CT scan rendered a diagnosis of a CVT unsustainable in that in his opinion the presence of a cerebral thrombus of the magnitude required to cause a severe encephalopathic illness would have shown signs on the scan of either the thrombus itself or an infarction, together with brain swelling.
In their joint report the two doctors retain their opposing opinions, albeit that Dr Kendall considered that the more likely diagnosis was that of a CVT.
It would appear that Professor Chadwick's initial report was commissioned in order to provide an opinion upon the nature of and recoverability from the hypoxic brain damage which the claimant suffered on 19th July 2005. The nature being profound and its duration likely to be permanent. He explained that he had considerable uncertainty as to the mechanisms leading to the hypoxic ischaemic brain injury and, that if a primary cardiac cause could be excluded in favour of a sudden seizure, he would be stepping outside his field of expertise to suggest that this was more probably caused by a venous sinus thrombosis than another cause. He stated that the post-partum period is associated with brain pathologies which increase the risk of acute symptomatic seizures including both PPE and CVTs. In this regard he agreed that symptoms such as headaches, neck stiffness and vomiting would be consistent with both such causes. He stated that CT imaging provides very poor sensitivity to identify intracranial changes, and at the time when the CT scan was taken it would not be able to identify the changes that would have become evident later of severe hypoxic brain injury.
Dr Sawle did not consider himself so constrained by his area of expertise. He agreed that the two most likely explanations for the claimant's cardiac arrest were either PPE or a CVT. He considered that there was only one factor which "weakly supports" the latter diagnosis, namely that the cardiac arrest occurred on the 5th day after the birth. The significance of this being that whereas this fitted within the window of time which research described as being associated with the occurrence of a CVT, only a relatively small minority of cases of PPE occurred at that point.
However, there were in his opinion a number of factors which favoured the diagnosis of PPE. Firstly, he considered that it was extremely rare for a seizure to cause a cardiac arrest. He stated that as research showed that it was necessary for a CVT to precipitate a seizure in order to cause a subsequent cardiac arrest, whereas PPE may cause a cardiac arrest either indirectly through a seizure or directly by the PPE itself, this made it more likely that a cardiac arrest would be caused by PPE, because there were two possible mechanisms by which this condition may cause the cardiac arrest, rather than the one rare cause in the case of a CVT. Secondly, research shows that where seizures occur to obstetric patients, those are more frequently of the focal variety rather than the generalised variety, and that it is only the latter type of seizure which is capable of giving rise to cardiac arrest. Thirdly, it would be rare for a focal seizure to occur without other neurological symptoms, besides headaches and vomiting, being present, such as aphasia, confusion, somnolence, limb weakness or visual loss. Indeed in the present case, the claimant had reported a lessening in the degree of pain associated with her headache. In contrast it is not unusual for PPE to occur after a short period increasing blood pressure, followed by a seizure, without any other neurological symptoms being present. Fourthly, a generalised seizure would have resulted in a haemorrhagic infarction or a major degree of venous blockage and raised pressure, both of which he understood are likely to lead to visible changes on a CT scan.
In their joint report the two doctors largely maintained the views which they expressed in their initial reports. Albeit they agreed that if the cause of the claimant's cardiac arrest had been a CVT, then this is likely to have shown changes of venous infarction on the CT scan. Moreover, the absence of any preceding focal neurological symptoms reduces the probability that the cause of the cardiac arrest was due to a CVT.
Evidence at trial
At trial oral evidence was provided by Julian Harrington, Dr Kapila, Dr Williams, Dr Pirie, Dr Kendall, Dr Forbes, Professor Chadwick and Dr Sawle.
Julian Harrington's recollection of the claimant's post natal condition was that she was largely immobile, and suffered from headaches and chills. The latter symptom being experienced despite her room being particularly warm. He accepted that the medical notes appeared to suggest that the claimant had left her room to visit Gene on the 14th July. However, his recollection was that only he had visited his son that day, and that the claimant had only left her room once on the 18th July when she was taken in a wheelchair to visit Gene. He accepted, as the medical notes appeared to suggest, that the claimant had only had chills over a couple of days. However, despite there only being one mention of a headache in the medical notes on the 19th July, he recalled the claimant complaining of headaches throughout the post natal period, albeit she told him that her headache was significantly worse on the 19th July.
Dr Kapila said that it was necessary for a preliminary differential diagnosis to be determined in order to inform him as to the appropriate treatment that should be provided to the claimant whilst she was in the intensive care unit. In making that determination he was reliant upon the history of events with which he had been provided, the results of his examination and the opinions of others, including the neurologist Dr Khan. He said that as the claimant had been provided with Magnesium Sulphate after the seizure, he maintained its provision to her because of the possible diagnosis of eclampsia. Moreover, although a subsequent lumbar puncture had shown the claimant's cerebral spinal fluid to be clear, after discussing the matter with the microbiologist, Dr Iyer, it was decided to provide antiviral medication to the claimant as a precaution. He said that the lumbar puncture had also shown an intra cranial pressure reading of 21cm, which he considered was towards the upper end of the normal range of between 5 and 25cm, and which may have been due to the convulsions which she had exhibited earlier. He acknowledged that a normal CT scan result did not necessarily exclude the occurrence of a CVT. However because of the reported normal CT result, he did not consider a CVT as one of the differential diagnoses in this case. However he accepted that it would be rare for eclampsia to occur 5 days post partum.
Dr Williams has a special interest and experience in pre-eclampsia, his research team being focused upon understanding the aetiology of the disorder. He explained that the cause of pre-eclampsia is currently understood to be associated with the placenta, and that when the condition occurs it is often discovered that the placenta is not properly embedded within the womb. Its classic characteristics are those of hypertension and proteinuria within the mother, and the babies of mothers suffering from pre-eclampsia are often found to be growth restricted. In the majority of cases the condition is monitored and it is only if the risk of hypertension is sufficiently serious that medical intervention is necessary. Ultimately, during the ante-natal period, the only cure for the condition is delivery of the baby, and a careful balance may have to be struck between the relative risks of the continuation of the condition to the mother, as opposed to that of premature birth to the baby. However, on occasions the condition may develop into eclampsia, which is characterised by a seizure within the mother's brain. Dr Williams said that this is most likely to occur in the peri-partum and immediate 24 hour post-partum period, when the blood supply is diverted away from the placenta and back to the mother. However, its cause is unclear.
Dr Williams referred to the research literature and in particular to Professor Redman's 1994 survey of "Eclampsia in the United Kingdom", where eclampsia was described in the introduction as being, "….the occurrence of convulsions in association with the signs and symptoms of pre-eclampsia." Its definition for the purposes of the research being, "…the occurrence of convulsions during pregnancy or in the first 10 days postpartum with at least two of the following features within 24 hours after the convulsions: hypertension ……proteinuria …….thrombocytopenia…….or an increased plasma aspartate transaminase concentration…." The national incidence of eclampsia was found to be 4.9 cases in 10 000 maternities. It was found that 75% of first seizures occurred in hospital, of which 38% developed before hypertension and proteinuria had been documented. Moreover, 18% of those suffering eclampsia did so during the intra-partum period, whilst 44% of those suffering eclampsia did so during the post-partum period. In relation to this latter group, 88% suffered eclampsia within the first 48 hours post-partum.
This research was updated in 2005 by Professor Knight in "Eclampsia in the United Kingdom 2005". This followed the widespread introduction of Magnesium Sulphate for the treatment of eclampsia and severe pre-eclampsia, albeit 99% of those surveyed had only been given Magnesium Sulphate after their first convulsion. It found that the national incidence of eclampsia had reduced to 2.7 cases in 10 000 births. Moreover, 19% of those suffering eclampsia did so during the intra-partum period, whilst 36% suffering eclampsia did so during the post-partum period.
In the intervening period Dr Tuffnell and others had published the results of a relatively small research study of "Outcomes of Severe Pre-eclampsia/Eclampsia in Yorkshire 1999/2003" which found that 24 of the post-natal cases of those suffering from eclampsia occurred within 24 hours of delivery, whilst 1 occurred at two days and another at 5 days post-natal.
Dr Williams readily acknowledged that the incidence of eclampsia within the population is more than that of CVTs. The estimated annual incidence of the latter being described in Dr Stam's review article in The New England Journal of Medicine, "Thrombosis of the Cerebral Veins and Sinuses", as 3 – 4 cases per million of population, albeit with 75% of those cases being female. It was noted in the article that "A prothrombotic risk factor or a direct cause is identified in about 85% of patients with sinus thrombosis", and that, "The frequency of peripartum and post-partum sinus thrombosis is about 12 cases per 100 000 deliveries….." Moreover, the symptoms and clinical course of the disorder are described as being "…highly variable." In relation to CT scanning the article noted that it, "……is a useful technique for the initial examination, to rule out other acute cerebral disorders and to show venous infarcts or hemorrhages, but its results can also be entirely normal."
Dr Williams acknowledged that of those mothers who developed a post-partum CVT, not all would go on to develop a seizure. Moreover, the confidential enquiry into maternal mortality, "Saving Mothers' Lives" published in 2011, showed that during the relevant period in only 8 cases per 100 000 maternities was a CVT recorded as the direct cause of death. He acknowledged that post-partum eclampsia may occur beyond the 48 hour post natal period, as exemplified in the single case study reported in volume 331 of the British Medical Journal, "Postpartum Eclampsia of Late Onset". Albeit that in the latter case Dr Williams considered, given the symptoms described, it was likely that the mother was also suffering from posterior reversible encephalopathy syndrome.
Overall, Dr Williams was of the opinion that in the present case due to the timing of the seizure, namely 5 days post-partum, it was likely that the risk of the occurrence of PPE as opposed to a CVT was on a par. He based this not only upon his own experience, but also noted that although there was clear research evidence showing a significant fall in the incidence of PPE after the initial 48 hour post partum period, there was no such data available for the incidence of CVTs. Moreover the guidance issued by the Royal College of Obstetricians and Gynaecologists, "Reducing the Risk of Thrombosis and Embolism during Pregnancy and the Puerperium", pointed out that a woman will remain at the highest risk of suffering a thrombotic event during the first week post-partum, such that the provision of thromboprophylaxis for only a 3 – 5 day period my be insufficient, and recommends that it should be provided over a minimum period of 7 days post-partum. It was for this reason that when he answered question 7 of the joint report, he had required the addition of the caveat, that although the incidence of PPE as opposed to a CVT in the population as a whole favoured the former rather than the latter explanation, the individual risk in the present case did not do so.
Dr Williams acknowledged that in the light of the lumbar puncture results, which showed that the claimant's intra-cranial pressure was within normal limits, it was likely that if a CVT had occurred, it had initially caused a localised focal seizure which had then progressed into a more generalised one. Therefore the headache which had been recorded in the medical notes on the 19th July was not one which was caused by any raised intra-cranial pressure, a matter which he had overlooked in his initial report. However, he pointed out that there was in any event a strong association between the incidence of headaches and CVTs. Moreover where, as in the present case, a relatively small venous blood clot may have occurred leading to only a partial blockage, the nature and strength of the resulting headache caused by the backing up of blood may well be less severe than would otherwise he the case. In this regard he observed from the medical notes in this case that the headache appeared to have become less intense if not resolved with the use of analgesics. He agreed that vomiting is a sign which was consistent with a diagnosis of both PPE and a CVT.
Dr Williams agreed that the lack of any sign of focal damage on the CT scan was a factor which tended against the diagnosis of a CVT. However, he pointed out not only that both the literature and other experts in the case suggested that negative scans may occur despite the occurrence of a CVT, but that he had himself been involved in a case when a CT had failed to disclose the occurrence of an acute CVT, which was shown to have occurred on more sensitive MRI imaging. He agreed that the claimant had been recorded as suffering from some hypertension, albeit it was not particularly severe. The normal systolic range, being between 90 and140, whilst the normal diastolic range, being between 60 and 90.
In conclusion, he remained of the opinion that the most likely diagnosis in this case was a CVT, and that it was very unlikely that the seizure was due to the occurrence of PPE. In regard to the latter opinion, he confirmed that the most important factors against a diagnosis of PPE were the history of well developed babies, the lack of any pre-eclampsia either previously or in the course of the most recent pregnancy and post-partum period, and the timing of the seizure being 5 days post-partum. In this regard, although he acknowledged that Gene had been born slightly past term, he had been the largest baby born to date to the claimant and could in no sense be classed as growth-restricted. Dr Williams maintained that the most important factors in favour of the occurrence of a CVT included, the post thrombotic condition of the claimant in the post-partum period, the blood loss resulting from acute uterine rupture, the traumatic caesarean section and the lack of consistent post-natal provision of Heparin. He said that the claimant's immobility would also be likely to increase the risk of a CVT, as would any dehydration resulting from the temperature of her room in general, her previous pyrexial condition and the more recent vomiting.
Dr Pirie has considerable experience in acute obstetric care, working within a very large and busy maternity department. He said that he had seen a large number of mothers with eclampsia and, over the last 26 years, has seen about 5 cases of the condition occurring beyond the initial 48 hour post-partum period. He has also seen a number of cases of CVT. He agreed with Dr Williams that eclampsia is characterised by the occurrence of a seizure, and that it is likely that the claimant suffered a seizure in this case, leading to a cardiac arrest and the resultant hypoxic brain injury. Therefore the real issue in the case is whether the seizure was caused by PPE or a CVT.
He said that the three most important factors why he considered that the most likely diagnosis in this case was that of PPE, was firstly because of the relative prevalence of eclampsia as opposed to CVTs within the community. Secondly, the normal result of the CT scan, and thirdly the intermittent nature of the clinical presentation.
In relation to the relative incidence of the two conditions, Dr Pirie said that in the main he based his opinion upon his own experience, rather than upon the results of research in the academic literature. Indeed he was part of a new movement away from reliance upon such research and preferred the value of evidence based medicine. That evidence being largely informed by experience, rather than the results of academic research. Having said that, prior to having written his report he had read the relevant academic literature.
It was against this background that he acknowledged that in his initial report he had neither mentioned the relative decline in the incidence of PPE after the initial 48 hour post-partum period, nor had he mentioned the results of research into the frequency of peri-partum and post-partum sinus thrombosis referred to in the review article in the New England Journal of Medicine. In relation to the former point, he didn't consider it to be of relevance, because although he acknowledged that there was a significant decline, there was no research results as to the extent of that decline after the expiry of the initial 48 post-partum period. In relation to the latter point, he said that the academic study upon which the figure mentioned in the New England Journal of Medicine was based was commercially sponsored and therefore likely to be skewed for its own purposes. He also acknowledged that where, at paragraph 11.15 of his own report, he had mentioned the reported incidence of CVTs as being around "6 per million maternities" this was a typographical error and ought to have made it clear that the incidence was "6 per million of the population."
Dr Pirie maintained his opinion that the relative incidence of the occurrence of PPE as opposed to a CVT, meant that the former event was more likely to have occurred than the latter one. However he acknowledged that the relative rarity of the occurrence of PPE after the expiry of the initial 48 hour post partum-period, caused the differential between the incidence of the occurrence of PPE as opposed to a CVT to be significantly less than if the seizure had occurred within the initial 48 hour post partum period.
In relation to the absence of signs of a CVT on the CT scan, Dr Pirie stated that he was reliant upon the opinions of the neuroradiologists as to the significance of this matter in the context of this case.
In relation to the intermittent nature of the clinical presentation, Dr Pirie stated that in his experience of individuals who have complained of a headache prior to the occurrence of a stroke, the nature of the headache is such that it would not be relieved by analgesics, but would become progressively worse. In that regard he referred to the descriptions of the types of headaches described in the confidential enquiry in relation to maternal mortality.
Dr Pirie accepted that in his initial report he had not mentioned the factors which he had agreed in the joint report were ones which tended against a diagnosis of PPE. He explained that this was because he did not believe that they had a strong countervailing effect. There is still a significant risk of a woman suffering from pre-eclampsia where she had not suffered from the condition in a previous pregnancy. Moreover he considered that the claimant had a history of small babies, her first child being below the first centile and one can never know a baby's growth potential.
Dr Pirie agreed that he had accepted in the joint report that the lack of consistent post-natal provision of Heparin was a significant factor favouring a diagnosis of a CVT. However he said that it was only of relatively minor significance, because in his opinion it was unclear as to whether its provision did reduce the risk of the occurrence of a CVT, as opposed to a deep vein thrombosis. He was referred to the confidential enquiry into maternal mortality which appeared to indicate that the increased use of thromboprophylaxis may have reduced the incidence of deaths from CVTs, and agreed that this appeared to be the situation. Indeed he assumed that its provision did decrease the risk of the occurrence of a CVT.
Dr Pirie was also referred to the definition of eclampsia in Professor Redmond's survey, and accepted that the claimant's post seizure test results did not fulfil the necessary criteria. However, this was not a matter which he considered necessary to mention in his original report, because not only was this only a research definition, but it is accepted that it is possible for PPE to occur in the absence of the fulfilment of such criteria, as indicated in the survey by Dr Tuffnell and others. He agreed that the relatively mild level of hypertension recorded in this case was not one which necessarily indicated that PPE had occurred.
Dr Kendall said that on its own a negative CT scan, like the one in the present case, cannot be determinative of the appropriate diagnosis, as both disorders can occur without signs being recorded on a CT scan. He agreed that Drs Shroff and deVeber's article, "Sinovenous Thrombosis in Children", suggested that conventional CT techniques missed the presence of a CVT in 16 – 40% in children and adults, such that it underestimates, "….. both the extent of sinus involvement and the presence and extent of venous infarcts." However, his own experience was nearer to that suggested in "Diagnosis and Management of Cerebral Venous Thrombosis" by Dr Saposnik and others, that on plain CT, abnormality is only shown in about 30% of cases of CVTs. However, he agreed that if the CVT had caused a thrombus in a cortical vein, as was posited in this case, then it is more likely than not that this would have been seen on a CT scan. He said that the occurrence of PPE may be seen on a CT scan, but agreed that more often than not there will be no signs of it. He said that from a neuroradiological perspective he is unable to provide an opinion as to the likelihood of the occurrence of a CVT as opposed to PPE in this case. However, he preferred the clinical opinion of Dr Williams to that of Dr Pirie.
Dr Forbes said that as a CT scan is more likely to record signs of a CVT than PPE, he favoured the latter diagnosis in this case. This being upon the basis that if a CVT had caused a thrombus in a cortical vein, then it is more likely than not that it would have been recorded on the CT scan, whereas if PPE had occurred, then it is more likely than not that it would not have been recorded on the CT scan. He said that he had glanced through Dr Sidhom and other's article on "Cerebral Venous Thrombosis: Clinical Feature, Risk Factors, and Long-term Outcome in a Tunisian Cohort", in which it was suggested that although CT scans are normal in up to 30% of CVT cases, their own cohort provided normal scans in about 46% of such cases, but had not read Dr Saposnik and others' paper. He said that he didn't consider it of importance to have read the academic literature as he had based his opinion upon his own clinical experience. He said that the Dr Sidhom's cohort was extremely small and that his own experience of missed CVTs on CT scans was more in line with that suggested in Drs Shroff and deVeber's article. Dr Forbes acknowledged that some of the observations in his original report, and in particular the strength of his opinion against a diagnosis of a CVT, was based upon a misunderstanding of the claimant's case, namely that the CVT had been the direct cause of the cardiac arrest/hypoxic damage. However, now that he appreciated the posited mechanism of the occurrence of a relatively small blood clot in a cortical vein causing focal ischaemic damage/seizure progressing to a general seizure, he concluded that although it is perfectly possible that a CVT had occurred in this case, on the balance of probabilities he would still have expected to have seen signs of it recorded on the CT scan.
Professor Chadwick said that it was common ground that the claimant's hypoxic brain injury had been caused by her having suffered a cardiac arrest, and his understanding was that, if a direct cardiac cause could be excluded, then the most likely cause of the cardiac arrest was the incidence of a seizure caused either by PPE or a CVT. He said that in either case, in order for the seizure to have caused the cardiac arrest, it would have had to have been a generalised seizure, which not only may have affected the muscles of the body, but must also have affected the autonomic parts of the brain which regulate the function of the heart and lungs. He said that this type of seizure may occur either directly, or indirectly through the rapid development of a focal seizure. He said that the latter type of seizure may be caused by a thrombus in the cortical veins and although this may not be recorded on a CT scan, one would expect to see some evidence of it.
He agreed that it was a rare event for PPE or a CVT to cause a generalised seizure, and that this made the diagnosis very difficult. He considered the diagnosis to be outwith the expertise of a neurologist and deferred to the opinions of Dr Williams and Dr Pirie. He was referred to Dr Cantu and Barinagarrementaria's review article on "Cerebral Venous Thrombosis associated with Pregnancy and Puerperium", as to the incidence of seizures following CVTs. However it was his opinion that the relevant table was not Table 2 which referred to presenting symptoms, but Table 3 which referred to the neurological findings in CVTs, where general seizures had been found to occur in 26.9% of cases. He agreed that the results of the lumbar puncture showed that the intra cranial pressure was within normal limits, albeit towards the upper end of the scale.
Dr Sawle agreed that of all of the possible diagnoses, PPE or a CVT were the most likely ones to have been responsible for having caused the claimant's cardiac arrest. However in this case he favoured the diagnosis of PPE causing it either directly or indirectly through the occurrence of a seizure. He acknowledged that PPE appeared to be characterised by the occurrence of a seizure, but maintained his opinion that PPE may lead directly to a cardiac arrest without the occurrence of one. He conceded that this was a matter which was outwith his field of expertise, but said that this was his understanding of the literature including the description of cardiopulmonary arrest in Dr Barton and Sibsai's article on "Acute Life-Threatening Emergencies in Preeclampsia – Eclampsia" and Table 4 of Dr Munro's article on the "Management of Eclampsia in the Accident and Emergency Department", albeit that when he was referred to and appreciated that the results recorded in Table 4 originated from Professor Redman's study into eclampsia in the United Kingdom, he accepted that this did not appear to provide support for his thesis.
He accepted that the reference to the incidence of generalised seizures caused by a CVT in his original report relied on the results set out in Table 2 of Dr Cantu and Barinagarrementaria's review article, which only referred to presenting symptoms. However, although he accepted, as Professor Chadwick had said, that it was possible for a CVT to have caused a focal seizure which developed into a general one and thereby caused the claimant's cardiac arrest, he maintained that the occurrence of such a seizure was still a rare event.
He also accepted that the reference to the rarity of a person with a CVT presenting with a headache alone, as opposed to other neurological symptoms, in his original report was based, inter alia, upon the results set out in Table 1 of Dr Ferro and others' article "Prognosis of Cerebral Vein and Dural Sinus Thrombosis" and Table 3 of Dr Cantu and Barinagarrementaria's review article, neither of which were limited to presenting symptoms. He agreed that in fact none of the literature to which he had referred in this part of his original report founded the assertion that it would be extremely rare for a patient with a CVT to present only with a short history of headache, rather the literature showed that these were simply the type of symptoms which may be exhibited by a person with a focal seizure.
However he maintained his opinion that the normal result of the CT scan was a significant factor tending against the occurrence of a CVT.
Dr Sawle stated that the results of the lumbar puncture showed that the claimant's intra-cranial pressure was within normal limits, albeit towards the upper end of the scale. However he accepted that even without any rise in intra-cranial pressure, the ischaemic damage caused by the presence of a small blood clot in the cortical veins could cause a headache, moreover that this may fluctuate depending upon her position. He acknowledged that the extent of his expertise did not allow him to provide an opinion as to the relative significance of the timing of the post-partum event, and therefore the reference in his original report to the weakness of the support to be gained from this feature in favour of a CVT should be excluded. However, from a neurological point of view he maintained that the occurrence of PPE was more likely than that of a CVT.
Discussion and findings
I remind myself of the helpful guidance provided by Stuart Smith LJ in Loveday v Renton & Wellcome Foundation Limited [1990] 1 Med LR 117, in relation to the court's approach to the assessment of expert evidence,
"The mere expression of opinion or belief by a witness, however eminent…….does not suffice. The court has to evaluate the witness and the soundness of his opinion. Most importantly this involves an examination of the reasons given for his opinions and the extent to which they are supported by the evidence. The judge also has to decide what weight to attach to a witness's opinion by examining the internal consistency and logic of his evidence; the care with which he considered the subject and presented his evidence; his precision and accuracy of thought as demonstrated by his answers; how he responds to searching and informed cross-examination and in particular the extent to which a witness faces up to and accepts the logic of a proposition put in cross-examination or is prepared to concede points that are seen to be correct; the extent to which a witness has conceived an opinion and is reluctant to re-examine it in the light of later evidence, or demonstrates a flexibility of mind which may involve changing or modifying opinions previously held; whether or not a witness is biased or lacks independence."
Undoubtedly what took place on the 19th July 2005 was a most unexpected event, and one which has caused a considerable amount of discussion and debate between the experts who have been instructed to provide their opinions as to its cause; none of whom have been able to provide certainty. However, this is not an atypical situation in contested civil proceedings arising out of alleged clinical negligence and, mindful as I am of the implicit invitation on the part of the defendant that because the matter is so fraught with difficulty I should on that basis resolve the proceedings in their favour, I consider that there is sufficient evidence in this case in order to allow me to reach a concluded view upon the issue which is determinative of liability in this case. In this regard I do not consider that the opinions expressed by the experts are in the main simply based upon which of the two diagnoses is the least likely, rather they have reached disparate opinions upon which is the most likely diagnosis in this case.
There is no dispute that the claimant's current state of health is due to a hypoxic episode, caused by the claimant having suffered an asystolic cardiac arrest during the few minutes whilst she was alone in her hospital room on the afternoon of the 19th July 2005. It is agreed that there is no evidence of any cardiac related condition which may have caused the arrest and, given the relevant surrounding circumstances, the two most likely causes of the arrest are either PPE or a CVT. Although at one stage or another there has been some variation as to the mechanism by which each of these disorders is likely to have caused the arrest, subject to the views of Dr Sawle, this now appears to be resolved.
In so far as PPE is concerned, this disorder is characterised by the occurrence of a seizure, and if this disorder was the cause of the claimant's cardiac arrest, then it is the effect of a generalised seizure upon the autonomic parts of the brain, and in particular those regulating the functioning of the heart, which was the immediate cause of her cardiac arrest. PPE, being an obstetric event, is one in which the views of the obstetricians are likely to be most authoritative, and both Drs. Williams and Pirie agree that PPE is not diagnosed without the occurrence of a seizure. Moreover, in the authoritative study reported by Professor Redmond and others, eclampsia is defined in the introduction as being, "……the occurrence of convulsions….."
Although I did not understand that Dr Sawle necessarily disagreed with this definition, he expressed the view, both in his original report and perhaps surprisingly maintained it in evidence, that PPE could cause a cardiac arrest either directly or indirectly through the mechanism of a seizure. This was not a view expressed by Professor Chadwick who, in relation to CVTs, stated that the occurrence of a generalised, as opposed to focal seizure, would be required in order to cause the relevant autonomic parts of the brain to be adversely affected, so as to cause a cardiac arrest. Dr Sawle accepted that the diagnosis of PPE was outwith his field of expertise and stated that his opinion was based upon certain aspects of the academic literature. In this regard I am afraid that I do not consider that the literature to which he referred supports his view. Although the articles variously stated that "Although rare, cardiopulmonary arrest can occur in association with these changes…...", and cardiac arrest is one of the tabulated "Complications of eclampsia", there is nothing within the articles to suggest that cardiac arrest is directly caused by the condition in the absence of a seizure, which is of course the fundamental pre-condition for its diagnosis. In these circumstances I consider that Dr Sawle is in error on this point, and I am satisfied that in order for either PPE, or indeed a CVT to have caused the claimant's cardiac arrest, the mechanism by which this took place was the occurrence of a generalised seizure.
In so far as a CVT is concerned, the evidence of both Professor Chadwick and Dr Sawle was that this can cause a general seizure, either through a large thrombus causing a significant rise in the intra-cranial pressure, or from the development of a focal seizure caused by the occurrence of a smaller thrombus in the cortical veins. In either event the generalised seizure may in turn adversely affect the relevant autonomic parts of the brain, leading to a cardiac arrest. In the absence of any evidence of significantly raised intra cranial pressure, it was the latter event which Professor Chadwick considered was likely to have occurred in the present case.
In so far as the resolution of the differential diagnosis between PPE and a CVT is concerned, although both the neuroradiologists and the neurologists have valuable matters to contribute to the overall assessment, especially in relation to the possible diagnosis of a CVT, it seems to me that the most valuable assistance is to be gained from the views of the obstetric experts. However before turning to the evidence of Drs Williams and Pirie, it is convenient to deal with that of the other experts.
The most important contribution provided by the neuroradiologists is in relation to the likelihood of a CT scan detecting changes which may be caused during the occurrence of either or both of these disorders. Although in his original report Dr Forbes appeared to hold a strong view against the occurrence of a CVT, as he acknowledged in evidence, this was based upon a misunderstanding of the mechanism by which it was posited that the disorder had caused the claimant's cardiac arrest. Once this misunderstanding had been resolved he accepted that despite the normal nature of the result of the CT scan, it was perfectly possible for a CVT to have occurred in this case, albeit that in his view it was more likely that PPE would result in a normal CT scan, whereas it was more likely that a CVT would result in an abnormal one.
It seems to me that from a neuroradiological point of view, this was an opinion that was not wholly dissimilar to the one held by Dr Kendall, albeit that the latter expert approached the matter from a different perspective, suggesting that because of the significant number of instances in which a CVT may result in a normal CT scan, the result of the CT scan in this case didn't favour the diagnosis of PPE. However he did acknowledge that more often than not PPE may result in a normal CT scan, whereas the effects of a thrombus of the cortical veins would be more likely to result in an abnormal scan. Although there was clearly a difference both in clinical experience and in the relevant academic literature as to the incidence of CVTs resulting in normal CT scans, taking into account the combined evidence of Drs Kendall and Forbes, I have reached the conclusion that in this case, whereas PPE is more likely to have resulted in a normal CT scan, a CVT is more likely to have resulted in an abnormal one. This is a matter, as the Consultant Neurologists agree, which requires to be taken into account when deciding the question of the differential diagnosis in this case.
It is apparent that Professor Chadwick remained of the opinion that from a neurological point of view, he was unable to provide an opinion as to the relative likelihood of the competing diagnoses, albeit that a CVT was more likely to result in an abnormal CT scan and the absence of preceding focal neurological symptoms reduced the probability of the occurrence of a CVT.
I have already mentioned the position of Dr Sawle in relation to his views on the mechanisms by which PPE may result in a cardiac arrest. The significance of my rejection of his opinion on that point, is that it is one of the four matters upon which he appears to have based his opinion that it is more likely that the claimant suffered PPE in this case. In this regard however I am afraid that I am similarly unable to accept his opinion in relation to two of the other matters upon which he relies.
It seems to me that Dr Sawle's reliance upon the results of Table 2 of Dr Cantu and Barinagarrementaria's review article, in order to seek to establish that it is much rarer for obstetric patients to suffer focal rather than general seizures is flawed. The title of Table 2 makes it abundantly clear that the results relate to presenting symptoms, such that the appropriate table is Table 3 from which it is apparent that there was only a modest increase in the number of such patients suffering from focal as opposed to generalised seizures. Moreover the number of obstetric patients suffering from generalised seizures after a CVT represented 26.9% of the total. Equally, as he eventually acknowledged in cross-examination, his reliance upon the academic literature to found the expression of his opinion that it would be "extremely rare" for a patient with a CVT to present only with a short history of headache was unwarranted. It is apparent that the academic literature to which he referred wasn't limited to presenting symptoms, and simply listed the type of other neurological symptoms which may result from a focal seizure.
In these circumstances apart from the matters upon which Professor Chadwick concurred, it seems to me that much of the force of Dr Sawle's opinion was dissipated. Moreover, it is of concern that he was providing an opinion outwith his area of expertise when he had sought to express a view upon the relative significance of the timing of the post-partum event.
I was impressed by an initial reading of Dr Pirie's original report, informed as it appeared to be, by a very clear statistical bias in favour of the occurrence of PPE over CVTs. What I had not appreciated, until listening to Dr Pirie's evidence in the course of the trial, was that not only was his opinion largely based upon his own clinical experience with little reference to the results of academic research, but that when this was considered, as he eventually acknowledged, a significantly different and less cogent picture emerged as to the bias in favour of the occurrence of PPE over a CVT in the particular circumstances of this case. I am afraid that by the conclusion of his evidence both this factor and some of the other contrasting matters which did not appear have been discussed in his report, led me to the conclusion that his opinions required to be scrutinised with particular care. In fairness to Dr Pirie, he did acknowledge at one point in his evidence, that having felt from the beginning that this was a case in which PPE had occurred, he may have become unconsciously biased and omitted matters in his report which ought to have been considered by him.
In contrast, not only did it become apparent during the course of Dr Williams' evidence that he was an expert of the first calibre in his field, but, with the exception of the results of the lumbar puncture, he had weighed with conspicuous care all of the matters germane to the conclusions which he reached. The defendant has sought in closing submissions to criticise him for having omitted from his initial report express reference to the incidence of the occurrence of CVTs. In my judgement this criticism is unfounded as it is apparent that, when properly analysed in the light of the clinical findings in this case, it is unlikely that there is any material differential.
It is readily apparent both from clinical observations and from the results of academic research that there is a clear statistical bias in favour of the incidence of PPE over CVTs. However, that is a matter of generality and, as became clear, it is a matter which requires careful examination and assessment as to its effect upon the present case. In relation to PPE I am satisfied that due to the date upon which the claimant's cardiac arrest occurred, and bearing in mind that 99% of the women who were included within the updated 2005 eclampsia survey by Professor Knight had not received magnesium sulphate prior to any seizure, the relevant incidence of eclampsia in general is 2.7 cases per 10 000 births. Moreover, although the overall incidence of CVT in the population as a whole may be 3 to 4 cases per million, it seems to me that the relevant figure relating to this case, where we are dealing with a post-partum event, is that referred to in Dr Stam's review article, based upon the research article by Drs Lanska and Kryscio, "Risk Factors for Peripartum and Postpartum Stroke and Intracranial Venous Thrombosis", namely that the frequency of peripartum and post partum sinus thrombosis is about 12 cases per 100 000 deliveries. The fact that this was commercially based research was not a matter which caused Dr Williams concern when he considered it, and I am unpersuaded of the validity of either Dr Pirie's criticism of its suitability or that of the defendant in closing submissions. On the contrary, as the article makes clear, in contrast to some of the other research, this survey was based upon results from a large and varied cohort.
As I have observed even the use of these statistics provides a bias in general terms in favour of the incidence of the occurrence of PPE over CVTs, albeit one of around 2.7 cases as opposed to 1.2 cases per 10 000 respectively, rather than that set out in Dr Pirie's original report. However, in order to properly understand the potential significance of these figures, I am satisfied like Dr Williams, and subsequently Dr Pirie, of the need to take properly into account the circumstances of the claimant's case, and in particular in this regard the timing of the cardiac arrest, namely 5 days post partum. In this regard I consider that it is of considerable significance that Professor Redman's survey found that the overwhelming majority of PPE, some 88%, occurred within the first 48 hours of the birth. A matter which is echoed in Dr Tuffnell and other's subsequent research study in Yorkshire. In contrast there is no research based evidence of the fall-off in the incidence of CVTs post-partum. Indeed such relevant academic study that there is in relation to the condition, suggests that a woman will remain significantly prothrombotic throughout the first week post-partum, hence the recommendation of the Royal College of Obstetrician's and Gynaecologists that thromboprophylaxis should be continued for a minimum of 7 days post-partum. In the event Dr Pirie acknowledged that, in the present case, the differential between the incidence of the occurrence of PPE as opposed to a CVT is significantly less than if the seizure had occurred within the initial 48 hours post-partum. On the other hand Dr Williams inclined to the view, as he alluded to in their joint report, that the risks of either event occurring in this case was on a par. It seems to me that the evidence upon which this latter opinion is held justifies this view. Moreover even if a differential does remain in favour of the incidence of PPE, it is so relatively insignificant as to carry little weight in the overall consideration of this case. In this regard I of course take into account that it is rare for a CVT to result in a seizure leading to a cardiac arrest, but so too is it relatively rare for PPE to lead to a cardiac arrest.
I turn then to consider the relevant clinical circumstances surrounding this case. The first one being the normal result of the CT scan which was undertaken after the occurrence of the cardiac arrest. This undoubtedly is a matter of relevance and one upon which all those involved have provided their various opinions. In the main and when properly analysed those opinions fall into two main camps, on the one hand it is suggested that this is a contra indication as to the occurrence of CVT and a positive indication as to the occurrence of PPE, whilst on the other that it is relatively neutral, neither supporting the occurrence of PPE nor militating against the occurrence of a CVT. I am inclined to the view that whilst undoubtedly the normal results recorded on the CT scan cannot support the occurrence of a CVT, and tends to undermine its occurrence, its ability to positively support the occurrence of PPE, whilst significant, requires to be balanced against both the incidence of normal CT scans after known CVTs, and the other relevant clinical circumstances of the case. In relation to the former, it seems to me that it is of relevance that not only is it the clinical experience of those carrying out such procedures, such as Dr Kendall, that the signs of a CVT are not infrequently unrecorded on a CT scan as opposed to more sensitive procedures, but as is pointed out in the relevant academic literature the results can be entirely normal in a significant number of cases,( Dr Stam's article in The New England Journal of Medicine; Drs Shroff and deVeber's article, and; Dr Saposnik and others' article). A matter which both Drs Williams and Pirie acknowledged in their joint report.
Of course much of the clinical presentation of the claimant leading up to her cardiac arrest and beyond is consistent with both diagnoses. However, it seems to me that there is here a preponderance of other significant factors which do, as Dr Williams suggests, positively support the likelihood of the occurrence of a CVT rather than PPE. The first of these is the significance of the fact that at the time when the cardiac arrest took place, the claimant was, as I have already observed, in a prothrombotic condition purely by reason of her post-natal status. Secondly, that condition was significantly enhanced by the occurrence of a number of subsidiary factors, including the uterine rupture, the emergency caesarean section, her pyrexial condition, her vomiting, relative immobility and the temperature of the room. In this regard I accept the evidence of Julian Harrington, that the temperature in the room was, as is not an uncommon and understandable in a hospital context, extremely warm, such that the claimant may well have been relatively dehydrated; a potentially prothrombotic factor. Thirdly, the lack of consistent provision of the post-natal thromboprophylaxis Heparin. In relation to this latter factor, having regard to the observations in the confidential enquiry into maternal mortality, I am not minded to accept the opinion of Dr Pirie that this factor is of little weight and prefer to accord it the significance which was accorded to it by Dr Williams.
I have not overlooked that two of the factors which both Drs Williams and Pirie agreed in their joint report were ones which significantly favoured the diagnosis of PPE were the headache suffered by the claimant and her hypertension.
As I understand the evidence the presence of a headache can be attributable to the existence of both PPE and a CVT. However Dr Pirie's real point was as to the nature of the headache of which the claimant made complaint, being one that was intermittent and at least resolved with analgesics, as opposed to one which did not resolve and worsened. I consider that the evidence on this point is somewhat equivocal. In that whilst I accept both from Dr Pirie and the literature that a headache caused by a CVT is likely to be one which can be described as the worst one ever experienced and is unlikely to be resolved by the ingestion of simple analgesia, I note that the description in the literature doesn't seek to distinguish between those cases in which such a headache is caused by a CVT causing raised intra cranial pressure, as opposed to a relatively small blood clot in the cortical veins. As I understand it from the evidence the former type of CVT would undoubtedly be likely to cause an extremely severe headache. However according to Dr Sawle and Dr Williams the latter type of CVT may also cause a headache of some degree, and Dr Sawle observed that headaches may fluctuate in intensity according to the position of the sufferer's body. Moreover, I accept the evidence of Julian Harrington that not only had the claimant been suffering from intermittent headaches during her post natal period in hospital, but that in contrast the severity of the headache which she suffered on the 19th July was significantly worse than any of the previous ones. In these circumstances and bearing in mind both the incidence of headaches being associated with CVTs and the mechanism by which it is now understood a CVT may have caused the cardiac arrest in this case, it seems to me that the presence of the type of headache which the claimant suffered on the 19th July is not inconsistent with the occurrence of a CVT; it appears to be consistent with the occurrence of both conditions.
Moreover, the significance of the evidence of hypertension appears to have lost much of its potency. Not only is it clear from the evidence that the hypertension suffered by the claimant on the 19th July was relatively mild in degree, but it was not one of the factors upon which Dr Pirie concentrated when advancing his opinion in favour of PPE, acknowledging as he did that it did not necessarily indicate the occurrence of PPE.
A point maintained by Dr Sawle was that if an initial focal seizure had taken place, then one may have expected the observation of other neurological signs, and none were recorded in this case. Although it is clear that much of the strength of this point also appears to have dissipated in the course of cross-examination, I am aware that Professor Chadwick had agreed in the joint report that from a neuroradiological point of view, the absence of such symptoms reduced the probability that the cause of the cardiac arrest was due to a CVT. Although he was not questioned about this aspect of his evidence, I note that he envisaged a fairly rapid development of the generalised seizure from the initial focal one. However, whether this is correct or not, it seems to me that the absence of any other observed neurological symptom is a matter which must be weighed in the balance, as a factor, albeit now one of limited weight against the occurrence of a CVT.
It is also necessary to bear in mind the matters which have been recognised from the outset by both Drs Williams and Pirie to be contra-indicators of the occurrence of PPE in this case. Namely, the lack of history of any pre-eclampsia or indeed eclampsia in either of the claimant's previous pregnancies, the lack of evidence of any pre-eclampsia in her third pregnancy and the fact that Gene appears to have been a well developed baby. In this regard, I am not persuaded by Dr Pirie's attempt to undermine the significance of these factors. Even if the complainant's first baby was below the 1st centile, there is no evidence that this had any association with an eclamptic condition. Moreover, although it may be that one can never know with certainty the full potential of a baby's growth, and even bearing mind that Gene was past term, I accept the evidence of Dr Williams that in reality there is no evidence that Gene was a growth-restricted baby.
Conclusions
As I have already observed, the issue which requires to be determined in relation to liability, is whether the claimant has been able to establish that it is more likely than not that the cause of her cardiac arrest on the 19th July 2005 was a CVT. In my judgment, and having considered the evidence with care, I am satisfied that she has been able to do so.
It is clear that at the outset of the trial the main focus of the defendant's case was its submissions relating to the relative incidence of the occurrence of PPE over CVTs. However, I consider that when properly analysed and due regard is had to the timing of the cardiac arrest, the evidence does not support those submissions. If any differential in favour of the incidence of PPE exists, then in my judgement it is so relatively insignificant as to carry little weight in the overall consideration of this case. In the event however, for the reasons I have set out above, I am persuaded that at 5 days post partum it is unlikely that there is any differential.
It is therefore necessary to focus upon the competing significance of the various clinical findings in this case.
It seems to me that the combination of other significant factors, over and above those which are consistent with both diagnoses, which are likely to have been causative of a CVT, and the presence of significant contrary factors indicating the likely absence of PPE, is such that in my judgment it is more likely than not that the claimant suffered a CVT leading to her cardiac arrest and consequent hypoxic neurological damage on 19th July 2005.
Although I appreciate that PPE can occur without a previous history or signs of pre-eclampsia and beyond the immediate 48 hour post natal period, not only does the evidence establish that this would have been a particularly unusual event, but set against the other significant factors which are likely to have been causative of a CVT, I accept the evidence of Dr Williams that it is unlikely that the claimant suffered PPE preceding her cardiac arrest, and instead it is likely that she suffered a CVT. Those other significant factors being the generally prothrombotic condition of the claimant, which was significantly increased by the effects of her traumatic delivery and post natal condition, together with the lack of consistent post natal provision of Heparin.
Moreover I do not consider that the other clinical findings, namely the headache, hypertension and lack of other neurological symptoms, are of such significance that, either alone or in combination, they materially alter my conclusion. Although the mechanism by which a CVT is likely to have caused a generalised seizure, namely from the development of a focal one, may well have caused other neurological symptoms, this was not inevitable. Moreover not only did Dr Pirie agree that the relatively mild degree of hypertension was not necessarily indicative of PPE, but according to both Dr Williams and Dr Sawle, the nature of the claimant's headache was consistent with the development of a relatively small thrombus in the cortical veins.
I should make it clear that I have taken full account of the evidence that the normal result of the CT scan favours the occurrence of PPE rather than a CVT. The former disorder being more likely to be consistent with a normal result, whereas the latter disorder is more likely to be inconsistent with a normal result. However, it is clear that in itself this is not a determinative matter; at the very least there will be a significant minority of cases of CVTs where normal results will be recorded on the CT scans. In my judgement it is likely that this is one of those cases.
In these circumstances, I am satisfied on the balance of probabilities that on 19th July 2005 the claimant suffered a CVT, leading to the development of a focal and then general seizure, which in turn caused her to suffer an asystolic cardiac arrest and consequential neurological damage.
111. As this is the only issue in this case which requires to be determined at this stage, it follows that I am satisfied the claimant has succeeded in establishing liability against the defendant. |
Mr Justice Phillips:
A large number of claims have been brought by claimants against their employers or former employers for damages for noise-induced hearing loss ("NIHL") alleged to have been caused by exposure to excessive noise at work, sometimes still referred to as "industrial deafness" or "occupational deafness". In most of these cases the claimant's solicitors (and counsel where instructed) are acting pursuant to a conditional fee agreement ("CFA"), providing for a success fee.
Until 1 April 2013, sections IV and V of Part 45 of the Civil Procedure Rules provided for fixed success fees to be recoverable from defendants in specified employer liability claims. Although the rules changed on 1 April 2013 to reflect that success fees were no longer recoverable from defendants, they continue to be recoverable where CFAs had been entered before that date (see s.44(6) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012) and the former provisions of Part 45 of the CPR still apply. Relevant extracts from those provisions are set out in an appendix to this judgment.
An issue has arisen in relation to the success fee payable by a defendant employer in the (very common) situation where a claim for damages for NIHL is settled before a trial has commenced. The issue is whether, in that context, NIHL is to be regarded as a disease. If NIHL is a disease, it falls within section V of Part 45, which provides for a success fee of 62.5% on settlement of claims in relation to diseases prior to trial (other than for certain specified conditions, neither of which encompasses NIHL). If, however, it is not a disease, it would be classified as an injury and, if 'sustained' on or after 1 October 2004, would fall within section IV, attracting a success fee of 25%. If sustained before that date, the success fee is not fixed and falls to be assessed by the court if not agreed.
On 4 April 2013, following a number of decisions at District Judge level which reached inconsistent conclusions, the Regional Costs Judge directed that the above issue be determined by a High Court Judge as a preliminary issue in costs proceedings in four nominated cases. This is my judgment on that issue.
The four cases all involve claims against BT by present or former employees (Messrs Dimelow, Fletcher, Griffiths and Hall). Each claim was compromised prior to trial, BT agreeing to pay compensation for NIHL suffered by the claimant as a result of using BT equipment which exposed their hearing to unsafe levels of noise. In each case BT has also agreed to pay the claimant's costs, but disputes the quantum of costs, in particular, challenging the success fee payable to the solicitors and (where instructed) counsel.
It is common ground between the parties that, until 2012, employer defendants (in reality their insurers, insurance of employer's liability being mandatory) proceeded on the basis that NIHL was a disease for the purposes of calculating success fees they were liable to pay following the settlement of NIHL claims. As set out in more detail below, such acceptance reflected the long-standing categorisation of NIHL as a disease in legislative, legal and medical contexts. In particular, it had been so regarded (and recognised as meriting a 62.5% success fee) in negotiations between representatives of personal injury lawyers and of the insurance industry in 2005, resulting in an 'industry' settlement on that basis, which settlement section V of Part 45 was intended to give effect.
The change in the insurers' stance resulted from the decision of Males J in October 2012 in Patterson v. Ministry Defence [2012] EWHC 2767 (QB) [2013] 2 Costs LR 197. The issue in that case was whether non-freezing cold injury ("NFCI") is a disease within section V or otherwise fell within section IV of Part 45. Males J concluded that, as NFCI would not be regarded as a disease as a matter of ordinary language, and as he was not satisfied that the term disease had an extended meaning in Part 45 (other than by virtue of the express inclusion in section V of various specified types of injury), NFCI was not a disease, but an injury falling within section IV: even if claims such as those for NIHL had in practice generally attracted the higher success fees applicable under section V, that was not a sure foundation on which to conclude that an extended meaning of the term 'disease' was intended. At paragraph 50, Males J stated as follows:
"Notwithstanding the objective of CPR 45 is to provide a clear and certain test for the award of success fees, inevitably questions may arise as to whether particular conditions are to be characterised as 'diseases'. When that occurs, and when the answer is not obvious, there is in my judgment no single test or definition which can be applied. In circumstances where the rule itself provides no definition of disease, and where the dictionaries do not assist, it would not be practicable or sensible for the court to attempt to supply its own definition. Instead it will be necessary to apply the natural and ordinary meaning of the word, and in cases which are near the borderline to form a judgment by taking account of the various factors which point in one direction or the other."
The insurers (through the defendant) now contend that, applying the natural and ordinary meaning of the words, NIHL is not a 'disease' but rather an 'injury'. They rely upon the following aspects of the aetiology of NIHL, which are common ground between the parties' medical experts:
i) NIHL is caused by the physical force which excessive noise (energy transmitted through the air in the form of waves) inflicts on the structure of the inner ear, in particular degrading hair cells which do not regenerate, but are replaced by scar tissue. The damage is primarily mechanical;
ii) long-term exposure will typically lead to gradual progressive hearing loss, the symptoms often being first noticed when age-related hearing loss (presbyacusis) overlays the traumatic loss;
iii) however, the damage suffered from each instance of exposure occurs immediately (although the subsequent scarring will affect the auditory system). If there is any progressive worsening of the damage (which is not proven in humans and the defendant's expert does not accept), it is limited to days or weeks after the exposure.
Mr Hogan, counsel for the defendant, asserts that the above aetiology demonstrates that NIHL is clearly an injury, being the result of damage to the ear caused immediately by physical trauma, and cannot be regarded as a disease in any natural or ordinary sense. He submits that therefore, applying the test formulated by Males J in Patterson, NIHL falls within section IV of Part 45. To regard NIHL a disease, he contends, would require a strained construction of the rules which, in this case, cannot be justified.
Mr Williams, counsel for the claimants, accepts that a layman, coming to the matter with no background, might well regard NIHL as an injury and not a disease. However, he contends that, when the rules are placed in their proper context, it is clear that the term 'disease' has an established meaning that includes NIHL and that the legislation must be taken to have adopted that established meaning. Further, he does not accept that the natural and ordinary meaning of the term 'disease' is limited to the view of the uninformed layman, but must reflect its usage, in particular, by doctors and lawyers.
Before considering the parties' respective contentions in detail, it is necessary to refer to the background materials (and in particular the legislative history) upon which the claimants, in particular, place heavy reliance.
The background materials
(a) The medical classification of NIHL
The defendant's medical expert, Mr A J Parker (a consultant ENT surgeon at the Royal Hallamshire Hospital, Sheffield), expresses the opinion that NIHL has the characteristics of a traumatic injury and is not a disease. However, as the claimants' expert, Dr Louisa Murdin (a consultant in audiovestibular medicine at Guy's and St Thomas' NHS Foundation Trust) points out, NIHL is frequently referred to in medical literature as a 'disease' of the ear. Mr Williams referred me, in particular, to the following:
i) the World Health Organisation's International Statistical Classification of Diseases and Related Health Problems (ICD-10) in Occupational Health, published in 1999, which states that classifications of occupational diseases have been developed mainly for two purposes: (1) notification of labour safety and health surveillance and (2) compensation. Category A.7, Diseases of the ear and mastoid process, includes as a disease "Noise effects on inner ear";
ii) Hunter's Diseases of Occupation (10th Ed, 2010), which includes, as Part 3, Diseases Associated with Physical Agents, section one of which relates to "Sound, noise and the ear".
iii) Ludman's Diseases of the Ear (6th Ed, 1998), which includes a chapter (35) on traumatic senorineural hearing loss, dealing specifically with NIHL.
Mr Williams asserts that there is no medical literature expressing the view that NIHL is not a disease and Mr Hogan does not dispute that assertion. I am satisfied that, in medical terms, NIHL may properly be categorised as a disease and frequently is so categorised.
(b) The legislative history
It was common ground that the relevant terminology employed by the former CPR Part 45 has its origins in the Workmen's Compensation Act 1897 and subsequent legislation relating to employers' liability and national insurance. Section 1 of the 1897 Act provided:
"If in any employment to which this Act applies personal injury by accident arising out of and in the course of the employment is caused to a workman, his employer shall … be liable to pay compensation ... ".
It was soon recognised that liability to pay compensation should not be limited to accidents, but should be extended to conditions caused by extended exposure to noxious agents during work processes. By section 8(1) of the Workmen's Compensation Act 1906, employers' liability to pay compensation was extended to six 'diseases' specified in the Third Schedule to the Act, namely, anthrax, various forms of poisoning (lead, mercury, phosphorus and arsenic and ankylostomiasis (hook worm)). In each case the specified disease was defined in terms of a specified process by which it was contracted (in the case of lead poisoning, for example, any process involving the use of lead or its preparations or compounds). Section 8(6) provided that:
"The Secretary of State may make orders for extending the provisions of this section to other diseases and other processes, and injuries due to the nature of any employment specified in the order not being injuries by accident ..."
It is apparent that the term 'disease' in the Third Schedule was being used as broad label for the newly-added conditions caused by work processes for which compensation would be payable, the term being used in contra-distinction to the term 'accident', not the term 'injury'. That was made even clearer in a 1907 report of the Departmental Committee on Compensation for Industrial Diseases which considered which conditions should be added to the Third Schedule to the 1906 Act. The report referred to the proper line of demarcation between 'accidents', which were already included in the 1906 Act, and 'diseases' which might be added to its Third Schedule. In fixing the boundary, the report regarded:
"as a result of 'accident' those symptoms which are due to 'mishap', an 'occurrence' or an 'event' – that is to say, to a cause which operates at a definite moment of time – and to regard as 'diseases' or as 'injuries not being injuries by accident' those which cannot be attributed to a cause of that character'.
The report considered that boilermaker's deafness was a injury due to employment, but recommended that it should not be added to the list of diseases for which compensation was payable because it "did not prevent a man from continuing his trade".
In Roberts v. Dorothea Slate Quarries Co Ltd [1948] 2 All ER 201 the House of Lords considered whether silicosis qualified as an injury by accident within the meaning of s1(1) of the Workmen's Compensation Act 1925. Silicosis was recognised to be a disease, but not one which attracted compensation under that Act. The appellant therefore contended that his incapacity for work was caused by the final clotting of his lungs by particles of silica he had inhaled whilst working in slate quarries and was due either to one final accident or to a number of successive accidents. The House of Lords rejected his contention, Lord Porter stating at page 205:
"The distinction between accident and disease has been insisted on through out the authorities and is, I think, well founded. Counsel for the employers formulated the proposition on which he relied by suggesting that, where a physiological condition is produced progressively by a cumulative process consisting of a series of occurrences operating over a period of time, and the microscopical character of the occurrences and a period of time involved are such that in ordinary language that process would be called a continuous process, the condition is not produced by an accident or accidents with in the Acts. I do not know, however, that any explicit formula can be adopted with safety. There must, nevertheless, come a time when the indefinite number of so-called accidents and the length of time over which they occur take away the element of accident and substitute that of process. In my opinion, disability from silicosis is one of such instances. It cannot be said to be the result of injury by accident."
Lord Simonds concluded at page 208 as follows:
"... it is just because I find it impossible to say of a sufferer from silicosis that his disease is due to 'a series of accidents each one of which is specific and ascertainable,' that I cannot admit his claim under s 1 of the Workmen's Compensation Act, 1925. It was the same reason that led Parliament to supplement that section by other provisions for the benefit of workmen suffering from silicosis and similar diseases."
It is accordingly clear that the concept of a 'disease' was introduced in the relevant legislation to cover symptoms and injuries for which compensation was to be payable by employers, but which were not caused by accident. Certainly at this stage Parliament was not using the term disease in (what the defendants now contend is) its 'natural and ordinary' sense, but rather to cover injuries by process as opposed to injuries by accident.
The distinction between 'accident' and 'disease' was maintained in the National Insurance (Industrial Injuries) Act 1946. Section 1 provided that all persons employed in insurable employment shall be insured against personal injury caused by accident arising out of and in the course of such employment. Section 55 provided that such persons shall be insured also against any prescribed disease and against any prescribed personal injury not so caused being a disease or injury due to the nature of that employment.
In October 1973 the Industrial Injuries Advisory Council reported, in accordance with section 62 of the National Insurance (Industrial Injuries) Act 1965, on the question of whether there were degrees of hearing loss due to noise that would satisfy the conditions for prescription under that Act. The report concluded that occupational deafness could meet the conditions for prescription and recommended that the disease should be covered by the industrial injuries scheme. Occupational deafness became a prescribed disease in 1975.
The same distinction between accident and disease was again maintained in the Social Security Act 1975 (which consolidated, among others, the National Insurance (Industrial Injuries) Acts 1965-1974) and in the Social Security Contributions and Benefits Act 1992. Section 94 of the 1992 Act provides that industrial injuries benefit shall be payable where an employed earner "suffers personal injury by accident …". Section 108(1) then provides:
"Industrial Injuries benefits shall, in respect of a person who has been in employed earner's employment, be payable … in respect of
(a) any prescribed disease, or
(b) any prescribed personal injury (other than an injury caused by accident arising out of and in the course of his employment),
which is a disease or injury due to the nature of that employment …"
Regulations made under the 1975 Act, the Social Security (Industrial Injuries) (Prescribed Diseases) Regulations 1985, which remain in force, define prescribed diseases as "a disease or injury described under ... these regulations, and references to a prescribed disease being contracted shall be deemed to include references to a prescribed injury being received". Schedule1 lists prescribed diseases, including: "A10 Substantial sensoineural hearing loss (occupational deafness)". Occupational deafness is defined in the Regulations as "the disease numbered A10 in part one of schedule 1 to these regulations".
It follows that NIHL has been expressly defined as a 'disease' in subordinate legislation governing statutory compensation for industrial injuries for about 30 years and had been so defined about 20 years prior to the introduction of section V of CPR Part 45 in 2005.
(c) The Pre-Action Protocols
The distinction between 'injury by accident' and 'disease' further survives in the Pre-Action Protocols made under the Practice Direction on pre-action conduct. A Protocol in relation to personal injury claims was introduced with the CPR in April 1999. On 8 December 2003 a further Protocol for Disease and Illness Claims came into force. Section 2 contains the following:
"2.1 This protocol is intended to apply to all personal injury claims where the injury is not as the result of an accident but takes the form of an illness or disease.
2.2 …. Disease for the purposes of this protocol primarily covers any illness physical or psychological, any disorder, ailment, affliction, complaint, malady, or derangement other than a physical or physiological injury solely caused by an accident or other similar single event."
It is quite clear that NIHL would constitute a disease under this definition and, indeed, the template for a letter of claim makes express reference to providing details of "exposure to noise or substances".
(d) The genesis of sections IV and V of CPR Part 45
In Lamont v. Burton [2007] 1 WLR 2814 (CA) the provenance of the rules relating to fixed success fees in various types of personal injury claims, including employer liability claims, was explained by Dyson LJ at paragraph 6 as follows:
"Although Sections II to V of CPR Pt 45 were recommended by the Civil Procedure Rule Committee and they subsequently received parliamentary approval, their genesis lies in a series of negotiations which were conducted under the auspices of the Civil Justice Council. The parties to the negotiations were some liability insurers who promoted the interests of defendants, and the combination of claimants' solicitors (represented by Association of Personal Injury Lawyers and the Motor Accident Solicitors Society) and legal expenses insurers who promoted the interests of claimants. The figures in sections II to V were the product of those negotiations."
The negotiations referred to by Dyson LJ were informed by reports by Paul Fenn and Neil Rickman, commissioned by the Civil Justice Council and the Department of Constitutional affairs, certain of the contents of those reports being referred to by the Court of Appeal in both Lamont v. Burton (at paragraph 7) and Atack v. Lee [2005] 1 WLR 2643.
Section IV of Part 45 came into force on 1 October 2004 pursuant to the Civil Procedure (Amendment No.2) Rules 2004. As already indicated, it provides for a fixed success fee of 25% in employer liability claims for injuries sustained after that date, but expressly excludes cases where the dispute relates to a disease. The next step was the negotiation, agreement and implementation of rules relating to fixed success fees in disease claims. It is common ground that there was no suggestion by any party at this stage that NIHL claims were already encompassed within section IV.
In December 2004 Fenn & Rickman produced the final version of their report on Calculating Reasonable Success Fees for Employers' Liability Disease Claims. The data used included that received from several insurers (including "AXA", a reference to a company in the same group as the defendant's insurer in these cases) and their panel solicitors, that data including details of NIHL claims. The report proceeded on the unquestioned assumption that 'deafness' was a disease, including it in a list of five named 'diseases'. NIHL was the third largest category considered, after asbestos diseases and vibration white finger ("VWF"). The other diseases identified were Repetitive Strain Injury ('RSI') and 'stress'. Each named disease was analysed in terms of pre-claim failure rates and expected revenues (contrasting CFA revenues, with a 100% uplift on success at trial, with revenues if a traditional hourly rate applied). The report concluded that, in order to be revenue neutral, the success fee required on settlements of NIHL cases was 64.07%. The equivalent figure for VWF was 69.54%, whilst for all other unidentified diseases it was 58.51%.
The negotiations referred to in Lamont v. Burton, to which AXA was a party, concluded in April 2005. On 1 July 2005 the Civil Justice Council issued a press release announcing that:
"… agreement has been reached on fixed recoverable success fees for Employers Liability (Disease). The final mediation meeting on 25th April 2005 culminated in agreement in principle after a year of work on this difficult issue. The detail of that agreement has since been refined and approved by the Civil Procedure Rule Committee and will be implemented in October 2005."
The press release noted that the key provisions of the agreement included:
"27.5% success fee in claims arising from asbestos-related diseases ….
62.5% success fees in claims arising from deafness, VWF and other diseases ... except RSI and stress claims.
100% success fee in claims arising from stress and RSI …"
It therefore could not be clearer that the parties to the negotiations, the Civil Justice Council and the Civil Procedure Rule Committee all understood and intended (and the parties agreed) that NIHL (and VWF) would be included within the categories of disease claims in respect of which a 62.5% success fee would be payable on settlement prior to trial. Apart from the express reference to NIHL and VWF in the press release, it is plain that the figure of 62.5% has been reached by taking into account the data for those two conditions: in particular, as the figure suggested by Fenn & Rickman for 'other diseases' was only 58.51%, the only explanation for the insurance industry agreeing to the adoption of an overall figure of 62.5% is that the higher failure rates for NIHL and VWF claims were put into the equation.
Section V of CPR 45 came into force on 1 October 2005 pursuant to the Civil Procedure (Amendment No.3) Rules 2005. It divides disease claims into three types. Asbestos-related claims (type A) and stress and RSI claims (type B) were allocated success fees as per the agreement announced by the Civil Justice Council (27.5% and 100% respectively). All disease claims not falling within either type A or type B (type C) were allocated 62.5%. From the history set out above, the clear and obvious conclusion is that, although not expressly named, NIHL and VWF are included within type C. If that is not the case (as the defendant now contends), the scheme has completely miscarried in that respect and the industry-wide agreement in relation to NHIL and VWF was not given effect.
The possibility of a last minute change of mind on the part of the Rules Committee as to the intended inclusion of NIHL and VWF can be ruled out. In its Annual Report for 2005 the Civil Justice Council recorded the following:
"Success fees in industrial disease cases: as a result of further mediation work the Civil Justice Council was pleased to be able to report to the Department for Constitutional Affairs in April 2005 an 'industry' agreement on levels of success fees to be paid in conditional fee cases in claims relating to industrial diseases caused by asbestos, vibration white finger and industrial deafness among others. After receiving ministerial approval the agreement was implemented by the Rules Committee in CPR 45 effective from October 2005."
(e) The classification of NIHL in litigation
Mr Williams further relies on consistent reference to NIHL as a disease in the litigation context (although, he accepts, not in an authoritative sense), including at the highest judicial levels. In particular:
i) In Barker v. Corus [2006] 2 AC 572 HL, Lord Walker of Gestingthorpe, in considering whether mesothelioma amounted to 'indivisible damage', stated at paragraph 112:
"It is not an industrial disease (such as hearing loss eventually leading to profound deafness) which becomes progressively more severe (though not necessarily at a uniform rate) with continuing exposure to harmful agents (such as excessive noise in shipyards)."
ii) In Sienkiewicz v. Greif (UK) Ltd. [2011] 2 AC 299 (SC) Lord Phillips of Worth Matravers P compared the divisible and non-divisible nature of various diseases, stating at paragraph 14:
"More commonly, diseases where the contraction is dose-related are divisible. The agent ingested operates cumulatively when we are first to cause the disease and then to progress the disease. Thus the severity of the disease is related to the quantity of the agent that is ingested. Asbestosis and silicosis are examples of such diseases, as are the conditions of vibration white finger and industrial deafness, although the insults to the body that cause these conditions are not noxious agents. …"
Further, legal textbooks such as Occupational Illness Litigation and Monkman on Employers Liability treat NIHL claims as claims for an occupational disease. The Health and Safety Executive notes on its website that "industrial hearing loss remains the occupational disease with the highest number of civil claims accounting for about 75% of all occupational disease claims".
The interpretation of sections IV and V
In Patterson (above), Males J at paragraph 18, set out a number of established principles of statutory interpretation as follows:
"(1) The task of the court is to ascertain the intention of the legislature expressed in the language under consideration. This is an objective exercise.
(2) The relevant provisions must be read as a whole, and in context.
(3) Words should be given their ordinary meaning unless a contrary intention appears.
(4) It is legitimate, where practicable, to assess the likely practical consequences of adopting each of the opposing constructions, not only for the parties in the individual case but for the law generally. If one construction is likely to produce absurdity or inconvenience, that may be a factor telling against that construction.
(5) The same word, or phrase, in the same enactments, should be given the same meaning unless the contrary intention appears."
Mr Hogan submits that, applying those principles:
i) The starting point is the ordinary meaning of the words 'injury' and 'disease', that is, their 'proper and most known signification': Bennion Statutory Interpretation 6th Ed, page 1058.
ii) There is nothing in the language of sections IV and V, or any other part of CPR 45, that would require or justify a departure from the ordinary meaning of the words 'injury' and 'disease'. The literal meaning of the provisions (at least in relation to a modern Act) is to be treated as pre-eminent and of far greater weight than applies to any other interpretative criterion: see Bennion, page 781.
iii) As the provisions are public legislation (albeit secondary legislation) which applies to all employers liability claims funded by CFAs (whether or not the parties and their representatives were privy to or otherwise aware of the 'industry' agreement referred to above), they should be read and understood on their face, without reference to extraneous materials such as those relied upon by the claimants and set out above. That approach is necessary to ensure certainty and consistency.
As for the result of applying the "natural and ordinary meaning' test, Mr Hogan submits in paragraph 26 of his skeleton argument as follows:
"Is noise induced hearing loss a disease, or an injury inflicted by invasive sound energy? On consideration of the evidence of both Mr Parker and Dr Murdin on a natural and ordinary application of the word 'injury', NIHL/tinnitus is an injury and not a disease. "
It can be seen that the thrust of Mr Hogan's argument is based on what he contends is the natural and ordinary meaning of the word 'injury', his starting point being the assertion that NIHL is an injury in ordinary parlance. He then simply assumes that it follows that NIHL, if it is an injury, cannot be a disease. He does not offer any analysis as to what does or does not fall within the ordinary meaning of the word 'disease', nor any basis for excluding NIHL from inclusion within that ordinary meaning (save for the assertion that it is an injury).
The problem with the above approach is that it is only valid if 'injury' and 'disease' are mutually exclusive terms. However, it is clear from sections IV and V themselves (leaving aside the lengthy legislative history and continuing current usage as referred to above) that there is (at least the very least) a degree of overlap between injury and disease, as recognised by Males J in Patterson (above) at paragraph 14. Although section IV applies only to injuries, rule 45.20(2)(a)(i) expressly excludes disputes relating to diseases from its scope: that would be otiose unless a disease could also be an injury. Further, although section V relates to diseases, it expressly includes a disease or physical injury caused by asbestos (rule 45.23(3)(c)) and a psychiatric injury caused by stress (rule 45.23(3)(d)(i)). Such injuries are expressly excluded from section IV by rule 45.20(2)(a)(iv) and are deemed to be 'diseases' for the purposes of section V.
It follows that the fact that NIHL may clearly be an injury does not determine whether or not it is also a disease within section V. That puts squarely in issue the true meaning of the term 'disease' in Part 45 and whether NIHL falls within that meaning.
(1) The meaning of 'disease' in the former section V of CPR Part 45
If viewed in isolation, the term 'disease' is far from easy to interpret and apply, as demonstrated by the fact that Mr Hogan did not attempt to explain its meaning or to explain why NIHL is not a disease (other than by asserting that it is any injury). In isolation, the term does not provide the certainty as to the success fee due in injury and disease claims funded by a CFA that was plainly the legislative purpose of sections IV and V.
However, as set out above, the term 'disease' has been used in legislation relating to employers' liability claims and insurance since 1906, legislation which Mr Hogan accepts represents the origins of the terminology used in the relevant section of Part 45. That legislation has consistently used the term 'disease' to cover conditions (including 'injuries') which have arisen by process rather than by accident. That exact distinction was adopted, only shortly before section IV and V were introduced, in the definition of 'disease' utilised in the Pre-Action Protocol for Disease and Illness claims. Pre-Action Protocols are published pursuant to a Practice Direction and their use is governed by provisions of the CPR and can have costs consequences: CPR 44.2(5)(a).
In R v. Secretary of State for the Environment Ex parte Spath Holme Ltd [2001] 2 AC 349 Lord Nicholls explained the proper approach to using legislative history and extraneous materials in interpreting a statute as follows (397C-398D):
"Additionally, the courts employ other recognised aids. They may be internal aids. Other provisions in the same statute may shed light on the meaning of the words under consideration. Or the aids may be external to the statute, such as its background setting and its legislative history. This extraneous material includes reports of Royal Commissions and advisory committees, reports of the Law Commission and the statute's legislative antecedents….
Nowadays the courts look at external aids for more than merely identifying the mischief the statute is intended to cure. In adopting a purposive approach to the interpretation of statutory language, courts must seek to identify and give effect to the purpose of the legislation. To the extent that extraneous material assists in identifying the purpose of the legislation, it is a useful tool.
This is subject to an important caveat. External aids differ significantly from internal aids. Unlike internal aids, external aids are not found within the statute in which Parliament has expressed its intention in the words in question. This difference is of constitutional importance. Citizens, with the assistance of their advisers, are intended to be able to understand Parliamentary enactments, so that they can regulate their conduct accordingly. They should be able to rely upon what they read in an act of Parliament. This gives rise to a tension between the need for legal certainty, which is one of the fundamental elements of the rule of law, and the need to give effect to the intention of Parliament, from whatever source that (objectively assessed) intention can be gleaned ...
This constitutional consideration does not mean that when deciding whether statutory language is clear and unambiguous and not a productive of absurdity, the courts are confined to looking solely at the language in question in its context within the statute. That would impose on the courts much too restrictive an approach. No legislation is enacted in a vacuum. Regard may also be had to extraneous material, such as the setting in which the legislation was enacted. This is a matter of everyday occurrence.
That said, courts should nevertheless approach the use of external aids with circumspection. Judges frequently turn to external aids for confirmation of views reached without their assistance. That is objectionable. But the constitutional implications points to a need for courts to be slow to permit external aids to displace meanings which are otherwise clear and unambiguous and not a productive of absurdity. Sometimes external aids may properly operate in this way. In other cases, the requirements of legal certainty might be undermined to an unacceptable extent if the court were to adopt, as the intention to be imputed to Parliament in using the word in question, the meaning suggested by an external aid. Thus, when interpreting statutory language courts have to strike a balance between conflicting considerations."
Mr Hogan submits that, whilst accepting that the court can consider the legislative history and extraneous materials set out above in this case, undue weight should not be given to them and that the 'literal' meaning should be preferred.
However, reference to the legislative history is particularly relevant in interpreting these provisions, not only because the terms 'injury' and 'disease' are otherwise relatively ambiguous, but also because the longstanding usage of those terms in antecedent legislation is reflected in the definition of disease in the Pre-Action Protocol, which can be regarded as 'internal' to the CPR, the very legislative scheme under consideration.
In my judgment consideration of the legislative history in this case strongly indicates that Parliament intended the term 'disease' in sections IV and V of CPR 45 to include any illness (whether physical or physiological), disorder, ailment, affliction, complaint, malady or derangement other than a physical or physiological injury solely caused by an accident or other similar single event. The provisions of section IV are therefore restricted to injuries caused by accidents (or other single events), preserving the long-established distinction.
The above conclusion is reinforced both by certain wording of the sections and by their substantive effect:
i) Section IV provides that it does not apply to injuries sustained before a specified date (rule 45.20(20(a)(ii)), consistent with its application to injuries caused by a single incident, when the precise date the injury was suffered will be known. In contrast, that provision would be inapposite in relation to injuries resulting from process (such as NIHL). It would rarely be possible to identify a date on which such a condition was 'sustained' and the need to do so would give rise to uncertainty and argument (as indeed has incurred in relation to the four test cases). That issue does not arise if conditions and injuries not caused by a single incident or accident are diseases within section V, which does not provide a cut-off date.
ii) The broad effect of sections IV and V is that success fees in injury claims are limited to 25% whereas higher percentages are provided for in disease claims. The rationale for higher success fees in disease claims must be that it is harder to prove how and when a disease was contracted than to prove how and when an injury was sustained. But that greater difficulty can only be to do with the difference between a (possibly) lengthy and unobservable process on the one hand and a single observable occurrence on the other, namely the difference between injury by process and injury by accident. No other distinction has been suggested to explain the assumed difference in failure rates which must underlie the provisions.
I recognise that the above conclusion differs from that reached by Males J in Patterson, but it does not appear that the lengthy legislative history, nor its relationship with the current Pre-Action Protocol, was drawn to his attention.
Applying the above meaning of 'disease', there is no doubt that NIHL falls within section V of the former CPR Part 45. Whilst not forming part of the issue I am deciding, I should add (in the hope of clarifying a further area where disputes may arise) that the same conclusion would apply in relation to VWF.
Mr Hogan referred throughout to "NIHL/tinnitus", no doubt in order to ensure that claims for tinnitus (a perception of ringing in the ears) were covered by my ruling on the preliminary issue. To the extent that tinnitus is a symptom of NIHL or otherwise is caused by exposure to excessive noise, it also clearly falls within section V.
(2) Whether NIHL is a 'disease' for the purposes of sections IV and V of the former CPR 45
If I am wrong about the meaning of 'disease' in sections IV and IV, it is nevertheless entirely clear, in my judgment, that the term (however it is defined) must be taken to include NIHL.
First, the categorisation of NIHL has its own legislative history, pointing in only one direction. It has been a 'prescribed disease' for the purpose of national insurance and social security legislation since 1975, following detailed consideration and recommendation by an advisory council mandated to undertake that task by statute. Occupational deafness has been expressly defined a disease since 1985. In using the term 'disease' in section IV and V without any list or definition, Parliament must be taken to have intended to include conditions such as NIHL which had been and were currently defined as diseases for the purposes of closely-related legislation.
Second, in the context of claims for occupational diseases, NIHL claims are not only recognised as that type of claim, but account for a substantial majority of all such claims. NIHL is not merely an occupational disease, but is the paradigm case of such a disease. That accounts for the fact that, when considering issues arising in occupational disease claims, courts give as examples claims relating to NIHL (see paragraph 37 above). Further, given that section V makes specific provision for asbestos, RSI and stress claims, the category of other diseases which comprises type C would be denuded of content if it did not include the two other main types of widely recognised occupational disease, NIHL and VWF. It is inconceivable, when looked at in its proper litigation context and considering the mischief being addressed, that Parliament did not intend to include NIHL (and VWF) in type C in section V.
Third, the Civil Justice Council's press release puts the matter beyond any sensible argument, expressly recording that an 'industry' agreement was to be embodied in rules and would prove for the success fee in claims for NIHL and VWF to be 62.5%. Mr Hogan does not dispute that the press release is an admissible document and that it demonstrates that the intention of the parties to the industry negotiation, the Civil Justice Council and the Rules Committee was (at least at the date of publication) that NIHL and VWF should be included as diseases in section V. His submission is that such private intentions must be ignored in favour of the literal meaning, which must prevail in public legislation, even if that means that (as in this case) the intended effect of the legislation miscarries.
However, sections IV and V were designed to regulate an aspect of claims between two clearly identifiable groups following negotiations and agreement between those groups under the auspices of the official bodies responsible for the legislation. The report of one of those bodies on the result of that process is a powerful factor in interpreting the legislation which is intended to enact the agreed outcome. In R (Public and Commercial Services Union) v. Minister for the Civil Service [2010] ICR 1198, Sales J considered the 1972 report of the Joint Superannuation Committee of the national Whitely Council in interpreting the effect of s2(3) of the Superannuation Act 1972. After stating his initial impression of the effect of the provision, Sales J stated at paragraph 38:
"That impression is reinforced by the terms of paragraph 12 of the joint committee report, which records the understanding of the staff and management sides at the time regarding the protections which would apply with the introduction of the Superannuation Bill. Such contemporaneous understanding of the effect of an act, particularly by an official body like the joint committee, constitutes a powerful form of contemporanea expositio and is a legitimate aid to the construction of that Act: see Bennion on Statutory Interpretation, 5th ed (2008) pp 702-706, 711-712. That is especially the case where, as here, an Act is being introduced specifically to regulate relations between certain persons and it is those persons who have the understanding in question and the."
I accept that there might be cases where the language of legislation is so clear that the court would be compelled to find that an intended scheme, even one as clearly evidenced as that reported in the Civil Justice Council's press release, had totally miscarried, the words actually used failing to give effect to what was intended by those who devised the scheme. But this is not such a case. I have set out above examples of NIHL being categorised as an occupational disease in medical literature, legislation, House of Lords and Supreme Court decisions, legal texts and the Pre-action Protocol for Disease and Illness claims, all of which goes to demonstrate that, consistently with the 'industry' agreement and the Civil Justice Council report of that agreement, NIHL may properly be categorised as a disease.
Conclusion
I therefore determine the preliminary issue in favour of the claimants: NIHL is a disease which falls within section V of the former Part 45 of the CPR, claims for damages for NIHL therefore attracting a 62.5% success fee if settled before trial. Such claims are not subject to section IV of Part 45.
I would add that defendant's insurers attempt to re-open (if not renege on) the industry agreement made in 2005 does them little credit. The large number of NIHL claims in which the argument about the success fee has been raised will have been funded by CFAs which were entered on the basis that a 62.5% success fee would be recovered. To seek to limit such success fees to 25% is an opportunistic attempt to avoid part of the overall bargain (in relation to NIHL) whilst taking the benefit of the remainder (for example, in relation to asbestos claims, fixed at 27.5%).
I was invited by the parties to determine the further question of whether, if NIHL is not a disease within section V, the claimants in the test cases 'sustained' their 'injuries' before 1 October 2004 in order to determine whether their success fees were at large or whether they were fixed by section IV of the former Part 45. Given my ruling above on the preliminary issue, this question does not arise for determination. Indeed, one of the reasons for my decision on the preliminary issue is that the concept of the date an injury was sustained is inapposite where injury results from a process, such as in NIHL cases. For that reason, and because the question of date of injury is highly fact-specific, I do not consider it would be appropriate to express any views on that question.
I would like to thank both counsel for their co-operative approach to identifying the relevant questions and materials and for their helpful written and oral submissions.
APPENDIX
IV FIXED PERCENTAGE INCREASE IN EMPLOYERS LIABILITY CLAIMS
Scope and interpretation
45.20
(1) Subject to paragraph (2), this Section applies where –
(a) the dispute is between an employee and his employer arising from a bodily injury sustained by the employee in the course of his employment; and
(b) the claimant has entered into a funding arrangement of a type specified in rule 43.2(1)(k)(i).
(2) This Section does not apply –
(a) where the dispute –
i) relates to a disease;
ii) relates to an injury sustained before 1st October 2004; or
iii) arises from a road traffic accident (as defined in rule 45.7(4)(a)); or
iv) relates to an injury to which Section V of this Part applies; or
(b) to a claim –
i) which has been allocated to the small claims track; or
ii) not allocated to a track, but for which the small claims track is the normal track.
(3) For the purposes of this Section –
(a) 'employee' has the meaning given to it by section 2(1) of the Employer's Liability (Compulsory Insurance) Act 1969; and
(b) A reference to 'fees' is a reference to fees for work done under a conditional fee agreement or collective conditional fee agreement.
Percentage increase of solicitors' and counsel's fees
45.21
In the cases to which this Section applies, subject to rule 45.22 the percentage increase which is to be allowed in relation to solicitors' and counsel's fees is to be determined in accordance with rules 45.16 and 45.17, subject to the modifications that –
(a) the percentage increase which is to be allowed in relation to solicitors' fees under rule 45.16(b) is –
…
(ii) 25% in any other case; and
(b) the percentage increase which is to be allowed in relation to counsel's fees under rule 45.17(1)(b)(ii), (1)(c)(ii) or (1)(d) is 25%.
…
V FIXED RECOVERABLE SUCCESS FEES IN EMPLOYER'S LIABILITY DISEASE CLAIMS
Scope and Interpretation
45.23
(1) Subject to paragraph (2), this Section applies where –
(a) the dispute is between an employee (or, if the employee is deceased, the employee's estate or dependants) and his employer (or a person alleged to be liable for the employer's alleged breach of statutory or common law duties of care); and
(b) the dispute relates to a disease with which the employee is diagnosed that is alleged to have been contracted as a consequence of the employer's alleged breach of statutory or common law duties of care in the course of the employee's employment; and
(c) the claimant has entered into a funding arrangement of a type specified in rule 43.2(1)(k)(i).
(2) This Section does not apply where –
(a) the claimant sent a letter of claim to the defendant containing a summary of the facts on which the claim is based and main allegations of fault before 1st October 2005; or
(b) rule 45.20(2)(b) applies.
(3) For the purposes of this Section –
(a) rule 45.15(6) applies;
(b) 'employee' has the meaning given to it by section 2(1) of the Employers' Liability (Compulsory Insurance) Act 1969;
(c) 'Type A claim' means a claim relating to a disease or physical injury alleged to have been caused by exposure to asbestos;
(d) 'Type B claim' means a claim relating to –
(i) a psychiatric injury alleged to have been caused by work-related psychological stress;
(ii) a work-related upper limb disorder which is alleged to have been caused by physical stress or strain, excluding hand/arm vibration injuries; and
(e) 'Type C claim' means a claim relating to a disease not falling within either type A or type B.
(The Table annexed to the Costs Practice Direction contains a non-exclusive list of diseases within Type A and Type B.)
Percentage increase of solicitors' fees
45.24
(1) In the cases to which this Section applies, subject to rule 45.26, the percentage increase which is to be allowed in relation to solicitors' fees is –
(a) 100% if the claim concludes at trial; or
(b) where –
(i) the claim concludes before a trial has commenced; or
(ii) the dispute is settled before a claim is issued,
To be determined by rule 45.24(2).
(2) Where rule 45.24(1)(b) applies, the percentage increase which is to be allowed in relation to solicitors' fees is –
…
(c) in type C claims --
…
(ii) 62.5% in any other case.
…
Percentage increase of counsel's fees
45.25
(1) In the cases to which this Section applies, subject to rule 45.26, the percentage increase which is to be allowed in relation to counsel's fees is –
(a) 100% if the claim concludes at trial; or
(b) where –
(i) the claim concludes before a trial has commenced; or
(ii) the dispute is settled before a claim is issued,
to be determined by rule 45.25(2).
(2) Where rule 45.25(1)(b) applies, the percentage increase which is to be allowed in relation to counsel's fees is –
(a) if the claim has been allocated to the fast track, the amount shown in Table 6; and
(b) if the claim has been allocated to the multi-track, the amount shown in Table 7.
(3) Where a trial period has been fixed, rules 45.17(2) to 45.17(5) apply for the purposes of determining the date fixed for the commencement of the trial.
TABLE 6
Claims allocated to the fast track
If the claim concludes 14 days or less before the date fixed for commencement of the trial
If the claim concludes more than 14 days before the date fixed for commencement of the trial or before any such date has been fixed
Type A
Claim
50%
27.5%
Type B
Claim
100%
100%
Type C
Claim
62.5%
62.5%
TABLE 7
Claims allocated to the multi-track
If the claim concludes 21 days or less before the date fixed for commencement of the trial
If the claim concludes more than 21 days before the date fixed for commencement of the trial or before any such date has been fixed
Type A
Claim
75%
27.5%
Type B
Claim
100%
100%
Type C
Claim
75%
62.5%
SECTION 25B OF THE COSTS PRACTICE DIRECTION
B.1 The following table is a non-exclusive list of the conditions that will fall within type A and Type V claims for the purposes of rule 45.23.
Claims Type A Asbestosis
Mesolthelioma
Bilateral Pleural Thickening
Pleural Plaques
Claims Type B Repetitive Strain Injury/WURLD
Carpal tunnel syndrome caused by Repetitive Strain Injury
Occupational Stress |
Mr Justice Supperstone :
Introduction
I will refer to Davis Solicitors LLP as the Claimant, and Fida Raja and Hande Riaz as the Defendants.
This is an appeal by the Claimant against the decision of HHJ Mitchell made at the Central London County Court on 1 August 2014 refusing the Claimant relief from sanctions, their appeal against the decision of Deputy District Judge Parker dated 13 December 2013, having been struck out on 31 March 2014, the Claimant having failed to comply with an 'unless' order of the court. Permission to appeal was granted by Knowles J on 18 December 2014.
The Factual Context
The Claimant is a firm of solicitors which practises from 34-36 High Street, Barkingside, Ilford, Essex. Ms Nancy Ballard, who appears for the Claimant, as she did below, is a sole practitioner in the firm.
The Defendants retained the Claimant with regard to the disrepair of a boiler at a property in respect of which they were co-tenants.
These proceedings relate to a claim made by the Claimant in respect of an unpaid invoice in the sum of £2,970 plus interest and costs. The Defendants defended the claim and counterclaim for damages for consequential losses incurred as a result of the alleged breach of duty and negligence of the Claimant. The counterclaim was resisted.
On 13 December 2013 Deputy District Judge Parker gave judgment, following a trial that had lasted one and a half days. The Claimant was ordered to pay to the Second Defendant £6,000 and to the Defendants the sum of £590 plus interest. In addition the Claimant was ordered to pay the Defendants' costs. The total sum to be paid by the Claimant to the Defendants pursuant to the judgment was the sum of £21,613.08 by 28 February 2014.
In his judgment DDJ Parker stated:
"It is difficult to conceive of a worse case in relation to poor service and a breach of the implied term in relation to reasonable skill and care.
The work undertaken by this Claimant has been shoddy, has failed to consider or make an assessment of the case as it developed, has failed to advise or have regard to the fact that the Defendants were not indigenous to England and their knowledge of the law and customs was challenging to them. Above all the Claimant has been negligent. I am satisfied to the requisite standard of proof."
The Claimant filed a Notice of Appeal seeking permission to appeal against the order of Deputy District Judge Parker.
On 11 February 2014 HHJ Wulwik, upon reading the Claimant's Notice of Appeal and a transcript of the judgment of DDJ Parker, ordered the Claimant to file a transcript of the hearing before the judge.
On 3 March 2014 Judge Wulwik ordered that:
"Unless the Claimant by 4pm on the 17th March 2014 files and serves a skeleton argument in support of the Appeal and lodges an Appeal Bundle, the Appeal shall be struck out and the Stay of Execution imposed by paragraph 3 of the order of the 11th February 2014 shall be discharged without further order."
On 31 March 2014 Judge Wulwik, upon reading a letter from the Defendants' solicitors dated 19 March 2014, the court file and noting the terms of the order he made on 3 March 2014, and that the Claimant on 17 March 2014 filed a skeleton argument but failed to lodge an Appeal Bundle as required by the order of 3 March 2014 or otherwise in accordance with CPR PD 52B.6, ordered that:
"Pursuant to the Order of the 3rd March 2014 the Appeal is now struck out and the stay of execution imposed by paragraph 3 of the Order of the 11th February 2014 is discharged."
On 2 April 2014 the Claimant wrote a letter for the attention of Judge Wulwik, having received a notice of his Order of 31 March 2014, stating:
"This is extremely unfair and concerning when the appeal bundle was filed with the Court on the 31st December 2013. The bundle consisted of the full papers in the Trial bundles."
The Claimant requested discharge of the order of 31 March 2014 without need of a formal application for relief of sanction.
On 3 April 2014 Judge Wulwik, through HM Courts and Tribunals Service, responded as follows:
"(a) The Court has no record of receiving an Appeal Bundle on the 31st December 2013.
(b) Civil Procedure Rules Practice Direction 52B.6 at 6.4 deals with the contents of an Appeal Bundle. If the bundle that the Claimant says it filed on the 31st December 2013 consisted only of the papers in the original trial bundle, it would not have complied with CPR PD 52B.6 at 6.4;
(c) The Appellant's Notice was put before His Honour Judge Wulwik immediately following his return from annual leave in February 2014;
(d) The Claimant must make such application to the Court as they think fit."
On 7 April 2014 the Claimant made an application for relief from sanctions.
The application was heard by HHJ Mitchell in the Central London County Court on 1 August 2014 when he dismissed the application.
On 21 August 2014 the Claimant filed a notice of appeal from the decision of Judge Mitchell.
The Civil Procedure Rules
CPR rule 3.9 provides:
"Relief from sanctions
(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need—
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders.
(2) An application for relief must be supported by evidence."
Practice Direction 53B – Appeals in the County Courts and High Court provides in Section 6 (Conduct of the appeal), so far as is material:
"6.3 Appeal bundle: As soon as practicable, but in any event within 35 days of the filing of appellants notice, the appellant must file an appeal bundle which must contain only those documents relevant to the appeal. The appeal bundle must be paginated and indexed.
6.4 Documents relevant to the appeal:
(1) Subject to any order made by the court, the following documents must be included in the appeal bundle—
(a) a copy of the appellant's notice;
(b) a copy of any respondent's notice;
(c) a copy of any appellant's or respondent's skeleton argument;
(d) a copy of the order under appeal:
(e) a copy of the order of the lower court granting or refusing permission to appeal together with a copy of the judge's reasons, if any, for granting or refusing permission;
(f) a copy of any order allocating the case to a track;
(g) a transcript of the judgment of the lower court or other record of reasons (expect in appeals in cases which were allocated to the small claims track and subject to any order of the court).
(2) The following documents should also be considered for inclusion in the appeal bundle but should be included only where relevant to the appeal—
(a) statements of case;
(b) application notices;
(c) other orders made in the case;
(d) a chronology of relevant events;
(e) witness statements made in support of any application made in the appellant's notice;
(f) other witness statements;
(g) any other documents which any party considers would assist the appeal court.
6.5 Service of the appeal bundle: A copy of the appeal bundle must be served on each respondent—
(a) where permission to appeal was granted by the lower court, at the same time as filing the appeal bundle;
(b) where the appeal court has granted permission to appeal, as soon as practicable after notification and in any event within 14 days of the grant of permission;
(c) where the appeal court directs that the application for permission to appeal is to be heard on the same occasion as the appeal, as soon as practicable and in any event within 14 days after notification of the hearing date."
In Denton v TH White Ltd [2014] EWCA Civ 906, the Master of the Rolls and Vos LJ, in a joint judgment, stated at paragraph 24:
"… A judge should address an application for relief from sanctions in three stages. The first stage is to indentify and assess the seriousness and significance of the 'failure to comply with any rule, practice direction or court order' which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate 'all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]' ".
The Decision of HHJ Mitchell
The judge noted that (1) the Claimant says that "she had already delivered the papers that were necessary for the appeal to the respondents, who do not seem to deny that is the case, but what they do say is, '…that they never received an appeal bundle. That is the case with the court'." (para 2); (2) Ms Ballard maintains that "she was not required by 6.5 to serve a bundle; not required by the rules" (para 3).
The judge referred to the fact that in early April 2014 by letter Judge Wulwik drew Ms Ballard's attention to the fact that there was no bundle at court as required by PD 52B, para 6.4. He said that the purpose of requiring a bundle "is to enable the court to pick up the case without having to rummage through the file and find individual documents" (para 3).
The judge noted that the application for relief from sanctions was made promptly and stated that if Ms Ballard had filed a bundle at that stage "it seems to me it would be likely that I would be granting relief from sanctions" (para 4). However
"the position is that no appellant's bundle was filed and it still has not been and the result is that the court is at a disadvantage. … this is not a trivial breach. It could have been remedied by filing an appellant bundle, with the application for relief from sanctions and I would almost certainly have granted relief. But the case has just wandered on without that having been done and I am being faced with having to rummage through the papers to try and makes sense of what is being said"(para 4).
In respect of the grounds of appeal from the decision of DDJ Parker, the judge said (at para 5):
"… although I could not form a definitive view because I have not had enough time, it seems to me it is highly dubious as to whether there are grounds of appeal at all. If there were substantive grounds, they seem to concentrate on the disrepair, whereas the judgement concentrates, to a large extent, on the professional conduct and in those circumstances, although it is not a matter for me, it does seem to me that I have to look at the merits of the appeal and they do not seem to me to be very strong."
Grounds of Appeal
A number of grounds of appeal were set out in the Notice of Appeal filed on 21 August 2014. However before me Ms Ballard limited herself to the grounds set out in a skeleton argument that she e-mailed to the court at about 1pm on 18 February 2015. In summary the grounds advanced in her oral submissions were that:
i) the breach was not significant;
ii) but for the Defendants' solicitor sending a letter dating 19 March 2014 to Judge Wulwik contending that the Claimant had not complied with his order, the judge would not have struck out the Claimant's appeal. The Defendants' action in this regard was "opportunistic" (per judgment in Denton at para 40);
iii) the judge erred in considering the merits of the appeal.
Discussion
Ms Ballard submits that the failure to file an appeal bundle was not a significant breach of CPR PD 52B because all relevant documents had been served on the Defendants and the Claimant had complied with all court orders in every other respect. There was, she submits, no prejudice to the Defendants because permission to appeal had not yet been granted and therefore there was no need for them to incur any costs.
I reject this submission. Paragraph 6.3 of PD 52B requires an appeal bundle, paginated and indexed, to be filed as soon as practicable, but in any event within 35 days of the filing of the Appellant's Notice, which in this case was by 4 February 2014. Paragraph 6.4 identifies the documents that must be included in the appeal bundle and the documents that should also be considered for inclusion. Not only did the Claimant fail to comply with the Practice Direction, but Ms Ballard ignored the 'unless' order of Judge Wulwik of 3 March 2014 relating to the lodging of an appeal bundle. She made no application to set aside the 'unless' order. It was only after the order of 31 March 2014 striking out the appeal that she wrote to the court. In fact, as Mr Dean, for the Defendants, observes it was not strictly necessary for the judge to make the order of 31 March 2014 as the Claimant's failure to lodge an appeal bundle by 4pm on 17 March 2014 would have resulted in the appeal being struck out without further order, pursuant to the terms of the order of 3 March 2014.
At various points in the appeal process Ms Ballard has attempted to explain why the default occurred. Mr Dean describes the reasons that she has given for the default as being "fluid". First she said in her statement dated 7 April 2014 in support of the Claimant's application for relief from sanctions that she had filed a bundle of documents used at the trial at the court on 31 December 2013 (para 7), and that skeleton arguments for the appeal were filed and served on the court and the Defendants' solicitors on 17 March 2014 (para 10). In her letter of 2 April 2014 she said that "the appeal bundle was filed with the court on the 31st December 2013". The letter continued: "the bundle consisted of the full papers in the Trial bundles". At this point she was not accepting there was a breach of the Practice Direction.
Now her position is that whilst she considered it unnecessary to file an appeal bundle, she accepts that she was in breach of the Practice Direction. However she states that the reason she made no attempt to correct the breach or even to serve an appeal bundle before the hearing before Judge Mitchell was because she did not think that filing an appeal bundle would assist. She thought, she says, that what was important was to make an application for relief from sanctions as promptly as possible. She stated that she thought it was only necessary to have an appeal bundle once permission has been granted. She did not appear to appreciate the need for applications for permission to appeal to be presented in accordance with the rules so as to ensure the effective management of the appeal process at the permission stage.
At another point during the course of her oral submissions Ms Ballard said the reason she did not file the Appellant's bundle was because she did not have the sealed notice of appeal. She also said that there was nothing else to put into the agreed bundle which was required by the terms of paragraph 6.4 at the time.
Ms Ballard made the point before Judge Mitchell, in her grounds of appeal (para 9) and in her written submissions to this court (para 2), that the Claimant was not in breach of PD 52B 6.5. This is correct, however it illustrates her failure to appreciate the importance of complying with PD 52B 6.3 and 6.4. Even now Ms Ballard has produced an incomplete and not properly paginated "Appeal Bundle". I can well understand the difficulties that Judge Wulwik and Judge Mitchell must have encountered when dealing with this case in the absence of any appeal bundle.
I reject Ms Ballard's submission that the Defendants have, by their solicitors' letter of 19 March 2014, bringing to the court's attention the Claimant's breach of the Practice Direction, acted "opportunistically and unreasonably" (see Denton, para 40) because they had the trial bundles. As Mr Dean points out that letter was written after the 'unless' order was made on 3 March 2014 and after 17 March 2014 when the appeal had been, at least arguably, automatically struck out (see para 26 above). In any event the recitals to the Order of 31 March 2014 make clear that Judge Wulwik in making that Order did not rely on the letter from the Defendants' solicitors alone (para 11 above).
Judge Mitchell described the breach in this case as being "not a trivial breach" (para 4). In Denton the Master of the Rolls and Vos LJ stated (at para 26), that "it would be preferable if in future the focus of the inquiry at the first stage should not be on whether the breach has been trivial. Rather, it should be on whether the breach has been serious or significant". In the circumstances I have referred to I consider the breach in this case to be serious and significant.
Ms Ballard has explained why the default occurred. I do not consider any explanation she has given constitutes a good reason. She has put forward reasons for not complying with PD 52B 6.3 and 6.4 which indicate a continuing lack of understanding of the importance of the rules. The purpose of PD 52B 6.3 and 6.4 is clear. It is to assist the orderly conduct of appeals throughout the appeal process.
In considering "all the circumstances of the case" as Rule 3.9(1) requires the court to do, Judge Mitchell was entitled to have regard to the merits of the underlying appeal. Having read the judgment of DDJ Parker and the grounds of appeal, I consider that Judge Mitchell was plainly entitled to form the view that the merits of the appeal "do not seem to be very strong" (see para 23 above).
Judge Mitchell was also entitled in considering all the circumstances of the case to have regard to the fact, as he did, that even by the time of the hearing before him, more than five months after the date by which the appeal bundle should have been filed, the Claimant was in continuing breach of the Practice Direction. The fact is that Ms Ballard had deliberately decided not to comply with the Practice Direction and the 'unless' order because she considered that what she had done in terms of filing and serving documents for the appeal was sufficient.
Conclusion
For the reasons I have given this appeal is dismissed. |
RULING ON APPLICATION
FOR ADJOURNMENT
Mr Justice Foskett :
Yesterday I had before me an application made on behalf of the Claimant in this action to adjourn the trial of the issue of liability currently fixed for 5 days to commence during a 5-day window beginning on 20 April – in other words during the first full week of next term.
The Defendant consented to the application but the consent of the parties will not, of course, bind the court to agreeing that there should be an adjournment. Ever since the Woolf reforms were implemented, fixed trial dates have been regarded as immovable save in the most exceptional and compelling circumstances. Leaving aside the impact that adjournments have on the parties directly involved in a case, any adjournment has an impact on other cases waiting to be heard.
A request for the adjournment first came before me as Judge in Charge of the Queen's Bench Civil List on paper on 17 March and for reasons I will summarise shortly I indicated that I was not minded at that stage to grant the application.
The action itself is brought on behalf of a female claimant who is now aged 21 who is severely physically and mentally disabled. She is a "protected party" and brings this claim through her mother as her "Litigation Friend". The case advanced on her behalf is that her disabilities were caused or materially contributed to by the negligence of the staff of the John Radcliffe Hospital in Oxford where she was born and the community midwives who were responsible for checking on her progress after discharge from the hospital. In short, it is alleged that early signs of hypoglycaemia (abnormally low blood sugar levels) were missed or not acted upon at the hospital and subsequently leading to an epileptic encephalopathy which was the cause of her disabilities. Various breaches of duty have been admitted on behalf of the Defendant, but causation is denied. The Defendant's case is that there is no evidence of neo-natal hypoglycaemia and the likely cause of her disabilities was a genetic cause or the result of some developmental problem that affected her brain development and function. That case is supported by two well-known and experienced experts, Dr Neil Thomas, Consultant Paediatric Neurologist, and Dr Janet Rennie, Consultant in Neonatal medicine.
The Claimant's case is supported by Dr Jane Hawdon, Consultant Neonatologist and Dr Colin Ferrie, Consultant Paediatric Neurologist.
It is the suggested inability of Dr Ferrie to take part in the trial that has given rise to the present application. The circumstances of Dr Ferrie's suggested unavailability are well known. He was the subject of a report in a Sunday newspaper on 4 January this year apparently taking cocaine. As a result he reported himself to the GMC and has subsequently been suspended pending an investigation by the GMC.
When the matter was before me on paper, all I was told was that he was unavailable and that the Defendant consented to the application. I did not have the issues in the case explained or any of the expert reports to hand. I indicated that I was not at that stage minded to grant the application because Dr Ferrie's difficulties were known about in January and no information was given as to what steps, if any, had been taken to obtain a different expert if Dr Ferrie's evidence could not be taken in writing.
Some further information has been given since then to which I will refer below. I will deal first with what Dr Ferrie has said. The episode has, he says, had a marked effect on his health. In response, I imagine, to my indication of reluctance to adjourn the case, a witness statement has been obtained from him dated 20 March, the material parts of which I quote as follows:
"4. My health has suffered. I have been advised that I am suffering from an adjustment disorder and depression both of which affect my ability to concentrate.
5. I feel that if I were called as a witness in Court I would not be able to concentrate upon the issues in hand particularly since the press are likely to become aware of my appearance in Court and the focus would be upon me rather than the issues to be raised at trial.
6. The attention of the press is likely to further affect my concentration and in the circumstances I feel that I would be unable to give evidence or to concentrate cogently upon the matters in hand.
7. I understand that I am not insured to appear in Court in any event as following my suspension the Medical Defence Union withdrew my membership.
8. I am aware of my duty to the Court and before this problem arose I had been summonsed as a witness and was prepared to give evidence.
9. However, in my present psychological state I feel that I could not concentrate on the issues and would not be able to advise and assist the Court appropriately upon the issues raised.
10. At the time I prepared this Statement my General Practitioner has issued me with a certificate stating that I am unfit to undertake any work."
The GP's certificate to which Dr Ferrie refers in the statement was not attached to the statement and, whilst it is said that it says that Dr Ferrie is "unfit to undertake any work", it does not apparently say specifically that he would be unable either to attend a court hearing to give evidence on the issues in question or to do so by video link.
I have to say that, as presently advised, I do not find the medical reasons for Dr Ferrie's non-availability as a witness very persuasive. I very much doubt whether, had that material been put before me to excuse the attendance of a witness either in person or by video link, I would have agreed to excusing the witness. It is, of course, understandable that someone unused to media interest might find any such interest unwelcome and difficult. However, since I cannot believe that the circumstances of the report in the Sunday newspaper would have any bearing on any issue that could arise in a trial of this nature (or indeed in any of the kind of issues with which Dr Ferrie's expertise is concerned), I would be surprised if any court would permit questions to be asked about those circumstances if any party sought to do so: the whole focus would simply be upon matters within his undoubted expertise. He has given evidence in the past, both on behalf of claimants and defendants, and his evidence has been accorded respect and has often been accepted. In a case in which he was due to appear in January this year which I tried, another well-known consultant paediatric consultant neurologist, Dr Lewis Rosenbloom, demonstrated his respect for Dr Ferrie's views even if, as occurred in that case, he did not agree with them.
Equally, the medical appraisal of his condition (which, of course, I accept might lead to concentration difficulties) is second-hand and not given from a level of expertise in the specialist area concerned to be persuasive.
I should say that both Mr Henry Witcomb and Miss Margaret Bowron QC, who appeared before me on this application each of whom have immense experience in this field of litigation and for whose assistance I express my appreciation, told me that their various sources of information do suggest that Dr Ferrie's current medical status is understood to be a cause of concern to those who know him well. Naturally, I respect what they told me and I am, of course, prepared to accept that it may well be accurate. However, the somewhat anecdotal nature of the information is not the same as having a report from an acknowledged expert in the field who has examined Dr Ferrie and who has given a full and informed opinion.
The other matter to which Dr Ferrie's statement gives rise is the question of his continued status to give expert evidence. I am unsure to what extent the apparent continued lack of insurance would have a bearing on that, but it would be something about which, if presented with this question again, I would need much greater information.
At the moment there seems to be a widespread assumption that all the work for which Dr Ferrie was responsible prior to 4 January this year will have to be re-distributed amongst other experts. I should say that I do not see that as necessarily so. As I have already indicated, I have myself tried a case in the last month or so in which Dr Ferrie was due to give evidence. That case started on or around 13 January and thus very shortly after the Sunday newspaper report and I had to proceed on the basis that Dr Ferrie was simply not available. The Claimant, for whom he had reported on the issue of life expectancy, wanted the case to go ahead without Dr Ferrie giving oral evidence; the Defendant wanted him present so that he could be cross-examined. I decided that the case should proceed and indeed it did: see [2015] EWHC 247 (QB). The absence of Dr Ferrie made resolution of the life expectancy issue more difficult, though not impossible. There will plainly be other cases where a similar approach can be adopted. I did not consider in that case that the inability of the Defendant to cross-examine Dr Ferrie prejudiced its position.
Notwithstanding what Mr Witcomb and Miss Bowron have told me, I repeat that, as things stand on the evidence before me in this case, I would not find Dr Ferrie's reasons for not giving expert evidence on an issue very much within his area of expertise as compelling. A general GP's note (which I have not seen) is hardly sufficient to justify a continuing absence from the witness box for months even if, for this purpose, "witness box" means one some distance away from the courtroom at the end of a video link. I am, as I have said, unsure about his professional status for this purpose and whether that truly has a bearing on the position.
The difficulty in this case is that I have had to deal with this application just over three weeks before the trial date, with the Easter holiday intervening. But for that, I may well have given some directions that would enabled me to make a more direct assessment of Dr Ferrie's ability or inability to give evidence, including calling him before me either in person or, more likely, via video link, doubtless with the assistance of his advisers, in the context of case managing the present case to trial. Unfortunately, there is just not the time to do that satisfactorily in this case.
I have looked very carefully at the issues in this case now that I have had the advantage of seeing the expert reports and the joint statement of the experts. I am not going to spell them out for the purposes of this ruling save to say that this is a very difficult case that raises complex causation issues. That is not, of course, to say that it presents the Claimant with insuperable obstacles: it does not. However, Dr Ferrie has given a very careful and thorough appraisal of the background to her case and is supportive of it. As will be apparent, for my part, I would wish to have been truly satisfied that Dr Ferrie could not give evidence to support it at the forthcoming trial but, as I have said, time is too short for me to make that assessment. But because of the difficult nature of the case and Dr Ferrie's close analysis of it, it seems to me that it would in the particular circumstances be wrong for me to insist that the Claimant goes ahead with, as it stands, an apparently reluctant expert witness on a matter that is so important to her. His oral articulation of his supportive view would be important in this case. Unfortunately, the new expert to be instructed is unlikely to be able to give attention to the case for 12 months and, of course, there is no guarantee that he will be as supportive as Dr Ferrie, but that is doubtless a risk that her advisers have in mind. In the circumstances and reluctant as I am to do so, I can see no alternative but to grant the application.
Although that is the conclusion I have arrived at in this case, I am not prepared for anyone to think that an adjournment will always be granted in any case in which Dr Ferrie has been involved or in which his absence means that he cannot be cross-examined. In my view, that latter reason would not have been a satisfactory reason in this case: the Defendant has two very experienced experts upon whom he can rely and I could see that this case could proceed without prejudice to the Defendant.
As I have indicated, this decision is not to be seen as a green light for further applications. Every such application, if made, will be dealt with on a case to case basis. However, the purpose of giving this fairly detailed ruling on the present application is to enable parties who might be contemplating making such an application in respect of a case listed in the QB Civil List in London (for which I am responsible) to be aware of the sort of issues that I will have in mind when considering such an application, the kind of detailed material I will want to see and, in particular, the detailed material I will need to see about Dr Ferrie's medical and professional situation before arriving at a decision. It is not the intention of this ruling to cause additional problems for Dr Ferrie. All I would observe is that, if he is asked by a solicitor acting for a client for whom he has prepared a report to submit himself to an appropriate medical examination, it would be very much in his interests to do so.
Cases involving those who have sustained serious brain damage are always difficult and sensitive cases and those involved, on either side, have often waited a long time for the case to get to court. That is one reason why the court is very unwilling to grant an adjournment except in compelling circumstances. |
Mr Justice William Davis:
Introduction
The Claimant, Karl Easton, is now aged 48. He left school at 16 with modest academic qualifications. He went to work at a local Sainsbury's supermarket as a trainee butcher. He gradually worked his way up through the ranks at Sainsbury's. By 2001 he was the manager of a Sainsbury's supermarket in Colchester. Over the next three years he progressed with Sainsbury's. He eventually became the manager of a very large branch of Sainsbury's at Warren Heath, Ipswich with an annual salary of around £72,000. His abilities as the manager of a large retail outlet were identified by B & Q, the well-known chain of DIY stores. In 2004 he was recruited by B & Q as a unit manager i.e. to manage one of their stores.
Mr Easton progressed well with B & Q. At the beginning of 2007 he was seconded to the head office of the company to lead a small team which implemented a structural change in the range of products available in B & Q stores. In July 2008 he was appointed as the manager of the B & Q store in Romford. This store was about to undergo a substantial refurbishment. The previous manager in post, Simon Green, considered that he was not able to manage a project of this size. B & Q moved him to a smaller store in Ipswich as the manager of that store. Mr Easton was regarded highly by senior management at B & Q and was seen as a manager capable of overseeing the refurbishment and thereafter of reaping the benefits of the refurbishment. The expectations of the senior managers were borne out by events. The refurbishment was carried out successfully. The Romford store performed well thereafter. By March 2010 Mr Easton's total gross salary including bonuses and benefits was around £105,000.
It is against this background that Mr Easton brings his claim for damages for psychiatric illness and consequential loss caused by work-related stress. In May 2010 he was diagnosed as suffering from depression. Save for two very brief unsuccessful attempts to return to work in September 2010 and January 2012, Mr Easton never worked again for B & Q. His case is that his initial illness was caused by occupational stress and that this occupational stress was due to the negligence and/or breach of statutory duty on the part of B & Q. Further, he claims that B & Q were in breach of duty in their management of his return to work in September 2010 so as to cause a relapse of his illness. B & Q accept that Mr Easton has suffered a psychiatric illness and that the illness at least in substantial measure was caused by occupational stress. Their primary case is that Mr Easton's illness was not foreseeable at any stage. They say also that they did not act in breach of any duty whether prior to the onset of the psychiatric illness or at the time of the return to work in September 2010.
The witnesses
The evidence called on behalf of the Claimant was as follows:
• Mr Easton himself.
• Teresa Dedman, a Human Resources manager with B & Q.
• David Griffiths, a department manager at the Romford B & Q store.
• Anthony Blow, another department manager at the Romford store.
• Mark Walpole, the service manager at the Romford store – he and another man named Russell were the two senior managers working immediately under Mr Easton.
The Defendant called the following witnesses:
• Philip Russell, the stock manager at the Romford store – he was the other senior manager reporting directly to Mr Easton.
• Nigel Hughes, the regional manager with responsibility for the Romford store – he was Mr Easton's line manager.
• Tanya Lakey, a supervisor at the Romford store.
• Damien McGloughlin, the divisional director for the Eastern region of B & Q until about the end of 2009 – the Romford store was one of around 80 stores for which he was responsible and he was Mr Hughes's line manager.
• Craig Black, the regional manager for East Anglia – he was Nigel Hughes's counterpart for that part of the country and he was involved in Mr Easton's first managed return to work in September 2010.
• Ian Herrett, a director of B & Q.
• Simon Green, the manager of the B & Q store at Ipswich at which Mr Easton's first return to work was attempted – he had been the manager of the Romford store prior to Mr Easton's appointment.
In general terms I am satisfied that the witnesses who gave evidence were doing their best to give accurate evidence about the matters to which they referred. Since the events about which they were speaking occurred in 2010 and earlier, there is ample room for honest mistake on the part of all of the witnesses. In those circumstances I have paid particular attention to contemporaneous documents (where available) and to accounts given by witnesses much nearer in time to the events i.e. in the course of a B & Q grievance procedure instigated in 2011 by Mr Easton. In relation to Mr Easton's own evidence I take into account that he views the events of 2010 and earlier through the prism of a genuine and significant psychiatric illness which is attributable to his work with B & Q. That has affected the accuracy of his recollection of some events and it has had an effect on his perception of what was said and done by senior managers at B & Q.
It is argued on behalf of Mr Easton that the witnesses called by B & Q (with one exception) are still employed by that company and that they should be regarded as partial. There was no investigation with the witnesses of the supposed effect on their evidence of their continued employment with B & Q. In his closing submissions on behalf of the Claimant Mr Buchan noted that Mr Russell had an ambition to be a store manager. Whilst it is true that Mr Russell gave this evidence, he was given no opportunity to meet the suggestion – even now only implicit – that his ambition had affected his evidence. I am unimpressed by the submission that the evidence of the witnesses called by B & Q should be given less regard simply because of their continued employment with the company. I also consider that there is little assistance to be gained in my assessment of the evidence of the Claimant's witnesses from the fact that they are not employed by B & Q. It is said that their attendance shows the high regard in which they held Mr Easton as a manager and their strength of feeling about the Romford store. The former point is not in issue. B & Q's case is that Mr Easton was a high performing manager. As to the latter, whether a witness feels strongly about something is not a proper indication that he or she is giving accurate evidence. It may be a trigger for exaggeration. I have assessed the evidence of every witness in the same way. Is the evidence internally consistent? How does it fit with contemporaneous documentation? How does it fit with other evidence given in the case? Is there anything inherently improbable about the evidence?
There is one witness on whose evidence I am satisfied it would not be safe to rely, namely Mark Walpole. In July 2010 he wrote to a Human Resources manager at B & Q raising a grievance in respect of his treatment by Mr Easton. He alleged that he had been regularly bullied and intimidated by Mr Easton. He said that he had been forced to do all of the early and late shifts at the store, Mr Easton not being part of the shift rota. His letter in July 2010 did not mention (other than in passing) any particular problems with the store before Mr Easton's illness. Subsequently Mr Walpole brought proceedings in the Employment Tribunal against B & Q. He made a witness statement in those proceedings, a copy of which was provided to me. In that statement he set out various difficulties experienced in the store in the later part of 2009 and in the first few months of 2010. However, he also catalogued the bullying which he said had been carried out by Mr Easton, this behaviour continuing up to May 2010. On the 17th March 2015 – which was the second day of the hearing of this claim – Mr Walpole made a further witness statement to the solicitors instructed by Mr Easton. This statement gave a completely different picture of his relationship with Mr Easton. He said this: "I enjoyed working with Karl Easton….We had a good working relationship. There were a few incidents, on about 5 or 6 occasions, when Karl telephoned me and blamed me for something. The next day he apologised." In his oral evidence Mr Walpole sought to explain the apparent discrepancy between the earlier documents and his statement of the 17th March 2015 by saying that the earlier documents were concerned only with the negative points in relation to Mr Easton because the positive points were not relevant in relation to his grievance or to his Employment Tribunal claim. I reject that explanation. It plainly was relevant to set out the full position vis-à-vis Mr Easton in the earlier documents. I am not in a position to determine why Mr Walpole has changed his account. However, I am quite satisfied that his various accounts are wholly inconsistent one with another. In consequence I shall pay no regard to the evidence given by Mr Walpole. In his closing submissions Mr Buchan argued that, because Mr Walpole was not cross-examined on his witness statement of the 17th March, the statement should be given considerable weight. I regret that I do not understand that submission. Mr Walpole was cross-examined on the basis of wholesale inconsistencies between his recent witness statement and earlier statements. It was not necessary for him to be cross-examined on the detail of the witness statement. His evidence was and is fundamentally flawed. The only material emanating from Mr Walpole which is of any assistance is the bundle of photographs he took of the warehousing/storage area at the Romford store sometime in May 2010.
Lack of promotion
Pleaded as part of Mr Easton's case is the allegation that B & Q were negligent in relation to his promotion i.e. to the next level up from store manager. There is no doubt that Mr Easton's disappointment at not being promoted was a factor in his illness. On the 28th July 2010 Amanda Hollingsworth, a psychotherapist who undertook counselling of Mr Easton wrote: "….his job with B & Q has played a big part in his breakdown. He explained that his job was relentless and, although he says he felt valued by higher management, he was recently overlooked for promotion. He has been promised promotion before and I have the sense that this recent disappointment has contributed to feelings of helplessness." On the 15th December 2010 Dr Muthalif, having reviewed Mr Easton's case wrote a report his G.P. in which he said "(Mr Easton) is a high achiever by nature and was expecting a promotion in his job which unfortunately did not happen. As a result he went off sick in May 2010." In the joint report prepared for the purposes of the proceedings by Dr Andersson and Dr Latcham the agreed conclusion was that "the 'passing over' for promotion was one cause of Mr Easton's depression." Since this issue is a discrete topic, it is convenient to deal with the evidence relating to it first.
Mr Easton said that there were various points at which the question of promotion was mentioned or discussed. It was the cumulative effect of the various discussions which affected him. It is to be noted that the discussions spoken of by Mr Easton were against a background of consistently high appraisal scores in his formal appraisal process. He referred to three discussions with Mr McGloughlin:
• In June 2008 Mr McGloughlin, when offering him the job at Romford, said that he could look forward to that job being his last posting as a store/unit manager when he had put the Romford store on a stable footing.
• In December 2008 Mr McGloughlin visited the Romford store as part of a divisional team visit. At its conclusion he told Mr Easton that, if the store's results and performance continued at the same level, there would opportunity for promotion. "Promises were made" is how Mr Easton puts it.
• At some point in the later part of 2009 Mr Easton was standing in for the manager of the Thurrock store. Mr McGloughlin visited the store as part of a Board visit. At the conclusion of the visit Mr Easton asked him about promotion. Mr McGlaoghlin said "trust me, I will not let you down, leave it with me." Mr Easton said that the proper interpretation of that comment was that "a clear promise had been made that I would be promoted".
Mr Easton said that Nigel Hughes also had spoken to him at the time that Mr Easton was acting as Mr Hughes's deputy to the effect that this would enhance his development for promotion. (Mr Hughes was not asked about this. His evidence in his witness statement was to the effect that Mr Easton's deputising for him would enhance his development but would not improve or guarantee promotion.)
The point at which he determined that he had been overlooked for promotion was early in 2010 when he spoke to a Mr France, the successor to Mr McGloughlin as divisional director. The conversation took place on the occasion of a meeting at head office which both men were attending. When Mr Easton raised the subject of his progression, Mr France said he did not know him and that he would have to prove himself to Mr France. In his witness statement Mr Easton said that "this came as a shock". In his mind one reason for Mr France's response was that "there never was any intention of advancing me in my career and that I was being exploited. At this point I felt very dejected".
Mr McGloughlin accepted that he had offered Mr Easton the job at the Romford store and that he had made the visits spoken of by Mr Easton. He agreed that he would have spoken to Mr Easton on those visits. He denied that he had any discussion about Mr Easton's promotion prospects in the terms described by Mr Easton. That was not because he had any specific recollection of the conversations. Rather, it was because he was the divisional director in charge of 80 stores and discussion about progression would be a matter for Mr Easton's line manager i.e. Mr Hughes. That would have come either in the appraisal process and/or in what B & Q called a talent development review ("TDR"). Mr McGloughlin was prepared to accept that he may well have offered some general praise along the lines of "well done". But he said that he would not have made remarks of the kind reported by Mr Easton. He agreed that he had not discussed Mr Easton's position with Mr France at the point of handover of the position of divisional director. Mr Easton was one of 80 store managers for whom he was responsible and the progression of those managers was a matter for the regional manager in the first instance.
The appraisal documents and the relevant TDR in relation to Mr Easton are in evidence. On the 26th February 2009 Mr Easton's full annual appraisal was carried out by his then regional manager, a Mr Clancy. The conclusion of the appraisal was that he had "further potential". Mr Easton was given an appraisal score of 6 which was described as follows: "Performs consistently well in current role. May make next level has displayed behaviours showing potential to progress". The TDR dates from January 2010. It identified Mr Easton as a high performer. There were two other managers of his grade within his region similarly described. On the 10th March 2010 Mr Hughes carried out Mr Easton's next full annual appraisal. This appraisal assessed Mr Easton as having "high potential". He had a score of 8 with this description: "Current role provides opportunity for growth/development – Will make next level if continue to deliver results/increase performance". Also within this appraisal was a short list of concerns arising from the last 12 months. One was whether the Romford store would be able to achieve the required increase in sales in the coming year because the previous year had set the bar high. The other was as follows: "Need to understand why I have been overlooked/not successful in the last 12 months for a next step opportunity and work towards achieving this goal".
What factual conclusion is to be drawn from this evidence? I am satisfied that during 2009 Mr Easton had persuaded himself that a promotion was on the cards. This is the only conclusion to be drawn from the concern he noted in his March 2010 appraisal. I am equally satisfied that nothing had been said or done whether by Mr McGloughlin or any other senior manager which could have led Mr Easton properly to reach that conclusion. I am quite certain that nothing had been said that conceivably could be taken as "a clear promise" of promotion. The appraisal and TDR documents make it quite clear that Mr Easton was given explicit guidance as to the position by his regional manager. Even in March 2010 he was told that he "will make the next level if continue to deliver results" (my emphasis). The appraisal and TDR system adopted by B & Q kept Mr Easton fully informed as to the true position. I have not heard any evidence from Mr France. I am prepared to accept that Mr Easton's account of the conversation between the two men in February 2010 was the gist of that discussion. It is consistent with Mr McGloughlin's evidence that he did not discuss Mr Easton with Mr France on handover and that the divisional director would not be directly concerned with the promotion of a store manager.
The negligence now alleged in relation to the promotion issue is threefold, some of the allegations having been abandoned in the written closing submissions prepared by Mr Buchan. First, it is said that Mr McGloughlin failed in his duty to Mr Easton by failing to discuss the latter's promotion when he handed over to Mr France. Second, Mr Hughes "deliberately misrepresented" to Mr Easton that acting as Mr Hughes's number 2 would enhance his chances of promotion. Third, Mr France was in breach of his duty to Mr Easton by failing to heed Mr Easton's excellent work record, requiring Mr Easton to prove himself again and failing to discuss Mr Easton's promotion prospects.
There was no breach of duty involved in the failure by Mr McGloughlin and Mr France to discuss Mr Easton's promotion prospects. This allegation is fanciful. In his closing submissions Mr Buchan argues that the failure represents "a lack of support". Other than that Mr Buchan makes no attempt to explain how the duty arises, what its extent is and how properly it should have been performed. There was no duty to discuss. B & Q had a perfectly proper system of identifying those who were suitable for promotion. It was adopted fully in Mr Easton's case. It is not clear how Mr Hughes's misrepresentation could give rise to a cause of action – even if I were to have concluded that the relevant representation had been made. As a result of what Mr Hughes said (if he said it), Mr Easton acted as Mr Hughes's number 2. That caused no loss or damage. It is not suggested that Mr Hughes made any kind of promise of promotion. Such a suggestion would be bound to fail given the content of the TDR and the March 2010 appraisal. As for the allegation that Mr France was in breach of duty when he failed to have regard to Mr Easton's work record and he required Mr Easton to prove himself, this cannot mean that Mr France should have acted upon the work record to promote Mr Easton. What it does mean in terms of negligence is not clear to me. Nothing is said in Mr Buchan's written submission other than "it is a matter for the court whether (the allegations) constituted negligence". I am quite sure that they do not.
The fact that one cause of Mr Easton's illness was not the result of any breach of duty on the part of B & Q is not the end of the case. As Mr Buchan rightly submits it is not necessary for Mr Easton to show that the breach of duty was the whole cause of the illness. If work related stress which was the result of a breach of duty made a material contribution, that will be sufficient to found liability. However, the wholly skewed perception of Mr Easton in relation to promotion is a relevant consideration when assessing his evidence generally.
Work related stress – the May 2010 breakdown
The evidence available to me on the issue of work related stress included at least 300 pages of witness statement evidence. A precise page count is not possible because the bundle adopted an unfathomable numbering system. Whatever the numbering I have read each and every page. The live witness evidence occupied three full days of court time. I have been provided with a typed note of the evidence as prepared by Ms Tamar Burton, junior counsel for the Claimant. That has been very helpful and I am grateful to her. In fact, the factual boundaries were much narrower than often is the position in a case of this type. My rehearsal of the evidence will not have to be of the length that sometimes is required.
A significant body of evidence was called about Mr Easton's management style. Mr Griffiths said he was firm but fair and he said that he had no experience of Mr Easton shouting at anyone in the course of his work. Mr Blow said he was a very supportive manager who provided clear direction. Mr Russell said that Mr Easton was abrupt and aggressive, manipulative and overbearing. He regularly berated members of staff on the shop floor in an inappropriate manner. Tanya Lakey said that Mr Easton was an aggressive bully without scruples who was wont to shout and scream at members of staff in full view of customers. I also heard from Mark Walpole on this topic but, for the reasons already given, I pay no regard to his evidence. There is little independent material which supports one view of Mr Easton as a manager as opposed to the other. Staff engagement surveys generally were positive. However, Mr Russell said that the purpose of those surveys from his point of view was to provide a view in relation to the morale of the store and how the company is going. It was not a vehicle for employees to vent their spleen about individuals. I suspect that the reality was that Mr Easton sometimes was angry with members of his staff but that in general he was a good manager. Mr Russell agreed with the latter proposition. I do not need to reach a firm view on the issue of Mr Easton's management style. It is of little or no relevance to the determination of whether B & Q exposed Mr Easton to such stress in the workplace as to cause a foreseeable risk of injury.
As set out in the introduction to this judgment, by 2009 Mr Easton was a very experienced manager of large retail outlets. He had significant experience with Sainsbury's. He had worked with B & Q for around 5 years. He was well used to the pressures of managing a large store. He had coped well with those pressures. He had not experienced any undue stress relating to his work. His evidence was that this began to change in the latter part of 2009. Until that time B & Q had employed night staff to restock the store i.e. when the store was closed. No doubt for reasons of economy B & Q instituted a countrywide change to the way in which stores were to be restocked. Rather than night staff doing that work overnight, restocking (or replenishment as it was known) was to be carried out by staff working from 6 a.m. to 10 a.m. and from 8 p.m. to midnight. Since B & Q stores generally are open from 7 a.m. to 9 p.m. from Monday to Saturday, this meant that replenishment was going on whilst stores were open – though presumably at a time when the stores were less busy.
Mr Easton's evidence was that this change in system occurred at his Romford store beginning in September 2009. The process of removal of night staff began then with the final removal occurring in December 2009. His evidence was that he had said that the change was not suitable for introduction at Romford because the warehousing/storage space at the store was very small given the size of the store and the turnover of sales. He said that Mr Hughes had agreed with him but that the change had gone ahead anyway. Mr Hughes's evidence on this point was to the contrary. He said that Mr Easton was keen to embrace any change put forward by senior management at B & Q. Resolution of this point is not of critical significance to the case overall because Mr Easton's evidence was that the removal of night staff initially did not cause particular problems. However, it may be a pointer to a more significant question, namely did Mr Easton tell Mr Hughes about later problems he was experiencing in the period leading up to his initial illness? I am satisfied that Mr Easton was happy to accept the change in the system. He was an experienced manager. He would have realised that the change was intended to improve B & Q's financial position. He was ambitious. He wanted to impress senior management with his ability to manage change. I am satisfied that, at the very least, he did not resist the removal of night staff from the Romford store.
Mr Easton's evidence was that the initial effects of the removal of night staff were not significant. He said that, at first, the stock level inputs were manageable. He said that the store did not get any many deliveries as previously and the level of stock was reduced so the available staff were able to restock the store. Although there were no longer any staff working overnight, some of the staff who had worked the night shift moved to the morning and evening replenishment teams and there was recruitment of new employees. Mr Easton said that in January 2010 his working day increased from 9 ½ hours to 10/11 hours due to the lack of night staff. In February 2010 his working day increased still further to 14 hours. He said that this was due to problems with stock and stock replenishment. He referred to a conference telephone call with Mr Hughes in about February 2010 in which he had said that he was working 14 hours a day and that he was knackered. The problems with stock continued until the point at which he suffered his illness.
The witnesses called by Mr Easton spoke of the removal of night staff. Mr Griffiths said that his working hours increased with the removal of night staff because he had to put stock away when this previously had been done by the night staff. Ms Dedman said that she had visited the Romford store after the removal of the night staff and had seen stock everywhere blocking the aisles. (It is relevant that Ms Dedman did not work at Romford and she was not involved in store management. I give little weight to her evidence on this topic.) Mr Blow's evidence was that the removal of night staff made the Romford store a difficult work environment because the workload in the day increased and stock piled up in the warehousing/storage areas.
Mr Russell (who was the manager in charge of stock at the Romford store) said that there were no particular difficulties as a result of the removal of the night staff. He said that the removal was a planned process and that staff were available morning and evening to do the work previously done by the night staff. He agreed that there came a time when more stock arrived in the store and there were some problems.
The evidence as a whole demonstrates that the change of system in relation to restocking the store created some problems. It was inevitable that requiring work to be done at the beginning and at the end of the day which previously had been done overnight would impose some pressures on stock management. The evidence of Mr Griffiths, Mr Blow and Mr Russell is to this effect. However, the stock records for the Romford store were produced in evidence covering the period from January 2008 to December 2010. Between December 2009 and March 2010 there was very little fluctuation in stock levels. The evidence does not support Mr Easton's contention that the situation deteriorated as 2010 progressed as stock levels increased. I am satisfied that the effect of the removal of night staff was nothing like as dramatic as has been painted by Mr Easton. It did not cause a 40% increase in his working hours. It was a significant change in working practice but its introduction did not involve any breach of duty on the part of B & Q. Moreover, I am satisfied that Mr Easton did not complain about the effects of the removal of the night staff (as he now alleges them to have been). That was for the same reason as his initial agreement with the removal of those staff.
The other development which Mr Easton said caused him to be exposed to excessive stress in his work was the introduction of Trade Point in the Romford store. B & Q in 2010 were trying to attract tradesmen into their stores for the kind of business previously done by traditional builders' merchants and other trade outlets. They had a national programme for creating a special area in their stores for the exclusive use of tradesmen – painters and decorators, plasterers, electricians, general builders – with the kind of stock required by tradesmen in store. In Romford this required the construction of a mezzanine floor over part of the existing shop floor area used principally for the display of doors, shelves and bedroom units. This requirement was unusual. The configuration of many B & Q stores was such that Trade Point could be accommodated at ground floor level. However, Romford was not unique in the need for significant building work. Mr Hughes said that the same had been required on another store in his region (West Thurrock) and, of the 120 stores nationwide where Trade Point was introduced, 12 to 15 required construction of a mezzanine floor.
The introduction of Trade Point at the Romford store was a major event in terms of the management of the store. For a number of weeks part of the store was a building site. To ensure that the store was able to continue more or less normal trading in those circumstances was bound to be a challenge to the store manager. Because a significant part of the shop floor was out of action there were bound to be problems with stock management. It was wholly foreseeable that the introduction of Trade Point – particularly in the construction phase – would impose real pressure on the management of the store. It was not of itself a breach of duty to introduce Trade Point at the Romford store and that is not how the case is put on Mr Easton's behalf. Rather, it is said that the introduction of Trade Point at the time it was introduced and in the way it was introduced imposed excessive and foreseeable stress on Mr Easton.
Mr Easton's evidence is that he was aware that Trade Point was to be introduced at Romford as early as September 2009. That much is recorded in his half-yearly appraisal carried out at that time. He said that he was made aware of the intention to begin the relevant work in March 2010 and that he asked for it to be postponed because it would coincide with the influx of seasonal stock and the busiest period of trading for the store. His evidence was that he made this request to Mr Hughes but it was rejected. Mr Hughes disputed that evidence. He agreed that there was some flexibility in start dates for the introduction of Trade Point. The introduction at Romford had been put back and the process had been brought forward at a store in Beckton in East London. Mr Hughes said that Mr Easton was keen to have Trade Point at his store because of the trading opportunity it would provide and eager to show that he was capable of managing its introduction notwithstanding the pressures that it would bring to bear.
No other witness can speak to the issue of whether a request was made for the postponement of the introduction of Trade Point at the Romford store. Mr Herrett who was the B & Q director with overall responsibility for Trade Point explained that Romford was a complex store in relation to the introduction of Trade Point because of the size of the store (relatively small) and the turnover of sales (relatively high). He said that his aim was to introduce Trade Point at the stores with the highest sales first. Romford fitted that description.
I conclude that Mr Easton probably did express some misgivings to Mr Hughes about the timing of Trade Point vis-à-vis his store. I do not consider that those misgivings were expressed in such terms as to indicate that it ought to have put B & Q on notice of a significant risk of excessive stress being imposed on Mr Easton. In his witness statement he put it this way: "I complained to Nigel Hughes about the timing of the build…" When he was cross-examined he said that he had asked for the build to be delayed. Those statements are not wholly consistent. The reality is that Mr Easton realised what Trade Point would involve in terms of disruption to trading and in conversations with his regional manager – of which there were many since the two men spoke regularly and were on good terms – he spoke of the likely disruption. It did not go beyond that. It is significant that, in the document relating to the annual appraisal conducted on the 10th March 2010, there is no mention of Trade Point. As already noted the half yearly appraisal document dating back to September 2009 referred to Trade Point. Mr Easton added the reference in handwriting under the section headed "Planning". In advance of his annual appraisal Mr Easton prepared a document which included the section "Concerned". I have already referred to the content of that section. It makes no reference to Trade Point at all. In evidence Mr Easton accepted that another concern he had in relation to Trade Point (to which I shall turn shortly) should have been mentioned by him in the appraisal document. The same must apply to the timing of its introduction. Had the issue been more than the passing grumble which I find that it was, it would have been referred to by Mr Easton in the appraisal process.
I do not have any clear evidence as to when the construction process actually commenced. I was provided with a plan of the construction of the mezzanine floor dated 9th April 2010. It was described on its face as Revision F. It is difficult to see how the construction of the mezzanine could have commenced without a full plan available. I have no evidence as to the extent of the revision which led to Revision F. Mr Easton's evidence is that "the Trade Point conversion had commenced in March". I conclude that the preparatory work for the construction of the mezzanine floor began in the later part of March though the building work began in early April. It is clear that it had been completed - in the sense that the mezzanine floor was in situ – by the 2nd May 2010 because on that day Mr Herrett and Mr Easton went up onto the mezzanine to have a conversation.
What was the effect on Mr Easton (and his managers at Romford) during this period of around 4 to 5 weeks? Mr Easton said that it had a huge impact on him. The construction work was grossly disruptive. He had to monitor the building work on a daily basis. He said that April was the month during which seasonal products – mainly garden products – were delivered. Because of the reduced shop floor space, storage space was at a premium and the situation was exacerbated by the fact that two of his senior staff were on long term leave. He was required to work 14 hours a day and 7 days a week.
Mr Griffiths's evidence on the issue of Trade Point was terse. He simply said that the stock situation was made worse by the advent of the construction of the mezzanine. He said that his weekly working hours increased from 50 to 70 but he elided the removal of night staff and the introduction of Trade Point as the reason for this even though the two factors temporally were months apart. Mr Blow's evidence was to almost identical effect. Mr Russell did not recall "any undue or unmanageable problems". Mr Russell was one of the senior managers said by Mr Easton to have been on long term leave at this time. Mr Russell's attendance record showed that he had been absent for 7 days - Wednesday 7th April to Thursday 15th April. Mr Russell confirmed that this was the total period he was absent. He said that otherwise he was at work and able to carry out his normal duties. That evidence undermines part of the picture painted by Mr Easton.
I am satisfied that the construction of the Trade Point mezzanine floor caused very considerable disruption at the Romford store. Mr Easton has exaggerated the effects of that disruption. He was not without the assistance of Mr Russell for the time he has asserted. The construction work itself was being carried out and overseen by a special team sent into the store so his need to monitor the work was limited. Equally, it did create real problems with storage and movement of stock. Running the store was a real challenge. At the end of April 2010 stock at the Romford store had to be taken to the Beckton store because of the lack of storage. The photographs produced by Mr Walpole show that the warehousing/storage areas were full. Having said that, Mr Herrett when shown the photographs said that this was what might be expected in a busy B & Q store – "typical" was the word he used – and he was not surprised by what was shown in the photographs.
Mr Easton said that he made it clear to Mr Hughes on a number of occasions that his situation was becoming impossible and that he needed assistance. In his evidence he spoke of conversations about his stock manager being unable to fulfil his duties. I do not accept that such conversations took place, not least because Mr Russell was able to work satisfactorily. The fact that those conversations did not occur does not of necessity mean that Mr Easton said nothing about the situation in his store. As I have said already Mr Hughes was a regular visitor to the store and the two men would have spoken when such visits occurred. I should say that scorn was poured on this proposition by Mr Buchan who put the case that Mr Hughes very rarely visited the Romford store. That scorn was ill-directed. Mr Hughes had only a dozen or so stores under his remit. Mr Easton was a close colleague. Romford was a busy store and geographically was a convenient store to visit when travelling to other stores in the region. As a regular visitor Mr Hughes would have been able to see for himself that the running of the store was disrupted by the construction work. I am satisfied that Mr Easton would have said that the position was challenging. He doubtless spoke of the difficulties with stock management. Equally, I am sure that, because of his desire to maintain his profile as a high performing manager, Mr Easton said nothing to Mr Hughes which could have suggested that he was "struggling and needed help" (as it is put in his witness statement). On the 28th April 2010 Mr Easton and Mr Hughes met for a review of his performance. It was only a short form review but it was an opportunity, had he chosen to take it, for Mr Easton to set out the position in his store if it was as desperate as he now says that it was. Nothing was said in the review meeting itself. Mr Easton says that he spoke to Mr Hughes as they walked to the meeting and told Mr Hughes that he needed assistance. Mr Hughes is unable to recall any such conversation. I accept that Mr Easton in all probability spoke to Mr Hughes as they were walking together and that Mr Easton said something about stock management at the Romford store. Since it plainly was problematic it is highly likely that he would have mentioned it. I do not accept that anything said by Mr Easton was the "cry for help" which he has alleged. It is agreed that very shortly before his illness Mr Easton, with the agreement and assistance of Mr Hughes, sent stock to the Beckton store. That does not support a finding that Mr Easton had been asking for assistance for some time prior to that. Rather, it shows that, when asked, Mr Hughes accommodated Mr Easton's difficulties.
The other issue in relation to Trade Point raised by Mr Easton in his evidence concerned the replacement of his trade manager at Romford. In February 2010 a Mr Heggarty was transferred from his store and replaced by a lady named Fran McMillan. Ms McMillan had not been a trade manager previously. Mr Easton said that he had complained about the transfer of Mr Heggerty. I can dispose of this issue relatively briefly and without detailed reference to the evidence. First, the arrival of Ms McMillan is not the subject of any specifically pleaded breach of duty. Second, no-one has given any evidence that anything occurred in relation to the demands placed on Mr Easton which resulted from Ms McMillan being in post rather than Mr Heggerty. Third, Ms McMillan arrived in Romford well before the construction of the Trade Point mezzanine even began. No-one suggests that she would not have been fully capable of managing Trade Point once it was up and running. I am satisfied that there is nothing in this point which advances Mr Easton's case at all. It rather diminishes his case by being raised at all.
Mr Easton's last day at work before he was diagnosed with depression caused by work related stress was the 2nd May 2010. On that day Mr Herrett and a Mr Phillips (a director of B & Q from whom I did not hear evidence) made an unannounced visit to the Romford store. There is some dispute as to the detail of what happened at that visit. The dispute is of no significance. It is agreed that the visit took place, that the store was poorly set up with shelves empty, that Mr Easton and Mr Herrett went onto the mezzanine floor to have a private conversation, that Mr Easton broke down in tears once he was alone with Mr Herrett, that Mr Herrett asked what was going on (or words to that effect), that Mr Easton gave some kind of explanation about stock levels and the introduction of Trade Point and that, after a visit to the warehousing/storage area, Mr Herrett and his colleague left the store. Issue was taken with the adequacy of the response of Mr Herrett and his colleague. I do not consider it necessary to make any finding as to that – though I am satisfied that Mr Herrett did telephone Mr Hughes as soon as he left the store and that Mr Hughes contacted Mr Easton to tell him to go home. Whatever the adequacy of the response, it was of no relevance to the onset of Mr Easton's illness. By the 2nd May 2010 Mr Easton had developed the depression which forms the basis of his claim.
The return to work – the further breakdown
Mr Easton was away from work for a little under 5 months. He was treated with medication i.e. anti-depressants. He consulted a psychotherapist i.e. Amanda Hollingsworth to whom reference already has been made. B & Q deal with occupational health issues through an independent healthcare company called Cigna. The Cigna case manager in respect of Mr Easton was someone named Liz Lennon. It is apparent that she reported regularly to B & Q although I have seen only two of her reports.
On the 9th September 2010 Liz Lennon reported in writing. The report was addressed to Nigel Hughes. Since Mr Hughes was on the verge of being sent to work on a project in China, he may not have seen it himself. However, the content of the report plainly was known to B & Q. It said that the dosage of Mr Easton's medication more recently had been reviewed and increased since which he slowly had begun to recover. It indicated that Mr Easton was receiving treatment from health professionals. A phased return to work was recommended. An example was given i.e. first week 1 day, second week 2 days and so on until full time working was resumed in the fifth week. The proposed date of the return to work was to be advised after a review in the following week. I have not seen any later report.
In due course it was decided that Mr Easton would begin his phased return to work at a B & Q store in Ipswich. Ipswich was close to Mr Easton's home address. It was a less busy store than Romford. On the 22nd September 2010 Mr Easton met Mr Black, the regional manager with responsibility for the Ipswich store. Mr Black knew Mr Easton although he had not had any managerial responsibility for him in the past. In addition Mr Black had been made aware of the circumstances of and reasons for Mr Easton's long absence from work. The phased return was agreed in the terms as set out in the example given in the report from Liz Lennon with the first day being in the week commencing 27th September 2010.
In his witness statement Mr Easton said that he did not feel mentally prepared for a return to work but he decided to do so because of his financial situation. That was not his oral evidence. He said at the hearing that he wanted to go back to work and that he felt ready to return. That is of some significance beyond the obvious inconsistency. Mr Black's evidence was that he understood that Mr Easton wanted to return to work in a post equivalent to the one he had held at Romford. That understanding would be difficult to maintain if Mr Easton's attitude was that he was unprepared for a return to work and that he was being driven by financial circumstances. The same would not apply if Mr Easton was ready and willing to resume work. I am satisfied that Mr Easton's oral evidence represents his subjective state of mind as it was on the 22nd September 2010. Mr Easton also gave oral evidence to the effect that he had said that he did not wish to work towards London in the future, the journey up the A12 being part of his decision. He gave no indication of when he said this or to whom. I heard no other evidence to suggest that Mr Easton gave this indication. This may have been what was in Mr Easton's mind. I am satisfied that he did not mention it to anyone else and certainly not to Mr Black. Had he done so, the events of the 7th October 2010 would not have occurred.
The 7th October 2010 was the fourth day of Mr Easton's return to work. If the phased return had gone to plan there would have been two further weeks of part time working before he returned to full time work. However, for reasons which now cannot be identified, a short term vacancy had arisen at the B & Q store in Belvedere in Kent. For whatever reason the store manager there was not going to be available to work in the store for 6 to 8 weeks and a temporary manager was needed. This vacancy had arisen at very short notice. Mr Black told me that there were other suitable candidates available but that he considered that he ought to offer the position to Mr Easton. He felt that Mr Easton would have been aggrieved if the offer had not been made to him. He did not discuss the position with Cigna before he had the conversation. As I have said, the offer would not have been made if Mr Easton had made known that he did not wish to resume a journey down the A12. Belvedere is close to Dartford in Kent. From Mr Easton's home it would have involved a journey down the A12. Indeed, the obvious route would have taken him close to Romford before he took the M25 to the Dartford Crossing.
There is some dispute as to how the meeting on the 7th October 2010 unfolded although the dispute is around matters of emphasis rather than real substance. There is no dispute about the first matter raised by Mr Black. Mr Easton had raised the question of sick pay at some point. He had been paid his contractual entitlement in relation to his sick pay but he had requested an ex gratia extension of his sick pay on compassionate grounds. It had been decided by Mr France – Mr Easton's divisional director in relation to Romford – that no additional sick pay would be paid. I shall deal with the consequence of this decision straightaway. Of itself it was wholly in accordance with Mr Easton's contractual terms. I am satisfied that it could not found any breach of duty of care to Mr Easton. Indeed, it is not pleaded in those terms. Rather, it is said that the decision amounted to a breach of a promise. Mr Easton's witness statement is to the effect that he had spoken to Mr Hughes on the topic, that Mr Hughes initially had said that Mr France had refused to go beyond Mr Easton's contractual entitlement but that later Mr Hughes had told Mr Easton that his "full pay would be back dated" (whatever that may mean). This was not explored with Mr Easton doubtless because it was a relatively trivial matter in the context of the meeting with Mr Black. Mr Hughes made no reference to it in his witness statement and he was not cross-examined about it. The state of the evidence is unsatisfactory, therefore. Nonetheless, I am quite satisfied that no promise was ever made. Mr France clearly did not change his mind. Mr Hughes had no sensible reason to say that he had when he had not. It follows that the sick pay point gives rise to no breach of duty. I accept that Mr Easton was very disappointed by the decision. He doubtless felt aggrieved by it.
The main purpose of the meeting was to offer Mr Easton the chance to work at the Belvedere store for 6 to 8 weeks. Mr Easton's evidence was that Mr Black made the offer to which his immediate answer was no. Mr Black did not take no for an answer. In his witness statement Mr Easton put it thus: "…I was very much pressured and bullied by Craig Black into accepting…the Belvedere store. I was asked repeatedly whether I would like to accept the store and pushed continually to accept it". His oral evidence was in similar terms. Mr Easton said that he only was able to end the meeting by saying he would think about it and he needed to talk to his wife. He also said that he felt that B & Q were trying to force him to resign. Mr Black denied the suggestion that he had pressured or bullied Mr Easton. He said that he did no more than put the option in front of Mr Easton with the onus being on Mr Easton to say yes or no as he chose. There was no-one else at the meeting so there is no third party account of it. Ms Dedman's witness statement contained the following in relation to the offer: "Craig Black led me to believe that this was not a request that was being made by Jon France, it was an instruction". After she had been cross-examined on this passage, it was clear that she could not identify anything said by Mr Black which could have inculcated such a belief. This evidence is of no weight. The long term absence log contained a note of the meeting as follows: "Craig had discussion with Karl reference covering Belvedere store for 6-8 weeks…Karl was not keen on the idea. He was asked to think about it and come back to Craig with a yes or no to doing this". The note is self-serving in that its content came from Mr Black. But it is a note made on the day of the meeting many months before Mr Black could have had any notion that there might be a dispute about what happened. The content of the note is more consistent with Mr Black's account of the meeting than that given by Mr Easton. More telling is the letter written by Mr Easton on the 9th October 2010. It asked for "clarification on a few points". Mr Easton asked what permanent position B & Q had in mind after Belvedere, what other re-introduction options were open and whether Mr Black was aware that Belvedere was almost double the distance from his home as compared to Romford. He asked for an early response. I leave to one side the inaccurate assertion as to the travelling distance from his home to Romford and Belvedere respectively. Romford was and is nearer to Mr Easton's home but the difference is not of the order suggested by Mr Easton. More important, this letter is entirely consistent with the account of the meeting as given by Mr Black. If Mr Easton were correct, he would not have written in these terms. I am satisfied that the meeting occurred in the manner described by Mr Black. In his closing submissions Mr Buchan invited me to draw an adverse inference from the manner in which Mr Black gave evidence. Leaving aside the fact that demeanour is a very poor guide to accuracy and reliability in a witness, I do not reach the same conclusions as Mr Buchan from the fact that Mr Black did not find giving evidence a comfortable experience and that he was careful when he answered questions.
Mr Easton went to his G.P. on the 8th October 2010 who re-certified him as unfit for work due to depression as a result of what Mr Easton told him. Why in those circumstances Mr Easton wrote as he did on the 9th October 2010 is not clear. In any event Mr Easton remained employed by B & Q but signed off as suffering with depression. There was a further attempted return to work in early 2012 but this failed. I do not need to consider the reasons for this or any of the events from October 2010 onwards. Although the pleaded claim rehearses the fact that Mr Easton underwent a grievance procedure and an appeal when he was unsuccessful in the initial procedure, the appeal also failing, no breach of duty is alleged in relation to those matters. I have seen and read a considerable body of documentation relating to Mr Easton's grievance and how it was conducted. There is no conceivable basis on which any breach of duty could be alleged. The fact that the conclusion was adverse to Mr Easton and that this added to his distress is not actionable. The grievance procedure material has been useful in one important respect. In the course of the appeal process Mr Hughes on the 22nd August 2011 gave a detailed account of the events surrounding Mr Easton's illness. In all important respects it was consistent with the evidence he gave before me. I note the criticisms made by Mr Buchan in his closing submissions. In my judgment the criticisms are of detail in relation to one aspect of his evidence. He was not taken in cross-examination to the matters now raised by Mr Buchan. They do not undermine the fundamental reliability of Mr Hughes as a witness. Contrary to the submission made by Mr Buchan I am satisfied that Mr Hughes was a reliable witness.
Risk assessment
A significant element of the case for Mr Easton, both as pleaded and as argued before me, was the lack of risk assessment in relation to stress. I shall come to how risk assessment is or is not of relevance to the issues of foreseeability, breach of duty and causation later in this judgment. At this stage I shall consider the evidence that emerged on this topic.
Mr Easton agrees that, when he was employed, he was given a copy of the staff handbook. This contained a section entitled "Stress Management". The relevant part was in these terms: "If you are experiencing problems which are causing you to feel stressed at work or affecting your performance, you have a responsibility to talk to your Manager. If managers are not aware that there is a problem, they will not be able to help". Mr Easton's evidence about any other document he received in relation to stress management was confused and contradictory. In his witness statement dated 16th July 2014 at paragraphs 19 to 22 he stated that he had received a document entitled "Stress Management Policy" but that he had not had time to read it. In his witness statement served days prior to the start of the trial he stated that he had never seen the document. When cross-examined he initially accepted that his earlier witness statement was correct. Further, he said that he had seen another booklet referred to at the end of the document entitled "Managing Pressure and Stress – Employees' Booklet". Later in his cross-examination he retracted this evidence and said that he would "have to stick with" the content of his very recent statement. I am satisfied that Mr Easton was provided with the document "Stress Management Policy" at or near the start of his employment. I am satisfied also that he had time to read it though I accept that he may have chosen not to do so. I am not satisfied that he was given a copy of the employees' booklet. It may have been available on the B & Q staff intranet but that was not something to which Mr Easton referred.
The Policy document identified that stress could lead to mental illness such as depression. It set out the responsibility of employees in relation to stress in precisely the same terms as the staff handbook. It dealt with the responsibility of line managers for controlling workplace stress. Mr Easton was the line manager for those working at the Romford store whilst his line manager was Nigel Hughes. The various factors relevant to stress were itemised under the heading "Line managers". These included the need to schedule work sensibly (which implicitly included the hours worked) and to address outward signs of stress such as changes in a person's behaviour and/or irritability.
The senior managers and directors of B & Q who gave evidence were asked about risk assessment in relation to stress. Mr Herrett (who had overall responsibility for the introduction of Trade Point across B & Q nationwide) accepted that no assessment of the risk of stress to employees arising from the disruption involved in Trade Point was carried out whether nationally or in individual stores. Mr McGloughlin agreed that risk assessments in relation to stress were not carried out by B & Q. He said that he would not have expected any. Both he and Mr Hughes confirmed that B & Q did not run training courses in stress awareness. Mr Hughes said that he was familiar with the Stress Management Policy and the booklets additional to that policy. That was the basis on which he monitored stress whether in respect of Mr Easton or any other employee for whom he had responsibility.
I was provided with a considerable body of advisory and guidance material produced by the HSE on various dates prior to 2010 in relation to work related stress and appropriate risk assessment. The documents were detailed but the six key risk factors were identified as: the demands of the job; control over the work; support received from managers and colleagues; relationships at work; role in the organisation; change and how it is managed. The guidance on assessment of risk in respect of stress essentially was as follows:
Identify the particular stress risk factors applicable to the relevant workplace.
Decide who might be harmed and how.
Evaluate the risks.
Develop and implement action plans to deal with the risks found.
Monitor and review the actions plans as they are operated.
The law
The leading authority on claims by employees for damages in respect of psychiatric injury caused by stress in the workplace remains Hatton v Sutherland [2002] ICR 613. The judgment of the court was given by Hale LJ (as she then was) and the principles to be applied were set out at paragraph 43 of the judgment. I set out that paragraph in full.
"(1) There are no special control mechanisms applying to claims for psychiatric (or physical) illness or injury arising from the stress of doing the work the employee is required to do. The ordinary principles of employer's liability apply.
(2) The threshold question is whether this kind of harm to this particular employee was reasonably foreseeable: this has two components (a) an injury to health (as distinct from occupational stress) which (b) is attributable to stress at work (as distinct from other factors).
(3) Foreseeability depends upon what the employer knows (or ought reasonably to know) about the individual employee. Because of the nature of mental disorder, it is harder to foresee than physical injury, but may be easier to foresee in a known individual than in the population at large. An employer is usually entitled to assume that the employee can withstand the normal pressures of the job unless he knows of some particular problem or vulnerability.
(4) The test is the same whatever the employment: there are no occupations which should be regarded as intrinsically dangerous to mental health.
(5) Factors likely to be relevant in answering the threshold question include:
(a) The nature and extent of the work done by the employee. Is the workload much more than is normal for the particular job? Is the work particularly intellectually or emotionally demanding for this employee? Are demands being made of this employee unreasonable when compared with the demands made of others in the same or comparable jobs? Or are there signs that others doing this job are suffering harmful levels of stress? Is there an abnormal level of sickness or absenteeism in the same job or the same department?
(b) Signs from the employee of impending harm to health. Has he a particular problem or vulnerability? Has he already suffered from illness attributable to stress at work? Have there recently been frequent or prolonged absences which are uncharacteristic of him? Is there reason to think that these are attributable to stress at work, for example because of complaints or warnings from him or others?
(6) The employer is generally entitled to take what he is told by his employee at face value, unless he has good reason to think to the contrary. He does not generally have to make searching enquiries of the employee or seek permission to make further enquiries of his medical advisers.
(7) To trigger a duty to take steps, the indications of impending harm to health arising from stress at work must be plain enough for any reasonable employer to realise that he should do something about it.
(8) The employer is only in breach of duty if he has failed to take the steps which are reasonable in the circumstances, bearing in mind the magnitude of the risk of harm occurring, the gravity of the harm which may occur, the costs and practicability of preventing it, and the justifications for running the risk.
(9) The size and scope of the employer's operation, its resources and the demands it faces are relevant in deciding what is reasonable; these include the interests of other employees and the need to treat them fairly, for example, in any redistribution of duties.
(10) An employer can only reasonably be expected to take steps which are likely to do some good: the court is likely to need expert evidence on this.
(11) An employer who offers a confidential advice service, with referral to appropriate counselling or treatment services, is unlikely to be found in breach of duty.
(12) If the only reasonable and effective step would have been to dismiss or demote the employee, the employer will not be in breach of duty in allowing a willing employee to continue in the job.
(13) In all cases, therefore, it is necessary to identify the steps which the employer both could and should have taken before finding him in breach of his duty of care.
(14) The claimant must show that that breach of duty has caused or materially contributed to the harm suffered. It is not enough to show that occupational stress has caused the harm.
(15) Where the harm suffered has more than one cause, the employer should only pay for that proportion of the harm suffered which is attributable to his wrongdoing, unless the harm is truly indivisible. It is for the defendant to raise the question of apportionment.
(16) The assessment of damages will take account of any pre-existing disorder or vulnerability and of the chance that the claimant would have succumbed to a stress related disorder in any event."
This set of principles has been cited and applied in many cases since 2002. It is not disputed that they remain an accurate summary of the proper approach. Mr Buchan does point out that in the years since 2002 the concept of risk assessment has been commonplace so as to require some amelioration of the rigour of the principles in Hatton. He also argues that statutory duties now apply which were not applicable when Hatton was decided. I shall come on to the statutory regulations shortly.
One case in which Hatton was discussed was MacLennan v Hartford Europe [2012] EWHC 346 (QB), a judgment of Mr Justice Hickinbottom. The facts of the case are of no consequence. However, Mr Justice Hickinbottom at paragraphs 14 to 22 conducted a very helpful discussion of some of the issues which can arise in cases of stress. I set out those paragraphs.
"Given the potentially crucial nature of foreseeability in this claim, it may be helpful to highlight some aspects of Hale LJ's propositions relating to that issue.
First, it is insufficient for a claimant to show that his employer knew or ought to have known that he had too much work to do, or even to show that he was vulnerable to stress as a result of overwork. To succeed, he must show that his employer knew or ought to have known that, as a result of stress at work, there was a risk that he would suffer harm in terms of a psychiatric or other medical condition (see, e.g., Bonser v UK Coal Mining Limited at [27] per Ward LJ, and at [30] per Simon Brown LJ).
Second, even then it is insufficient merely to show that there was a known risk of some psychiatric or other injury in the future. The claimant must show that the employer knew or ought to have known that, as a result of stress at work, there was a risk that he would suffer harm of the kind he in fact suffered (Hatton at [43(2)], quoted above). Consequently, where (as in Mrs MacLennan's case), she suffered a breakdown, it is insufficient for the employer to have actual or constructive knowledge that there was a risk that the employee might at some stage in the future suffer some other medical condition as a result of his work if the nature of the work continued unabated: the employer must have knowledge of an imminent risk of the sort of collapse of health that in fact occurred (Bonser at [25]; Pratley v Surrey County Council [2003] EWCA Civ 1076 at [23], [25] and [31]; and Hartman v South Essex NHS Trust [2005] EWCA Civ 6 at [11]-[12]).
Third, although most employees will have difficulties with the amount or nature of their work from time-to-time, very few are at risk of psychiatric illness as a result. An employer is entitled to assume that an employee can withstand the normal pressures of the job unless (i) the job is such that employees are known to be at particular risk if injury (e.g. if other employees doing the same or similar work have become ill as a result of the work), or (ii) the employer knows or ought to know that a particular employee is especially vulnerable to stress-induced illness because, for example, that employee has already had a psychiatric episode as a result of stress at work about which the employer is or ought to be aware, or he manifests clear signs to his employer of some impending harm to health prior to the illness in fact suffered (Hatton at [29]; and Bonser at [31]). Either of those may trigger a duty on the employer to consider taking steps to protect the health of the employee; although, because each employee will have a different ability to deal with stressful situations, whilst the nature of the work will always be relevant, usually the actual or constructive knowledge of the employer as to a particular employee's vulnerability to stress-related illness is of greater importance. Hence, Hale LJ's comment in proposition (3) above, that: "Foreseeability depends upon what the employer knows (or ought reasonably to know) about the individual employee". It is often said that this is because each employee will have a different ability to "cope" with stressful situations.
However, care is needed here. Like "stress" (see paragraphs 23-5 below), "cope" has a variety of meanings in an employment context. At large, its meaning is "to deal successfully" with something; but, in a work context, there are differing parameters for "success". Where an employee has too much to do, the usual consequence is that his performance of that work suffers: some of the work does not get done, or there is a reduction in the quality of the work that is done. In performance terms, such an employee is not "coping" with his work. Most employees will on occasions be "overworked", and will have problems in "coping" with their work, in this sense. However, that does not mean that work necessarily poses a threat to that person's health. Indeed, even in those circumstances, it will rarely do so. Doing your work whilst maintaining your function and health is to use another legitimate marker of "success" for the purposes of the definition of "coping", but a marker that is quite different and distinct. When used in an employment context, "cope" may have either meaning: but it is often used in reference to performance, rather than health.
Fourth, an employer has a duty to act only when "the indications [are] plain enough for any reasonable employer to realise that he should do something about it" (Hatton at [31]). Of course, for all sorts of reasons, it is understandable that an employee may not wish to reveal to his employer that he is having difficulties with his job, or may not wish to reveal the full extent of his difficulties. As Hale LJ said in Hatton (at [15]):
"Some things are no-one's fault. No-one can blame an employee who tries to soldier on despite his own desperate fears that he cannot cope, perhaps especially where those fears are groundless. No-one can blame an employee for being reluctant to give clear warnings to his employer of the stress he is feeling. His very job, let alone his credibility or hopes of promotion, may be at risk. Few would blame an employee for continuing or returning to work despite the warnings of his doctor that he should give it up. There are many reasons why the job may be precious to him."
However, where an employee keeps his difficulties, and any resulting stress and/or medical condition, from his employer, Hale LJ continued:
"… it may be difficult in those circumstances to blame the employer for failing to recognise the problem and what might be done to solve it."
Although of course there may be circumstances in which there are other signs of impending harm to health, sufficiently clear to an employer to trigger his duty to take steps, where an employee does not, directly or through a doctor, inform his employer that work is having a detrimental effect on his health, or at least risks doing so, then it may be difficult for him to prove that the employer ought to have foreseen a risk to his health as a result of his work (see, e.g., Barber at [6], per Lord Scott).
That is especially so because an employer has no general obligation to make searching or intrusive enquiries, and may take at face value what an employee tells him. In particular:
"An employee who returns to work after a period of sickness without making further disclosure or explanation to his employer is usually implying that he believes himself to be fit to return to work which he was doing before. The employer is usually entitled to take that at face value unless he has good reasons to think to the contrary." (Hatton at [30]).
The foreseeability threshold in claims such as this is therefore high (see, e.g., Bonser at [28] per Ward LJ, where it is described as such); and it may prove a formidable obstacle on the facts of a particular case (Garrett v The London Borough of Camden [2001] EWCA Civ 395 at [62]-[63] per Simon Brown LJ).
The principle statutory regulation on which Mr Buchan relies is Regulation 3(1) and 3(3) of the Management of Health and Safety at Work Regulations 1999 which read as follows:
3.-(1) Every employer shall make a suitable and sufficient assessment of-
(a) the risks to the health and safety of his employees to which they are exposed whilst they are at work; and
(b) the risks to the health and safety of persons not in his employment arising out of or in connection with the conduct by him of his undertaking,
for the purpose of identifying the measures he needs to take to comply with the requirements and prohibitions imposed upon him by or under the relevant statutory provisions and by Part II of the Fire Precautions (Workplace) Regulations 1997.
(3) Any assessment such as is referred to in paragraph (1) or (2) shall be reviewed by the employer or self-employed person who made it if-
(a) there is reason to suspect that it is no longer valid; or
(b) there has been a significant change in the matters to which it relates; and where as a result of any such review changes to an assessment are required, the employer or self-employed person concerned shall make them.
Mr Buchan also invites me to consider the Working Time Regulations 1998 and the various amendments thereto by which the Working Time Directive forms part of our law. My understanding is that he accepts that these regulations give rise to no civil remedy. He invites me to take them into account when assessing the allegation of breach of duty at paragraph 107(q) of the pleaded case i.e. permitting Mr Easton to work in excess of 48 hours per week from September 2009 onwards.
Conclusions
Leaving aside issues relating to risk assessment Mr Easton's claim on a proper application of the principles adumbrated in Hatton is bound to fail at the first hurdle - foreseeability - in respect of his first breakdown. Mr Easton had spent his 10 year managerial career in charge of large retail outlets. He had no history at all of any psychiatric or psychological problems. Nothing about him gave anyone any clue that he might succumb to a psychiatric illness. All of those who knew him well within B & Q had no idea that he might do so. It came as a surprise to Ms Dedman even though (on her evidence) she was well aware of the problems he was experiencing at work and as a Human Resources specialist she was someone with an appreciation of the issues relating to stress at work. I do not propose to relate in detail the principles in Hatton as explored in MacLennan to the facts of this case. It is not necessary to do so. It is quite clear that the foreseeability threshold in respect of the first breakdown cannot begin to be surmounted on any view of the evidence. Whilst it is not of immediate significance to the issue of foreseeability of psychiatric illness being suffered by Mr Easton on an individual consideration of his circumstances, it is of note than Mr Hughes with his 10 or more years' experience of regional management with B & Q was unaware of any other store manager developing work related stress and consequent illness save for one manager whose illness was more related to personal issues that his work. Thus, not only was there nothing about Mr Easton which put anyone on notice that he might suffer psychiatric illness but also there was nothing about store managers in general giving rise to foresight of such a risk.
As to the relapse suffered by Mr Easton it is true that B & Q now knew that he had suffered a psychiatric illness. The fact that he was still taking medication is hardly determinative as to how his future employment should have been handled. There are many people who hold down demanding jobs who still require medication. But B & Q were on notice that Mr Easton was vulnerable. Had I accepted his account of the meeting he had with Mr Black, there might have been a basis for concluding that further psychiatric illness was a foreseeable consequence of dealing with him in that way and that Mr Black was in breach of his duty of care to Mr Easton. I have taken a different view of the evidence. The fact that there was a planned return to work and that Mr Black's offer did not accord with that plan is not sufficient to mean that making the offer was a breach of the duty of care owed to Mr Easton. The approach taken by Mr Black was a reasonable one. Mr Buchan argues to the contrary. He submits that the planned return to work schedule should not have been altered without consultation with Cigna and B & Q's HR department and that it was unprofessional to make the offer of the post at Belvedere when Mr Easton was vulnerable. If Mr Black had pressured and bullied Mr Easton and/or if the offer had been made on the basis that it was the only alternative, I would have agreed with Mr Buchan's argument. That was not the position. Mr Easton on his own account was ready to return to work and he wanted to return to work. He was an experienced manager. Notwithstanding his recent illness, Mr Black was entitled to act on the basis that Mr Easton would be able to assess whether he wished to take up a particular opportunity. The evidence of Dr Latcham is that, assuming Mr Black's account of the meeting to be correct, the offer made to Mr Easton was "appropriate".
It follows that I am satisfied that the events of the 7th October 2010 did not amount to a breach of duty. That disposes of that part of Mr Easton's claim since risk assessment in the ordinary sense had no part to play at that stage. Even if there were a breach of duty on the basis of Mr Black's account the evidence of Dr Latcham is that the meeting of the 7th October 2010 had no significant effect on Mr Easton's illness. If that is right, the meeting was of no causative effect. The joint report refers to a worsening of depression "should Mr Easton's account on this matter be preferred". As I have made clear, I do not prefer his account.
Issues of breach of duty and causation only arise if it is accepted that the psychiatric illness following the events of the 7th October 2010 was foreseeable. Mr Buchan argues that it is simply not open for me to find that the relapse was unforeseeable. In the sense that Mr Easton was at risk of psychiatric illness, there was a foreseeable risk. But the issue of foreseeability goes further than that. The employer must know or the employer ought to have known that as a result of stress at work there was a risk of psychiatric illness. In relation to the relapse that would require foresight that offering Mr Easton the temporary post at Belvedere would cause a recurrence of the psychiatric illness. The citation from paragraph 30 of Hatton does not mean that, if the employer is aware of some vulnerability, the employer inevitably will be liable for any psychiatric illness then suffered by the employee due to some act of the employer. I have concluded that B & Q were not in breach of duty by reason of the approach taken by Mr Black so my conclusion on foreseeability is not decisive. In fact, I consider that Mr Black's approach did not give rise to a risk of psychiatric injury of which he knew or ought to have known.
What then of the issue of risk assessment? Given the well-established principle that foresight of an imminent risk of psychiatric illness being suffered by the individual concerned is necessary to found liability, how do the principles of generic risk assessment apply to this type of case? If there has been a breach of Regulation 3 of the 1999 Regulations, that does not remove the need for proof that the particular harm suffered by Mr Easton was foreseeable. Mr Buchan put forward the argument that a proven breach of the Regulations would dispense with the need for such proof without success in Mullen v Accenture Services [2010] EWHC 2336 (QB). He does not put it forward in these proceedings. Rather, he argued that on the facts of this case a proper risk assessment approach on the part of B & Q would have provided them with the requisite knowledge.
He relies on the approach taken by H.H. Judge Cotter Q.C. (sitting as a deputy High Court Judge) in the case of Bailey v Devon Partnership NHS Trust (2014 – unreported). In the course of a very lengthy judgment the judge in that case rehearsed the argument as put to him – as it happens by Mr Buchan.
"Mr Buchan argued that a risk assessment should have been undertaken and should have led to a recognition that the consultants generally were at risk of stress related illness. Given the existence of a specific policy relating to stress that should then have led to its full implementation including as a first step the filling in of the stress assessment tool. That would then have provided a focussed assessment of the stress experienced by the Claimant. So given the current appreciation of the risks posed by stress it did not require the indications of impending harm to the Claimant's health arising from stress at work to be "plain enough" before an individual assessment became necessary. It became necessary through a different route. Understanding this to be Mr Buchan's argument: I accept it."
Judge Cotter Q.C. in taking that view did not ignore what was said in Hatton and in subsequent cases. Having discussed the principles in Hatton at length he said this:
"However stress cases are highly fact specific and it may be in certain circumstances appreciation of a general risk of psychiatric injury to a group of employees following a risk assessment may require action which would have prevented the future illness of an individual who was not at "short-term" risk."
That approach coupled with the argument as presented to the judge by Mr Buchan involves no derogation from the principles in Hatton. Rather, it builds on the statutory requirement to undertake risk assessments. Where such a risk assessment showed a general risk of psychiatric injury to the relevant group of employees, it would then require individuals to complete a stress assessment tool either at appropriate intervals or when the individual was aware of signs of stress or both. By this route the employer who failed to take any steps in relation to risk assessment could be fixed with constructive knowledge of imminent psychiatric illness.
Application of that approach does not assist Mr Easton's case. I am satisfied that, had a general risk assessment been conducted, no general risk of psychiatric injury would have been uncovered. The working environment of B & Q was pressured but no more than many other similar organisations. As Mr Hughes commented when he was being asked about the pressures on a store manager working for B & Q at the peak season, they were relatively modest compared to the pressures he had faced in the same role when working for Sainsbury's in the period leading up to Christmas. As already noted there was simply no history in B & Q of store managers suffering from psychiatric illness. Until the early months of 2010 Mr Easton himself would have abjured any suggestion of being under undue stress, never mind being at risk of psychiatric illness.
Even if proper risk assessment would have led to Mr Easton using an individual stress assessment tool, it must be asked when he would have been prompted to use it. His evidence varied as to when he began to feel under stress. I conclude that it was in the later part of March 2010 i.e. the point at which Trade Point implementation began when stress became noticeable. What then would he have observed and noted? It is far from clear that he would have noted anything at all. The staff handbook of which he was aware required him to talk to his manager (Mr Hughes) if he felt stressed at work. As I have found, he did not approach Mr Hughes in those terms. As Mr Hughes said Mr Easton simply made what were termed as "normal complaints around day to day stuff". I have set out why Mr Easton took that approach. I am satisfied that the same reasoning would have applied to a stress assessment tool.
In the B & Q document entitled "Managing Pressure and Stress – Employees' Booklet" there was a section headed "Identifying Signs of Stress in Yourself". There were then four sub-headings dealing with physical, psychological, emotional and behavioural signs. Each sub-heading detailed 10 or 12 different signs. This part of the document in effect was an individual risk assessment tool. Mr Easton made a witness statement four days before the commencement of the trial dealing with that document. He asserted that prior to his illness he had suffered from nine of the physical signs, all 11 psychological signs, all 12 emotional signs and 11 of the behavioural signs. He said that, had he had this tool to hand, he would have realised that he was suffering from symptoms of stress. The signs outlined in the booklet were specific. They were easily identifiable without any medical training or specialist knowledge. Had Mr Easton truly been suffering from these symptoms, he would have been able to describe them. In his witness statement of the 16th December 2011 he set out what he identified as the symptoms of stress in these terms: "I was very tired, I was not 'being myself', I was unapproachable and short with people. This affected everything I did, both at home and work. I was also very emotional when on my own." That description falls far short of the matters set out in the booklet. On balance I am satisfied that Mr Easton was not experiencing the signs as set out in the booklet until the point at which he was suffering from a psychiatric illness. By that time it would have been too late for anything to have been done by his employers to remedy the position.
For all of these reasons I conclude that on the facts of this case proper risk assessment would have had no effect on the outcome. That being so Mr Easton has failed to establish that his psychiatric illness was foreseeable and, in any event, that there was any breach of duty on the part of B & Q. It follows that his claim for damages must fail.
Quantum
Had the claim succeeded both in relation to the initial illness and in respect of the relapse I consider that general damages for pain, suffering and loss of amenity would have been in the region of £17,500. The case falls at the lower end of the "Moderately severe" bracket of psychiatric damage as set out in the Judicial College guidelines. I do not proposed to review the medical evidence at length but it shows that Mr Easton suffered from significant depression for approximately 2 ½ years with some symptoms continuing thereafter and with a risk of recurrence of depressive illness.
The medical evidence does not support a continuing loss of earnings based on a residual earning capacity of £28,000. That is barely a quarter of Mr Easton's pre-illness earnings. The agreed medical evidence is that Mr Easton now is capable of working in any capacity for which he is trained. I have not heard sufficient evidence to determine what Mr Easton's true residual earning capacity is. All I can say is that it must be significantly higher than the figure put forward in his schedule of loss.
I accept that an award for loss of congenial employment may be made in cases where the employment at first blush is not of itself attractive. I have myself made such an award recently to a claimant who no longer could work as a skilled tradesman. However, it is not appropriate where the claimant as here potentially will be able to return to an occupation similar to that which he found congenial. |
The Hon. Mr Justice Coulson:
1. Introduction
In these proceedings, the claimant, GB, pursues a claim in negligence against the defendant arising out of medical treatment which she received whilst detained by the defendant at Yarl's Wood Immigration Removal Centre between 16 June and 27 July 2012. It is said that the prescription of an anti-malarial drug caused her to suffer a severe psychotic reaction. In the autumn of the last year, Master Leslie ordered the trial of a preliminary issue as to whether or not the defendant owed to GB a non-delegable duty of care. If it did not, the claim in negligence must fail, although there is a separate claim against the defendant for unlawful detention which is unaffected by this issue. If there was such a duty, then there are a variety of other disputes arising out of the allegations of negligence and causation which are also unaffected by this preliminary issue.
2. Anonymity
At the outset of the trial, Mr McCullough QC applied for an anonymity order. This was put on the basis that such an order was necessary to protect GB from those who may seek to target and exploit her as a result of knowing that she has brought these proceedings, which could result in substantial compensation. It was said that, because she lived in the community, the prospects of such targeting was not fanciful.
My initial view was that an anonymity order was not appropriate in this case. However, Mr McCullough QC drew my attention to the recent Court of Appeal decision in JX MX v Dartford and Gravesham NHS Trust [2015] EWCA Civ 96. In that case the Court of Appeal made an anonymity order in respect of an approval hearing concerning a child's claim for damages following severe birth injuries. The Court of Appeal not only concluded that an anonymity order was appropriate in that case, but they also set out wide-ranging guidelines in respect of all cases where children or other vulnerable persons would face an invasion of privacy if their identity became public. At paragraph 33 of his judgment, Moore-Bick LJ said:
"An important aspect of justice is consistency. The question for decision in each case is whether a derogation from the principle of open justice is necessary in order to ensure that justice itself is done. At one level that must depend on the facts of the individual case, but it is important to ensure a reasonable measure of consistency in order [to] prevent the administration of justice being brought into disrepute. This is an area in which fine distinctions are difficult to justify and not easily understood… It appears that applications for anonymity orders are becoming more frequent and, according to the very experienced judge who dealt with the matter below, there is uncertainty among judges about the course that should be taken. In those circumstances we think it appropriate for us to provide some guidance for judges at first instance."
He went on to identify one of the principles to be applied: that, unless the judge was satisfied after hearing argument that it was not necessary to do so, an anonymity order should be made.
I respectfully agree with Moore-Bick LJ's observations about the need for consistency. I also note what is an effective reversal of the ordinary burden of proof in cases involving children and (as in this case) vulnerable people: that an anonymity order should be made unless it can be shown to be unnecessary. It has not been shown to be unnecessary in the present case. In those circumstances, despite my initial doubts, I concluded at the hearing that, in accordance with the guidance from the Court of Appeal, an anonymity order should be made.
3. The Preliminary Issue
By an order dated 22 October 2014, the relevant parts of which were by consent, Master Leslie ordered that there should be a preliminary issue as follows:
"(i) Whether or not the defendant owed a non-delegable duty of care to the claimant so as to render it liable to the claimant in respect of any negligence acts or omissions on the part of those providing medical care at Yarl's Wood IRC, in particular Dr Inskip (were such negligence to be established);
(ii) Further alternatively, whether or not the defendant was vicariously liable for the acts or omissions of the medical practitioner and other Yarl's Wood health care staff."
Although the scope of the duty alleged is not identified in the order, it was submitted by Mr McCullough QC at the hearing that it was "the duty to take reasonable care in the medical advice and treatment provided to those in the control of the Home Office through being in immigration detention". He said emphatically that, contrary to what Ms Anderson had suggested, he was not alleging some sort of higher duty to provide "infallible medical care" or "perfect care in every situation". The preliminary issue was, therefore, whether there was a non-delegable duty owed by the defendant to GB to take reasonable care in the medical advice and treatment provided to her whilst she was a detainee.
Throughout the hearing before me, both parties made copious references to the judgment of Lord Sumption in Woodland v Swimming Teachers Association and Others [2013] UKSC 66; [2014] AC 537. That was also a case where a preliminary issue was identified about the existence or otherwise of a non-delegable duty of care. What the parties failed to do was refer me to paragraph 2 of that judgment, in which Lord Sumption expressed doubts about the wisdom of hearing a preliminary issue in that case. He said:
"But it must be very doubtful whether deciding such a point on the pleadings was really in the interests of these parties or of the efficient conduct of their litigation. The pleadings are unsatisfactory. There are no findings of fact and almost everything is disputed. A decision of the point presently before us will not be decisive of the litigation either way, because there are other bases of claim independent of it. The point has taken more than two years to reach this stage, during which, if the allegation had been allowed to go to trial, it would almost certainly have been decided by now. As it is, regardless of the outcome of this appeal it will now have to go back to the High Court to find the relevant facts."
In my judgment, much of what was said by Lord Sumption in Woodland is equally applicable here. Even if I found no duty, the defendant would remain in these proceedings because of the separate claim for wrongful detention. The preliminary issue therefore goes only to whether or not there should be further parties to the proceedings, namely Serco, the company running Yarl's Wood on behalf of the defendant, and/or the doctor who prescribed the anti-malarial drug. In my view, this did not justify the use of a costly preliminary issue procedure in this case. In commercial litigation (funded by individuals or companies) preliminary issues are relatively rare because they are not generally regarded as efficient. It seems only to be in publicly-funded cases, often where there is an echo of the procedures of the Administrative Court, where this way of proceeding remains popular. In my judgment, it is time for a rethink.
However, the difficulty with which I was faced on the morning of the hearing was the difficulty always faced by first instance judges in this situation. They may be sceptical as to the utility of a preliminary issue, but if they refuse to hear it, they are merely adding to the costs of an action which (as here) is being publicly-funded on both sides. They therefore have little option but to listen to the arguments and resolve the issue, no matter how doubtful they may be as to the value of the exercise.
4. The Agreed Statement of Facts
The problems in this case were compounded by the failure on the part of the defendant to agree a Statement of Facts prior to trial. Master Leslie very sensibly ordered that a Schedule of Facts should be agreed at least 42 days before the trial. There was no such agreement. Indeed, at the start of the hearing, the Schedule of Facts remained in dispute. I indicated that I was not prepared to hear the case on that basis. Ultimately a Schedule of Facts was agreed, based on the proposals from the claimant, with deletions by the defendant. It is attached at Section 11, as Appendix 1.
In summary, the factual position is this. GB is a Nigerian national born on 15 September 1978. After 22 June 2010 she was an illegal over-stayer in the United Kingdom. She became pregnant. In June 2012 she was arrested following a public argument with the man whom she said was the father of her child. She accepted a caution for criminal damage and was detained under the defendant's immigration powers. On 19 June 2012 she was taken to Yarl's Wood IRC, which is run on behalf of the defendant by Serco.
When GB arrived she had a medical screening. Two days later, on 21 June 2012 she was seen by Dr Inskip, a general practitioner employed by a local GP surgery. He conducted an assessment and prescribed GB with Mefloquine, an anti-malarial drug. This was because the defendant was proposing to send GB back to Nigeria (that is why she was in Yarl's Wood in the first place) and there are clear rules relating to the prescription of anti-malarial drugs to those who might be sent back to countries where malaria is commonplace.
On 10 July 2012, GB was refused asylum and the decision was taken to remove her from the United Kingdom. It is GB's case that from about that time onwards, she began to exhibit signs of psychosis. On 16 July 2012, following an assessment by a consultant psychiatrist, Dr Jane Mounty, it was suggested that GB had a drug-induced psychosis, triggered by the Mefloquine, and that she was sectionable under the Mental Health Act. On 27 July 2012, she was released from detention. She was subsequently granted refugee status until 7 July 2019. Apart from the claim for wrongful detention, the only other claim in these proceedings relate to the allegedly negligent prescription of Mefloquine.
5. The Relevant Statutory Framework and Regulations
The relevant parts of the Immigration and Asylum Act 1999 are in Part VIII, Detention Centres and Detained Persons. Section 149 provides as follows:
"149.— Contracting out of certain [removal centres].
(1) The Secretary of State may enter into a contract with another person for the provision or running (or the provision and running) by him, or (if the contract so provides) for the running by sub-contractors of his, of any [removal centre] or part of a [removal centre].
(2) While a [removal centre] contract for the running of a [removal centre] or part of a [removal centre] is in force—
(a) the [removal centre] or part is to be run subject to and in accordance with the provisions of or made under this Part; and
(b) in the case of a part, that part and the remaining part are to be treated for the purposes of those provisions as if they were separate [removal centres].
(3) If the Secretary of State grants a lease or tenancy of land for the purposes of a [removal centre] contract, none of the following enactments applies to the lease or tenancy—
(a) Part II of the Landlord and Tenant Act 1954 (security of tenure);
(b) section 146 of the Law of Property Act 1925 (restrictions on and relief against forfeiture);
(c) section 19(1), (2) and (3) of the Landlord and Tenant Act 1927 and the Landlord and Tenant Act 1988 (covenants not to assign etc.);
(d) the Agricultural Holdings Act 1986;
(e) sections 4 to 7 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (irritancy clauses);
(f) the Agricultural Holdings (Scotland) Act 1991 [and the Agricultural Holdings (Scotland) Act 2003 (asp 11)];
(g) section 14 of the Conveyancing Act 1881;
(h) the Conveyancing and Law of Property Act 1892;
(i) the Business Tenancies (Northern Ireland) Order 1996.
(4) The Secretary of State must appoint a contract monitor for every contracted out [removal centre].
(5) A person may be appointed as the contract monitor for more than one [removal centre].
(6) The contract monitor is to have—
(a) such functions as may be conferred on him by [removal centre] rules;
(b) the status of a Crown servant.
(7) The contract monitor must—
(a) keep under review, and report to the Secretary of State on, the running of a [removal centre] for which he is appointed; and
(b) investigate, and report to the Secretary of State on, any allegations made against any person performing custodial functions at that centre.
(8) The contractor, and any sub-contractor of his, must do all that he reasonably can (whether by giving directions to the officers of the [removal centre] of otherwise) to facilitate the exercise by the contract monitor of his functions.
(9) "Lease or tenancy" includes an underlease, sublease or sub-tenancy.
(10) In relation to a [removal centre] contract entered into by the Secretary of State before the commencement of this section, this section is to be treated as having been in force at that time."
Section 151 provides as follows:
"151.— Intervention by Secretary of State.
(1) The Secretary of State may exercise the powers conferred by this section if it appears to him that—
(a) the manager of a contracted out [removal centre] has lost, or is likely to lose, effective control of the centre or of any part of it; or
(b) it is necessary to do so in the interests of preserving the safety of any person, or of preventing serious damage to any property.
(2) The Secretary of State may appoint a person (to be known as the Controller) to act as manager of the [removal centre] for the period—
(a) beginning with the time specified in the appointment; and
(b) ending with the time specified in the notice of termination under subsection (5).
(3) During that period—
(a) all the functions which would otherwise be exercisable by the manager of the contract monitor are to be exercisable by the Controller;
(b) the contractor and any sub-contractor of his must do all that he reasonably can to facilitate the exercise by the Controller of his functions; and
(c) the staff of the [removal centre] must comply with any directions given by the Controller in the exercise of his functions
(4) The Controller is to have the status of a Crown servant.
(5) If the Secretary of State is satisfied that a Controller is no longer needed for a particular [removal centre], he must (by giving notice to the Controller) terminate his appointment at a time specified in the notice.
(6) As soon as practicable after making an appointment under this section, the Secretary of State must give notice of the appointment to those entitled to notice.
(7) As soon as practicable after terminating an appointment under this section, the Secretary of State must give a copy of the notice of termination to those entitled to notice.
(8) Those entitled to notice are the contractor, the manager, the contract monitor and the Controller."
Section 153 provides as follows:
"153.— [Removal centre] rules.
(1) The Secretary of State must make rules for the regulation and management of [removal centres].
(2) [Removal centre] rules may, among other things, make provision with respect to the safety, care, activities, discipline and control of detained persons."
The Detention Centre Rules provide a detailed series of rules relating to the running of IRCs. The detail is exhaustive: for example, by reference to Rule 18, there is a minimum of one hour that each detainee is entitled to be in the open air every day.
Rule 33 deals with health care in the following terms:
"33.— Medical practitioner and health care team
(1) Every detention centre shall have a medical practitioner, who shall be vocationally trained as a general practitioner and a fully registered person within the meaning of the Medical Act 1983 [who holds a licence to practise].
(2) Every detention centre shall have a health care team (of which the medical practitioner will be a member), which shall be responsible for the care of the physical and mental health of the detained persons at that centre.
(3) Each member of the health care team shall (as far as they are qualified to do so) pay special attention to the need to recognise medical conditions which might be found among a diverse population and the cultural sensitivity appropriate when performing his duties.
(4) The health care team shall observe all applicable professional guidelines relating to medical confidentiality.
(5) Every request by a detained person to see the medical practitioner shall be recorded by the officer to whom it is made and forthwith passed to the medical practitioner or nursing staff at the detention centre.
(6) The medical practitioner may consult with other medical practitioners at his discretion.
(7) All detained persons shall be entitled to request that they are attended by a registered medical practitioner or dentist other than the medical practitioner or those consulted by him under paragraph (6), so long as—
(a) the detained person will pay any expense incurred;
(b) the manager is satisfied that there are reasonable grounds for the request; and
(c) the attendance is in consultation with the medical practitioner.
(8) The medical practitioner shall obtain, so far as reasonably practicable, any previous medical records located in the United Kingdom relating to each detained person in the detention centre.
(9) The health care team shall ensure that all medical records relating to a detained person are forwarded as appropriate following his transfer to another detention centre or a prison or on discharge from the detention centre.
(10) All detained persons shall be entitled, if they so wish, to be examined only by a registered medical practitioner of the same sex, and the medical practitioner shall ensure that all detained persons of the opposite sex are aware of that entitlement prior to any examination.
(11) Subject to any directions given in the particular case by the Secretary of State, a registered medical practitioner selected by or on behalf of a detained person who is party to legal proceedings shall be afforded reasonable facilities for examining him in connection with the proceedings."
The Immigration Directorate's Instructions are also very detailed. Section 5 is headed 'Inoculations and Other Preventative Treatment (Prophylaxis) For Persons Being Removed from the United Kingdom'. Sections 5.6 and 5.7 read as follows:
"5.6 People detained prior to removal have access to medical care and advice from healthcare professionals in immigration removal centres. Detainees are not charged for treatment.
Where removal centre medical staff consider that preventive treatment should be given, removal directions may be set but should be dependant on any pre-departure element of such treatment being completed. Medical advice on preventive measures, including advice leaflets, should be made available to detainees as soon as possible, and should if possible be given as appropriate in the initial medical examination or screening which all detainees receive within 24 hours of detention, and in any case when removal directions are set. Where removal medical staff consider that preventive treatment is necessary and can be completed (subject to para 5.7 below) without delay to planned removal, removal directions may be set but for a date after the treatment is completed. Caseworkers and those responsible for setting removal directions should consult the health care professionals, via the IND team at the centre, on the appropriate minimum time lag between administering medication and removal taking place.
Caseworkers, those responsible for setting removal directions and IND teams at removal centres should document case histories as thoroughly as possible. This is because, if a JR is commenced, access to a claimant's medical records cannot be guaranteed. Therefore, if staff have carefully minuted, for example, any refusal of malarial prophylaxis after it has been offered, then that may make it easier to keep RDs in place, respond to any further representations on the point and/or defend any JR claim. These points should if possible be minuted directly on CID.
5.7 Preventive treatment for malaria is a special case in that medication must be taken shortly before travel. People detained prior to removal may not therefore be able to make the necessary arrangements for themselves. Any malaria prophylaxis recommended as appropriate by the removal centre medical staff for pregnant women and children under 5 should normally be provided and time allowed for it to take effect before removal. The guidance by the Advisory committee on Malaria Prevention (at Appendix, together with a supplementary letter) should be followed and copies of it should be given to the detainees concerned. Specialist advice (according to the relevant condition or age of the detainees), which can be obtained from a helpline, should be provided for pregnant women, children under 5 and those with medical conditions which might contra-indicate the prophylaxis. In the event of adverse side-effects, time should also be allowed to obtain and follow further medical advice. Removal need not be deferred in any case where a detainee declines (on his or her own behalf or on behalf of a dependant child) to take malaria prophylaxis that has been provided on medical advice."
Finally I was referred to the contract between the defendant and Serco which referred to the above documents (with the exception of the Immigration Directorate's Instructions), but which did not appear to add anything further. The contract between Serco and the doctors has not been found by either party. The fact that the defendant was unable to supply a copy of this contract, pursuant to which those whom the defendant has detained in Yarl's Wood were medically treated, was surprising.
6. Woodland and the Clarification of the Law Relating to Non-Delegable Duties
Although Lord Sumption had reservations about the utility of the preliminary issue in Woodland, there can be no doubt that his judgment provided a much-needed clarification of the law in this area. At paragraphs 3-6 he succinctly explained the background to non-delegable duties, noting that:
(a) In principle, liability in tort depends on proof of a personal breach of duty. For that principle there is at common law only one true exception, namely vicarious liability (paragraph 3);
(b) The issue that arose in Woodland, namely whether the local education authority owed a pupil a duty of care during swimming lessons which were conducted by a company to whom the authority had contracted out the provision of swimming lessons, did not concern vicarious liability. Instead, assuming that the local authority was not vicariously liable for negligence of those providing the swimming lessons, the question was the scope of their duty to pupils in its care (paragraph 4);
(c) The law of negligence was generally fault-based so that a defendant was personally liable only for doing negligently "that which he does at all or for omissions which are in reality a negligent way of doing that which he does at all". The law did not in the ordinary course impose personal liability for what others do or fail to do (paragraph 5);
(d) English law had long recognised that non-delegable duties did exist but it did not have a single theory to explain when or why. Lord Sumption identified two categories of exception. The first (which did not arise there and does not arise here) was where the defendant employs an independent contractor to perform some function which was either inherently hazardous or liable to become so in the course of his work (paragraph 6).
The second category of non-delegable duty was relevant in Woodland and is relevant in the present case. At paragraph 7 Lord Sumption said:
"7…It comprises cases where the common law imposes a duty on the defendant which has three critical characteristics. First, it arises not from the negligent character of the act itself but because of an antecedent relationship between the defendant and the claimant. Second, the duty is a positive or affirmative duty to protect a particular class of persons against a particular class of risks, and not simply a duty to refrain from acting in a way that foreseeably causes injury. Third, the duty is by virtue of that relationship personal to the defendant. The work required to perform such a duty may well be delegable, and usually is. But the duty itself remains the defendant's. Its delegation makes no difference to his legal responsibility for the proper performance of a duty which is in law his own."
Then, following an exhaustive review of the origins of this exception; the employment cases; the hospital cases; and the Australian case law; Lord Sumption addressed the circumstances in which a non-delegable duty might arise. He said this:
"In what circumstances will a non-delegable duty arise?
23. In my view, the time has come to recognise that Lord Greene MR in Gold's case [1942] 2 KB 293 and Denning LJ in Cassidy's case [1951] 2 KB 343 were correct in identifying the underlying principle, and while I would not necessarily subscribe to every dictum in the Australian cases, in my opinion they are broadly correct in their analysis of the factors that have given rise to non-delegable duties of care. If the highway and hazard cases are put to one side, the remaining cases are characterised by the following defining features: (1) The claimant is a patient or a child, or for some other reason is especially vulnerable or dependent on the protection of the defendant against the risk of injury. Other examples are likely to be prisoners and residents in care homes. (2) There is an antecedent relationship between the claimant and the defendant, independent of the negligent act or omission itself, (i) which places the claimant in the actual custody, charge or care of the defendant, and (ii) from which it is possible to impute to the defendant the assumption of a positive duty to protect the claimant from harm, and not just a duty to refrain from conduct which will foreseeably damage the claimant. It is characteristic of such relationships that they involve an element of control over the claimant, which varies in intensity from one situation to another, but is clearly very substantial in the case of schoolchildren. (3) The claimant has no control over how the defendant chooses to perform those obligations, i.e. whether personally or through employees or through third parties. (4) The defendant has delegated to a third party some function which is an integral part of the positive duty which he has assumed towards the claimant; and the third party is exercising, for the purpose of the function thus delegated to him, the defendant's custody or care of the claimant and the element of control that goes with it. (5) The third party has been negligent not in some collateral respect but in the performance of the very function assumed by the defendant and delegated by the defendant to him.
24. In A (A Child) v Ministry of Defence [2005] QB 183, para 47 Lord Phillips of Worth Matravers MR, delivering the leading judgment in the Court of Appeal, suggested that "hitherto a non-delegable duty has only been found in a situation where the claimant suffers an injury while in an environment over which the defendant has control." This is undoubtedly a fundamental feature of those cases where, in the absence of a relevant antecedent relationship, the defendant has been held liable for inherently hazardous operations or dangers on the public highway. But I respectfully disagree with the view that control of the environment in which injury is caused is an essential element in the kind of case with which we are presently concerned. The defendant is not usually in control of the environment in which injury is caused by an independent contractor. That is why as a general rule he is not liable for the contractor's negligence. Where a non-delegable duty arises, the defendant is liable not because he has control but in spite of the fact that he may have none. The essential element in my view is not control of the environment in which the claimant is injured, but control over the claimant for the purpose of performing a function for which the defendant has assumed responsibility."
At paragraph 25 Lord Sumption also considered the test as to whether it would be fair, just and reasonable to impose a non-delegable duty of care in that case. He made a number of points which refer back in one way or another to his five ingredients in paragraph 23. They were inevitably connected to the educational background in that case. At paragraph 26, applying those principles to the present case, he concluded that there was a non-delegable duty owed by the local educational authority to the claimant. He said "the alleged negligence occurred in the course of the very functions which the school assumed an obligation to perform and delegated to its contractors. It must follow that if the latter were negligent in performing those functions and the child was injured as a result, the educational authority is in breach of duty."
7. The Application of Woodland to the Present Case
On behalf of GB, Mr McCullough QC argued that Woodland was clearly applicable to the present case and that each of the five features or elements of a non-delegable duty identified by Lord Sumption in paragraph 23 of his judgment applied to the present case. He also submitted that the finding of such a duty in the present case was fair, just and reasonable. Ms Anderson for the defendant said that these elements were not applicable to the present case and that the finding of a duty would not be fair, just and reasonable. I propose to set out my views on this issue in some detail since it is, in my judgment, the critical debate arising out of these preliminary issues.
(a) Vulnerability
A non-delegable duty only arises in circumstances where the claimant is especially vulnerable or dependant on the protection of the defendant against the risk of injury. Lord Sumption expressly noted that other examples of such a situation were likely to include prisoners. Mr McCullough QC therefore argued that GB, as a detainee at Yarl's Wood, was expressly within this first category.
Ms Anderson's riposte to this was twofold. First she suggested that a detainee in an IRC was a long way removed from a prisoner in an ordinary prison and that the regime in IRCs was much more benign. Her second point was that GB was not dependant on the protection of the defendant.
I reject both of Ms Anderson's submissions on this point. There is no meaningful distinction to be drawn between a prisoner and a detainee in an IRC. Inmates of both establishments have one vital feature of their lives in common: they are held against their will and cannot leave the place where they are detained. Moreover I consider that those detained in an IRC on the orders of the defendant are thus dependant on the protection of the defendant. The one follows the other. It explains why Lord Sumption expressly identified prisoners within this category of relationship. For those reasons therefore, this first element of a non-delegable duty is made out in the present case.
(b) An Antecedent Relationship
Mr McCullough QC argued, by reference to Lord Sumption's second ingredient, that there needed to be an antecedent relationship which placed the claimant in the actual custody of the defendant, and from which it was possible to impute the assumption of a positive duty on the part of the defendant to protect the claimant from harm. A characteristic of such a relationship is an element of control over the claimant. He said that all of those features were present in this case.
Ms Anderson accepted that there was a duty to protect but she said that it was not a special duty because of what she described as the "detention centre context". It was not entirely clear what this meant.
In my view, there can be no doubt that the second element of the non-delegable duty is made out in the present case. Since GB was being detained on the orders of the defendant, she was in the actual custody of the defendant. There was a significant element of control, as identified in Section 4 above (including the statutory power to monitor; to intervene; and to make rules and provide instructions governing how Yarl's Wood is run). There was a positive duty to protect GB from harm. In my view, it was in recognition of that positive duty that the detailed Detention Centre Rules and Immigration Directorate's Instructions were made and promulgated.
(c) No Control
As to Lord Sumption's third ingredient, Mr McCullough QC said that GB had no control over how she was dealt with. As a detainee, she was obliged to accept the medical treatment offered to her. Although she could have asked to see another medical practitioner, the rules make clear that that would have been at her own expense. It was completely different to the choices open to someone who was at liberty, and who could choose which NHS practice they went to and which doctor within that practice that they saw. There was, he said, no free choice.
Ms Anderson said that, although there was control of GB within the detention centre, "there was no medical control". She said that GB's position was no different to that of someone who was at liberty. Ultimately, in whichever situation the defendant was in, the medical services were being provided by the State.
In my view, Mr McCullough QC was right to say that Ms Anderson's submissions in this context were "unreal". GB was detained by the defendant in an IRC and so, as the Detention Centre Rules make plain, she was obliged to accept the medical treatment she was given. There was no free choice. Her position was different to that of someone who was at liberty. The third element is also therefore made out.
(d) Delegation of an Integral Part of the Positive Duty
As to the fourth ingredient, Mr McCullough QC said that the provision of medical treatment to those who were detained at an IRC was an integral part of the positive duty which the defendant had assumed towards the claimant. That had been delegated to a third party, and the third party was exercising, for the purposes of the function delegated to it, the defendant's custody or care of the claimant and the element of control that went with it.
I am in no doubt that Serco were exercising a function delegated to it by the defendant. The issue is whether it can be said that the provision of medical treatment of detainees was an integral part of the positive duty owed. Ms Anderson said that it was not, and at least inferred that the provision of medical care was simply an incidental element of their detention.
Of the five elements identified by Lord Sumption, I have found this the most difficult to apply in the present case. On the one hand, I accept that the provision to her of medical services was not the reason that GB was in Yarl's Wood. But I have concluded that the provision of medical care was an integral part of the positive duty owed by the defendant to GB. There are two reasons for that: one general and one specific.
The general reason can be found in the Detention Centre Rules and the other requirements referred to in Section 4 above: they all stress the importance of the provision of proper medical care to detainees. On a fair reading of those documents, I consider that this was an integral part of the duty owed to GB. I note that there is some recent authority in support of this conclusion: see paragraph 51 below.
But even if I was wrong about that, and the provision of medical care was not generally integral to the defendant's duty to GB, I still conclude that, on the agreed facts in this case, the prescription of anti-malarial drugs was integral to the duty owed to GB. That is because the defendant was preparing GB for at least the possibility of her removal back to Nigeria. That is why she was detained in Yarl's Wood in the first place. Because removal to Nigeria was a possibility, she was given anti-malarial drugs to prepare for her return. This was one of the defendant's key responsibilities: not to remove an over-stayer to a country where malaria is prevalent, without taking steps to protect that person from that disease when he or she was returned. Thus a prescription of the anti-malarial drug (which is at the heart of the claimant's case in negligence), arose directly out of the defendant's detention and control of GB prior to removal, and was therefore an integral part of the positive duty assumed towards GB, the performance of which had been delegated to Serco.
(e) Negligence in the Performance of the Core Function
My answer to this point is really wrapped up in the previous point. If that analysis is right, then there was negligence in the performance of the core function. Whether or not there was negligence of course remains to be tested at some future trial, but for the purposes of this preliminary issue, this final ingredient too is made out.
(f) Fair, Just and Reasonable
If, as I have found, the five ingredients are in place, the next question is whether it is fair, just and reasonable to find a non-delegable duty. Mr McCullough QC's arguments were really reflections of the points that he had made as to why a duty of care existed in the first place. He said that detainees in immigration detention were inherently vulnerable and were highly dependant on the observance of proper standards of care. They had to submit to lawful detention with no influence over how the defendant may delegate its duties towards detainees. The duty was open-ended but only concerned with functions that the defendant was required to perform.
There were two more pragmatic considerations which he urged upon the court. The first was that it would be unfair if GB had no recourse against the defendant merely because the defendant had chosen to contract out the running of Yarl's Wood to an independent contractor, Serco. It would, he said, be undesirable to create an anomaly, whereby an IRC run by the defendant would give rise to a duty, whereas one that had been the subject of outsourcing, would not. In that regard, his submissions reflected paragraph 25(4) of the judgment of Lord Sumption in Woodland where he said:
"It is important to bear in mind that until relatively recently, most of the functions now routinely delegated by schools to independent contractors would have been performed by staff for whom the authority would have been vicariously liable. The recognition of limited non-delegable duties has become more significant as a result of the growing scale on which the educational and supervisory functions of schools are outsourced, but in a longer historical perspective, it does not significantly increase the potential liability of education authorities."
The same point was made at paragraphs 29-32 of the judgment of Baroness Hale in Woodland.
The final point raised by Mr McCullough QC is that it was fair, just and reasonable because, even if the day-to-day work was carried out by Serco, GB ought to still have the right to pursue the defendant and should not have to identify who was responsible for a particular function and/or a particular failure before commencing litigation. Of course, if the contract between the defendant and Serco has been properly drafted, the defendant would be able to recover any damages for which it may be liable from Serco or their insurers, pursuant to a contractual indemnity.
Ms Anderson's submissions in relation to this aspect of the case amounted really to no more than this: that there was no proper reason why GB was not pursuing either Serco or the doctor in these proceedings. Since they were more directly responsible for what had happened, it was not just, fair and reasonable to impose potential liability on the defendant. I note that this submission, taken to its legal conclusion, would have defeated the existence of the non-delegable duty in Woodland.
In my view, the submissions put forward by Mr McCullough QC are to be preferred, and demonstrate why it is fair, just and reasonable for a duty to exist in this case. The out-sourcing should be irrelevant in law. Rather, it should not be for GB to have to try and work out which private contractor or individual doctor might be liable for which failure, and then litigate on the basis of that assessment. She was detained by the defendant; she was in the defendant's control; she was entitled to look to the defendant for proper protection. If she did not receive it, the defendant was in breach of its duty. Accordingly, for all these reasons, I conclude that the imposition of a non-delegable duty in this case is fair, just and reasonable.
It is also worth undertaking something of a reality check at this point. The defendant decided to detain GB, and consequently had clear responsibilities for her treatment as a detainee as a result. It would not be just, fair or reasonable to conclude that those responsibilities disappeared simply because of an outsourcing decision.
8. Christina Morgan v Ministry of Defence [2010] EWHC 2248 (QB)
In Morgan, Supperstone J found that the defendant, who was responsible for the running of a Young Offender Institution at Stoke Heath, did not owe a non-delegable duty in respect of the negligence of the doctors who were not their employees, and who allegedly failed to recognise the extent and effect of the deceased's mental health problems. In consequence of these problems, he hanged himself at the YOI, and the claim was brought by his dependants. Supperstone J found that the defendant did not owe a non-delegable duty to the deceased in respect of the performance of the doctors, because the doctors were not their employees.
The facts in Morgan are too close to the facts in the present case to be sensibly distinguished. For the reasons set out in Section 7 of this Judgment I have reached the view that the defendant owed a non-delegable duty to GB. That conclusion is at odds with the decision of Supperstone J in Morgan. Can those different results be rationally explained? In my view, they can, for the reasons set out below.
First, Supperstone J's judgment came some years before the decision in Woodland. There can be no doubt that Lord Sumption's judgment in that case has clarified what was an extremely confused area of the law. That is, I think, an important difference.
Secondly, this difference is exemplified by reference to Supperstone J's own reasoning in Morgan. I have referred above to paragraph 24 of Lord Sumption's judgment, in which he pointed out that Lord Phillips in A(A Child) was wrong to say that 'control of the environment' was an essential element in cases of non-delegable duty. On the contrary, as Lord Sumption pointed out, the defendant was not usually in control of the environment in which injury was caused by an independent contractor, which is why - as a general rule - he was not liable for the contractor's negligence. A non-delegable duty arose in circumstances where the defendant was liable, not because he had control, but in spite of the fact that he may have had no control.
This passage is important for two reasons. First, it demonstrates that the clarification provided by Lord Sumption in Woodland was so far-reaching that it even extended to correcting a misassumption by Lord Phillips. Second, in Morgan, at paragraph 35 of his judgment, Supperstone J expressly relied on Lord Phillips' analysis of control in A(A Child) as an integral part of his reasoning as to why there was no non-delegable duty of care in that case. In other words, Supperstone J's reason for reaching the conclusion that he did in Morgan relied on the very feature which Lord Sumption has subsequently disavowed.
Thirdly, in his review of the authorities, Supperstone J said that "the hospital cases are to be distinguished" without explaining how or why he had formed that view. The hospital cases formed an integral part of Lord Sumption's review and his conclusion that, in certain circumstances, a non-delegable duty did arise.
Fourthly, although Supperstone J dealt with the question of whether the duty was fair, just and reasonable, he did so in very short order. The points that were argued before me did not apparently arise before him, whilst the possible financial difficulties of the private provider, which was the same point argued in Morgan, was not a matter that was expressly raised before me at all.
Finally, I should say that it appears now to be accepted that this area of the law has moved on from the decision in Morgan. I was referred to the case of Amadou Nyang v G4S Care and Justice Services Ltd and Others [2013] EWHC 3946 (QB), where Lewis J noted that:
"…The 1st Defendant [G4S] is required by rule 33 of the Detention Rules to have a medical practitioner and a health care team responsible for the care of the physical and mental health of detained persons. The 1st Defendant arranged for that duty to be discharged by entering into arrangements with Dr Thomas, who in turn employed the 7th and 8th Defendants and others, to provide health care. In the light of that, the 1st Defendant conceded at the hearing that it is liable for any negligence on the part of the 7th and 8th Defendants as the duty to provide care for the physical and mental health of detainees is a non-delegable duty owed by the 1st Defendant to Mr Nyang: see Woodland v Essex County Council [2013] UKSC 66."
Of course I accept that this was a concession of a non-delegable duty made by G4S, rather than a ruling to that effect. But Lewis J clearly endorsed the concession and expressly referred to both the Detention Rules and the decision in Woodland. If Morgan was still good law, then G4S would not have been liable for the negligence of the doctors: that indeed was the very issue which Morgan had decided.
For all these reasons, therefore, I conclude that, following the decision in Woodland, and on the basis of the arguments which were advanced before me, I am obliged to reach a different view to that of Supperstone J in Morgan. I find on the agreed facts of the present case, and as a matter of principle, that the defendant did owe GB a non-delegable duty of care.
9. The Crown Proceedings Act 1947
This subsidiary issue arose in an unsatisfactory way. In Morgan, Supperstone J found that he claim which the claimant sought to make in that case was outside The Crown Proceedings Act 1947 ("CPA"). Although he dealt with that issue before going on to consider whether or not there was a non-delegable duty, it seems to me that the issues more properly arise the other way round. The questions should be, first, whether there was a non-delegable duty and then, secondly, if there was, whether the CPA operated to prevent any liability on the part of the Crown in respect of that duty. Mr McCullough QC argued that, consciously or unconsciously, Supperstone J may have been influenced by his answer to the CPA issue when going on to find that there was no non-delegable duty.
On that basis, on the assumption that there was a duty (which is what I have found), it was for the defendant to show that the CPA operated to bar the defendant's liability. Unhappily, the defendant was not really ready to do that and no authorities were cited to me other than Morgan. In the end, Ms Anderson appeared to rest her case on the assertion on this point, that Morgan was rightly decided.
Section 2 of the CPA provides as follows:
"2.— Liability of the Crown in tort.
(1) Subject to the provisions of this Act, the Crown shall be subject to all those liabilities in tort to which, if it were a private person of full age and capacity, it would be subject:—
(a) in respect of torts committed by its servants or agents;
(b) in respect of any breach of those duties which a person owes to his servants or agents at common law by reason of being their employer; and
(c) in respect of any breach of the duties attaching at common law to the ownership, occupation, possession or control of property:
Provided that no proceedings shall lie against the Crown by virtue of paragraph (a) of this subsection in respect of any act or omission of a servant or agent of the Crown unless the act or omission would apart from the provisions of this Act have given rise to a cause of action in tort against that servant or agent or his estate."
Section 38, the interpretation section, defines "agent" as including "an independent contractor employed by the Crown".
Mr McCullough QC's submission was extremely simple. He said that, because s.2(1)(a) of the CPA extended the Crown's liabilities to its servants or agents, including independent contractors as defined by s.38, that was sufficient to catch not only the defendant, but those engaged by the defendant, which would include for this purpose, Serco and/or the doctor. He noted that this argument did not arise in Morgan, where there was no reference to s.38 or the category of independent contractors. Instead the argument in Morgan focused on vicarious liability, which was of no application to that case (or this).
Ms Anderson said that clause 2(1)(a) would not apply to an independent contractor if the duty of care was a non-delegable duty of care of the sort that I have found. She was unable to explain how and why that limitation or exclusion could arise: it is certainly not within the words of the section.
It seems to me clear that, on the face of the words used, the defendant's liability for an independent contractor is plainly caught by s.2(1)(a). That is what s.38 provides. That means that the CPA does not bar this claim. To the extent that Morgan suggests to the contrary, I find that that was because the independent contractor point was simply not taken before Supperstone J. If it had been, I conclude that the result would have been different.
Ms Anderson had an alternative argument that somehow sought to distinguish between the Crown, on the one hand, and the defendant, on the other. She said that an independent contractor was the agent of the defendant, but not the agent of the Crown. Given that the defendant is an emanation of the Crown, I am bound to say that I did not wholly follow this argument. No authority was cited in support of this purported distinction. To the extent that it sought to distinguish between the Crown and a governmental department of the Crown, it seemed to me to be wrong.
Although there was also an argument that s.(2)(3) and s.(2)(6) were also engaged by this claim, it did not seem to me that that argument added anything to the argument under s.2(1)(a). In the light of that, I decline to say anything further about that alternative submission.
Finally I should say this about the CPA. There was a suggestion in the judgment in Morgan, and a bold submission to that effect by Ms Anderson before me, that the purpose of the CPA was to limit the Crown's liability in tort. I am not quite sure if that is right. The 1947 Act was designed to codify what had previously been a rather muddled area of the law, as to the circumstances in which a claimant could or could not issue proceedings against the Crown or its emanations. There is nothing in the preamble of the CPA to say that it was somehow concerned with limitation or exclusion. Furthermore, s.2 is designed to put the Crown in the same position as an ordinary private person of full age and capacity. Such a person would owe a non-delegable duty in the circumstances identified by Lord Sumption. So, too, in my judgment, does the Crown and therefore, in this case, the defendant.
10. Conclusions
For the reasons set out above, I would answer the first preliminary issue in the affirmative. In those circumstances the second preliminary issue adds nothing and does not require to be answered.
The parties have seen this judgment in draft in order to correct typographical errors. I will deal with all consequential matters, including costs, at a subsequent hearing, if they cannot be agreed.
11. Appendix 1
AGREED STATEMENT OF FACTS
Introduction
This is an agreed statement of facts for the purposes of the preliminary issue trial. The preliminary issue to be tried is as follows:
(i) Whether or not the Defendant owed a non-delegable duty of care to the Claimant so as to render it liable to the Claimant in respect of any negligent acts or omissions on the part of those providing medical care at Yarl's Wood Immigration Removal Centre (IRC), in particular Dr Inskip (were such negligence to be established) ;
(ii) Further or alternatively, whether or not the Defendant was vicariously liable for the acts or omissions of the medical practitioner and other Yarl's Wood staff.
The facts set out below are confined to those considered relevant for the preliminary issue. Further undisputed facts may be ascertained from the pleadings: the factual background set out in the Particulars of Claim is largely admitted in the Defence. The names of the Claimant [GB] and the alleged father of her child [GA] have been anonymised pursuant to the Order of 17 March 2015.
Statement of Facts
The Claimant is a national of Nigeria, born on 15 September 1978.
The Claimant first arrived in the UK on 24 January 2010 on a six-month visa valid between 22 December 2009 and 22 June 2010. She claims that she returned to Nigeria prior to the expiry of her visa upon hearing the news that her husband and son had been killed. She says that while in Nigeria her deceased husband's family told her she must marry her husband's brother, who already had four wives. She states that she did not want to marry him and therefore returned to the UK in May 2010, while her visa remained valid and overstayed her visa.
While in the UK the Claimant became pregnant. She says the father is GA.
On 15 June 2012 the Claimant and GA were arrested by the police when arguing in the street. The Claimant was held overnight on 15 June 2012 under police powers. A risk assessment noted that the Claimant said she was pregnant, but did not have any mental health problems and was feeling ok. On 16 June 2012 the Claimant accepted a caution for criminal damage for grabbing GA and being reckless as to causing damage to a chain around his neck, which broke. GA was held and questioned by police regarding the domestic violence allegation and immigration offences.
The Claimant's detention under immigration powers was authorised by the Defendant on 16 June 2012 at 19:30 while the Claimant was in police custody, with pregnancy noted as a risk factor in the Detention Authority. She was detained because she had overstayed her visa and the Defendant intended to remove her from the UK once a travel document was available.
The Claimant was held in the police station under immigration powers until 19 June 2012 when she was transported to Yarl's Wood IRC.
Yarl's Wood IRC is the Defendant's immigration detention centre. The Defendant has contracted with Serco, a private company, to run Yarl's Wood detention centre.
On 19 June 2012 at 23:30 after arrival at Yarl's Wood the Claimant had a medical screening with a nurse.
On 21 June 2012 at 09.40 the Claimant was seen by Dr TG Inskip, a General Practitioner who is employed by a local GP surgery. Serco have a service level agreement with the GP surgery to provide cover at Yarl's Wood IRC for two days per week. Dr Inskip conducted a Rule 34 Detention Centre Rules 2001 GP Assessment at the conclusion of which he prescribed the Claimant Mefloquine 250mg and she was given 4 tablets to be taken weekly.
On 27 June 2012 the Claimant claimed asylum and she had an Asylum Screening Interview the following day.
On 3 July 2012 the Claimant signed a medical disclaimer allowing health care staff at Yarl's Wood to divulge details of her medical history to the Defendant, the Claimant's legal representative and the Tribunal (Immigration and Asylum Chamber).
On 9 July 2012 the Claimant had her full asylum interview. The following day she was refused asylum and a decision to remove the Claimant from the UK was made, which she appealed.
From 11 July 2012 onwards the Claimant's Home Office records and medical records from Yarl's Wood document that the Claimant was hearing voices and exhibiting other signs of psychosis.
On 13 July 2012 she attended the nurse triage "complaining of hearing voices in her head." A referral was made for a mental health assessment and for a GP to see her the following day.
On 14 July 2012 the Claimant's medical notes record that she was seen by Dr Osho, a General Practitioner. The plan recorded was to have bloods taken and for the Claimant to be reviewed by the mental health team.
On 16 July 2012 Medical Justice arranged for her to be seen by Dr Jane Mounty, a consultant psychiatrist, who formed the view that the Claimant had a drug induced psychosis, triggered by Mefloquine, and that she was sectionable under the Mental Health Act and lacked capacity.
On 20 July 2012 a Registered Mental Health Nurse, Noel Fill, undertook a mental health assessment. He found that the Claimant was in an acute stage of psychosis and that she required assessment by a psychiatrist as soon as possible and that she may require assessment in a hospital. Following the assessment her medical notes record that she was prescribed Risperidone, an anti-psychotic drug.
On 26 July 2012 the Claimant was assessed by Dr Leahy, an NHS psychiatrist who provided specialist care at the IRC. Dr Leahy recommended that the dosage of Risperidone be increased and noted that the Claimant may need in-patient assessment.
On 27 July 2012 the Claimant was released from detention with residence and reporting requirements. |
MRS JUSTICE NICOLA DAVIES:
The claimant seeks permission to appeal the Order of Deputy Master Eyre (the Master) dated 16 October 2014 dismissing the claimant's applications for permission to re-amend the Particulars of Claim and adduce expert evidence at trial. Before this court the claimant has focussed upon the issue of the re-amendment of the Particulars of Claim. In summary the grounds of appeal are that the Master failed to give adequate reasons for his decision such that neither the parties nor the court is in a position to ascertain why the Master reached the decision which he did. Accordingly the Court itself should consider afresh the issues which were before the Master. Secondly the Master's refusal of permission upon the ground that the claimant's case by way of amendment stood no real prospect of success at trial is wrong. Permission to appeal was refused by Simler J on a reading of the papers on 25 November 2014.
Background
In late 2006 the claimant and her husband incorporated a company, Denkale West London Limited, ("DWLL"). In January 2007 the company entered into two dealership agreements and a lease with the defendant, a group which manufactures motor vehicles including Fiat, whereby it became an authorised dealer in, and repairer of Fiat vehicles, and the tenant of premises in West London owned by the defendant from which it was to conduct that business. The claimant alleges that in the summer of 2006 the defendant's employees, in particular Mr Phil Norton, lied to her and her husband in relation to the prospective Fiat car dealership about which they had enquired. As a result of what are alleged to be fraudulent representations the claimant was induced to act as she did and as a result suffered loss. The claim was issued in November 2012, six years and nine months after the representations in respect of which complaint is made.
The chronology of the pleadings is as follows:
Particulars of Claim 13 March 2013
Defence 9 May 2013
Amended Defence 4 April 2014
Reply 19 September 2013
Amended Particulars of Claim 28 February 2014
Revised draft Re-Amended
Particulars of Claim 21 July 2014
Disclosure has taken place, the date for witness statements has been postponed by reason of these applications, the trial is set down for June 2015.
Following a change of solicitors and counsel in 2014, the claimant sought permission to re-amend the Particulars of Claim. The proposed amendments may be divided as follows:
i) amendments which are described by the claimant as being "general introductory" or amendments which are said to better particularise the existing claim;
ii) amendments which the claimant describes as seeking to "articulate the case in a different way in respect of "PARC" data and to advance a new case in respect of information relating to Alfa Romeo;
iii) amendments in respect of loss.
The Master refused permission in respect of all the amendments, the claimant pursues the application for permission in respect of all the amendments save those in relation to Alfa Romeo and one point in respect of loss.
The Order of the Master
In the Order dated 16 October 2014 the terms are set out and under the heading "REASONS" are ten paragraphs. The first three summarise the background and paragraphs 4 to 10 are as follows:
" 4.The claimant now seeks to re-amend her Particulars of Claim, Counsel contending that the proposed adjustments simply clarify her present allegations and that it would be wrong to subject the proposals to detailed scrutiny, that being the function of the trial.
5. The Defendant objects that the proposals call for a scrutiny that is at least to a degree detailed, and that it is proper to do that, since such scrutiny will show that the re-amendments ought not to be permitted.
6. Both Counsel have provided written arguments, and, after considering both arguments, it is absolutely clear that the Defendant's contentions are without exception correct – including the contention that careful scrutiny is needed now – and that the re-amendments ought to be refused.
7. In view of the detail in the Defendant's written argument, it is unnecessary to repeat the points made, but among the high points are these:
a) Alfa – Romeo" (not relevant for this application)
b) "PARC data: These are the data relating to road-vehicles that are compiled by the DVLA. At present, the Particulars of Claim allege simply that the data provided by the Defendant were incorrect. The proposal is to abandon that allegation and to allege instead that the Claimant asked the Defendant for data that had been refined by the Defendant to produce only data relevant to what the Claimant's husband told the Defendant that she needed. The refinement was to exclude from the data the statistics for fleet-cars, since, the Claimant now insists, she was not interested in those. However:
1. The budgets that the Claimant's husband produced show clearly that the Claimant intended to deal in fleet-cars.
2. There is no trace in the documents of any warning by the Claimant or her husband that statistics about fleet-cars were nonetheless to be excluded.
3. The Claimant now says that her husband gave the Defendant such warning orally, and received the required assurance orally, yet there is no witness-statement from her husband or other evidence to support this.
c. Losses: The Claimant wants to include in the losses for which she says that she ought to be compensated by the Defendant:
1. Repayment by her of a debt to Chevrolet. However|
(A) The only documentary evidence leads to the conclusion that the debt was repaid by a third party; and
(B) There is no suggestion by the Claimant, still less any evidence, that such was not the case, or that she for example repaid the third party.
2) The Claimant also wants to include losses resulting from the closure of the dealership and her other business, yet does not care now to put forward figures for those losses, and offers merely the prospect of figures and supporting evidence at some future time. Considering how very late after the events in issue this comes, this approach is utterly unfair and improper.
8. For those reasons and the other reasons given by the Defendant, the allegations contained in the proposed re-amendment are plainly not merely untrue, but untruthful. The allegations of fraud that remain are so weak as to make the action objectionable or at least highly-suspect to the extent that it is brought in fraud.
9. It is hard to believe that the action was begun as an action in fraud in good faith. Even if it was, though, this application shows that it is most certainly not now being maintained in good faith.
10. It follows that, if there were a future application for striking - out or a stay, this action would be vulnerable".
Prepared for the hearing before the Master were clear and detailed skeleton arguments on behalf of the claimant and the defendant. The detail of the defendant's case was set out in 59 paragraphs and no one reading it could have been in any doubt as to the case which the defendant was placing before the court. Further, witness statements from the claimant, Arun Chauhan, her solicitor, Richard Manyon, the defendant's solicitor and the report of Sidney Hopper the claimant's proposed expert were before the Master and this court.
On 22 December 2014 Simler J refused permission to appeal, her reasons were as follows:
"(i) I am not satisfied that the appeal would have a real prospect of success or that there is any other compelling reason why the appeal should be heard."
(ii) The proposed appeal concerns a refusal to allow re- amendments to a claim based on fraudulent misrepresentations alleged to have been made in June 2006, which was not listed until May 2013; and a refusal to permit expert evidence to be called. The Appellant has had many years in which to consider how she wished to put her case. Far from simply clarifying already pleaded matters, the re-amendments represent a substantive change to a number of aspects of the claim, and there is no compelling reason why these matters were not pleaded earlier.
(iii) There was accordingly a heavy onus on the Appellant to persuade the Deputy Master that the re-amendments had real prospect of success; and that the expert evidence should be permitted in the circumstances.
(iv) Following detailed consideration of the documents in the case (disclosure having been completed) and lengthy argument on both sides, the Deputy Master was entitled to conclude that the Appellant did not discharge that onus in circumstances where the re-amendments were either inconsistent with or contradicted by contemporaneous documents; or unsupported by the evidence and so amounted at best to self-serving speculation. It followed from the refusal to permit the re-amendments that there was no basis for allowing the expert evidence to be called.
(v) The judgment as a whole contains sufficient reasons that make plain the principles on which the Deputy Master proceeded and explain why he reached the impugned decisions.
(vi) The conclusion reached by the Deputy Master that each of the proposed amendments still relied on, did not stand a real prospect of success at trial, is not arguably wrong. Nor is there any basis for concluding that there was an improper exercise of discretion in this case."
The claimant's application – proposed amendments
Background/Further Particulars of the claimant's existing case
The background amendments e.g. first and final sentences of para 2A and para 2C, the content of contemporaneous documents (para 4A); the information and data which the claimant contends must have been available to Fiat and its employees (para 2F) are said to do no more than provide further information. As the judgment contains no explanation for the Master's refusal to allow these amendments it is said to be difficult to understand what if any reasoning he applied to them, in any event there are no proper grounds for concluding that these amendments did not stand a real prospect of success.
The amendments said by the claimant to further particularise the existing pleaded case relate to:
i) The position in relation to warranty work (para 6,17(2))
The original pleading raises a claim based on the premise that the proposal put to the claimant and her husband was on the footing that the dealership they were to take on was "to retain the warranty work within the postcode allocated to the dealership". It is said that the claimant's complaint has always been that limited warranty work went to the dealership in part because of the agreement with Addison Lee. (para 17 (2)). The amendments sought alleged that the relevant individuals at Fiat knew of the relevant agreement (paras 2E, 2G) add a cross reference to an existing paragraph of the Pleading (8B), make clear the nature of the claimant's case as to the existence of the relevant agreement (paras 17 (2) (iii), (iv)) and "adequately" particularise the allegation of deceit (para 18(B)).
ii) The representation that an "average dealer within the area would obtain £800 - £900 unit retail (para 8)
The existing pleading raises a claim based upon the allegation that the profit per unit figure given was wrong. (paras 8, 17 (3)). By way of amendments the claimant seeks to allege that the relevant individual at Fiat knew of the competition which the dealership faced (para 2(F)) and refers to a contemporaneous internal Fiat document stating that the previous franchisee had concluded that the site was "not viable" (paras 4A, 17 (3) (iv)). Further particularisation of the allegation of deceit is set out at paragraph 18 C.
iii) The fact that a flagship dealership was opened in Wigmore Street in March 2008.
It is the claimant's case that the defendant had been aware of the opening of a new flagship dealership in Wigmore Street, a fact not disclosed to her. The amendments seek to allege that the relevant individual at Fiat knew of the proposed opening of the site (2E) plead more fully the claimant's case as to timing of the opening of the site (para 17 (4) (ii)); sort out more clearly the legal basis of the claimant's case (para 17 (3) (iii)) and adequately particularise the allegation of deceit (para 18 D).
The "PARC" amendments.
Prior to the agreement being made the defendant supplied the claimant and her husband with "PARC" data in relation to the dealership. In the original pleading the claimant contended that the data was "wrong" (para 17 (2)). It is now said that the existing pleading fails to set out the true nature of the claimant's case and what the claimant now seeks to allege in summary is as follows:
1. A prospective motor dealer, in order to consider the position, needs to establish the number of cars the dealership may be expected to service and to do this he needs the serviceable car park figure. This must have been appreciated by the defendant's business development manager, Mr Norton;
2. A manufacturer such as Fiat must have a substantial amount of data relating to its dealership network and performance ordinarily include customer data split into retail, business and fleet users. Thus the data required to conduct the data analysis was data which the defendant would have ordinarily had;
3. Mr Gill by email in June 2006 sought data to enable him to "see if it is viable for me to operate". It is said that can only be understood as meaning data upon which he could base projections not the "raw" PARC data;
4. Mr Norton supplied, without qualification a document showing a PARC figure of 8,854. The claimant's case is that this could only be understood as being a figure excluding the fleet registrations however, that figure included the fleet registration;
5. It is now alleged that during a telephone conversation on 20 June 2006 Mr Norton provided express confirmation that the 8,854 was useable for forecasting purposes in respect of "service figures";
6. As the quoted figure included fleet registration the claimant now alleges that the projections based on that figure proved inevitably to be wrong. The amendments are set out in paras 2B, 2D-F, 5A, 6A-D, 7, 8, 8A, 17(1), 18 A of the draft Re-Amended Particulars of Claim.
The claimant criticises the reasoning of the Master in refusing the PARC amendments upon three bases: i)It is said that the Master appears to have concluded that the fact that the claimant and Mr Gill were interested in fleet sales also meant that they wanted data including fleet data for service projections. The claimant's evidence supported by her expert explains why these are two separate matters, evidence with which the Master failed to engage. It is said that the dispute was one which could not be properly resolved short of trial. ii) The Master appears to have considered that the fact that no warning was given in the documents by the claimant and Mr Gill that they would rely upon such figures meant that the claimant's claim could not succeed. The absence of a legal warning is legally irrelevant and the Master was wrong to take it into account. iii) The Master apparently concluded that an account of a conversation between an employee of the defendant and Mr Gill was incapable of belief. That is said to be a conclusion not open to the Master it having being admitted on the pleadings that a conversation took place on the day in question although contradicted in evidence before the Master by the defendant's solicitor. The issue being precisely what was said. It is the claimant's case that in the absence of any contemporaneous note or record of what was said the issue cannot be resolved without a trial and it was wrong of the Master to try to conclude that the account of the conversation given by Mr Gill was incapable of belief.
Loss
The claimant sought permission to amend paragraph 20 of the Particulars of Claim so as to reduce the amount claimed under certain heads of loss and add further heads of loss. In relation to the first three heads of loss (paras 20 (1) - (3)) which sought to reduce the quantum of the claim, the Master gives no reasons for his refusal of permission. As to the addition of further heads of loss (paras 20(5)-(7)) the Master's decision was premised on the fact that the claimant had not provided further particulars and/or evidence in support. The Master wholly failed to have regard to the fact that the qualifications and particularisations of these claims required expert accountancy evidence. It was unrealistic to expect the claimant to go to the expense of obtaining that evidence before permission to amend was granted and in any event for the purpose of a pleading what was before the court was adequate.
Aside from the particularity of the criticism raised in respect of specific amendments counsel on behalf of the claimant criticised the Master for giving his decision at the end of a full day's hearing. The reasons were provided at a later date. It is said that the Master had not had sufficient time to properly consider and reflect upon the decision he was to make. Further criticisms were made of the Master which it is not necessary to repeat in this judgment save to say that they bordered on the personal and came perilously close to rudeness.
Conclusion
At paragraph 1 of the Particulars of Claim the claimant is described thus:
"The claimant is an experienced business woman in the motor trade. She graduated in Chemistry and joined Tesco's graduate programme after leaving university in 1993. In 1997 the claimant left Tesco to join Hyundai Cars UK, in 2001 she moved to Renault Retail Group as commercial development manager and in early 2004 the claimant joined Denkale Limited full time."
It was the claimant who signed the Statement of Truth at the end of the Particulars of Claim and the Amended Particulars of Claim. In February 2014 the Amended Particulars of Claim had been completed. It contained none of the radical amendments seen in the draft Re-Amended Particulars of Claim, which is 17 pages in length as compared with 7 pages of the original pleading, 22 new paragraphs are included together with amendments to half of the paragraphs which have survived from the Amended Particulars of Claim. The changes go far beyond particularisation and clarification and include new and substantive allegations. For the purpose of this application the substantive applications relate to the PARC data and the additional claims of loss.
PARC data
It is obligatory to register with the Government every vehicle at a particular address. This information is retained and made available to the public free of charge. The information includes the make, model, age, engine capacity of the vehicle and the address of the registered keeper. Companies collate the data and sell analyses of it in differing levels of detail. The claimant's original claim was that Mr Norton had provided Mr Gill with erroneous figures as to the number of Fiat vehicles in the dealership's postcodes (Amended Particulars of Claim paras 7, 17 (1)).
The definition of "PARC" was set out in paragraph 5 of the Particulars of Claim as follows: "PARC refers to the number of (Fiat) vehicles registered within the dealership's postcode and the age of the vehicles". No issue was taken with the definition in the Defence. At the first CMC in October 2013 the claimant provided a case summary dated 29 September 2013 paragraph 2 of which read "PARC refers to the number of (Fiat) vehicles registered within the dealership's postcode and the age of the vehicles". At the next CMC in February 2014 the claimant produced another case summary which contained the identical wording. At that hearing the court gave permission to the claimant to amend her Particulars of Claim paragraph 5, which stated "PARC refers to the number of (Fiat) vehicles registered within the dealership's postcode and the age of the vehicles". The Master also directed a hearing in April 2014 for the claimant's application for forensic examination of a laptop. Prior to that hearing the claimant circulated another case summary with the same wording as the first two drafts in relation to the PARC data. On 7 April 2014 the parties jointly instructed a company to carry out a forensic examination of a computer belonging to one of the defendant's employees. A copy of the joint letter of instruction states "Mrs Gill alleges that the PARC figures provided by the Defendant were inaccurate. Please refer to the Amended Particulars of Claim and the Defence for full details of this issue".
The issue of PARC data was also of relevance in the context of a proposal for expert evidence. On 27 September 2013 the claimant's solicitors sent a letter including a draft order with a proposal for expert evidence. Under the terms of the order the role of the expert was to "review vehicle PARC data for the relevant location…. analyse and summarise the raw data… [and] consider distortions between the PARC figures provided and the actual circumstances prevailing". The same formulation was repeated in a draft order sent by the claimant's solicitors on 3 October 2013. In the covering letter to the draft order the claimant's solicitors explained the role of the expert as they perceived it as being: " the PARC figures consisted of complex data which requires the analysis of a specialised expert in the particular field of the automotive dealership trade, as well as experience in accounting… our client relied upon the PARC figures provided by your client and accordingly the figures will need to be assessed by an expert in order to evaluate their accuracy and whether they truly represented the market position at the time".
The claimant's solicitors circulated a further draft order seeking permission for the claimant to adduce expert evidence on 19 February 2014. This draft used exactly the same formulation relating to PARC data as the earlier drafts save that it also provided that the expert would "consider the accuracy of any representation made by the defendant in relation to the PARC data". In fact the claimant did not seek permission to rely on expert evidence at the hearing because of difficulty in obtaining a draft report. The claimant's solicitor prepared a witness statement for the hearing exhibited to which was an email from the claimant's proposed expert Mr Lewis of 24 February 2014 which stated: "We have undertaken an initial review of the [PARC] data. On the basis of this initial review it is not clear that the PARC data was necessarily inaccurate. Rather, it would be necessary to consider how this data was used by your client [the claimant] developing its business plan and any specific representations made by Fiat regarding the PARC data". The point relied upon by the defendant at the hearing before Master Eyre was that the proposed expert did not question the nature of the PARC data or suggest that this was not in fact PARC data as generally understood within the motor trade.
The change in the approach of the claimant to PARC data first appeared in the witness statement of her new solicitor Mr Chauhan dated 16 May 2014 when he stated at paragraph 13 "It is important to understand what the expression "PARC" or "Parc" data means in the motor industry in respect of dealer site acquisitions. I am told by the Claimant and Mr Gill that the expression "PARC"/"Parc" is always understood as meaning not simply the total number of vehicles of a particular marque, but that total figure less registrations unlikely to be of relevance to the trade of the dealership in question. For example vehicles registered in the names of large fleet customers, lease companies, and rental companies would be removed. This is because such vehicles are most unlikely to generate business for a dealership. For example, a small electrical firm with two or three vans might well use the services of a dealership whereas a large business (EDF Energy) would be most unlikely to".
In the second witness statement of Richard Manyon dated 30 May 2014 the defendant's solicitor referred to the PARC data provided to the claimant's husband by the defendant on 20 June 2006. This showed that the total market for new vehicle sales in the postcode around Hayes for 2004 and 2005 was broken down into business, retail and fleet sales. On the documentation relating to the 2005 figures it is clear that the number of Fiats sold was identified. It was therefore apparent from the data sent by the defendant that both fleet and retail vehicles were included. Further, Mr Manyon stated, the claimant and her husband acknowledged that the fleet trade was as shown in the PARC data and this would be an important and relevant consideration in their proposed business when on 9 October 2006 the claimant emailed the defendant stating: "fleet in the area contributes just over 80% of registrations and this is the key to pump registrations into the area".
In the same email Mr Gill refers to a dealer who had worked with the claimant when she was at Renault and who was familiar with the fleet market and customers. Mr Manyon states that this demonstrates that fleet deals were an important part of the plans which the claimant and her husband had for the new dealership, they were aware that fleet vehicles constituted a substantial proportion of the vehicle PARC within the Hayes postcodes and were basing their business plans on this information. It follows, and so Mr Manyon asserted, that Mr Chauhan's contention that the claimant believed that the PARC data provided excluded fleet vehicles was not sustainable. It is therefore of note that when the draft Re-Amended Particulars of Claim dated 21 July 2014 were provided to the defendant the claimant's new explanation as given to Mr Chauhan was no part of that draft.
The significant change to the claimant's case in respect of PARC data as now contained in the draft Re-Amended Particulars of Claim is contained in paragraphs 5A(5), 6A-C. It is now alleged that when Mr Gill asked for "vehicle Parc" data he was in fact asking for the number of Fiat cars (not vehicles) excluding registrations of Fiat cars and any other cars which were "unlikely to be of relevance to the after sales trade of the dealership in question". Further it is alleged that Mr Norton knew not only that that is what Mr Gill meant but also that he knew what was not likely to be of relevance to the Gill's proposed dealerships.
It is the claimant's contention that it is the fault of her former solicitors that this case was not pleaded before. This is difficult to accept. The issue is one of fact. The claimant is described in paragraph 1 of the original pleading as an experienced business woman in the motor trade. She signed the Statements of Truth on the Particulars of Claim and the Amended Particulars of Claim. Given the claimant's proven intelligence and the knowledge and experience gained during the course of her career she would have been in a better position than many to understand and explain the meaning of 'Parc' data and give appropriate instructions to her solicitors.
Nothing better demonstrates the tactics of the claimant than her attempted shift of position in May 2014 when instructing Mr Chauhan as to a new interpretation of PARC data. By this time the claimant's expert had not provided unequivocal support for the claimant's original case upon the accuracy of the Parc data. The second interpretation was given in Mr Chauhan's witness statement. When this explanation was comprehensively negated by the defendant's solicitor, who relied upon contemporaneous documents, the claimant abandoned the second interpretation and moved onto a third which is now a part of the Re-Amended Particulars of Claim. All of this evidence was before the Master. His conclusion that the allegations are not merely untrue but untruthful and that the action is not now being maintained in good faith, is both fair and reasonable given the history of the matter as set out above. In my view an appeal upon the PARC data issue has no reasonable prospect of success, further there is no other compelling reason for this ground of appeal to be heard.
Losses
New heads of loss.
The claimant has adduced no evidence to support the new heads of loss save for her own assertions. A contention that it was not practical for the claimant to obtain expert evidence until she knew whether the proposed amendment was to be allowed carries little weight given the time which the claimant has had to bring proceedings and the dearth of other evidence relating to loss. The reasoning of the Master upon the issue of loss identifies the relevant issues, his conclusion is not arguably wrong, an appeal stands no reasonable prospect of success, there is no other reason to grant permission.
The general allegation that the Master's reasoning cannot be identified is without foundation. The Master's reliance upon the defendant's clear and detailed skeleton argument together with his own reasoning enables the court to understand what he did and why.
Remaining proposed amendments.
It is clear that what the Master did in determining this application was to address particularly contentious proposed amendments and thereafter consider the application as a whole. This was an approach which it was open to this experienced Master to take. He did so in the context of the history of these proceedings which included the issue of a claim alleging misrepresentations made over six years prior to the issue of proceedings and the fact that, Amended Particulars of Claim had been issued just some months before this application. The claimant had ample time to consider, formulate and plead her claim. No good reason was before the Master or this court as to why these amendments were sought at such a late date. In the circumstances the decision of the Master was neither wrong nor unreasonable. An appeal stands no reasonable prospect of success. There is no other compelling reason why the appeal should be heard given the age of these proceedings and the history of the claimant's case. Accordingly this application is refused. The issue of the proposed expert evidence was dependent upon the application being allowed. |
MRS JUSTICE PATTERSON:
This is an application by the claimants, Harlow District Council and Essex County Council, for an interim injunction under section 222 of the Local Government Act 1972 and 187B of the Town and Country Planning Act 1990 against 35 known defendants and persons unknown.
From 8 October 2013 members of certain traveller families have come to Harlow district. Predominantly they are members of the McGinley and Stokes family, but they are not exclusively from those family groups. The pattern has been for the families to establish themselves in one encampment, the local authority and police then take action against them, move them on, the encampment disperses and then re-appears in another part of the district and then the process starts over again.
Over the last 17 months numerous attempts have been made through the use of other powers, but in particular, the Criminal Justice and Public Order Act 1994 to move the families on, but all attempts have failed. In total, I am told that there have been 109 encampments to date within the district of Harlow. The encampments have taken place on a mix of public and private land. At times there have been encampments of up to 280 people in 69 caravans with associated vehicles and animals, including dogs and horses. None of the encampments has had planning permission, nor has it been the subject of any application for planning permission.
Elizabeth Fitzgerald, the Planning and Development Manager of the first claimant, says in her witness statement that none of the pitches which have been used as encampments are suitable or fit for long-term occupation. She sets out in her witness statement the position with regard to the development plan and gypsy and traveller accommodation needs. It is accepted that the council is required to make provision for gypsy and traveller accommodation within the district, but at present there is a policy void on that particular issue. A recent assessment of need has been undertaken in 2014 by Opinion Research Services on behalf of the Essex Planning Officers' Society entitled 'Essex Gypsy and Traveller and Travelling Show People Accommodation Assessment'. That was compiled in July 2014 with an update report in September of last year. The document identified a need for 25 additional pitches within the district by 2033, with nine of those required by 2018. The first claimant is working with the second claimant with a view to bringing 10 currently dilapidated and unused pitches back into use and looking at the potential sale of land for the use of private pitches. The delivery of those 10 pitches will satisfy, it is said, the claimants' unmet need in 2018.
Ms Fitzgerald's witness statement continues, in paragraph 12, as to the various matters that have to be had regard to in determining applications for traveller signs. In particular, they include the existing level of local provision and need for sites, the availability or lack of alternative accommodation for the applicants, other personal circumstances of the applicant, and the locally specific criteria used to guide the allocation of sites in plans or which form the policy, where there is no identified need for pitches and plots, to assess applications that may come forward on unallocated sites. The Local Planning Authority should determine applications for sites from any travellers and not just those with local connections.
Ms Fitzgerald repeats that there have been no planning applications submitted by the groups of travellers since October 2013. She records that the defendants have been advised to contact the Essex Countywide Gypsy and Travel Unit with a view to discussing the merits of pitches within Harlow or making alternative arrangements with bordering the district which may be suitable. She is aware that certain meetings have been with certain of the defendants and that certain of them have, in fact, pitches elsewhere in the country, in particular in Barnsley and in Stoke.
The sites occupied to date are highway verges, grass verges, schools, enterprise zone land or public amenity land. None of those are considered to be appropriate sites for either permanent, transit or temporary gypsy and traveller pitches. In particular, Ms Fitzgerald says that they prejudice the short and medium term use of the land when it is recreational land allocated recreational use by members of the public.
Her witness statement went through the various criteria which have to be addressed and concludes that, first, in terms of the current provision within the district the council has means in hand which should enable it to deliver appropriate sites by 2018. In terms of the availability, or lack of, alternative accommodation for the applicants, she sets out that she is not aware of the defendants (or any of them) endeavouring to find any alternative suitable locations within the district. In so far as any other personal circumstances of the applicants are concerned, she has not been advised of any personal circumstances on the part of the group of defendants that would override normal planning considerations.
In terms of the locally specific criteria used to guide the allocation of sites in plans there is nothing which indicates that it would be appropriate to grant permission on sites which have hitherto been occupied by the defendants.
So far as the other criteria are concerned:
(1) Promotion of peaceful and integrated coexistence between the site and the local community.
She sets out that as can be seen from other statements (to which I will refer shortly in this judgment) the actions on the part of the defendants have created substantial discordance with the settled traveller and non-traveller community, such that it is unlikely that a peaceful and integrated coexistence could now be created.
(2) In terms of collaboration with health services and access to appropriate health services.
Given the size of Harlow and ease of access from within the core of the settlement to health facilities, access would be readily available to such services if located on an authorised site with a postal address.
(3) To ensure children can attend school on a regular basis.
Given the size of Harlow and ease of access from within the core of the settlement to educational establishments, access is readily available from any authorised site with an established postal date.
(4) To provide a settled base that reduces the need for long distance travelling and possible environmental damage.
She understands that the defendants have settled bases elsewhere, to which I have already referred, and have not been looking for a settled base in Harlow.
(5) To provide for proper consideration of the effect on local environmental quality and on the health and well-being of any travellers that may locate there or on others as a result of the new development.
She says that the current locations being used by travellers are entirely at odds with that requirement cited as the pitches have been, often on the roadside, adjacent to main thoroughfares where the quality of environment is exceptionally poor.
(6) To avoid placing undue pressure on local infrastructure and services.
She says there that, subject to being provided in the appropriate location within the district a lawful development will not have any detrimental effect on local infrastructure.
In her statement she continued and dealt with the issue of flooding, which is not relevant in the current circumstances. To the extent that traditional lifestyles can contribute to sustainability that, she comments, can be dealt with on appropriate sites. As a result, she concludes that the existing use of land which has occurred is an unauthorised use of land and a breach of planning legislation.
The consequences of the unlawful encampments on the part of the defendants have been five-fold so far as the claimants are concerned.
(1) Human excrement has been left at each site. The known defendants have been asked why they have not been able to use the toilet facilities within each of their caravans and their replies have been consistent, namely, it is dirty to do so. The consequences of that approach, as graphically revealed in the photographic evidence before the court, is a volume of raw excrement left at each encampment site. As Mr Pitt, the current acting Head of Environmental Health Services Environment and Licensing Manager with the first claimant, sets out in his witness statement, such an accumulation of untreated faeces is prejudicial to human health. Not only is there raw excrement, but excrement has been left in socks and on toilet paper which has been deposited at the encampments. As the encampments have been at or close to school sites, children's play areas and other recreational areas certain such sites have had to be closed whilst the equipment and the area is cleaned and restored to a condition where it is safe for the public to use. On some occasions owners taking their dogs out for walks have had their dogs come back covered in human faeces, thereby imposing a requirement to clean up their pet upon their return home.
(2) On each occasion when the encampment has moved on large amounts of rubbish have been left behind. Sometimes that has included LPG cylinders which, both when used as part of the encampment and subsequently being left, are a risk to public safety according to evidence submitted by the fire officer. At one stage a LPG cylinder was in use in a public space proximate to Passmore School exhibiting a clear risk to public safety. Photographic evidence shows the volumes of rubbish left behind. Sometimes it is stacked up in significant amount clearly impeding the enjoyment of the public of areas of public open space and exposing them to risks.
(3) The encampments have caused damage to land. Again, there is voluminous photographic evidence of fields churned up by muddy tyre tracks, evidence of fires and deposit of litter and damage to gate posts as the defendants have forced their way on particular occasions onto new sites.
(4) Many is the time, according to Ms Ridgley, the Community Safety Team Manager of the first claimant, that the first claimant has done works to prevent entry, such as by the erection of bollards and security of fencing to prevent access to a likely traveller site only to have their effects literally ripped up as the defendants have entered onto the site and taken possession of it.
(5) As a consequence of the above, there has been growing community tension. That has resulted in many complaints to the first claimant, activity on social media and a march planned and organised for the 14th of this March 2015 entitled 'Get Travellers out of Harlow'.
(6) A significant practical example of the difficulties caused by the defendants is the problems that their encampment caused at Fresh Start Independent School. That is a school which caters for young people with behaviour, emotional and social difficulties. It provides education for children of the County of Essex with significant educational needs. All of its pupils are statemented, many with autism and hyperactivity disorder, with anger difficulties and a history of offending behaviour. The head teacher had to close the school on 13 October 2014 for one day due to an unauthorised encampment setting up on the hard-standing inside the entrance to the school and again on 11 December 2014, four days early for the Christmas holidays, because of another encampment adjacent on the old Passmore School site, which was disruptive to the vulnerable children at the school as well as the problems caused by human excrement, the use of LPG cylinders, both of which I have referred to earlier.
(7) Photographic evidence of the encampments or the condition shortly after the encampment has moved on at the Greyhound Car Park, Cold Harbour Road, Staple Tower as well as the old Passmore School paint a vivid picture of the impact of the defendants' activities.
In addition, there have been complaints to the first claimant about the antisocial behaviour on the part of the defendant. The presence of loose, untethered and aggressive dogs, abandoned horses, noise from generators, loud music and nuisance caused by children, vans driving and parking on public footpaths, cycle tracks and public open space have all caused complaints from ordinary members of the public. Despite a concerted effort involving the police and the local authority acting in accordance with their agreed protocol and applications to court for eviction of the defendants, their behaviour of moving onto a different site within the district and starting all over again has remained with no sign of it ceasing.
All of the defendants have been offered a Bricks and Mortar Assessment by the Housing Operations and Advice Manager. None have taken that up.
There is within the District of Harlow a push to increase employment opportunities as a result of the designation of an enterprise zone. The Head of Regeneration within the Enterprise Zone speaks in his witness statement of the deleterious effects of the encampment on the prospect of attracting new businesses and jobs. Certain of those with whom he has been developing business contacts have written to complain about the effect of an encampment upon the prospect of further development within the administrative district of Harlow.
As a result of all of the above the Head of Governance took the decision on 22 January 2015 that it was expedient for the promotion and protection of the interest of the inhabitants within the area of Harlow to institute the current proceedings.
All of the defendants have been served in accordance with the ex parte order obtained from Walker J on 20 February 2015. I am satisfied that all have been duly served and appropriate steps have been taken in relation to those persons unknown. None have attended court.
The submission made by the claimants is that, in these circumstances, it is expedient to grant a district wide injunction. Harlow District is small; it is some 11.69 square miles. A plan before the court showing the previous encampments illustrates them scattered across the district.
It is, of course, a matter of fact and degree as to whether a district wide order, as is sought, is proportionate. I have no doubt, as a result of the circumstances which I have set out, that the order sought is both necessary and proportionate. First, there has been a clear breach of planning control for some 17 months and it is reasonable to apprehend further breaches should no further action be taken. Second, persistent efforts by the public authorities to deal with the problem by other means have failed. Third, the approach of the local authority hitherto has been expensive to the public purse, both in terms of money, but more significantly in terms of time spent without any visible change to the behaviour on behalf of the defendants. Third, the consequences of the unlawful behaviour and breach of planning control are not conducive to the best interest of the other law abiding residents within the district.
It is clear from the evidence before the court that there are no children with particular needs, nor any other circumstances on behalf of the defendants that could outweigh the necessity for the order which is sought. As I have indicated, in my judgment the order sought is both necessary and proportionate.
As a result, in the circumstances the balance of convenience lies, in my judgment, heavily in favour of the grant of the injunction required and requested, which I so order. |
Mrs Justice McGowan :
This is an application for permission to appeal a decision of His Honour Judge Denyer QC sitting in the County Court in Bristol. The parties were ordered by Dingemans J to prepare for the appeal even though permission was not granted. This hearing has proceeded, as an effective appeal, on that basis.
On 22 September 2014 His Honour Judge Denyer QC gave judgment striking out paragraphs 10-12 of the Appellant's defence which purported to raise an Article 8 argument.
The Facts
The Appellant, Matthew Jones, owns and lives on a boat called "The Mrs T". The boat is currently moored on the Kennet and Avon Canal, ("the canal").
The Respondent is the Canal and River Trust, ("the trust"). The trust is the navigational authority for the canal. It manages the internal waterways, under a statutory duty. It is a public authority and the successor of the British Waterways Board. The trust is not a housing authority.
As part of its management responsibility the trust grants licences to those who wish to use boats on the waterways. One form of licence is a "Home Mooring", which allows a boat to be kept on a fixed mooring. Another form of licence is a "Continuous Navigation Licence". This, as the name suggests, requires the holder to move his boat through a certain distance over a certain period of time. The Appellant only held a continuous navigation licence. Amongst the factual disputes in this case will be how far and how often the appellant moved his boat.
The trust contends that it has lawfully terminated the Defendant's continuous navigation licence. It has brought proceedings for declaratory and injunctive relief. It submits that it is entitled to remove the boat from the waterway and to prevent its return.
The Appeal
The Appellant sought to add to his defence the argument that the Trust did not properly, or at all, consider his housing needs in reaching the decision to terminate his licence. The learned Judge was asked to consider, as a preliminary issue, whether the Article 8 argument should be struck out as it was bound to fail. Article 8 sets out the right to respect for private and family life, in particular in relation to the provision of social housing,
1. Everyone has the right to respect for his private and family life, his home and his correspondence.
2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
This appeal raises one principal and two subsidiary issues,
i) Did the learned judge err in adopting the same approach as that adopted in cases where a breach of Article 8 was alleged in cases of social housing against public authority landlords,
ii) Did he err in deciding that to require the trust to substantiate the proportionality of their decision to terminate the appellant's licence would impose too great a burden on the trust and
iii) Even if that approach was correct did the judge err in finding that the Article 8 point was not seriously arguable, given its potential relevance to any relief sought.
The Decision
As a public body which is not a housing authority, the trust cannot owe any duty to the Appellant in relation to his housing needs under Article 8. Accordingly any test to be applied to a local authority housing department would not apply and no proportionality argument, however it is to be determined, can arise.
Nonetheless the learned Judge went on to consider whether the Article 8 point might raise a triable issue. In an ex tempore judgment the learned Judge determined that the trust could not be expected to investigate or deal with the Appellant's Article 8 rights as the burden imposed would be too great. In argument, in the original hearing and in this court the series of authorities distilled in the decision of the Supreme Court in Pinnock [2010] UKSC 45 were cited.
I have considered those authorities and it will not assist the parties for them to be recited here. Of greatest guidance to local authority landlords in Article 8 cases is the series of seven principles laid down by Etherton LJ, as he then was, in Thurrock Borough Council v West [2012] EWCA Civ 1435.
The reasoning of the Judge in the County Court in considering whether there was a need for a more structured approach cannot be faulted, even if it is based on a generously wide view. In concluding that the point could not be sustained he applied a correct interpretation of the authorities and principles. It may be that he encouraged false hope by suggesting that the competing arguments were "finely balanced". They are not. The appeal is dismissed. |
Mr Justice Dingemans:
This is the hearing of a claim by the Claimant, Ali Babitu Kololo ("Mr Kololo"), against the Defendant, the Commissioner of Police of the Metropolis ("the Commissioner"). Mr Kololo claims that the Commissioner has wrongly refused a data subject access request made pursuant to section 7 of the Data Protection Act 1998 ("DPA"). The Commissioner claims that Mr Kololo's request is an abuse of process because it is said to be an improper attempt to use the DPA to circumvent provisions of the Crime (International Co-Operation) Act 2003 ("CICA") and says that the Court should in any event, as a matter of discretion, refuse to order compliance with the request.
Background
On 11 September 2011 David Tebbutt was murdered at the Kiwayu Safari Village Resort in Kenya and his wife Judith Tebbutt was kidnapped and taken to Somalia. Mrs Tebbutt was released in March 2012. It was alleged, and Mr Kololo denied, that he had directed the Somalian kidnappers to the place where Mr and Mrs Tebbutt were sleeping. Mr Kololo was arrested on 11 September 2011.
As the incident involved the murder and kidnapping of British nationals the Metropolitan Police Service deployed police officers, fingerprint and ballistics experts, and forensic scientists to Kenya. Detective Superintendent Hibberd (now Detective Chief Superintendent Hibberd) led the team and made a witness statement dated 19 June 2012 in the course of the proceedings and gave evidence at Mr Kololo's trial.
Mr Kololo was convicted after a trial at Lamu Magistrates' Court. It appears that evidence was heard on various days between 25 April 2012 and 3 April 2013. Submissions were then made by prosecution and defence and Mr Kololo was convicted on 29 July 2013 of robbery with violence and kidnapping. He was sentenced to death. The evidence shows that there is a de facto moratorium on the carrying out of the death penalty in Kenya.
Mr Kololo is appealing against his conviction and sentence on a number of grounds. The grounds of appeal against conviction include grounds that: he did not have a lawyer during parts of the proceedings; his ability to follow the proceedings was compromised because he did not have an interpreter for his language; the alleged confession evidence was inadmissible; there were issues about disclosure; and there are issues about Mr Kololo's connection to black tanga shoes which appeared to have made footprints near the scene of the killing and kidnap and which were exhibited during the trial.
As was common ground at the hearing it is not for this Court to comment in relation to Mr Kololo's conviction or grounds of appeal against conviction or sentence.
The relevant data subject access requests
Mr Kololo, acting through his lawyer in Kenya, instructed lawyers to act on his behalf in London. Data subject access requests were made to the Home Office, Foreign and Commonwealth Office and the Metropolitan Police Service ("MPS") in connection with proposed judicial review proceedings.
The Home Office and Foreign Commonwealth Office provided data pursuant to those requests but the MPS refused. The judicial review proceedings were not pursued against the MPS.
However a further subject access request was made on behalf of Mr Kololo by letter dated 4 August 2014, received by the MPS on 14 August 2014. The request sought "all records relating to Mr Kololo". The letter also made it clear that the information was required urgently because it was believed "that the information requested could prove crucial to Mr Kololo's case and be used to avoid a death sentence being carried out". The request was refused by the MPS by letter dated 11 September 2014 on the basis that it constituted an abuse of process.
This hearing was expedited because it appears that sometime later this month there will be a directions hearing in Kenya in relation to Mr Kololo's appeal. The evidence from Mr Kololo's lawyer in Kenya is that any application to rely on fresh evidence should be made at that directions hearing.
Issues
I am very grateful to Mr Turner QC and Ms Proops for their helpful submissions. I should record that it is common ground that, notwithstanding that Mr Kololo has not been to the United Kingdom, the fact that data relating to him is held by the Commissioner means that this Court has jurisdiction to order compliance with the request.
It appears that the main issues in this case are whether the making of the subject access request is an abuse of process and whether the Court ought, as a matter of discretion pursuant to section 7(9) of the DPA, refuse to direct the Commissioner to comply with the subject access request because it was made for an improper purpose.
Statutory provisions
The DPA gave domestic effect to the provisions of Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and the free movement of such data" ("the Directive"). The second Recital to the Directive recorded that data processing systems must "whatever the nationality or residence of natural persons, respect their fundamental rights and freedoms, notably the right to privacy".
Section 1(1) of the DPA defines "personal data" as meaning data which "relate to a living individual who can be identified (a) from those data, or (b) from those data and other information which is in the possession of, or is likely to come into possession of, the data controller, and includes any expression of opinion about the individual".
Section 2 defines "sensitive personal data" as including data consisting of information as to "the commission or alleged commission by him of any offence".
Section 7(1) provides that "an individual is entitled (a) to be informed by any data controller whether personal data of which that individual is the data subject are being processed by or on behalf of that data controller ... (c) to have communicated to him in an intelligible form (i) the information constituting any personal data of which that individual is the data subject, and (ii) any information available to the data commissioner as to the source of those data
Section 7(9) provides "If a court is satisfied on the application of any person who has made a request under ... this section that the data controller in question has failed to comply with the request in contravention of those provisions, the court may order him to comply with that request".
Section 14 provides that if data is shown to be inaccurate the Court may order rectification or erasure of that data.
Exemptions are provided for in Part IV of the DPA. Section 27(5) provides "except as provided by this Part, the subject information provisions shall have effect notwithstanding any enactment or rule of law prohibiting or restricting the disclosure, or authorising the withholding, of information".
Section 28 of the DPA provides certain exemptions for the purposes of safeguarding national security. Section 29 of the DPA provides certain exemptions for the purposes of "the prevention or detection of crime" and "the apprehension or prosecution of offenders".
The Crime (International Co-operation) Act 2003 ("CICA") makes provision in section 13 for overseas courts or prosecuting authorities to request "assistance in obtaining evidence in a part of the United Kingdom".
Relevant legal principles
The forty-first Recital to the Directive emphasised the right of an individual to verify the accuracy of data relating to him. In YS v Minister voor Immigratie (Cases C- 141/12 & C-372/12) [2015] 1 CMLR 18 the European Court of Justice emphasised, at paragraph 44, by reference to the forty-first Recital to the Directive that "the protection of the fundamental right to respect for private life means ... that that person may be certain that the personal data concerning him are correct and that they are processed in a lawful manner".
The European Court of Justice in Criminal Proceedings against Lindqvist (Case C- 101/01); [2004] QB 1014 emphasised that the balance between rights which might compete with data protection rights were for member state authorities to determine.
In R(Lord) v Secretary of State for Home Department [2003] EWHC 2073 (Admin) Munby J. noted, at paragraph 160, that the exercise of discretion in one case may throw little if any light on how it should be exercised in another and recorded that the applicant in that case was doing nothing wrong in seeking more information than he would have been entitled to under the common law. He referred to the discretion being "general and untrammelled'.
In Durant v Financial Services Authority [2004] FSR 28 Auld LJ, in obiter statements which it is common ground are useful, referred to the purposes of the DPA at paragraph 27 noting that the provisions enabled the data subject to check whether processing unlawfully infringed privacy but were not an automatic key to any information, readily accessible or not, of matters in which the data subject may be named or involved.
I was shown examples of subject access requests being refused as a matter of discretion where other means of requesting the documents were more appropriate, see Ezsias v Welsh Ministers (unreported 23 November 2007) and Guidance by the Information Commissioner recognising that the Courts might not always order compliance with subject access requests.
Reference was also made to R(Omar) v Secretary of State for the Foreign and Commonwealth Office [2013] EWCA Civ 118; [2014] QB 112 where the Norwich Pharmacal procedure was held not to apply where the provisions of CICA might be used. As was noted at paragraph 10 the issue in that appeal was "whether Norwich Pharmacal relief is excluded where a statutory regime covers the ground". The extensive differences between CICA and Norwich Pharmacal were noted. The approach to interpretation when considering the relationship between a statutory remedy and a common law remedy was noted in paragraph 24 of the judgment. CICA provided for ministerial discretion, national security and Crown service. This meant that there was no room for a complementary common law procedure for obtaining evidence relevant to overseas criminal proceedings.
I note that the statutory regime under the DPA was not considered in R(Omar). It was in reliance on R(Omar) that it was submitted on behalf of the Commissioner that this subject access request amounted to an abuse of process and should be refused.
Evidence relating to the subject access request and findings on the purposes for subject access request
Mr Kololo made a witness statement dated 21st February 2015 in which he acknowledged at paragraph 6 that the most important thing for him at the moment was his ongoing criminal appeal against conviction and his death sentence but he continued that "I want to know what information the Metropolitan Police hold on me and what they are doing or have done with it. I want to know who they have shared it with and for what purpose. I worry about the way in which they have used or may use the personal information they collected on me Mr Kololo also went on to say that he had been told that he might be able to apply to Court to stop the Metropolitan Police from doing something with the material which might cause him or his family damage or distress.
It is apparent that Mr Kololo's principal aim is to have a response to his subject access request in the hope that it might provide him with material which might be used for the purposes of his appeal. That much is apparent from the request for expedition. It is also apparent that his evidence about the Commissioner holding material causing him or his family damage or distress is speculative.
However, in order for any data which Mr Kololo might obtain from the Commissioner to be of any assistance to Mr Kololo on his appeal, it is likely that Mr Kololo will want to try and point to inaccuracies in the data. I should note that it is not for this Court to determine whether there any inaccuracies in the data and the Court cannot do so without having seen the data.
Exercise of statutory discretion in this case and no abuse of process
It is common ground that section 7(9) gives the Court a discretion whether to order the data processor to comply with the subject access request. This is "general and untrammelled" but it is also common ground that such a discretion should be exercised to give effect to the statutory purposes of the DPA and be proportionate.
In my judgment the making of the subject access request in this case is not an abuse of process. The decision in R(Omar) related to the use of a common law remedy where there was a co-existing and appropriate statutory remedy by way of CICA and where the common law remedy did not provide exemptions for national security and other relevant matters. The DPA makes specific provision for exemptions for national security and for the investigation and prosecution of crime, unlike the common law Norwich Pharmacal procedure. There is nothing to indicate that, in this case, CICA should be an exclusive remedy.
I should note that in this respect I have not found the reference to the provisions of section 27(5) of the DPA to provide the complete answer to the Commissioner's case that they were submitted, on behalf of Mr Kololo, to be. It was said that because section 27(5) provides that "the subject information provisions shall have effect notwithstanding any enactment or rule of law... " the doctrine of abuse of process could not be relevant because CICA was an "enactment" and abuse of process was a "rule of law" and the subject information provisions should therefore have effect. This submission is correct as far as it goes, but the subject information provisions include section 7(9) of the DPA. As is apparent section 7(9) of the DPA provides the Court with discretion to refuse to order compliance. This means that if I had found Mr Kololo's request to be an abuse of process by reason of CICA I would have refused to order compliance as an exercise of discretion.
I therefore turn to consider whether I should order compliance with the subject access request. In my judgment this is an appropriate case in which to order compliance. This is because a purpose for which Mr Kololo is making the subject access request is to determine whether there are inaccuracies in the data. This means that Mr Kololo (or his legal representatives) is making the subject access request to verify the accuracy of the data. This is so even though verifying the accuracy of the data is unlikely to be of assistance to Mr Kololo for his appellate proceedings. However if the data is not accurate Mr Kololo (or his legal representatives) may seek to correct any inaccuracies in the data. This might, depending on the inaccuracies, be of assistance to Mr Kololo for his other purposes.
It is apparent that verifying data is a proper statutory purpose from the Recital to the Directive, and in particular the forty first Recital, which was specifically referred to in YS. It is also apparent that correcting inaccuracies in data is a proper statutory purpose. This appears from the statutory rights set out in section 14 of the DPA to rectification of data. Therefore, in my judgment, ordering compliance with the subject access request in this case will accord with the purposes of the DPA. I note that the existence of collateral proceedings, in which it is proposed to use the verified or corrected data, does not, of itself amount to a reason to refuse compliance. This is apparent from, among other judgments, the decisions in YS and R(Lord).
In my judgment, given that Mr Kololo has been sentenced to death (albeit that the sentence is the current subject of a moratorium) ordering the Commissioner to comply with the subject access request is proportionate.
There is nothing in the evidence before me to suggest that the existence of CICA makes, in the particular circumstances of this case, the making of the subject access request inappropriate. It is apparent that no CICA request has yet been made, and it will take time to make such a request. There is nothing to suggest that such a request would assist Mr Kololo in verifying data.
Other matters
It was apparent that because the Commissioner had defended these proceedings on the basis that the request was an abuse of process there had not been detailed consideration of the exemptions in section 29 or other relevant exemptions. In order to ensure that proper points (if there are any) may be taken in relation to the exemptions I will, as discussed with counsel at the hearing, record that this ruling requiring the Commissioner to comply with the subject access request may be met with a refusal to disclose specific data by reference to section 29 (although Ms Proops did not think such an eventuality likely in this case) or other relevant exemptions. In such an event a further hearing may be necessary.
Mr Kololo had asked for a declaration to the effect that the Commissioner had acted unlawfully in refusing to comply with the subject access request. In circumstances where I am ordering compliance with the subject access request the granting of the declaration adds nothing to the claim, and might, at worst, be misinterpreted.
Conclusion
For the detailed reasons given above Mr Kololo's subject access request is not an abuse of process, and I order the Commissioner to comply with the subject access request made by Mr Kololo. |
Sir David Eady :
Introduction
There are before the court two libel actions brought by a French national, Bruno Lachaux, against respectively Independent Print Ltd and Evening Standard Ltd. He complains of articles appearing in The Independent and the Evening Standard newspapers, both in hard copy and online, which are very similar in content and for present purposes can conveniently be considered together. The complaint relates to publication both in this jurisdiction and in Dubai.
After a long debate, it was eventually agreed between the parties that I should determine issues of meaning on a preliminary basis, both so far as relevant to the Claimant's pleaded case (as sought in his application notices dated 5 December 2014) and in relation to the Lucas-Box meanings raised in support of the defences of truth. In any event, the early determination of meaning is increasingly commending itself to the court as a matter of case management. It will often enable issues to be narrowed for trial, promote the saving of costs and encourage earlier settlement.
It is thus necessary to set out the words complained of in each action.
The article in The Independent
In The Independent, on pages 16 and 17 of the print issue dated 25 January 2014, an article was published by Alastair Sloan headed "British mother faces jail in Dubai after husband claims she kidnapped their son". Its content is said to be defamatory and is in the following terms (with paragraph numbers added for convenience):
"(Sub-heading) Family of Afsana Lachaux claim UK is unwilling to help for fear of risking jet deal.
(1) The family of a British woman trapped in the United Arab Emirates and facing charges of kidnapping her young son have accused the UK authorities of abandoning her.
(2) Afsana Lachaux, 46, from Poplar, east London, was a British civil servant when she met a wealthy French currency dealer who she married in 2010. The couple moved to Dubai where she gave birth to their son, Louis.
(3) Four months later, the family claim, her husband became violent. They also claim he hid Louis's French passport, and refused to allow him to be registered as a British citizen. Fearing for her own safety, they say, Ms Lachaux escaped, taking Louis with her.
(4) She tried to return to the UK, but her husband secured a travel ban from a Dubai court and requested that her passport be confiscated. He also initiated divorce proceedings and won custody of Louis.
(5) Mrs Lachaux turned to the UK consulate for help. At first, says her son Rabbhi Yahiya, 26, officials referred her to a refuge for victims of domestic violence. But, he added, they didn't realise the refuge was legally bound to notify her husband once she checked in.
(6) Mrs Lachaux was forced on the run again. She again contacted the consulate and was advised to go to the police station to face charges of libel her ex-husband had brought.
(7) There she was physically assaulted by a police officer, her son claims, and Louis was denied food and water.
(8) Then in October, when his mother was meeting a friend, her ex-husband snatched Louis from her arms. She has not seen him since.
(9) Ms Lachaux's ex-husband filed a further case against her for kidnapping, and if found guilty, she could face several years in prison.
(10) Mr Yahiya says he has written several letters to the Foreign Office to no avail. 'As a family, we are disgusted with the way they have handled my mother's case,' he said.
(11) In the past year, Prime Minister David Cameron and Foreign Secretary William Hague, have made official trips to Dubai in a bid to secure a lucrative sale of Eurofighter Typhoon military jets.
(12) 'Most of our calls were never returned. They don't want to jeopardise the sale,' claimed Mr Yahiya.
(13) Rori Donaghy, director of Emirates Centre for Human Rights, added: 'The British government have failed to support Afsana, because they were seduced by the deal.' Meanwhile Nick McGeehan, Middle East Director for Human Rights Watch, said the 'UAE's laws discriminate against women', meaning 'Mrs Lachaux cannot be guaranteed a fair trial.'
(14) Mrs Lachaux's MP, Labour's Jim Fitzpatrick, told The Independent: 'The way Afsana Lachaux has been treated is appalling. As a woman in a Muslim country the authorities there have taken the word of the man as true.'
(15) A Foreign Office spokesperson said: 'We cannot interfere in the judicial process of another country. We will continue to provide consular assistance to the family'."
The article in the Evening Standard
In the print issue of the London Evening Standard dated 10 February 2014 Susannah Butter published an article under the heading "Dubai's a small place – he took Louis in an instant". There is also a sub-heading claiming "Tomorrow a London mother goes to court accused of abducting her own three-year-old. Her older son tells Susannah Butter how escaping a troubled marriage left Afsana Lachaux facing jail abroad after her ex-husband 'snatched' their child". The words also appeared in the online edition from 10 February 2014 (although referring to "today" rather than "tomorrow") and thereafter on a continuing basis. The words are complained of as defamatory (and again paragraph numbers are added for ease of reference):
"(1) Today, in a Dubai courtroom, more than 4,000 miles away from her home, a jury will decide if Afsana Lachaux is guilty of kidnapping her three-year-old son Louis from her ex-husband.
(2) The 46-year-old former civil servant from Poplar may never see her child again. Her older son from a previous marriage, Rabbhi Yahiya, 26, says: 'Unless the British Government intervenes, my mum risks going to jail for something she didn't do, after which she will be deported and lose her son. All she did was leave an abuser.'
(3) Despite being accused of kidnapping, Lachaux hasn't seen her three-year-old since October last year, when her husband allegedly took him out of his pushchair in the street. The case has cost the family a 'debilitating'£70,000 in legal fees and left 'an overriding feeling of helplessness'.
(4) The exact charges relate to Lachaux not bringing her son to a custody visit with her ex-husband, who cannot be named for legal reasons, in March 2012. But Yahiya, who works for the British Council, gives his mother's version of events. 'She didn't turn up because on previous visits she was assaulted by him in public. She told the police but they didn't want to hear it.' The allegations of domestic violence have not been tested in any court, and her ex-husband has denied them.
(5) Lachaux is originally Bangladeshi but grew up in east London, where she married and brought up Rabbhi, 26, and his 23-year-old brother. 'She rose up the civil service from local government and worked in regeneration. She was a successful, sociable, headstrong woman. I am proud of her. We liked going to Greenwich as a family.' She and Yahiya's father are divorced.
(6) In 2009 Lachaux told her children she was seeing a French man, a comfortably off avionics engineer based in Dubai. Yahiya says: 'I never asked where they met. We were glad my mum had found someone and was happy.'
(7) They married in summer 2009 in London and moved to Dubai in February 2010. 'It was a big adventure – the first time my mum had lived abroad. They were in love and planning to have a child so she was excited. Now I remember that he seemed reserved and only his brother and parents came to the wedding but at the time I didn't question it. It was a happy time.'
(8) Louis was born two months premature, in April 2010, and shortly afterwards Yahiya stopped hearing from his mother as frequently. 'We thought it was odd that she hadn't brought Louis to see us. In November we Skyped.'
(9) He recounts what he heard that day.
(10) 'She told me he had beaten her and showed me the bruises. She was crying, which I'd never seen her do before. She told me that since Louis was born her husband had become controlling. He refused to let her register Louis as a British citizen, got him a French passport and hid it with his birth certificate outside the house. The impression I got was that he didn't want her to take Louis anywhere without him. A woman can't work in the United Arab Emirates without her husband's permission so she was confined to the house. Eventually she told the police but they just said, "Go home to your husband". It's seen as the man's right to chastise his spouse there.'
(11) A year later, Yahiya persuaded her to escape. 'I went to Dubai in April 2011. We fled but couldn't leave the country because we didn't have Louis's passport.' They stayed in hotels and rented apartments but, according to Yahiya, things got worse. 'In June 2011 she was taken to Bur Dubai police station for 'absconding'. She and Louis were put in the same cell where a British man had allegedly been beaten to death by guards a month earlier.'
(12) Yahiya says she was locked up for four hours in 40-degree heat and denied food and water. 'While she was holding her one-year-old and asking why she was there, a prison guard pushed her in the face.' Although Lachaux had never been charged with any offences, her passport was confiscated by Dubai police.
(13) Her husband obtained visiting rights to see Louis, so every week Lachaux would meet him in the park. According to what his mother told Yahiya: 'Once he tried to snatch Louis and it badly bruised his head,' Yahiya alleges. 'She went to the police but they said they didn't care if she lived or died.'
(14) She went to the Dubai Foundation for Women and Children in February 2012. 'It's the only refuge in Dubai and they had a legal obligation to tell her husband where she was. She and Louis shared bunks with illegally trafficked sex workers.'
(15) In March 2012 she went into hiding and stopped the visits – it is for this that she is being prosecuted. 'I told her not to go any more. I was concerned for her.' Yahiya and his brother received an email from her husband, warning that if they went to Dubai he would report them for aiding a kidnap. She lived on the sofas of friends and 'in squalid accommodation, living off noodles' with Louis who, his brother says, is 'sharp and funny'.
(16) And then, on October 29 last year, her husband tracked her down. 'Dubai's a small place. She told me he took Louis – it happened in an instant.' Lachaux hasn't seen her son since.
(17) When she called the British Embassy to report the incident they told her that in August 2012 her husband had obtained a divorce in a Sharia court and been given custody. 'My mum didn't even know. Men can do that in Dubai. She was denied custody on claims that Louis had eczema, making her an "unfit mother".' She claimed to Yahiya that she did not know the four witnesses who testified against her.
(18) Since this began, Lachaux's family have been trying to help but the Dubai justice system has proved impenetrable.
(19) 'For three years I have been in touch with the Dubai Embassy, the British Embassy there, William Hague and the Middle East ministers. I've told them about every incident but they say they can't intervene in the judicial process of another country. Our MP Jim Fitzpatrick has been supportive, and asked David Cameron to raise my mum's case when he's been there. I've read about an Austrian woman and a Norwegian woman being raped there, and both their governments intervened. Why can't ours do anything to help my mum? Do you understand the frustration?' The Standard contacted the Dubai police for a response, and was referred to the British Consulate in the UAE. The FCO spokesman said: 'Consular staff have been providing assistance to Mrs Lachaux since 2011 including attending court hearings with her. Consular officials have approached the UAE authorities about this case and we will continue to work closely with them. However we cannot interfere in the judicial process of another country. We must respect their systems just as we expect them to respect the UK's legal processes.'
(20) Meanwhile, Yahiya awaits the court case. 'Every time I speak to my mum I try to keep her spirits up. She's still strong but her face has changed. She's so skinny and on tenterhooks the whole time. My family and I would like the British authorities to ask the Dubai government to drop her case, overturn the current custody order and return her passport so that she and her son can come home to London'."
The nature of the exercise
When called upon to determine meaning(s) in a defamation claim, a judge applies the test of the "reasonable reader" of the relevant newspaper. The exercise is thus not limited by the pleaded meanings of the parties: Slim v Daily Telegraph [1968] 2 QB 157. That is not to say, of course, that if the judge's meanings ultimately correspond in substance with those of the relevant party, he should nonetheless strive to find different words to express them, merely for the purpose of emphasising his independence.
In arriving at my own evaluation of the article's meanings or imputations, I bear in mind the guidance given in such cases as Skuse v Granada Television Ltd [1996] EMLR 278 (CA); Gillick v Brook Advisory Centres [2001] EWCA Civ 1263; Charman v Orion Publishing Group Ltd [2005] EWHC 2187 (QB), at [11]; Jeynes v News Magazines Ltd [2008] EWCA Civ 130; Waterson v Lloyd [2013] EWCA Civ 136; and Simpson v MGN Ltd [2015] EWHC 77 (QB).
The Independent: Claimant's meanings
The meanings pleaded in the Independent particulars of claim (at paragraph 7) are short and to the point, namely that the Claimant:
i) became violent towards his ex-wife Afsana soon after the birth of their son, which caused her, fearing for her safety, to escape and go on the run with the child;
ii) having tracked Afsana down, callously and without justification snatched their son back from his mother's arms; and
iii) falsely accused Afsana of kidnapping their son, a false charge which if upheld could result in her, quite unfairly and wrongly, spending several years in a Dubai jail.
It seems to me clear that the Independent article does indeed bear those meanings. They accurately in my view reflect the sting of the piece, and that emerges in particular from the passages I have numbered as (1), (3), (5), (6), (8) and (9). (I would not have added the word "callously", but it is no doubt an inference which reasonable readers are likely to draw.)
The Independent: Defendant's meanings
The defence at paragraph 6 admits the Claimant's meanings, subject to certain minor qualifications. As I understand it, the Defendant's case is, for example, that "without justification" (see Claimant's meaning (ii) above) would connote to "reasonable readers" immoral rather than illegal behaviour. The thinking is that because readers have been told that the Claimant obtained custody under the law of Dubai, they would assume that the "snatching" was lawful (even if callous and/or immoral). Yet I would have thought that a right to custody does not necessarily imply a right to self-help by "snatching". (In any event, reasonable readers in Dubai might have a different understanding on this and other points from that of readers in England and Wales.) This rather technical argument does not, however, in my judgment need to be resolved for present purposes, if at all. Looking at the matter more broadly, reasonable readers would probably think the worse of the Claimant for "snatching" the child from his mother even if it were permitted by local law.
A similar point was taken on the "falsity" of the charge of kidnapping. The Defendant submits that a reader might well conclude that the kidnapping charge was not "false" under the law of Dubai. Again, I do not believe it is necessary to pursue the point. The plain implication of the article is that the kidnapping charge, launched by the Claimant, was wholly without merit.
The Defendant goes on to plead inter alia a defence of truth in relation to somewhat differently worded defamatory "imputations". As a matter of principle, it is legitimate to take that course if the words bear an additional defamatory meaning (i.e. over and above those pleaded by the claimant) – provided there is compliance with the rule identified by O'Connor LJ in Polly Peck (Holdings) Plc v Trelford [1986] QB 1000, 1032: "Where a publication contains two or more separate and distinct defamatory statements, the plaintiff is entitled to select one for complaint, and the defendant is not entitled to assert the truth of the others by way of justification" (emphasis added).
At paragraph 9 of this defence, there are identified a number of "imputations" which are said to be substantially true. In other words, they are Lucas-Box meanings (which happen to overlap to a large extent with the Claimant's meanings). I need to sort them out, in so far as they differ at all in substance from the Claimant's meanings, in order to decide, first, whether they are conveyed by the article at all and, if so, whether they are to be classified as "separate and distinct" and thus impermissible under the rule in Polly Peck.
The principal imputation pleaded (at paragraph 9.1) is that the Claimant, who married Afsana, a British national, outside Dubai, has cynically taken advantage of Emirati law, based on Sharia, and its law enforcement system which discriminate appallingly against women in order to deprive her of custody of and access to their 3-year-old son Louis and thereby deprive Louis of the benefit of such custody and access. This passage mingles a number of themes together which need to be considered separately.
I do not quite see where the phrase "cynically taken advantage" is to be found in the article. It is not suggested, for example, that he chose the Emirati system, from a number that were available to him, specifically to disadvantage Afsana. It is difficult to see from this article what other system of law was open to him, given where the persons concerned were living. There is, moreover, no express reference to "Sharia" in the Independent article. It may (or may not) be a matter of general knowledge, but if it is external to the article one might expect to see it brought in to support an innuendo – if this were necessary to establish a particular defamatory meaning. In my view, however, it is not. Nevertheless, the Defendant is entitled to plead (and in due course prove) simply that the Claimant was content to use a system of law which discriminates against women – since that is to be found in the article and does not need to be embroidered with rhetorical phrases like "cynically taken advantage".
It is also alleged that he hid Louis' passport from Afsana and refused to allow him to be registered as a British citizen (as she requested). That is a meaning to be found in the paragraph of the article numbered (3) above.
Next, and importantly, it is pleaded that the Claimant was "violent, abusive and controlling" and that he caused Afsana to fear for her own safety. Although there does not appear to be any express reference to "abuse" in this article (unlike in the Evening Standard), or for that matter to "controlling", I believe that these imputations are to be found there nonetheless – in light of the conduct attributed to the Claimant. If it is necessary to do so, they can be characterised as "inferential meanings". It might be argued that, where violence is expressly alleged, it should not be permitted to bring in, to support a defence of truth, an arguably lesser form of abuse, since that would not be capable in itself of demonstrating violence. It seems to me, however, that it is probably right to view domestic abuse as a continuum – including such matters as verbal abuse, "controlling" and sometimes physical violence. To put it another way, I do not believe that "controlling" can necessarily be regarded as "separate and distinct" from physical abuse. It is all part of a pattern. It is to be noted, in any event, that reliance is placed on physical violence in the defence. If that part of the defence does not succeed, it would in my view be open to the Defendant to argue that other forms of abuse, if established, could still amount at least to what used to be called "partial justification": see e.g. Pamplin v Express Newspapers [1988] 1 WLR 116, and Gatley on Libel & Slander (12th edn), at 27.8 and 27.9.
Against that background, I would not rule out paragraph 9.1.2.
At paragraph 9.1.3, the meaning is pleaded that the Claimant caused her passport to be confiscated, and thus also her to be trapped in the UAE. That seems clearly to emerge from the paragraph in the article numbered (4) above. So too, the meaning that he caused her to "go on the run" with Louis is derived from paragraph (3) above. That particular point is pleaded separately at paragraph 9.1.4 of the defence, although it is already to be found in the Claimant's first meaning (set out above).
I accept that the article (at paragraphs (3) and (9) in particular) imputes that the Claimant initiated "an abduction prosecution against her which was false and which led to her facing the risk of lengthy imprisonment in the UAE": see paragraph 9.1.5 of the defence. On the other hand, it is not so immediately obvious why it is said to convey the additional meaning that custody was also obtained "on a dishonest basis". Unlike the Evening Standard article, the one published in The Independent makes no reference to eczema or to the four unknown witnesses. Nevertheless, I believe that the meaning is implicit – on the basis that the kidnapping allegation is said to be false and that this would have formed part of the Claimant's case on custody. Paragraph 9.1.5 of the defence therefore survives.
At paragraph 9.1.6, the meaning is pleaded that the Claimant "took Louis away while he was living with [Afsana] and refused to return him". The article certainly alleges at paragraph (8) that he "snatched Louis from her arms" and that she has not seen him since. The addition of the word "refused" implies that he has been asked to return the child and refused that request. The article itself does not say that (although it may in fact be the case), but the Defendant would certainly be entitled to plead and prove simply that "he has not returned him". I have no wish to quibble, but these uncertainties only arise because of the pleader's inclination to depart from the actual words and import creative paraphrasing. It has been said that libel pleaders never seem content to say that the words in issue mean what they say; and that a pyramid of insulting paraphrases has to be erected on them: see e.g. Alexander v Arts Council of Wales [2001] 1 WLR 1840, at [41]. (More usually, of course, it is the claimant's pleader who is tempted to embellish.)
At paragraph 9.2 of the defence, there is further rhetoric in the form of comment on the Claimant's conduct "as pleaded above". The Lucas-Box meanings are supposed to reflect simply the words in the article (including, of course, inferences). But the words "grotesque" and "devastating" are not there and I do not see why it is necessary to plead them. The journalist's words surely speak for themselves. I cannot see the advantage of re-writing Mr Sloan's article and seeking to prove the new version. It would have been simpler, since there seems to be no dispute about them, to adopt the straightforward meanings pleaded by the Claimant and then set about establishing their truth. If that defence succeeds, of course any interested observer may characterise the Claimant's conduct by the use of his or her own disapproving adjectives, but that is quite a different exercise from the present task of clearly identifying the factual allegations made by the journalist against the Claimant (and which accordingly have to be proved to substantiate a defence of truth).
The Evening Standard article: Claimant's meanings
I now turn to the Evening Standard article set out above.
The Claimant's meanings are pleaded at paragraph 6 of the particulars of claim, namely that he:
i) became violent and abusive towards his ex-wife Afsana within months of marrying her, beating her and leaving her with bruises on at least one occasion;
ii) assaulted Afsana in public on custody visits relating to their young son;
iii) attempted to snatch their son on one custody visit, leaving him with a badly bruised head;
iv) callously and without justification snatched their son from out of his pushchair in the street; and
v) subjected Afsana to the grotesque injustice of facing jail in Dubai for "abducting" her own child, when in truth she had only fled with him to escape the Claimant's violent abuse.
I note again the addition of "callously" and "grotesque" which do not appear in the article itself. I would not include "callously" within my own meanings, but it makes little difference. I will proceed on the basis that the context is such that the reasonable reader would infer from the journalist's description that the Claimant behaved "callously" in snatching the child. I would not go so far as to include "grotesque" – even though some readers may choose themselves so to characterise his behaviour. That is, of course, not the same as accepting that it is part of the meaning. Subject to that point, I consider that these pleaded meanings are to be found in the article, and especially by reference to the paragraphs I have numbered (1), (2), (3), (4), (10), (13), and (16).
The Evening Standard article: Defendant's meanings
The Defendant's Lucas-Box meanings are set out at paragraph 9 of the defence (again labelled as "imputations").
Paragraph 9.1 corresponds to that in the Independent defence which I have addressed above, and I do not intend to repeat the comments I made in that context. I would not include the reference to "cynically taking advantage", although there is a mention of "Sharia" in the Standard at the paragraph numbered (17) above.
Paragraph 9.1.1 refers to the obtaining of a French passport for Louis and to the refusal to allow him to be registered as a British citizen. That reflects paragraph (10) of the article.
At 9.1.2, the meaning is pleaded that the Claimant was violent, abusive and controlling and that he caused Afsana to fear for her safety. That accords particularly with paragraphs (2), (10), (11) and (15) of the article.
At 9.1.3, reference is made to his advancing a dishonest case to the effect that she was an unfit mother. That is to be found in the article at paragraph (17).
At 9.1.4, it is pleaded that the words imputed that he falsely reported her for absconding, which led to her being detained in prison in unpleasant conditions. Those allegations are to be found in paragraphs (11) and (12) of the article.
At paragraph 9.1.5, there is reference to his having caused her passport to be confiscated (by Dubai police). That is based primarily on paragraphs (11) and (12) of the article.
At 9.1.6, there is pleaded the meaning that he assaulted her during custody visits and tried to snatch Louis. That reflects paragraphs (4) and (13) in the article.
There is then introduced the allegation that the Claimant had threatened Rabbhi Yahiya and his brother that, if they came to Dubai, he would report them to the police for aiding a kidnap. That corresponds to paragraph (15) in the article.
At 9.1.8, the meaning is added that she had been caused to go on the run with Louis. That reflects especially paragraphs (2), (11), (14) and (15) of the article.
At 9.1.9, there is again the imputation that the Claimant obtained custody on a dishonest basis, initiated an abduction prosecution, which was false and which led to her facing the risk of lengthy imprisonment in the UAE. The foundation for this seems to me to lie particularly in paragraphs (1), (2), (3), (4), (11), and (17) of the article.
At 9.1.10, there is again the meaning that the Claimant took the child away while he was living with his mother and "refused" to return him. That is reflected in paragraph (16) of the article, subject to the point I have already made about "refusal".
Paragraph 9.2 of the defence corresponds to paragraph 9.2 in the Independent defence. I make the same points in relation to it.
Conclusion
Subject to relatively minor points, my findings on the natural and ordinary meanings of the articles accord with those pleaded by the parties. In the interests of greater clarity, although at the risk of tedium, I shall set out the natural and ordinary (including inferential) meanings for each article as I have found them to be. There is inevitable duplication, since I am keeping as close to the wording of the parties as I can, and the Defendant's meanings are expressed in his pleader's own words, as I have explained.
(a) The Independent
The Claimant:
i) became violent towards his ex-wife Afsana soon after the birth of their son, which caused her, fearing for her safety, to escape and go on the run with the child;
ii) having tracked Afsana down, callously and without justification snatched their son back from his mother's arms (and has never returned him);
iii) falsely accused Afsana of kidnapping their son, a false charge which if upheld could result in her, quite unfairly and wrongly, spending several years in a Dubai jail;
iv) was content to use Emirati law and its law enforcement system, which discriminate against women, in order to deprive Afsana of custody of and access to their son Louis;
v) hid the child's French passport and refused to allow him to be registered as a British citizen, as Afsana wished;
vi) was violent, abusive and controlling and caused Afsana to fear for her own safety;
vii) caused her passport to be confiscated thus for her to be trapped in the UAE;
viii) obtained custody on a false basis and also initiated a prosecution of Afsana in the UAE, which was founded upon a false allegation of abduction, and which gave rise to the risk of a lengthy prison sentence there.
(b) The Evening Standard
The Claimant:
i) became violent and abusive towards his ex-wife Afsana within months of marrying her, beating her and leaving her with bruises on at least one occasion;
ii) assaulted Afsana in public on custody visits relating to their young son;
iii) attempted to snatch their son on one custody visit, leaving him with a badly bruised head;
iv) callously and without justification snatched their son from out of his pushchair in the street (and has never returned him);
v) subjected Afsana to the injustice of facing jail in Dubai for "abducting" her own child, when in truth she had only fled with him to escape the Claimant's violent abuse;
vi) having chosen to obtain a divorce in a Sharia court, also used Emirati law and its law enforcement system, which discriminate against women, in order to deprive Afsana of custody of and access to their son Louis;
vii) hid the child's French passport and refused to allow him to be registered as a British citizen, as Afsana wished;
viii) was violent, abusive and controlling and caused Afsana to fear for her own safety;
ix) caused her passport to be confiscated thus for her to be trapped in the UAE;
x) threatened to report Rabbhi and Shabbir Yahiya to the police for aiding a kidnap if they came to Dubai;
xi) caused Afsana to go on the run with Louis;
xii) obtained custody on a false basis and also initiated a prosecution of Afsana in the UAE, which was founded upon a false allegation of abduction, and which gave rise to the risk of a lengthy prison sentence there.
The repetition rule
Since Mr David Price QC referred to the point in the course of his submissions, I would add that I see no reason to suppose that the long established (although only relatively recently named) "repetition rule" has been impliedly abrogated by the Defamation Act 2013. Accordingly, in so far as any of the defamatory imputations contained in these articles are attributed to members of Afsana's family, a defence of truth will still require the substantive allegation to be proved – not merely that the allegation was so made: see e.g. Gatley on Libel & Slander (12th edn) at 11.18 and 30.8.
Issues that remain outstanding
I need to make clear that other preliminary matters may have to be resolved later, such as for example "serious harm" (which the Defendant intends to raise but has not yet done so); whether or not the particulars pleaded are capable of supporting the Lucas-Box meanings; and issues relating to "public interest". I was not required to go into any of these subjects. |
Mrs Justice Elisabeth Laing DBE :
Introduction
Mr Lloyd worked for various different employers during the 1950s, 1960s and 1970s, mostly as a welder, and was exposed to asbestos by at least some of those employers. Before he died, he issued a claim for damages for asbestosis against two of those former employers or their successors ("the first claim"). The defendants to the first claim were Ruthner Continuous Crops Systems Limited ("Ruthner") and Babcock Woodhall Duckham Limited ("BWD"). Ruthner was the successor of Unit Superheater and Pipe Co Limited and BWD was the successor of Woodhall Duckham Construction Limited. The first claim was settled, with a contribution from a third employer, Bewley and John Limited ("BJ") in 2011, for a relatively small amount. In 2012, a doctor diagnosed mesothelioma, and Mr Lloyd died soon afterwards, on 7 May 2012. After his death, his widow ("the Claimant") brought this claim for damages for mesothelioma against the Defendant ("the second claim"). The Defendant is a fourth former employer of Mr Lloyd. It was not joined in the first claim and did not contribute to its settlement.
The issues in this case are, first, whether, the second claim is an abuse of process, and if not (it being conceded that the limitation period for bringing it has expired), the court should exclude the limitation period which would otherwise apply, so as to permit the Claimant to bring the second claim.
In Durham v BAI (Run Off) Limited [2012] UKSC 14; [2012] 1 WLR 867, paragraphs 5 and 6, Lord Mance JSC described mesothelioma. It is a "hideous disease that is inevitably fatal. In most, if not all, cases, it is caused by inhaling asbestos fibres. It is a cancer of the pleura. It cannot usually be detected until shortly before death. No-one knows exactly how it is caused or how it develops. It is impossible to know what part any particular inhalation of asbestos played in its development..... A significant number of those who get mesothelioma have no occupational record of exposure to asbestos. The likelihood is that, discounting mesothelioma which develops from no known cause, that their mesothelioma is a result of breathing in dust in the environment. The more fibres that are inhaled, the greater the risk. There is usually a long period between exposure to asbestos and the development of mesothelioma. This can be about 35 years. About 3000 people a year die in the United Kingdom from mesothelioma, reflecting the common use of asbestos during the 1960s and 1970s."
I heard live evidence from the Claimant's solicitor, Ms Child, and from Mr Phillips, the solicitor to the Defendant's insurer. Their evidence was limited, in effect, to commenting on the documents. I have also read their witness statements, the witness statements from Mr Lloyd, and witness statements from Messrs Morgan, Miller and Woods who worked with him at various sites over the years and the medical evidence, and documents from the files of Mr Lloyd's former solicitors, Corries. Where it is has been necessary for me to find facts on the documents, those findings have been based on my assessment of the balance of that evidence, and what that balance most probably shows.
The facts
Mr Lloyd's employment history
Mr Lloyd was employed by various employers in the 1960s and 1970s. Those employers included the Defendant. On the Claimant's case, that employment was for a period of about 17 months in total. That is based on a letter dated 13 March 1997, from Jacobs Engineering, who took over part of the Defendant's business, to Johnson & Higgins UK Limited. That letter was sent in connection with a claim for industrial deafness. That letter says that Mr Lloyd was employed as a welder on four different sites, Clydach (for two different periods), Killingholme, Landarcy and Pembroke. The dates given for the Llandarcy employment are 7 August 1970 to 15 September 1970. The Clydach employment is a reference to employment at the Mond Nickel works, I am told.
In the most recent medical report, dated 15 November 2012, and prepared by Dr Davies for this claim, he said that, in his opinion, Mr Lloyd was suffering from asbestosis from 1993. Asbestosis is fibrous matter in the tissue of the lungs. Dr Davies based that opinion on his review of the X-rays. It is striking that Mr Lloyd did not get a contemporaneous diagnosis of asbestosis until much later, that is, 6 October 2008, when it was diagnosed on a CT scan.
It is appears from Dr Catterall's report of 21 November 2006 that pleural plaques were first seen on an X-ray on 18 March 1986 and all subsequent chest X-rays were reported as showing pleural plaques or thickening (report, section 5).
On 10 November 2004, Mr Lloyd was diagnosed by a Department of Social Security ("DSS") doctor as having localised pleural thickening and calcified plaques. Pleural plaques are caused by the body's reaction to the presence of asbestos and they are found, as their name suggests, not in lung tissue, but in the pleura, the linings of the lungs. "Pleural thickening", according to Ms Child, who is experienced in these cases, is often used interchangeably with "pleural plaques". Mr Lloyd was reported by this doctor to be describing symptoms of shortness of breath. This doctor did not consider that Mr Lloyd had either D1 or D9 (I was told that these are the labels which were given by the DSS to two industrial diseases, diffuse pleural thickening, and asbestosis, respectively, although the two decisions in the bundle and the appeal letter dated 7 December 2004 concern diffuse pleural thickening and pneumoconiosis). The DSS doctor did not comment on whether there was a causal link between Mr Lloyd's reported symptom and his observations.
On 13 May 2005, Mr Lloyd saw Dr Foley. She noted his history of asbestos exposure and of a fall. A chest X-ray had reported thickening pleura on the left and some calcification. Mr Lloyd was generally fit and well, except when he had bronchitis, and his lung capacity was less than would be expected of a man of his age. She referred him for a CT scan. She was not sure about the cause of his symptoms, and she was concerned about possible mesothelioma. The CT scan was done on 26 May 2005.
Mr Lloyd was reviewed by Dr Malin on 9 June 2005. The CT scan report had noted widespread pleural plaques, mostly calcified. Gross thickening was not present. No active pulmonary disease was suggested. The conclusion of that report was that the evidence was consistent with previous asbestos exposure but that there were no radiological signs which "were particularly suggestive of mesothelioma". Dr Malin's view was that there was no significant evidence of fibrosis. He explained to Mr Lloyd that the pleural plaques were benign, but did show significant exposure to asbestos. He explained that he was at an increased risk of developing mesothelioma, but was not certain to do so. He was discharged from the clinic, but told that he would be reviewed if he had new unexplained chest pain, weight loss or breathlessness. Mr Lloyd mentioned that he was considering a civil action and was given a leaflet about plaques.
Later, in a report dated 21 November 2006, Dr Catterall described extensive pleural plaques which probably accounted for the mild restriction on lung expansion, but that (in November 2006) the respiratory impairment was mild and there was no evidence of other asbestos-related disease. That diagnosis was based on the X-rays. He did not consider that the left-sided pleural shadowing was caused by Mr Lloyd's injury in 2007.
I should explain that Dr Catterall had noted that Mr Lloyd had a history of trauma to the left chest, and a possibility of localised pleural thickening at the site of the trauma (report section 1). Dr Catterall said in section 3.1 of this report that Mr Lloyd had had two injuries to his chest. These (in 1984 and in 1997) are further described in that section of the report. Dr Catterall also said that in 2003, Mr Lloyd's GP had suggested that Mr Lloyd might be suffering from mild chronic obstructive lung disease caused by the fact that he had smoked in the past.
Dr Catterall could find no other explanation for the restriction on lung function. The level of restriction might account for breathlessness during vigorous exercise but would have no noticeable effect on normal activities; it would not account for mild breathlessness on climbing stairs, which was more likely to be the result of mild weight gain and increasing age. The pleural plaques had been present before Mr Lloyd reported being breathless. The prognosis was good: it was unlikely that the degree of lung restriction would increase, or that Mr Lloyd would develop asbestosis. There was a small increased risk of mesothelioma and of lung cancer (2% in the case of each). Dr Catterall did not see Mr Lloyd before preparing his report.
On 14 February 2008, he clarified his report by saying that "mild restrictive defect" was accurate, and that it was possible that it was caused by a combination of excess weight and the pleural plaques. It appeared that Mr Lloyd's residual lung capacity was lower than average. The pleural plaques were unlikely to account for Mr Lloyd's breathlessness to date and there was no reason to think that they would account for more breathlessness in the future.
On 6 October 2008, Mr Lloyd had a CT scan of his chest. The report on it, by Dr Callaway, said that there was evidence of asbestos disease, with multiple calcified pleural plaques. There were also minimal interstitial changes which would be consistent with a degree of fibrosis. Dr Callaway's conclusion was that there was heavy calcification of both pleura indicating previous asbestos exposure. There was minimal fibrotic change.
On 16 January 2009, Dr Catterall wrote a further report. He interviewed and examined Mr Lloyd (in October 2008) in order to prepare this report. By that stage Mr Lloyd had an abnormal chest X-ray and respiratory symptoms. Dr Catterall referred to the CT scan on 6 October 2008. He asked Dr Callaway to compare it with the 2005 CT scan. Dr Callaway's reply (his report is also in the bundle), in short, was that as the 2005 scan was not a high resolution scan it was impossible to tell if what he had seen in 2008 was present in the 2005 scan. The fibrotic changes were less than 5% in lung volume. Dr Catterall's view was that the change in the pleural plaques between the two scans was minimal. Mr Lloyd had had further lung function tests in 2008 which Dr Catterall analysed in this 2009 report.
Dr Catterall's conclusion was that there were interstitial changes which were so minor in degree and extent that they were not likely to have functional consequences, but on the balance of probabilities, they were early asbestosis. The lung function tests suggested a "borderline-normal" restrictive defect; only "a mild impairment of maximal lung function at best". The restriction in lung function was likely to be caused mainly by the pleural plaques, but a small contribution from the early asbestosis could not be excluded. The results did not explain Mr Lloyd's breathing difficulties. The decline in lung function since 2005 was probably explained by various factors, each making a small contribution. The prognosis was still good. Pleural plaques did not progress to cause clinically significant disease. The mild fibrosis might progress, but was unlikely ever to cause serious disability, as Mr Lloyd's exposure to asbestos, while significant, was comparatively modest. There was a less than 50% chance that Mr Lloyd would develop more than a 10% disability from this. The risks of mesothelioma and lung cancer were small; but they had doubled since the last report (to 4% in each case).
On 18 December 2009, Dr Ellis, a consultant respiratory radiologist, reviewed the 6 October 2008 CT scan. His view was that it showed diffuse-type pleural thickening which might have a debilitating effect, and interstitial fibrosis which was probably asbestosis.
Dr Butland produced a report dated 30 March 2010. He was instructed by the insurers of Ruthner. He interviewed and examined Mr Lloyd. It is clear both from his report, and Mr Lloyd's letter of 17 March 2010, which he sent about this encounter to Corries, that he and Mr Lloyd did not get on well. Dr Butland started, as he describes in his report, by asking Mr Lloyd to produce documents to identify himself. This does seem an unnecessary step, but Dr Butland does not seem to have reacted well to Mr Lloyd's request, in turn, to see his passport, which he also records in his report. Dr Butland records that Mr Lloyd would not answer some of his questions. He records that Mr Lloyd suffered from deafness, and also that "To his credit, at the end of the consultation, Mr Lloyd said, "I do apologise for being hasty" ".
Mr Lloyd's contemporaneous account of the consultation, which was written before the date of Dr Butland's report, is that he was having problems with his hearing aid, and so could not understand many of Dr Butland's questions. This made him a little agitated with himself. He asked to read Dr Butland's written questions, as that would be easier for him than trying to hear them, but Dr Butland refused. Mr Lloyd gave further details, in direct response to Dr Butland's report, when it was disclosed over a year later, in letters dated 12 May 2011 and 5 June 2011 to Corries. I do not consider that, on the basis of these two accounts of the consultation, I can properly conclude that Mr Lloyd was being deliberately difficult or unco-operative. It is more likely that he was disconcerted by the request for his passport, and by Dr Butland's reaction when he, in turn, asked to see Dr Butland's passport; and that the difficult start to the consultation, combined with the problems he had with his hearing aid, might have made it seem as if he was being more deliberately difficult when he was not.
Dr Butland's report explains that pleural plaques are strongly associated with a history of asbestos exposure, and are "by far the most common respiratory effect of asbestos inhalation. They may occur after lower exposure than is required to cause asbestosis. Among people whose jobs expose them to asbestos, the prevalence of plaques increases in relation to the degree of exposure to asbestos and in relation to the time which has passed since the exposure occurred. Pleural plaques are not commonly visible on plain chest X-rays less than 20 years after a person is first exposed to asbestos. They do not normally cause symptomatic impairment of lung function. They are not thought to lead directly to other types of asbestos-induced disease". Dr Butland pointed out that most of research on lung function and disability in asbestosis is based on X-ray diagnosis, and so on "considerably more severe disease than is picked up on modern CT scanners". As CT scanners improve, it becomes possible to detect early asbestosis even sooner. There is no data on whether these subtle changes cause disability or a change in lung function tests. His experience was that minimal asbestosis does not usually cause respiratory disability in otherwise normal subjects; it is usually an incidental finding in patients who have other causes of breathlessness. His view was that this very early "CT-only asbestosis" was contributing to less than 1% of total disability.
He explained that diffuse pleural thickening is a type of pleural fibrosis which extends continuously over a variable proportion of the thoracic cavity. Its incidence increases in proportion to the time which has passed since first exposure. Its occurrence is dose-related. Depending on its location, it can cause a restrictive defect and shortness of breath on exertion. Dr Butland considered that there was no evidence of diffuse pleural thickening at the age of 75 years. In his later report, Dr Davies says that diffuse pleural thickening is "defined as concentric pleural thickening, usually involving the loss of the costophrenic angle on a plain chest" X-ray.
Dr Butland analysed all the GP's notes, and hospital records. He concluded that Mr Lloyd had smoked a pipe for about 38 years, from the age of 23; Mr Lloyd having provided him and Dr Catterall with different accounts of how long he had smoked for. He had told Dr Catterall that he had only smoked for 10-15 years. Dr Butland attributed Mr Lloyd's history of bronchitis to the fact that he had smoked. The first reference in the medical records to breathlessness was in 2005.
Dr Butland's conclusion was that Mr Lloyd had many pleural plaques but that they had not caused disability. His winter bronchitis, and the associated cough, wheeze and breathlessness were caused by his former smoking habit. He had been overweight, and this had contributed to his breathlessness, and would make a small contribution to his restrictive lung function deficit. He had no disability attributable to asbestosis, pleural plaques, or to any other consequence of exposure to asbestos. His risk of future diffuse pleural thickening sufficient to cause shortness of breath and disablement was 1%, his risk of an increase in asbestosis sufficient to cause shortness of breath and disablement was 2-3%, and the risks of mesothelioma and lung cancer were 2 and 4% respectively. 2.5% of the latter risk was due to asbestos exposure. His life expectancy had been reduced by 0.5 years as a result of such exposure.
Mr Lloyd had "minimal CT only asbestosis involving less than 5% of the lung". Dr Butland did not attribute any current disability or breathlessness to that, but did attribute some of the fall in vital capacity since 2005 to asbestosis. He considered that he and Dr Catterall agreed on this.
The multiple pleural plaques were caused by his occupational exposure to asbestos but did not cause any disability. Although it had been difficult to take a history, Mr Lloyd was exposed to asbestos intermittently between 1957 and 1973, and had on occasion worked alongside laggers, who generate "some of the highest respirable asbestos fibre concentrations". His occupational exposure to asbestos was the cause of his asbestosis. Dr Butland agreed with Dr Catterall that the injury to the left side of Mr Lloyd's chest was irrelevant.
Dr Catterall produced a further report dated 11 June 2010. Mr Lloyd had had a further CT scan, on 26 April 2010. That had shown no evidence of progression of the interstitial disease. There was bilateral asymmetrical pleural disease with extensive calcification. There was some pleural thickening. The pleural disease showed no sign of progression in either lung.
Dr Catterall said there was one significant difference between the reports of Drs Ellis and Callaway, which was Dr Ellis' reference to diffuse pleural thickening. On reflection, he and Dr Callaway both agreed that some of the pleural thickening was of the diffuse type. This had several implications. It supported the theory that Mr Lloyd's borderline restrictive defecit was due to asbestos-related pleural disease as diffuse pleural thickening is a well-recognised cause of restricted breathing. Second, it could help to explain the fall in capacity between June 2005 and December 2008. It was possible that there had been subtle changes in pleural thickening which were not visible radiologically. This was at least as likely an explanation of the fall in vital capacity as slight progression in mild asbestosis. A third implication was that because the condition could be progressive, Mr Lloyd might become more breathless than if he had only pleural plaques and mild asbestosis. Dr Catterall thought that Mr Lloyd's chance of becoming 10% disabled was slightly greater than 50%, but he was not likely to become 20% disabled.
Dr Catterall's conclusion was that Mr Lloyd had asbestos-related lung disease due to a combination of pleural plaque disease and diffuse pleural thickening. He also had very mild interstitial lung disease which was probably asbestosis. His borderline restriction on breathing was caused mainly by the asbestos-related pleural disease. The prognosis was still good, but somewhat more guarded than in January 2009. The risks of mesothelioma and lung cancer were unchanged.
On 8 July 2010, Dr Ellis reviewed the 2008 and 2010 CT scans. He repeated what he had said about the 2008 scan, and said that "There is no radiologic evidence to indicate any progression of the asbestos related disease between the two CT scans.
Dr Davies' report dated 15 November 2012 gives further information from Mr Lloyd's medical notes from July 2010 onwards. On 27 July 2010, Dr Sturney wrote to Mr Lloyd's GP. Dr Sturney referred to Mr Lloyd's persistent cough. A chest X-ray showed no changes from January 2010. Mr Lloyd was seen by Dr Al-Najjar on 15 November 2010. Dr Al-Najjar was shown a report of a CT scan which showed that Mr Lloyd's interstitial lung disease had not progressed. Dr Al-Najjar's view, based on an X-ray taken that day, was that there was no progression of the left-sided consolidation. Mr Lloyd would be seen in 6 months' time. On 4 July 2011, Mr Lloyd was seen by Dr Malin. He had a marked cough, which was bad enough to reduce his appetite, and his weight had fallen from 87kg to 79kg. Mr Lloyd's lung function tests and X-ray revealed no change, but his weight should be monitored, as if he continued to lose weight, he should have a further CT scan.
On 19 August 2011, Mr Lloyd was urgently referred by his GP to a chest clinic because of a 4-week history of cough, night sweats, persistently raised inflammatory markers with a normal white cell count, some weight loss, muzzy headedness and marginal anaemia. Dr Al-Najjar referred in a letter dated 26 September 2011 to Mr Lloyd's continued weight loss (now 76.7kg). The X-ray showed a progressive increase in shadowing at the left base. He had mild chest discomfort and increased breathlessness on exertion. He had a reduced appetite, weight loss and night sweats. Dr Al-Najjar said that a CT scan was needed to rule out mesothelioma or lung cancer.
On 23 November 2011, Mr Lloyd had a CT scan. The scan was said to be "suspicious of mesothelioma" and a biopsy was recommended. A letter dated 14 December 2011 to Dr Suntharalingan said that its author had explained to Mr Lloyd and to the Claimant that the CT scan raised the possibility of a left pleural malignancy. The biopsy was done on 29 December 2011. The report about that, dated 30 December 2011, noted "spindly atypical mesothelial cells" but said that it was not "diagnostic for mesothelioma". The conclusion was "slightly cellular plaque".
A VAT's pleural biopsy was then arranged. Mr Lloyd was seen on 24 January 2012 by Mr Batchelor, who suggested that Mr Lloyd might have early Horner's syndrome. On 30 January 2012, he had a left open pleural biopsy. The report on this mentioned a "patchy fibrous exudate". The conclusion was "benign pleural plaque". On 9 February 2012, Dr Foley wrote to Dr Maskell. She asked him to review Mr Lloyd's case. She said that clinically mesothelioma seemed "highly likely" but "we have not proven that he has mesothelioma". By then he had had two negative biopsies. There was a further histopathology report on 27 February 2012. The findings were interpreted as an "atypical spindle cell proliferation". A further biopsy was planned.
Mr Lloyd saw his GP twice in March 2012. His mood was low and his appetite was poor. He was in some pain. There was a further biopsy, this time of a lymph node. The report on it is dated 21 March 2012. The conclusion was that Mr Lloyd had a poorly differentiated adenocarcinoma which was secondary to, most likely a lung, or possibly a breast, tumour. Mesothelioma was thought to be unlikely, because of the way the cells reacted. But a letter from Dr Maskell shortly after (22 March 2012) said that the staining profile was in keeping with predominantly sarcomatoid mesothelioma. Mr Lloyd saw his GP on 16 April 2012. He was suffering a great deal of pain.
On 24 April he was too unwell to go to an outpatient clinic to discuss his recently diagnosed mesothelioma. The Claimant and his daughter went. The Claimant described a rapid recent deterioration. Mr Lloyd was confined to bed and needed her nursing care. Dr De Winton and Mr Lloyd's family had a frank discussion about end-of-life care. They were told that he had days or weeks, rather than weeks or months, to live. He died on 7 May 2012. His cause of death was recorded as "malignant pleural mesothelioma".
A post mortem examination was done on 10 May 2012. In the lung there were deposits of poorly differentiated tumour with epithelioid and spindled shapes. This had grown along the pleural surface in areas, and had invaded blood vessels. Its phenotype was indeterminate, which meant that it was difficult to tell if it was mesothelioma or cancer. Metastatic tumours were found elsewhere in the body. A supplementary pathology report said that the tumour was "extremely difficult to classify". On balance, it was thought to be mesothelioma, but it had unusual features. An asbestos count was not done, because asbestos fibres were evident from light microscopy, and because the tumour was more likely to be mesothelioma, the author of the report thought that it could be attributed to asbestos exposure. A national expert had been consulted to confirm the diagnosis of mesothelioma. The evidence indicated "extensive asbestos exposure".
Dr Davies based the occupational history in his report on Mr Lloyd's witness statement of 19 April 2012. He had also reviewed all the medical notes. It seems that he might not have reviewed these as carefully as Dr Butland, as he mentions only two relevant references to Mr Lloyd's smoking history, and describes it, on page 29 of his report, as "minimal".
Dr Davies considered that Mr Lloyd had very clear X-ray evidence of calcified pleural plaques which are consistent with asbestos exposure. In his opinion, Mr Lloyd did not have diffuse pleural thickening. Pleural plaques indicate asbestos exposure. There is a long latent period. They become more calcified and visible on X-rays as time passes. They do not usually cause symptoms unless they are confluent with pleural thickening at the base of the chest associated with the loss of the costophrenic angle on a chest X-ray. Pleural plaques are thought to be associated with exposure to amphibole asbestos.
Dr Davies indicated that the detailed debate in the pathology reports about the type of tumour Mr Lloyd had was outside his area of expertise; so he deferred to the expert view that, on the balance of probabilities, Mr Lloyd died from malignant mesothelioma. If someone has died from mesothelioma, and has a history of asbestos exposure, the balance of probability favours the conclusion that the exposure to asbestos caused the mesothelioma. The latent period can vary from at least 15 to 40 years. Mesothelioma probably begins to grow about 10 years on average before there are clinical signs. If a court accepted that the diagnosis of mesothelioma was correct, the case was straightforward, because of Mr Lloyd's history of exposure to asbestos. If a court accepted Mr Lloyd's occupational history, it is probable that the exposure to asbestos in his employment caused pleural plaques, asbestosis and mesothelioma.
Pleural plaques were clearly visible on X-rays from 1983, but were unlikely to have caused any disability. Dr Davies thought that he had some respiratory disability from asbestosis probably from 1993 onwards; a 10% disability until 2005, when there was clear evidence that his breathing deteriorated. The notes suggested a 20% disability from asbestosis from 2005 to 2010, and a significant decline from then on. His view was that there was an extensive pleural malignancy in January 2010.
The first claim
In his first witness statement, Mr Lloyd explained that he became worried about asbestos when he was approached for a statement about a former colleague, Lyn Jones. He had an X-ray in 2000, but was not told the results. He later learned (in 2004) that this showed some localised pleural thickening and calcified plaques.
In 2004, he saw an advertisement in a newspaper inviting people who had worked with asbestos to contact solicitors. He contacted Corries, who helped him to make an application for industrial injuries disablement benefit. He filled in an asbestos questionnaire. He had a medical assessment with the benefits agency in November 2004. He did not qualify for any benefit. He wrote to his solicitors to say he was a little disappointed about this as he knew he had some medical problem. According to his second witness statement, a letter from his solicitors dated 25 November 2004 was the first clue he had that he was suffering from an asbestos-related medical condition. He first noticed he was getting short of breath 10 years ago. He said he smoked a pipe moderately in his mid-years, but had given up 20-35 years before. I have already mentioned that when Mr Lloyd was seen by Dr Malin on 9 June 2005 he was considering a civil claim.
In June 2005 Corries sent letters of claim to the two defendants in the first claim. Corries wrote to Downlands (the claims handlers for Excess, who insured the Defendant) on 22 August 2005 to ask if they insured Unit Superheater. On 1 December 2005, they wrote to the Defendant's liquidator to intimate a claim and to ask for details of the Defendant's insurers. Corries also sent claim letters to the two defendants in the first action in November 2007, suggesting a claim for symptomatic pleural plaques.
On 6 February 2006, Corries advised Mr Lloyd (as a result of the decision of the House of Lords in Rothwell v Chemical & Insulating Co Limited [2007] UKHL 39 [2008] 1 AC 1), that he did not have a claim. In March 2006 Corries discovered that the Defendant, which had ceased trading in 1990 and was in liquidation, had had insurance cover with Excess between 1968 and 1970. According to Mr Phillips, part of its business was acquired by Jacobs Engineering, which had some records for the Defendant. So far he has found a file about an occupational deafness claim which Mr Lloyd made in 1997. It was noted that it might be worth writing to Downlands (the relevant claims handlers), as this covered part of the period when Mr Lloyd had said he was employed by the Defendant, but it was felt that a letter of claim was not justified in the current legal climate. At the same time, Corries made a standstill agreement with the two defendants who were eventually sued in 2011.
Corries instructed Dr Catterall to provide a report in 2006, after Mr Lloyd reported a deterioration in his breathing. There was dialogue between Corries and Dr Catterall between January 2007 and May 2007. Counsel advised that the claim was "on the cusp of" actionability, just on the right side. A second barrister was more cautious, but agreed with the first that no action should be taken until the decision of the House of Lords in Rothwell. Ms Child, the Claimant's solicitor, summarises what the documents in Corries' file show about further investigations in 2008. These revealed that the Defendant had not been dissolved because of pending litigation relating to asbestos and that Excess had insured the Defendant since 1922.
On 21 November 2007 Corries wrote to Unit Superheater's insurers, who had written to them to say that following the decision of the House of Lords in Rothwell, they did not consider that Mr Lloyd had a claim. Corries had obtained a further medical report and believed that his case could be distinguished from the test cases. Corries said that his case was a rare example of symptomatic pleural plaques. Mr Lloyd had suffered damage and had an actionable claim. Zurich were invited to put forward proposals, failing which, a claim would be made. On 28 March 2008, Corries made a Part 36 offer to Zurich acting for Unit Superheater. The claim was valued at £6000 on the assumption that Mr Lloyd did not contract any further diseases. That claim was rejected by Zurich on 8 April 2008, as on the medical evidence, no compensation was due.
Corries sent a letter before claim to Downlands on 6 August 2008. On 7 August 2008 Downlands asked what type of disease this was, and were told, "Symptomatic plaques/pleural thickening". Downlands' initial response was that they would set up a claim, and write. On 12 August 2008, Downlands' further response was that they had never seen a symptomatic pleural plaques claim before and did not consider that the relevant policy would provide an indemnity, no actionable injury having been sustained during the currency of the policy. They would not be taking any further action.
On 15 September 2008, Corries noted Downlands' position (and referred to the "Bolton v MMI principle). Corries said they trusted that Downlands would deal with the matter if the decision in the test cases went against them, and there was no appeal. On 18 September 2008, Corries wrote to Zurich to say that they had traced insurance cover for the Defendant, Excess, but Downlands were refusing liability based on the policy wording. They also appeared to have traced cover for BJ, and would confirm.
On 30 October 2009, Corries wrote to Downlands again, referring to the first instance decision in the Trigger cases. Corries said that their understanding was that Downlands were still refusing to entertain claims. Corries enclosed up-dated medical evidence. Downlands emailed on 30 October 2009. They said that the case was likely to raise "various issues aside from 'trigger'. The Appeal in the trigger litigation commences next week". They said they would nominate Plexus Law to accept service, without prejudice, in accordance with the Trigger Practice Direction. They then asked for copies of the medical evidence, an employment history and the names of the other employers who were being pursued. Corries replied with that information on 11 November 2009. They said that Mr Lloyd's original statement was likely to be supplemented by a more detailed statement in due course.
It was, I think, common ground that Excess were the only insurers to refuse an indemnity pending the outcome of the Trigger litigation not only in respect of mesothelioma claims, but in respect of all asbestos-related claims. The effect of the Practice Direction issued on 26 July 2007 was that all claims were transferred to Master Whitaker for him to consider whether they should be referred to Burton J, or stayed pending the lead cases. Paragraph 12 of the Practice Direction gave Burton J power to extend the definition of the core issue to include claims other than mesothelioma claims. It does not seem that he did so. The Practice Direction only applied in terms to mesothelioma claims (see paragraph 1.2).
Corries wrote to Downlands again on 28 July 2010. They enclosed further medical evidence. This had been forwarded to the other defendants, who had been invited to put forward settlement proposals. Downlands were asked whether they wanted to nominate solicitors for service. Downlands replied on 29 July 2010, saying that their email of 3 November 2009 was relevant to service.
Excess had, according to the witness statement of Mr Phillips given a general notice in 2006 that it was not providing any indemnity for asbestos-related disease because of the wording of the relevant policy. Excess were a party in the "Trigger" litigation (which culminated in the decision in the Supreme Court in Durham). These test cases concerned the extent of the liability of various insurers for mesothelioma under a variety of different employer's liability policies. The cases were heard in the High Court in 2008. There was an appeal to the Court of Appeal, and then to the Supreme Court. The judgment of the Supreme Court was handed down on 28 March 2012.
In an email dated 20 January 2010, after previous contact with Royal Sun Alliance ("RSA") from Corries, RSA revealed that they were the insurers for BJ from 1 April 1968 to at least 31 December 1979. Corries sent them further information about the claim on 28 July 2010.
Corries wrote to Downlands on 28 July 2010. That letter attached recent medical evidence. The letter said that Zurich had been invited to put forward reasonable settlement proposals, failing which proceedings would be issued. They asked for an address for service "should it become necessary to go down the route of litigation". A file note dated 29 July 2010 records an email from Downlands to Corries. This said, "Thank your for your letter dated 28th July. Our email of 3/11/09, below, is relevant to service". Corries did not communicate further with Downlands about the first claim. On 20 October 2010 Corries wrote to Mr Lloyd to say that after the decision in the Trigger litigation, it looked as though the Defendant's policy was "pretty useless" for his claim (this is a reference to the decision of the Court of Appeal). Corries said that they would seek a barrister's advice, as the point might go to the Supreme Court.
During this period, Corries applied to have Ruthner restored to the Register of Companies. On 29 November 2010, Mr Lloyd wrote to Corries with an up-date about his health. His recent breathing test had been lower than the previous one, but the specialist was "non-committal" about the X-ray. He was to be followed up in 6 months' time. Corries reported to Mr Lloyd their efforts to restore Ruthner to the Register, and their researches about Woodhall Duckhams in a letter dated 14 December 2010. Ruthner was restored to the Register on 21 December 2010. Zurich had still not provided Dr Butland's report to Corries. Corries were conscious of the need to issue proceedings, but in early 2011 had still not identified Woodhall's successor company, despite their researches. Mr Lloyd was told what was being done in a letter dated 2 March 2011. He was asked to give authority for HMRC to be approached for information about his deductions history. He gave this. On 5 April 2011, HMRC called Corries to say that they could not release deductions and facings cards because they belong to employers, but that they could answer specific questions.
Dr Butland's report was disclosed to Corries on 28 April 2011, over a year after it was written. Zurich put forward an offer of £10,000 plus benefits on behalf of two employers. It reflected a Holtby deduction in relation to the exposure with BJ and the Defendant. On 9 May 2011 Corries wrote to Mr Lloyd. They summarised the effect of the competing medical evidence. If Dr Butland's report was preferred, Mr Lloyd would recover nothing, and if Dr Catterall's, Mr Lloyd would be entitled to damages, but "perhaps only a very modest sum". The solicitor told him about Zurich's costs inclusive offer of £10,000. She said that Corries' fees excluding those of experts amounted to £17,000, so she could not advise him to accept the offer.
Counsel advised on 1 June 2011 that the limitation period would expire on 8 October 2011. Corries should aim to be issuing a claim by the beginning of July. Corries should make a Part 36 offer, and warn the defendants that proceedings would be issued. They should take Mr Lloyd's instructions on whether he wanted a final or provisional award, and on making a Part 36 offer. Counsel advised that it would be preferable to include Woodhall if possible, as they appeared to have an insurer. If the claim were issued it would be against Ruthner and Woodhall. It was a 50/50 (or "very borderline") claim on the medical evidence. If there were no insurers for BJ and the Defendant, this would reduce the claim by about a third. Counsel valued the claim at £9000 on a provisional damages basis and at £12-13,000 on a full and final basis, reduced by the appropriate Holtby deduction. Counsel advised that the risks of mesothelioma and lung cancer were sufficient to mean that Mr Lloyd should be persuaded to ask for provisional damages.
Corries wrote a full letter of advice to Mr Lloyd on 31 May 2011. It suggested that no insurers had been identified for the relevant years for BJ or for the Defendant. This was not correct as regards the Defendant, as its insurers had been identified. Mr Lloyd replied on 5 June 2011. He said that if he were to put a figure on the claim, it would be £10,000 plus expenses. He was not sure that a provisional settlement at his age would be of much benefit. A file note dated 8 June 2011 repeats the mistaken assertion that the Defendant's insurers had not been traced, as did Corries' letter of 8 June 2011 to Mr Lloyd. In that letter Corries asked for clear instructions about the type of award Mr Lloyd favoured, and repeated their advice that a provisional award would be sensible.
Mr Lloyd replied on 5 July 2011 and said that his current view was that he would like compensation on a full and final basis. He reported on a recent visit to hospital; his breathing capability had deteriorated a bit, but the chest X-rays did not seem to show much change on an initial view. He signed a settlement form of authority for a Part 36 offer of £9000 in full and final settlement. On 13 July 2011, Corries sent a Part 36 offer to Zurich in the sum of £9200 to conclude the claim against Superheater and Woodhall. When the draft particulars of claim were received from counsel, Corries noted that a claim for provisional damages was pleaded, although Mr Lloyd's instructions were that he wanted a full and final settlement (file note of 18 July 2011). On 21 July 2011, a file note records that Corries had considered a hospital letter sent by Mr Lloyd to Corries. It referred to weight loss and said that its cause was uncertain, and Mr Lloyd wanted to lose more weight. The note said that the hospital letter confirmed that Mr Lloyd's asbestos-related disease was causing minimal, if any, problems, and that the benefits of settling the claim out of court were "absolutely huge".
Proceedings were issued on 12 September 2011, but not served, as it looked as though the insurers might settle them (see Corries' letter of 21 September 2011 to Mr Lloyd). Mr Lloyd wrote to Corries on 11 October 2011. He said that he had been a bit involved with doctors and consultants lately and was due to have an appointment on 7 November, and a further scan. A file note dated 12 October 2011 records an offer from Zurich "acting on behalf of all the interested parties" to settle the claim.
On 12 October 2011 Corries wrote to Mr Lloyd to say that Zurich had made a counter offer of £8500 net of benefits. Zurich felt that the medical evidence was equivocal. Corries referred to their inability to trace insurers and advised Mr Lloyd to accept the offer. They advised him of the costs consequences of failing to beat the offer at trial. The offer was a good outcome in the light of the conflicting medical evidence. Corries wrote again on 31 October 2011, asking for Mr Lloyd's instructions. He replied to the letter of 12 October 2011 on 30 October 2011, rejecting the offer. He reported his recent hospital visit and the finding of fact that he had lost one and a half stone. He was a little disconcerted about this. He would accept the offer if Corries and Zurich would each give £700 to the Royal United Hospital Bath.
A file note dated 9 November 2011 recorded the fact that Mr Lloyd was digging his heels in over £700. He would have to be advised that the offer would have to be reported to the ATE insurers, and if he acted against Corries' advice, this would be a breach of the CFA, and the funders would withdraw, which would make Mr Lloyd personally liable for Corries', and the defendants' costs. On 7 November 2011 Mr Lloyd wrote to Corries to say that his appointment for a scan had been re-scheduled for 23 November 2011.
A file note dated 14 November records an increased offer, made on 10 November, on the 'phone, of £8850. On 10 November 2011, Corries wrote a firm letter of advice to Mr Lloyd. Zurich had increased the offer to £8850, meeting in the middle, although they were reluctant to budge. The reality was that the offer was within £150 of the best outcome that could realistically be achieved. Mr Lloyd was advised to accept the offer. He was advised in stark terms of the costs consequences if the offer was rejected, and not bettered. Mr Lloyd replied on 11 November 2011, agreeing to accept the offer. He would have fought on if he had been younger and in better health. He agreed with Corries' comments about judges' rulings, and described this as "another strong deciding factor. We see so many of the unbelievable decisions they make these days". He was irked at the response to the claim over the years, and the disdainful attitude to his out-of-pocket expenses.
On 17 November 2011, Corries accepted Zurich's increased offer by email. Corries received the settlement cheque on 21 November 2011.
Corries issued proceedings against Ruthner and BWD on 12 September 2011 (HQ11XO3370). The statement of truth on the particulars of claim was signed by Mr Lloyd on 25 July 2011. Damages limited to £15,000 were claimed. The particulars of claim gave particulars of exposure to asbestos, and particulars of breach of duty by both defendants. The particulars of injury were "pleural plaques, very mild asbestosis and diffuse pleural thickening". It is clear from those particulars that the pleader considered that Mr Lloyd's degree of disability was less than 10%. At paragraph 9 of the particulars of claim, Mr Lloyd claimed provisional damages pursuant to section 32A of the Senior Courts Act 1981 calculated on the footing that he would not later develop more serious conditions. As I have already noted, this did not reflect Mr Lloyd's instructions.
In his second witness statement dated 19 April 2012, Mr Lloyd stated (at paragraph 58) that Corries settled a claim for him for asbestosis in November 2011 for £8750 "on a full and final basis". He said that this was only against the two employers who were named as defendants to that claim. However, it seems from investigations carried out by Boyes Turner ("BT") (who were later instructed by Mr Lloyd) in November 2012 that although BJ were not sued, they in fact contributed, on an apportioned basis, to the settlement of the first claim. An email dated 14 November 2012 from Clare Buckley at Royal & Sun Alliance Group ("RSA"), replying to a letter dated 12 November 2012 from Ewan Tant at BT, states that BJ contributed to the settlement. Zurich acted as overall claim co-ordinator and paid the total, and they were reimbursed by RSA. Copies of the cheques are attached. It is common ground that the settlement sum reflected a "Holtby" discount of 9%; that is, a percentage to represent the months of employment with the Defendant, who was not sued in the first claim. The total Holtby discount was 33% despite RSA's contribution to the settlement sum.
By November 2011, according to that statement, Mr Lloyd was very unwell, and deteriorating fast (since September 2011), though he had no definite diagnosis. He told Corries that he was getting worse and did not want to settle his claim for so little. He felt under a lot of pressure from Corries to settle. Their advice was that "weighing up all the factors", to settle. They discussed a provisional settlement, but he was told that since the medical reports gave a low risk of contracting mesothelioma, he should settle on a full and final basis. They were well aware of his deteriorating condition but he had not been diagnosed. He did not want to accept the offer, as he did not feel it was a fair reflection of his pain or the extent of his disability. Corries told him he would be liable for costs if he continued. This account is not reflected in the documents in Corries' file, to which I have referred. I prefer those documents to his account.
On or about 22 March 2012, the Claimant received a diagnosis of mesothelioma. He described in his second witness statement what a shock this was. He instructed his then solicitors, BT, to issue a claim for mesothelioma in April 2012. He died of mesothelioma on 7 May 2012. A letter before claim was sent to the Defendant and copied to Downlands, on 22 June 2012. Mr Phillips asked BT whether they were pursuing the claim and was told by BT on 19 August 2013 that he could close the file. This was prompted by negative advice from counsel about accord and satisfaction.
In September 2013, the Claimant instructed Withy King ("WT"). WT wrote a further letter of claim (on 28 November 2013). I asked Mr Philips whether he had destroyed his file after the 19 August 2013 letter. He said he had not: the file had been archived. So he did not rely on that letter to his detriment. This claim was issued on 31 January 2014. It is for damages for mesothelioma on behalf of the Claimant's estate, pursuant to the Law Reform (Miscellaneous Provisions) Act 1934 and on behalf of herself as the Claimant's widow and dependant, pursuant to the Fatal Accidents Act 1976.
The Law
The legal framework I have to consider has two main features:
(1) the rule against abuse of process; and
(2) the 1980 Act
I will consider these in turn.
(a) Abuse of Process
I have found the judgment of Andrew Edis QC sitting as Deputy Judge of the High Court (as he then was) in Dowdall v William Kenyon & Sons Limited [2014] EWHC 2822 (QB) helpful. He considered some of the issues which arise in this case. The first issue was abuse of process. He referred to Johnson v Gore-Wood (No 1) [2002] 1 AC 1 and Dexter Limited v Vlieland-Boddy [2003] EWCA Civ 14, in particular, paragraph 49. Clarke LJ (as he then was) there said that it is for a defendant to show that a claim is an abuse. It is more likely to be an abuse of process for a claimant to sue the same defendant twice, but there can be abuse where a claimant brings two claims against different defendants. The fact that a complaint which is made in a second claim could have been made in an earlier claim does not necessarily make it an abuse. The question is whether "applying a broad merits-based approach" the claimant's conduct is, in all the circumstances, an abuse. A court is unlikely to find an abuse unless the second claim involves unjust harassment or oppression of a defendant.
(b) The 1980 Act
(i) The primary limitation period
Section 11 of the 1980 enacts a special time limit for actions in respect of personal injuries. It applies here. An action to which section 11 applies must not be brought after the period which applies in accordance with section 11(4) of (5) (section 11(2)). The general rule is that that period is three years from the date when the cause of action accrued or the date of knowledge (if later) of the claimant (section 11(4)).
Section 14 defines "date of knowledge" for the purposes of section 11. That date is the date on which he first had knowledge of (1) the fact that the injury in question was significant, (2) the fact that it was attributable to an act which is alleged to be negligent or a breach of duty, and (3) the identity of the defendant. Knowledge that acts or omissions were, or were not, negligent or a breach of duty is irrelevant (section 14(1)).
An injury is "significant" if the claimant would reasonably have considered it a sufficiently serious injury to justify his instituting proceedings for damages against a defendant who did not dispute liability and who was able to satisfy a judgment (section 14(2)).
"Knowledge" includes knowledge which a person might reasonably be expected to acquire from facts he can see or find out, and from facts he can find out with the help of any medical or other expert advice which it is reasonable for him to get. But a person is not fixed with knowledge of a fact he could only find out with expert advice as long as he has taken all reasonable steps to get (and where appropriate) to act on, such advice (section 14(3)).
The rule in Fairchild v Glenhaven Funeral Services [2003] 1 AC 32 and in Barker v Corus UK Limited [2006] 2 AC 572 imposes liability for mesothelioma on those who have negligently exposed people to asbestos and so created a risk of mesothelioma. In paragraph 57 of his judgment, Lord Mance said that, if the later decisions of the Supreme Court are taken into account, what he called the "Fairchild principle" extends to any case where there has been an act or omission exposing a person to asbestos, which might have caused mesothelioma but which cannot be shown as a matter of probability to have done so. The Supreme Court's later decision in Barker (about the nature of each employer's liability) was reversed by Parliament in the Compensation Act 2003, so that each employer was liable for the whole damage caused by mesothelioma.
The cases give some useful indications about what a cause of action is, and when, in this context, a cause of action accrues.
"Cause of action" was explained by Lord Esher MR in Coburn v Colledge [1897] 1QB 702 as "...every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment from the court." The issue in Rothwell was, what degree of damage is necessary to constitute a cause of action against an employer when an employee has been negligently exposed by him to asbestos. The House of Lords held that the existence of visible physical changes to an employee's lungs (pleural plaques) caused by, and signalling the presence of, asbestos, which might independently cause diseases such as asbestosis or mesothelioma, but which produced no physical symptoms, was not compensatable damage.
Lord Hoffmann also explained the relationship between this conclusion and a well-settled principle of personal injury law, which is that if a person has suffered actionable personal injury as a result of a defendant's breach of duty, he can and must claim damages in the same action for all the damage which he has suffered or will suffer in consequence of that breach of duty (judgment, paragraph 13). He referred to a passage in the judgment of Bowen LJ in Brunsden v Humphrey (1884) 14 QBD 141 at page 148.
In Brunsden v Humphrey the plaintiff brought a claim in the county court for damages to his cab caused by the negligence of the defendant's employee (as we would now refer to him). He recovered damages when the defendant paid a sum into court. He did not at that stage know the extent and significance of his injuries. He then brought a claim for personal injuries in the High Court. The injury was sustained from the same negligent act as the damage to the cab. The issue for the Court of Appeal was whether the plaintiff had one cause of action, or two. Bowen LJ said that "It is a well settled rule of law that damages resulting from one and the same cause of action must be assessed and recovered once and for all". The test was whether precisely the same cause of action was being litigated in both claims and a good criterion was that the same evidence would maintain both actions. He went on to say (at page 148) that nobody could doubt if the plaintiff had recovered any damages for injury to his person "he could not have maintained a further action for fresh bodily injuries caused by the same negligence, merely because they had been discovered or developed subsequently". The negligent driving led to two separate kinds of injury and two wrongs were done. The claim in the county court for damage to the cab did not bar the subsequent claim for personal injury.
In Rothwell Lord Hoffmann said that the "single action rule" was very old, and "for the protection of defendants". A corollary of the rule was that if a claimant does have a cause of action, he may recover damages for the risk that he may suffer further injury in consequence of the same act of negligence, even if he could not recover independently for that risk (judgment, paragraph 14).
He also referred (judgment, paragraphs 15 and 16) to section 32A of the Senior Courts Act 1982, which enables rules of court to be made giving a court power to award damages assessed on the footing that a risk will not materialise, and further damages at a future date if the risk does materialise. This means that a claimant who has a cause of action for personal injury caused by negligent exposure to asbestos can choose, when he makes a claim against his employer, either, to sue for his actual damage plus compensation for the risk of further damage, or for the actual damage, with a right to go back to court to claim further compensation if any risk (such as of the development of mesothelioma) does materialise in the future.
Lord Hoffmann said (judgment, paragraph 20) that Smith LJ had been right, in the Court of Appeal, to hold that section 32A was consistent only with the proposition that a claimant has only one cause of action for all personal injury consequences of a wrongful act or omission. She said, "The wording of the section is not consistent with the notion that the same exposure to asbestos can and does give rise to separate torts in respect of each consequence. Because he has only one cause of action, as soon as a claimant knows he has one personal injury consequence, he must sue for all such possible consequences." So Parliament has legislated, in section 32A, on the assumption that the "single action rule" is correct. See also Ministry of Defence v AB [2010] EWCA Civ 1317 paragraph 82.
In Durham Lord Mance SCJ said that no cause of action arises from exposure or inhalation alone (paragraph 52, citing Rothwell). Damage is only incurred when mesothelioma develops. At paragraph 64, Lord Mance said that "No cause of action at all exists until mesothelioma actually develops". Development of mesothelioma is a "pre-condition" for the application for the principle in Fairchild. "The cause of action exists because the defendant has previously exposed the victim to asbestos, because that exposure may have led to mesothelioma, not because it did, and because mesothelioma has been suffered by the victim....the actual development of mesothelioma is an essential element of the cause of action. In ordinary language the cause of action is "for" or "in respect of" mesothelioma ....." (at paragraph 65). As Lord Mance explained at the start of his judgment, the particular features of mesothelioma have led the courts to develop a special rule about liability for mesothelioma. This is that (leaving aside exposures which happened less than 10 years before death) when a person gets mesothelioma, each person who has, in breach of duty, exposed him to a significant amount of asbestos dust and thus created a "material increase" in the risk of his getting mesothelioma will be held to be jointly and severally liable in for his mesothelioma.
I was initially troubled by these dicta in Durham which seem to suggest that a claimant has a cause of action for mesothelioma and that that cause of action is only completed when a claimant contracts mesothelioma. This is a suggestion which would be inconsistent with the "single action rule", at least in a case in which a claimant develops mesothelioma after earlier developing an actionable disease caused by exposure to asbestos, such as asbestosis, diffuse pleural thickening or (rarely) symptomatic pleural plaques.
However, I have concluded that these dicta do not have this effect. There are three reasons why. First, the cases which were before the Supreme Court in Durham appear to have been cases where the claimants were suing for mesothelioma only, so that there was need for, and no, discussion of the relationship between this supposed cause of action and any prior cause of action for other asbestos-related disease. Second, none of the JJSC adverts to the single action rule. Parliament's assumption in enacting section 32A of the 1981 Act that the single action rule is correct is not, of course, decisive, but it seems to me that if the Supreme Court had wished to indicate that the rule, or Parliament's assumption, was wrong, or did not apply to mesothelioma if it followed on from asbestosis, it would have needed to say so expressly. Third, while it is inconceivable that Bowen LJ in Brunsden could have had in mind diseases with a long latent period, Lord Hoffmann in the passage in Rothwell to which I have referred clearly did.
I have already referred to Dowdall. The following points emerge from paragraphs 12-16 and 45 of that judgment, and the citations there from the Durham case.
(1) Asbestosis is a divisible injury, so a defendant is only liable for that part of the injury which can be attributed to the tortious exposure for which he is responsible
(2) Mesothelioma is not a divisible injury; a defendant may be liable for the whole injury if his tortious conduct has increased the claimant's risk of contracting mesothelioma
(3) Exposure to asbestos and to the risk of asbestosis and of mesothelioma is not an injury.
(4) The emergence of asymptomatic pleural plaques marking past exposure to asbestos is not an injury; and no cause of action accrues for asbestosis at the point when such plaques are diagnosed (Rothwell; Preston v BBH Solicitors [2011] EWCA Civ 1429).
For the reasons given above, however, I respectfully consider that the conclusion of Edis J that asbestosis and mesothelioma are distinct injuries and give rise to distinct causes of action is wrong.
It follows that once a claimant who has been negligently exposed to asbestos develops a significant injury (such as asbestosis, diffuse pleural thickening, or symptomatic pleural plaques), he has a cause of action. Time starts to run for the purposes of section 11. It is common ground that he has a separate cause of action against each defendant (if there are more than one) who has negligently exposed him to asbestos. The point when he knows (or ought reasonably to have found out) that he has a significant injury, and who exposed him to asbestos, is his date of knowledge for the purposes of section 14.
He must bring a claim for all the consequences of the tortious exposure to asbestos at the same time. He has a choice: his claim for damages may include a claim for damages in respect of the risk of suffering later more serious injury, or he may make a claim for provisional damages pursuant to section 32A Senior Courts Act 1981 in respect of such potential injury. Time does not start to run again if he later develops asbestosis, nor does he have a new date of knowledge when he finds out that he has developed asbestosis.
(ii) Discretionary exclusion of the primary limitation period
Section 33(1) of the 1980 Act gives a court power to direct that section 11 should not apply to a claim or cause of action, if it is equitable to do so. The court must take into account the degree to which (1) the provisions of section 11 prejudice a claimant and (2) any discretionary exclusion would prejudice a defendant. The court must take into account "all the circumstances of the case" (section 33(3)).
Section 33(3) directs a court to have regard, "in particular" to 6 things. They include (a) the length of, and reasons for, the claimant's delay; (b) the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by either side is or is likely to be less cogent than if the action had been brought within the limitation period; (c) the conduct of the defendant after the cause of action arose, including the extent (if any) to which he responded to requests reasonably made by the claimant for information; (d) the extent to which the claimant acted promptly and reasonably once he knew whether or not the act or omission of the defendant to which the injury was attributable might then be capable of giving rise to an action for damages; and (e) the steps, if any, taken by the claimant to get expert advice, and what advice he got.
The decided cases show that the availability of an action against negligent legal advisers may be relevant to the exercise of the section 33 discretion, but that such a claim is more likely to be relevant if it is completely straightforward; classically, where solicitors have themselves missed a limitation period. The possibility of a claim against former solicitors is not the same as the availability of a claim (subject to limitation) against a negligent defendant, and damages are only payable for the loss of the chance. The cases also show that one of the relevant circumstances is the strength of the claim against the defendant. Neither of these factors, however, is one on which Parliament has put special emphasis.
Discussion
(a) Abuse of process
Mr Platt QC submitted that the court should apply especially robust rules to litigation about industrial injuries which have a long latent period. There are about 2000 mesothelioma cases every year, and many thousands of cases about industrial deafness. It is "mass market" litigation. Insurers are heavily involved, operating industry understandings and agreements. Claims such as these can be made against several different employers, and because they surface long after the relevant employment has ended, cause particular forensic difficulties for employers and for insurers. Claimants should not only be discouraged, but should be stopped, from bringing successive claims for the same injury against different employers. This is fairer to employers, and a much more efficient use of lawyers' time, and of the courts' resources.
This is an attractive submission. An employee has a separate cause of action against each employer who has contributed to his injury. While the evidence about the employee's injury may be the same, the evidence about each tortfeasor's conduct will necessarily be different. But it is tidier from the employers' point of view if their liability inter se for the injury is decided at the same time as the employee's claim. But it does not follow that an employee must sue all employers at one go, nor, if he does not, that that is necessarily oppressive. It will all depend on the facts.
The real difficulty which arises for defendants in asbestos cases is caused by the different rules about their liability inter se, depending on whether the employee's claim is for a divisible injury, such as asbestosis, or for an indivisible injury, such as mesothelioma. The reason why the Defendant's insurer is unhappy about the current claim is that, if it proceeds and is successful, the Defendant will be liable for the whole of the indivisible injury in this case, and will have to try and obtain a contribution from Mr Lloyd's other employers, some of whom having contributed, pro rata, to the full and final settlement of Mr Lloyd's claim for asbestosis, may resist such a claim. But that is a consequence of the different rules which govern liability for asbestosis and for mesothelioma. I somehow doubt that the Defendant would have suggested that it was an abuse of process if this claim had been merely a claim for the Defendant's aliquot share of liability for Mr Lloyd's asbestosis (rather than a claim for damages for mesothelioma).
There is a particular reason, on the facts of this case, why I do not consider that I should strike out the current claim as an abuse of process. This is that the Defendant's insurer has known for a long time that Mr Lloyd had a potential claim, but, first, relying on the Bolton case, and then on the existence of the Trigger litigation, including its outcome in the Court of Appeal, took the approach that, not only was Mr Lloyd's claim weak, but that its indemnity was not available against that claim. I do not consider that there is anything oppressive or harassing about the Claimant's conduct on the facts of this case.
I have set out the facts at some length, but they boil down to this. The Defendant's insurers were notified of the likelihood of a claim in 2008. Their position was that they would not talk pending the outcome of the Trigger litigation. Corries cannot be criticised for pursuing the other employers, and obtaining a settlement for Mr Lloyd from them. His clear instructions were that he wanted to settle against those employers on a full and final basis. The Defendant could have obtained the protection of such a settlement of Mr Lloyd's cause of action against them by talking to Corries. Instead they chose to resist any claim until the Trigger litigation had been decided. Excess might have escaped liability completely if the decision of the Court of Appeal had been upheld in the Supreme Court. But by choosing that approach, it seems to me that Excess took the risk that if they lost in the Supreme Court, they might be exposed to liability in respect of claims such as this, which they had not settled pending Trigger, and which, in the meantime, might have become (as this claim did) more expensive.
Mr Lloyd only had one cause of action against each of his employers. But he had a separate cause of action against each. I do not consider that, on the facts of this case, there is any abuse in settling claims arising from the causes of action against the former employers whose insurers did play ball, and not wasting time pursuing the employer whose insurer would not. Inconvenient as it may be for the Defendant to be facing a bigger claim now than the claim it fended off while Trigger was pending, I do not consider that it has suffered any injustice. It took a calculated risk, and the gamble did not come off. It presumably took that risk with its eyes open, because it was significantly commercially advantageous to do it.
(b) Limitation
There are three questions:
(1) When did Mr Lloyd's cause of action against the Defendant accrue?
(2) When did he first know that he had an actionable claim against the defendant?
(3) In the light of the answers to those questions, would it be just, having regard to all the circumstances, and, in particular, to the matters referred to in section 33(3) of the 1980 Act, to allow the Claimant to bring this claim?
(i) When did Mr Lloyd's cause of action accrue?
The evidence is not clear. None of the medical experts was cross examined, so I have done the best I can with the written evidence. I do not accept Mr Davies' view that Mr Lloyd had asbestosis as early as 1993. The fact that he did not examine Mr Lloyd is of slight, if any relevance to this issue. What is more important is that, as far as Mr Kilvington was able to tell me when I asked him, Dr Davies' opinion to this effect was based on the same evidence as were those of the doctors who had examined him earlier. I think it improbable that Mr Davies has reliably spotted something from the early X-rays which the other doctors who had looked at them have missed, particularly as the asbestosis which was detected in the 2008 CT scan was only detectable by CT scan, and was very slight in extent.
I also consider that Dr Davies's views about the levels of disability which Mr Lloyd suffered between 1993 and 2005 (which he attributed to asbestosis) are unlikely to be correct. They differ markedly from those of Dr Butland and Dr Catterall, and it seems to me that Dr Davies has significantly underestimated the potential importance of Mr Lloyd's smoking, and of his weight gain. Neither Dr Catterall nor Dr Butland, both of whom, unlike Dr Davies, examined Mr Lloyd (after 2005), reported the high levels of disability suggested by Dr Davies.
On the evidence as a whole, I do not consider it probable that Mr Lloyd had symptomatic pleural plaques at any stage. First, the medical evidence does not point unequivocally in that direction, and second, it is common ground that symptomatic pleural plaques are very rare. Dr Davies, in his report, opined that Mr Lloyd's did not have diffuse pleural thickening. He did not clearly state that Mr Lloyd had pleural plaques which were not symptomatic, but on balance, I think that is what he meant in paragraph 9.1a of his report. Neither Dr Butland nor Dr Davies suggested that Mr Lloyd had symptomatic pleural thickening. There is some suggestion to this effect by Dr Catterall, and Dr Ellis, but I prefer the views of Dr Butland and Dr Davies on this issue.
My conclusion is that Mr Lloyd developed asbestosis about the time of, or shortly before, the 2008 scan, and that at that stage it caused him some disability, but not as much as 20%. That is when he suffered damage, and, on the balance of probabilities, that was caused by his occupational exposure to asbestos. He may well have had symptomatic asbestosis before it was diagnosed in October 2008, but I am unable to say on the balance of probabilities when that was. I therefore find that Mr Lloyd had a significant injury for the purposes of section 14(2) of the 1980 Act no earlier than 6 October 2008. That was also his date of knowledge, for the purposes of section 14(1).
His cause of action for asbestosis against the Defendant was, therefore, time-barred (subject to discretionary exclusion) three years after 6 October 2008. The first action, for asbestosis, against two former employers other than the Defendant, was commenced on 12 September 2011, before that period expired.
Section 33 of the 1980 Act
The relevant factors
The delay is between 6 October 2008 and 31 January 2014. For most of that period, Excess were resisting claims, on the basis of the Trigger litigation. So whatever the reasons for delay while Trigger was pending, the issue of proceedings against the Defendant before 28 March 2012 (or more likely, 28 days from that date) would not have put the Defendant in a better position than it would have been had proceedings been issued at the end of April 2012. The reasons for delay between that date and January 2014 are not very clear, and to the extent that they are, not very compelling. Two sets of new solicitors were instructed, and time was taken transferring papers between solicitors. An unhelpful advice was received from counsel on accord and satisfaction (a point which Excess abandoned at this hearing).
The only practical difference which issuing the proceedings in April 2012 would have made is that Mr Lloyd was still alive then. But he died very shortly after that, and it is not realistic to suppose that the Defendant could have tested his evidence in that short period. So I do not consider that the Defendant has suffered any practical forensic disadvantage as a result of the delay between April 2012 and January 2014. The vast majority of the forensic difficulty faced by the Defendant comes from the long latency periods for asbestosis and mesothelioma, most of which elapsed before the cause of action accrued.
The conduct of Defendant (acting through its insurer) after the cause of action arose is relevant, for the reasons I gave when considering the abuse of process argument. I consider that to a significant extent, the Defendant has brought this state of affairs on its own head.
Mr Lloyd, through Corries, did act promptly and reasonably once he knew he had a cause of action against the Defendant. The Defendant was notified of the claim in 2008. It chose to rely on the Trigger litigation, rather than to engage with the claim. If Corries had made a conscious decision not to continue to pursue the Defendant in the first claim when it was widely known that Excess was refusing to settle claims pending the outcome of Trigger, they could not have been criticised for that. It cannot, in my judgment, make any difference that, instead, by the time they issued proceedings and settled with the three other former employers, they seem to have forgotten what they knew about Excess.
Mr Lloyd took all the legal and medical advice which it was reasonable for him to take in the circumstances.
In my judgment, the balance of the factors in section 33(3) is clearly in favour of allowing this claim to proceed. The next question is whether any of other of the relevant circumstances, not expressly referred to in section 33(3), tilts the balance the other way. Mr Platt QC referred, in particular, to three.
First, he argued that this is a weak claim. On the Defendant's case, Mr Lloyd was only employed for 5 weeks, at the Llandarcy plant. However, those 5 weeks were during the summer. The Claimant's case, based on the witness statements of Messrs Morgan, Miller and Woods, is that part at least of that period is likely to have been during the summer shut-down there. This was a large industrial plant, with long lengths of piping. Those pipes were all lagged with asbestos lagging. During the shut-down the lagging was stripped off, and Mr Lloyd would then have inspected and where necessary, welded the pipes. The welds were also protected with asbestos in order to prevent them cooling too fast. The lagging was then replaced, and this involved mixing asbestos powder in large drums. During the shut-down period, the whole plant was very dusty and dirty.
I do not need to decide how long Mr Lloyd was employed by the Defendant. It seems to me that even if the Defendant is right, and Mr Lloyd was only employed by it for 5 weeks, the Claimant has an arguable case that it is likely that Mr Lloyd would have had an exposure to asbestos during that period which was more than de minimis (see the views of Dr Butland, which I have already referred to). Even if some of it is "vicinity" or "bystander" rather than direct exposure, the evidence as a whole suggests significant exposure. Given what was then known about asbestos, as a result of the 1965 Newhouse and Thompson report, the Claimant also has an arguable case that that exposure was negligent. Nor am I impressed by the argument that the Claimant's evidence is obviously unreliable. Mr Lloyd's second statement is more detailed than the first, but I do not consider that there are significant inconsistencies between the two statements. When Corries served the first statement on 11 November 2009, they told Downlands that it was likely that there would be a more detailed statement from Mr Lloyd. There may be an argument to be had about whether, on the medical evidence, Mr Lloyd in fact had mesothelioma. But it is plainly arguable that he did. So to the extent that the strength of the claim is relevant, that factor does not point against the exercise of the section 33 discretion in the Claimant's favour.
Second, Mr Platt QC argued that Corries' conduct of the first claim was plainly negligent, and that that meant that the Claimant had an alternative remedy against Corries. She should be left to that, rather than being permitted to sue the Defendant out of time. I am not persuaded by that argument. I do not consider that a claim against Corries in negligence would be straightforward. This is not a case where Corries missed a limitation period.
In proportion to its value, this was not a simple claim to litigate. The file shows that Corries worked hard to identify the relevant employers and their insurers, taking steps to restore one to the Register. It is true that, by the time they were close to issuing proceedings, they appear to have forgotten that they had traced insurers for the Defendant and for BJ. But they had made strenuous efforts to identify, from a complex web of companies, which company was the right Woodhall Duckham defendant. They had helped Mr Lloyd to make an unsuccessful benefits claim in 2004, and had obtained medical evidence to support a claim for Mr Lloyd which, for much of the relevant period was seen both by them and by counsel as being a marginal claim which was on the cusp of actionability.
I am not persuaded that if they had remembered that they had identified Excess as the Defendant's insurer, that would have made any difference. I do not consider, on the balance of probabilities, that Excess would have agreed, had they been approached, to a limitation amnesty, or to the entry of judgment against the Defendant for damages to be assessed. At that stage, Excess were taking an aggressive approach to such cases, and do not seem to have been willing to concede anything. Their answer, had they been served, would have been that they were not willing to contribute to the settlement, as they did not consider that the indemnity in the relevant policy covered the Defendant's liability. Moreover, it is clear that when approached, they also thought that the underlying claim against the Defendant was weak. Bolstered by the decision in the Court of Appeal, they would not have looked at the first claim until after the decision of the Supreme Court; and by then, Mr Lloyd had mesothelioma.
Mr Platt QC argued that Corries acted improperly in putting pressure on Mr Lloyd to settle the claim for very little money at a time when, in hindsight, it was actually much more valuable than it seemed, because it is likely that Mr Lloyd had mesothelioma by then. But Corries only had the expert medical evidence which they had, and the file shows that when Mr Lloyd gave them further information about his hospital visit in July 2011, that was analysed. The difficulty is that at the time the first claim was settled, even though we now know that Mr Lloyd was probably very ill, the expert medical evidence did not support anything other than a borderline claim. Corries might have obtained a somewhat bigger settlement for Mr Lloyd if they had remembered that they did know who BJ's insurer was; although, in the event, BJ did contribute to the settlement. At the time the claim was settled, the file shows that Mr Lloyd was not pressurised into giving up a realistic aspiration for a much bigger claim: he and the Defendants were but a few hundred pounds apart. Corries were litigating with ATE insurance, and they were right to tell Mr Lloyd what the consequences would be if he rejected the defendants' offer and then did not better it at trial. He himself sensibly acknowledged that there was an unpredictable element in going to trial.
Third, Mr Platt QC argued that this was just like a case in which solicitors issue in time, but then negligently fail to serve proceedings, and then issue a second set of proceedings once the limitation period has expired. I reject this submission. The first claim, against different defendants was issued and served within the limitation period. The second claim is a different claim; it is against a different defendant, who has not previously been sued, and did not contribute to the settlement of the first claim.
My conclusion is that none of these circumstances tilts the balance against allowing this claim to proceed. |
HHJ McKenna :
Introduction
This is a claim for damages for clinical negligence brought on behalf of Finlay Middleton by his father and litigation friend, Gavin Middleton, in respect of a significant brachial plexus injury to Finlay's right upper limb as a result of the circumstances of his birth on 1 February 2002 at the Ipswich Hospital for which the Defendant, the Ipswich Hospital NHS Trust, is responsible. In particular, the delivery was complicated by shoulder dystocia as a result of which Finlay suffered damage to the nerves emanating from the spinal cord in the neck at the level of the shoulder as a result of force being applied to those nerves. The resulting injury is also known as "Erb's Palsy".
Brachial plexus injuries are one of the most important fetal complications of shoulder dystocia. Most cases resolve without permanent disability with fewer than 10 per cent resulting in permanent brachial plexus dysfunction.
Shoulder dystocia is defined in the December 2005 Guidelines of the Royal College of Obstetricians and Gynaecologists ("RCOG") as a delivery that requires additional obstetric manoeuvres to release the shoulders after gentle downward traction has failed. Shoulder dystocia occurs when either the anterior or, less commonly, the posterior fetal shoulder impacts on the maternal symphysis or sacral promontory. It is common ground that that definition reflects the thinking in 2002.
Finlay is the third son of Jo-Anne and Gavin Middleton, his elder brothers being Jak, born on 15 January 1995, and Dan, born on 19 August 1996.
Jak was born at 38 weeks gestation and the labour was long and painful with delivery by means of ventouse vacuum extraction and, at birth, he weighed 3720gms.
Dan was born at 40 weeks gestation, after a rapid and, insofar as Mrs Middleton was concerned, an apparently uneventful labour. In fact, however, the delivery was recorded as having been complicated by "moderate degree of shoulder dystocia". Dan weighed 3920gms.
Whilst the overall effects of the injury on Finlay are the subject of broad agreement, there is disagreement in relation, in particular, to his future needs and the quantification of those needs. Liability causation and quantum are all in issue.
In broad terms, Finlay's case can be divided into two parts as follows:
i) It is alleged that Finlay's mother should have been advised, as part of her antenatal care, of the risk of shoulder dystocia and told of the possibility of having a caesarean section instead of giving birth vaginally. If she had been warned of the risk, it is said she would have opted for a caesarean section and Finlay would have been born in that manner, in which case, it is common ground, he would not have suffered the brachial plexus injury.
ii) Had Finlay's mother in fact opted for a vaginal birth, it would have only been on the basis that there would have been an intervention at an early stage if circumstances changed and, in the event, when the progress of labour became delayed, caesarean section ought to have been considered and Mrs Middleton would have opted for a caesarean section and, in the further alternative, by 1815hrs at the latest on 1 February 2002 a caesarean section was mandated.
It is admitted on behalf of the Defendant that there ought to have been a discussion with Finlay's mother about mode of delivery prior to her labour with Finlay as a result of the occurrence of shoulder dystocia in the delivery of Dan and that this did not occur. However, it is denied that, had such a discussion taken place, Finlay would have been delivered by caesarean section; rather it is said that the labour and delivery would have proceeded as they did and that Finlay would have suffered the injury in any event since Mrs Middleton would have been advised to proceed with a vaginal delivery, with the reassurance that she would be under consultant care and senior staff would have been present or nearby at delivery and she would have accepted that advice.
On Finlay's alternative case, it is said that even if there had been a concern raised over the potential size of the baby, the advice would still have been to continue with a vaginal delivery and, on the balance of probabilities, that advice would have been accepted. Moreover, the care during labour was in accordance with a reasonably competent body of opinion.
Evidence
Finlay relies upon the lay evidence of his mother and father whilst the Defendant relies upon the lay evidence of the clinicians involved in Finlay's care. They are midwives Lynne Lacey, Cherry Quinnell and Janet Bull together with Mr Raef Faris, who at the time was an obstetric registrar. Mr Faris did not in fact ever see Mrs Middleton during her labour with Finlay but was consulted from time to time. Unfortunately the Court did not hear from the obstetrician who was directly involved in Mrs Middleton's labour and the subsequent delivery of Finlay. That obstetrician, Dr Christo, emigrated to India shortly after the events with which this Court is concerned.
In respect of liability and causation, Finlay relies on the expert evidence of Mr Jarvis, Emeritus Consultant in Obstetrics and Gynaecology, whose special interest was in fact urinary gynaecology and Carole Bates, a midwife, together with their respective contributions to joint statements of experts whilst the Defendant relies upon reports from Mr Tuffnell, a consultant gynaecologist and obstetrician at Bradford Teaching Hospital NHS Foundation Trust since 1994 and Deputy Medical Director since 2007 and a peer reviewer of the RCOG's Guidelines for Shoulder Dystocia in 2012 and Tracey Reeves, Midwife, respectively and their respective contributions to joint statements of experts. A significant quantity of literature has also been produced by the experts.
So far as Finlay's condition and prognosis is concerned, the orthopaedic evidence is largely agreed and has been read. Finlay's condition has had educational and psychological implications as set out in reports of a joint single expert in educational psychology, Mr Albert Reid, and the reports of psychologists and their joint statement. There are some differences between the psychological experts, Dr Ford for Finlay and Dr Newns for the Defendant, but those differences are not significant and again their evidence has been read.
There are also differences between the parties' experts in relation to Finlay's physiotherapy needs but they were not significant enough to justify their attendance at court. Their reports, therefore, Wendy Murphy for Finlay and Sandra Holt for the Defendant, have also been read as have the reports of Julia Ho, an occupational therapist instructed on Finlay's behalf, and Jacqueline Green instructed on behalf of the Defendant.
The parties' respective positions in respect of the valuation of Finlay's claim were set out in the updated schedule of loss, dated 11 November 2014, and the counter schedule dated 19 December 2014, although there was some agreement on a number of heads during the course of the trial which has shortened that aspect of the trial. The principal areas of difference are: future handicap on the labour market; future assistance; future travel costs; past travel costs and care and assistance.
The Law
There is little dispute between the parties as to the relevant law. In most situations the issue as to whether a doctor or other medical professional has been negligent is determined by applying the test in Bolam v Friern Hospital Management Committee [1957] 1 WLR 583. In directing the jury in that case, McNair J said as follows at page 587:
"I myself would prefer to put it this way, that he is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of medical men skilled in that particular art… Putting it the other way round, a man is not negligent, if he is acting in accordance with such a practice, merely because there is a body of opinion who would take a contrary view."
In Bolitho v City and Hackney Health Authority [1998] AC 232, the House of Lords emphasised that McNair J had said that the practice in question had to be accepted as proper by a responsible body of medical men. Elsewhere in his judgment he had said that it must be regarded as acceptable by a reasonable body of opinion. Lord Browne-Wilkinson, who gave the leading speech, commented as follows at page 241:
"The use of these adjectives – responsible, reasonable and acceptable – all show that the Court has to be satisfied that the exponents of the body of opinion relied upon can demonstrate such opinion has a logical basis. In particular in cases involving, as they so often do, the weighing of risks against benefits, the judge before accepting a body of opinion as being responsible, reasonable or acceptable, will need to be satisfied that, informing their views, the experts have directed their minds to the question of comparative risks and benefits and reached a defensible conclusion on that matter."
Later, at page 243, he continued:
"In the vast majority of cases the fact that distinguished experts in the field are of a particular opinion will demonstrate the reasonableness of that opinion. In particular, where there are questions of assessment of the relative risks and the benefits of adopting particular medical practice, a reasonable view necessarily presupposes that the relative risks and benefits have been weighed by the experts in forming their opinion. But if, in a rare case, it can be demonstrated that the professional opinion is not capable of withstanding logical analysis, the judge is entitled to hold that the body of opinion is not reasonable or responsible."
In Pearce v United Bristol Healthcare NHS Trust [1999] PIQR P53 CA, which concerned the adequacy of advice given to a mother who shortly afterwards gave birth to a stillborn baby, Lord Woolf MR said as follows:
"In a case where it is being alleged that a plaintiff has been deprived of the opportunity to make a proper decision as to what course he or she should take in relation to treatment, it seems to me to be the law, as indicated in the cases to which I have just referred, that if there is a significant risk which would affect the judgment of a reasonable patient, then in the normal course it is the responsibility of a doctor to inform the patient of that significant risk, if the information is needed so that the patient can determine for him or herself as to what course he or she should adopt."
I was also referred to the cases of C v North Cumbria University Hospitals NHS Trust [2014] Med LR 189, where the court set out the principles and considerations to be applied to the assessment of expert evidence in a case such as the present, Sardar v NHS Commissioning Board [2014] Med LR 12, Smith v Barking, Havering and Brentwood Health Authority [1994] 5 Med LR 285, Jones v North West Strategic Health Authority [2010] EWHC 178, and finally Montgomery v Lanarkshire Health Board [2015] UK SC 11 handed down during the course of the trial the latter three of which deal with issues of causation where, as here, the proper advice as to risk was not given and, in particular, the challenges facing a court in the light of evidence as to what a patient would have done had the proper advice been given in circumstances where the outcome was adverse.
Background
Finlay's mother, Mrs Jo-Anne Middleton, was born on 8 October 1964. She and her husband Gavin are both teachers and, in fact, Mr Middleton is an assistant head teacher. As I have already recorded, they have two other older children, Jak and Dan.
Mrs Middleton's labour with Jak was very long and painful and after his birth Jak looked battered by the experience. Mr Middleton described it as very traumatic and indeed rather graphically as being very agricultural.
Dan's birth, by contrast, followed a very rapid labour and Mrs Middleton was unaware that there had been any difficulty with his delivery. The delivery was recorded by midwife Quinnell as having been complicated by a "moderate degree of shoulder dystocia". Mrs Middleton was unaware that there had been this difficulty with delivery. It is admitted that she ought to have been told of it and, plainly, had she been, she, in turn, would have informed the booking midwife of it at the time of her next pregnancy. It is admitted that this would have altered what would have happened during the following pregnancy since it is common ground that the risk factors for shoulder dystocia include shoulder dystocia in a previous pregnancy.
At the material time, shoulder dystocia was commonly referred to as being either mild, moderate or severe although it is common ground that at the material time there was no commonly accepted definition of any of these terms. In her evidence, midwife Quinnell, whilst accepting that she had no recollection at all of Finlay's delivery, stated that at that time what she meant by moderate shoulder dystocia could just have been no more than that the shoulders were a tight fit. Certainly, as appears from the Notes which she made, there was no mention of any intervention such as the McRoberts Manoeuvre or suprapubic pressure having been required and it was, she said, her usual practice, to write in the Notes if such manoeuvres had been necessary. Moreover, it is clear from the Notes that Mrs Middleton was pushing in a standing position and there was no suggestion in the Notes that that changed at any stage prior to Dan's birth.
Mrs Middleton became pregnant with Finlay in mid 2001. Although her booking appointment occurred at the same hospital, as I have previously identified, the previous moderate shoulder dystocia was not picked up either from Mrs Middleton as she had not been told about it, or from the Notes and therefore no record of that complication was made as part of the booking process. As a result, Mrs Middleton was transferred from consultant to midwifery care which, it is common ground, would not have happened had the previous shoulder dystocia been noted.
There would also have been an early consultation which should have involved a discussion with Mrs Middleton and in which she would have been made aware of the increased risk of the recurrence of shoulder dystocia in the subsequent delivery and of the other risk factors for shoulder dystocia which include the baby being large. She ought to have been advised of the potential risks to her baby from the occurrence of shoulder dystocia, including obstetric brachial plexus injury and, Finlay contends, the small risks of asphyxia, brain damage and death. She would have been told there would be no reason why she should not deliver vaginally and that the risks would depend on factors such as the size of the baby and that monitoring would be in place and that an alternative option would be delivery by caesarean section and the risks of that procedure should have been explained with the ultimate choice being that of Mrs Middleton and the clinical team, taking due note of her wishes.
The early stages of pregnancy
Mr Jarvis, whilst conceding that it was not mandatory to advise Mrs Middleton to undergo a caesarean section, expressed the view that there should have been a discussion identifying the pros and cons. He accepted that Finlay's mother would have been informed that the majority of such babies would deliver safely by vaginal delivery. Mr Tuffnell suggested that Finlay's mother should have been told that she was more likely to have another shoulder dystocia and that she might need manoeuvres to deal with it, should it happen but she would have been reassured that a vaginal birth was both reasonable and appropriate. Mr Faris, in his evidence, suggested that that would have been the approach of the defendant at the material time.
In her witness statement, Mrs Middleton expressed the view that what would have played on her mind had she known the full circumstances surrounding Dan's birth and the various risk factors to which I have referred, was what she described as the horrible time that she had had with Jak's delivery. She would, she says, have wanted to avoid another delivery like that at all cost and would have preferred for the risks of any injury to be to her rather than to her baby and hence she would have chosen caesarean section as the mode of delivery had she been in possession of the full facts. She was aware of family members and others who had had caesarean sections without any apparent problems. Moreover, what would also have played on her mind was that her own sister had lost a child at five months of pregnancy. She would not have been concerned at the prospect of scarring and indeed had subsequently opted for a "tummy tuck" following the delivery of Finlay.
In her oral evidence, Mrs Middleton said that she would have discussed the whole matter with her husband and they would have decided that she should opt for a caesarean section. She would not have wanted to bring a child into the world with a disability and she would have been particularly concerned by the use of the word "palsy". Later in the course of her evidence she went on to say that had she received the relevant information at an early stage in her pregnancy she might well have asked for a review later on in the pregnancy. In effect she would have sought to delay making any final decision as to the mode of delivery.
To my mind, it would have been wholly consistent with Mr and Mrs Middleton's careful and considered approach for them not to have made any definite decision at this early stage so far as mode of delivery was concerned and I conclude, on the balance of probabilities, that Mrs Middleton would have gone away and researched matters and wanted to see how the pregnancy progressed but, importantly, would have been fully aware of the relevance of fetal size and the reason for its relevance.
Progress of Pregnancy
The pregnancy progressed normally until December 2001/January 2002. At that stage Mrs Middleton was feeling that she was very large; "absolutely huge" in her words, so much so in fact that she had measured her waist at 121cms and taken a photograph of herself.
At an antenatal clinic on 9 January 2002, at 37 plus weeks gestation, her symphyseal-fundal height ("SFH") was measured to be 40cms. This was 3cms greater than normal for the gestational age. The SFH measurements prior to Christmas 2001 had all matched the gestation in weeks. Although Mrs Middleton expressed her concern to the midwives about the size of her baby she was reassured at that stage.
On 1 February 2002 Mrs Middleton was admitted to Brook Ward with a history of contractions from 0300hrs that morning and showed at 0415hrs. She was contracting 1:5. The baby was active and a TENS machine was in situ for pain relief. Midwife Lacey carried out maternal observations which showed a temperature of 35.8°C, pulse of 92 and blood pressure of 100/65. There were traces of protein in her urine. Midwife Lacey carried out an examination and on palpation felt that the baby was at term and that it might well be a large baby. The lie was longitudinal and the presentation was cephalic with 2/5th palpable. The position was noted as LOA and the fetal heart rate was heard at 150 beats per minute.
Midwife Lacey carried out a further assessment and a vaginal examination at 0845hrs, at which point the cervix was 4cms dilated, effaced, thinning and central and the presenting part was -2 to the ischial spine. She noted the membranes were bulging and left intact and no cord was felt. The fetal heart rate was at 154 beats per minute. She discussed the birth plan with Mrs Middleton.
Midwife Lacey continued to monitor the fetal heart rate at regular intervals and an epidural was discussed with Mrs Middleton. She had a bath at 1010hrs and a plan was made to reassess at 1145hrs.
A further vaginal examination was undertaken at 1200hrs to assess progress and it was noted that the cervix was central and effaced with Mrs Middleton being 5 centimetres dilated. Midwife Lacey carried out an artificial rupture of membranes, the fetal heart rate was noted at 148 beats per minute and meconium stained liquor was identified as a result of which midwife Lacey contacted Mr Faris who advised transference to consultant-led care.
At 1215hrs a CTG was applied and at 1225hrs Mr Faris was informed in view of previous "moderate shoulder dystocia", a fact which midwife Lacey surmised she had picked up from reading the Notes of the previous delivery of Dan.
At this stage the CTG was showing decelerations with contractions down to 85 beats per minute but with a good recovery of the baseline to 145 beats per minute.
A further vaginal examination was carried out at 1230hrs and the cervix was found to be 7 centimetres dilated.
By 1255hrs Mrs Middleton was becoming distressed and wanted an epidural so midwife Lacey discussed the matter with Dr Faris who suggested that a Senior House Officer should review, which happened at 1305hrs and an epidural was arranged which was sited by an anaesthetist at 1345hrs at the first attempt. By 1400hrs Mrs Middleton was comfortable and the CTG which had been removed whilst the epidural was being sited had been reapplied. There was a further review by the Senior House Officer at 1420hrs who noted that the CTG was very reactive post epidural and had a baseline of 135 beats per minute with normal variability and accelerations. The plan was for a further review in one hour.
There was a review at 1530hrs where the CTG was noted as remaining reactive, VE: Caput, most probably OA. PP at spines, 9 centimetres dilated and the plan was to continue and re-examine in one hour.
At 1625hrs Mrs Middleton requested an epidural top-up which the Registrar agreed to and at 1650hrs a further vaginal examination was carried out to assess the position and no cervix was felt. Full dilatation was confirmed and the presenting part was at the level of ischial spines with caput +. Meconium stained liquor was also noted and the Registrar was asked to review.
The Registrar, Dr Christo, attended at 1715hrs and made an entry in the notes as follows:
"Large baby O/e abdominally vertex 1 / 5th palpable. VE – lower segment seems stretched. Cx fully dilated, caput +, no moulding. Vertex left occipito anterior at O station. Meconium tinged liquor. Plan – allow head to descend prior to pushing – 30 minutes to one hour."
At this stage midwifery care was handed over to midwife Bull and midwife Lacey had no further involvement.
Midwife Bull carried out her own assessment of Mrs Middleton at 1745hrs and noted that the fetal heart rate was 142 beats per minute and that she was contracting 1:2. Meconium stained liquor was draining and Mrs Middleton was noted as being comfortable and resting. A further epidural top-up was given at 1800hrs.
At 1815hrs midwife Bull noted that the CTG had a baseline of 140 beats per minute with a good beat to beat variability. Active pushing commenced at 1830hrs and the midwife continued to monitor the fetal heart rate regularly.
By 1905hrs the vertex was just visible when the labia was parted. Shortly after this midwife Bull contacted Dr Christo who suggested that the mother try pushing in the lithotomy position and that she would come and review. That review took place at 1935hrs and Dr Christo made an entry in the Notes as follows:
"CTG satisfactory. 2nd stage 3 hours Pushing for one hour. VE – vertex LOA. Caput ++. Vertex at +1 station. No significant moulding. Meconium tinged liquor. Pelvis seems gynaecoid. For instrumental delivery."
Dr Christo advised that the mother should be prepared for an instrumental delivery and midwife Bull noted at 1945hrs that preparations were made for that and senior midwife Chitty was called at 2008hrs to assist and the paediatrician was called and asked to attend at 1945hrs. Dr Christo then carried out a ventouse delivery. There was difficulty with the shoulders. The McRoberts Manoeuvre was applied and a further midwife was called to assist. Suprapubic pressure was applied and the legs were hyper-flexed. An episiotomy was performed by Dr Christo who then delivered Finlay at 2012hrs.
What assessments and discussions ought to have occurred in the latter stages of pregnancy?
It was the evidence of Mr Jarvis that the combination of the previous history of a baby with shoulder dystocia and the finding of a uterus that was larger than gestational age, coupled with Mrs Middleton's own view that she thought she was bigger than expected, should have led to an ultrasound assessment of fetal weight during the last few weeks of pregnancy, even though he conceded that ultrasound was not an accurate predictor of a baby's weight. This should then have been followed by a discussion with a senior obstetrician. Mrs Bates expressed the view that a baby that feels large on palpation and a fundal height that exceeded gestational age should have prompted the midwife to refer Mrs Middleton to an obstetrician, regardless of whether or not she knew about the previous shoulder dystocia. Moreover, had they been aware of the previous shoulder dystocia as they should have been, the staff should have taken more notice of what she described as a sudden discrepancy in fetal size.
Tracey Reeves agreed that if the baby was thought to be larger and there was a confirmed history of shoulder dystocia this should have been an indication for an obstetric review.
Mr Tuffnell, for his part, did not accept that the increased fundal height measurements would have mandated any further investigation since they were within range, although he did concede that there would have been those who would have advised that an ultrasound scan be undertaken, particularly if the mother was anxious to have one and it might reassure her. In his view the ultrasound could not be relied on as a predictor of weight particularly so far as a large baby was concerned since it tended to estimate weight towards the mean, that is to say to underestimate it, and ultrasound would not have influenced his decision-making on the issue of the likely size of a baby.
There was much criticism of Mr Jarvis's evidence by counsel for the Defendant in her closing argument, much of it, to my mind, justified. That criticism included the fact that he had retired from clinical practice as long ago as 2002 although it must, of course, be remembered, that the events with which this court is concerned, took place in 2002, and his lack of any particular specialty in shoulder dystocia, both of which criticisms were contrasted with justification with the position so far as Mr Tuffnell was concerned. More significantly, his emphasis on fundal height measurements crossing centiles in early January 2002, which he had plotted on a chart, but which he was forced to concede was not common practice at the time and was not the practice at the Defendant's hospital was, in my judgment, misplaced and his assertion that an ultrasound scan would have shown that Finlay's predicted birth weight would have been 5 Kg + or – 10% seems to me to display a misunderstanding of the paper on which he relied which demonstrated that a single estimation would have been given as counsel for the Defendant submitted in her closing argument. It is also a concern to me that he felt able to assert that a caesarean section was mandated by 18.15hrs at the latest and his apparent change of opinion as to whether pushing should have commenced. Neither opinions inspired confidence. Mr Tuffnell, by contrast, was an experienced practicing obstetrician whose views as to the efficacy or otherwise of an ultrasound scan for predicting birth weight carried real conviction as did his views as to the management of the second stage of labour to which I refer, albeit briefly, below.
For my part, I prefer the evidence of Mr Tuffnell to that of Mr Jarvis on this aspect and conclude on the balance of probabilities that ultrasound scanning was not mandated. That said, as I have recorded, Mr Tuffnell did accept that there ought to have been a discussion between Mrs Middleton and an obstetrician about the issue of risk and the management of the pregnancy in the context of the previous shoulder dystocia.
Mrs Middleton's evidence was that had she known all the material facts she would have recognised the significance of the potential size of the baby and discussed it with the obstetrician. She would have voiced her concern and would have pushed for an ultrasound scan. She would have wanted as much information as possible and she knew that a scan was non-invasive and would not pose a risk to her or, more particularly, to the unborn baby.
What is said on behalf of the Defendant is that the fundal height measurement was within the normal range, contained a subjective element and in any event one or other of the measurements taken on 5 and 9 January 2002 must have been incorrect. Moreover, Mrs Middleton did in fact see an obstetrician on 10 January, albeit for itchiness rather than on account of any concern about the baby's size and there is no evidence that size was raised as an issue with the obstetrician, Mrs Middleton's evidence being that she could not recall any discussion about size on that occasion.
In the light of Mr Tuffnell's evidence, even if it had been discussed, it was said that Mrs Middleton would have been reassured that the measurements were within normal limits and the fact that she was not obese, or diabetic, coupled with Jak's and Dan's birth weights meant that she was at a lower risk of a macrosomic baby and that whatever she may now say she would have done, on the balance of probabilities, she would not have requested an ultrasound scan, her present belief to the contrary being coloured by hindsight.
In my judgment, Mrs Middleton, had she had the information she should have had, would plainly have wanted to understand what risks there were and bearing in mind that she was concerned enough about her size (without the background knowledge of why that was significant in the context of shoulder dystocia) both to have measured herself and to have taken a photograph because she suspected the baby she was carrying was even larger than either Jak or Dan, she would have pressed for an ultrasound scan and would not simply have accepted the reassurance which it is said would have been offered. In this regard, it is to be noted that Mr Tuffnell, even though he expressed doubts about the accuracy of ultrasound scanning, conceded that it was easy to arrange and was non-invasive and he himself, if a mother had pushed for it, might well have agreed to one being undertaken if only for reasons of her reassurance. Moreover it is plain from the letter from the Defendant dated 12 March 2003 in response to Mrs Middleton's letter of complaint of 30 December 2002 that the Defendant's hospital did make use of such scans at the time. On the balance of probabilities, therefore, I conclude that, in all the circumstances of this case, an ultrasound scan would have been requested and would have been undertaken.
Had such an ultrasound scan been undertaken, Mr Tuffnell agreed that on the balance of probabilities the result would have been likely to have shown an estimated weight at term of between 4.5 and 5.5 kilograms and that on the balance of probabilities the scan would produce a result which was plus or minus 10 percent of the actual weight. On any view therefore the predicted weight would suggest that the baby was likely to be substantially larger than either Jak or Dan.
It is also to be remembered that at a weight potentially over 4.5 kilograms the risk that Mrs Middleton might require an instrumental delivery increased and it is common ground that instrumental delivery is in itself an additional risk factor both for shoulder dystocia and the risk of brachial plexus injury and the Defendant, in its letter of 12 March 2003 to which I have already referred, made it clear that if the possibility of a fetal weight of over 5000 grams had been indicated, the mode of delivery including caesarean section would have been appropriately discussed with Mrs Middleton.
I have already touched on Mrs Middleton's evidence about how she would have viewed matters had she known the full facts and of her concern to avoid another delivery like Jak's at all costs and her preference for any risk of injury to be to her rather than to her baby, a perfectly understandable maternal reaction. She says she would also have been heavily influenced by the use of the term "palsy".
She was adamant that a combination of her experience of problems with Jak's delivery, her knowledge that there had been difficulties with Dan's shoulder and the fact that the baby was likely to be even bigger than Jak or Dan had been, the increased likelihood of having a Jak-type delivery and that the risk of potentially serious injury, would cumulatively have led her to opt for a caesarean section rather than a vaginal birth. She would not have been swayed by any suggestion that the actual risks were low since she was naturally risk-averse which was evidenced by her decision to opt for a hospital birth with Finlay notwithstanding the existence of a geographically closer birthing unit. She simply would not want to have run even a comparatively small risk of having a disabled child. She was not herself particularly mathematical and for her the key thing would have been the identification of the risk not its quantification.
On behalf of the Defendant, it was submitted that Mrs Middleton's evidence was necessarily, but understandably, heavily influenced by her knowledge of how events transpired and although palpably an honest witness, she had very understandably been unable to put out of her mind the knowledge of what in fact had happened and what she had learnt subsequently. Moreover, her evidence did not disclose any objective reasons why she would have opted for a caesarean section in circumstances where a majority of women would not. On the contrary, it was said that her instinct following what was, on any view, a traumatic experience with Jak's delivery was to aim for as natural a birth as possible with Dan and that given her good experience with Dan's birth, she would reasonably have hoped a third labour would have an equally positive outcome.
Moreover, in cross-examination, and in response to a question about whether she would have gone against the advice of an obstetrician that a caesarean section would not have been recommended even if the baby was suspected to be larger than her previous babies, she replied that she did not know what she would have done if she had had all the facts and when asked whether there would have been any reason to reject that advice at that stage she replied that she would hope the medical advice would have given both sides of the argument weighing up the pros and the cons of both ventouse and caesarean section. (It should be noted that this passage of cross-examination occurred when Mrs Middleton had been asked a series of questions about what had been happening during the second stage of labour following the review by Dr Christo at 1715hrs and culminating in the decision to proceed with an instrumental delivery and therefore at a time when the risks of caesarean section would have been greater than if such a course of action had been embarked upon before labour had commenced).
I should begin this section of my judgment by reiterating that I find both Mr and Mrs Middleton to be patently honest witnesses doing their best to assist the Court in difficult circumstances. They were in my judgment patently caring parents and their obviously careful approach to life in general was mirrored in their approach to giving evidence, which was both thoughtful and sincere.
I must however be cautious about placing too much reliance on Mrs Middleton's evidence that she would have opted for a caesarean section. As counsel for the Defendant submitted, she now knows that the alternative of a vaginal birth was in fact what led to Finlay being significantly disabled and it is unrealistic to expect her to be able to set aside that knowledge. What I must decide is whether it is more likely than not that she would have chosen to have a caesarean section without the knowledge of what was to come whatever she now says.
Having carefully considered all the evidence I have come to the conclusion that Mrs Middleton would in fact have opted for a caesarean section even if the advice from the obstetrician would have been to proceed with a vaginal birth and I do so notwithstanding the specific evidence of Mrs Middleton referred to above on which counsel for the Defendant, not surprisingly, placed considerable reliance in her closing argument. In coming to that conclusion, I have taken into account the totality of the evidence and my assessment of both Mr and Mrs Middleton as, as was submitted on Finlay's behalf, very careful and thoughtful parents who have made considerable sacrifices for their children's sake. They are plainly people who put their own children's interests very much ahead of their own. By way of example only, Mr Middleton in particular has travelled all over the country to support and facilitate Finlay's swimming activities and both parents have made it clear that they would be prepared to move from their current home in Suffolk to Manchester if necessary to further Finlay's swimming ambitions, notwithstanding that both are in full-time employment in Suffolk. Moreover, I have no doubt that Mrs Middleton would not be deterred by any personal inconvenience such as not being able to drive for a period following a caesarean section.
I was also particularly impressed by Mrs Middleton's evidence as to her approach to risk and in particular that what was key for her was the identification rather than the quantification of risk. That was evidence which very much had the ring of truth about it as did Mr Middleton's evidence as to the traumatic nature of both of the earlier deliveries and his distress that his wife had been injured during Dan's delivery. In my judgment, he would have been likely to have encouraged and/or supported a decision by Mrs Middleton to opt for caesarean section had the full facts been known prospectively.
Mrs Middleton plainly wanted to avoid another traumatic birth like Jak's at any cost. Had she known that Dan's birth, which she thought had gone so well, had in fact been complicated by shoulder dystocia and that there was a risk of the same thing happening in the case of Finlay with the risk being increased as a result of his potential size which might have led to another instrumental birth, on the balance of probabilities, she would have opted for caesarean section since, in my judgment, her aversion to another traumatic Jak-like birth would clearly have weighed more heavily than her desire for a natural birth and her actual elation at what she thought had been a very successful natural birth with Dan would have been overshadowed by the subsequently acquired knowledge that what had been thought to have been an uneventful birth had in fact not been so uneventful and the knowledge that Dan could have been permanently injured as a result of the shoulder dystocia.
It was of course the evidence of Mr Tuffnell that he was able to persuade most of his patients not to elect for caesarean sections in such cases and that therefore his experience was that most patients did not. I do not doubt Mr Tuffnell's powers of persuasion. However, it would appear from the Defendant's letter dated 12 March 2003, to which I have already referred on a couple of occasions, that the Defendant's attitude would not have been quite so negative so far as electing for caesarean section is concerned in such cases and crucially in any event, what this court is concerned with is what these particular parents would have done in the particular circumstances of this case.
On the balance of probabilities therefore I conclude that Mrs Middleton, in discussions with the obstetrician following the ultrasound scan, would not have been influenced by statistics but would have put the wellbeing of her baby ahead of herself and elected, and if necessary pushed, for caesarean section rather than run any risk of repetition of a Jak-type birth and that that would have been the mode of Finlay's birth. It follows in my judgment therefore that Finlay succeeds on the issue of causation.
In the circumstances there is no need for me to go on to consider the Claimant's alternative case based on criticisms made by Mrs Bates of Midwife Bull in allowing Mrs Middleton to push and by Mr Jarvis that by 1815hrs at the latest caesarean section was mandated. Suffice to say that I entirely reject both criticisms and accept the substance of Mr Tuffnell's evidence that the management of labour in this case was entirely reasonable. In particular it was reasonable to allow time for the head to descend before pushing commenced in the hope that this would lead to delivery, bearing in mind that the CTG was reassuring and it cannot be said that Mr Tuffnell's view is illogical. On the contrary, to my mind, it plainly represents the view of a reasonable body of competent obstetricians and Mr Jarvis's opinion to the contrary was, at best, a value judgment in respect of which there is plainly a range of views. It was equally reasonable for Midwife Bull to have allowed Mrs Middleton to begin pushing without first reverting to the Registrar.
Quantum
Finlay's Injuries
Finlay's delivery was complicated by severe shoulder dystocia. As I have recorded, various manoeuvres were required and delivery was described as being extremely difficult. Moreover, it was noted that Mrs Middleton was to give birth by caesarean section in any future deliveries.
On delivery Finlay was macrosomic and weighed 5070gms and had Apgar scores (a measure of fetal well-being out of 10) of 0 at 1 minute, 5 at 5 minutes and 7 and 10 minutes. He required resuscitation, cardiac massage and intubation. There was meconium at, or below, the vocal cords. He was transferred to the special care baby unit where it was noted "shoulder dystocia +++, meconium delivery, large for dates". He was found to have bilateral cephalohaematoma (swelling to the head) and it was noted from the outset that his right arm appeared flaccid and with no spontaneous movement in the right arm or hand representing a right brachial plexus palsy. He remained in hospital for six days and required a splint for his right arm. Although there was some tone in the long finger flexors and some scapula movement there were no other signs of recovery.
Finlay was seen by Professor Birch on 17 April 2002 and it was noted that he had a serious injury to his right brachial praxis of grade 4 with Horner's Syndrome (4 representing the highest level of severity). Serial nerve conduction studies showed persistent disruption in the C5, C6, C8 and T1 nerve roots with some limited reintervation in the C7 nerve root. Although there was some functional recovery thereafter, there remained a problem with finger extension and a significant loss of shoulder function and further splinting of his right arm was required.
On 6 August 2003, at age 1½, he underwent anterior muscle release surgery in his right shoulder, remaining in a plaster cast jacket until October 2003 and he required intensive physiotherapy.
In 2005, at age 4, he developed co-contraction in the right arm and a failure of recovery within the C7 nerve route. As a consequence, on 10 December 2006 he underwent a pronation osteotomy (that is to say a surgical cutting and resetting of the bones to rotate the arm and hand into a more useable position) with subsequent immobilisation in plaster and physiotherapy. There was further revision osteotomy surgery in October 2009 and surgery to remove a metal plate which had fractured in June 2010. Finlay has residual scarring: 12.5cms long in the deltopectoral groove extending to his upper arm and 14cms long on his right forearm.
In short, as appears from the Joint Statement of the orthopaedic experts, Finlay has been left with a right arm that is significantly smaller and shorter, with reduction in size of the shoulder girdle and shortening and reduction of muscle bulk in the forearm. His right arm is about 20 per cent smaller than his left and the fingers are also significantly smaller. As he grows the relative deformity will increase proportionately. At present, the difference in arm length is about 12 per cent and this will persist.
In terms of function, the ranges of motion of the right upper limb are significantly reduced: flexion and extension being 71° on the right compared to 250° on the left. Shoulder rotation is significantly limited and there is no active wrist flexion. Grip strength is significantly reduced, being about one third that on the left.
The orthopaedic experts agree that there is so little movement in the right shoulder and such poor grip in the right hand that essentially the right arm acts as no more than an assist device, although Mr Giddins feels that the right arm has some use such as in supporting paper "and so is a little better than an amputee". However, the experts agree that Finlay will be permanently and severely handicapped in relation to activities around the house, for DIY and on the open labour market. They agree that he is ineligible for employment in the armed services, police or paramedical services and will work essentially in a one-handed fashion.
As a result of the injury, Finlay is plainly vulnerable to significant difficulties in daily life should he injure his left arm or it becomes compromised in any way through overuse. As a consequence of his injury, his finger movement and dexterity are very limited and he struggles with holding implements such as a knife, opening drawers, managing buttons, zips shoelaces, belts and the like. He has difficulties with balance, is prone to fall and cannot save himself using his right arm if he does. He still requires some help with dressing and drying and cannot tie up laces, button-up tight trousers or put on his swimming cap.
Finlay is very keen on sport and his parents have shown great dedication in trying to find activities at which he excels. His principal sport is now swimming. He is unable to use his right arm at all and is categorised as having an S8 disability. He has competed and been picked up by the Paralympics British National Talent Squad and has been swimming in national events since 2012. He is now in the top six in the country. It is common ground that this has helped his confidence.
Finlay has been assessed by a jointly instructed educational psychologist, Mr Albert Reid, whose view was that, but for his injury, Finlay would probably have been right dominant and would have been right-handed. He feels that Finlay has deficits which mean that although he is likely to go on to get GCSEs at average levels, thereafter he would be likely to go on to some form of vocational study. The fact that Finlay is likely to be limited academically does mean that he is unlikely to be able, in terms of employment in the future, to compensate for his physical disability by seeking a career that requires higher intellectual and lower physical skills.
In terms of psychological aspects, Dr Ford's view was that Finlay's vulnerability was mild to moderate and on the balance of probabilities he was at risk of developing an adjustment disorder regarding appearance issues in the future. Dr Newns for her part maintained that, whilst there was a strong likelihood that he would require psychological support, she did not feel it was possible to predict whether he was likely to have symptoms of a clinically significant degree in the future. She did agree that he was at risk of developing psychological problems. Both experts agreed that Finlay was self-conscious about his scar.
General Damages
The Judicial Studies Board Guidelines give a range of £77,715 to £105,875 for severe arm injuries which fall short of amputation but which are extremely serious and leave the injured person little better off than if the arm had been lost; for example, a serious brachial plexus injury.
It is contended on behalf of Finlay that this is a particularly serious injury and is towards the upper end of the scale and that, in addition, the Court has to take into account Finlay's vulnerability and the likelihood of psychological difficulties which might lead to an adjustment disorder at some point in the future as well as the risk that he might suffer an injury to his left arm.
The Defendant, by contrast, submits that Finlay's injury properly falls in the middle of the bracket since Finlay is in a somewhat better position than an amputee, both cosmetically and functionally in that he can at least use his right arm as an assist device and has some, albeit modest, use from it. It was also submitted that Finlay had coped admirably well with his disability with the encouragement and support of his parents and had been able to partake in virtually all normal activities for a boy of his age, including many sports, skiing, cycling and the like, as well of course as discovering a talent for swimming and competing at national level in that activity.
The range contended for by the parties is £90,000 to £100,000. It seems to me that, having regard to the totality of the evidence in this case, the appropriate figure for general damages is the mid-point between the parties' respective contentions, namely £95,000.
Special Damages
I understand that agreement has been reached on a number of heads both prior to, and in the case of therapies and equipment, during the trial and I do not therefore deal with those matters in this judgment.
Past Care
Prior to discount for the gratuitous nature of the care, Finlay puts forward a mid-point figure of £65,973 whilst the Defendant advocates for a figure of £60,563 with the Defendant contending for a one third discount and Finlay for 25 per cent. Plainly there are authorities which support both approaches.
To my mind Finlay's suggested discount of 25 per cent is to be preferred in the light of the well known case of Evans v Pontypridd Roofing Limited.
Both parties rely on the evidence of their respective experts as to the amount of such care. The only area in dispute relates to the number of hours for transport and therapeutic appointments with Miss Ho allowing 200 hours per annum up until December 2009 (conclusion of surgery) and 40 hours thereafter, whilst the Defendant suggests 50 hours per annum until the end of 2007 and 10 hours per annum thereafter. It is common ground that these are all estimates, the exact amount of time varying from year to year depending on whether there has been surgery or otherwise extensive treatment in any given year. To my mind the suggested mid-point figure of £65,973 put forward on Finlay's behalf is to be preferred since it reflects what, to my mind, is a more realistic estimate of the amount of time actually spent and the relevant figure, therefore, after discount of 25 per cent is £49,479.92.
Travel
There are essentially two issues here. The first is the appropriate rate per mile. Finlay suggests 40p per mile whilst the Defendant concedes 25p per mile. For my part I can see no justification for a figure beyond 25p per mile.
The second issue relates to the cost of attending swimming training and competitions which it is said are likely to continue up until age 18, which the Defendant submits are simply not a result of any breach of duty on its part. Rather they are the costs of pursuing an activity at which Finlay excels and which his parents support him to undertake so that as a matter of principle they are not recoverable. The competing argument put forward on behalf of Finlay is that the costs are properly recoverable as being a mitigation of the loss he has sustained since they arise directly out of his disability. I do not accept that argument, accepting as I do the submissions made on the Defendant's behalf and I reject counsel for Finlay's analogy with attendance at Headway in the case of a brain injury.
Future Care
As I understand it the parties agree the need and rates up until the age of 21. Thereafter they disagree with Miss Ho, contending for six hours per week whilst Ms Green for the Defendant suggests that the need will decrease and then stabilise at 3 hours per week until the age of 30, when it will halve to reflect the likelihood that Finlay will share chores with a partner. It is also agreed that some allowance for future childcare should be made to reflect the possibility that Finlay may, in the future, have one or more children which in turn will give rise to additional care needs in the light of his injury
Plainly it is very difficult to predict what the course of Finlay's future life will be at this early stage, whether, and if so when, he might have a partner and whether, and if so when, they might have children. Whilst I have no doubt that both experts have done their best to identify Finlay's likely future care needs, doing the best I can in the light of the various uncertainties, I conclude that a reasonable approach to the quantification of this aspect of Finlay's claim is to adopt six hours per week until the age of 30 and then to reduce that to 3 hours per week to reflect that by that time he may well have a partner with whom to share chores, coupled with a further allowance of £20,000 for childcare. There should also be some allowance for the likelihood that at least some of the care involved in this future period will have to be secured from agency carers at higher cost. Again, doing the best I can, I would add a further sum of £10,000 in respect of this risk.
DIY, Decorating and Gardening
This is a particularly difficult aspect to quantify. At this early stage in his life it is particularly difficult to predict what, if any, gardening, decorating and DIY Finlay might have performed for himself but for the effects of the injury. Many people can and do many or all of these tasks for at least some period of their lives, whilst others, although they may physically be able to undertake them, choose to pay others to do them on their behalf. Many people, whether out of choice or necessity, do not own their own home and might not even have a garden or have a need to undertake DIY and /or decorating. Doing the best I can it seems to me that a figure of £900 per annum is a reasonable reflection of the sum which Finlay might be anticipated as spending on these items from the age of 25 until the age of 70 which but for his injury, he would have undertaken himself. To my mind it is unrealistic to suggest that, but for the injury, Finlay would have continued to undertake gardening, DIY and decorating beyond the age of 70.
Future Travel
In light of my conclusions as to the attribution or lack of it of travel for swimming, it does not seem to me that any award under this heading is justified.
Loss of Earnings
Again, with a thirteen year old, quantification of future earnings is particularly difficult and perhaps not surprisingly, therefore, there is a fundamental disagreement between the parties as to the appropriate approach with Finlay arguing for a multiplier multiplicand approach and the Defendant arguing for a lump sum on the basis of the well-known decision in Blamire v South Cumbria Health Authority ( 1993) PIQR Q1. What is said on behalf of Finlay is that he will plainly be compromised on the labour market, both in terms of his ability to achieve a career in a wide range of fields and in terms of obtaining and retaining employment. Further, whilst it is accepted that Finlay's academic limitations would themselves limit his options in any event, such that he would have been looking at practical and/or vocational occupations, his range of choice within that practical/vocational range of options has been further limited as a result of his injury. I accept the force of those submissions.
It was further submitted that there was a clear differential in earnings between the sorts of practical/vocational occupations which are closed to Finlay because of his injury and those which remain open to him and that that differential should be reflected in an award and that the correct way to approach quantification is to consider what career Finlay would be likely to have pursued uninjured. Given Mr Reid's assessment, these are likely to have been practical careers following the obtaining of vocational qualifications. However, with his disability, Finlay cannot enter fields of work such as engineering draughtsman, IT technician or electrical trades and is more likely to be restricted to working in capacities such as a disabilities sports coach, or in sales and customer service or other administrative occupations, the earnings for which are, it is said, substantially lower.
Equally it is submitted on the basis of the orthopaedic and other evidence to which I have referred that Finlay has a significant disability for the purposes of Ogden 7 and that the full multiplier adjustment set out in Table B is warranted.
On the Defendant's behalf it was submitted that given all the uncertainties, the Court cannot make an accurate assessment given Finlay's youth, personality and the optimistic predictions for his future and all the other circumstances of the case such that the appropriate approach is to award a lump sum and adopting a broad-brush approach the relevant figure is £50,000.
For my part I do not accept that submission made on the Defendant's behalf. In my judgment this is just the sort of case where it is appropriate to adopt the approach advocated on Finlay's behalf. The question is whether and to what extent there is in fact an earnings deficiency. On this question I am satisfied that there is a deficiency as a result of the inevitable limitations on the type of practical and vocational occupations now open to Finlay which attract lower salaries than some of the practical/vocational occupations closed to him as a result of his injury. However, as it seems to me, the figure quoted on Finlay's behalf as to likely earnings uninjured is overly optimistic as a result of the inclusion of some particularly high earning categories, such as design and development engineer and teaching and educational professional, in arriving at an average. Absent these particular occupations, the average uninjured earnings become £29,040 gross (rather than £32,500) with a consequential reduction to arrive at the net figure. I would adopt the average injured prospects figure of £17,304, giving a figure of £14,721 net referred to by Finlay's counsel in his closing argument in order to arrive at the multiplicand.
Thereafter adopting Ogden 6, the multiplier from 21 to 68 (Finlay's stated retirement age) is 27.14 which must be reduced by 0.8229 to reflect accelerated receipt for 7.89 years, giving a multiplier of 22.33 and allowing for the fact that Finlay will pursue Higher Education, the appropriate Table B discount is 0.61. The difference in multiplier is therefore 0.92 - 0.61 namely 0.31 giving a multiplier for loss of 6.92.
There is a claim for loss of pension. To my mind this is wholly speculative and I am not persuaded that there is any attributable loss under this heading.
Form of award
The Court is obliged to consider whether or not to make a Periodical Payments Order. In this case, I have no doubt that such an order would not be appropriate having regard to Finlay's long life expectancy and the comparatively low sums recoverable in respect of future care and the like, coupled with the administrative complexity of such an arrangement.
Conclusion
I trust that I have dealt with all the issues on which the parties require a determination and that the parties will be able to calculate the sums due in respect of damages to reflect the terms of this judgment. If, however, there remain any matters in dispute on which, inadvertently, I have failed to make a ruling, I should be grateful if the parties would alert me to the lacuna, providing a short skeleton argument setting out the respective positions on the outstanding matter(s) and I will endeavour to incorporate my conclusions within the draft before the judgment is formally handed down.
Subject to that caveat, I trust that the parties will be able to agree the terms of an order which reflects the substance of this judgment.
Finally I would like to take this opportunity to thank both counsel for their considerable help and assistance throughout this trial. |
Mr Justice William Davis:
Introduction
The Claimant, Ian Milroy, is now aged 55. In 1989 he began working for the Defendant, BT, as an engineer. In 2003 he attended a one day BT course in order to qualify as a Mobile Elevated Work Platform ("MEWP") operator. He was trained to operate a Type 5 MEWP. This is a modified Ford Transit van with a boom rising from the roof of the van. The working platform is a bucket at the end of the boom capable of accommodating two people. The raising and other movement of the boom is controlled either from a set of controls within the bucket or from controls at ground level at the rear of the van. A MEWP would be used by BT employees to gain access to telephone lines and other relevant installations at high level.
Mr Milroy initially only worked intermittently as a MEWP operator. From 2004 he worked permanently in that capacity. Until early 2009 each MEWP was manned by two trained operators. One operator would work from the bucket whilst the other would act as ground support. Mr Milroy fulfilled both functions. From early 2009 onwards each MEWP was manned by a single operator. When a MEWP was required by an engineer working on site for high level access, whether on the highway or at a building, the engineer would contact a line manager who then would send a MEWP. The engineer would be required to act as ground support for the trained MEWP operator whilst the MEWP was being used.
On the 26 August 2009 Mr Milroy responded to a request for the attendance of a MEWP on a country lane near Catsfield, East Sussex. An engineer named Keith Bradley was on site there and he needed to gain access to the top of a carrier pole. Running alongside the lane were overhead high voltage power lines ("HVPL"). When Mr Milroy was operating the MEWP in its raised position, he came into contact with the current running through the HVPL either because his head touched the power line or because there was arcing of current from the power line. As a result he suffered serious injury.
Mr Milroy now brings a claim against his employers. He alleges that BT failed to provide a safe system of work such that they were in breach of their common law duty and in breach of statutory duties imposed by the Electricity at Work Regulations 1989 and the Provision and Use of Work Equipment Regulations 1998. He also alleges that they are vicariously liable for the breach of duty of his fellow employee, Mr Bradley. BT deny any liability to Mr Milroy. They say that they had in place a safe and sufficient system of work so as to fulfil their common law and statutory duties. Alternatively, they say that Mr Milroy was negligent himself to such an extent as to extinguish their liability or, at the very least, sufficient to reduce very substantially the contribution of any breach on the part of BT. I am required only to decide the issue of liability. Should it arise, the issue of quantum of damages – if not agreed - will be determined at a later date.
Preliminary issue – admissibility
Mr Milroy did not give evidence from the witness box. On the 13th December 2013 he signed a comprehensive witness statement. That statement was the subject of a Civil Evidence Act notice dated 26 January 2015, the basis of the notice being medical evidence as to Mr Milroy's lack of capacity to give evidence in court. Mr Daniels on behalf of BT submitted at the outset of the trial that I should not admit the evidence at all on the basis that the medical evidence demonstrated that Mr Milroy was not competent to give evidence at the time of his witness statement. I did not accept that submission for the following reasons.
On 26 November 2012 Mr Milroy's capacity to instruct a solicitor and to understand the legal process was considered by a clinical psychologist, Lorna Morris. On testing of Mr Milroy she found the following: moderate to severe impairment of information processing speed; mild reduction in general memory functioning; severe impairment of attention abilities. She noted that he had poor insight into these cognitive impairments. Notwithstanding those matters she concluded that he had full capacity to conduct the proceedings. However, she went on to say that the impairments she had found on testing were likely to mean that he would not properly comprehend questions put to him in court were he to give evidence and that he might become flustered or confused in the witness box. She considered that, in that environment, he was at risk of being falsely led.
In December 2014 Dr Bodani, a consultant neuropsychiatrist, reported on the issue of mental capacity. He had examined Mr Milroy in September 2014. He confirmed and agreed with the findings made by Lorna Morris when she tested Mr Milroy. He disagreed with her conclusion that those findings were compatible with capacity to conduct the proceedings. He observed that the cognitive impairments meant that, if he were presented with too much information at the same time, Mr Milroy would "blank out" or would become flustered and anxious. Dr Bodani said that this meant that he would not be able to understand issues as they arose and to give proper instructions. Dr Bodani also referred to the risk of Mr Milroy being suggestible and easily led i.e. in the context of the conduct of the litigation.
That evidence clearly was sufficient to justify the appointment of Mr Milroy's wife as his litigation friend. Mr Daniels's argument is that it demonstrates that Mr Milroy was not capable when he made his witness statement of understanding the questions which must have been put to him for the statement to be taken and/or of giving a rational account of himself. I disagree. Mr Milroy undoubtedly would have considerable difficulty in dealing with the process of giving evidence in court and unassisted the evidence he gave in that context would be highly problematic. If these were criminal proceedings and he was required to give evidence, he would be the kind of witness for whom an intermediary to assist him would be essential. However, there is nothing in the evidence of Lorna Morris and/or Dr Bodani to indicate that Mr Milroy is or was incompetent to give an account of working practices at BT, of the training he received and insofar as he could recall them of the circumstances in which he came to be injured. He required the right circumstances and time to reflect on what he was saying. I am entitled to infer and I do infer that his solicitors approached the taking of his witness statement with the content of Lorna Morris's report very much in mind.
His mild reduction in memory functioning is a matter to which regard must be had when assessing the reliability of Mr Milroy's evidence. In his closing submissions Mr Daniels submitted that the evidence of Mr Milroy "must be approached with considerable caution" because of the issues surrounding capacity. That is putting it too high. I shall not ignore the medical evidence when assessing the evidence of Mr Milroy. Equally it does not provide a basis for significant caveats to be placed upon that evidence.
The effect on the weight to be given to Mr Milroy's evidence due to his absence from the witness box is not an issue of admissibility. However, it is convenient to deal with it at this point. The written submissions of Mr Daniels note that important areas of Mr Milroy's evidence – his training, his decision making on the day, the conversations he had with Mr Bradley, what actually happened – could not be explored in cross-examination. That is true. But there is a limit to what could have been achieved in cross-examination. Mr Milroy's evidence is that his memory of events on the day of the incident comes to an end at a point prior to any possible discussion or decision making in relation to the use of the MEWP in close proximity to HVPL. There is no reason to doubt that part of his evidence. It is consistent with the medical evidence in respect of the consequences of the accident. It is something which BT accepted as genuine in the course of their investigations. It follows that cross-examination on the central issues in the case would not have been a useful or profitable exercise. I accept that he could have been cross-examined about training he underwent in September 2008 which both parties agree is of significance. Even that cross-examination would have been of limited scope. What Mr Milroy says about his recollection of that training is clear. I have had the advantage of seeing the training materials provided to Mr Milroy in precisely the same form as they were provided to him. Though some difficulties arise as outlined hereafter I am in a reasonable position to assess his evidence on this point. Although the absence of the opportunity to cross-examine is not to be ignored, it is of limited effect vis-à-vis the weight to be attached to Mr Milroy's evidence.
The Factual Background – Training and associated issues
When Mr Milroy in 2003 trained as a MEWP operator BT's guidance in relation to working near to HVPL was set out at part 7 of a document EPT/PPS/B046 entitled "Work on overhead BT lines in the vicinity of power". It was in relatively brief terms. The relevant passage was as follows:
"To avoid danger keep….elevating platforms etc. well clear of electrical equipment and, in particular, avoid any possibility of their contact with overhead power wires. When working near HV power lines, as far as possible, keep all personnel, tools and appliances away from any HV power conductor by a distance at least equal to the clearance shown below."
In respect of a power line with an operating voltage of up to 33Kv (which was the type of power line involved in the accident) the clearance distance was identified as 2 metres.
It is not apparent from the evidence I have heard the extent to which Mr Milroy's attention was drawn to that document. In 2003 BT's system involved providing each engineer or MEWP operator with a Filofax containing all of the relevant manuals and safety guidance. I shall infer that Mr Milroy had a Filofax with this document within it. I have not seen the detailed content of the training given to him in 2003. I have been provided with what appear to be e-learning slides, one of which depicts a power line and bears the legend "33Kv keep 2 metres clear". That is the only slide dealing with working near HVPL. Given the terseness of the document cited above I conclude that this was the sum total of Mr Milroy's training in relation to HVPL at this point. Mr Milroy's evidence was that he understood the instruction to be that he was not to go within the area of a notional 2 metre diameter from any HVPL.
David Wallington, the Group Safety Officer of BT, gave evidence that this guidance was intended to indicate that the 2 metre clearance was to be horizontal i.e. a MEWP on the ground should not be within 2 metres of the power line above. Mr Wallington frankly and properly accepted that this was not clear from the contemporaneous documents. He accepted that they sensibly could be read as indicating a clearance of 2 metres in diameter around the relevant power line. He said that the system of working in the vicinity of HVPL was "clarified" (to use his word) in about 2007 because the "confusion" (again his word) in the earlier documents had been recognised. There was no little debate in the course of the evidence as to the proper description of what occurred in 2007 in relation to MEWP working near HVPL. I am satisfied that it amounted to a significant and important change in working practice. I am satisfied also that it was a necessary change in the system of work. Merely leaving a clearance of 2 metres in diameter around a power line exposed anyone working in that position to a significant risk of serious injury or death.
Two relevant documents were issued by BT. By now the Filofaxes had been superseded by laptop computers. Thus, the documents were provided in electronic form only. SFY/GRA/A019 was entitled "Generic Risk Assessment – Working with MEWPs". It set out in short form the system to be adopted when working in the vicinity of HVPL. It is not necessary to consider this document in any detail since it was accompanied and supplemented by a new section of the BT Health and Safety handbook – SFY/HSH/039. This latter document was the comprehensive revision of the system of working in the vicinity of HVPL. The essential features of the revised system were as follows:
An on-site risk assessment to be completed if a MEWP was to be used within 25 metres of HVPL.
In such circumstances 2 MEWP trained operators had to be in attendance before a MEWP could be operated.
A red sector was to be identified i.e. a minimum of 2 metres either side of the HVPL with a green sector beyond it.
No part of the MEWP could be allowed to encroach into that red sector at any time during the work.
The ground support person ("GSP") had an essential role in what was termed safe sector working. He was required to be involved in the risk assessment and, during movement of the working platform of the MEWP, he was required to monitor visually the operation of the MEWP and to guide, warn and direct the MEWP operator in relation to the position of the MEWP in relation to the HVPL. In the event of the MEWP entering the red sector the role of the GSP was to tell the operator to stop the MEWP and to move it out of the red sector.
Since this was a significant change to the working practice of MEWP operation near to HVPL, BT provided specific training for MEWP operators and for engineers generally. In Mr Milroy's case this occurred on the 19th September 2008. His evidence is that he was unaware of the new guidance prior to this date. The relevant documents were within the electronic file of guidance and instructions provided to him on his laptop. The evidence of Mr Wallington is that the documents thereby were "available" to Mr Milroy. In strict terms that is correct. However, it cannot amount to sufficient notice to an employee of a significant change to working practice for the relevant material to be placed in an electronic file containing many documents without any further notification. I am satisfied that Mr Milroy was unaware of the new system until September 2008. Until then he understood that a clearance of 2 metres in diameter around the power line was what was required. Moreover, I am satisfied that his understanding was a foreseeable consequence of the materials provided to him in 2003 and that it was foreseeable that he would have been unaware of the change in system unless and until specific steps were taken to alert him to it.
The training in September 2008 was by way of computer based training. On the day in question Mr Milroy undertook 13 different pieces of training activity. Other than the training in relation to "Working safely with MEWPs" (which was the relevant training so far as these proceedings are concerned) I have no evidence as to how long each piece of training lasted. Since each piece of training was separately recorded, I infer that each must have lasted at least a few minutes. The training was in relation to various disparate matters e.g. working on joint user poles, location of underground services, signing/lighting/guarding. The relevant training ("Working safely with MEWPs") was an online programme consisting of a number of modules. At the conclusion of each module the trainee was required to answer some questions before moving on to the next module. There were 20 questions in total. Mr Milroy achieved a mark of 90% i.e. he answered 18 of the 20 questions correctly. There is no evidence as to which questions he answered incorrectly. The training programme lasted for around 30 minutes, possibly slightly longer depending on the length of time taken to answer the questions.
I have watched a DVD which replicates the online training provided to Mr Milroy in September 2008. Mr Milroy's evidence is that he does not now recall the training he was given. He says that, until the material was disclosed to him as part of the post-accident disciplinary process, he remained unaware of the new system. He offers as a possible explanation the fact that he undertook a large number of training programmes on the day in question so that he did not take on board the information in question. Since the adequacy of the training and its context is significant, I must set out the content of the programme as I viewed it.
There were three modules of significance to this case – though it is to be noted that there were three other modules dealing with matters of no relevance to this accident. As the title of the programme suggests, it was concerned with general safety in operating a MEWP. What of the relevant modules? First, there was a module dealing with the GSP. Its message was that the primary responsibility of the GSP was to ensure that the operator and the public were not endangered but that the GSP's role also was to provide help and advice to the operator. It required the GSP to be alert for HVPL together with any other hazards. In the event of work near to HVPL the GSP was required to have completed this training programme and to be a fully trained MEWP operator. Finally the GSP had to remain close to the MEWP so that he could observe what was happening. Second, there was a module dealing with risk assessments. It alerted the person being trained to the generic risk assessment and to the specific risk assessment required where there were HVPL. Third (and most important), there was a module in respect of HVPL. It identified the risks involved with work near any power line. It specified the clearance distance for each type of power line. It emphasised that the assessment of risk was to be a joint exercise between the operator and the GSP. The module then explained that this was a new way of working i.e. the red and green sectors and that no part of the MEWP could enter the red sector. The film showed a GSP marking out the red sector with cones. The module concluded with an explanation of the role of the GSP i.e. to monitor the operation of the MEWP visually and to guide and warn the operator in relation to the position of the MEWP and any HVPL.
I already have observed that assessing the impact of the programme on someone in Mr Milroy's position is subject to some difficulty. As I watched it the new system was explained clearly. But I was watching it for a purpose and I knew to what the programme was directed. I did not see the programme in the context of a dozen other training programmes. I must take those matters into account when assessing the likely impact of the programme on Mr Milroy. Moreover, the questions which were posed in the course of the programme are of some significance. They covered various topics, most of which were unrelated to HVPL and the use of MEWPs in the vicinity thereof. For instance, there were three questions about belt safety and two about dropwires. The questions directly relating to work near to HVPL were as follows. What is the minimum safe clearance distance of HVPL carrying a charge of 200Kv? When does a laminated sheet have to be completed as part of the on-site risk assessment? The first could have been answered by reference to the pre-2007 system. The second referred to the new system but only tangentially. Therefore, Mr Milroy was not triggered to rehearse the critical element of the new system i.e. the introduction of a red sector into which the MEWP was forbidden from encroaching. I conclude that it was foreseeable that this single piece of computer based training delivered on the same day as a dozen other pieces of training would be insufficient to ensure that Mr Milroy had absorbed the very significant change that had been made to the system of work in the vicinity of HVPL. It follows that I accept his evidence that he did not appreciate that there was a new system or what it was.
In reaching this conclusion I reject the evidence of Mr Wallington on this issue. In his witness statement he said this: "From my knowledge of the training that BT gives and from the records of the specific training the Claimant received and the competencies he showed in being licensed and in his FPQ checks I have no doubt that he would have been aware of BT's policies and instructions relating to working near overhead power cables." Mr Milroy was licensed on 24 July 2008 i.e. about 8 weeks prior to his training. Any competency he showed in that process cannot have reflected "BT's policies and instructions" as they then applied since Mr Milroy had yet to be trained. That factor undermines the conclusion reached by Mr Wallington. I observe in passing that it does not reflect well on BT's process of licensing that a MEWP operator was licensed to work in the proximity of overhead electrical cables when he had yet to be trained on the system of work in place. As one of BT's witnesses put it "there could have been a better way of doing it". What about the FPQ checks? There were two such checks after Mr Milroy had been trained. An FPQ check is an exercise carried out by a BT manager of the employee as the employee is engaged on site. It requires the manager to go through a long list of questions, some of which will be marked "not checked" where the relevant activity is not being undertaken at the time. On 16 March 2009 Mr Milroy was seen by a Mr Blackaby. Question 40 (out of 63) was as follows: "Can the person demonstrate that all hazards from any overhead power lines in the vicinity have been identified, knows the precautions to take and has applied appropriate control measures to manage any significant risks?" Mr Blackaby marked that question as checked. In his witness statement Mr Blackaby said that he would not have marked this question as checked if he had not been satisfied about Mr Milroy's competence. Mr Blackaby explained the position further in his oral evidence. What he actually asked Mr Milroy was "if you are in the vicinity of power lines, do you know the correct precautions to take?" or something to that effect. When Mr Milroy answered that he did, Mr Blackaby moved on since he "did not have time to go through every rule and regulation". Mr Blackaby confirmed that the fact that other questions which were more specific to work near to HVPL were marked as unchecked meant that Mr Milroy had not been working near HVPL at the time of the check. The FPQ exercise in this respect did not involve any observation of the proper system in operation. I entirely understand the pressure of time under which Mr Blackaby was operating. He is not to be criticised for the perfunctory nature of his enquiry of Mr Milroy. Equally it is completely unrealistic to say as he did in his witness statement that he was satisfied about Mr Milroy's competence in relation to HVPL. Mr Milroy's response gave the listener no indication at all of what precautions Mr Milroy would take. On 11 August 2009 a further FPQ check was conducted by a Mr Simmonds. He marked the relevant question as unchecked doubtless because there were no HVPL in the vicinity at the time and he did not consider that he had time to review the relevant system in detail. All of that means that the conduct of FPQ checks does not begin to provide a basis for the assertion made by Mr Wallington.
Part of Mr Milroy's pleaded case is a breach of Regulation 9(1) of the Provision and Use of Work Equipment Regulations 1998 which is as follows:
9.-(1) Every employer shall ensure that all persons who use work equipment have received adequate training for purposes of health and safety, including training in the methods which may be adopted when using the work equipment, any risks which such use may entail and precautions to be taken.
Given the context in which the training for the use of MEWPs in the vicinity of HVPL was given – the introduction of a new system of working to revise substantially a previous unsafe system where the possible consequence of failing to follow the new system was very grave – I conclude that the training given to Mr Milroy was not adequate. It was given many months after the new system was introduced via changes or additions to computerised materials. It was one piece of training delivered on a day when a significant amount of other unconnected training was provided. Even within the relevant training programme other issues were considered. The questions which formed part of the training did not address the critical aspects of the working method. Given the potential importance of the issue it was not adequate for there to have been no follow up whether via FPQ checks or otherwise. I also consider that it is significant that operating a MEWP in the vicinity of HVPL was unusual. Mr Wallington said that "the vast majority of MEWP operations occur away from HVPL". Mr Milroy had never worked close to HVPL prior to the date of the incident. If training in the use of equipment is likely to be put into practice on a regular basis, the training will be reinforced by its practical application. That in effect will be part of the training. Here the relevant use of the MEWP was bound to be very unusual yet also extremely risky in terms of health and safety. That underlines the inadequacy of the training given to Mr Milroy.
Mr Milroy was known as a good and careful MEWP operator. That is the evidence of BT's witnesses as well as the witnesses called by Mr Milroy. I am satisfied that, had his training been adequate, he would have followed the system as introduced in 2007. In that event he would not have suffered injury because the system of work would not have allowed him to operate the MEWP where he did. It follows that BT's breach of statutory duty in respect of Regulation 9(1) was a significant cause of the accident.
The Accident
The evidence as to the circumstances of the accident itself is limited. Mr Milroy's injuries mean that he has no recollection of the events immediately prior to the accident. He does provide an account of the lead up to those events. He went to the country lane near Catsfield at around 4.00 p.m. on 26 August 2009. He met Mr Bradley whom he did not know. Mr Bradley was the engineer on site. He explained that he was trying to locate a fault on the line and that access to the top of a carrier pole (CP 10) was needed. The pole was designated "D" which meant that it was unsuitable to use a ladder. Mr Milroy conducted a risk assessment. This was an informal risk assessment which he did in his head. He noticed HVPL nearby but they were of no relevance to the use of the MWEP at CP 10 because they were some distance away. It is clear that this assessment was correct. Mr Milroy used the MEWP to gain access to the top of CP 10. Mr Bradley acted as GSP. Mr Milroy identified that the cables were not working at CP 10. He lowered the bucket of the MEWP. That is Mr Milroy's last recollection until the following morning. Nothing up to that point was anything other than wholly routine.
In his closing submissions Mr Daniels observed that for subsequent events "Mr Bradley is the only evidence we have". In fact there is no evidence from Mr Bradley in the ordinary sense of the word. Neither party has served a witness statement from him or called him. I draw no adverse inference against either party from the absence of Mr Bradley from the proceedings. Equally, I am left without any proper evidence from him at all. The effect of this lacuna in the case is accentuated when consideration is given to the hearsay material relating to Mr Bradley.
He told a police officer at the scene that a gust of wind had blown the bucket in which Mr Milroy was standing into the mains cable.
Prior to the arrival of the police he had said to a lady who had seen at least some of what had occurred that she should say that he was on the ground throughout.
In his BT disciplinary interview he said that he had gone up in the bucket with Mr Milroy because Mr Milroy did not know how to use the equipment to carry out the relevant line test, the decision to do that being a joint one.
In none of that material does Mr Bradley give any proper explanation of how the accident occurred. What he told the police officer was clearly a lie. His remark to the lady at the scene was linked to that lie. The only reported description of the accident from Mr Bradley comes from an investigation report prepared by his trade union. It is impossible to gauge whether what he told the investigator has been accurately reported. Assuming the report to be accurate, assessing the credibility of the account is highly problematic. There is no doubt that Mr Bradley told self-serving lies in the immediate aftermath of the accident. For what it is worth, his account as reported in the union investigation report was that the MEWP was moved from CP 10 to CP 9 in order for the line to be tested at that pole. The MEWP was used to gain access. He went up in the bucket for the reason given in his BT disciplinary interview. He said that he was working on the line at the top of CP 9 when a lady came on the scene with a horse. The lady could not get to where she wanted to go because of the position of the MEWP. She asked if the MEWP could be moved. Mr Bradley said that they would only be a couple of minutes at which point Mr Milroy unexpectedly moved the bucket. This surprised Mr Bradley because he was still working on the line at the top of CP 9. Mr Milroy said "oops sorry" at which point Mr Bradley turned to see Mr Milroy standing rigid. The bucket then moved back to the top of CP 9.
Mr Daniels relies on this account as an accurate description of the events. He argues that one consequence is that Mr Bradley cannot be criticised for failing to warn Mr Milroy about the proximity of HVPL as he moved back because Mr Bradley then was engaged in a task at the top of CP 9. I do not accept that the account is accurate in the respect relied on by Mr Daniels. There is a preponderance of evidence that the bucket was moved by Mr Milroy as a result of the request made by the lady with the horse. However, the distance from the top of the pole to the nearest power line was 4.25 metres. (I take this distance from the EDF measurement as later provided. It is a slightly shorter distance that was understood to be accurate during the hearing. The difference is of no significance.) The movement of the bucket on the MEWP could not be fast. The evidence is that, when first operated, the bucket will move at a snail's pace. Whilst it can speed up a little thereafter, it would have taken at least 2 or 3 seconds to reach the nearest power line. Any surprise element would have disappeared by the time that Mr Milroy came into contact with the power line. The reality must be that Mr Bradley was aware that the bucket was to be moved as a result of the request by the lady with the horse. He was not still working at the pole when the bucket began to move and its movement did not come as a surprise. Had he chosen to do so, he could have kept a look out for the power line.
The system of work adopted on 26 August 2009
In order to gain access to CP 9 Mr Milroy parked the MEWP almost exactly below the HVPL. For that reason he must have used a stepped approach to get to the top of CP 9. The bucket of the MEWP could only be moved in one plane at a time i.e. either upwards or sideways. In order to avoid the HVPL as the bucket achieved its position at the top of CP 9, Mr Milroy must have moved the bucket up a little, then to the side a little, then up a little and so on. In that way he was able to keep 2 metres away from the HVPL which was what he believed was required in order to operate the MEWP safely given the presence of the HVPL.
The unequivocal evidence of Mr Colquhoun, an engineer called on behalf of Mr Milroy, was that this was in fact a safe system of work albeit not the one prescribed by BT. Mr Cotterill, the engineer called on behalf of BT, agreed with Mr Colquhoun but he added that considerable care would be required in adopting this stepped approach. It is submitted that, if that joint view is accepted, the causative effect of any failings on the part of BT in respect of the accident fall away leaving only the part played by Mr Bradley as a relevant issue. I shall assume for this purpose that this submission is correct. Mr Daniels argues that I only can depart from the joint view of the expert engineers if there is a permissible evidential basis for doing so. I agree with that proposition. In fact there is ample evidential basis for doing so. Mr Wallington is a witness with a considerable level of expertise. In his witness statement he said "no sensible engineer or indeed member of the public in my view could reasonably assume operating a MEWP in such close proximity to power cables as the Claimant did is safe". Leaving aside the implied comment within that evidence about the sense of the engineers instructed by the parties in this case, his view is properly admissible on the issue of safe system. The HSE inspector who completed the investigation, Mr Simmons-Jacobs, is a specialist inspector in relation to this type of incident. His view was expressed in clear terms. "….it was foreseeable that the basket of the MEWP or someone riding the platform might come into contact with the power cables during normal action of the boom and platform". He cited guidance issued by the Energy Networks Association and the relevant BS code of practice in support of that view. It follows, I am quite sure, that, despite the evidence of Mr Colquhoun which has some support from Mr Cotterill, the system of work adopted by Mr Milroy was unsafe. It is true that the accident must have occurred when Mr Milroy did not strictly follow his stepped approach. But the very reason for maintaining the kind of exclusion zone set out in BT's own system is to allow for the fact that a minor error close to HVPL can have catastrophic consequences. As Mr Wallington said, the operation of the MEWP at CP 9 should have never have taken place at all.
In the context of the system of work he in fact employed Mr Milroy pleads a breach of Regulation 4(3) of the Electricity at Work Regulations which is as follows:
(3) Every work activity, including operation, use and maintenance of a system and work near a system, shall be carried out in such a manner as not to give rise, so far as is reasonably practicable, to danger.
For the reasons already identified the system of work did give rise to danger. Because of the failure to provide Mr Milroy with proper training or other satisfactory notification of the appropriate system, BT created and are liable for this breach of statutory duty.
Mr Bradley
Mr Bradley was not a fully trained MEWP operator. Thus, even if it had been possible to maintain a 2 metre horizontal exclusion zone (which it was not), the use of the MEWP should not have taken place. A second fully trained MEWP operator was needed to act as GSP. Much debate occurred in the course of the case as to whose responsibility it was to establish Mr Bradley's status. Should he have pointed out his lack of qualification so as to prevent the use of the MEWP near to HVPL? Was it incumbent on Mr Milroy to do so in view of his status as MEWP operator? This debate was wholly sterile. Neither man appears to have been aware of the requirement for a second MEWP trained operator to act as GSP. Certainly Mr Milroy was not. That follows from my findings in relation to his knowledge of the content of the electronic guidance and his recollection of the September 2008 training. In early 2009 Mr Bradley undertook the same computer based training programme as that completed by Mr Milroy in 2008. In the course of his disciplinary process he said that he remembered "very little of it". On the balance of probabilities I conclude that Mr Bradley had no real recollection of the training he had been given in relation to working with a MEWP in the vicinity of HVPL. Thus, he did not recall the requirement in respect of attendance of a second trained MEWP operator. In all of those circumstances the issue of who was responsible for establishing Mr Bradley's status does not arise.
What can be said about Mr Bradley is that he did not stay on the ground to act as a GSP when the MEWP was being operated in close proximity to HVPL. In his state of knowledge as it then was, that is what he should have done. Had he done so, he would have been in a position to warn Mr Milroy whenever he moved too close to the HVPL. As BT's own guidance makes clear, that is a primary purpose of a GSP when there are overhead dangers. In argument it was suggested that the GSP is there to deal with the safety of those on the ground. That is part of the function of a GSP but only part. By entering the bucket Mr Bradley ensured that there was no proper lookout being kept for any incursion of the bucket into area close to the HVPL. I am satisfied that this was a causative breach of his duty owed as a fellow employee to Mr Milroy.
I do not consider it necessary to consider whether Mr Bradley, once he was in the bucket, failed in his duty to keep a look out as the bucket was manoeuvred – always assuming such a duty existed. His fundamental breach of duty was removing himself from a position on the ground where he could provide proper guidance as a GSP. He apparently did so because he had the technical knowledge to carry out the relevant test whereas Mr Milroy did not. One answer to that conundrum was to contact the coach (someone in a supervisory capacity) to whom he already spoken twice in the period leading up to the accident and explained the problem. Whatever the coach would have advised or decided, it certainly would not have involved Mr Bradley going aloft in the bucket along with Mr Milroy.
No evidence has been called from the coach (a gentleman named Guttridge). Part of Mr Milroy's pleaded case is that this man ought to have realised that there were HVPL in the area in which event he ought to have stopped the work taking place – or not sent Mr Milroy to the scene at all. I am not convinced by this proposition. It is said that the presence of underground BT cables ought to have alerted him to the presence of HVPL. Even if that should have been sufficient to alert him, Mr Guttridge provided a MEWP to work at CP 10 where there were no proximate HVPL. I tend to the view that any proven failing on the part of Mr Guttridge is too remote from what befell Mr Milroy.
As it turned out it was unnecessary for the MEWP to be used at all at CP 9. On the day after the accident the relevant repair was carried out using a ladder. Although undergrowth needed to be cleared from the area, it was something which was achieved by the two engineers who attended on the next day. Had Mr Bradley adopted that course, no question of using a MEWP near to HVPL would have arisen at all. Mr Bradley was aware that CP 9 was close to HVPL. He knew or ought to have known that this rendered problematic the use of any kind of hoist. In his disciplinary interview he conceded that he simply had given no consideration to any method of working which would avoided the use of the MEWP to gain access to CP 9. Those conducting the interview identified a method of testing which did not involve leaving the ground at all and which could have been used in the situation which faced Mr Bradley. That would have meant that the MEWP never would have been used at CP 9. Mr Bradley was the engineer carrying out the relevant repair work. Mr Milroy only was on site because he was a MEWP operator. It was for Mr Bradley to consider available alternative testing methods. I am satisfied that Mr Bradley was in breach of his duty of care to Mr Milroy by not considering a method of working which did not involve the use of a MEWP close to HVPL when such a method could have been adopted. Mr Bradley was acting in the course of his employment. BT are vicariously liable for his breaches of duty.
Contribution of Mr Milroy
When opening the case on behalf of Mr Milroy, Mr Duthie accepted that Mr Milroy contributed by his own negligence to the event which caused his injury. That was an entirely realistic concession. Mr Daniels submits on behalf of BT that, whatever their breaches, the accident was caused wholly by the negligence of Mr Milroy. When he moved the bucket of the MEWP, he must have been aware that HVPL were close by yet he moved the bucket without keeping a proper lookout. Mr Daniels argues that these actions were the sole cause of the accident. I reject that argument. Where an employer is in breach of a statutory duty owed to an employee, it is rare for that breach not to be of causative effect. That is particularly so where there is more than one breach and where, had the breaches not occurred, the employee would never have been in the situation which led to his injury. In the circumstances of this case BT's breaches of duty as set out above were a substantial cause of the accident. In addition, the breaches of duty of Mr Bradley for which BT are vicariously liable were of significant causative effect.
On the basis of my findings as set above, two criticisms can be made of Mr Milroy. First, he moved the bucket so that he came into contact with the HVPL – or, if not into actual contact, then so close to them as to create an arcing effect. The difference between those two scenarios is of no consequence in terms of Mr Milroy's lack of care. Second, he allowed Mr Bradley into the bucket and went on to raise the MEWP with Mr Bradley on board so as to remove the GSP.
As to the first criticism, I consider that the type of short term inattention which was involved in Mr Milroy's movement of the bucket is the very thing anticipated by the system of work introduced in 2007 by BT. The system of work was set up because an operator of a MEWP cannot operate to fine margins in the vicinity of HVPL. On the available evidence Mr Milroy moved the bucket due to the request of the lady with the horse. He may have been distracted by her. He may have misjudged how far he could move back before beginning his stepped movement of the boom. Mr Milroy failed to take due care in what he was doing but the lack of care was modest and was far outweighed by the breaches of duty which had placed him in the position in which he found himself.
As to the presence of Mr Bradley in the bucket, Mr Milroy clearly must accept at least an equal share of the blame for that and for its consequences. Mr Daniels argues that it was within Mr Milroy's power to prevent Mr Bradley entering the bucket and/or to refuse to move the MEWP whilst Mr Bradley was in that position. He points out that Mr Milroy was the qualified MEWP operator and, as such, in charge of its operation. Thus, so it said, Mr Milroy must bear the greater part of the responsibility for Mr Bradley's failure to act as the GSP. I do not accept that proposition. There is no evidence that either man was in a position superior to the other in terms of their status within BT. The reason why Mr Bradley did what he did was because Mr Milroy could not complete the relevant test due to lack of some technical expertise. In his disciplinary interview Mr Bradley acknowledged that "I thought the quickest thing to do was to go up in the bucket with him". He went on to say that it was the decision of "both of us". I conclude that the notion of Mr Bradley going up in the bucket came from him. Mr Milroy could and should have vetoed it but, in the circumstances as a whole, he is no more than equally at fault in relation to the absence of a GSP. Further, I am satisfied for the reasons already given that the further and separate breach of duty on the part of Mr Bradley was not contributed to by Mr Milroy.
Taking all matters into account I conclude that the contribution of Mr Milroy to the accident and to his consequent injury is one third. In reaching that conclusion I have considered the review of the underlying principles to be applied when assessing contributory negligence as conducted by the Supreme Court in Jackson v Murray and another [2015] UKSC 5. Although that review was carried out in a different context, namely a collision between a car and a pedestrian, the general principle of achieving a balance between causative potency and blameworthiness applies to the circumstances of this case.
It follows that there must be judgment for the Claimant on the issue of liability subject to a reduction of one third to allow for his contribution. Counsel must draft the consequent order to include directions for a CMC to deal with issues of quantum. |
Mr Justice Dingemans:
This is the liability only hearing of a claim by the Claimant, Mrs A, against the Defendant East Kent Hospitals University NHS Foundation Trust ("the Trust"). Mrs A alleges that the Trust, in breach of duties to use reasonable care and skill in the management of her pregnancy, failed to advise her that her baby might be suffering from a chromosomal abnormality either at a consultation on 13 May 2009 or at a consultation on 3 June 2009. Mrs A alleges that had she been advised of this she would have undergone further investigation by amniocentesis, which would have proved the abnormality, and that she would have terminated her pregnancy either in week 32 of the pregnancy if she had been given advice on 13 May 2009, or week 35 if she had been given advice on 3 June 2009.
As it was on 22 July 2009 Mrs A's baby, B, was born suffering from an unbalanced chromosome 4 and chromosome 11 translocation which has caused severe disabilities to B. This is a very rare chromosomal abnormality. The experts at the trial had not heard of a similar case, but Mrs A believed that she had tracked down in the United States another family with a child with a similar abnormality and thought that there might be others worldwide.
Mrs A seeks damages for the costs that she has suffered as a result of B's birth, see generally McFarlane v Tayside Health Board [2000] 2 AC 59.
Issues
I am very grateful to Mr Gibson QC and Mr Dickason for the Claimant and Mr Whitting QC for the Trust for their helpful written and oral submissions. It is common ground that the first and major issue is whether, at the time of consultations on 13 May or 3 June 2009, there was evidence from which it might be inferred that there was a material risk that B might be suffering from a chromosomal abnormality. If so, it is common ground that the doctors ought to have raised that material risk with Mrs A.
If the risk had been raised with Mrs A there are then issues about whether Mrs A would, in the light of the information about the risk, have requested an amniocentesis. It is common ground that if Mrs A had had an amniocentesis, after a delay to enable cellular material to grow and be examined, the chromosomal abnormality would have been discovered. The final issue is whether, either at week 32 or week 35, both of which dates were at a time when the foetus would have been viable, Mrs A would have requested a termination of the pregnancy. It is common ground that if such a termination had been requested there would have been units which would have been able lawfully to carry out that procedure at that late stage of the pregnancy.
Anonymity order
At the commencement of the trial on 16th March 2015 Mr Gibson sought an order pursuant to section 39(1) of the Children and Young Persons Act 1933 ("the 1933 Act") directing that no newspaper report should reveal the name of the Claimant and B. It appeared that no notice had been given to members of the press and that Mr Whitting for the Trust had only been given a few minutes' notice of the application.
The explanation for the lack of notice was that a request had only just been made by Mrs A on behalf of B. I asked about my jurisdiction to make an order in relation to section 39(1) of the 1933 Act in circumstances where B was neither a witness nor the Claimant, and I was told that there had been no time to carry out relevant research into the law before the request was made. Although I was concerned about jurisdiction under the 1933 Act, I was aware that an order might in certain circumstances be made under the Human Rights Act 1998 ("the 1998 Act"). Members of the press then present in Court stated that they had no objections at that time to an order protecting B's identity so long as they could report the existence of the proceedings and the identity of the Trust. In these circumstances I made an interim order preventing B from being identified in any newspaper report until after a further hearing at 10.15 am on 17th March 2015, and I directed the Claimant to produce a Skeleton Argument in support of its application for an order.
In the Skeleton Argument the application for an order pursuant to the 1933 Act was not pursued. This was in the light of the decision in R v Jolleys ex parte Press Association [2013] EWCA Crim 1135; [2014] 1 Cr App R. 15 where the Court of Appeal made it clear that the provisions of the 1933 Act did not extend to a child who was not a victim, party or witness.
In the Skeleton Argument, and in oral argument on 17th March 2015, Mr Gibson then pursued his application on the basis of article 8 of the European Convention of Human Rights ("ECHR") to which domestic effect has been given by the provisions of the 1998 Act. Mr Gibson submitted that: (1) there was a risk that if B was identified, professionals involved in her treatment might not care for her properly; and (2) the case involved the family's private life and there were sensitivities if B ever became capable of knowing what was being said (albeit at a time before her birth) about her parents' attitude to her birth. Mr Gibson relied on the recent judgment of the Court of Appeal in JX MX v Dartford & Gravesham NHS Trust [2015] EWCA Civ 96 as authority for the proposition that he did not need to adduce evidence to show the sensibilities which might be engaged in this case.
JX MX was a case which dealt with anonymity orders for children and protected parties seeking Court approval of a proposed settlement. The Court of Appeal specifically noted the importance of open justice but identified that there had always been a historic exceptions for suits affecting wards and what were then termed lunacy proceedings. At paragraph 29 of the judgment it was noted that approval proceedings for children and protected parties did not lie outside the scope of open justice but the Court saw force in the argument that the court should be more willing to recognise a need to protect the interests of claimants who are children or protected parties, including their right to privacy, in relation to such approval hearings. In such approval hearings, when the reasons for seeking an order would generally be the same, it was not necessary to serve a witness statement. However such an exemption from the normal rules of evidence does not apply to this case, and after further submissions had been made a further witness statement from Mrs A was adduced. This was produced after Mrs A had given evidence in the trial, but both parties were content that I could rely on it for the purposes of the application for anonymity.
In her witness statement Mrs A set out her concerns. She noted that although it was unlikely that B's understanding would ever be at a level to comprehend the implications of the evidence in this case, B was a vulnerable 5 year old who would remain vulnerable into adulthood, and B reacted badly to confrontational or emotional behaviour on the part of other persons. Mrs A was concerned that persons, knowing of Mrs A's approach to some of the issues engaged in this case might harass or confront Mrs A and B either at her school or more generally. Mrs A said that she accepted that everyone had the right to their own views, but wanted to protect B from the consequences of any such confrontation. Mrs A noted that treatment of Mrs A and B at the Trust had always been sympathetic, but she was keen to ensure that B was treated in the same way as if the claim had not been brought.
It is established that the combined effect of section 6 of the 1998 Act and section 37 of the Senior Courts Act 1981 is that the Court may, in appropriate cases, make orders for anonymity, see In re Guardian News and Media Ltd and others [2010] UKSC 1; [2010] 2 AC 697. However it is also established that the Court would not, except in the most compelling circumstances, make further exceptions to the general principles of open justice, see In Re S (A Child)(Identification: Restrictions on Publication) [2004] UKHL 47; [2005] 1 AC 593 at paragraph 20. In cases where both article 8 (privacy rights) and article 10 (freedom of expression rights) are engaged it is necessary to undertake the ultimate balancing test, see In Re S at paragraph 17. This test shows that neither article 8 nor article 10 has precedence over the other, there is a need for an intense focus on the comparative importance of the specific rights, the justifications for interfering with the rights must be considered, and proportionality must be applied to each right.
It is obviously tempting for a Court, particularly in circumstances when dealing with persons who are living with the consequences of the disabilities suffered by B, to do all that it can to remove or lessen the burden of public exposure that comes from open Court proceedings. However it is established that "the hearing of a case in public may be, and often is, no doubt, painful, humiliating, or deterrent to both parties and witnesses" but that "is to be tolerated and endured, because it is felt that in public trial is to be found, on the whole, the best security for the pure, impartial and efficient administration of justice, the best means for winning for it public confidence and respect", see Lord Atkinson in Scott v Scott [1913] AC 417, which was followed and applied in JX MX.
In this case there is no basis for making an order for anonymity, or reporting restrictions, based on the fact that members of the medical profession might treat B less well because her mother had brought proceedings. Such a concern is entirely speculative, and would involve a deliberate and flagrant breach of professional duties on the part of the healthcare professionals, and there is no basis for inferring that it will happen in this case. If such a speculative concern justified an order for anonymity, anonymity orders would be made in every claim arising out of a clinical dispute. In my judgment such an approach would create a risk that public confidence would be undermined in the Court process. The public must have confidence in the Court process where claims with very serious financial consequences for both Claimants and NHS Trusts are determined.
However given the particular circumstances of this case and claim and the particular disabilities suffered by B, and attempting to assess the comparative importance of the article 8 and article 10 rights engaged, in my judgment it is right to grant an order requiring that, in any reporting of these proceedings, the Claimant and her husband are referred to as Mr and Mrs A and that their child is referred to as B. This is because the evidence establishes that B, with her disabilities, reacts badly to confrontation and there is evidence that others may confront Mrs A. This order is intended to preserve the right of the public to know about the claim, the evidence adduced, and the reasons for my decision, but also attempts to provide proper protection to B.
As there was no appearance after the first afternoon from members of the press when issues of anonymity were raised, I will give permission for any person to apply to discharge this order, on giving 48 hours notice in writing to the Claimant's solicitors, who are identified above.
Relevant legal principles
It is common ground that a doctor will be liable for breach of duty if the doctor has failed to do what a reasonably competent practitioner would do having regard to the standards normally adopted in the profession. A doctor who acts in accordance with a practice accepted at the time as proper by a responsible body of medical opinion is not guilty of negligence just because there was a body of competent medical opinion which might adopt a different technique, see Bolam v Friern Hospital [1957] 1 WLR 582. However further and different considerations apply in relation to the issue of providing information and obtaining informed consent.
The issue of consent was considered in Sidaway v Board of Governors of the Bethlem Royal Hospital [1985] AC 871. Lord Bridge and the majority of the House of Lords adapted and applied the Bolam test subject to some exceptions, although Lord Scarman held that the right of patients to make their own decisions was a basic human right protected by the common law.
Lord Woolf MR in the Court of Appeal in Pearce v United Bristol Healthcare NHS Trust [1999] PIQR P53 revisited the issue and held "if there is a significant risk which would affect the judgment of a reasonable patient, then in the normal course it is the responsibility of a doctor to inform the patient of that significant risk, if the information is needed so that the patient can determine for him or herself as to what course he or she should adopt". In Wyatt v Curtis [2003] EWCA Civ 1779 the Court of Appeal applied Pearce and it was stated, at paragraph 16, that "Lord Woolf's formulation refines Lord Bridge's test by recognising that what is substantial and what is grave are questions on which the doctor's and patient's perception may differ …" clarifying that the question was whether any catastrophic outcome was "sufficiently real".
The importance of patient autonomy was underlined in Chester v Afshar [2005] UKHL 41; [2005] 1 AC 134. Lord Bingham at paragraph 5 said the duty to advise was "to enable adult patients of sound mind to make for themselves decisions immediately affecting their own lives and bodies".
The Supreme Court addressed the issue of consent in Montgomery v Lanarkshire Health Board [2015] UKSC 11. There was a constitution of 7 Supreme Court Justices because the Supreme Court was examining the approach taken in Sidaway. In a judgment dated 11 March 2015 (some 5 days before the start of the this trial) the Supreme Court set aside a judgment of the Inner House [2013] CSIH 3, which had affirmed a judgment of the Lord Ordinary in the Court of Session [2010] CSOH 104. A mother had a large baby but was not warned of the risks of shoulder dystocia (where the baby's shoulder gets stuck in delivery) and was not advised of the option of a caesarean section. The Supreme Court reviewed the decisions in Bolam, Sidaway, Pearce, Wyatt and Chester v Afshar. They noted that in Sidaway a number of different approaches had been taken by the Law Lords, and concluded that "the analysis of the law by the majority in Sidaway was unsatisfactory in so far as it treated the doctor's duty to advise her patient of the risks of proposed treatment as falling within the scope of the Bolam test, subject to two qualifications neither of which was fundamentally consistent with that test". Emphasis was placed on patient autonomy.
The appropriate legal test was considered, and it is now established at paragraph 87 of Montgomery, that a doctor is "under a duty to take reasonable care to ensure that the patient is aware of any material risks involved in any recommended treatment, and of any reasonable alternative or variant treatments". The test of materiality is "whether, in the circumstances of the particular case, a reasonable person in the patient's position would be likely to attach significance to the risk, or the doctor is or should reasonably be aware that the particular patient would be likely to attach significance to it".
It was emphasised that "the assessment of whether a risk is material cannot be reduced to percentages. The significance of a given risk is likely to reflect a variety of factors besides its magnitude: for example, the nature of the risk, the effect which its occurrence would have upon the life of the patient, the importance to the patient of the benefits sought to be achieved by the treatment, the alternatives available, and the risks involved in those alternatives. The assessment is therefore fact-sensitive, and sensitive also to the characteristics of the patient".
When confronting arguments which had been raised against such an approach the Supreme Court noted that "the guidance issued by the General Medical Council has long required a broadly similar approach", see paragraph 93 of Montgomery.
The GMC published "Consent: patients and doctors making decisions together" which came into effect on 2 June 2008 and was in force at the material time. It noted that in order to have effective discussions about risk and adverse outcomes which the patients were most concerned about the options, including the option of doing nothing, needed to be discussed. It was stressed that "you must not make assumptions about a patient's understanding of risk or the importance they attach to different outcomes. You should discuss these issues with your patient". Later reference was made to the fact that "Patients should be told of any possible significant adverse outcomes of a proposed treatment" and that in the context of treatment, "a small but well-established risk of a serious adverse outcome" was significant.
Evidence
I heard factual evidence from Mr and Mrs A on behalf of Mrs A. I heard factual evidence on behalf of the Trust from Dr Lenka Galajdova ("Dr Galajdova") a consultant obstetrician and gynaecologist who had obtained that status in Belgium but who was at the time working as a senior Registrar while taking further examinations and who carried out the consultation on 13 May 2009, and from Dr Kate Neales ("Dr Neales"), the consultant obstetrician who carried out the consultation on 3 June 2009.
I also heard expert evidence on behalf of Mrs A from Dr Myles Taylor, a consultant gynaecologist & obstetrician who has over 6 years experience as a consultant in fetal medicine in a district general hospital preceded by 5 years in a London unit and from Dr William Reardon, a consultant clinical geneticist, who has 25 years experience working in Ireland and Britain. I heard expert evidence on behalf of the Trust from Dr David Howe, a consultant in FetoMaternal Medicine who has 12 years experience as a consultant in fetal medicine providing a regional tertiary service, and from Professor Frances Flinter, a consultant in clinical genetics, who has been working 25 years in a regional genetic department.
Much of the evidence was common ground and I will identify the areas of dispute and my findings where there are disputes. Otherwise the narrative below represents my findings on the evidence.
Circumstances leading up to the pregnancy with B
Mr and Mrs A married in 2005. At that time Mrs A was aged 33 years and Mr A was aged 31 years. Mrs A had post-graduate qualifications and worked as a museum curator and her husband worked for a different museum as a collections manager. Mrs A understood that fertility in women declined after their 35th birthday so she had a desire to get on with having a child, and Mr and Mrs A immediately tried for a baby. After 6 months they underwent investigations into sub-fertility. The investigations suggested that normal conception should be possible and showed no cause for concern. As it is relevant it should be noted that Mr A's sperm count was high although the morphology of some of the sperm was poor and there were 50 per cent with forward progression.
After a further 12 months without becoming pregnant Mr and Mrs A attended the fertility clinic at Medway Maritime Hospital and were referred to the Brabourne Clinic for fertility treatment. The fertility treatment was due to commence in February 2007 but in the event Mrs A conceived naturally in January 2007. However Mrs A suffered a miscarriage at 8 weeks.
Mr and Mrs A were told that the natural conception was a good sign, but Mrs A noted that no one had looked into why she had miscarried. I understand Mrs A's concerns about this given what they now know, but the evidence showed that 1 in 5 pregnancies resulted in a miscarriage and it is common ground that there was no breach of duty in failing to investigate the miscarriage. Mr and Mrs A were then provided with the course of fertility treatment funded by the NHS. The NHS will only fund one cycle. They were offered the option of "normal" IVF, in which the sperm and egg are mixed in a dish, or Intra Cytoplasmic Sperm Injection ("ICSI") which involves injecting a sperm directly into the egg. They chose ICSI and Mrs A said she understood that this involved choosing the better looking sperm, and Mrs A recalled being told that the problems with Mr A's sperm were serious enough to proceed straight to ICSI. In October 2007 Mr and Mrs A underwent IVF using ICSI which was unsuccessful.
After this Mr and Mrs A used their savings to undertake one further, and what would have been for financial reasons, final course of IVF. Mr and Mrs A undertook a lot of research because they did not want to use up their savings and proceed if their chances of success were low. They wanted to ensure that they would have a successful pregnancy and a healthy baby, but became concerned about the lack of energy in Mr A's sperm. Mr and Mrs A went to their GP and had a test called a DNA fragmentation and sperm aneuploidy test at a clinic in London. The results were sent to the fertility clinic and their GP. The results showed that the DNA fragmentation test had been carried out on chromosomes 13, 18 and 21 and an "absence of chromosomal disjunction abnormality on the sample studied" was recorded, meaning that there was no chromosomal abnormality detected for chromosomes 13, 18 and 21. Chromosomes 13, 18 and 21 are noted to be capable of causing a trisomy. A trisomy is a genetic abnormality which causes a baby to have 3 copies of chromosomes and not 2 copies of the chromosome. The trisomies which occur with chromosome 13 are known as Patau's syndrome, the trisomies occurring with chromosome 18 are known as Edwards' syndrome and the trisomies occurring with chromosome 21 are known as Down's syndrome.
Under "Notes" at the bottom of the DNA fragmentation report it was stated "Please note that 3 of 22 autosomes have been examined. Therefore a normal result does not preclude increased aneuploidy rates for other chromosomes". This meant that there was a warning that other chromosomes might have more or less than the normal number of copies. All of the professionals who were consulted advised them that there was no reason not to proceed with the privately paid ICSI. There is a letter dated 16 June 2008 which suggests that Mr and Mrs A were told that ICSI represented the best chances of obtaining conception.
Mr A's chromosomal abnormality
It has now been established, as a result of further testing following B's birth, that although Mr A has the normal number of chromosomes (46), part of chromosome 4 has broken and attached itself to chromosome 11. Chromosome 11 has part of chromosome 11 broken which has in turn attached to the missing part of chromosome 4. This has created what is called a balanced translocation. In a normal pregnancy the father and mother will supply 23 chromosomes each to make up the 46 chromosomes in the baby.
It is apparent from the evidence that I heard that Mr and Mrs A were particularly frustrated that Mr A's chromosomal abnormality had not been picked up by testing before or after they underwent the second round of ICSI treatment, but it is accepted that there is no claim against those who advised Mr and Mrs A leading up to the second round of ICSI treatment. As noted above the DNA fragmentation test had shown an absence of chromosomal disjunction abnormality on the sample of Mr A's sperm which had been tested.
B's pregnancy and the management and treatment of Mrs A
The second round of ICSI treatment was successful. An ultrasound scan (at 7 weeks and 2 days) identified a pregnancy on 13 November 2008. On 8 January 2009 Mrs A was booked in for antenatal care at the William Harvey Hospital in Kent. The estimated delivery date was 6 August 2009, at which time Mrs A was going to be 37 years old.
In a scan on 26 January 2009 (when Mrs A was 12 weeks and 4 days) it was noted that there was a "single viable fetus".
Nuchal translucency and serum biochemistry tests confirmed that B was not at an increased risk of genetic abnormalities for trisomies with chromosome 13 (Patau's syndrome), 18 (Edwards' syndrome) and 21 (Down's syndrome). These tests were discussed on 25 February 2009 and Mrs A was handed a document, which she recalled as being smaller than the document in the bundle but which it is accepted contained the same figures, which recorded the risks of chromosomal abnormality adjusted to take account of the results. The risks were 1:37,891 for a trisomy with chromosomes 13 and 18, and 1:1753 for a trisomy with chromosome 21. Mrs A said that the only chromosomal abnormality about which she was really aware before the birth was Down's syndrome. The cut-off risk on the document for referring for an amniocentesis was 1:250 for Down's and 1:100 for the other two syndromes. Dr Reardon considered that those cut-off rates were consistent with good practice.
On 27 March 2009 (when Mrs A was 21 weeks and 1 day) an anomaly ultrasound scan was performed. The fetal measurements were recorded to be just above the 5th centile. The fetal measurements were for biparietal diameter ("BPD"), which is a form of skull measurement; head circumference ("HC"); femur length ("FL"); and abdominal circumference ("AC"). Normal liquor (or amniotic fluid) was recorded, and measurement of this is sometimes recorded as the Amniotic Fluid Index ("AFI"). The evidence showed that a reading below 8 for the AFI would be below normal. Blood flows are sometimes measured by peak systolic to end-diastolic ("S/D") by way of Doppler studies or scans which can identify poor flow between the baby and the placenta.
A repeat scan was booked for 4 weeks to confirm normal growth.
On an antenatal visit on 1 April 2009 B's measurements were noted to be on lower centile on a scan, but the results were discussed and reassurance given. On 22 April 2009 an ultrasound was carried out. This showed "growth demonstrated … Growth remains just above the 5th centile. Review by midwife".
On 6 May 2009 at an antenatal visit Mrs A was noted to be fit and well, and at low risk of Down's syndrome. The abdominal circumference ("AC") was noted from a scan to be just above the 5th centile, but better. No complaint is made about Mrs A's management and treatment before 13 May 2009.
The consultation on 13 May 2009
On 13 May 2009 (when Mrs A was 27 weeks plus 6 days) Mrs A had a further antenatal visit. She had a scan. This showed that the measurements for BPD, FL and HC were continuing around the 5th centile, but AC was now below the 5th centile. AFI was 6.7. Umbilical Dopplers S/D were 3.82, which was normal.
Mrs A saw Dr Galajdova. It was apparent that Mrs A did not have a particularly clear recollection of the meeting and gave evidence that she had seen a male doctor who she thought might have been Eastern European and who she described. The description matched Dr Waronski and the notes show that Mrs A did meet Dr Waronski on other occasions, but not on 13 May 2009. Dr Galajdova, who is female, had no recollection of the meeting itself save that recreated from the notes, but she confirmed that she must have seen Mrs A to have made the notes that she did. In the end it became common ground that Mrs A had seen Dr Galajdova on 13 May 2009 and I make a finding to that effect. It is obvious that over time the sequence of meetings with doctors might become honestly but mistakenly mixed up in the memory, and in my judgment that is what had occurred with Mrs A. Mrs A remembered being told, on a number of different occasions, that her baby was constitutionally small.
The notes recorded "growth less than 5 % tailing off". Dr Galajdova says that she would have advised Mrs A that "although some babies are constitutionally small, the recent scan suggested that this baby's growth rate was slowing down" indicating that there was a problem. Dr Galajdova said that she had noted that growth was tailing off, and was concerned that B might be born imminently. Dr Galajdova told Mrs A about this which caused Mrs A to be shocked. Dr Galajdova gave steroids to Mrs A to enhance fetal maturity. Dr Galajdova was very concerned about placental insufficiency, which she believed was indicated by the AC measurements. It was for this reason that she requested Doppler scans to measure blood transfer across the placenta to be checked, and for weekly antenatal visits.
It is common ground that Dr Galajdova did not tell Mrs A that B might be suffering from a chromosomal abnormality, and I will address below the issue of breach of duty.
Later developments in May
On 15 May 2009 (when Mrs A was 28 weeks plus 1 day) cord Dopplers were scanned and checked and normal, and the AFI was normal at 8. A scan showed normal Dopplers and an AFI of 6 on 20 May 2009. In the antenatal visit on the same day (when Mrs A was 28 weeks plus 6 days) these measurements were noted.
On 22 May 2009 (when Mrs A was 29 weeks plus 1 day) a scan showed fetal heart movements, an AFI of 6 and Dopplers which were normal. On 27 May 2009 a scan was carried out. This showed an AFI of 7 and normal cord Dopplers. In the antenatal visit on the same day (when Mrs A was 29 weeks plus 6 days) growth was recorded as "still just below 5th centile slightly better than last week".
On 29 May 2009 Mrs A had a CTG. The notes show that these were being performed weekly because of reduced growth, but the trace was reassuring.
The consultation on 3 June 2009
In an antenatal visit on 3 June 2009 Mrs A saw Dr Neales. A scan was carried out showing AFI of 6.3 and normal Dopplers. The notes record "IUGR" meaning "intra-uterine growth restriction". A reduced AFI was noted. The notes recorded "no underlying cause identified". It was noted that there had been steroids. The plan was to have weekly Doppler scans, check of the amniotic fluid index and blood pressure checks. The aim of the plan was to get to 36 weeks for the pregnancy if there was no change on the ultrasounds or clinical findings. Other notes show that Dr Neales recorded that it was "IVF/ICSI pregnancy 2nd cycle" there was a move to shared care. The breech position was noted and the notes recorded "reduced AFI ?? IUGR". This records Dr Neales was questioning whether there was IUGR. A caesarean section was booked for 22 July 2009 which would be brought forward if there was stopped growth or there was an abnormal Doppler.
It is common ground that Dr Neales did not tell Mrs A that B might be suffering from a chromosomal abnormality. There was an issue about Dr Neales' note and the statement "no underlying cause identified". Dr Neales said that her note meant that she had excluded other causes such as chromosomal abnormality and infection and not identified the underlying cause. I accept Dr Neales' evidence on this point because I accept that if Dr Neales had not excluded chromosomal abnormality as a material risk she would have said as much to Mrs A. However this does not answer whether there was actually a material risk at the time, and I will address the issue of breach of duty below.
Continuing visits and management to the birth
In an antenatal visit on 10 June 2009 (when Mrs A was 31 weeks plus 6 days) an additional scan was requested. In the ultrasound scan measurements showing asymmetric growth (particularly for BPD and AC) were recorded. It was noted that the BPD, HC and AC readings were on the 5th centile but showed normal growth since the last scan. AFI was 2.5. All of this was showing growth in accordance with a low base.
On 11 June 2009 Mrs A had another reassuring CTG trace. On 12 June 2009 (when Mrs A was 32 weeks plus 1 day) a scan showed normal cord Dopplers and increased AFI at 4.5.
On 15 June 2009 a reassuring CTG trace was obtained. In an antenatal visit on 17 June 2009 (when Mrs A was 32 weeks plus 6 days) the notes record that Mrs A felt well. A scan had shown that AFI was 4 and there were normal Dopplers. Fetal movements were felt.
On 19 June 2009 (when Mrs A was 33 weeks plus 1 day) the AFI was noted to be 4 and there were normal Dopplers with S/D of 2.58. On 22 June 2009 Mrs A attended for a CTG scan. She was reassured about the IUGR. The outcome of the CTG scan was noted to be suspicious and the monitoring continued and was noted on a yellow sheet and continued until it became reassuring.
In an antenatal visit on 24 June 2009 (when Mrs A was 33 weeks plus 6 days) no abnormality was detected. This followed a scan showing normal Dopplers and an AFI of 4.5.
In an antenatal visit on 1 July 2009 (when Mrs A was 34 weeks plus 6 days) a scan showed AFI was 4.5 and there were normal Dopplers. The baby was recorded to be active.
In an antenatal visit on 8 July 2009 (when Mrs A was 35 weeks plus 6 days) an ultrasound scan showed that BPD and AC were at the 5th centile but showing normal growth. Normal growth of AC and FL was noted. AFI was 3.2. S/D was raised on the Doppler reading. The growth was asymmetric. It was noted that Mrs A felt well, it was noted that the BPD and HC were at the 5th centile that showed normal growth since the last scan. On 9 July 2009 a reassuring CTG trace was obtained.
On 10 July 2009 (when Mrs A was 36 weeks plus 1 day) a scan showed AFI at 4 and cord Dopplers normal with good end diastolic flow. On 15 July 2009 (when Mrs A was 36 weeks plus 6 days) a scan showed AFI at 6.4, normal Dopplers and a breech presentation.
On 22 July 2009 B was born by caesarean section at 0919 hours at 37 weeks and 6 days. After the birth B's condition was diagnosed. The placental histology was normal.
Findings on the evidence about Mrs A's attitude to the risk of having a disabled baby
Mrs A said in her witness statement (at paragraph 102) that "if during the pregnancy I had been told that there was the possibility of B being born disabled I would not have proceeded with the pregnancy" and (at paragraph 103) that "I do not believe in bringing a child into the world if they are going to suffer and be unable to lead a full life. If we had the slightest belief that there would be something wrong I would not have proceeded with the pregnancy". Mrs A also said (at paragraph 104) that "we agreed that I would undergo the testing for Downs syndrome in early pregnancy, which actually came back as low risk. However, had the test suggested that I was at risk of having a baby with Downs syndrome I would have opted to undergo an amniocentesis". Mrs A did not accept the suggestion in cross examination that this did not reflect her attitude at the time and was affected by hindsight.
It was apparent that Mrs A did not want to have a disabled baby, and as was remarked in evidence, everyone wants to have a healthy baby. However the evidence also showed, and I find, that Mrs A was prepared to accept a "background" risk of having a disabled child because that was her own evidence about what she had accepted in relation to the Down's syndrome test. When asked about the passages suggesting that Mrs A would not accept any risk, and her continuation of the pregnancy with risks of 1:1753 for Down's syndrome, Mrs A made it clear that she did not consider that sort of figure to be a real risk.
Was there evidence showing that there was a material risk that B might be suffering from a chromosomal abnormality on either 13 May 2009 or 3 June 2009
The question about whether Mrs A should have been warned about the risk that the low growth on 13 May 2009 or 3 June 2009 might have been caused by chromosomal abnormality depends on whether there was a "material risk" that B was affected by chromosomal abnormality on either 13 May 2009 or 3 June 2009. In this case that means either a reasonable person in Mrs B's position would be likely to attach significance to the risk, or "the doctor is or should reasonably be aware that [Mrs B] would be likely to attach significance to it".
The GMC Guidance makes it clear that "a small but well-established risk of a serious adverse outcome" is significant for the purposes of obtaining consent. It is also clear from Montgomery that what is a material risk cannot be reduced to percentages, is fact sensitive and sensitive to the characteristics of the patient.
I therefore need to assess whether there was evidence showing a material risk that B might be suffering from a chromosomal abnormality on either 13 May 2009 or 3 June 2009. It is common ground that if there was evidence showing that there was a material risk that B was suffering from a chromosomal abnormality on either 13 May 2009 or 3 June 2009, then Mrs A should have been told about that risk. Mrs A contends that the evidence shows that there was such a material risk, and the Trust contends that there was no evidence showing such a material risk.
In order to address this question it is necessary to consider the effect of a number of different factors relied on by the respective sides. However I should refer first to the evidence of Dr Galajdova and Dr Neales. Dr Galajdova said that she had considered the situation by reference to "decision trees" and had not considered the issue of chromosomal abnormality to be anything that was required to be raised with Mrs A. Dr Galajdova accepted that she could not exclude the risk, but said that she could not exclude theoretical risks of most things, and made it clear that she did not consider there to be a material risk in this case. Dr Galajdova did not make any reference to the ICSI conception, considering that in this case it did not make any difference. It was apparent, because Dr Galajdova had studied medicine in University Hospital, Ghent, Belgium where ICSI had been pioneered, that she had a good understanding of some of the issues relating to ICSI addressed by the experts.
Dr Neales was aware that B had demonstrated IUGR. Dr Neales had considered whether B was constitutionally small and placental insufficiency. Dr Neales had excluded the less frequent fetal infection or chromosome abnormality, She had considered that the small size was "probably due to placental insufficiency" and that there was "no reason to suspect any other cause, and thus no further investigations were needed".
The evidence relied on by Mrs A to show that there was evidence showing such a material risk is that: the morphology of Mr A's sperm was abnormal, which Dr Taylor considered might be indicative of an underlying paternal problem; Mrs A had suffered a miscarriage at 8 weeks' pregnancy, although it would not have had a great impact it could be considered with other factors according to Dr Taylor and Dr Reardon; that Mr and Mrs A had undergone an unsuccessful cycle of ICSI treatment which although Dr Taylor and Dr Reardon accepted was the likely outcome of an ICSI cycle, Dr Reardon said might point towards a possible chromosomal basis for the subfertility; Mrs A had become pregnant by ICSI, which it was said by Dr Reardon and Dr Taylor increased the risk of any foetus having a chromosomal abnormality as the parental karyotype had not been tested; there was IUGR of B; there were normal Doppler scans. All of this meant that the risk of a chromosomal abnormality was material, being about 1-3 per cent. The doctors should have asked Mrs B about her attitude and would have discovered that she wanted to know what was the cause of B's low growth and was sure that she did not want to take any risk of bringing a disabled child into the world.
The evidence relied on by the Trust to show that there was no evidence showing such a material risk is that: the total sperm count for Mr A was normal and the percentage of normal forms was normal according to World Health Organisation guidelines according to Professor Flinter; the miscarriage by Mrs A at 8 weeks pregnancy was not an indication of any chromosomal abnormality according to Dr Howe and Professor Flinter; the unsuccessful ICSI cycle was not relevant because that was the most likely outcome of any ICSI cycle according to Dr Howe and Professor Flinter; Dr Howe did not consider that a successful ICSI pregnancy was relevant in this case. Professor Flinter said that if Mr A had had no or low sperm counts that would increase the risk of the foetus inheriting a Y chromosome abnormality if the baby were male, but there was in this case no low or no sperm count and no association between ICSI and non sex-chromosome abnormalities in the context of a reasonable sperm count; Dr Howe and Professor Flinter said that the nuchal translucency and serum biochemistry tests confirmed that B was not at increased risk of chromosomal abnormalities tested; they also considered that the normal anomaly scan had the effect of further reducing risk of the baby having chromosomal and structural anomalies; the AFI was reduced; and the tailing off of growth was asymmetric, and the tailing off of growth was for the AC, abdominal circumference, which was associated with placental insufficiency. This meant that there was no material risk of B being affected by chromosomal abnormality there was only a risk described as "theoretical", "negligible" or "background", and which in percentage terms was less than 1 in 1,000. There was therefore no need to discuss this risk with Mrs A and in any event any reasonable patient, and Mrs A, would not have wanted to know about it and would have ignored it in the same way that she had ignored the residual background risk of Down's syndrome.
It was common ground that the nuchal translucency assessment and serum biochemistry showed that the risks of trisomies 13, 18 and 21 were reduced, and that such tests might pick up some other chromosomal abnormalities. It was also common ground that the fetal anomaly scan carried out at 21 weeks showed no structural problems, and showed a smaller than average baby which led to the use of serial growth scans which was appropriate. It was also common ground that there was no evidence that the ICSI procedure itself increased the risk of structural chromosomal anomalies, but Dr Taylor and Dr Reardon on one hand, and Dr Howe and Professor Flinter on the other hand disagreed on the significance in relation to having a baby with a chromosomal abnormality. It is also common ground that the scan on 13 May 2009 showed that the baby was smaller than average.
Both sides also placed reliance on Guidance from the Royal College of Obstetricians and Gynaecologists ("RCOG") and other publications. RCOG Guideline No.31 was published in November 2002. Under a headline "When a small fetus is diagnosed, assess for risk of chromosomal defects" it recorded that "up to 19 % of fetuses with an AC and EFW less than the fifth centile may have chromosomal defects … Therefore, all growth-restricted fetuses need an ultrasound anatomical survey as a minimum. It may also be appropriate to offer karyotyping". Reference was made as authority for the figure of 19 % to a paper by Snijders and others "Fetal growth retardation: associated malformations and chromosomal abnormalities", published in 1993.
I should note that in 2013, so after the relevant dates in this case, RCOG issued an amended guideline which suggested that "karyotyping should be offered in severely SGA fetuses with structural anomalies and in those detected before 23 weeks, especially if uterine Doppler is normal".
It was common ground between the experts at the trial that the risk was very much reduced from the 19% figure used in the 2002 RCOG Guideline because of developments in scanning since the paper by Snijders and others and because an anatomical survey had been carried out by ultrasound scan which had not shown any structural anomalies. Dr Taylor and Dr Reardon both relied on the figure as a starting point, and emphasised that the normal Doppler's was a factor which would increase the risk of a chromosomal defect. The Trust noted that the actions of Dr Galajdova and Dr Neales were not in breach of any mandatory RCOG Guidance, and that all that was suggested by the guidance was that karyotyping might be appropriate, but that in this particular case it was not.
The paper by Snijder and others showed that 89 of the 458 fetuses had chromosomal abnormalities. However only 4 of those 89 did not also have a structural abnormality on ultrasound. That gives an overall percentage of 0.78%. Professor Flinter and Dr Howe both gave evidence that modern ultrasound facilities as used in 2009 would have picked up nearly all of the remaining chromosomal abnormalities, effectively meaning the risk was a background risk. Dr Howe said that the risk of IUGR being due to chromosomal abnormality was less than 1in 1,000, having looked carefully at the reported incidence of chromosomal abnormalities of the type suffered by B. Analysis of the type of chromosomal abnormality identified in the paper shows that none of those chromosomal abnormalities were in fact relevant to the situation of Mrs A's pregnancy at 28 weeks once normal structural anomaly scans and normal chromosomal testing is shown. It should be recorded that Snijders and others challenged traditional thinking that chromosomal abnormalities were associated with early onset symmetrical growth restriction (at pages 552-553).
Reference was also made to other published papers. The paper by Anandakumar and others: Early Asymmetric IUGR and Aneuploidy was published in 1996. This showed that the incidence of IUGR in chromosomally abnormal foetuses was 5.8 per cent. However it is also right to record that there did not appear to be any of the chromosomal defects relevant to this case in the study. Some reliance was also placed on the paper by Anandakumar which showed that where there had been late onset of IUGR, there was an incidence of zero for chromosomal abnormalities. It is fair to note that in this case the IUGR was diagnosed late, but it does not show that it was a late onset. That said the figures from Anadakumar can properly be added to the samples used by the others, and the figures do show that viable foetuses at a late stage of pregnancy with chromosomal abnormalities generally comparable to the type suffered by B are exceptionally rare.
There was a paper by Hansen and others: The risk of major birth defects after ICSI and IVF published in March 2002 which suggested that infants conceived with ICSI or IVF had twice as high a risk of major birth defects as compared with natural conception, and also showed an increase of chromosomal abnormalities.
The paper by Bonduelle and others: Prenatal testing in ICSI pregnancies was also published in 2002. The paper looked at chromosomal abnormalities following ICSI, and part of the concern was to see whether the process of ICSI might cause such abnormalities. There was no evidence to show that the ICSI process caused such abnormalities but the results were relied on by both sides to support their respective cases on risks of chromosomal abnormalities in foetuses following ICSI conceptions.
Dr Taylor relied on the figure that there were 3.84 per cent of abnormalities (of 338 ICSI infants tested postnatally 13 had abnormal karyotypes). Both he and Dr Reardon said that underestimated the risk because fathers were offered pre conception testing, and this would have reduced numbers of babies with chromosomal abnormalities. Dr Reardon said that he was not qualified to quantify the risk but said that it was small but significant and agreed that it was at least 3 per cent, relying on a 3 per cent figure from the paper by Bonduelle and others and 4 per cent from the paper by Snijders and others. Dr Howe considered that the majority of chromosome anomalies after ICSI were shown to be sex chromosome anomalies which would not be related to growth restriction, and that the risk of unbalanced structural chromosome anomalies remained very low at about 1:1500. Both Dr Howe and Professor Flinter said that Dr Taylor and Dr Reardon had taken figures in the papers relating to ICSI as a starting point, but also used them as an ending point, and had failed to take account of all the features which meant that there was no risk beyond background risk in this case. Analysis of the appendix to this paper shows that there was one possible chromosomal abnormality relevant in the circumstances of this case. Given the numbers this supported a figure of a risk of less than 1:1500.
Dr Reardon also referred to an abstract published in the American Society of Human Genetics which referred to chromosomal anomalies of 11.5 per cent in IUGR with normal scans. However Professor Flinter pointed out that these were chromosomal anomalies shown with new testing with heightened sensitivity and show anomalies which are present in the majority of persons without obvious effect. As this was only an abstract, and because it related to copy number variances of uncertain effect, I did not derive assistance from this paper.
There was also reference to an internet publication called Up to Date which shows a copyright date of 2014. This suggested that Chorionic villus sampling ("CVS") (which was another form of testing for chromosomal abnormalities carried out at an early stage of pregnancy) or amniocentesis should be offered to all ICSI couples after counselling about the risks of paternally inherited chromosomal abnormalities. Mr Gibson relied on Professor Flinter's evidence when being cross examined about this publication which was said to have been to the effect that counselling and testing ought to be offered to all ICSI couples. This had not been my understanding of Professor Flinter's evidence at the time, and Mr Gibson had himself expressed surprise that Professor Flinter had agreed with the proposition put in cross examination.
I have considered this point and I have had the advantage of helpful notes of evidence on this point from the solicitors on both sides to compare with my own note, as well as a transcript of the relevant evidence which I received on 14th April 2015. Part of the difficulty with examining what went on is the fact that Professor Flinter was, as Professor Flinter made clear, not familiar with the publication, and so was being asked questions about a text that she had not studied. The second part of the difficulty was that Professor Flinter responded to the question about whether she agreed with the proposition set out in the text by saying "I would qualify that …" and explaining that by reference to the fact that Mr A did not have low or no sperm. It was suggested that this was the qualification which next appeared in the text, which Professor Flinter accepted. Professor Flinter then noted that Mr A had a good sperm count, and the sperm were within the normal range. Mr Gibson then asked whether, subject to that qualification, the advice was right and Professor Flinter agreed.
I have to say that I did not derive much assistance from this exchange. Professor Flinter made it plain that the suggestion was not relevant in a case such as this, where Mr A had a good sperm count, and the sperm were within the normal range. Professor Flinter was not familiar with the text and had made that clear. The text is directed at a situation before there have been nuchal translucency and serum biochemistry tests and ultrasound scans which have excluded structural abnormalities. The question for me is whether the evidence available on 13 May 2009 or 3 June 2009 would have shown that there was a material risk that B was suffering from a chromosomal abnormality.
There was one final piece of evidence from Professor Flinter which it is necessary to record. Professor Flinter said that the starting point for an assessment of the risk of a chromosomal abnormality of the type suffered by Mrs A was 1 in 50,000. This was calculated by taking 200,000 individuals making 100,000 couples and 100,000 pregnancies, working out a 1 in 500 chance of a translocation, which meant 400 individuals would have a translocation. Assuming everyone gets pregnant, 50 per cent of the pregnancies from those individuals will be chromosomally unbalanced, giving a figure of 200 chromosomally unbalanced pregnancies. 99 per cent of those will not be viable, leaving 2 chromosomally unbalanced pregnancies in 100,000 giving the 1 in 50,000 figure. Professor Flinter stressed that this was simply a starting point, and that IUGR would affect the statistics, but she did not get beyond a figure of 1 in 1,000.
Findings
In my judgment the evidence did not show that there was a material risk to which Mrs A should have been alerted that B was suffering from a chromosomal abnormality. If the risk had been at the level indicated by either Dr Taylor and agreed by Dr Reardon (namely somewhere between 1 or 3 per cent), or anywhere approaching that level, then I would have concluded that both Dr Galajdova or Dr Neales should have raised it with Mrs A. However in my judgment the evidence given by Professor Flinter and Dr Howe to the effect that the risk was 1 in 1,000 or, as Dr Galajdova and Dr Neales put it, theoretical, negligible or background, was much to be preferred and I accept that evidence. The reason that I accept the evidence given by Professor Flinter and Dr Howe is because: (1) Mrs A had successfully carried B to 27 weeks plus 6 days (as at 13 May 2009) and from then on to 3 June 2009, and the evidence shows that very few foetuses with chromosomal abnormality will be carried to term; (2) the nuchal translucency and serum biochemistry tests had excluded to background level the risks of genetic abnormalities for trisomies with chromosomes 13, 18 and 21, which are the most common type of chromosomal abnormality; and (3) the ultrasound scans had not detected any structural abnormalities, and most foetuses with chromosomal abnormalities will be detected by such testing. These factors meant that the prospects of B having a chromosomal abnormality were, in real terms, well below background levels. It is true that B was conceived following ICSI, there was IUGR and normal Doppler scans. However the reduction in growth was detected late and was asymmetric and was concentrated on the AC. There was also a reduced AFI. These factors strongly suggested that the reduction in growth was related to placental insufficiency.
In my judgment the approach by Dr Taylor and Dr Reardon to the specific circumstances of B's case did not condescend to deal with the effect of the normal nuchal translucency and serum biochemistry tests, and the normal ultrasound scans or the fact that B was an ICSI baby. If the effect of those findings were applied to the statistics relied on in the papers by Snijders and others; Anandakumar and others and Bonduelle and others it is apparent that the risks in this case for B were reduced to no more than a background level.
As to the point about the sperm there was no information available to Dr Galajdova or Dr Neales, and there is nothing to suggest that they acted in breach of duty in failing to obtain it. In my judgment even if it had been obtained it would not, for the reasons given by Professor Flinter have made any difference because the total sperm count was normal and the percentage of normal forms was normal.
As to the point about the previous miscarriage the evidence shows that 1 in 5 pregnancies end in miscarriage, this was only the first miscarriage suffered by Mrs A, and there is nothing to suggest that any investigation or warning ought to have been triggered.
As to the point about the failed ICSI cycle in my judgment it would have provided no relevant evidence because this was the likely outcome for any ICSI cycle.
In these circumstances there was no need to have any discussion about fetal karyotyping with Mrs A. This was because a reasonable patient, in the position of Mrs A, would have attached no significance to risks at this background level. Further, for the reasons given in paragraph 62 above, I do not find that Mrs A would have attached significance to these levels of risk.
In my judgment the decision in Montgomery affirms the importance of patient autonomy, and the proper practice set out in the GMC Guidance and the proper approach set out in Pearce and Wyatt. It is not authority for the proposition that medical practitioners need to warn about risks which are theoretical and not material.
In my judgment the evidence shows that B was a small foetus, who grew along the 5th centile for most of the pregnancy. B was rightly described as a constitutionally small baby. There was a tailing off of growth on 13 May 2009, but there was thereafter growth continuing in accordance with the relevant centile. The scan on 10 June 2009 showed an increase of the rate of growth so that AC had recovered to the 5th centile. The tailing off of growth on 13 May 2009 was asymmetric in that it affected the measurement for AC, but not FL and HC. The AFI was reduced. In these circumstances I find that the cause of the tailing off of growth before the recovery was placental insufficiency. This is because the tailing off of growth was asymmetric and for abdominal circumference which it was common ground was most likely to be associated with placental insufficiency. There was also a reduced AFI which was commonly associated with placental insufficiency. I also note that there had been an increase in growth velocity for a period after the scan of 13 May 2009. I should record, out of completeness, that I accept Mr Gibson's submission, which Mr Whitting did not challenge, that a finding that the cause of B's low growth was placental insufficiency (such a finding being on the balance of probabilities) does not answer whether there was a material risk as at 13 May 2009 or 3 June 2009 about which Mrs A ought to have been warned. It was for that reason that I addressed first my finding of material risk on 13 May 2009 or 3 June 2009.
Would Mrs A have undergone amniocentesis
I turn to consider whether, if Mrs A had been told about that there was a risk that B might have a chromosomal abnormality, Mrs A would in the light of the information about that risk have requested an amniocentesis. It is common ground that if an amniocentesis had been performed (and the probabilities are that it would have been performed without inducing a miscarriage), after a delay to enable cellular material to grow and be examined, the chromosomal abnormality would have been discovered.
The evidence shows that if a material risk had been identified by Dr Galajdova on 13 May 2009 she would have referred to Dr Neales. It appear that Dr Neales would have provided information, whether on 13 May 2009 or 3 June 2009, to the effect that it was likely that B was genetically small or there was placental insufficiency, but in a very small number of cases can indicate an underlying problem. That risk could only be excluded with amniocentesis, which carried risks of premature delivery, miscarriage bleeding or infection.
Mrs A notes (at paragraph 113 of her witness statement) that the fear of having a baby with chromosomal defect "would have been fore front in my mind and despite the risk of provoking premature labour" she would have opted for amniocentesis. Mr A said that they would have been absolutely determined to find out what was wrong, and that they were living on the edge at the time, being concerned that Mrs A might go into premature labour at any time.
I find that Mrs A would have pressed for further information from Dr Neales. This is because it was apparent from the evidence and the medical notes that Mr and Mrs A had taken a careful approach to all the information that they were being given. As Mr A said in evidence in relation to the issue about a termination, there would have been a discussion. That discussion would have yielded Dr Neales' view that the risk of B having a chromosomal abnormality was a negligible, theoretical or a background risk. That discussion would also have provided Mrs A with the information that amniocentesis carried a 1 in 100 risk of provoking premature delivery, and Mrs A knew, or would have been reminded, such a premature birth carried risks of significant risk of disability to B.
In these circumstances Mrs A would have been in a situation where there was a negligible, theoretical or background risk of chromosomal abnormality which might have been excluded or confirmed, against a real risk of provoking premature delivery. There was nothing in Mrs A's beliefs about having a disabled child that suggested she would opt for a higher risk of having a disabled baby. Any such decision in this case would have been illogical on the evidence and I do not find that Mrs A would have made such a decision. I note in this respect that Mrs A was prepared to live with the theoretical or background risk of having a Down's syndrome child after the earlier nuchal translucency and serum biochemistry tests.
Would Mrs A have elected for a termination at week 32 or 35
The final issue is whether, either at week 32 or week 35, at a time when the foetus would have been viable, Mrs A would have requested a termination of the pregnancy if an amniocentesis had been carried out and shown that there was a chromosomal abnormality.
It is common ground that Mrs A would have been told that: the overwhelming majority of children with a chromosomal abnormality would be likely to have developmental delay; it would be extremely unlikely that there would be no significant effect or that child would lead a normal and healthy life; delayed growth and development were commonly associated with the chromosomal imbalance; it was likely the child would suffer from cognitive deficit and would need a degree of care throughout life and would not be independent; and the prognosis would be guarded. Mrs A said that, notwithstanding the nature of the operation that would be required to be carried out to effect an abortion on a foetus aged over 30 weeks (injecting the heart with potassium to stop the heart of the foetus, waiting for 2 days to ensure that the foetus was dead, and then being induced for delivery), she would have gone through with it if she had been told what doctors agree she would have been told.
Mr B was more hesitant, to the extent that at the beginning of his re-examination on this issue Mr Gibson remarked that he was not sure where Mr A was with his evidence. In the final event Mr A said that there would have been a discussion and that he believed that they would have opted for a termination.
I have found this part of the case the most difficult to determine. I should record, out of fairness to Mr and Mrs A, that they did not have the opportunity of making this decision and were therefore attempting to put themselves into a position which did not confront them. However I do not accept the evidence that Mrs A and Mr A gave to the effect that they would have had a termination at that late stage of the pregnancy. This is because when Mrs A was told by Dr Galajdova that there was a real risk that B might be born prematurely on 13 May 2009 (when Mrs A was 27 weeks plus 6 days pregnant), in circumstances where the evidence showed that Mrs A was well aware of the potential consequences that might have for disabilities with a premature baby, Mrs A's reaction was, as recorded in the notes by Dr Galajdova, one of shock and continued efforts to do all that she could to maintain the pregnancy. If Mrs A had adopted the approach that she said that she had, namely taking no risk of bringing a disabled child into the world, she would have at that stage begun discussions about terminating the pregnancy. I accept, as Mr Gibson submitted, that as a patient Mrs A's approach did not have to be logical or internally consistent, but Mrs A's evidence was that her belief was clear and consistent, namely that Mr and Mrs A would not bring a disabled child into the world but when confronted with that risk they did not act as they indicated that they would. Their understandable reaction to the news on 13 May 2009 shows that although Mr and Mrs A have convinced themselves after the event that they would have terminated the pregnancy at either week 32 or 35, they would not have done. They would have continued with the pregnancy, hoping for the best outcome.
Conclusion
For the detailed reasons given above there was as at 13 May 2009 and 3 June 2009 no material risk that B was suffering from a chromosomal abnormality. There was the background risk but there was nothing to suggest that was a risk to which a reasonable patient, in the position of Mrs A, or Mrs A herself, would have attached any significance.
I do not accept if Mrs A had been given about the risk of B having a chromosomal abnormality that Mrs A would have had an amniocentesis, because the risks of having a disabled baby would have been greater from amniocentesis than from continuing with the pregnancy. I do not find that Mrs A and Mr A would have had a termination of the pregnancy if an amniocentesis had been carried out and shown that there was a chromosomal abnormality, this is in the light of their actions when told about the risks of imminent delivery on 13 May 2009. I therefore dismiss the claim. |
Mr Justice Simon:
Introduction
In this action the Claimant (NXB) claims damages against the Defendant, the Crown Prosecution Service (CPS) under s.6 of the Human Rights Act 1998 for breaches of the positive obligation that arises under Article 3 of the European Convention on Human Rights.
No one shall be subjected to torture or to inhuman or degrading treatment or punishment.
The claim arises out of the withdrawal of a prosecution against (a man who is identified for the purposes of this claim as) DK for offences of sexual assault against NXB between 1993 and 1995 when she was a child. On 31 October 2011, the day of the trial at Newcastle Crown Court, Counsel for the Prosecution informed the trial Judge, HH Judge Evans, that the CPS had decided to offer no evidence and verdicts of Not Guilty were then entered.
In summary, it is the Claimant's case that the CPS made a series of rushed, ill-informed and erroneous assessments of the strength of the Prosecution case, culminating in an irrational decision founded on errors of law and the misapplication or disregard of established policy.
The facts
NXB was born in July 1980 and grew up in Sunderland. It is not in dispute that her experience of childhood was harsh and that this has had a profound effect on her subsequent wellbeing. NXB's evidence is, and always has been, that DK (then in his forties) groomed her, sexually assaulted her, and on three occasions had sexual intercourse with her when she was between the ages of 13 and 15; and it is important to note that the Defendant does not challenge this account in these proceedings.
The first occasion of sexual intercourse was on 28 December 1993, when she was 13, in circumstances that she was to describe as 'very brief and painful'. The second time was in 1995, when she was 14, nearly 15. The third time was on 11 November 1995 in DK's car, when she was 15.
On 21 September 2010 she went to Etal Lane police station in Newcastle and made a complaint of sexual abuse against DK. Her allegations were referred to a specialist officer, DC Thorpe, who took a statement from NXB. Although this first witness statement is dated 22 September 2010 it is clear that not all of its contents were written at the same time. The statement begins:
Over the last 18 months I have been seeing a councillor. One of the reasons I have needed counselling is because of incidents of a sexual nature with a 40 year old man, which occurred when I was 12 years old, through until I was 15 years old. The counselling is due to end and I feel the need to get everything out in the open now that I am 30. I have decided to tell the police everything as I want closure to this so I can get along with my life.
The statement then described a history of grooming by DK, leading to frequent sexual assaults over a protracted period by DK. The detail of some of the descriptions makes the evidence both disturbing and convincing.
The statement described DK taking NXB ice-skating and to a public house where they would drink together. She described the second occasion of sexual intercourse (in his car in a car-park on the coast between Whitburn and South Shields) and the third occasion (again in his car in a car park, this time above Marsden Cliffs). Following this third occasion (on Saturday 11 November 1995) she had told a friend (L) that DK had had sex with her; and, importantly from the point of view of the Prosecution case, she also described being driven by DK on Sunday 12 November to Dryburn Hospital for a 'morning after' pill to prevent the risk of pregnancy. The reason that she was able to describe the third occasion with such detail was that at this stage of the interview, she told DC Thorpe that she had diaries for 1994 and 1995 in which she had described the process of grooming and specific incidents of sexual abuse.
It was by reference to the 1995 diary that she was able to recall that on Tuesday 14 November 1995 she had confided to a teacher at her school (JS).
Told [JS] what had happened on Saturday, but didn't mention any names.
During the course of the preparation of the statement NXB also handed to the police 26 letters which DK had sent her over the period of the abuse she had described. Although the letters were not directly incriminating they provided support for the allegations of the manipulative grooming which she had described in her statement to the police. She also handed over 2 poems she had written about DK in August and October 1996.
At page 15 of the 16 page statement she described the first occasion of sexual intercourse on 28 December 1993 as a result of recalling what occurred from an entry in her 1994 diary.
Messed around in house. Met DK at multi-storey and went to his house. Ended up starkers all but leather bit and sox. Did 69 and BJ and a very brief painful bit of intercourse. Plus lots of hugging + kissing. Watched tele – went to bed.
I have mentioned some of the specific allegations in the statement because I accept Ms Law's submission that its contents form the basis of an inherently credible case against DK.
Once they had been handed over to the police the 1994 and 1995 diaries were kept for use as exhibits. However, it was NXB's evidence (and not disputed by the Defendant) that before she handed them over to the police she told DC Thorpe that she had tippexed out some entries in the 1995 diary the previous night, saying that these entries related to matters that she was not ready to deal with. As her witness statement in the present action explained:
DC Thorpe asked me what they said and I told her truthfully that I couldn't remember the specific contents but I knew the general content of them and I knew that they did not concern [DK]. DC Thorpe said as long as they did not relate to [DK] that was fine. She did not ask me about it again.
The alterations to the 1995 diary also consisted of black line obliterations of some passages as well as tippexing. I shall refer to all affected passages as the 'edited' or 'concealed' parts of the diary although in fact, when the original pages of the diary are held up to the light, it is possible to read most of the obscured passages underneath. As will become apparent NXB's assertion that she could not remember the specific contents of what had been concealed was not strictly speaking true; and was a statement which was later repeated.
The changes to the 1995 diary were to weigh heavily in the decision to withdraw the prosecution on 31 October 2011. Up until then the CPS had not been made aware of the alterations. On any view this was very unfortunate.
The concealed parts of the 1995 diary related to two individuals: JS (the teacher who figured in the entry on 14 November 1995 and was mentioned in NXB's first police statement) and DA (a 40 year-old man who shared the same first name with DK but whom the Claimant referred to in a slightly different way in the 1995 diary). The entries which had been concealed in the 1995 diary referred to (a) a relationship with JS which plainly went beyond an appropriate teacher/pupil teacher relationship in what was said and done; and (b) a number of occasions in January 1995 when DA had sexual intercourse with NXB.
She did not tell DC Thorpe that the passages in the 1995 diary which had been concealed included references to sexual intercourse with DA.
On 10 October 2010 NXB made a further 2nd witness statement to the police which, as well as describing the impact of DK's criminal behaviour on her life, contained a short passage by way of background:
He was the first person I had sexual intercourse with; he was the first person I had any sexual activity with. I did have boyfriends at that age, but they were more like friends who were boys, there was never anything sexual between us. It was [DK] who I spent most of my time with.
On 20 December 2010 the police sought written charging advice from the CPS in a MG3 form; and the papers came before Mr Paul Rowland, a CPS Crown Advocate and Reviewing Lawyer. The request for charging advice came with the two statements of NXB, as well as some photocopied pages from the diaries covering the first and third occasion in which NXB described sexual intercourse having taken place with DK, as well as other material. Although the MG3 form requires weaknesses in the case to be identified, the police did not alert the CPS to the editing of the diaries. Mr Rowland considered that, on the face of the papers, there was no reason to disbelieve NXB's statements and took into account the evidence from other witnesses of an inappropriate relationship between NXB and DK. Applying the Code for Crown Prosecutors he was satisfied on the material he had seen that there was a realistic prospect of conviction and that it was in the public interest to prosecute.
He did, however, identify one potential problem in the case: In 2000 NXB had been a civilian employee of Northumbria Police and appeared to have been dismissed after being found to have misused the Police National Computer to access information about DK. Mr Rowland satisfied himself that no formal complaint had been made.
On 10 February 2011 he provided charging advice and authorised DK to be charged with various offences (some of which were subsequently amended) of indecent assault contrary to s.14(1) of the Sexual Offences Act 1956 and indecency with a child, contrary to s.1(1) of the Indecency with Children Act 1960.
On 31 May the CPS instructed prosecuting counsel, Ms Katherine Dunn. Ms Dunn is an experienced Grade 4 Prosecutor (the most senior grade) and was recognised by the CPS to be experienced in conducting cases of sexual abuse (including rape).
In June 2011 she was asked to advise on evidence and was sent the prosecution papers. These did not include the original of the 1995 diary which remained in the hands of the police until 31 October 2011, the day of the trial. She advised that the indictment needed to be amended to particularise the acts alleged and that two further counts be added. In addition she asked for various other pieces of evidence to be obtained, including full copies of the 1994 and 1995 diaries. She also advised that other evidence that had come to light should be disclosed to the defence as potentially undermining the Prosecution case.
This included the result of an enquiry of JS as to whether NXB had told him about the third occasion of sexual intercourse. He told the police that he did not recall her disclosing anything to him. She further advised that a bad character application should be considered in relation to DK's conviction in July 2006 on 3 counts of indecent exposure, although she later revised this view.
A Plea and Case Management Hearing took place at Newcastle Crown Court on 17 June 2011. DK was arraigned and pleaded Not Guilty to all counts; and the Prosecution was ordered to serve copies of the diaries and DK's letters on the Defence.
An issue subsequently arose at a Public Interest Immunity hearing in relation to NXB's medical records. Judge Evans, having been told that NXB objected to them being disclosed, very sensibly indicated that she should let him know her reasons for this in person and the issue was subsequently addressed at a hearing on 11 October.
On 5 July a conference with Ms Dunn was held at which Mr Rowland, DC Thorpe (as officer in the case), DC Paisley and Ms Gillian Olson (a CPS paralegal) attended. The note taken by Ms Olson identified what were thought to be difficulties in dealing with NXB and, in particular, the difficulties in getting her to agree to the PII review of her medical records and counselling notes. At this stage Ms Dunn had still not seen copies of the diaries, poems or letters and was not aware of any editing. I should note that by this stage the working relationship between DC Thorpe and NXB had broken down; and I am not prepared to find that this was exclusively the fault of DC Thorpe.
On 14 July there was a further conference at which NXB and Ms Olson attended without any representatives of the police. The purpose of this meeting was to explain why the Prosecution needed access to NXB's medical and counselling documents. NXB made a number of unexceptional complaints about the delays in the trial process and specific complaints about the insensitive attitude of the police. At the conclusion of the conference she consented to Ms Dunn looking at her confidential medical and counselling records.
On 10 August 2011 copies of the diaries were handed over to the Defence; and on 1 September a Defence Case Statement and Disclosure application was served.
The general nature of the Defence was a denial of the offences.
Whilst the Defendant accepts that he and the complainant had a close friendship, there was nothing inappropriate about it and he was never intimate with her. Their friendship was akin to a father/daughter relationship ... At no time during the course of their friendship did the Defendant ever kiss the complainant. On occasions, if she was upset, he would give her a hug. This was only ever done as a parent would hug a child. There was never any sexual contact between the two of them.
As Ms Law observed, this defence did not sit easily with the contents of some of DK's letters, nor the witness statement of NXB's friend, L.
The Third Party Disclosure Application referred to copies of the diaries being received on 17 August 2011. It is clear that the Defence had noticed references in the 1995 diary to JS; and it was noted that the Prosecution had either contacted him or attempted to contact him. The Disclosure application focussed on the references to the sexual nature of NXB's relationship with JS; and the Defence sought his contact details so that it could take a witness statement from him. There was specific reference to the diary entry for 14 November 1995 to which reference has been made above; and the Defence interest in JS was highlighted in §10 of the Application document.
If her diary entries recording intimacy between [NXB] and [JS] are also untrue, this would undermine the accuracy and/or reliability of the entries themselves and, potentially, her credibility overall.
On 6 September the Defence asked for better copies of the 1994 diary. It is clear that, at this stage they had not realised that the original of the 1995 diary had been edited. This request was forwarded to police by the CPS.
On 22 September 2011, the police wrote to the CPS explaining that the copies of the diaries were poor, that some of the writing was very faint in the originals and offering to send the originals if required.
There is a police note dated 5 October, recording that JS remembered NXB but did not recall her disclosing anything of a sexual nature to him.
On 6 October the CPS wrote to the Defence solicitors saying that they would contact JS to see if he would agree to be contacted by the Defence.
Although a hearing on 11 October 2011 before Judge Evans was intended to resolve the PII issues, they were not in fact dealt with until 20 October when the Judge handed down his Ruling. Having read the material he concluded that there was nothing which needed to be disclosed, adding that he understood NXB's concern about matters of an intensely personal nature being revealed in public. The case was adjourned to 31 October for a trial before Judge Evans and a Jury.
The police made further contact with JS and, on 24 October, emailed the CPS informing them that he recalled NXB as a pupil at school, but did not remember her disclosing anything to him. He did not want any involvement in the case and did not want his details passed to the Defence, saying there was no point since he could not remember anything. Ms Olson passed this information on to the Defence by letter dated 25 October.
On the morning of the trial (31 October 2011) the police brought the original diaries to court and these were made available to the Defence.
At 11.40 Counsel appeared before the Judge and informed him that there was to be a trial. Ms Dunn requested time in which to look at some further documents and also to prepare an amended indictment with three new counts.
At about 12.10 Counsel appeared in Court again. DK was arraigned and pleaded Not Guilty to the three new counts. At this point Ms Dunn raised the issue of the editing of the 1995 diary. She had been told that having inspected the originals the Defence had noticed that the 1995 diary had been edited. She told the Judge that the police were taking a statement from NXB, with the agreement of the Defence, to explain what had occurred. She also raised the issue of JS. Counsel for DK indicated that the Defence wished to call JS, but did not have the means to locate him. The Judge asked how they could call him without a statement and was told (on instructions) that the Defence would call him 'blind': in other words without the benefit of a statement. Defence Counsel pointed out that she might need a witness summons and that there were a number of references to JS in the diaries.
The Judge indicated that he would like to see the statement taken from NXB and that he would order the Prosecution to give JS's details to the Defence.
The statement which was taken from NXB at Court on 31 October 2011 was short, and explained how she had come to edit the 1995 diary.
Prior to contacting the police, I read through this diary. I realised that ... there are some entries which are of a personal and private nature. I decided to edit these personal things using tippex white marker, before handing the diary to the police. I did this because I did not want other people to read personal entries, which have nothing to do with [DK]. I cannot remember exactly the content of this edited material, but I can say that it has nothing to do with [DK]. I did not edit anything to do with him. I cannot even remember what the content of these entries would have read.
After this statement was signed, the Judge gave Ms Dunn permission to speak to NXB; and there is a handwritten note of what occurred. Although it is not always easy to follow, certain points are clear. First, NXB felt that she was under pressure and felt intimidated by what had occurred. Secondly, she did not want to talk about the matters in the 1995 diary which she had concealed. In evidence at this trial she identified this matter as her relationship with DA in January 1995. She said she would answer questions about JS, but not about DA. Ms Dunn indicated that if she refused to answer questions which the Judge considered relevant then the trial would be stopped. NXB reiterated that she had not lied, she had just not spoken about some things.
In her trial witness statement Ms Dunn described her recollection.
[19] [NXB] maintained at first that she would not answer any questions about the passages which she had edited. She said she wasn't ready to talk about certain things which she was trying to 'work through piece by piece'. It was explained that the Judge had ruled that this line of questioning was relevant to the Defence and if she refused the case would have to stop. She said she felt she was being blackmailed into 'telling everything', which would 'open up a can of worms'. She was very distressed and stormed out of the conference saying that the line of questioning would destroy her life.
[20] During the discussion it became clear she was particularly fearful of questioning about [DA] who she reported had also sexually abused her. This abuse had allegedly taken place during the period of abuse by [DK]. This had not been referred to in her original [22 September 2010] statement and she had not told her counsellor about it. It was only recorded in her diary. The Defence case was that all of this was fabricated. This would have provided them with further material to support that assertion.
[21] In the morning the Claimant had sworn a statement [the short 3rd statement referred to above] that she did not remember what she had edited out. However, it was apparent from what she was saying during the conference that she was fully aware of what she had edited. This concerned me greatly – had this emerged through cross-examination it would have further undermined her credibility ...
[22] I was also concerned about the answers she gave to questions which I put (with the Judge's permission) about some diary entries. She stated she did not have a sexual relationship with her teacher [JS], but this appeared to be contradicted by a number of diary entries.
Ms Dunn adhered to this evidence despite vigorous cross-examination from Ms Law. Her concerns were about both what had been concealed and the fact that it had been done. A selective version had been given. NXB had told the truth but not the whole truth. There was also a potential conflict between her explanation that there had been nothing untoward about her relationship with JS and the concealed parts of the 1995 diary.
Ms Dunn's view was that in the light of these matters the Prosecution case had been undermined to the extent that there was no realistic prospect of a conviction. She spoke to Mr Rowland, as the CPS senior reviewing lawyer, explained what had happened and described her concerns that NXB's credibility had been seriously undermined. Her trial witness statement continued.
[26] We considered the evidence overall - balancing the strength of the letters and the likely evidence of the teacher - and concluded that there was not a realistic prospect of success and the case should be stopped. In the light of this Mr Rowland instructed me to offer no evidence.
Mr Rowland's evidence was that he thought the right decision had been made.
[Ms Dunn] had been involved for some months and was an experienced accredited CPS prosecutor for serious sexual offences. I had observed her on many occasions and always found her to be competent and diligent. I didn't think there was anything awry with the decision. From my knowledge and what I learned it was clear that there was no prospect of a conviction.
It is clear that NXB was very unhappy about the decision. She told Ms Dunn that she had changed her mind and that she would now be prepared to answer questions about the concealed passages in the diary, and that abandoning the trial would be the worst outcome for her. Ms Dunn took the view that it would not be in anyone's interest to call an extremely distressed witness when she did not consider there was a realistic prospect of success, in circumstances where NXB had repeatedly said that being questioned about the diary would destroy her life.
She returned to Court and informed the Judge that the Prosecution had decided to offer no evidence and verdicts of not guilty were entered on all 7 counts. While the Judge recognised that his approval was not necessary, he indicated that he entirely understood why the decision had been made.
I know, having taken the unusual step in this case of speaking to the Complainant herself, that there are issues in her life which are difficult for her to deal with leaving aside the complaint that she made in this case, and it always seemed to me that that vulnerability might well emerge during the course of this trial. However, at the end of the day the interests of justice demand that in some cases ... issues which might not on the face of it appear to be relevant ... have to be examined , and that danger is something that complainants in all cases have to face ...
The reference to having spoken to NXB was a reference to the hearings which led to his PII Ruling.
On 1 November Mr Rowland wrote to NXB on behalf of the CPS explaining why he had made the decision not to proceed, and offering a meeting in which he would try to answer any questions she might have.
There was a meeting between Mr Rowland, Ms Dunn and NXB on 10 November, in which they explained their decision to withdraw the prosecution based on the different picture revealed by the edited diary.
On 25 November 2011 NXB made a formal complaint against the police and on 27 November a formal complaint against the CPS. On 18 January 2012, a response was sent from the Head of Unit, Mr Sydenham. The contents of the letter included the following:
I do sympathise and understand that you have been subject to 14 months of stress whilst waiting for the proceedings to reach conclusion and I also agree that had a decision been made at an early stage to disclose the full diaries then you could have prepared yourself for cross examination about everything which happened to you.
With regard to your requested resolution, Mr Rowland's decision to prosecute was based upon the copy documentation which was provided to us. These documents as I understand the position did not reveal the edited sections and the potential significance of those edited sections was not highlighted. I do not believe that the officer in charge of the case appreciated the potential significance of the edited sections of the diaries as they were not highlighted to us in the disclosure officer's report, which would have been the case otherwise.
I have examined the photocopies of the diary entry provided and I do not believe that it would have been reasonable to have expected Mr Rowland to have identified from those photocopies that there were edited sections not disclosed to the CPS and to appreciate therefore that there may have been significant material which the defence would want to rely upon.
The Claim Form was issued on 23 May 2012 and Particulars of Claim followed on 17 September 2013. Although the Claim was initially against the Chief Constable of Northumbria as the 1st Defendant and the CPS as 2nd Defendant, Amended Particulars of Claim were settled by Counsel (not Ms Law) on 28 January 2015, so as to remove the Chief Constable. The key allegations were contained in two subparagraphs of §61 of the amended Particulars of Claim in which it was said that the CPS acted unlawfully and irrationally in two respects.
First, in taking the decision to offer no evidence on all 7 counts on the indictment, (a) due to wrongly assessing that there were significant inconsistencies between the Claimant's diary entries and her witness statements, and/or (b) due to assessing that her witness statements contained significant inconsistencies, and/or (c) failing to take into account the other strongly corroborative evidence, including letters from DK (that he accepted he wrote) and the evidence of seven other witnesses. The Defendant thereby irrationally concluded that the Claimant was not a reliable witness, and that there was no realistic prospect of success.
Secondly, in concluding that it was in the Claimant's best interests to offer no evidence due to the risk to her mental health if the case were to proceed. This was a decision taken against the express wishes of the Claimant and without any consultation or investigation of the Claimant's mental health or the effect of stopping or continuing the trial. This was despite the Claimant's consultant psychiatrist being present in court.
The matters of complaint at trial were not confined to these two headings. The criticisms of what had occurred were directed almost entirely at Ms Dunn and, in particular, her decision to recommend that the trial be brought to an end. A large number of wholly unpleaded criticisms of her judgment were advanced in the course of cross-examination over the best part of a day without warning. Without ruling on whether this should be permitted I asked Ms Law to set out the nature of her case on Article 3; and she did so in a document with allegations numbered from (i) to (ix). I consider these allegations later in this judgment, although for convenience I have altered the enumeration.
Before turning to the law and to my conclusions on the claim, it is convenient to consider some of the factual matters in issue.
First, the police knew that the 1995 diary had been altered because they had been told so by NXB when she handed over the diaries to them. The edited parts concealed descriptions of sexual intercourse with DA in January 1995 and a relationship with JS which was, at the very least, sexualised and inappropriate. Other passages which had not been concealed might have led to suspicions about these two relationships if one were looking out for it. However what is certain is that these matters have become very much clearer with focussed attention and the assistance of a typed version of the manuscript. The potential significance of the concealment was not just the existence of these relationships but what NXB wished to conceal about them.
Secondly, I am satisfied that both Ms Dunn and Mr Rowland were aware of and applied the Code for Crown Prosecutors as issued by the Director of Public Prosecutions pursuant to s.10 of the Prosecution of Offenders Act 1985. Section 5 of the Code lays down a two stage test for bringing prosecutions: the evidential stage and the public interest stage. In relation to the evidential stage, the Code provides:
5.2 Crown Prosecutors must be satisfied that there is enough evidence to provide a 'realistic prospect of conviction' against each defendant on each charge. They must consider what the defence case may be, and how that is likely to affect the prosecution case.
5.3 A realistic prospect of conviction is an objective test. It means that the jury ... properly directed in accordance with the law, is more likely than not to convict the defendant of the charge alleged. This is a separate test from the one that the criminal courts themselves must apply ...
5.4 When deciding whether there is enough evidence to prosecute, Crown Prosecutors must consider whether the evidence can be used and is reliable ...
I am also satisfied that they were aware of the need to find a way around the difficulties that had arisen if this were possible.
Thirdly, neither Ms Dunn nor the CPS was told by the police that the 1995 diary had been edited. I reject Ms Law's argument that Ms Dunn should have noticed from the copied version of the 1995 diary that it had been edited. It is not at all obvious from the photocopies that deletions had been made, even if one knows what one is looking for, and it is relevant that DK's Defence team, who had been sent the copies in August and who had based a disclosure application on entries in relation to JS, do not appear to have noticed that it had been edited. The editing only became apparent when the original was brought to court and the tippexing could be seen. I also reject the suggestion that Ms Dunn, or someone else at the CPS, should have inspected the originals at an earlier stage. They were exhibits in the custody of the police, and in a case like this it would be unusual for Counsel to inspect the originals unless an issue had arisen as to the authenticity of the exhibit or the copies themselves gave rise to issues which might need to be investigated by reference to the originals.
Fourthly, although I have endeavoured to summarise the discussions with NXB, the Prosecution team's notes of the discussion with NXB, after the Judge gave permission for them to speak to her, illustrate some of the difficulties faced by the Prosecution.
NXB: Will answer about JS, the rest – no.
...
NXB: If I do answer what will happen?
KD: If you do, I'll proceed.
...
NXB: I haven't lied, just not told you some things
...
KD: Do you want to speak to [her Counsellor]
NXB: I wanted her in but you wouldn't let me ... Do you have any idea of the can of worms you are going to open up?
...
KD: Will you answer [questions about the concealed diary entries]?
NXB: If you want to destroy my life, off you go, ask then. (Walks out)
Fifthly, what concerned Ms Dunn initially was the editing of the 1995 diary which concealed matters from the Defence and the Court. In the first witness statement NXB had said that she had 'decided to tell the police everything.' As Ms Dunn put in evidence, 'We were relying on the diary as evidence of the truth and she had destroyed part of the evidence.' Following the making of the 3rd statement Ms Dunn was concerned that NXB was still withholding information. She had said that she could not remember what was concealed when she plainly could. In Ms Dunn's view, NXB had only described one out of 3 potential abusers, and was still refusing to answer questions about DA when the decision was made to withdraw the prosecution.
Sixthly, the evidence of the discussions between Ms Dunn and Mr Rowland leading up to the decision to withdraw the prosecution demonstrate a careful, balanced and unhurried review of the strengths and weaknesses of the Prosecution case in the light of what had occurred.
The law
Although the prohibition against torture is clear, the ambit of the other rights in Article 3 has not (and perhaps cannot) be precisely defined, nevertheless, it clearly provides a positive obligation on the State to provide the means for an effective investigation and prosecution of crime where it is aware of credible allegations of harm. The obligation has been described at a relatively high level of abstraction in two cases in the European Court of Human Rights.
In MC v. Bulgaria (2005) 40 EHRR 20 it was described at [153] as:
a positive obligation ... to enact criminal-law provisions effectively punishing [serious crime] and to apply them in practice through effective investigation and prosecution.
It is clear from the decision that the State's positive obligations under Articles 3 and 8 were not engaged by allegations of errors or isolated omissions, see [168]. The Court was concerned with systemic failures which reflected a fixed and inappropriate attitude to prosecuting (in that case) 'date rape', see [169].
In Ali & Ayse Duran v. Turkey (2008) Application no.42942/02 at [61], it was said that:
The requirements of Articles 2 and 3 go beyond the stage of the official investigation, where this has led to the institution of proceedings in the national courts: the proceedings as a whole, including the trial stage, must satisfy the requirements of the positive obligation to protect lives through the law and the prohibition of ill-treatment. While there is no absolute obligation for all prosecutions to result in conviction or in a particular sentence, the national courts should not under any circumstances be prepared to allow life-endangering offences and grave attacks on physical and moral integrity to go unpunished.
It is common ground between the parties that there is an obligation in domestic law to have a system in place which provides for the effective investigation and prosecution of allegations of historic sexual assaults on children. It is not, and could not be, any part of NXB's case that there is a systemic failure to prosecute such cases before the courts. They are regarded as amongst the most serious of crimes, and there is no assumption that the harm caused by such crimes reduces in time.
The domestic courts recognise that the CPS is vested with a wide discretion in respect of whom it charges with offences and decides to bring to trial, see for example the judgment of the Divisional Court given by Lord Bingham of Cornhill CJ in R v. DPP, ex parte Manning [2001] QB 330 at [23].
Authority makes clear that a decision by the Director not to prosecute is susceptible to judicial review: see, for example, R. v. Director of Public Prosecutions, ex parte C [1995] 1 Cr. App. R. 136 . But, as the decided cases also make clear, the power of review is one to be sparingly exercised. The reasons for this are clear. The primary decision to prosecute or not to prosecute is entrusted by Parliament to the Director as head of an independent, professional prosecuting service, answerable to the Attorney General in his role as guardian of the public interest, and to no-one else. It makes no difference that in practice the decision will ordinarily be taken by a senior member of the CPS, as it was here, and not by the Director personally. In any borderline case the decision may be one of acute difficulty, since while a defendant whom a jury would be likely to convict should properly be brought to justice and tried, a defendant whom a jury would be likely to acquit should not be subjected to the trauma inherent in a criminal trial. If, in a case such as the present, the Director's provisional decision is not to prosecute, that decision will be subject to review by Senior Treasury Counsel who will exercise an independent professional judgment. The Director and his officials (and Senior Treasury Counsel when consulted) will bring to their task of deciding whether to prosecute an experience and expertise which most courts called upon to review their decisions could not match. In most cases the decision will turn not on an analysis of the relevant legal principles but on the exercise of an informed judgment of how a case against a particular defendant, if brought, would be likely to fare in the context of a criminal trial before (in a serious case such as this) a jury. This exercise of judgment involves an assessment of the strength, by the end of the trial, of the evidence against the defendant and of the likely defences. It will often be impossible to stigmatise a judgment on such matters as wrong even if one disagrees with it. So the courts will not easily find that a decision not to prosecute is bad in law, on which basis alone the court is entitled to interfere. At the same time, the standard of review should not be set too high, since judicial review is the only means by which the citizen can seek redress against a decision not to prosecute and if the test were too exacting an effective remedy would be denied.
In R (Da Silva) v. DPP and IPPC [2006] EWCA 3204 the Divisional Court (Richards LJ, Forbes and Mackay JJ) considered, in the context of a claim under Article 2, whether this approach needed to be modified in the light of the passing of the Human Rights Act 1998. Richards LJ concluded that the relevant legal tests remained the same; and, in describing the function of a court of review at [46], quoted from the judgment of Lord Walker of Gestingthorpe in R (ProLife Alliance) v. British Broadcasting Corporation [2003] 2 WLR 1403.
[T]he court's task is not to substitute its own view for that of a [decision-makers], but to review their decision with an intensity appropriate to all the circumstances of the case.
In R(B) v. Director of Public Prosecutions [2009] 1 WLR 2072, [2009] EWC 106 (Admin), the Divisional Court (Toulson LJ and Forbes J) was concerned with a claim for judicial review of a decision not to prosecute for a serious assault in which part of the claimant's ear had been bitten off and a defendant had been charged with an offence contrary to s.18 of the Offences Against the Person Act 1861. The claimant had a history of psychotic illness with symptoms of paranoia and hallucinations. On the basis of a medical report, which concluded that the claimant's medical condition might affect his recollection of events, the CPS decided that it could not put the claimant before the jury as a reliable witness and that there was no realistic prospect of a conviction. Accordingly the CPS offered no evidence and the defendant was acquitted. The Divisional Court concluded that in applying the evidential test in §5 of the Code for Crown Prosecutors - whether there was enough evidence to provide a realistic prospect of conviction - the CPS should have considered whether the evidence viewed overall was sufficient to merit a conviction taking into account what it knew of the defence case.
[54] In the present case, if the prosecutor had applied the merits based approach and asked himself whether he thought that it was more likely than not, or at least as likely as not, that [the claimant's] identification of [the defendant] as the ear biter was the result of an hallucination, I cannot see how merely on the strength of Dr C's report he could have answered that question in the affirmative. There was an opportunity to explore the matter further, because Dr C was due to be available to answer further questions, but the decision to offer no evidence forestalled that.
[55] The reasoning process [based on Dr C's report] for concluding that [the claimant] could not be placed before the jury as a credible witness was irrational in the true sense of the term. It did not follow from Dr C's report that the jury could not properly be invited to regard [the claimant] as a true witness when he described the assault which he undoubtedly suffered. The conclusion that he could not be put forward as a credible witness, despite the apparent factual credibility of his account, suggests either a misreading of Dr C's report (as though it had said that [the claimant] was incapable of being regarded as a credible witness) or an unfounded stereotyping of (the claimant) as someone who was not to be regarded as credible on any matter because of his history of mental problems.
[56] For those reasons I conclude that the decision to terminate the prosecution was unlawful. Unfortunately, because it was immediately followed by the prosecution offering no evidence, it was also irreversible.
Having held that the decision was irrational and a misapplication of the Code for Crown Prosecutors Toulson LJ went on to consider whether there had been a breach of Article 3.
[65] It is established law that Article 3 carries with it a positive obligation on a state to provide protection through its legal system against a person suffering such ill-treatment at the hands of others, but the positive obligation does not have clearly defined boundaries. One aspect of the duty is the provision of a legal system for bringing to justice those who commit serious acts of violence against others.
...
[69] [Counsel for the CPS] also submitted that if the termination of the prosecution was unlawful as a matter of domestic law, it did not follow necessarily that there was a violation of Article 3. As an abstract proposition I agree that there is not a necessary linkage (and in some instances judicial review of a decision not to prosecute might avoid a violation of the Convention); but we are concerned only with the facts of the present case.
[70] In this case [the claimant] suffered a serious assault. The decision to terminate the prosecution on the eve of the trial, on the ground that it was not thought that [the claimant] could be put before the jury as a credible witness, was to add insult to injury. It was a humiliation for him and understandably caused him to feel that he was being treated as a second class citizen. Looking at the proceedings as a whole, far from them serving the State's positive obligation to provide protection against serious assaults through the criminal justice system, the nature and manner of their abandonment increased the victim's sense of vulnerability and of being beyond the protection of the law. It was not reasonably defensible and I conclude that there was a violation of his rights under Article 3.
In R (Gujra) v Crown Prosecution Service [2012] 1 WLR 254, [2011] EWHC 472 (Admin) the Divisional Court (Richards LJ and Edwards-Stuart J) considered a claim to review a decision not to prosecute where the CPS had taken over a private prosecution. In his judgment Richards LJ emphasised again the diffident approach which the Court adopts in challenges to prosecutorial decisions not to prosecute.
[41] ... The court should be very slow indeed to conclude that the judgment formed by an expert prosecutor as to the reliability of individual pieces of evidence or the likelihood of securing a conviction on the evidence as a whole is so far out that it should be struck down as irrational.
[42] ... On the material before the court, I am satisfied that the claimant's challenge to the rationality of the CPS must be rejected. [The Crown Prosecutor] did a thorough job of evaluating the evidence. One can nit-pick about the details, but there is no point of substance which, on a fair reading of his review, he failed to take into account, nor did he take into account matters that he ought reasonably to have omitted from consideration.
This view of the matter was left undisturbed on appeal, see [2013] 1 AC, 484.
In L v. DPP and Commissioner of Police for the Metropolis [2013] EWHC 1752, (Sir John Thomas PQBD and Simon J) Sir John Thomas reiterated one of the important factors which weighed in the decision-making in that case at [43].
As it is of the essence of the decisions to prosecute that there is a significant margin of discretion given to the prosecutor, it can be well understood why two prosecutors might differ.
In R (F) v. Director of Public Prosecutions [2014] QB 581, [2013] EWHC 945 (Admin) Lord Judge CJ giving the judgment of the Divisional Court stated.
[5] Lord Bingham [in ex p. Manning] went on to underline that the test should not be so exacting that 'an effective remedy would be denied' when judicial review constitutes the only way in which 'the citizen can seek redress against a decision not to prosecute'. However the court examining the decision not to prosecute is not vested with a broad jurisdiction to exercise its own judgment, and second guess the defendant's decision, and direct reconsideration of the decision simply because the court itself would have reached a different conclusion. The remedy is carefully circumscribed. In the decided cases different epithets have been applied to highlight how sparingly this jurisdiction should be exercised. The remedy is 'highly exceptional', 'rare in the extreme', and 'very rare indeed'.
[6] Without suggesting a comprehensive list, the decision not to prosecute may be shown to follow a perverse decision to disregard compelling evidence or inexplicably to ignore the relevant prosecutorial policy or policies, or a combination of both. It may, although as far as we know there have never been any such examples, follow some impropriety or abuse of power by those entrusted by the defendant with the relevant responsibility. It may also be based on an error of law. If so it would be open to this court to require the decision to be reconsidered and the law correctly applied.
The present case is a civil claim for damages, rather than a claim for judicial review; and the parties were agreed that the application of the relevant principles involved a two-stage enquiry: first, whether the claim met the public law test for impugning a decision not to prosecute; secondly, if so, whether a breach of article 3 was established. This is the way that the Divisional Court considered the matter in the case of B, although another way of analysing the position is to regard the positive obligation in Article 3 as being confined by those principles of public law which exclude from complaint matters of judgment and even errors and non-systemic failures.
Without attempting a comprehensive summary of the principles which derive from the cases cited above, certain themes emerge.
(1) The decision whether to continue or withdraw a prosecution must depend on the exercise of an informed judgment of how the case against a particular defendant would be likely to fare before a jury, applying the evidential test in §5 of the Code for Crown Prosecutors. The exercise of this judgment will involve an assessment of the strength of the evidence against the defendant and of the likely defences, see for example ex p. Manning (above). It presupposes that (within the confines of what is reasonably practical) the prosecutor has properly informed him or herself and asked the right questions before arriving at the impugned decision, see R(B)v. DPP (above) at [53].
(2) The Courts recognise that those making prosecutorial decisions will have an experience and expertise which is not available to most courts of review, and that in some borderline cases the decision may be very difficult, see again ex p. Manning (above).
(3) The test to be applied is not whether the court disagrees with the decision, but whether the decision can be impugned on public law grounds: usually, (a) because of some unlawful policy, or (b) because of a failure to act in accordance with clear and settled policy, or (c) it was an irrational decision (in other words a decision which no reasonable prosecutor could have arrived at in the circumstances), see for example, R v. Director of Public Prosecutions, ex p. C [1995] 1 Cr App R 136, ex p. Manning (above) at [23] and [41], R (da Silva) v. DPP and IPPC (above) at [49]; R (Gujra) v. CPS (CA: above) at [42], L v. DPP and another (above) at [43] and R (F) v. DPP (above) at [5].
(4) Although the test should not be so exacting as to deny an effective remedy, the Court's jurisdiction to grant public law relief is in practice exercised sparingly, see F at [5]. Although I am doubtful whether the test is one of exceptionality, it is such that successful claims are likely to be rare.
(5) In order to decide whether there is a breach of Article 3 it will be necessary, in relation to a withdrawal of a prosecution, to consider the nature of the allegation of breach, to decide whether it meets the exacting standards implicit in the positive obligation, to identify the harm and to make a causative link. Plainly not every withdrawal of a prosecution will result in a successful claim for damages by the victim for breach of Article 3; and justifiable criticisms of the decision-making by individuals will not necessarily lead to the conclusion that the State had inflicted harm.
Conclusion
I have already dealt with complaints (i) and (ii) in Ms Law's document setting out the detailed nature of NXB's case, which are criticisms that Ms Dunn should have realised before 31 October 2011 that the 1995 diary had been changed, see [63] above. The other criticisms of Ms Dunn in the particulars of §61 of the Amended Particulars of claim fall into 3 broad categories, although some of these overlap, as do my conclusions.
The first broad category of complaints relate to what is said to be the CPS's failings in relation to the Claimant: (iii) to inform itself about NXB's mental state and take any steps to improve her mental state, such as asking for an adjournment to allow her time to come to terms with the fact that she would be questioned and to consider whether she wanted special measures; (iv) reaching an irrational conclusion that she was not a reliable witness; and (v) reaching a further irrational conclusion that it was in her best interests to offer no evidence against NXB's express wishes.
I do not accept these submissions. Although I am doubtful whether an adjournment would have been granted, or at least any adjournment which would have put off the trial for any significant length of time, it is striking that the Prosecution was not placed under time pressure in addressing the issue which had arisen, since the Judge allowed time for Ms Dunn to speak to NXB and to consider the Prosecution's position. In these circumstances Ms Dunn was entitled to the view that there was no benefit to be gained from requesting a further adjournment. So far as special measures are concerned, NXB had previously been asked whether she would like to give evidence screened from DK and had said she did not. This was a matter recorded by the police on 4 June 2011.
Ms Dunn had to form a view as to whether the Prosecution should be withdrawn, and in doing so she applied the evidential test in the Code. Ms Law, in her analysis of what occurred, which benefitted from the clarity of hindsight, submitted (in effect) that Ms Dunn reached the wrong conclusion. However, that would plainly not be sufficient to succeed in an Article 3 claim; and in any event I am very far from persuaded that it was the 'wrong' decision, and I am quite clear that it was neither due to the application of an unlawful policy, nor due to a manifest failure to act in accordance with CPS policy nor a decision which was irrational. Although I am not critical of NXB, for the reasons I have already expressed, I do not consider that it was either perverse or irrational for Ms Dunn to conclude from what she had learnt during the course of the day that it was neither in the public interest nor in NXB's own interest to continue with the prosecution.
The second broad category of complaints relate to Ms Dunn's views about the course of the trial if it had gone ahead: (vi) failing to take proper objection to the Defence assertion that it intended to cross-examine NXB on the basis that the content of the diary entries in relation to JS and DA were fabricated when there was no evidence that they were, and there was good evidence that they were not; and (vii) failing properly to consider the likelihood of JS attending to give evidence and what his likely evidence would be if he did.
I do not accept that the Defence would not have been able to cast substantial doubt on the reliability of the entries about JS and DA. NXB had not been able to remember the first occasion of sexual intercourse with DK until she had looked at the 1994 diary; and it was important for the Defence to show that the diaries could not be relied on. Once the Prosecution had been told that JS denied that NXB had told him about the rape on 14 November 1995, at the very least, the Prosecution could hardly have advanced its case relying on that entry; and if JS had been called to say that the diary entries in relation to him were fantasies his evidence would have had a significant impact on NXB's credibility. Ms Law developed a number of submissions whose conclusion was that JS would never have been called by the Defence. She may be right, but the nature of the debate highlights one of the weaknesses of this way of advancing the claim for breach of Article 3: it involves not simply a close analysis of what occurred, but criticisms of predictive judgments as to the way in which the case would or might have developed, with all the implicit uncertainties in such an exercise.
The final broad category of complaints relate to the final assessment of the strength of the case in the light of what had occurred, and what might have been done to improve the prospects of success: (viii) failing to consider, and reach a rational decision based on, all the evidence, including the other Prosecution witness statements, DK's interviews (including his provable lies), his letters to NXB and the prospects of successfully applying to adduce DK's bad character; and (ix) failing to properly identify and seek to rectify any apparent weaknesses in the Prosecution case, contrary to §3.3 of the Code for Crown Prosecutors.
It was apparent from the evidence of Ms Dunn that she had carefully considered all aspects of the prosecution case, taking into account the matters referred to in (viii) above, and that she did not take the decision to withdraw the prosecution lightly. The letters were clearly taken into account as evidence of an inappropriate relationship with DK falling short of proof of the offences. As already noted, a material factor in Ms Dunn's decision was being told by NXB, after she had made the 3rd witness statement in which she had said she could not remember the contents of the edited material, that she could in fact remember the contents. As she put it in the course of cross-examination: 'She gave the impression she was concealing something.' The statement about what she could remember, which was similar to the omission in her 2nd witness statement, was bound to be picked up by the Defence. Although she later changed her mind, NXB had also said that she was not prepared to answer questions about DA. Ms Dunn's evidence was that the decision was not made lightly, and that she was conscious of the impact on NXB. She and Mr Rowland considered the other supporting evidence and gave it such weight as they considered was appropriate (for example, discounting the evidential value of NXB's poems).
As Ms Wheeler submitted, the present case was very different to R (B) v. DPP, in which the claimant was able to rely on a crass assumption that where a victim of a crime suffered from a particular mental impairment a prosecution would fail. There was not only a flawed systemic assumption, there were ongoing threats from the defendant, and the way he had been treated both at court and afterwards had been the subject of adverse comment by the Court. The reasons for withdrawing the case had never been explained to B and subsequent letters to the CPS had been ignored. In the present case the decision had been explained at the time and in a subsequent meeting and letters of complaint had been answered.
The fact that so many different allegations have been made does not mean that there were many irrational decisions and egregious failures to follow policy, it demonstrates the difficulties in advancing a claim under Article 3 where a decision has been made by an experienced prosecutor on the basis of a number of factors in the course of a dynamic and developing trial process, and where the relevant prosecutorial duties are not owed exclusively to the victim.
The collapse of the case was highly regrettable. The trial of serious criminal charges against DK did not take place; and the criminal process ended not with the verdict of the Jury but with the Prosecution feeling compelled to withdraw the case at a very late stage.
NXB is an intelligent woman who endured long periods of sexual abuse in her childhood, and now suffers from a chronic and debilitating physical condition, and is mentally unwell. The Jury never heard her evidence and was deprived of the opportunity of returning guilty verdicts. She was (and is) entitled to the view that she was suddenly faced with an issue which she had raised over a year before when she had handed over the original diaries to the police, telling them that she had edited the 1995 diary and explaining why she had done so. She had thought (and had been given no reason to believe otherwise) that she could 'compartmentalise' her 'relationship' with DA, as well as her relationship with JS which she still did not regard as sexualised. She was suddenly told that this was not so.
Although in qualitative terms entirely different, Ms Dunn has been put in a difficult position. The allegations in §61 of the Amended Particulars of Claim had been broadly framed, yet when it came to the cross-examination it was alleged that she had fallen well below the standards reasonably to be expected of a prosecutor in this type of case. She faced detailed criticism during a long cross-examination and answered questions which challenged both her decision and her reasons as careless and irrational, without any sufficient warning in the form of a properly pleaded case that might have warned her that it was being said that she alone was at fault for the failure of the prosecution. All this without the benefit of anonymity which had been afforded to prosecuting counsel in R (B) v. DPP.
For the reasons I have given I am clear that neither she nor the CPS was materially at fault, and that the decision to withdraw the prosecution was neither irrational nor founded on a misunderstanding or misapplication of prosecutorial policy, and was not bad in law. Nor did the evidence show a breach of the State's obligation to establish and apply a criminal law system which punishes historic sexual abuse, see MC v. Bulgaria (above) at [185]. There are policies, checks and counterchecks in place which are designed to ensure that the prosecutions of such offenders are compliant with the human rights of their victims. What this case illustrates is that the forensic process, dependent as it is on human agency, is imperfect.
For all these reasons I have concluded that the claim fails and there will be judgment for the Defendant. |
HHJ Richard Parkes :
THE APPLICATION
This is a dispute involving the Jehovah's Witnesses, an evangelical Christian organisation. The claimant is, or was, a member of that organisation. He complains of an announcement which he says was made by a local elder at the Wimbledon Congregation of Jehovah's Witnesses on 19 July 2012, in these words: "Frank Otuo is no longer one of Jehovah's Witnesses".
The claimant issued a claim form on 19 July 2013. It appears to be a claim in slander, although the form does not say so. No relief is claimed. It is said in terms not to be a monetary claim.
After various interlocutory steps had been taken, the defendant belatedly issued an application dated 19 June 2014 to strike out the claim on the footing that the claim form had not been issued within the limitation period, so that the claim was time-barred. On 30 October Master Leslie struck the claim out, holding since that the publication complained of had taken place on 19 July 2012, the limitation period expired on 18 July 2013. However, he gave the claimant leave to appeal to the judge on a matter of law arising out of the delay in taking the limitation point. The question was whether the defendant's conduct amounted to acquiescence or had given rise to an estoppel.
According to Master Leslie's approved note of judgment, no application had been made to him for the primary limitation period to be disapplied (under s32A Limitation Act 1980). It seems that may have been a misunderstanding, for there is an application notice apparently dated 29 July 2014 which seeks precisely that order, together with an application for leave to amend the Particulars of Claim. However, on any view there was no evidence on the point before Master Leslie.
The appeal from Master Leslie's order was dismissed by Sir David Eady on 12 December, but the judge ordered that the claimant's outstanding application under s32A, Limitation Act 1980 should be listed before a judge. That (together with the application for leave to amend) is the application which is now before me.
THE PLEADINGS
The application for permission to re-re-amend the Particulars of Claim is not opposed, so I will refer to that version of the pleading for the purposes of this application.
The announcement complained of is said to have been made in front of at least 75 people, both members and general public. No natural and ordinary meaning is pleaded.
However, it is said that the innuendo meaning of the announcement was that the claimant had remorselessly engaged in one or more of a number of sinful acts, namely fraud, paedophilia, theft, adultery, fornication and drunkenness. The first element of the extrinsic facts relied on is "the defendant's own publications used regularly for teaching its members and people who are curious to know about the defendant's teachings", and an example of one such is given, not by setting it out in the pleading but by reference to another document which was not before me. That document may or may not provide the necessary extrinsic facts to give rise to the meaning pleaded, but for present purposes I need not spend time on the point. I assume, and as I understood him Mr Otuo confirmed, that his case is that it would only be if he was guilty of such sinful acts that he would be the subject of such an announcement. In other words, any Jehovah's Witness would understand the full meaning of what the claimant calls the 'coded' announcement.
As far as fraud is concerned – leaving aside the other 'sinful acts' - it is also pleaded that ten members were present who knew that the claimant had been charged with fraud and had been subjected to the defendant's own internal proceedings. The innuendo meaning which that sub-group would have understood the announcement to bear would have been that the claimant had been found guilty of fraud and was no longer fit morally to be one of Jehovah's Witnesses and should be shunned. The claimant adds that 'authorised representatives' of the defendant had in fact wrongly adjudged him to be a fraudster.
The claimant sets out in the Particulars of Claim the damage that he says he has suffered. Much of it relates to the fact of the organisation's decision that he should no longer be a member, rather than to the publication of the words complained of. For instance, he pleads that his young children cannot understand why their father has been ostracised by the only community they have known since birth; he has lost all his Jehovah's Witness friends, and is not allowed 'spiritual association' with his wife and children; and he laments the loss of his association with the organisation. On the face of it, those are all matters which flow from the decision to exclude him from the organisation, not from the announcement of the decision. His claim in slander can only relate to the damage done to his reputation by those to whom the announcement was published. That is pleaded, but it forms only a small and relatively insignificant part of the damage complained of.
He asks rhetorically in his Particulars of Claim whether damages would be a sufficient remedy for the damage done, and answers his own question "emphatically no", but concedes that if there is to be financial reparation, a minimum of £140,000 would go some way to achieve it. In the prayer, he asks for a retraction and apology, damages in the sum of £140,000 and aggravated and exemplary damages (the basis for which is not pleaded) of £75,000, notwithstanding that the claim form makes no monetary claim.
The defendant is the Watchtower Bible and Tract Society of Britain. It is a registered charity. It has put in a defence, since amended, which admits that it is ultimately liable to indemnify the elders of Wimbledon against valid claims made arising out of their lawful acts. It is not absolutely clear whether that is an admission of responsibility for publication. In the context of the defence as a whole, I think that it is.
The core of the amended defence goes to meaning. The defendant's case is that an announcement that a member has left the organisation is entirely neutral, and gives no indication of any reason. Members leave voluntarily for a variety of reasons: for instance, they may decide that they no longer accept the organisation's teachings, or they may take up secular employment incompatible with the beliefs of Jehovah's Witnesses, for example membership of the armed forces. They may also be asked to leave because their conduct may, even if not criminal, be found to be incompatible with that expected of them. The announcement is always the same, whatever the reason. Moreover, the investigation into the claimant's conduct had been carried out in strict confidence, so no-one to whom the announcement was made would have known of it.
It is also pleaded that the announcement was made only to members and was protected by qualified privilege; and that (if the announcement did bear the innuendo meaning pleaded) it was true. Particulars of justification have yet to be provided.
There is not yet any Reply, although the Particulars of Claim contain what appears to be an allegation of malice, to the effect that named agents of the defendant were indifferent to the truth or falsity of the defamatory allegation complained of.
THE APPLICABLE PRINCIPLES
By s4A, Limitation Act (substituted by Defamation Act 1996 s5(2)), the 6 year time limit under s2 of the Act shall not apply to actions for (inter alia) libel and slander, and no such action shall be brought after the expiration of one year from the date on which the cause of action accrued.
Section 32A allows for a discretionary exclusion of the one year time limit:
"(1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which—
a) the operation of section 4A of this Act prejudices the plaintiff or any person whom he represents, and
b) any decision of the court under this subsection would prejudice the defendant or any person whom he represents,
the court may direct that that section shall not apply to the action or shall not apply to any specified cause of action to which the action relates.
(2) In acting under this section the court shall have regard to all the circumstances of the case and in particular to—
a) the length of, and the reasons for, the delay on the part of the plaintiff;
b) where the reason or one of the reasons for the delay was that all or any of the facts relevant to the cause of action did not become known to the plaintiff until after the end of the period mentioned in section 4A—
(i) the date on which any such facts did become known to him, and
(ii) the extent to which he acted promptly and reasonably once he knew whether or not the facts in question might be capable of giving rise to an action; and
c) the extent to which, having regard to the delay, relevant evidence is likely—
(i) to be unavailable, or
(ii) to be less cogent than if the action had been brought within the period mentioned in section 4A.
The modern starting point on the approach to be taken to s32A is Steedman v BBC [2001] EWCA Civ 1534, [2002] EMLR 17, where it was said at [15] that the discretion afforded by s32A was largely unfettered: the section
"… requires the court to balance any prejudice to the claimant on the one hand and the defendant on the other in allowing the action to proceed or otherwise. All the circumstances of the case must be had regard to in assessing the justice of the matter with particular reference to the length of, and reasons for, the delay and the extent to which the passage of time since the expiration of the limitation period has had an impact on the availability or cogency of relevant evidence."
The limitation period for actions in defamation has been progressively reduced since 1985 from six years to three, and then from three to one. The rationale of those reductions is clear. Time is of the essence in defamation actions, and the claimant will normally be anxious – and will be expected to be anxious - to obtain an apology or correction at the earliest possible moment, in order to undo the damage to his reputation (see the Pre-Action Protocol for Defamation: Civil Procedure vol 1, 2014, paragraph C6-001 at 1.4). That is why experienced defamation judges have tended to regard disapplication of the limitation period as an exceptional matter. Sharp LJ, a judge with great experience of defamation work, put it this way in Bewry v Reed Elsevier UK Ltd [2014] EWCA Civ 1411, [2015] EMLR 6 at [5]:
"…it is clear that special considerations apply to libel actions which are relevant to the exercise of this discretion. In particular, the purpose of a libel action is vindication of a claimant's reputation. A claimant who wishes to achieve this end by swift remedial action will want his action to be heard as soon as possible. Such claims ought therefore to be pursued with vigour, especially in view of the ephemeral nature of most media publications. These considerations have led to the uniquely short limitation period of one year which applies to such claims and explain why the disapplication of the limitation period in libel actions is often described as exceptional."
The onus is of course on the claimant to make out a case for disapplication. Much will depend on the explanation which the claimant gives for the delay. In both Steedman and Bewry, that explanation was insufficient.
EVIDENCE AND ARGUMENT
The claimant, who appears in person, put in a very long witness statement one day before the hearing. Much of it provides a detailed, albeit somewhat partial, account of the course of the litigation, and much is argument. However, some reasons are given for the delay in issuing proceedings.
What the claimant says is that he was not aware that he had a cause of action until he had a "casual chat" with a lawyer friend, on about 29 June 2013. The friend alerted him to the possibility of a claim in slander, and warned him that he had to take action 'no later than the date of publication that year (2013)'. It did not occur to him that the final date for issue would be 18 (as opposed to 19) July. From 16 to 18 July, he was claimant in a three day interlocutory hearing against another Witness in the Chancery Division, the return date for his application for a freezing injunction, and he was under great pressure.
Moreover, he explains that he had wanted to "restore his reputation and resolve differences" with the defendant in a non-litigious way, and had two meetings with the defendant to try to resolve matters. He does not say when those occasions were, but refers to one by reference to correspondence which he exhibits. On 29 October 2012, he wrote to the Body of Elders in Wimbledon asking for reinstatement, and he repeated that request by letter dated 17 June 2013, received (according to the defendant) on 6 July 2013. It appears that the elders met him on 22 July 2013 to discuss his application for reinstatement, three days after he had in fact issued a claim form. There is no reference in the correspondence to another meeting, but I infer that if there was another meeting, it also was directed to the question of reinstatement. The claimant does not suggest otherwise. He does say, however, that he told the elders on 22 July 2013 (I infer, at the meeting) that a defamation suit would follow.
It is worth noting that although in his witness statement he claims to have wished to seek a non-litigious route to restore his reputation as well as to resolve his differences with the defendant, in neither of the exhibited letters did he complain of the announcement made on 19 July 2012 (as opposed to the decision which it heralded) nor of any damage done to his reputation.
The claimant told me that he did not send a letter before action. He says, however, that he served the claim form and Particulars of Claim on the defendant on 13 August 2013.
In the course of submissions, the claimant told me that after the announcement of 19 July 2012 there was a period during which he did nothing: he "retreated", he said, to consider what had befallen him after his forty years of association with the Jehovah's Witnesses. He also told me that after he learned of the cause of action on 29 June 2013, he waited for a meeting to take place, in the hope that the outcome would make it unnecessary to issue a claim form. (It is unclear to me why he expected there to be a meeting, since I cannot see that his letter of 17 June 2013 had asked for one, but I am prepared to accept that he did).
The claimant argued that the prejudice to him if the limitation period was not disapplied would be the loss of the chance to clear his name. He also made it clear that "until he was cleared by the court if found innocent", as he put it, he would continue to suffer ostracism from the community of Jehovah's Witnesses, as a direct result of the announcement made by the defendant. He explained that he had been shunned by the only community that he had known for 43 years, and that his own mother had not received him for over two years.
The defendant did not put in evidence on this application. It did not suggest that the delay in issuing proceedings had caused it any particular prejudice. Mr Daniel, counsel for the defendant, took his stand primarily on what he argued was the claimant's failure to show a case for disapplying the limitation period. In particular, he contended that the claimant had known all the facts that made up his claim since the date of the announcement – the date and time of the announcement, the words spoken and those to whom they were published. Yet he made no complaint for a whole year.
CONCLUSIONS
I am unimpressed by the claimant's assertion that he did not realise that he had a cause of action until 29 June 2013. He knew what had been said at the meeting on 19 July 2012, and he must have known what (on his case) it meant, namely that he was guilty of fraud and/or had remorselessly engaged in fraud, paedophilia, theft, fornication or drunkenness. He did not need legal advice to know that he had been the subject of what on his case was an exceptionally damaging allegation, and whether or not he knew that he had a claim in law, I would have expected him to complain of it. Yet he made no mention of the words now complained of in his letters to the defendant of 29 October 2012 and 17 June 2013, which were focused on his wish to be reinstated as a member. Indeed, it appears that he said nothing at all about his present complaint until he met representatives of the defendant on 22 July 2013.
In any event, he certainly learned of his cause of action (and of the applicable limitation period) on 29 June 2013, so s32A(2)(b) has no application here. His explanation for not issuing his claim form in the period of nearly three weeks which was still available to him is that he hoped to achieve a non-litigious resolution of his differences with the defendant and of his wish to restore his reputation, and he did not wish to issue until the meeting with the elders had taken place. In fact, there is no evidence that he even told the defendant until 22 July 2013 that he had a complaint about damage to his reputation. He also relies on the pressure of the hearing between 16 and 18 July. I find his explanation unpersuasive. He had plenty of time in which to issue a brief claim form well before the hearing of the Chancery application, and if he had wished to obtain vindication of his reputation by non-litigious means he would have informed the defendant of his complaint in slander as soon as he learned (as he says he did) that he had one. Otherwise he can have had no reasonable expectation that a meeting, whenever it was held, would resolve his slander complaint – only, at most, that it would resolve the separate matter of his expulsion from membership.
It is worth recalling the opinion of Sir Brian Neill's Supreme Court Procedure Committee (Report on Practice and Procedure in Defamation, July 1991) at VIII.5: "We would not expect a plaintiff to receive much sympathy if no relevant complaint had been made within the relevant 12-month period".
Nor am I impressed by the claimant's argument that the discretion should be exercised in his favour given his mistake as to the last date on which to issue, or given the fact that he was only a day out of time. There was no good reason to leave issuing proceedings until the last minute. This is not a case like Hartley v Birmingham City District Council [1992] 1 WLR 968, where proceedings were inadvertently issued a day late against a background of prolonged negotiations with underwriters about quantum, liability not being in issue. As Leggatt LJ observed, if that application to disapply the limitation period had failed, it was hard to imagine any application being successful.
It is my conclusion that the claimant's reasons for failing to issue proceedings within the limitation period are inadequate, and certainly not, to adopt the language of the defendant's successful submissions in Bewry, of a sufficiently precise or compelling nature to discharge the heavy onus on him as the applicant under section 32A.
Plainly, a refusal to disapply the limitation period prejudices the claimant, because it means that he cannot take steps to vindicate his reputation by means of slander proceedings. However, his failure to complain of the allegation for over twelve months, his focus in correspondence on gaining re-admission to membership of the defendant's organisation, and the emphasis in his present claim on damage flowing not from the alleged slander but from the fact of his removal from membership, strongly suggest to me that his wish to vindicate his reputation is very much secondary to, and seen by him as a means to achieve, his primary goal of re-joining the Jehovah's Witnesses. Moreover, Steel J suggested in Steedman at [29(2)] that it was relevant to take into account, in assessing the prejudice to the claimant in not being able to proceed, the strength of his case. By the same token, I take into account the fact that, had his claim proceeded, he would have faced what is prima facie a strong defence of qualified privilege. Indeed, it is the corollary of his innuendo meaning of guilt of fraud, which depends on special facts known to members of the defendant organisation, that – even if outsiders had been present when the announcement was made – only insiders – Jehovah's Witnesses - would have understood the words in a defamatory sense.
Conversely, if I exercised my discretion to disapply the limitation period, the defendant would suffer the substantial prejudice of having to defend a slander action of which it had known nothing until after the limitation period had expired. In my view, it would be quite wrong to describe the consequences of my refusal to disapply the limitation period as a windfall for the defendant, in the sense that it certainly would have been in Hartley.
It is not suggested that the delay has any effect on the defendant's ability to defend the claim. That is an important consideration – indeed, it is one that s32A(2)(c) expressly requires the court to have in mind - but it is far from decisive (see Steedman at [23]), and in the present case it seems to me to carry little weight.
In conclusion, I can find no sufficient reason to disapply the limitation period in this case, and the claimant's application is dismissed. The consequence would appear to be that the action also falls to be dismissed, since the limitation defence is now bound to succeed, but I will hear submissions on what orders should follow. |
Mr Justice Dingemans:
This is an appeal from the judgment of Master Kay QC dated 10 December 2014. Master Kay dismissed applications to strike out, or grant reverse summary judgment in respect of, the claim made by the Claimants Steven Trevor Owens and Abigail Diana Owens ("Mr and Mrs Owens"). The claim is for damages, including aggravated damages, for defamation in respect of statements made in a letter dated 21 September 2013 and an injunction against the Defendants Steven Grose and Virginia Grose ("Mr and Mrs Grose").
Mr and Mrs Grose appeal contending that the claim should have been struck out or dismissed. Mr and Mrs Owens appeal contending that they should have had their costs, which were ordered to be in case.
The letting of the house
Mr and Mrs Grose let a house at 2 Beechwood, Fordingbridge, Hampshire ("the property") to Mr and Mrs Owens on a 6 month tenancy from 20 February 2013. Goadsby & Harding (Residential) Limited ("Goadsby") acted on behalf of Mr and Mrs Grose as letting agents. Mr and Mrs Owens paid a deposit of £1,575.
Under the terms of the tenancy agreement Goadsby were also appointed the stakeholder to hold the deposit. The deposit was security for performance of the tenants' obligations including breaches on the part of the tenants of their agreements and obligations.
Provision was made in the tenancy agreement for the deposit to be safeguarded by the Tenancy Deposit Scheme. The tenancy agreement provided for a dispute resolution service by Dispute Service Limited ("DSL") in which DSL offered to resolve disputes about deposits by final and binding adjudication using an Independent Case Examiner ("ICE"), see paragraphs 2.24 to 2.35 of the tenancy agreement.
There were special conditions of the tenancy to the effect that Mr and Mrs Owens could keep a cat and 2 dogs at the property but that they would have the property, carpets and soft furnishings professionally cleaned at the conclusion of the tenancy. It was also agreed that Mr and Mrs Owens only had access to the garage nearest the front door of the property.
The dispute about cleaning, damage and the deposit
At the conclusion of the tenancy a dispute arose between Mr and Mrs Grose and Mr and Mrs Owens about whether some or all of the deposit should be repaid. A check out inventory was performed in late August 2013 and by email dated 27 August 2013 Mrs Grose complained to Goadsby "deposit queries" by an email, copied to Simon Whitlock who was the person at Goadsby with whom Mr and Mrs Grose had had most contact, complaining that there were dog scratches on the door which had not been there before, and that it did not look like the property had not been professionally cleaned and asking to see any invoice. By email dated 30 August 2013 Charlotte Old, property administrator at Goadsby, forwarded the email to Mr and Mrs Owens.
On 5 September 2013 Janine O'Hara, a senior supervisor at Goadsby, emailed Mr and Mrs Grose noting that the price of a new door would be £100, and recording that there had been no reply about the cleaning invoice.
By letter dated 10 September 2013, emailed to Charlotte Old, Mr and Mrs Owens replied. An invoice for cleaning the carpet in the lounge was enclosed, but it was reported that the "carpet cleaner deemed that the other carpets were too clean to need cleaning and we left them in abeyance". Complaints were made about the condition of the property at the beginning of the tenancy. Mr and Mrs Owens also complained that there had been "illegal use of the parking bays" and blocking of access to the garage, for which a sum of £500 was demanded. It was contended that the landlord was not allowed to use the garage. Complaint was made about the state of the bathroom and the need to use a jug in the bathroom. It was said that to allege that the property was in a worse condition than before was "blatantly untrue". Photographs of the oven were attached. The letter concluded noting that if the deposit was not received Mr and Mrs Owens were more than happy to proceed to Court and suggesting that Goadsby should inform Mr and Mrs Grose about the rules and regulations relating to landlords.
By letter dated 12 September 2013 Louise Rankin, a manager at Goadsby, wrote to Mr and Mrs Owens proposing a deduction of £100 and VAT for the door and asking again for an invoice from the cleaning company. By letter dated 16 September 2013 Ms Rankin wrote to Mr and Mrs Grose enclosing the letter dated 10 September 2013 and asking "how you wish us to respond".
By letter dated 21 September 2013 Mr and Mrs Grose wrote a letter to Goadsby. This is the letter in respect of which the claim for defamation is brought. The letter responded to the letter dated 10 September 2013. It started "to address the Owens letter in the first instance … who are the carpet cleaning company to decide the carpets did not need cleaning" reporting the finding of white dog hairs. Reference was made to the photographic record and the fact that the Owens' dog had left large scratches on the door. Mr and Mrs Grose raised other complaints about the behaviour of Mr and Mrs Owens' dog and cat (faeces in the garden and fights between cats). There was a discussion about the claim for £500 being a diversionary tactic, and the fact that Mr and Mrs Owens had parked in front of the garage which had been excluded from the tenancy, and failed to permit anyone to view the property until 20th August, which was in breach of express conditions in the contract.
In relation to the points about the shower and jug comments were made about the bathroom suite. Mr and Mrs Grose wrote that they had offered Mr Owens to have a power shower fitted "but he said he would get a plumber who worked for his company Owens and Porters to come and fit a shower on the company account". Mr Grose reported that he had offered to pay for the capital cost but that had not been accepted. The letter continued noting "this does raise the question though regarding Mr Owens using his company resources" noting that it would not be permissible in a private home, and that Mr Grose's sister, who was an accountant, said that would be illegal. Reference was made to other work being charged to Mr Owens' company and the dim view HMRC might take. The letter went on pointing out that Mr and Mrs Grose had not wanted Mr and Mrs Owens as tenants because of the animals, and commenting again on the lack of cleaning. Mr and Mrs Grose wrote stating "we too would be more than happy to proceed to court for the sum of £3700 based on their instigating after the fact charges, plus the outstanding amount incurred for the damaged door and the caveat of the cleaning of the house after the pets. Indeed we would welcome the chance to bring these facts … to a wider audience …".
It appears that in November 2013 Goadsby, as letting agents for Mr and Mrs Grose, initiated a dispute resolution procedure with DSL. DSL is a body authorised to resolve such disputes pursuant to section 212 of the Housing Act 2014. The letter dated 21 September 2013 was sent to DSL. There is an issue about whether it was sent by Mr and Mrs Grose, or whether if sent by Goadsby, Mr and Mrs Grose are liable for its further publication to DSL.
The proceedings and the application
By a claim form dated 23 April 2014 Mr and Mrs Owens commenced their claim for libel. The Particulars of Claim were attached. The publications of the letter dated 21 September 2013 to both Goadsby and to DSL were complained of. The defamatory meanings were pleaded to be that: (a) the Claimants were bad tenants; (b) the Claimants had fabricated dishonest objections to the Defendants' dilapidations claim with the intention of avoiding liability; (c) the Claimants failed to care for their pets; (d) the First Claimant had illegally used the sources of his company to pay for personal expenses; and (e) the First Claimant, as a prominent local managing agents, was a hypocrite because he did not comply with standards of good behaviour by tenants.
There were issues over service and an application for judgment in default was made, which was withdrawn. In supporting witness statements in respect of that application Mrs Owens made it clear that she was very upset by the allegation that she had not cared properly for her pets, and Mr Owens said that the letter was an obvious assault on his reputation for honesty and in professional and personal dealings and was a significant threat to his financial future and the goodwill in his business. He noted that in respect of some blocks of flats Goadsby would be representing persons with other interests to those represented by Mr Owens and he exhibited letters written to tenants represented by Goadsby.
By an application dated 9 September 2014 Mr and Mrs Grose applied for the claim to be struck out or for reverse summary judgment on the bases: (1) Mr and Mrs Grose were not responsible for the publication to DSL; (2) the publications were on the occasion of qualified privilege; and (3) the claim was a Jameel abuse of process.
Mr Grose made a witness statement in support of the application. He accepted that his frustration had come over in the letter of 21 September, but contended that it contained material which he honestly believed to be true and correct. The letter dated 21 September 2013 had been sent to Louise Rankin, who was dealing with the issue over the deposit, and Simon Whitlock who had the ongoing relationship with Mr and Mrs Grose. He said he was not aware that Goadsby would send their letter to DSL, and he did not impliedly authorise them to do so.
Mr Owens put in a witness statement suggesting that the Grose's applications were out of time, making comments about the applications, and stating that he wanted the matter tried without delay. Mrs Owens put in a further witness statement referring to the highly damaging and wounding claims made in the letter dated 21 September 2013.
The judgment below
The hearing before Master Kay QC took place on 10th December 2014. He dismissed the applications. He gave short oral reasons at the time which were later expanded into a written judgment. Master Kay QC summarised the relevant law, including the law relating to Easyair Limited V Opal Telecom [2009] EWHC 339 on the test to be applied when considering applications for summary judgment, and the respective cases. Master Kay QC concluded that the applications were within time. He noted that there appeared to be valid claims for breach of contract to clean the carpets and for the damage done by Mr and Mrs Owens' dogs. He considered the claim made by Mr and Mrs Owens for £500 for car parking to be at first sign "an unjustifiable attempt to reduce any liability which the tenants might have". He concluded that Mr Grose had become frustrated with the stance taken by Mr and Mrs Owens noting "some of the points made were undoubtedly justified and would be subject to qualified privilege however, unfortunately, the tenor of the letter was somewhat heated and included aspersions upon the First Claimant's financial dealings and professional probity".
In his conclusions on the legal issues engaged Master Kay QC found that: (1) the letter contained material which impugned the probity of Mr Owens; (2) the extent of publication was a matter for trial; (3) much of the letter to Goadsby was subject to qualified privilege however whether qualified privilege would be a defence to the imputations of lack of probity was "a matter of mixed fact and law which needs to be decided"; (4) malice "is also a matter which should be decided at trial"; (5) having regard to issues about real and fanciful prospects, the matter should be determined at trial; (6) in relation to Jameel the references to Mr Grose's probity were sufficient to warrant this being considered a substantive tort which might have a deleterious effect on his professional reputation. There were doubts about the other matters but that would be for the trial judge; and (7) therefore the applications should be dismissed.
Issues on the appeal
I am very grateful to Mr Helme and Mr Considine for their helpful written and oral submissions. It appears that the following matters are in issue on the appeal: (1) whether the publications (to Goadsby and DSL) should have been found to be on an occasion of qualified privilege; (2) if so, whether there should have been a finding that there was no prospect of adducing evidence of malice which would justify a trial; (3) if not, whether the publications should have been found to be a Jameel abuse of process; (4) whether the issue about liability for the publication to DSL should have been left to trial; and (5) whether Mrs Owens' claim ought in any event to be struck out.
There were issues about the admissibility of two witness statements prepared for the purposes of the appeal. The first was a further witness statement from Mr Grose and gave further details about publication to DSL. This showed that Goadsby had uploaded some materials to the DSL forum, and that some had been uploaded by Mr Grose. Mr Grose contended that this showed that he had not uploaded the letter dated 21 September 2013 to DSL.
The second was a further witness statement from Mr Owens. This was produced in the course of the hearing following questions about the case on malice, and related to that part of the letter dated 21 September 2013 which related to the shower. In the course of submissions Mr Considine had stated that it was not only alleged that part of the letter dated 21 September 2013 was wrong, but that the conversation about the shower and the use of a plumber had never even taken place. Mr Considine said that he had only just become aware of this feature of the case in the course of the hearing, and sought permission to rely on the statement. The statement was potentially relevant to the issue of malice, because the authorities recognise that there is a distinction between saying something which is false, and inventing a conversation which is the basis for the defamatory statement. In the further witness statement Mr Owens stated in relation to the conversation referred to in the letter dated 21 September 2013 that "I recall a conversation with Mr Grose re the shower but I did not state that I would get a plumber working for my company to fit a shower on my company account. Mr Grose is being dishonest when he claims that part of the conversation took place. The only conversation that took place was about a shower curtain rail and the performance of the existing tap hose".
Mr and Mrs Owens objected to the further witness statement of Mr Grose, and Mr and Mrs Grose objected to the further witness statement of Mr Owens. It was agreed that I should look at the respective statements for the purposes of the hearing and reserve my decision as to admissibility of the statements to this judgment.
I should record that issues about whether there was (a) an absolute privilege in respect of the publication to DSL; (b) a qualified privilege because Mr and Mrs Grose were responding to attacks being made on them by Mr and Mrs Owens; and (c) the actual meaning of the words; were not the subject of the application or appeal. If the action progresses to trial those matters will become issues in the action.
Relevant legal principles
I have summarised below relevant legal principles relating to: Jameel abuse of process; qualified privilege and malice.
It is established that in order to deal with cases justly, proportionately and to maintain a proper balance between the Convention right to freedom of expression and the protection of other rights, the Court is required to stop as an abuse of process defamation proceedings which serve no legitimate purpose, see Jameel v Dow Jones [2005] EWCA Civ 75; [2005] QB 946 at paragraph 55. The test proposed in that case and accepted by the Court was whether "a real and substantial tort" had been committed in the jurisdiction, see paragraph 50 of Jameel.
The test has been expressed in a number of different ways, namely whether "the game is worth the candle", see paragraph 69 of Jameel, or whether there is any prospect of a trial yielding "any tangible or legitimate advantage such as to outweigh the disadvantages for the parties in terms of expense, and the wider public in terms of court resources", see Schellenberg v BBC [2000] EMLR 296.
In some cases it can be shown that the proceedings would not achieve anything of practical utility for the Claimant, see Cammish v Hughes [2012] EWCA Civ 1655; [2013] EMLR 13 at paragraph 60 and Euromoney Institutional Investor Plc v Aviation News Limited and another [2013] EWHC 15050 (QB) at paragraphs 142-144.
Vindication is an important point of defamation proceedings, and vindication, and consequential injunctions, may eliminate or reduce the risk of republication, see McLaughlin v London Borough of Lambeth [2010] EWHC 2726 (QB); [2011] EMLR 8 at paragraph 112.
It needs to be remembered that dismissing an action for an abuse of process is a draconian power vested in the Court which should only be exercised in an exceptional case, see Haji-Ioannou v Dixon and others [2009] EWHC 178 (QB) at paragraph 30. Applications of this type are not a "numbers game" so far as evidence about publication is concerned. This is because cases have shown that a slander published to only one person can cause immense damage, and everything will be specific to the relevant case.
The fact that costs are likely to be high does not mean that an action should be struck out as an abuse, Haji-Ioannou at paragraph 43. This is particularly so given the increased power available to Courts to control the expenditure of disproportionate costs following the recent reforms to the Civil Procedure Rules.
It is common ground that a publication to a person who has a duty or interest in receiving it will be a publication on an occasion of qualified privilege, see Gatley on Libel and Slander, Twelfth Edition, at 14.1.
It is also common ground that any matter which "is in any way relevant to or connected with the subject matter which is protected by the privilege" will be covered by the privilege, although the inclusion of material of marginal relevance may be evidence of malice, see Duncan & Neill on Defamation, 4th Edition, at 19.10(a) and (b).
In Horrocks v Lowe [1975] AC 135 at 151 Lord Diplock cautioned about taking too restrictive an approach to what was covered by the privilege noting that "as everyone knows, ordinary human beings vary in their ability to distinguish between that which is logically relevant and that which is not … As regards irrelevant matter the test is not whether it is logically relevant but whether, in the circumstances, it can be inferred that the defendant either did not believe it to be true or, though believing it to be true, realised it had nothing to do with the particular duty or interest on which the privilege was based, but nevertheless seized the opportunity to drag in irrelevant defamatory matter to vent his spite, or for some other improper motive".
Occasion of qualified privilege
It was common ground that the publication to Goadsby, who were letting agents and stakeholders for the deposit, was on an occasion of qualified privilege, but Mr Considine submitted that the defamatory imputations pleaded to the effect that: Mr Grose had illegally used the sources of his company to pay for personal expenses; and that Mr Grose, as a prominent local managing agent, was a hypocrite because he did not comply with standards of good behaviour by tenants; were not in any way connected to or relevant to the report to Goadsby, and so were outside the scope of the qualified privilege. I reject that submission. It is apparent that the letter dated 21 September 2013 was a response to Mr and Mrs Owens' letter rejecting the deposit claim. Mr and Mrs Owens had made comments about the shower and its state and their actions as tenants, and Mr and Mrs Grose had responded setting out what they say had occurred, before going on to raise the issue about using company resources for his private residence. The whole of the letter was "in any way related to or connected with" the dispute about the deposit because it was a response to a letter contesting the claim for retention of the deposit. Goadsby acting as letting agents for Mr and Mrs Grose, and stakeholders for the deposit, had an interest and duty in receiving the material.
Mr Considine submitted that the publication of the letter to DSL was not on an occasion of qualified privilege because the dispute which had been referred to DSL was limited to the costs of cleaning the carpets and repairing the door, a total of £342. Mr Considine noted that DSL asked not to be sent volumes of correspondence in their instructions. In my judgment DSL had a duty or interest in receiving the whole of the letter dated 21 September 2013 because DSL were providing a dispute resolution service relating to the deposit. The letter dated 21 September 2013 was a response to a letter denying that sums from the deposit should be retained. The whole of the letter was "in any way related to or connected with" the dispute about the deposit because it was a response to a letter contesting the claim for retention of the deposit.
Even though the whole of the letter was "in any way related to or connected with" the dispute about the deposit I have to consider whether parts of the letter were of such marginal relevance that they might amount to evidence of malice.
No prospect of showing malice at trial
It was perfectly apparent from the whole of the correspondence before me that the dispute about the deposit had generated a considerable amount of heat on the part of Mr and Mrs Owens on the one hand and Mr and Mrs Grose on the other hand. In the correspondence neither side had been strictly logical, in the way that a Court determining a dispute attempts to be. For example Mr and Mrs Owens failed to deal with the breach of an express covenant to have the property professionally cleaned, and had become fixated on the condition of the property when they had taken it over. It might also be noted that the phrase "illegal use of the parking bays" and demand for £500 in Mr and Mrs Owens' letter dated 10 September 2013 was not likely to take the heat out of the dispute. For their part Mr and Mrs Grose had, at the least, interpreted the conversation about the shower by making an illogical leap to a conclusion that there was evidence of some form of wrongful use of company resources without proper declaration to HMRC. I should, as a matter of fairness to Mr Owens record in this judgment that no one in this action has alleged, and there is no evidence before me to support the proposition, that Mr Owens either misused company property or was guilty of failing to declare a benefit from his company.
However the fact that the claims were false is no evidence that they were made maliciously. The circumstances of a heated dispute about the return of a deposit might be thought to be classic territory for the making on both sides of illogical, false, but honestly intended claims and statements to persons who had a duty or interest in receiving them. The fact that Mr Grose had spoken to his sister about the legality of company payments is not evidence of anything other than a genuine, but completely mistaken, belief in the honesty of the charge being made against Mr Owens.
As noted above, in the course of submissions Mr Considine had stated that it was not only alleged that part of the letter dated 21 September 2013 was wrong, but that the conversation about the shower and the use of a plumber had never even taken place. Mr Considine said that he had only just become aware of this feature of the case in the course of the hearing. In the statement which was produced in the course of the hearing Mr Owens stated that he recalled a conversation with Mr Grose about the shower, but disputed that he said he said he would get a plumber working for his company to fit a shower, and alleged dishonesty on the part of Mr Grose. However it should be noted that in Mr and Mrs Owens' solicitors' letter dated 11th November 2013 to Mr and Mrs Grose it was recorded "… our client told you that a plumber who often did work for his company would be prepared to fit the shower rail for which you produced some brackets, and not charge for doing so …" before noting that was an entirely different matter from what Mr Grose had suggested.
It is therefore common ground that there was a conversation about a plumber, that it was said that the plumber often worked for the company, and that no charge for fitting would be made. Mr and Mrs Owens' solicitors were quite right to point out that such material never justified the conclusion which Mr and Mrs Grose had purported to draw, but that is a very long way from saying that Mr and Mrs Grose were knowingly dishonest in making the unjustifiable deduction from the conversation that they had.
There is nothing in the materials or submissions before me to show that Mr and Mrs Owens have any prospect of showing that Mr and Mrs Grose: made defamatory statements which they knew to be untrue; dragged in irrelevant defamatory matter to vent their spite; or acted for any improper purpose. For these reasons in my judgment there is no evidence fit to be considered at trial on the issue of malice. In these circumstances the defence of qualified privilege must succeed. It therefore follows that, in my judgment, Master Kay QC was wrong not to grant reverse summary judgment on this point and I allow the appeal, but it is fair to note that I appear to have had the benefit of fuller argument on this point. I have also had the opportunity to see a further witness statement showing exactly what Mr Owens would have said at trial on this point.
In that last respect I propose to admit the statement from Mr Owens produced in the course of the hearing. It is right to record that it was made very late, and could have been put before Master Kay QC. However it is also right to note that although this hearing involved an appeal, it did relate to the future of the action. The statement does not provide evidence of malice for the reasons set out above, but admitting the statement enables Mr and Mrs Owens know that even if it had been adduced earlier, it would not have made any difference to the result.
Jameel abuse
In the light of my conclusion on the issue of qualified privilege I will state my conclusions on the remaining issues shortly. In my judgment Master Kay QC was right to conclude that the allegation in relation to Mr Owens acting illegally in using company resources would have justified a trial. This was a serious allegation. It is true that the publication was limited, and it is true that Mr Owens appeared to be worried about republication by Goadsby to others, but it might be said that also showed that Mr Owens believed that Goadsby would have acted on the basis of what was said in the letter. Such an action, if otherwise viable, would not have amounted to a Jameel abuse of process.
However that can be contrasted with the claim brought by Mrs Owens. I do not doubt Mrs Owens' strength of feeling about the allegations in the letter but those allegations were going to be determined in part in relation to the deposit, there was no proposed plea of justification in this action, and the proceedings would have served no purpose. I note that Master Kay QC did not in his judgment decide that the proceedings in relation to Mrs Owens were not a Jameel abuse, but appeared to leave them extant because the claim involving Mr Owens was still proceeding.
Responsibility for DSL publication
In my judgment there was a case fit to be tried in relation to Mr and Mrs Grose's responsibility for the publication to DSL. This is because the letter dated 21 September 2014 was either sent directly by Mr and Mrs Grose, or it was sent by letting agents acting on behalf of Mr and Mrs Grose to DSL and there were issues about Mr and Mrs Grose's liability for Goadsby's actions. Master Kay QC was right to conclude that this was an issue for trial. The new witness statement from Mr Grose does not conclude the matter one way or the other, but in circumstances where I have admitted the late witness statement from Mr Owens it seems to me to be fair to admit the late witness statement from Mr Grose.
Both claims dismissed
In these circumstances both claims by Mr and Mrs Owens should be dismissed, and it is not necessary to address the claim by Mrs Owens on its own.
Conclusion
For the detailed reasons given above the publications of the letter dated 21 September 2013 to both Goadsby and DSL were on occasions of qualified privilege and Mr and Mrs Owens have no prospect of adducing evidence of malice fit to be tried. In these circumstances reverse summary judgment ought to be granted to Mr and Mrs Grose, the claim should be dismissed, and I allow the appeal to that extent from the order of Master Kay QC.
It is only fair to both Mr and Mrs Owens to conclude by recording that there was no plea of justification advanced in relation to the claims made in the letter dated 21 September 2013. |
THE HONOURABLE MR JUSTICE BLAKE:
Introduction
This is an application made by the defendant Secretary of State to strike out the Particulars of Claim (POC) and enter judgment for the Defendant pursuant to CPR 3(4) because they disclose no reasonable grounds for bringing the claim. In the alternative, summary judgment on the whole claim is sought pursuant to CPR 24 (2) on the grounds that the claimants have no real prospect of succeeding and there is no compelling reason why the case should be disposed of at trial. In either case it common ground that real prospects of success mean something more than merely arguable.
The claim is question is a part 7 claim that was issued on 2 July 2012 and POC were served in April 2013. I shall for the purpose of these proceedings assume that the facts set out in those particulars are true.
The pleadings have been supplemented by three witness statements from Mr Ponnusamy for the claimants and two from Mr Todd of the Asia Pacific Directorate of the FCO.
The seven claimants were all born in what is now Malaysia on various dates between May 1950 and July 1966. I use the term Malaysia although from the nineteenth century to date there have been many changes in the constitutional status of that nation, its territory and name. An instructive history of how a patchwork of separate territories came to be governed after 1858 when the East India Company ceded its possessions to the British Crown is to be found in Fransman's Nationality Law (3rd edition) 2011 at section B.132.
In respect of the lead up to the events with which this claim is concerned it can be noted:-
i) In 1946 the Malayan Union was created consisting of nine Malay states that were British protectorates with traditional rulers who were also Islamic religious leaders, and the crown colonies of Penang and Malacca.
ii) In 1948 the Union was replaced by Federation of Malaya that was created with its own local citizenship and constitutional arrangements for governance with elected representatives.
iii) In August 1957 the Federation of Malaya became an independent country within the Commonwealth but those who were CUKCs by reason of their connection with Penang and Malacca were permitted to keep that status.
iv) In 1963 the former dominions of Singapore, North Borneo and Sarawak joined the Federation and the new state of Malaysia was created, but Singapore with its predominantly Chinese population was expelled from Malaysia and became an independent state in 1965.
The POC do not reveal the nationality of the claimants but I was informed that the first six claimants are Malaysian but the seventh claimant has difficulty in proving her entitlement to Malaysian nationality because of the absence of a birth certificate for her mother. The particulars state that ethnically they are all south Indian in origin and some/all are Hindu by faith. Their ancestors all came to Malaysia in the nineteenth or early twentieth century as indentured labour to serve the Malaysian economy at a time when both the economy and the institutions of government were dominated by the British.
The essence of the particulars is that the interests of the Indian (mainly Tamil speaking) population of Malaysia were ignored during the period 1944 to 1957 when independence was agreed with a constitution that provided for an entrenched privileged position for the ethnically Malay community. It is contended that the community of mainly Tamil indentured labourers worked on British owned estates and mines. They did not speak the Malay language and many were illiterate and undocumented. They either did not have the right to vote in the emerging democracy after the Second World War or were not registered to vote and in any event were not politically organised or represented. As British subjects or protected persons before the coming in to force of the British Nationality Act 1948, and because the British government were aware of their vulnerable status it is contended that they were entitled to the special protection of the colonial power to safeguard their interests when sovereignty was ceded. It is then contended that this duty of protection was not property discharged, leaving them in a vulnerable position after independence from which each of the claimants has suffered with respect to access to higher education, employment in government, ownership of land, conducting business, the security of Hindu religious land and cemeteries and personal status with respect to registration of marriage and acquisition of citizenship.
Malaysian independence
Although I have concluded that the resolution of this application turns on legal principles relating to the law of tort, by way of background to the application of these principles, I will attempt a very brief and necessarily selective summary of some of the events and issues that led to Malaysian independence in August 1957. In doing so I have drawn from Mr Todd's first witness statement; extracts from the national archives quoted in the witness statements of Mr Ponnusamy (the first claimant) and an article he exhibits by Geoff Wade in the Asia Pacific Journal 'The origins and evolution of ethnocracy in Malaysia' (undated but written after March 2008).
Following the ending of the Second World War and the Japanese occupation of the Malay peninsula there was discussion as to the political future of the region. There were three broad ethnic groups in the country: Malay (or Bumiputra), Chinese and Indian. In 1951 a Cabinet minutes estimated the population of the Federation of Malaya as 2.5 million Malays, 2 million Chinese, 500,000 Indians and 70,000 others.
It seems that British policy favoured the creation of a single state within the Commonwealth of all the permanent inhabitants of the Federation under a common citizenship but recognised that the traditional rulers and the predominant strands of Malay political opinion favoured a political entity based on the historic religion, language and respect for the special status of the Malay people that had characterised some of the provisions of the treaties with the nine Malaya states by which British protection came to be afforded.
A Colonial Office memo of July 1944 cited by Mr Wade in his article referred to:
'participation in the government by all the communities in Malaya is to be promoted subject to the special recognition of the political economic and social interests of the Malay race'.
This prompted the then Supreme Commander of Allied Forces in South East Asia, based in Ceylon, Lord Louis Mountbatten to comment
"I cannot help feeling that in the long run nothing could perhaps to do more to perpetuate sectional antagonism ….than the giving of special recognition to ne race…I feel that our objectives should be to break down racial sectionalism in every way open to us, politically, economically and social and to endeavour to substitute for it the idea of Malayan citizenship".
The response from the Colonial Office stated:
"The Malays are, by general consent, not at present capable of competing on equal terms economically with the 'immigrant' races- Chinese and Indian. From the beginning of our relations with the States we have pursued in the Malay States the policy of taking positive measures to prevent the submergence of the Malays in the public services and in the ownership of the land by the more energetic , competent and resourceful Chinese. The most damaging criticism of new policy will be precisely on these grounds, since we are endeavouring to admit non-Malay communities to a political equality with the Malays in the State territories. We shall make certain of estranging the Malays unless we can assure them of measures not only in the political and social field which will prevent such 'equality' inevitably resulting in their submergence, but also in such matters as the reservation of Malay lands."
Lord Mountbatten was un-persuaded but in substance these two view points are reflected in the subsequent debates that led to the passage of the independence legislation and the adoption of 1957 Constitution that is the focus of these claims.
The Malay Union lasted from 1946 to 1948 and was based on a single citizenship. It was opposed by the United Malays National Organisation (UMNO) because they feared Malay dominance would be diluted. It was short lived and replaced in 1948 by the Federation of Malaya that created an additional local Malay citizenship that was to be basis of eligibility for the franchise and included the Malay subjects of the princely rulers of the nine states, those born in the territories of the Malay states who habitually speak the Malay language and conform to Malay custom. British subjects born locally who have resided there for fifteen years.
In 1949 the Malayan Chinese Association was founded representing moderate Chinese political opinion. At this time there was an armed insurgency by the Chinese dominated Malayan Communist party.
An alliance of the MCA and UMNO was formed that won electoral victories between 1952 and 1955. In 1954 the Malayan Indian Congress the largest Indian political party joined the Alliance. Mr Ponnusamy states that this organisation was not primarily concerned with the plight of indentured labourers on estates. The Alliance won 226 of the 268 seats nationwide in 1954 and negotiations for independence began.
In early 1956 a constitutional conference was held in London where it was proposed that an independent commission chaired by Lord Reid should be set up to draft a constitution.
The terms of reference included at point v) 'the safeguarding of the special position of the Malaya and the legitimate interest of other communities'. The Reid Commission itself noted the tension between a common nationality of an united Malayan nation enjoying equality before the law irrespective of race creed and culture and the terms of reference safeguarding the special position of the Malays. It recorded the fact that representatives of the Alliance parties and the rulers of the Malay states that these arrangements should not be indefinite and should in time yield to the principle of equal treatment (paragraph 163). It explored the origins of the special arrangements in the original treaties, the 1948 Federation agreement, and in the four areas where special arrangements operated at the time. It noted:
"We found little opposition in any quarter to the continuance of the present system for a time, but there was great opposition in some quarters to any increase in the present preferences and to their being continued for any prolonged period. We are of opinion in the present circumstances it is necessary to continue these preferences. The Malays would be at serious and unfair disadvantage compared with other communities if they were suddenly withdrawn. But with the integration of the various communities into a common nationality which we trust will gradually come about, the need for these preferences will gradually disappear. Our recommendations are made on the footing that the Malays should be assured that the present position will continue for a substantial period, but that in due course the present preferences should be reduced and should ultimately cease so that there should be no discrimination between races or communities."
The draft constitution produced by this group recommended a 15 year time limit on preferential treatment for the Malay community in respect of four areas of concern: land, admission to public services, business quotas and educational benefits.
The draft was considered by a working committee of representatives of the traditional Malay rulers, the Alliance government and the High Commissioner and other officials. The end result was that the 15 year limit to the special arrangements was removed and other provisions safeguarding the rights of the non-Malay peoples of the Federation diluted.
The claimants are critical of the British administration in permitting these amendments to take place, and rely on the passages in the Reid Report indicating that they had the consent of the Alliance party and it's Chief Minister Tunku Abdul Rahman. I note, however, that Mr Wade quotes the memoirs of Tunku Rahman in his article to the effect that:
"it was , of course, not a perfect constitution …But we knew that we were going to be in power with an overwhelming majority and if any changes appeared necessary we would amend the constitution …So why waste time haggling over it at that stage?"
The claimants further are critical of the fact that British defence and economic interest in the Federation are mentioned as relevant factors in the memoranda abstracted from public records but not the welfare of the Indian labourers.
Mr Todd points out :
'the Working Committee's task was one of political negotiation with a view to accommodating as many competing interests and viewpoints as possible. The aim was to settle a document which would command assent from as many as possible of the citizens of Malaya and enable the States to move to independence in peace'.
Mr Ponnusamy disputes that the process of making a constitution was or should have been a compromise, but his statements are a matter of political contention rather than disputes as to the primary facts. I have no doubt that the reaching of an agreement was the outcome of a process whereby competing interests were accommodated as far as possible.
The Independence Legislation
The Federation of Malaya Independence Act (FMIA) received the Royal Assent 31 July 1957
Section 1 reads as follows:
Provision for establishment of the Federation as an independent sovereign country.E+W+S+N.I.
(1) Subject to the provisions of this section, the approval of Parliament is hereby given to the conclusion between Her Majesty and the Rulers of the Malay States of such agreement as appears to Her Majesty to be expedient for the establishment of the Federation of Malaya as an independent sovereign country within the Commonwealth.
(2) Any such agreement as aforesaid may make provision—
(a) for the formation of the Malay States and of the Settlements of Penang and Malacca into a new independent Federation of States under a Federal Constitution specified in the agreement and for the application to those Settlements, as States of the new Federation, of State Constitutions so specified;
(b) for the termination of Her Majesty's sovereignty and jurisdiction in respect of the said Settlements, and of all other Her power and jurisdiction in and in respect of the Malay States or the Federation as a whole, and the revocation or modification of all or any of the provisions of the Federation of Malaya Agreement, 1948, and of any other agreements in force between Her Majesty and the Rulers of the Malay States.
(3) Any such agreement shall be conditional upon the approval of the new Federal Constitution by enactments of the existing Federal Legislature and of each of the Malay States; and upon such approval being given Her Majesty by Order in Council may direct that the said Federal and State Constitutions shall have the force of law within the said Settlements, and, so far as She has jurisdiction in that behalf, elsewhere within the Federation, and may make such other provision as appears to Her to be necessary for giving effect to the agreement.
(4) Any Order in Council under this section shall be laid before Parliament after being made.
(5) In this Act "the appointed day" means such day as may be specified by Order in Council under this section as the day from which the said Federal Constitution has the force of law as aforesaid.
The Act thus permits:
i) Her Majesty to reach such agreement as appears expedient for the establishment of an independent state.
ii) Such agreement shall be conditional on the approval of a new federal constitution by enactments of the federal legislature and each of the Malay states and
iii) On such approval being reached Her Majesty by direct by Order in Council that the new constitution takes effect.
The process of agreement must have been concluded by the time of the passage of the Act although the new constitution is not scheduled to the Act but to the subsequent agreement reached on 5 August 1957.
Article 89 of the Constitution made provisions for the continuation of Malaya land reservations and 89(2) enabled new such reservations to be created subject to certain conditions.
The following provisions of the Constitution are of potential relevance to these proceedings
Article 3
(1) Islam is the religion of he Federation; but other Religions of the religions may be practised in peace and harmony in any part of the Federation.
Article 8
(1) All persons are equal before the law and entitled Equality to the equal protection of the law;
(2) Except as expressly authorised by this Constitution, there shall be no discrimination against citizens on the ground only of religion, race, descent or place of birth in any law or in the appointment to any office or employment under a public authority or in the administration of any law relating to the acquisition, holding or disposition of property or the establishing or carrying on of any trade, business, profession, vocation or employment.
(3) There shall be no discrimination in favour of any person on the ground that he is a subject of the Ruler of any State.
(4) No public authority shall discriminate against any person on the ground that he is resident or carrying on business in any part of the Federation outside the jurisdiction of the authority.
(5) This Article does not invalidate or prohibit:-
(a) any provision regulating personal law,
(b) any provision or practice restricting office or employment connected with the affairs of any religion , or of an institution managed by a group professing any religion to persons professing that religion;
(c) any provision for the protection, wellbeing or advancement of the aboriginal people of the Federation (including the reservation of land) or the reservation to aborigine of a reasonable proportion of suitable positions in the public service;
(d) any provision prescribing residence in a State or part of a State as a qualification for election or appointment to any authority having jurisdiction only in that State or part or for voting in such an election;
(e) any provision of a Constitution of a State, being or corresponding to a provision in force immediately before Merdeka Day
(f) Any provision restricting enlistment in the Malay Regiment to Malays
Article 153
(1) It shall be the responsibility of the Yang di-Pertuan Agon to safeguard the special position of the Malays and the legitimate interests of other communities in accordance with the provisions of this Article.
(2) Notwithstanding anything in this Constitution, but subject to the provisions of Article 40 and of this Article, the Yang di-Pertuan Agong shall exercise his functions under this constitution and federal law in such manner as may be necessary to safeguard the special position of the Malays and to ensure the reservation for Malays of such proportions as he may deem reasonable of positions in the public service (other than the public service of a State) and of scholarships, exhibitions and other similar educational or training privileges or special facilities given or accorded by the Federal government and when any permit or licence for the operation of any trade or business is required by federal law, then, subject to the provisions of that law and this Article, or such permits and licences.
(3) The Yang di-Pertuan Agong may in order to ensure in accordance with clause (2) the reservation of Malays of positions in the public service and of scholarships, exhibitions and other educational or training privileges or special facilities, given such general directions as may be required for that purpose to any commission to which Part X applies or to any authority charged with responsibility for the grant of such scholarships, exhibitions or other educational or training privileges or special facilities, and the Commission or Authority shall duly comply with the directions.
(4) In exercising his functions under this constitution and federal law in accordance with clauses (1) to (3) the Yange di-Peruan Agong shall not deprive any person of any public office held by him or the continuance of any scholarship exhibition or other educational) or training privileges or special facilities enjoyed by him
(5) This Article does not derogate from the provisions of Article 136.
(6) Where by existing federal law a permit or licence is required of the operation of any trade or business the Yang di-Pertuan may exercise his functions under the law in such manner, or give such general directions to any authority charged under that law with the grant of such permits or licences, as may be required to ensure the reservations of such proportion of such permits or licences for Malays as the Yang di-Pertuan Agong may deem reasonable; and the authority shall duly comply with the directions.
(7) Nothing in this Article shall operate to deprive or authorise the deprivation of any person of any right, privilege, permit or licence accrued to or enjoyed or held by him or to authorise a refusal to renew to any person any such permit or licence or a refusal to grant to the heirs successors or assigns of a person any permit or licence when the renewal or grant might reasonably be expected in the ordinary course of events.
(8) Notwithstanding anything in this Constitution, whereby any federal law any permit or licence is required for the operation of any trade or business, that law may provide for the reservation of a proportion of such permits or licences for Malays; but no such law shall for the purpose of ensuring such a reservation –
a. Deprive or authorise the deprivation of any person of any right, privilege, permit or licence accrued to or enjoyed or held by him; or
b. Authorise a refusal to renew to any person any such permit or licence or a refusal to grant to the heirs, successors or assigns of any person any permit or licence when the renewal or grant might in accordance with the other provisions of the law reasonably be expected in the ordinary course of events, or prevent any person from transferring together with his business any transferable licence to operate that business: or
c. Where no permit licence was previously required for the operation of the trade or business, authorise a refusal to grant a permit or licence to any person for the operation of any trade or business which immediately before the coming into force of the law he had been bona-fide carrying on, or authorise a refusal subsequently to renew to any such person any permit or licence, or a refusal to grant to their heirs, successors or assigns of any such person any such permit or licence when the renewal or grant might in accordance with the other provisions of that law reasonably be expected in the ordinary course of events.
(9) Nothing in this Article shall empower Parliament to restrict business or trade solely for the purpose of reservations for Malays.
(10) The Constitution for the State of any Ruler may make provision corresponding (with the necessary modifications) to the provisions of this Article.
Article 159
(1) Subject to the following provisions of this Article the provisions of this Constitution may be amended by federal law.
(2) No amendments to this Constitution shall be made before Parliament is constituted in accordance with Part IV, except such as the Legislative Council may deem necessary to remove any difficulties in the transition from the constitutional arrangements in operation immediately before Merdeka Day to those provided for by this Constitution; but any law made in pursuance of this clause shall, unless sooner repeal, cease to have effect at the expiration of a period of twelve months beginning with the day on which Parliament first meets.
(3) A Bill for making any amendment to the Constitution (other than an amendment excepted for the provisions of this clause) shall be be passed in either House of Parliament unless it be supported on the Second and third Readings by the votes of not less than two-thirds of the total number of members of that House.
(4) The following amendments are excepted from the provisions of clause (3), that is to say-
a. any amendment to the Second, Sixth or Seventh Schedule;
b. any amendment incidental to the consequential on the exercise of any power to make law conferred on Parliament by any provision of this Constitution other than Articles 74 and 76; and
c. Any amendment incidental to or consequential on the repeal of the law made under clause (2) or consequential on an amendment made under paragraph (a)
(5) A law making an amendment to Article 38, 70, 71 (1) or 153 shall not be passed without the consent of the Conference of Rulers.
(6) In this Article "amendment" includes addition and repeal.
The constitution is decreed by Article 4 to be the supreme law of the Federation. There is constitutional protection in the cases of deprivation of liberty, the prohibition on slavery, forced labour, retrospective penalties, freedom of movement, freedom of speech and access to education in Articles 5, 6, 7, 9, 10 and 12. Some of the rights provided and entrenched were more advanced than common law of England and Wales at the time, although the provisions on discrimination were subject to the special protection of the Malay people which would not be the case in a common law principle of equality although a proportionate measure of positive discrimination might well have been accepted for a reasonable period.
Following political agreement the Constitution came into force in August 1957 Since 1958 Mr Todd explains that there have been no fewer than 57 amendments to the constitution.
The Particulars of claim
The POC at [16] to [18] state that the defendant owed the claimants a duty of care to take all reasonable and necessary steps to prevent the systemic use of the colonial administration of discrimination or unfair treatment on the grounds of face religion or ethnicity because of its responsibility for the discharge of Her Majesty's duty of protection towards her subjects. They contend that the defendant should have ensured that the claimants would not be subject to treatment that violated the ECHR and assumed a specific responsibility to the forebears of the claimants by reason of its knowledge of the likely losses they would suffer.
The particulars of negligence assert that in breach of that duty the defendant failed to prevent Article 153 of the Constitution becoming law and failed to ensure that the laws of the Federation complied with the ECHR that had been signed in 1950 and ratified in 1953, or otherwise provided special protection for persons of the claimants' community.
The liability contended for is based on the defendants' ability to control the decisions of the working party in drafting the constitution.
The POC assert that as a result of these breaches of duty, each of the claimants has suffered discriminatory treatment in connection with university education, registration of marriage, holding of property and citizenship. Although no details are provided, by inference it is clear that the acts complained of were encountered over the age of 18 and in general the less favourable treatment is said to be continuing.
Mr Ponnusamy's witness statement gives some broad picture of the difficulties and the social and economic discrimination suffered by those who were indentured labourers both in colonial times and more pertinently for this claim since independence in 1957.
The application to strike out
The claimants' pleaded case for a duty of care in the formation of constitutional legislation is a novel and unprecedented one and if well founded will lead to a significant development in the legal relations between the executive and all persons within the protection of the state.
Mr Bennathan QC for the claimants submits although the duty of care contended for is a new step in the law tort it is possible that incremental development once the facts have been fully established may lead to liability and reminds me of the jurisprudence that indicates great caution should be and reminds me of the jurisprudence that indicates great caution should be exercised before striking out a claim without full factual investigation even if it appears to be weak: see Barrett v Enfield LBC [2001] 2 AC 550 per Lord Browne-Wilkinson at p. 557 D; Phelps v Hillingdon LBC [2001] 2 AC 619 at 644 D and Anyanwu v South Bank Student Union [2001] ICR 391 2/13 a decision concerned itself with an allegation of race discrimination.
It is of central importance at the outset to recognise that:-
(i) This is not an application brought for judicial review of a decision of a public authority;
(ii) Nor is it a claim for relief brought under the human rights act or any common law duty to act compatibly with the ECHR in 1957.
(iii) It is not a claim for damages for breach of a tort of assault, trespass or false imprisonment arising out of an independence movement as was the case in claim in Mutua v Foreign and Commonwealth Office [2012] EWHC 2678 (QB)
A claim for damages could not be brought against the Crown before the passage of the Crown Proceedings Act 1947 and any such claim that can now be brought under s. 2 must comply with the statutory scheme of that Act. In particular s. 40 (2) (b) provides:
Except as therein otherwise expressly provided, nothing in this Act shall:—
(b) authorise proceedings to be taken against the Crown under or in accordance with this Act in respect of any alleged liability of the Crown arising otherwise than in respect of His Majesty's Government in the United Kingdom or affect proceedings against the Crown in respect of any such alleged liability as aforesaid.
Mr Chamberlain QC for the defendant, contends that these claims fail at this preliminary hurdle since every allegation made in the particulars of claim is done other than in respect of Her Majesty government in the United Kingdom but by right of Her Majesty in the former Federation of Malaya.
In addition he submits that there are no reasonable grounds for bringing a claim and no reasonable prospects of success for at least four distinct reasons, any one of which would be fatal to the continuation of these proceedings:
(i) There was no duty of care owed in respect of acts preparatory to legislation;
(ii) Even if there arguably might have been, there is no evidence of a breach of duty, that is say that had the defendant insisted on a time limit to the s.153 or a removal of the clause from the draft constitution this is what would have taken place.
(iii) Even if the first two propositions were right the claimants have not shown any causal link between the breach of duty in 1957 and the discrimination suffered today.
(iv) Finally it is contended that for the claimants to succeed in proving the damage they allege they have suffered in recent years they would have to show that the acts done by an independent foreign sovereign were in breach of the principles of international law but such assertion would involve a breach of the non-justiciability principle with respect to the acts of a foreign state.
I make no decision in respect to this last ground of the application that indeed was not pursued by Mr Chamberlain at the hearing. I accept that an investigation into allegations gross violations of human rights on the territory of another sovereign state may be required in the course of civil litigation and this is an emerging exception to the sovereign immunity principles see the judgment of Lloyd-Jones LJ in Belhaj v Straw [2014] EWCA Civ 1394 at 114- 121. It is possible that evidence of overt racial discrimination in the treatment of social and economic rights are concerned may be constitute evidence of treatment is inhuman and degrading and of a character prohibited both by Article 3 ECHR and other general provisions of international law (see Case 25781/94 Cyprus v Turkey Grand Chamber of the ECtHR 10 May 2001 at paragraphs 302 to 311.
However, the other submissions are different in nature. In my judgment they can be examined without a consideration of the evidence.
Issue 1: Is the defendant sued in right of HMG in the UK
Here the defendant relies on the case of R v Secretary of State for Foreign and Commonwealth Affairs ex p Quark Fisheries [2005] UKHL57 [2006] 1 AC 529. This was a challenge to an instruction issued by the defendant to the Director Fisheries of South Georgia, a dependent territory of the Crown where there was no permanent population. There were two issues determined by the Appellate Committee: first, whether the instruction was given in right of HM as sovereign of South Georgia and dependencies (SGSSI) or the UK; second whether Article 1 of Protocol 1 to the ECHR applied to SGSSI .
Lord Bingham reviewed the authorities at [12] to [16] and concluded at [19]:.
"Collins J, before whom this question was not (it seems) very fully argued, concluded in para 34 of his judgment that
"there is no question but that in acting pursuant to the 1985 Ordinance, the [Secretary of State] was acting on behalf of the Crown in right of government of SGSSI."
The Court of Appeal reached a different view. In doing so, it observed (para 48) that under the 1985 Order there "is a very considerable reservation of powers to the Secretary of State". But this is not so. There is a considerable reservation of powers to Her Majesty, as Queen of SGSSI, but none to the Secretary of State. It went on to suggest (para 50), borrowing the language of Laws LJ in Bancoult, that "it would be an abject surrender of substance to form to treat the instruction given by the Secretary of State on behalf of Her Majesty as one given in right of [SGSSI]". But I do not think the issue is properly to be regarded as a contest between substance and form: it turns on identifying the correct constitutional principle. While the court accepted (para 51) that the reason why a particular decision is taken cannot be determinative of the construction of the instruction, it held that the instruction had nevertheless to be construed in the context of a factual matrix which included the political and diplomatic context of the instruction. Here, there is no issue of construction. What is in issue is the constitutional standing of the instruction. The factual matrix might, I accept, be relevant if there were in a given territory no government, or no government worthy of the name, other than the United Kingdom Government. There would then be no government other than that of the United Kingdom Government on whose behalf an exercise of executive power could be made, no other government in right of which the Queen could act. But that is not this case. Here, there is nothing to displace the initial inference that the instruction was given by Her Majesty, through the Secretary of State, in right of the government of SGSSI."
Lord Hoffman concurring said at [64]:
"The test for whether someone exercising statutory powers was exercising them as a United Kingdom public authority is in my opinion whether they were exercised under the law of the United Kingdom. In this case they were not. The acts of the Secretary of State in advising Her Majesty and communicating her instructions to the Commissioner had legal effect only by virtue of the Order, which is the constitution of SGSSI and not part of the law of the United Kingdom. The court is neither concerned nor equipped to decide in whose interests the act was done. That this would also be the approach of the Strasbourg authorities is shown by the decision of the Commission in Bui Van Thanh v United Kingdom (1990) (Application No 16137/90)."
The position was different from Bancoult v SSFCA [2001] QB 1067 where an Order in Council in respect of the dependent territory of Diego Garcia was challenged by way of judicial review because the jurisdiction to issue judicial review was not necessarily ousted because it related to overseas territories see Laws LJ at [27].
In my judgment the position in the present case is considerably stronger than in Quark because in 1957 there was evidently a functioning elected federation government of Malaya that negotiated independence in London. The negotiations were with both the sovereign rulers of the Malay states and the federation government and what was being negotiated was the termination of Her Majesty's authority over the territory of the Federation of Malaya.
Mr Bennathan submits: that Quark is distinguished because the 1957 Act was passed by the Westminster Parliament, but that is in substance no different from stating that Orders in Council are passed by Her Majesty's Privy Council sitting in Westminster. In my judgment it is clear from the terms of the agreement that constitutional authority being exercised was in respect of the affairs of the Federation of Malaya.
The very substance of s 1 (2)(b) FMIA and the agreement that implements the constitution is the termination of the treaties and the other bases of jurisdiction that once governed the exercise of the Crown's authority in the Federation and the transfer of sovereignty to the independent state that subsequently became Malaysia. Thus Article 167 of the Constitution makes plain that on independence day all rights in respect of the government of the Federation shall cease.
On this ground alone, this application to strike out these proceedings must succeed as the claim does not comply with the requirements of the CPA 1947. I nevertheless will go on to consider the other three points canvassed in argument. I will propose to deal the existence of a duty of care last and address breach of duty and causation first as they are closely related to the fact that after August 1957, Her Majesty's authority in Malaysia ceased.
Breach and causation
Assuming for present purpose that the defendant owed the claimants a duty of care in the negotiations that led to the independence constitution, the harm suffered and the loss for which they sue did not occur until after independence and the new sovereign government had taken power. Although the POC are silent about when the loss occurred by implication it is after each of the claimants had achieved the age of majority and is within the limitation period for negligence.
In my judgment it is impossible for the defendant to be responsible for treatment alleged to be severely discriminatory suffered under the laws and practices of Malaysia as they are presently said to be constituted.
First, whatever view is taken of the nature of the Article 153 special treatment clause, in its terms it is designed to preserve special arrangements for one ethnic group and not disenfranchise or cause ill treatment of another group.
If indentured labours of Indian tamil origin were discriminated against in the ways alleged by the claim form, this was as a result of the application of laws and the development of practices permitted by the government of Malaysia after independence pursuant to its responsibilities under article 167.
The claimants point to the views of Mr Wade that the present situation in Malaysia where ethnic Malays holds position in the judiciary public administration police defence forces and universities out of proportion to their present numbers 65% of the population as opposed 26% Chinese 8% Indian, can all be attributed to maintenance of the special position in 1948 and 1957. As a matter of academic opinion that may be a perfectly reputable view to take, but it is does not amount to an assessment of legal responsibility for any discrimination and causation of damage.
The point is best illustrated if we assume that the claimants' core contention that the recommendations of the Reid Commission that the Article 153 be confined to a further 15 years had survived into the federation constitution. This would have meant that in 1972 or thereabouts it would cease to exist. However if a two third majority of the Malay legislature wanted it to continue it would have been open to amend the constitution as had been done on some 57 occasions. This merely makes the point that legislative responsibility after 1957 rests with the government of Malaysia and it is in consequence of the legislative or other decisions taken after 1972 that the claimant claims to have suffered loss.
Mr Bennathan submits that the extent to which the FCO controlled the proceedings of the constitutional conference and the working party is an evidence based issue that should be determined at trial; further, the influential role of the British Government can be said to have been at least a material contributory factor to the institutionalised discrimination in favour of Malays
I accept that it may it is easier to continue such a provision where there is no built in sunset clause in the constitution , but that does not mean that as a matter of law, whatever principle of causation is applied, the defendant is responsible for choices made by an independent state. I find that no assistance is provided by application by analogy with the rescue case of Knightly v John [1982] 1 WLR 349 where it was held that the acts of the rescuer did not break the chain of causation of the loss occasioned by the original tortfeasor.
So even if at trial the claimants could have shown that it was more probable than not that if the British government had vetoed any attempt to water down the Reid Commission proposals a constitution would have been adopted with the special position of Malays limited to 15 years, there would still not be reasonable prospect of success in establishing liability for negligence for the loss and injury claimed
Duty of Care
It is common ground that the law of negligence develops incrementally applying the three fold test derived from Caparo Industries v Dickman [1990] 2 AC 605 whether there is a relationship of proximity, whether there is foreseeability of the loss suffered and whether in all the circumstances it is fair just and equitable to impose such a duty.
As the duty of care is said to arise in respect of the exercise of a public law discretion exercised pursuant to statute, it is first necessary for the claimants to demonstrate that the exercise of the power was irrational or otherwise outwith the power concerned: see X v Bedfordshire [1995] 2 AC 633 at 736.
For good measure, Mr Chamberlain drew my attention to Misick v SSFCA [2009] EWCA Civ 1549 where an Order in Council suspending provisions of the Turks and Caicos constitution was challenged. The enabling power under the West Indies Act 1962 was similar to that under the FMIA (see paragraph 6 of the judgment) and Laws LJ demonstrated at [17] and [18] that the width of the power in a constitutional statute made a judicial review challenge of irrationality very difficult to mount.
I accept that the Article 153 provision was controversial in 1957 during the constitutional commission, the subsequent working party and in Parliament during the debates essentially for the reasons reflected in the views of Lord Mountbatten.
I further accept that its indefinite survival in a constitution, long after a reasonable time has expired for one community to catch up in any perceived disadvantage in educational qualifications and experience of administration, as Mr Wade suggests is now the case, would be unlikely to withstand challenge in any judicial tribunal applying Article 14 ECHR or similar provision of international law or indeed the equality clause of the Malaysian constitution shorn of its proviso.
However, I reject Mr Bennathan's comparison of this article alone or with the other articles complained of with the apartheid system, or the Nuremburg laws of the Nazis. By the standards in 1957, given the history and the political situation briefly described in the earlier part of this judgment, it would not be possible to argue that the existence of some such provision was perverse irrational or outwith the breadth of the statutory authority to achieve an agreement for independence.
It is significant that Lord Reid himself, a very distinguished judge of the Appellate Committee of the House of Lords, considered there to be no real opposition for its continuation for a time limited period despite the objectionable implications of which he was well aware.
Irrationality is a necessary but not sufficient condition for such a duty, but within the broad discretionary area of action for what is deemed expedient for the good order of the federation, I do not think that there are reasonable prospects of success in the claimants being able to demonstrate that the failure of the FCO to insist on the Reid proposals being adopted was irrational
Mr Chamberlain in his oral submissions drew attention to the pertinent jurisprudence of the CA in three cases deciding on the existence of the duty of care where public law powers were being exercised.
Carty v Croydon [2005] EWCA Civ 19; [2005] 1 WLR 2312 where a child sued for negligence in the provision of a statement of special educational needs. Dyson LJ as he then was said;
Liability of public authorities in negligence: the general approach
21. Certain decisions are simply not justiciable at all. Thus where the decision involves the weighing of competing public interests or is dictated by considerations which the courts are not fitted to assess, they will be likely to hold that the issue is non-justiciable: see, for example, per Lord Hutton in Barrett at p 583D. These cases are comparatively rare. The present case clearly does not fall into this category, and I shall say no more about it. I should interpolate that it is also well established that, where no private law claim will lie for breach of statutory duty, a claim in negligence will rarely, if ever, lie where the carelessness relied on is merely the failure to perform the statutory duty: see, for example, Gorringe.
……..
24. Lord Browne-Wilkinson adopted the same approach when he dealt with the three education cases in X v Bedfordshire CC. At p 761A he said:
"Although it is very improbable, it may be that the exercise of the statutory discretions involved in operating the special needs machinery of the Act of 1981 involved policy decisions. The decision as to what should be included in the statement and what provision should be made is, by statute, a decision conferred on the defendant authority. Therefore, even if such decisions were made carelessly, the claim will fail unless the plaintiff can show that the decisions were so careless that no reasonable education authority could have reached them."
But "discretion" is a somewhat protean word. It connotes the exercise of judgment in making choices. In a sense, most decisions involve the exercise of discretion. The decision of a public authority to build a school on one site rather than another involves an exercise of discretion, but, as has often been said, there can also be discretion even in the hammering of a nail: see per Lord Slynn in Barrett at p 571C-E. A claim based on the allegation that it was negligent to decide to build a school on site A rather than site B would almost certainly be struck out as non-justiciable. This is because it concerns the exercise of a particular kind of discretion, involving the choice of allocation of resources and policy questions of what is in the public interest on which the court is not equipped to adjudicate. The greater the element of policy involved, the wider the area of discretion accorded by the court."
Rowley v SS Work and Pensions [2007] EWCA Civ 598 [2007] 1 WLR 281 concerned tortuous liability for egregious failures of the Child Support Agency to secure that the claimant received child support. It was accepted that the loss suffered was foreseeable and that in the circumstances of the statutory scheme that there was a relationship of proximity. Dyson LJ said
22. There are many cases where it is inappropriate to decide the question whether a public authority owes a common law duty of care without a full consideration of the facts which can only be undertaken at a trial. But there are some cases where it is possible to decide the question without a trial. Such a case is one where it is clear that, even if it is assumed in the claimant's favour that all the facts that he or she alleges are true, the claim must fail: see the approach to this issue taken by Lord Rodger of Earlsferry in D v East Berkshire Community NHS Trust [2005] UKHL 23, [2005] 2 AC 373 at para 99. The Secretary of State submits that this is such a case.
23. An important feature of this case is that the claimants do not rely on any particular facts in support of their case that the Secretary of State owed them a common law duty of care in discharging his functions under the 1991 Act. Their case is that the duty of care arose from the performance of those functions alone. They do not say that a relationship was created between the Secretary of State and themselves other than one which arises in every case from the very performance of his statutory duties and exercise of his statutory powers. In these circumstances, I do not see how findings of fact made at a trial would assist in determining whether a duty of care was owed to the claimants. During the course of argument, Mr ter Haar suggested that a trial is necessary to enable the court to have a proper appreciation of the extent to which other remedies to compensate victims of the CSA's incompetence are effective. He referred to the Parliamentary Commissioner for Administration ("the Ombudsman") and the ex gratia compensation scheme which is described in the policy document known as "Financial Redress for Maladministration Guide" ("FRMG") for persons who have suffered financial loss as a result of maladministration by the CSA. He submitted that this could be a relevant factor in deciding whether a duty of care was owed by the Secretary of State.
24. In my judgment, however, the efficacy of these alternative remedies (in so far as it is relevant at all) should be judged by what they purport to provide rather than how effectively they work in practice. The existence of a duty of care cannot depend on the vagaries of how effective an alternative remedy may be from time to time.
25. In my view, this is a case which is suitable for a strike-out application. There is no area of factual enquiry which needs to be undertaken before the question of law raised by this appeal can be decided. I turn, therefore, to consider that question of law.
…….
61. In deciding whether it is fair, just and reasonable to impose a duty of care on a public authority in the carrying out of its statutory functions, it is necessary to consider whether such a duty would be inconsistent with the statutory framework in which it is acting. It may be said that this is better considered as a free-standing question, rather than as an aspect of the third limb of the Caparo test. In A v Essex County Council [2003] EWCA Civ 1848, [2004] 1 WLR 1881 at para 33, Hale LJ considered the question whether to impose a common law duty of care would be inconsistent with the statutory framework as an aspect of justifiability, rather than as an aspect of the third limb of the Caparo test. But she acknowledged that "the considerations relevant to each of these issues overlap and it is not always possible to draw hard and fast lines between them." Perhaps the classification does not matter. The important point is that a duty of care must not be inconsistent with the presumed intention of Parliament.
Connor v Surrey [2010] EWCA Civ 286 [2011] 1 QB 429, was a case where a head teacher succeeded in establishing a duty to prevent injury to health by the local authority who failed to exercise their statutory powers to remove a governing body in a school where relations had become dysfunctional Laws LJ engaged in a valuable and instructive survey of the authorities before standing back and distilling some conclusions from the general picture:
103. But the learning largely leaves aside our case, in which the prospective defendant owes the claimant a duty of care arising independently of the impact of action or inaction under statute. The authorities show that where there is no such separate and independent duty of care the court's task is to see whether an affected person may after all enjoy a right, created by the attribution of a duty of care in the particular context, to sue in respect of injuries suffered by him which in fact flow from action or inaction under the statute. These following states of affairs may be discerned in the succession of authority. (1) Where it is sought to impugn, as the cause of the injury, a pure choice of policy under a statute which provides for such a choice to be made, the court will not ascribe a duty of care to the policy-maker. So much is owed to the authority of Parliament and in that sense to the rule of law. (2) If a decision, albeit a choice of policy, is so unreasonable that it cannot be said to have been taken under the statute, it will (for the purpose of the law of negligence) lose the protection of the statute. While this must, I think, point to the same kind of case as does the Wednesbury rule (since only a Wednesbury perverse decision will be outwith the statute), Wednesbury is not made a touchstone of liability for negligence in such cases: the immunity arising in (1) is lost, but the claimant must still show a self-standing case for the imposition of a duty of care along Caparo lines and he may be unable to do so. (3) There will be a mix of cases involving policy and practice, or operations, where the court's conclusion as to duty of care will be sensitive to the particular facts: "the greater the element of policy involved, the wider the area of discretion accorded, the more likely it is that the matter is not justiciable so that no action in negligence can be brought" (per Lord Slynn in Barrett). This is likely to be a large class of instances. (4) There will be purely operational cases, like that of the bus driver on the school trip, where liability for negligence is likely to attach without controversy.
Mr Bennathan points out:
(i) It is entirely foreseeable that if there was no sunset clause on Article 153, the Malay politicians who had a majority in any legislative assembly would want to perpetuate it for their own political advantage with their communities.
(ii) The duty of care here is owed by reason of allegiance as British nationals within the meaning of the BNA 1948 and the apprehension of future harm without constitutional protection.
In my judgment, none of the three Caparo criteria are made out in this claim.
Proximity
There was no special relationship between the defendant and the claimant's or their ancestors owed in 1957. The relationship was simply a public law one governed by the emerging principles of judicial review and any relevant provisions of the law of the Federation at the time. There was no statutory responsibility to promote the interest of the Indian minority in constitutional negotiations and there was no promise or undertaking to do so.
Generally governments are there to promote laws and governance in the interest of all the community majority and minority rather than any special interest group. The fact that one group obtained special mention under the constitution did not of itself impose some special duty to provide for the interests of others. As a matter of public law, of course the impact of any laws on a particular community would have been a relevant circumstance, but there was nothing to indicate here that any special representations had been made on behalf of the Indians or that their circumstances were such as to require some pre eminent protection.
A relationship of proximity in the law of tort is based on some special connection between the claimant and the defendant whether by contract, or quasi contract, control of the location of injury, statutory responsibility for the welfare of children or collection of child maintenance. The broader the class claimed the less likely is the relationship to have the qualities that make it proximate in the eyes of the law. The class claimed by the claimants is very large indeed, and effectively merges public law relevant considerations and private law responsibilities.
It is not sufficient that some harm or disadvantage can be foreseen if no action is taken. The three elements of the Caparo tests are distinct and cumulative and not merely repetitious. Here the context is reaching agreement on the terms of a constitution where the issues under consideration are at their broadest and most policy driven. In the absence of some special feature which is neither pleaded in the nor substantiated in the supporting data, there is nothing to suggest some special relationship that would arguable establish proximity in the present context see Lord Roskill in Caparo 628 F-E; Lord Oliver 633 E-635F and see also Dyson LJ in Rowley at 51 to 55.
Foresight of injury
I am prepared to accept that it was foreseeable that future Malay politicians may not be willing to let the special status lapse in the future and therefore a real risk that it would become indefinite whatever was said to Lord Reid's commission.
That is not the same as foresight of damage resulting from serious discrimination against these claimants in the field of education, employment and such like. Quotas reserved for Malays are not the same as exclusive access. The treatment complained of was not mandated by the 1957 constitution, even if it did not provide sufficient means to prevent it. Thus I do not see how on the material before me the defendant in 1957 would be expected to foresee that the 7th claimant would have difficulties in establishing her nationality status because her mother did not have a birth certificate or that a Hindu temple or cemetery could not establish title to the premises. These issues did not loom large in the negotiations and are very specific problems part from the general provisions of the constitution.
The claimants here seek to expand the supposed duty from resisting the dilution of the Reid Commissions' proposals to the building in of a series of measures to protect the existing social pre 1957 position of Tamil Indians. But in the absence of a special duty of inquiry and protection, these would not be obvious consequences of general measures.
Fair just and equitable
Even if there were reasonable prospects of success the two previous issues, I have no doubt that it would not be fair just and equitable to impose a private law duty of care in negligence on the SSHD. The reasons have largely been identified in the preceding passages of this judgment but may be summarised :
(i) Negotiating an independence constitution is a broad public duty function requiring agreement with political actors who have their own distinct aspirations. It is impossible to see how such a function can be discharged against a risk of a damages claim by a party whose claims that their interest were insufficiently pressed in the negotiations. Such a duty is therefore in consistent with the statutory scheme of the FMIA.
(ii) There is a proper remedy by way of judicial review on established public law principles in the event that relevant considerations are not taken into account. Those principles now include human rights norms whether directly under the HRA or indirectly as reflecting the rationality standards of the common law world. Damages do not follow as matter of course for successful challenges in judicial review and only moderate just satisfaction are awarded in vindication of human rights claims. The existence of an alternative remedy is relevant to whether it is fair to impose a duty of care see Rowley at [71] to [73].
(iii) Although it appears that the ECHR had been ratified and extended to Federation of Malaya by 1953, this is not a claim based on a breach of human rights and could not be so given the time of the relevant events.
(iv) The proposed duty would be very far reaching and impose a liability for damages for events long after the legislation is passed , where the use made of the legislation by third parties cannot be known in absence and where the adverse consequences suffered by the claimant will not be readily foreseen or predictably prevented.
Conclusions
For all these reasons I have no doubt that once the true legal context of the claim has been identified there no reasonable grounds for bringing the claim the particulars should be struck out under CPR 3 (4)(2)(a) and judgment entered for the defendants under CPR 3(4)(3).
If the claimants' grievances about their treatment in Malaysia they need to pursue them in the institutions of that country or by any other relevant international means. |
His Honour Judge Richard Seymour Q.C.:
Introduction
The claimant in this action, RTA (Business Consultants) Ltd. ("RTA"), carries on business as business transfer agents: that is to say, it seeks on behalf of vendors of businesses purchasers for such businesses.
Mr. Peter Bracewell is the owner of the property known as and situate at Drymen Pottery, 9-11 Main Street, Drymen, Glasgow, Stirlingshire ("the Property"). In the Property the business ("the Business") of a cafe/restaurant and public house, with a small gift shop, has been carried on for many years. Mr. Bracewell himself started to carry on the business in about 1990.
At the beginning of 2010 Mr. Bracewell was thinking of selling the Property and the Business. He made contact with RTA by telephone, it seems, on 28 January 2010. At least in a printout of an electronic document entitled "Business Details" produced by RTA the date of a telephone call on 28 January 2010 was recorded, with the note, "Spoke to V[endor] and in current climate if val[uation] was to expectations, he would sell". As a result of the call an appointment was made for a representative of RTA, Mr. Philip Manners, to call at the Property. The case for RTA in this action was that in fact Mr. Manners visited Mr. Bracewell twice, first on 1 February 2010, and again on 22 February 2010. Mr. Bracewell asserted that in fact there was only one visit by Mr. Manners, on 22 February 2010. The case for RTA as to the number and date of the meetings was supported, and the assertion of Mr. Bracewell rendered less likely, by an entry on the "Business Details" document with this comment:-
"PM [Mr. Manners] 1/2/10: Vendor is considering selling the cafe and pub. Has meeting with bank manager this afternoon as they may foreclose. PM to CB [which Mr. Manners explained in his cross-examination at the trial meant "call back"] Thu 3/2."
The "Business Details" document itself noted an appointment for Mr. Manners to meet Mr. Bracewell on 22 February 2010 at 7.30 p.m. In addition it recorded, as "Price Wanted" "WANT OUR OPINION", and, as "Reason for Sale" "CONSIDERING OPTIONS". RTA maintained an electronic diary for Mr. Manners. That electronic diary, the relevant sheets of which were printed out and adduced in evidence at the trial, recorded Mr. Manners visiting Mr. Bracewell at 10.00 a.m. on 1 February 2010 and again at 7.30 p.m. on 22 February 2010. I shall explain later in this judgment why it might matter whether there was one meeting or two between Mr. Manners and Mr. Bracewell.
What was not in dispute, however, was that on 22 February 2010 Mr. Maimers completed in manuscript an RTA document which recorded details of the Property and the Business, including a "SELLING PRICE" for the Property and the Business of "OFFERS OVER £940,000 + SA V [stock at valuation]", and that on the same date Mr. Bracewell entered into a written agreement ("the Agreement") with RTA. The Agreement included the following provisions:-
"2. I/We hereby appoint R.T.A. (BUSINESS CONSULTANTS) LTD. agents for the sale of the Property and/or Business and give you the sole selling rights for an irrevocable TWELVE MONTH period from this date subject to my/our option under Clauses 10 and 11 (overleaf). I/we agree that these sole selling rights shall remain in force after that date until terminated by me/us or alternatively by your Company. Termination, by either of us, must be delivered in writing by registered or recorded delivery post and provide 28 days advance notice.
3. I/We agree to pay you a commission of £40,000 plus VAT when a sale or one of the events hereinafter mentioned takes place. I/We understand that I/we will be liable to pay your agreed remuneration in addition to any other costs or charges agreed in each of the following circumstances.
a) If unconditional contracts for the sale of the Business and/or the Property are concluded or exchanged during the period which you have Sole Selling Rights even if the Purchaser was not found by you but by another Agent or by any other person including me/us.
b) If unconditional contracts for the sale of the Business and/or the Property are concluded or exchanged after the termination of the period in which you have Sole Selling Rights but to a Purchaser who was introduced to me/us during that period or with whom we had negotiations about the Business and/or Property during that period.
c) ...
4. I/We authorise you to accept any ["offers over" written in manuscript above what follows] offer for the said Property and/or Business on my/our behalf in the sum of £940,000 + SAV or such lower figure as I/we instruct you to accept and I/we agree that there is no necessity for you to inform me/us in writing or otherwise of any offers received below the sum of £ - — unless you as Agents believe that such action would be in my/our interest.
5. Upon signing this agreement I/we agree to pay to you a registration fee of £9,000 plus VAT. I/we am/are fully aware that these monies are non-refundable and are totally independent from any commission charges payable.
…
8. IT IS AGREED THE BALANCE OF THE REGISTRATION FEE (£8,000 + VAT) WILL BE PAID IN 8 INSTALMENTS OF £1,000 + VAT BY 22/3/10, 22/4/10, 22/5/10, 22/6/10, 22/7/10, 22/8/10, 22/9/10, 22/10/10.
9. For the purpose of this Agreement I/we accept that if I/we grant a lease of the property then I/we will be deemed to have sold the properly and the commission thereof agreed and stated overleaf will be due and payable. I/We further accept that in ascertaining your entitlement to commission there will be disregard for the fact that I/we might make to any prospective purchaser a private loan of monies and/or that a purchaser might have been known to me/us and negotiated with me/us before the date of this agreement.
10. Notwithstanding the foregoing provisions I/we agree that I/we shall have an option to revoke this agreement at any time within the initial 12 months Agency period and that if I/we shall exercise this option (and I/We agree that I/we will be deemed to have exercised the said option if I/we purport to cancel the said agreement within the said Agency period or if I/we prevent you from selling the said property and/or business) I/we will pay you in return for any work you have carried out on my/our behalf and/or in compensation for your loss of opportunity to earn your commission that I/we would have been obliged to pay you if the said Property and/or Business had been sold and the said commission above mentioned had become payable. I/We understand that I/we will not be entitled to exercise this option at a time when a person/s is expressing an interest or negotiating for the purchase even if such a purchaser is not in an immediate position to sign a contract.
11. If I/we cancel this agreement when a person/s is expressing an interest in the purchase of the said Property and/or Business or if at such time I/we prevent you from selling the Property and/or Business then I/we agree that the said commission shall be payable even if that prospective purchaser is not in an immediate position to purchase merely by virtue of the fact that any Finance arrangements, including the sale of other Property had not been finalised at the date of such cancellation."
Between the date of the Agreement and 8 May 2010 no one seems to have expressed any interest, beyond requesting details of the Property and the Business, in purchasing the Property and the Business. In a letter dated 8 May 2010 to RTA Mr. Bracewell wrote
"I telephoned you last week to discuss, terminating our attempts to sell the business until the market recovers as your estimated price seems to be unachievable at present.
I am very upset to report that nobody has returned my telephone call, I look forward to hearing from you very soon and ask that you undertake no further sales expenses until you have spoken to me."
What seems to have prompted the writing of the letter was that Mr. Bracewell was already thinking not of selling the Property and the Business, but of letting them to a lady called Carly Bannerman, who was a friend, on a somewhat informal basis, but involving payment of a rent of £40,000 per annum. By the date of the letter Mr. Bracewell had only paid three of the monthly instalments of £1,000 plus Value Added Tax for which clause 8 of the Agreement provided. He has never paid the outstanding balance of £6,000 plus Value Added Tax.
Mr. Bracewell's letter dated 8 May 2010 seems not to have been received by RTA. Mr. Bracewell sent a copy of it to RTA under copy of a letter dated 10 June 2010. In response to the latter letter Mr. Paul O'Reilly, chief executive of RTA, wrote a letter dated 21 June 2010 in which he pointed out that RTA could only accept an early termination if Mr. Bracewell exercised the option for which the Agreement provided, and that in any event Mr. Bracewell owed the balance unpaid of the registration fee, plus Value Added Tax.
So far as the documents copied and adduced in evidence went, there was then a gap in correspondence, which ended with a letter dated 10 September 2010 which Mr. Bracewell wrote to RTA:-
"Surprised and disappointed by your last letter, the business has not been sold or leased."
Although the letter to which that was a reply was not adduced in evidence, plainly it was contended on behalf of RTA in the missing letter that the arrangement between Mr. Bracewell and Carly Bannerman amounted to a disposal of the Property and the Business entitling RTA to payment of its commission under clause 3 or clause 9 of the Agreement. In a letter dated 13 September 2010 to Mr. Bracewell Mr. O'Reilly asserted, inter alia, "With respect, it is you that informed us you had agreed a lease to a Mrs. Bannimen [sic].". Further correspondence between the parties took place, to the detail of which it is not necessary to refer, but, at least in Mr. Bracewell's letters dated 10 June 2010, 10 September 2010 and 9 November 2010 he used as his address his private address, rather than the address of the Property, and Mr. O'Reilly's letters to Mr. Bracewell dated 21 June 2010, 13 September 2010, 29 September 2010 and 3 November 2010 were all addressed to Mr. Bracewell at his private address. However, in his letter to Mr. O'Reilly dated 10 November 2010, written using the letterhead of the Property, Mr. Bracewell included this paragraph
"I am very honoured to have a letter dated 3rd November from you as I note that you are the Chief Executive of RTA. However, once again your company writes to my home address rather than my business address, which is a basic mistake as either your company is incompetent in terms of reading the address that I write from or one part of it does not communicate with the other. Furthermore, I am advised that in writing to me personally rather than my company you are reinforcing my position as a consumer. If you truly believe that the RTA contract is a business contract, in future please use my business address as detailed at the top of this letter."
I shall return to the significance of what Mr. Bracewell wrote in his letters dated 10 September 2010 and 10 November 2010.
This action was commenced by a claim form issued on 18 October 2010. In it RTA claimed against Mr. Bracewell payment of the sum of £47,000, being £40,000 plus Value Added Tax at the then prevailing rate of 17.5%, said to be due pursuant to the terms of the Agreement as a result of the transaction between Mr. Bracewell and Carly Bannerman; alternatively, payment of the sum of £7,050, being £6,000, the unpaid balance of the registration fee for which the Agreement provided, together with Value Added Tax at the rate then applicable. The claim form was accompanied by Particulars of Claim.
Mr. Bracewell, acting in person, served a Defence on 27 October 2010. Subsequently the Defence was amended and a counterclaim added. The Defence and Counterclaim was re-amended on 25 July 2014. The action had been supposed to come on for trial on 28 July 2014, but by order of Haddon-Cave J made on 24 July 2014 permission to re-amend the Defence and Counterclaim was granted and the original trial date vacated. Consequently the action came on for trial effectively on 24 February 2015. The counterclaim raised by Mr. Bracewell sought repayment, in effect, of the sum of £3,000 plus Value Added Tax paid on account of the registration fee pursuant to the terms of the Agreement.
The defences raised by Mr. Bracewell, and the matters relied upon in support of the counterclaim, evolved over time. However, it is necessary in this judgment to deal with most of the points raised on behalf of Mr. Bracewell, whenever they first surfaced. Logically the first of the matters requiring consideration is the contention that the Agreement is unenforceable by reason of illegality.
Illegality
By Estate Agents Act 1979 s.1(1) it is provided that:-
"This Act applies, subject to subsections (2) to (4) below, to any person in the course of a business (including a business in which he is employed) pursuant to instructions received from another person (in this section referred to as "the client") who wishes to dispose of or acquire an interest in land -
(a) for the purpose of, or with a view to, effecting the introduction to the client of a third person who wishes to acquire or, as the case may be, to dispose of such an interest; and
(b) after such an introduction has been effected in the course of that business, for the purpose of securing the disposal or, as the case may be the acquisition of that interest;
and in this Act the expression "estate agency work" refers to things done as mentioned above to which this Act applies."
It was common ground before me that in relation to those cases, like that of Mr. Bracewell, in which RTA sought to find a buyer for a business the assets of which included an interest in land, the activities of RTA fell within the definition of the expression "estate agency work" in Estate Agents Act 1979 s.l(l). The relevance of that is the reference to "estate agents" in Money Laundering Regulations 2007, SI 2007 No.2157 ("the 2007 Regulations").
The 2007 Regulations were made to implement in part Directive 2005/60/EC in relation to money laundering.
By Regulation 24(1) of the 2007 Regulations it is provided that:-
"A supervisory authority must effectively monitor the relevant persons for whom it is the supervisory authority and take necessary measures for the purpose of securing compliance by such persons with the requirements of these Regulations."
By Regulation 23(1)(b) of the 2007 Regulations the Office of Fair Trading ("OFT") was designated "the supervisory authority " in relation to "estate agents".
For the purposes of the 2007 Regulations the expression "relevant persons" was defined in Regulation 3(1) as including "(f) estate agents". At Regulation 3(11) of the 2007 Regulations the expression "estate agent" is defined as meaning:-
"(a) a firm; or
(b) sole practitioner
who or whose employees carry out estate agency work within the meaning of section 1 of the Estate Agents Act 1979 (estate agency work) when in the course of carrying out such work."
Regulation 2(1) of the 2007 Regulations defined the expression "firm" as meaning, "any entity, whether or not a legal person, that is not an individual and includes a body corporate and a partnership or other unincorporated association;".
Consequently the 2007 Regulations applied to RTA insofar as its business included "estate agency work", which it did in relation to the services agreed to be performed for Mr. Bracewell under the Agreement.
Regulation 32 of the 2007 Regulations is in these terms, so far as presently material:-
"(1) The supervisory authorities mentioned in paragraph (2),
(3) or (4) may, in order to fulfil their duties under regulation 24, maintain a register under this regulation.
(2) ...
(3) The OFT may maintain registers of—
(a) ...
(b) estate agents.
(5) Where a supervisory authority decides to maintain a register under this regulation, it must take reasonable steps to bring its decision to the attention of those relevant persons in respect of whom the register is to be established.
(6) A supervisory authority may keep a register under this regulation in any form it thinks fit.
(7) ..."
By Regulation 33 of the 2007 Regulations it is provided that:-
"Where a supervisory authority decides to maintain a register under regulation 32 in respect of any description of relevant persons and establishes a register for that purpose, a relevant person of that description may not carry on the business or profession in question for a period of more than six months beginning on the date on which the supervisory authority establishes the register unless he is included in the register."
OFT determined to establish a register of "estate agents" on 1 July 2009.
It was common ground before me that RTA did not apply to OFT for registration under the 2007 Regulations until 12 October 2012. OFT notified RTA on 2 November 2012 that it had been registered pursuant to the 2007 Regulations.
Thus at the date of the making of the Agreement RTA was not registered with OFT for the purposes of the 2007 Regulations, and it should have been.
It was submitted on behalf of Mr. Bracewell that the consequence of RTA not having been registered under the 2007 Regulations at the date of the Agreement was that the Agreement was unenforceable by reason of illegality.
Although it was accepted on behalf of RTA that, at the date of the making of the Agreement, RTA should have been, but was not, registered pursuant to the provisions of the 2007 Regulations, it was contended that the consequences of not having been registered did not include that the Agreement was unenforceable by reason of illegality.
I observe that the potential consequences of failure to comply with the requirements of Regulation 33 of the 2007 Regulations for which the 2007 Regulations themselves provide are these
"42 (1) A designated authority [which, by Regulation 36 included OFT] may impose a penalty of such amount as it considers appropriate on a relevant person who fails to comply with any requirement in regulation ... 33 ...
(2) The designated authority must not impose a penalty under paragraph (1) where there are reasonable grounds for it to be satisfied that the person took all reasonable steps and exercised all due diligence to ensure that the requirement would be complied with.
45(1) A person who fails to comply with any requirement in regulation ... 33 ... is guilty of an offence and liable -
(a) on summary conviction, to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to imprisonment for a term not exceeding two years, to a fine or to both.
(2) ...
(3) ...
(4) A person is not guilty of an offence under this regulation if he took all reasonable steps and exercised all due diligence to avoid committing the offence.
"
However, it was not contended before me that it was necessary or relevant for me to consider whether, had such been sought against it, on the facts of its case RTA would have been liable to a civil penalty or had committed a criminal offence. The position was, as I accept, that RTA was unaware of the requirement to register under the 2007 Regulations until the matter was brought to its attention by a letter dated 11 October 2012 written to it by OFT. Although, during the trial, it was suggested on behalf of Mr. Bracewell that RTA had been at fault in failing to acquaint itself with the requirements of the 2007 Regulations as applied to "estate agents" by decision of OFT, registration was simply an administrative matter. OFT had, under Regulation 34(3) of the 2007 Regulations, only a very limited discretion, based on an applicant not providing, or not providing correctly, the information required to be provided on registration, or not paying the prescribed fee, not to register anyone who sought registration as an "estate agent". Although a fee was payable upon making an application for registration, it was comparatively modest - £160.
Mr. Mark Spackman, who appeared on behalf of RTA, pointed out that the scheme of the 2007 Regulations was relatively relaxed. OFT had a power, but not a duty, to establish a register of "estate agents". If it decided to exercise that power, as it did, it was under a duty to take reasonable steps to bring that decision to the attention of those affected. The register could be kept in any form. There was six months after the decision to establish a register in which persons affected could seek registration. If they did not they might be liable to pay a civil penalty, or commit a criminal offence, but only if the person sought to be proceeded against did not take all reasonable steps and exercise all due diligence to comply. The suggestion was, I think, that the requirement to register with which RTA failed to comply was in the nature of a comparatively trivial administrative regulation, and certainly not anything involving what might be described as dishonesty or "turpitude
I accept that, on the material put before me, the failure of RTA to comply with the requirement to register with OFT earlier than it did, did not indicate dishonesty or "turpitude". OFT plainly took the same view, as it did not seek to impose any civil penalty on RTA or to prosecute it.
However, Mr. William Hibbert, who appeared on behalf of Mr. Bracewell, submitted that it was immaterial to the question whether the Agreement was unenforceable by reason of illegality that RTA may not have been exposed to a civil penalty or to prosecution. Mr. Hibbert reminded me of the well-known passage in the judgment of Lord Mansfield CJ in Holman v. Johnson (1775) 1 Cowp. 341, 343:-
"The objection, that a contract is immoral or illegal as between the plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. The principle of public policy is this; ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff's own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted. It is upon that ground the Court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and the defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would have the advantage of it; for where both are equally in default, potior est conditio defendentis."
Mr. Hibbert submitted that Regulation 33 of the 2007 Regulations in terms prohibited, after OFT had made its decision to require registration of "estate agents", the carrying on of any business involving "estate agency work" by anyone who had failed to register within six months of the decision of OFT. Implicitly, contended Mr. Hibbert, that meant that any contract made by someone who should have been, but had failed to become, registered was unlawful because it was the mechanism by which the prohibited business was undertaken.
I was reminded of other, well-known, explanations of the approach of the court to circumstances in which a contract has been made which it appeared might have been unlawful as in breach of some statutory provision.
In St. John Shipping Corporation v. Joseph Rank Ltd. [1957] 1 QB 267 Devlin J expressed these views, at page 288:-
A court should not hold that any contract or class of contracts is prohibited by statute unless there is a clear implication, or "necessary inference", as Parke B put it, that the statute so intended. If a contract has as its whole object the doing of the very act which the statute prohibits, it can be argued that you can hardly make sense of a statute which prohibits an act and yet permits to be made a contract to do it; that is a clear implication. But unless you get a clear implication of that sort, I think that a court ought to be very slow to hold that a statute intends to interfere with the rights and remedies given by the ordinary law of contract. Caution in this respect is, I think, especially necessary in these times when so much of commercial life is governed by regulations of one sort or another, which may easily be broken without wicked intent. Persons who deliberately set out to break the law cannot expect to be aided in a court of justice, but it is a different matter when the law is unwittingly broken. To nullify a bargain in such circumstances frequently means that in a case - perhaps of such triviality that no authority would have felt it worth while to prosecute - a seller, because he cannot enforce his civil rights, may forfeit a sum vastly in excess of any penalty that a criminal court would impose; and the sum forfeited will not go into the public purse but into the pockets of someone who is lucky enough to pick up the windfall or astute enough to have contrived to get it. ..."
The important point which emerges from that passage is it is a matter of construction of the relevant statutory provision in each case whether breach of that provision has the consequence that a particular contract is illegal. Although the court should be cautious in reaching the conclusion that, as a matter of construction, breach of a statutory provision should result in a contract being illegal, if, on proper construction, that is its consequence, the court must give effect to that conclusion.
My attention was drawn to a number of authorities in which the issue was whether breach of a statutory provision had the consequence that a particular contract was unenforceable by reason of illegality.
As long ago as 1836 Parke B, in Cope v. Rowlands (1836) 2 M & W 149, said, at page 157, in a case about a statute of Queen Anne:-
"It is perfectly settled, that where the contract which the plaintiff seeks to enforce, be it express or implied, is expressly or by implication forbidden by the common or statute law, no court will lend its assistance to give it effect. It is equally clear that a contract is void if prohibited by a statute, though the statute inflicts a penalty only, because such a penalty implies prohibition. ... And it may be safely laid down, notwithstanding some dicta apparently to the contrary, that if the contract be rendered illegal, it can make no difference, in point of law, whether the statute which makes it so has in view the protection of the revenue or any other object. The sole question is, whether the statute means to prohibit the contract?"
However, in Smith v. Mawhood (1854) 14 M & W 452 Parke B concluded that a breach of Excise License Act 1836 did not have the consequence that a contract was rendered illegal and unenforceable.
Other cases to which my attention was drawn included Cornelius v. Phillips [1918] AC 199, in which breach of a provision of Moneylenders Act 1900, was held to render a moneylending contract illegal; Re an arbitration between Mahmoud and Ispahani [1921] 2 KB 716, in which the same conclusion was reached in a case involving a breach of Seeds, Oils and Fats Order 1919, even though the innocent plaintiff had enquired of the defendant whether he possessed the requisite licence, and had been told that he had; and Vita Food Products Inc. v. Unus Shipping Co. Ltd. [1939] AC 277, in which breach of a Newfoundland statute, Carriage of Goods by Sea Act 1932, was held not to render the contract in question illegal.
The question of the impact of "turpitude" on a claim or a defence may arise in circumstances other than one in which the issue is the enforceability of a contract said to have been made in breach of a statutory provision. I was referred to a number of cases in this category, including Tinsley v. Milligan [1994] 1 AC 240, Stone & Rolls Ltd. v. Moore Stephens [2009] AC 1391, and Les Laboratoires Servier v. Apotex Inc [2014] 3 WLR 1257. Although Mr. Spackman submitted that assistance was to be derived from these authorities as to the modem approach to illegality, the other cases which I have so far mentioned being of some age, it was plain, in my judgment, that that was not so. The position remains, so far as enforceability of a contract said to have been made in contravention of a statutory provision is concerned, that what is determinative, as it has always been since at least 1836, is the proper construction of the relevant statutory provision. The leading judgment in Les Laboratoires Servier v. Apotex Ltd., with which Lord Neuberger of Abbotsbury JSC and Lord Clarke of Stone-cum-Ebony JSC agreed, was that of Lord Sumption JSC. It is plain from the following passage, in my judgment, that, whatever the relevance of "turpitude" in other classes of case, it is not relevant to "the rather special case of contracts prohibited by law, which can give rise to no enforceable rights":-
"22. However, it does not follow that the courts should be insensitive to the draconian consequences which the ex turpi causa principle can have if it is applied too widely. The starting point in any review of the modern law must be that we are concerned with a principle based on the application of general rules of law and not on fact-based evaluations of the effect of applying them in each individual case. However, the content of the rules must recognise that within the vast and disparate category of cases where a party in some sense founds his claim on an immoral or illegal act there are important differences of principle. The application of the ex turpi causa principle commonly raises three questions: (i) what acts constitute turpitude for the purposes of the defence? (ii) what relationship must the turpitude have to the claim? (iii) on what principles should the turpitude of an agent be attributed to his principal, especially when the principal is a corporation? Each of these questions requires a principled distinction to be made between different kinds of immoral or illegal act and different ways in which they may give rise to claims. For present purposes, we are concerned only with the question what constitutes turpitude for the purposes of the defence. The question what relationship it must have to the claim arises only if that question is answered in favour of Servier, and no question of attribution arises in this case at all.
What is "turpitude"?
23. The paradigm case of an illegal act engaging the defence is a criminal offence. So much so, that much modern judicial analysis deals with the question as if nothing else was relevant. Yet in his famous statement of principle in Holman v. Johnson 1 Cowp 341 Lord Mansfield CJ spoke not only of criminal acts but of "immoral or illegal" ones. What did he mean by this? I think that what he meant is clear from the characteristics of the rule as he described it, and as judges have always applied it. He meant acts which engage the interests of the state or, as we would put it today, the public interest. The illegality defence, where it arises, arises in the public interest, irrespective of the interests or rights of the parties. It is because the public has its own interest in conduct giving rise to the illegality defence that the judge may be bound to take the point of his own motion, contrary to the ordinary principle in adversarial litigation. In some contexts, notably the invalidity of contracts prohibited by law, the ex turpi causa principle can be analysed as part of the substantive law governing the parties' rights. The contract is void, and any right derived from it is non-existent. But in general, although described as a defence, it is in reality a rule of judicial abstention. It means that rather than regulating the consequences of an illegal act (for example by restoring the parties to the status quo ante, in the same way as on the rescission of a contract) the courts withhold judicial remedies, leaving the loss to lie where it falls. This is so even in a contractual context, when the court is invited to determine the financial consequence of a contract's voidness for illegality. The ex turpi causa principle precludes the judge from performing his ordinary adjudicative function in a case where that would lend the authority of the state to the enforcement of an illegal transaction or to the determination of the legal consequences of an illegal act.
24. In Lord Mansfield CJ's day, and for some time thereafter, this rule of abstention was sometimes expressed as a principle protecting the innocence or dignity of the court against defilement. In the notorious "Highwaymen's Case ", Everet v. Williams (1725) (unreported); but noted at (1893) 9 LQR 197, in which the court was invited to take an account between two highwaymen, it not only dismissed the claim as "scandalous and impertinent" but ordered the arrest of the plaintiffs solicitor and fined him. Two centuries later, in Parkinson v. College of Ambulance Ltd. [1925] 2 KB 1, 13, Lush J said of a contract to procure an honour, that "no court could try such an action and allow such damages to be awarded with any propriety or decency." Today, the same concept would be expressed in less self-indulgent terms as a principle of consistency. This was the point made by McLachlin J in her much-admired judgment in Hall v. Hebert (1993) 101 DLR (4th) 129, 165:
"to allow recovery in these cases would be to allow recovery for what is illegal. It would put the courts in the position of saying that the same conduct is both legal, in the sense of being capable of rectification by the court, and illegal. It would, in short, introduce an inconsistency in the law. It is particularly important in this context that we bear in mind that the law must aspire to be a unified institution, the parts of which - contract, tort, the criminal law - must be in essential harmony. For the courts to punish conduct with the one hand while rewarding it with the other, would be to 'create an intolerable fissure in the law's conceptually seamless web' ... We thus see that the concern, put at its most fundamental, is with the integrity of the legal system."
25. The ex turpi causa principle is concerned with claims founded on acts which are contrary to the public law of the state and engage the public interest. The paradigm case is, as I have said, a criminal act. In addition, it is concerned with a limited category of acts which, while not necessarily criminal, can conveniently be described as "quasi-criminal" because they engage the public interest in the same way. Leaving aside the rather special case of contracts prohibited by law, which can give rise to no enforceable rights, this additional category of non-criminal acts giving rise to the defence includes cases of dishonesty or corruption, which have always been regarded as engaging the public interest even in the context of purely civil disputes; some anomalous categories of misconduct, such as prostitution, which without being criminal are contrary to public policy and involve criminal liability on the part of secondary parties; and the infringement of statutory rules enacted for the protection of the public interest and attracting civil sanctions of a penal character, such as the competition law considered by Flaux J in Safeway Stores Ltd. v. Twigger [2010] Bus LR 974"
So I come back to the question whether, on proper construction, the effect of a breach of Regulation 33 of the 2007 Regulations by someone carrying on business in the undertaking of "estate agency work" is that any contract made for the purposes of providing "estate agency work" is illegal. In my judgment that is, indeed, the proper construction of Regulation 33. A person required to be registered, but who is not registered, is prohibited from ("may not") "carry[ing] on the business or profession in question for more than six months beginning on the date on which the supervisory authority establishes the register". In order to carry on the business of providing "estate agency work" it is necessary for an "estate agent" to enter into contracts with those wishing to sell property, and perhaps also with those wishing to buy property. Without such contracts there is no business. On the face of Regulation 33, therefore, what the 2007 Regulations were trying to achieve, so far as is presently material, was to prevent unregistered persons acting as "estate agents", and that could only be achieved by prohibiting them from entering into contracts to provide services of "estate agency work". It is not for the court to consider whether the sanction of rendering illegal the contracts of unregistered "estate agents" is disproportionate. Proportionality was a matter for Parliament in deciding how to implement Directive 2005/60/EC. Seeking to prevent the use of the financial system for the purposes of money laundering or financing terrorism is a matter in which there is a manifest public interest. There is obviously also a public interest in seeking to ensure that businesses potentially handling significant amounts of money comply with their own obligations under the 2007 Regulations by subjecting them to supervision by relevant authorities. That some incentive should be thought necessary to induce businesses to subject themselves to supervision is unsurprising. What that incentive should be was, as I say, a matter for Parliament. A prohibition on carrying on business unless registered clearly provides a more powerful incentive than a civil penalty or a fine, in the case of a limited liability company. What is plain, however, is that the purpose of making provision for civil penalties or prosecution was not simply, as Parke B found was the case in Smith v. Mawhood, raising revenue.
In the result, the Agreement was illegal and is consequently unenforceable. It follows that this action is dismissed, as is the counterclaim insofar as it relies upon alleged breach of a term said to have been implied into the Agreement.
Cancellation of Contracts made in a Consumer's Home or Place of Work etc. Regulations 2008
If I had not concluded that the Agreement was illegal and unenforceable, it would have been necessary to consider the possible application in the circumstances of the present case of Cancellation of Contracts made in a Consumer's Home or Place of Work etc. Regulations 2008, SI 2008 No. 1816 ("the 2008 Regulations"). By Regulation 7(2) of the 2008 Regulations it is provided, so far as is presently material, that, in a case to which the 2008 Regulations apply:-
"The trader must give the consumer a written notice of his right to cancel the contract and such notice must be given at the time the contract is made ..."
It was accepted before me that RTA was a "trader" for the purposes of the 2008 Regulations, if they applied, and that the notice specified in Regulation 7(2) had not been given. It was also accepted that, if the 2008 Regulations applied, the consequence of RTA not having given the notice required by Regulation 7(2) was that provided for in Regulation 7(6):-
"A contract to which these Regulations apply shall not be enforceable against the consumer unless the trader has given the consumer a notice of the right to cancel and the information required in accordance with this regulation."
In other words, if the Agreement was in principle enforceable, and the 2008 Regulations applied, the Agreement was unenforceable against Mr. Bracewell for breach of Regulation 7(2) of the 2008 Regulations.
By the end of the trial it was common ground that the issue whether the 2008 Regulations applied in the present case fell to be determined by the answer to the question whether, in entering into the Agreement, Mr. Bracewell was a "consumer".
The expression "consumer" is defined in Regulation 2(1) of the 2008 Regulations as meaning:-
"a natural person who in making a contract to which these Regulations apply is acting for purposes which can be regarded as outside his trade or profession."
In entering into the Agreement Mr. Bracewell was seeking to turn to account his interest in the Property and the Business by engaging RTA to seek a buyer. Simply in the light of the definition of the expression "consumer" in Regulation 2(1) of the 2008 Regulations, construed as ordinary English words, it seems to me that Mr. Bracewell was not a "consumer" in entering into the Agreement, so that the 2008 Regulations did not apply. In the light of submissions made to me by Mr. Hibbert it is, perhaps, important to emphasise that, in order to be a "consumer" for the purposes of the 2008 Regulations, it is not enough that a person should merely not be acting in the course of his business, so that, if his business did not consist in selling businesses, he was not acting in the course of his business in seeking to sell it. The important thing was whether he was "acting for purposes which can be regarded as outside his trade or profession". Seeking to exploit his trade by selling his business to realise a capital asset is, in my judgment, not acting for purposes outside his trade, but seeking to achieve one of the purposes of having a trade, namely to realise, at an appropriate time, its capital value. A step preliminary to selling a business, such as advertising it for sale, or engaging an agent to seek purchasers, is equally, in my judgment, not outside the relevant trade or profession.
Mr. Hibbert sought to persuade me that, in English law, the word "consumer" did not so much mean whatever it was defined in any particular statutory provision as meaning, but rather was almost a status people having which should be protected. That may be slightly over-stating Mr. Hibbert's submission, but it is difficult to understand why he referred me to the decision in Davies v. Sumner [1984] 1 WLR 1301, in which the issue was whether a false trade description was applied "in the course of a trade or business ", and the decision in R&B Customs Brokers Co. Ltd. v. United Dominions Trust Ltd. [1988] 1 WLR 321, in which the issue was whether the purchase of a motor car was on terms excluding the provisions of Sale of Goods Act 1979 s. 14...3) or whether exclusion of that provision was negated by Unfair Contract Terms Act 1977 s.12(1), unless I was being invited to accept some submission along those lines.
I have indicated my view of the proper construction of the definition of the expression "consumer" in Regulation 2(1) of the 2008 Regulations simply as a matter of interpretation of the English words used in the definition. However, actually it is not appropriate, in construing the relevant words, simply to look at the definition in Regulation 2(1). The 2008 Regulations were a re-implementation in English law of Council Directive 85/577/EEC. The English language text of that Directive also included a definition of the expression "consumer", actually in exactly the same words as the definition in Regulation 2(1). Thus it is obvious that the intention of Parliament in enacting the 2008 Regulations was to apply the same definition of "consumer" as had been used in the English language text of Council Directive 85/577/EEC.
The First Chamber of the European Court of Justice had to consider the impact of the French language text of the definition of "consumer" in Council Directive 85/577/EEC in France v. Di Pinto [1991] ECR I-1189, a case with some similarities to the present. In the course of its judgment the Court said:-
"14. In its first question, the Cour d'Appel de Paris seeks in substance to ascertain whether a trader who is canvassed for the purpose of concluding an advertising contract concerning the sale of his business must be regarded as a consumer entitled to protection under the directive.
15. It is necessary on this point to refer to Article 2 of the directive. It follows from that provision that the criterion for the application of protection lies in the connection between the transactions which are the subject of the canvassing and the professional activity of the trader: the latter may claim that the directive is applicable only if the transaction in respect of which he is canvassed lies outside his trade or profession. Article 2, which is drafted in general terms, does not make it possible, with regard to acts performed in the context of such a trade or profession, to draw a distinction between normal acts and those which are exceptional in nature.
16. Acts which are preparatory to the sale of a business, such as the conclusion of a contract for the publication of an advertisement in a periodical, are connected with the professional activity of the trader; although such acts may bring the running of the business to an end, they are managerial acts performed for the purpose of satisfying requirements other than the family or personal requirements of the trader."
Essentially the same form of words as the definition of the expression "consumer" in the English language text of Council Directive 85/577/EEC appeared in the English language text of Article 13 of Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 ("the Brussels Convention
"In proceedings concerning a contract concluded by a person for a purpose which can be regarded as being outside his trade or profession ..."
In Benincasa v. Dentalkit Srl [1997] ECR I-3767 the Sixth Chamber of the European Court of Justice had to consider the effect of the German language equivalent of those words. It said:-
"15. As far as the concept of 'consumer' is concerned, the first paragraph of Article 13 of the Convention defines a 'consumer' as a person acting for a purpose which can be regarded as being outside his trade or profession'. According to settled case-law, it follows from the wording and the function of that provision that it affects only a private final consumer, not engaged in trade or professional activities (Shearson Lehman Hutton, paragraphs 20 and 22).
16. It follows from the foregoing that, in order to determine whether a person has the capacity of a consumer, a concept which must be strictly construed, reference must be made to the position of the person concerned in a particular contract, having regard to the nature and aim of that contract, and not to the subjective situation of the person concerned. As the Advocate-General rightly observed in point 38 of his Opinion, the self-same person may be regarded as a consumer in relation to certain transactions and as an economic operator in relation to others.
17. Consequently, only contracts concluded for the purpose of satisfying an individual's own needs in terms of private consumption come under the provisions designed to protect the consumer as the party deemed to be the weaker party economically. The specific protection sought to be afforded by those provisions is unwarranted in the case of contracts for the purpose of trade or professional activity, even if that activity is only planned for the future, since the fact that an activity is in the nature of a future activity does not divest it in any way of its trade or professional character."
The European Court of Justice revisited the qualities of a "consumer" for the purposes of Article 13 of the Brussels Convention in Gruber v. BayWa AG [2006] 2 WLR 205:-
"36. In paras 16-18 of the judgment in Benincasa [1997] ECR I-3767, 3795-3796, the court stated in that respect that the concept of "consumer" for the purposes of the first paragraph of article 13 and the first paragraph of article 14 of the Brussels Convention must be strictly construed, reference being made to the position of the person concerned in a particular contract, having regard to the nature and aim of that contract and not to the subjective situation of the person concerned, since the same person may be regarded as a consumer in relation to certain supplies and as an economic operator in relation to others. The court held that only contracts concluded outside and independently of any trade or professional activity or purpose, solely for the purpose of satisfying an individual's own needs in terms of private consumption, are covered by the special rules laid down by the Convention to protect the consumer as the party deemed to be the weaker party. Such protection is unwarranted in the case of contracts for the purpose of trade or professional activity.
37. It follows that the special rules of jurisdiction in articles 13- 15 of the Brussels Convention apply, in principle, only where the contract is concluded between the parties for the purpose of a use other than a trade or professional one of the relevant goods or services.
38. It is in the light of those principles that it is appropriate to examine whether and to what extent a contract such as that at issue in the main proceedings, which relates to activities of a partly professional and partly private nature, may be covered by the special rules of jurisdiction laid down in articles 13-15.
39. In that regard, it is already clearly apparent from the purpose of articles 13-15, namely, properly to protect the person who is presumed to be in a weaker position than the other party to the contract, that the benefit of those provisions cannot, as a matter of principle, be relied on by a person who concludes a contract for a purpose which is partly concerned with his trade or profession and is therefore only partly made outside it. It would be otherwise only if the link between the contract and the trade or profession of the person concerned was so slight as to be marginal and, therefore, had only a negligible role in the context of the supply in respect of which the contract was concluded, considered in its entirety.
40. As the Advocate-General stated in paras 40 and 41 of his opinion, in as much as a contract is entered into for the person's trade or professional purposes, he must be deemed to be on an equal footing with the other party to the contract, so that the special protection reserved by the Brussels Convention for consumers is not justified in such a case.
41. That is in no way altered by the fact that the contract at issue also has a private purpose, and it remains relevant whatever the relationship between the private and professional use of the goods or service concerned, and even though the private use is predominant, as long as the proportion of the professional usage is not negligible.
42. Accordingly, where a contract has a dual purpose, it is not necessary that the purpose of the goods or services for professional purposes be predominant for articles 13-15 of the Convention not to be applicable."
The significance of the expressions of view of the European Court of Justice which I have set out is explained in the judgment of the Sixth Chamber in Marleasing SA v. La Comercial Internacional de Alimentacion SA [1990] ECR I-4135:-
"7. However, it is apparent from the documents before the Court that the national court seeks in substance to ascertain whether a national court hearing a case which falls within the scope of Directive 68/151 is required to interpret its national law in the light of the wording and the purpose of that directive in order to preclude a declaration of nullity of a public limited company on a ground other than those listed in Article 11 of the directive.
8. In order to reply to that question, it should be observed that, as the Court pointed out in its judgment in Case 14/83 Von Colson and Kamann v. Land Nordrhein-Westfalen [1984] ECR 1891, paragraph 26, the Member States' obligation arising under a directive to achieve the result envisaged by the directive and their duty under Article 5 of the Treaty to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts. It follows that, in applying national law, whether the provisions in question were adopted before or after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph of Article 189 of the Treaty."
In other words, in the circumstances of this case, in construing the definition of the expression "consumer" in Regulation 2(1) of the 2008 Regulations, this court should interpret it consistently with the objective of Council Directive 85/577/EEC as construed and explained by the European Court of Justice, at least insofar as that is possible under English law.
Happily, the interpretation of the definition of "consumer" in Regulation 2(1) of the 2008 Regulations which commended itself to me without reference to the European jurisprudence is simply confirmed by that jurisprudence. Consequently, had it been necessary, I should have found that the 2008 Regulations did not apply to the making of the Agreement, and there was no obligation on RTA to provide the notice referred to in Regulation 7(2).
Unfair Contract Terms
At the commencement of the trial it appeared that there existed a further point which might necessitate consideration, namely whether particular terms of the Agreement thought to be being relied upon on behalf of RTA satisfied the requirements of Unfair Terms in Consumer Contracts Regulations 1999, SI 1999 No. 2083 ("the 1999 Regulations"). The 1999 Regulations only applied if Mr. Bracewell was acting as a "consumer" in entering into the Agreement. The definition of the expression "consumer" in Regulation 3(1) of the 1999 Regulations was very similar, but not identical, to that in the 2008 Regulations:-
"any natural person who, in contracts covered by these Regulations, is acting for purposes which are outside his trade, business or profession,"
The 1999 Regulations re-implemented in this country Council Directive 93/113/EEC. That Directive had a definition of "consumer" in Article 2 which was in identical terms to the definition in Regulation 3(1) of the 1999 Regulations. For the reasons which I have explained, the definition of "consumer" in Regulation 3(1) of the 1999 Regulations fell to be construed in accordance with the European jurisprudence to which I have referred. Consequently it was accepted at the end of the trial that, if Mr. Bracewell was not able to satisfy me that he was a "consumer" for the purposes of the 2008 Regulations in entering into the Agreement, he would not be able to satisfy that he was a "consumer" nonetheless for the purposes of the 1999 Regulations.
It is, perhaps, helpful, despite the fact that the 1999 Regulations in the end were not of any real significance in this action, to explain that the effect of a term in a contract being found to be unfair is explained in Regulation 8 of the 1999 Regulations:-
"(1) An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.
(2) The contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term."
The only term of the Agreement which was relied upon by RTA in support of its claim for £47,000, and thus relevant on any view to be considered under the 1999 Regulations, was clause 9. Had it been necessary to reach a conclusion as to whether clause 9 was an unfair term for the purposes of the 1999 Regulations, it would have been necessary to construe it, applying the usual principles explained by Lord Hoffmann in his speech in Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1998] 1 WLR 896 at pages 912 - 913, namely:-
"The principles may be summarised as follows.
(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
(2) The background was famously referred to by Lord Wilberforce as the "matrix of fact", but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.
(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997j AC 749.
(5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Compania Naviera SA v. Salen Rederierna AB [1985] AC 191, 201:
"if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion which flouts business commonsense, it must be made to yield to business commonsense."
A focus of attention would have been the words "grant a lease of the property". In my judgment those words would have to have been construed in the context that the "grant [of] a lease of the property" was to mean that Mr. Bracewell was "deemed to have sold the property" — in other words, the grant of a lease was to be treated as equivalent to a sale. It must follow, it seems to me, that it could not have been intended that the creation of a minor leasehold interest in the property, such as a periodic tenancy, was to have that effect. The words in clause 9 "grant a lease of the property" must, I think, mean, first, a formal grant of a lease in writing, and, secondly, a lease of such duration as to be equivalent to an outright sale. Thus, had it been necessary to reach a conclusion on the point, I should not have decided that the arrangements made between Mr. Bracewell and Carly Bannerman for her to occupy the Property and to carry on the Business amounted to Mr. Bracewell "grant[ing] a lease of the property".
Misrepresentation
The Re-Amended Defence and Counterclaim included these pleas:-
"4. The contract was entered into at the Drymen Pottery's premises at a meeting between Mr. Phil Manners of the Claimant and the Defendant and in the presence of Ms Margaret Colvin. At the meeting Mr. Manners stated:
a. he valued the business at £900,000 and stated that it would not be sold for less;
b. the asking price should be £940,000;
c. commission would be approximately 5%;
d. there would be a 1% fee (i.e. £9,000) payable in advance but this would be set off against commission and the fee could be paid at a rate of £1,000 plus VAT per month (unless and until an offer was made).
…
14. Further or in the alternative, the contract was governed by Scottish law.
a. In making the statements set out in paragraph 6 [sic - it was common ground before me that "4" was meant] (a) and (b) above the Claimant impliedly represented to the Defendant the fact that equivalent business[es] were selling for prices of about £900,000. The Defendant relied on the said representation and was induced thereby to enter into the contract with the Claimant. In fact the representation was false as prices for similar properties were in fact much less than £900,000 and were about £500,000 - £600,000.
b. In the premises
i. the Claimant was negligent in making the representation, which went to an essential matter in the contract;
ii. in consequence the contract was void alternatively the Defendant is entitled to reduction (rescission) of the contract;
iii. alternatively the Claimant made an innocent misrepresentation and the Defendant is entitled to reduction (rescission) of the contract.
c. Further or in the alternative, there was an implied term of the contract that the Claimant would exercise reasonable skill and care in the provision of his services as a selling agent. In placing a sale value of at least £900,000 plus VAT on the property with an asking price of at least £940,000 and/or marketing it at that price (if, which is not admitted, the Claimant in fact carried out any marketing activity at all), the Claimant failed to exercise reasonable skill and care in and about the service it provided. The advice that the property should be marketed at the price suggested and the marketing at that price was a fundamental breach of contract by the Claimant, entitling the Defendant to rescind the contract, which he did by his letter of 8 May 2010."
These pleas gave rise to a number of difficulties. Before coming to other problems, it is convenient to notice the factual disputes between the parties. The Amended Reply to Re-Amended Defence and Defence to Counterclaim included these assertions:-
"2.5 Mr. Manners visited the Defendant at the Drymen Pottery on two occasions, the first occasion being on or about the 1st February 2010 and the second occasion being on the 22nd February 2010, the day when the contract was signed by the Claimant;
2.3 [sic] On the first occasion, the only persons present were Mr. Manners and the Defendant. On the second occasion there was a woman present whom the Defendant identified as his wife. This may be the person referred to as Ms Margaret Colvin in the Amended Defence;
2.5 During the first meeting on the 1st February 2010, Mr. Manners:
(i) confirmed the ownership of the business and that the Defendant was a sole trader;
(ii) ascertained from the Defendant that he was thinking of selling the business within 3 months and that the Defendant was under pressure from his secured lender to sell;
(iii) asked the Defendant what price the Defendant wished to obtain for the business and the Defendant told Mr. Manners that he wanted around £850,000 - £900,000 for the business, broken down as £150,000 - £170,000 for the business stock and goodwill and £700,000 - £750,000 for the property, Drymen Pottery;
(iv) told the Defendant that there would be commission payable in the event of the sale of the business and that an "up front" registration fee would be required but did not discuss how much either of these amounts would be or how they were calculated;
(v) was not provided with any accounts for the business and provided no advice to the Defendant as to the value of the business or the property.
2.6 During the second visit:
(i) the Defendant told Mr. Manners he wanted to put the business on the market;
(ii) the Defendant did not provide Mr. Manners with any annual (or any other) accounts for the business but provided Mr. Manners estimates of the turnover of the cafe and of the public house which were incorporated in the contract;
(iii) the Defendant provided authority to the Claimant through Mr. Manners to accept any offers for the business in excess of £940,000 without any necessity for the Claimant to inform the Defendant of any offers for the business below that price;
(iv) the Defendant again provided no accounts for the business to Mr. Manners;
(v) Mr. Manners and the Defendant agreed that the commission was to be £40,000 and the registration fee was to be £9,000 payable in 8 monthly instalments from the date of the contract;
(vi) the amount of the registration fee was determined by the amount of work which the Claimant would have to do to market the business and the commission was based on the expected sale price of the business;
(vii) Mr. Manners provided the Defendant with the contract and invited him to read it and the Defendant read the contract and then signed the contract."
In a witness statement dated 25 January 2014 Mr. Manners, who was called to give evidence at the trial on behalf of RTA, gave a detailed account of his two meetings, as he contended them to have been, with Mr. Bracewell
"8. To the best of my recollection, my first meeting with the Defendant at the Drymen Pottery was with him alone and there were no other parties present when we were discussing matters concerning his intention to market his business for sale. I met him at the Drymen Pottery on the morning of 1 February 2010
9. After initial introductions and general pleasantries, I went through some routine questions with him. I checked that he was the owner of the business and that he was the decision maker and enquired whether he was a sole trader, partner in a business, or director of a limited company. The Defendant confirmed to me that he owned and operated the business as a sole trader and that he was therefore the decision maker.
10. I also asked the Defendant how soon he would be looking to sell the business. I cannot recall his exact response however I believe that he was looking to sell within the next 3 months. We then had a general conversation about how the business was going for the Defendant. During that conversation, the Defendant gave me an indication of his average annual turnover in respect of the different elements of the business and I recall that he also mentioned that he was under some pressure from a secured lender who was looking to enforce its security against the business premises in the near future.
11. During this first meeting, I did not discuss figures in respect of our commission or registration fees with the Defendant. I endeavour not to discuss such matters on first appointments with clients as the purpose of that appointment is purely to gauge their interest in actually selling their business. I of course made the Defendant aware that we do charge commission for our services together with a registration fee which is payable up front. However, I did not indicate any amounts to him at this stage as we did not have any idea at this stage what the asking price for the business would be.
12. I then gave the Defendant a short presentation on the Claimant's business, relating to what we do, how long the company has been in existence, our marketing practices, and the general basis of how our fees are charged as discussed below.
13. I then asked the Defendant to show me around the business premises. I recall that he took me to see the cafe, the kitchen, a gift shop area, the restaurant and the pub which is located on the first floor.
14. Following the tour of the business premises, we then sat down together and discussed his business in depth. The Defendant explained what type of business it was, namely a cafe/restaur ant and pub, and gave me an estimate of his average annual turnover. I do not recall him providing me with detailed trading accounts at that meeting.
15. When discussing the asking price for a business with potential clients, I always explain to them that I would like them to provide me with the price they would wish to obtain if a buyer were to enter the premises tomorrow and ask to purchase the business from them. Once the client has provided me with their estimate of what they think the business and premises is worth I then ask to see their trading accounts and take detailed information as to turnover which is often provided at a second visit. I asked the Defendant to give me his desired sale price for the business, taking into account the personal value of the business to him.
16. I recall that the Defendant said that he would like to obtain £850,000 to £900,000 for the sale of his business, including the business premises.
17. I have never suggested a sale price to the Defendant for his business. ...
19. As previously stated, I do not believe that the Defendant had accounts available at this first meeting. In such circumstances, I will simply ask clients to give me a global figure for the entire business including any property. I asked this of the Defendant and I recall that he said that his preferred global figure would be £850,000 to £900,000. I then asked if he has had a recent valuation of the business property. I cannot recall whether or not the Defendant had received a recent valuation of his property. However, in cases where no such valuation exists, I simply ask the clients to provide me with a rough estimate of their own valuation as they will be more familiar than me with values of properties of their specific nature in the locality. I recall that the Defendant estimated the value of the business premises at approximately £700,000 to £750,000. On that basis, with no trading accounts from which to ask the Defendant to provide a valuation of the business aspect, the valuation of the business element of the global asking price would simply have been ascertained by deducting the Defendant's estimated valuation of the property from the global asking price of £850,000 to £900,000.
20. Once we had discussed the matter of the asking price, I provided the Defendant with some of the Claimant's standard literature and agreed a date by which to telephone him to discuss further. I recall that the Defendant said he was going to meet with his bank manager that afternoon to discuss his business liabilities as he believed that his secured lender was shortly going to seek possession of his business premises. As a result he suggested that I call him back on 3 February 2010. I left the premises, having been therefor at least one hour.
…
22. I recall that I attended the Drymen Pottery sometime after 4pm on 22 February 2010 as it was my last call of the day and it was dark at the time I arrived. I believe that the Defendant's wife was at the time a dental surgeon in a practice near the Drymen Pottery building.
23. Upon arrival at the Drymen Pottery, I was asked to proceed to the dental surgery to meet the Defendant. I met the Defendant in the waiting area of the dental practice together with his wife where we sat down to discuss the marketing of his business. The Defendant's wife was present throughout this meeting.
24. After general introductions and pleasantries, I asked the Defendant whether he was prepared to put his business on the market. The Defendant confirmed that he was. I then went through some standard details such as the details of the business address, and contact details for the Defendant.
25. I recall that the Defendant did not have a set of accounts to hand at this meeting. If he had, then I would have entered very specific figures in relation to annual turnover in the final agreement and other documents filled in by me at the meeting. However, I note that I only included approximate figures of £150,000 and £250,000 relating to turnover in the final agreement. The figures in respect of turnover for the business were provided verbally by the Defendant after I asked him to confirm the turnover figures as previously discussed at our meeting on 1 February 2010.
26. I then took further information to confirm my previous conversation with the Defendant such as the tenure of the property, the number of staff, opening hours and more in depth information regarding the pub and the restaurant aspects of the business. The additional information regarding the day-to-day aspects of the business were recorded on a Business Information Sheet and Licensed Premises Sheet [copies of which were adduced in evidence at the trial].
27. I then asked the Defendant to confirm the asking price at which he would like his business to be placed on the market. The Defendant confirmed that he wanted the asking price to be set at £900,000.
28. I then handed a copy of the sole agency agreement to the Defendant, once I had filled in the relevant business details.
29. I explained that our commission is added to the sale price and asked The [sic] Defendant if he would be prepared to provide me with a figure above which the Claimant would be authorised to accept offers to purchase the business without seeking his prior approval. The Defendant confirmed that he was willing to do so and stated that the Claimant could accept offers of £940,000 plus the value of any stock without seeking his approval on the basis that this was his desired asking price together with the Claimant's commission exclusive of VAT. That figure was then inserted into clause 4 of the agreement.
30. In relation to the registration fee, I reiterated to the Defendant as per our first meeting that we do require a registration fee payable upfront. There is no set figure for that registration fee and it is not based on any percentage of the sale price. Business Consultants [that is, representatives like Mr. Manners] have some discretion as to the registration fee and I tend to base the registration fee on the approximate value of the amount of work required to market the business, the total value of the business together with other considerations such as affordability to the client.
31. I stated that the registration fee would be £9,000 plus VAT and the Defendant said he would not be able to afford to pay that in one instalment. He offered to pay £1,000 plus VAT immediately and would pay eight further payments of £1,000 plus VAT per month for the next 8 months. I agreed that this was acceptable and the Agreement was amended to reflect that.
32. I do not as a matter of course go through every paragraph of the contract with clients. If they ask me to, I of course will. I do discuss every aspect of the contract which I need to annotate in manuscript, such as the commission and registration fees, however once I have been through those aspects I hand the agreement to the client, and I did so with the Defendant, and state that they should only sign the agreement once they are happy with it. The Defendant read through the contract with his wife present and signed to show his acceptance. The Defendant also initialled every clause which had been completed or amended in manuscript to signify his acceptance. ...
33. The Defendant then wrote out a cheque in the sum of £1,175 in respect of his first instalment of the registration fee and handed the same to me. ...
34. The Defendant did not raise any queries in relation to the other terms of the agreement such as the ability to terminate the agreement and the trigger events for payment of commission. The duration of the second visit was at least one hour though I cannot recall the exact length of time I was present at the Defendant's premises."
Mr. Bracewell and Ms Colvin were both called to give evidence at the trial on behalf of Mr. Bracewell. Each prepared a witness statement describing the events of the one meeting which they contended had taken place with Mr. Manners, on 22 February2010. Their witness statements dealt with the meeting considerably more briefly than Mr. Manners. What Mr. Bracewell said, in a witness statement dated 18 February 2014, was:-
"21. I recall that Phil Manners arrived pretty much on time. It was dark and the meeting took place in my partner's dental practice, as we did not want any of the staff who were working to become aware of the proposed sale. Margaret was at the meeting.
22. At the meeting Phil Manners told us once again that the Claimant had buyers waiting to acquire the business and we were informed by him that it could obtain £900,000 for us and that the asking price should be £940,000. I was very pleased not only because the offers which Phil Manners said they could provide were from potential buyers that they already had, but also the asking price exceeded any expectations that I had at the time. I relied on what Phil Manners told me and it was because of what he said that I entered into the contract with the Claimant.
23. We were informed by Phil Manners that the Claimant could organise funding for the potential purchasers and that I could expect the sale to complete by August 2010 which was also good news.
24. It was mentioned at this meeting for the first time that the Claimant would require a 1% arrangement fee which Phil Manners calculated to be £9,000. We considered this to be a lot of money, but Phil Manners confirmed that I could make the payments in instalments of £1,000 per month with the first payment being due that day (22nd February 2010). I considered the position with Margaret and we decided that although it was expensive, if the Claimant had buyers and given the valuation they had put on the business, there was little risk in agreeing to their terms.
25. Phil Manners took some details from me about the business which I think he may have written down. The information which appears in the marketing sheet dated 22nd February 2010 ... appears to reflect that information. It is worth noting that a number of restrictions were placed on the advertising of the business. ...
28. In the event, Phil Manners did not even enter the business premises. He asked me for photos of the business so that they could be used to incorporated [sic] into the sale particulars and/or marketing material. ...
29. Phil Manners produced a contract and made some amendments to it... He asked me to sign it. I wanted some time to consider the terms and asked for a copy. He refused to give me a copy and became upset. In the end I signed the contract and also initialled the amendments as he requested. He did not let me have a copy for my records even though I requested it.
30. Phil Manners also produced an invoice ... I believe he did leave a copy of this invoice with me. I gave him a cheque in the sum of £1175.00 which represented the first instalment of the registration fee ... at the meeting. The cheque was drawn from my account with Bank of Scotland. The meeting concluded shortly thereafter."
The account of Ms Colvin in her witness statement dated 18 February 2014 was even more laconic: -
"6. I do recall Peter and I met a representative of RTA at my dental practice which is next door to the bar and restaurant. I was present throughout that meeting which I believe took place on 22nd February 2010. The reason the meeting took place in the dental practice was because we did not want the staff to know that the bar and restaurant might be sold. We had to be discreet.
7. I understand that the person we met on 22nd February 2010 is called Phil Manners. Peter and I were interested in learning what price the business could be sold for and what sum RTA valued the business at. Mr. Manners confirmed that RTA had buyers waiting to purchase the business. I understood from Peter that he had been told this prior to the meeting by RTA agents. During the course of the meeting Mr. Manners said that RTA could obtain about £900,000 for the business if it was sold through them. I recall that Peter was also pleased with the news that RTA were confident the sale could be completed by August 2010. It is my recollection that this information was provided by Mr. Manners.
8. Phil Manners was keen to enter into a contract immediately and I recall that he wanted Peter to sign a contract straight away. We learned for the first time at that meeting that RTA would be seeking about £9,000 plus VAT for their services. I remember discussing this with Peter because it seemed like quite a lot of money. In the end we concluded that despite the upfront cost there was little risk as RTA had buyers already interested in purchasing the business.
9. The meeting concluded after Peter had signed the contract and paid a cheque to Mr. Manners for part of what I understand is a registration fee."
It has to be said that the accounts of both Mr. Bracewell and Ms Colvin concerning what happened on 22 February 2010 seemed rather odd, given that Mr. Bracewell's case was that Mr. Manners had valued the Property and the Business at £900,000, and that Mr. Bracewell had relied on that valuation in entering into the Agreement. One might have expected that Mr. Bracewell and Ms Colvin would say, in their respective witness statements, something along the lines, "Mr. Bracewell asked Mr. Manners what he thought the business was worth, and Mr. Manners said about £900,000". However, what one found was rather more circumspect. Mr. Bracewell did not suggest that he had asked Mr. Manners for a valuation, rather that Mr. Manners volunteered, not an opinion as to value, but an assertion as to how much RTA could obtain. Ms Colvin expressed herself in very similar terms on this point.
Mr. Manners, Mr. Bracewell and Ms Colvin were each cross-examined at the trial.
I regret to say that I was unimpressed by Mr. Bracewell as a witness. As I have already pointed out, his evidence as to there only having been one meeting, on 22 February 2010, was contradicted by the contemporaneous documentary evidence that there had also been a meeting on 1 February 2010. Mr. Bracewell was asked in cross- examination about the terms of his letter dated 10 September 2010 to RTA. He told me that he considered that an informal agreement with a friend did not amount to the Business having been "leased". That tendentious assertion might have been more plausible if Mr. Bracewell had not deliberately, and dishonestly, sought by the terms of his letter dated 10 November 2010 to RTA to create the false impression that he was still operating the Business, at that time firmly in the hands of Carly Bannerman. Notwithstanding the vehement assertion in his witness statement of 18 February 2014 that he was not given a copy of the Agreement, in cross-examination Mr. Bracewell accepted that he was either given a copy by Mr. Manners on 22 February 2010, or one was sent to him through the post very shortly thereafter. In cross-examination Mr. Bracewell affected to be unfamiliar with what I have described in this judgment as the "Business Details" document. In paragraphs 9, 11 and 13 of his witness statement dated 18 February 2014 Mr. Bracewell commented in detail upon various of the entries in that document. I came to the conclusion that, as Mr. Spackman submitted in closing, Mr. Bracewell simply gave, from time to time, whatever account of the events of his involvement with RTA he thought suited him.
The evidence of Ms Colvin was not so obviously unsatisfactory on its face as that of Mr. Bracewell, but, unhappily, I reached the conclusion that her evidence of the meeting with Mr. Manners on 22 February 2010 was no more reliable than that of Mr. Bracewell.
By contrast, I was impressed by Mr. Manners as a witness. He seemed to me to be taking care in his evidence to be accurate, so far as his recollection went, and to be balanced in what he told me. Where his evidence could be evaluated against the background of contemporaneous documents, the documents supported it. Although Mr. Manners accepted that he had made many calls since his meetings with Mr. Bracewell, he said that he recalled the meetings because the town of Drymen is particularly attractive and he was pleased to have the opportunity of visiting it.
In the result, the misrepresentation allegations against RTA fail on the facts. I find that Mr. Manners did not express any opinion to Mr. Bracewell that the Property and the Business were worth about £900,000, or any figure. What Mr. Manners did do was to ask Mr. Bracewell how much he would be prepared to sell for, and the figure of £940,000 which was fixed as the asking price for the Property and the Business was the result of Mr. Bracewell's answer to that question, with the commission of RTA added.
If I had found the facts in relation to the misrepresentation allegations to be as was contended for on behalf of Mr. Bracewell, it would have been necessary to consider other aspects of the pleas in paragraph 14 of the Re-Amended Defence and Counterclaim.
Despite the plea that the Agreement was governed by the law of Scotland, no evidence as to the law of Scotland was adduced at the trial, and so I could only have proceeded on the traditional basis, that the law of Scotland, or any other non-English system of law, was to be taken to be precisely identical to the law of England in the absence of evidence to the contrary.
If Mr. Manners had expressed the view that the value of the Property and the Business was £900,000, that would have been an expression of opinion, not a representation of existing fact, and thus could not found any claim in misrepresentation. It was sought to grapple with that problem, at paragraph 14 of the Re-Amended Defence and Counterclaim, by contending that the expression of opinion alleged involved an implied representation of existing fact, namely that "equivalent business[es] were selling for prices of about £900,000". However, in my judgment the expression of opinion alleged did not have implicit within it that representation of existing fact. No doubt any expression of opinion involves, implicitly, the representation of the fact that the opinion expressed was the genuine opinion of the person expressing it. However, at least in the ordinary case, no other representation of existing fact is implicit, and in particular not a representation that the person expressing the opinion has good grounds for that opinion, or has undertaken research which objectively justifies that opinion. Although no doubt fervently held by those holding such views, many opinions on political or religious matters are not based upon deep reflection or factual investigation, and are simply incapable of rational justification.
In the result, the allegations of misrepresentation would have failed to lead to any relief, even if I had accepted the evidence of Mr. Bracewell and that of Ms Colvin as to what was said to have happened at the meeting with Mr. Manners on 22 February 2010.
Mr. Hibbert told me that the reference to negligence in paragraph 14 of the Re-Amended Defence and Counterclaim reflected the law of Scotland concerning misrepresentation. Maybe so. However, for the avoidance of doubt, any allegation to the effect that Mr. Manners was negligent in valuing the Property and the Business at £900,000 would have failed in any event for want of proof that no reasonably competent valuer could have assessed the value of the Property and the Business at £900,000. Mr. Manners told me, and I accept, that he had, and has, no qualifications as a valuer, but in order to support an allegation of negligence against Mr. Manners it was necessary for Mr. Bracewell to adduce some evidence to the effect that no reasonably competent person expressing an opinion about value of the Property and the Business could possibly have valued it at £900,000, and to formulate the requirement as "no reasonably competent person who was not a valuer could possibly have valued the Property and the Business at £900,000" would be bordering on the absurd.
I have already explained why Mr. Bracewell is no better able to rely in this action upon the Agreement than RTA. However, had it been necessary to do so, I should have found that, in order to make good the allegation of breach of an implied term of skill and care, it was necessary to adduce the same sort of evidence as would have been necessary to support a claim in negligence. Moreover, insofar as it might have mattered, the contention that Mr. Bracewell sought to rescind the Agreement by his letter dated 8 May 2010 was not, in my judgment, well-founded. By the letter Mr. Bracewell was not seeking to terminate the Agreement on any ground, merely to discuss the possibility of termination.
Conclusions as to liability
In the result, both the claims in this action and the claims in the counterclaim fail and are dismissed.
Costs
I have not been addressed by Counsel in relation to costs, dependent upon the outcome of the action and the counterclaim. However, in order to focus submissions when I am addressed, I think that it would be helpful to express my preliminary view that, the claims in the action having failed by reason of the fact that the Agreement was illegal, and so unenforceable; and the ordinary principle in a case of a contract being unenforceable by reason of illegality being that the loss sustained by each party should lie where it falls, the appropriate order as to costs should be no order. |
Mr Justice Warby :
On 19 March 2015 I tried the issue of whether the words complained of by the claimant in this libel action are defamatory of him. I held that they are not. These are my reasons for reaching that conclusion.
THE CLAIM
The claimant (Mr Rufus) and the defendant (Mr Elliott) are both former professional footballers. Both have remained involved with football after their playing days. Mr Rufus now helps the Charlton Athletic Community Trust. Mr Elliott has been an anti-racism campaigner for many years, and was a trustee of the "Kick it Out" anti-racism campaign of the Football Association. He has been awarded a CBE for his work on diversity and anti-racism. Mr Rufus and Mr Elliott were at one time friends and business acquaintances, but since 2013 they have been fighting this action.
The facts alleged by Mr Rufus, which for present purposes are assumed to be true, can be shortly summarised. In December 2012 a business dispute arose between the two men. On 11 February 2013 Mr Elliott sent Mr Rufus an offensive and aggressive text message. It included these words: "Ur a stupid man nigger … You dog. Ur history my friend". On 18 February 2013 the text message became public through an article in The Sun newspaper under the headline "N-word slur by CBE ace". The sub-headline was "A football anti-racism champion has sparked a race row after calling another black man 'n*****'". The article gave details of the words used in the text message.
The fact that Mr Elliott had sent such a text message to Mr Rufus was widely reported by third party media, and on chat forums, and on Twitter, on and between Tuesday 18 and Saturday 23 February 2013.
On Saturday 23 February 2013 Mr Elliott resigned his position as a Kick It Out trustee and participated in the issue of a press release (the Press Release), which was published via the organisation's website, containing these words:-
"Today Paul Elliott CBE has resigned from his position as a Kick It Out trustee.
He has released the following statement to clarify this decision:
'Earlier this week, a former friend and business colleague, made public a SMS text message I sent him, in which I used a term which is widely known as being derogatory to my own community.
I regret using it; it is inappropriate and not part of my everyday vocabulary. As an advocate of high standards of public behaviour, and integrity in public life, I know the use of this word sends out mixed messages and contradicts my position as a Kick It Out trustee.
I will continue to be active in other projects in what I believe to be a true and just cause.'
Kick It Out extends its thanks to Paul for the key role he has played over the past 20 years, through his distinguished unpaid work, loyalty and devotion in helping the campaign in all areas of its work. His commitment to the aims and objectives of Kick It Out has inspired others everywhere."
The Press Release, or the gist of it, was widely republished in the national news media over that weekend and the following one. In addition, there was what is described by Mr Rufus as a "social media network frenzy" during which, according to Mr Rufus's case, a number of people posted messages "falsely insinuating and implying that the claimant had made the text message public as alleged by the defendant". The posting of those messages is said to flow from the publication of the Press Release. As is clear from this quotation, which comes from his Particulars of Claim, Mr Rufus maintains that it was not he who made the text public. That, however, is not before me for decision. The only issue is whether the Press Release defamed Mr Rufus in the eyes of ordinary reasonable readers.
In late February 2013 Mr Rufus complained through solicitors of libel and in May 2013, not satisfied with the response, he issued this claim for damages. Mr Rufus's case is that a large number of those who read the Press Release will previously have read the Sun article, or third party reports of the facts it contained; these readers will therefore have identified Mr Rufus as the "former friend and business colleague" referred to in the Press Release as having made public the text message. It is accepted by Mr Elliott that for these reasons at least some readers of the Press Release will have understood it to refer to Mr Rufus.
Paragraph 8 of Mr Rufus's Particulars of Claim asserts that the Press Release was defamatory of him. Paragraph 9 pleads that, by way of innuendo, the press release meant that Mr Rufus "had acted dishonourably and betrayed the Defendant and deliberately harmed his reputation by making public a private SMS Text communication sent by the Defendant to the Claimant which was inappropriate in that it contained a term that is widely known as being derogatory of the black community and which contradicted the Defendant's role as a Kick It Out trustee, causing his resignation from it".
This is quite an elaborate meaning. However, the words in the middle of it are drawn almost verbatim from the Press Release. Apart from the word "inappropriate", they are essentially descriptive. There is no real dispute that the Press Release conveyed a meaning to this effect. It is the parts of the meaning that I have italicised, and in particular the opening words, which are at the centre of the dispute between the parties.
The facts relied on in support of the innuendo are identified in paragraphs 10 and 11 of the Particulars of Claim. Paragraph 10 asserts that "The fact of the content of the Text Message and its sending by the Defendant to the Claimant" had been published in The Sun. Paragraph 11 pleads that "The fact of the content of the Text Message and the identity of the Defendant as its sender and the Claimant as its recipient were widely reported by third parties" in the media, chat forums and Twitter. No other features of the reporting by The Sun, or others, are relied on in support of the innuendo.
THE ISSUE
The parties agreed that the issue for my decision was whether the Press Release was defamatory of Mr Rufus. They disagreed, however, on the approach I should take to deciding the issue. To set that disagreement in its context it is appropriate briefly to describe and explain the slightly circuitous route by which the issue came before me.
On 23 October 2013 Dingemans J heard an application by Mr Elliott for rulings that the words complained of were not capable of being defamatory of Mr Rufus, or of meaning that he acted dishonourably, betrayed Mr Elliott or deliberately harmed his reputation, and for an order striking out the claim. The application, made under 53PD 4.1, took the form it did because at that time the law was that issues of fact arising in an action for libel had to be tried by jury, unless certain specified exceptions applied, provided that a timely application for jury trial was made: see Senior Courts Act 1981, s 69; CPR 26.11 (in its then form); and Thornton v Telegraph Media Group Ltd [2011] EWCA Civ 748, [2011] EMLR 29. Where a case would or might be tried by jury a judge could only decide the threshold question of whether a jury could reasonably find the words to be defamatory or to bear a pleaded meaning. Mr Elliott had wanted the actual meaning to be determined at that stage, but Mr Rufus would not agree. It is hard to see how any of the statutory exceptions to the presumption in favour of jury trial could ever have applied in this case.
On 1 November 2013 Dingemans J gave judgment, holding that the words were capable of defaming Mr Rufus, and dismissed the application: [2013] EWHC 3355 (QB). The Judge highlighted at [6] that his decision was no more than a threshold ruling, saying: "I should point out that this is an application about whether the words are capable of bearing a defamatory meaning. It is not the hearing of a preliminary issue for a determination as to the actual meanings of the words. That is because the actual meanings will be a matter for trial, which may (depending on directions), be a jury trial."
Permission to appeal against Dingemans J's decision was refused by him, and by Sedley LJ on paper, but the application was renewed, and granted by Maurice Kay LJ V-P and Rafferty LJ after an oral hearing. On 20 February 2015 however the Court of Appeal (McCombe and Sharp LJJ and Mitting J) dismissed the appeal: [2015] EWCA Civ 121. The judgment of Sharp LJ, with whom the other members of the court agreed, emphasised the "narrow compass" of the argument before the Judge, identifying as one good reason for that the fact that "the threshold of exclusion is a high one. The judge's task under 53PD 4.1 is no more and no less than to 'pre-empt perversity': see Jameel v The Wall Street Journal Europe Sprl [2004] EMLR 6.": [8]. This point was reflected at [25] where Sharp LJ gave this reason for dismissing the appeal: "It is possible (and no more) that those who read the Press Release thought both that the defendant should not have said what he did but the worse of the claimant for having made what was essentially a private row public, given the circumstances."
The Court ordered that there should be a preliminary "trial of actual meaning" before a judge on the first available date. It had been asked to, but was not able to decide actual meaning itself, as that is a fact-finding exercise outside its province: see [27]. The court was able to direct that the issue should be tried by a judge without a jury because by that stage Mr Rufus had agreed to that course. Without such agreement, the "old" law that continues to apply to this case might very well have meant that it was necessary to have a jury trial.
As Sharp LJ pointed out at [28], however, this sequence of events is highly unlikely to be repeated now that the reforms of libel law enacted by the Defamation Act 2013 are in force, including the removal of the presumption in favour of jury trial by s 11 of the Act. Under the reformed law, there would be no obstacle to an application for a judge to try at an early stage the issue that I have now decided, nearly two years after this action began. The fact that the trial took place less than a month after the Court of Appeal's decision was handed down is an indication of how swiftly such hearings can be arranged, with co-operation from the parties. The hearing itself lasted just over an hour.
MY APPROACH TO THE ISSUE
Conventionally, the question of whether words are defamatory is approached in two stages, by first identifying the single meaning which the words would convey to an ordinary reasonable reader and then determining whether that meaning is defamatory. This two-stage approach is reflected in PD53 4.1, which authorises the court to decide at any time "(1) whether a statement complained of is capable of having any meaning attributed to it in a statement of case; (2) whether the statement is capable of being defamatory of the claimant; …." I am not now concerned with whether the words are capable of bearing a meaning, or capable of being defamatory. I refer to this paragraph of the Practice Direction only to illustrate the conventional dichotomy.
It was clearly the intention of the Court of Appeal that this trial should encompass both meaning and defamation, and resolve for good the question of fact, whether the words complained of defame Mr Rufus. That was also the intention of the parties. The parties identified an agreed core meaning of the Press Release: that Mr Rufus had made public the text message. But beyond that, they disagreed on the right approach.
Mr Barnes, for Mr Rufus, submitted that the single issue was whether the Press Release was defamatory, but that the purpose of the trial was not to determine whether the agreed literal meaning was defamatory, shorn of any insinuations it contained or inferences that would be drawn. Rather, the question was whether in the context of the Sun article the article bore the meaning pleaded in the Particulars of Claim, or some other meaning defamatory of the claimant. He offered as an alternative encapsulation of the claimant's meaning the one he had advanced in the Court of Appeal: that Mr Elliott's resignation statement was defamatory of Mr Rufus "as it meant that [Mr Rufus] had made public the text message sent to him by [Mr Elliott] which was both disloyal and wrong." He recognised, and pointed out, that I was not bound by the pleaded case and entitled to find a different meaning.
Mr Price QC submitted on behalf of Mr Elliott that there was no real room for dispute about the meaning the Press Release would convey to readers who knew that the text message had been sent to Mr Rufus, and what that message said. The Press Release meant that Mr Rufus had made public a text message sent to him by Mr Elliott containing the n-word in circumstances where the two men were former friends and business partners, and had caused Mr Elliott's resignation from a position in an anti-racist organisation which has a zero-tolerance policy to the use of that word. The issue, he submitted, was whether that conduct would be regarded as "disloyal" or in any way blameworthy by society generally. The decision I had to make was therefore not a "meaning ruling", but a "defamation ruling".
In my view it is Mr Barnes' submissions that better reflect the right approach. The meaning of words is often a matter of subtlety, going well beyond what they literally say. As Lord Reid has explained, the defamatory sting of words often lies not so much in what the words themselves say but also "what the ordinary man will infer from them" (Lewis v Daily Telegraph [1964] AC 234, 258), and the ordinary reader indulges in "a certain amount of loose-thinking" (Morgan v Odhams Press Ltd [1971] 1 WLR 1239, 1245). A statement may therefore insinuate or imply, to the ordinary reader, some facts or some other form of suggestion which the statement does not mention. An obvious example, even if commonplace in this context, is a statement about a police arrest, or "probe", which will often imply that the person arrested or under investigation has done something to justify reasonable suspicion of criminal conduct. Similarly, a statement might imply, without stating, that conduct which it describes is maliciously motivated. To this extent Mr Barnes' submissions are correct. It is therefore important in my judgment to begin by considering what the words complained of would suggest to the ordinary reader about the claimant.
It is once that determination has been made that the question becomes whether the attribution to the claimant of the particular behaviour or state of mind, or whatever else is suggested by the words, is defamatory. It is at this stage that the question arises of what the reader would think of a person who acted or thought in the way stated or implied by the words complained of; whether the reader would regard the claimant as having acted in a way that is "wrong", "deplorable", "culpable", "disreputable" or similar. Sometimes the distinction is blurred, because the words themselves expressly condemn the claimant's behaviour using some disparaging adjective or adverb, but that is not this case. Sometimes the distinction is blurred by the way the claimant's case is put, because words such as "wrong" or "disreputable" are incorporated into the pleaded meaning although not present in the statement.
I have approached the issue for decision in the conventional two stages. I add one other point. When dealing with meaning it is right to make allowance for the fact that there may be different ways of putting what is essentially the same or a similar complaint. I do not, for instance, regard Mr Barnes' encapsulation as in any way straying outside the boundaries of the pleaded case. But it seems to me that the pleaded case must be treated as setting the parameters of what the claimant can say about meaning. In particular, my decision must be made on the basis of the innuendo case that has been pleaded, and not some different case.
MEANING
Legal principles
The essential principles were identified in Gillick v Brook Advisory Centres [2001] EWCA Civ 1263 by Lord Phillips MR, adopting part of the judgment of Eady J:-
"the court should give the article the natural and ordinary meaning which it would have conveyed to the ordinary reasonable reader reading the article once. Hypothetical reasonable readers should not be treated as either naive or unduly suspicious. They should be treated as being capable of reading between the lines and engaging in some loose thinking, but not as being avid for scandal. The court should avoid an over-elaborate analysis of the article, because an ordinary reader would not analyse the article as a lawyer or accountant would analyse documents or accounts. Judges should have regard to the impression the article has made upon them themselves in considering what impact it would have made on the hypothetical reasonable reader. The court should certainly not take a too literal approach to its task."
This passage refers to an article, but the same principles apply to any published statement.
The same principles apply where the meaning complained of is an innuendo meaning. An innuendo meaning, in the sense the term is used in this case, is one that depends on the reader knowing some fact that is extraneous to the statement complained of, and not common knowledge. The pleading of an innuendo meaning must "identify the extraneous facts": 53PD 2.3(2). It must also explain how those facts became known to the reader. Often this second task is accomplished by relying on inference from third party media coverage, as in this case.
What may not be done, in reliance on an innuendo referring to third party media publication, is to incorporate in the claim some defamatory meaning which is conveyed only by the third party publication. It is the defendant's statement itself, and its implications and insinuations, for which the defendant is responsible and not any other defamatory material published by others on the same subject, unless he has adopted or repeated it: Astaire v Campling [1966] 1 WLR 34, CA. The reason is obvious: a person ought not to be held responsible for what others have published, if he has not adopted or referred to it in what he himself has said. As Davies LJ said in Astaire at 40, "statements made … in other articles in other papers, in this context seem to me not to be 'facts' within RSC Ord. 82, r. 3(1)" [(the predecessor of 53PD 2.3(2))].
The meaning of the Press Release
(i) The innuendo facts
The innuendo pleaded on behalf of Mr Rufus complies with the basic principles I have identified. It asserts that there were readers of the Press Release who already knew three things which are agreed to be facts: that (i) Mr Elliott had sent (ii) Mr Rufus (iii) an offensive text message containing the n-word. It explains that these facts were known to readers of the Sun article and other third party publications. It follows in my judgment that to those within these groups who read the Press Release, of whom there were admittedly some, the Press Release would mean at least this: Mr Rufus, a former friend and business colleague of Mr Elliott, had made public an SMS text message Mr Elliott had sent him, in which Mr Elliott had abused and threatened Mr Rufus, using the n-word.
Mr Barnes invited me to treat the Sun article as providing additional "context" for the Press Release, suggesting that the reader would, and that I should, take from the Sun article three further items of information in arriving at a meaning: (iv) that the text related to a business venture; (v) that neither party was prepared to comment on the argument or the insult; and (vi) that Mr Elliott had insisted that the term was not offensive because of the nature of the conversation and because it was between two black men. All those are factual assertions made in the Sun article.
However, this submission undoubtedly goes beyond the pleaded case. None of these matters are facts pleaded in the innuendo particulars in paragraphs 10 and 11 of the Particulars of Claim. Indeed, I note that although item (iv) is pleaded in paragraph 3 of the Particulars as part of a narrative of events, there is no later reference to that paragraph, or that fact; and items (v) and (vi) are not asserted as facts anywhere in the Particulars.
Mr Barnes pointed to what he suggested was a concession in paragraph 5 of Mr Price's skeleton argument in the Court of Appeal, and to paragraph [6] of Sharp LJ's judgment, recording that it "appears to be common ground, again for present purposes, that the Sun article can be relied on as context." I do not, however, read either of these as involving anything more than a recognition that at that stage of the proceedings the Sun article had some relevance. That can be explained by the fact that it was relied on by way of innuendo in the way pleaded on behalf of Mr Rufus. In any event, I was not persuaded that the issue before me ought to be decided by reference to a concession that was made, if at all, on another occasion, especially when the nature and extent of the supposed concession are both debatable.
Mr Barnes pointed out that the material on which he sought to rely was not defamatory, and thus not ruled out by Astaire v Campling. It seemed to me however that this was an attempt to introduce into the assessment of meaning additional factual elements contained in a third party publication which formed no part of the statement complained of or, strictly speaking, its context, and which are not pleaded either as context or as innuendo facts. I do not think that either the pleaded case, or principle, would allow me to have regard to what the Sun, or third parties, told their readers about these issues, other than the three facts specifically alleged in the Particulars of Claim.
(ii) Discussion
I approached the task of deciding meaning by reading the words complained of and the claimant's pleaded case, and forming my own impression, before reading the parties' skeleton arguments and the other materials provided. I have however paid attention to each party's submissions about meaning.
I have already indicated above my response to Mr Price's submission that there is no room for dispute about meaning. In seeking to persuade me that the Press Release bore the meaning pleaded in paragraph 9 of the Particulars, or something similar, Mr Barnes made three main submissions. First, he argued that it was made clear to the reader that it was the making public of the SMS that had caused Mr Elliott's resignation. He pointed out that the resignation statement contained within the Press Release was expressly aimed at clarifying the reasons for Mr Elliott's resignation, and began with a reference to the SMS. Mr Barnes referred to Mr Elliott's statement that the use of the n-word sends "mixed messages and contradicts my position as a Kick It Out trustee" and submitted that it was wrong. The SMS did not contradict Mr Elliott's position, for so long as it remained on Mr Rufus's phone. If he had not disclosed the message (as the words complained of suggested he had) there would have been no mixed messages and no contradiction.
This is not at all the impression that I gained on reading the words before the hearing and, having now heard the argument, I reject it. On the contrary, in my view the resignation statement read as a whole gives the impression that Mr Elliott felt it right to resign because of his use of the n-word. It is that which was, he admitted, "inappropriate", regrettable, and in conflict with his public position as a trustee. On the face of it, he was saying the resignation was justified by his behaviour in sending the text, and not because it had been made public. The publicity was referred to, as a significant part of the context in which the resignation took place, but it was not presented as the reason for the resignation. This is a natural reading of the words, and indeed is what the ordinary reader would expect. Mr Elliott was clearly not saying in his resignation statement that his behaviour had been acceptable and was only a resigning issue because it had been made public, or anything like this.
Secondly, Mr Barnes submitted that the reference to a "former friend and business colleague" led to a defamatory sting of dishonour and betrayal, implying that the duties of friendship and loyalty had been broken. Again, I disagree. The facts are stated blandly and neutrally. It is easy for the reader to understand why the two are not friends any more, and the reader would detect and understand a degree of annoyance on the part of Mr Elliott at the making public of the text. But the words do not in my view convey the impression that Mr Elliott is, in the course of confessing his own faults, complaining of dishonour or disloyalty by his former friend. I do not agree, either, with Mr Barnes' third point. This was that the statement implied an accusation that Mr Rufus deliberately set out to harm Mr Elliott's reputation. Making all due allowance for loose thinking, this is far too strained a reading in my opinion.
(iii) Conclusion
In my judgment the Press Release meant by way of innuendo that Mr Rufus, a former friend and business colleague of Mr Elliott, had made public an SMS text message which Mr Elliott had sent him, in which Mr Elliott, a trustee of the Kick It Out campaign and a long term anti-racism campaigner, had abused Mr Rufus by calling him a nigger and threatened him; and that as a result of the disclosure Mr Elliott had resigned his position as trustee because, as he acknowledged, his use of the n-word was inappropriate and in conflict with his public position. The Press Release did not bear the meaning complained of, nor did it mean that Mr Rufus had acted disloyally.
WAS THE PRESS RELEASE DEFAMATORY OF MR RUFUS?
This question has to be answered by reference to the meaning I have identified, applying well-established principles. Those principles, to which I shall come shortly, involve identifying and applying the standards of right-thinking people generally. That is a fact-finding exercise. However, evidence is not normally adduced on the issue. Subject to a point which I shall deal with at the end of this judgment, neither side has suggested that any evidence other than the Sun article and the Press Release is relevant or admissible in this case. If the issue were tried by jury, the jurors would be told what the relevant principles are and directed that, having decided on meaning, they should apply those principles to the case, using their own knowledge and experience to reach a conclusion on what are the relevant standards of right-thinking people generally, drawing whatever help they might gain from the arguments advanced. I adopt the same approach.
Legal principles
The test of what is defamatory is now partly statutory, by virtue of s 1 of the Defamation Act 2013. But this case must be decided by reference to the common law. In any event the issue here is not the one dealt with by s 1, namely whether the statement is harmful enough to be actionable. Rather the issue is whether it is defamatory at all. The applicable test is a common law test that is unaffected by the 2013 Act.
A convenient statement for present purposes is provided by Sir Thomas Bingham MR in Skuse v Granada Television Limited [1996] EMLR 278, 286:
"A statement should be taken to be defamatory if it would tend to lower the plaintiff in the estimation of right-thinking members of society generally or would be likely to affect a person adversely in the estimation of reasonable people generally."
This statement, which was relied on by Dingemans J with the approval of the Court of Appeal, draws together syntheses of previous authorities proposed by Lord Atkin in Sim v Stretch [1936] 2 All ER 1237, 1240 and by the Faulks Committee (Report of the Committee on Defamation Cmnd 5909, March 1975) at para 65: see the analysis of Tugendhat J in Thornton v Telegraph Media Group Ltd [2010] EWHC 1414 (QB), [2011] 1 WLR 1985 at [29](3) and (6) and [56]-[57]. The word "estimation" now has a slightly archaic feel, and can be treated as synonymous with "esteem" or "opinion".
The word "generally", which appears twice in the citation from Sir Thomas Bingham MR, is important. It reflects the fact that a statement which tends to lower a person, or would be likely to affect them adversely, in the esteem or opinion of a section of society only is not a defamatory statement. To put it another way, the standards to be applied in assessing whether the offending statement is damaging to reputation in a way that is legally actionable must be collective standards of society generally, that are shared and agreed upon by society at large, and not just by a part of society.
Perhaps the best known expression of the principle is that of Greer LJ in Tolley v Fry [1930] 1 KB 467, 479: "Words are not actionable as defamatory, however much they may damage a man in the eyes of a section of the community, unless they also amount to disparagement of his reputation in the eyes of right thinking men generally". The application of the principle is perhaps most vividly illustrated by three cases, which were considered by Dingemans J and the Court of Appeal: Mawe v Pigott (1869) Ir.R 5 C.L. 54, Myroft v Sleight (1921) 90 LJKB 883, and Byrne v Deane [1937] 1 KB 818. The common theme of the first and third of these cases is that the statements complained of were held not to be defamatory because they attributed to the plaintiffs conduct of which right-thinking people generally would approve, or at least not disapprove, however much it might involve disloyalty that would be disapproved of by a sector of society.
Thus, a priest could not complain of being accused of informing on disloyal and criminal classes: Mawe v Pigott, where Lawson J agreed that the priest might be exposed to "great odium" amongst certain classes who were themselves criminal, but held that "we cannot be called upon to adopt that standard." Nor can a golf club member sue, as in Byrne v Deane, for an allegation that he has reported the club to the police for having illegal gaming machines. The plaintiff complained of a rhyme posted on the club wall containing, he said, an implied imputation of "underhand disloyalty." Slesser LJ's view was that the meaning of the words was that the plaintiff had reported the crime to the police (p832), which could not possibly be defamatory, tested by the standard of "what a good and worthy subject of the King would think of such a person" (p833). Greene LJ also did not regard the rhyme as conveying the meaning complained of, but rather as meaning simply that the plaintiff had given information to the police (p839). But even if the statement could suggest to his fellow club members that he had been disloyal to them, his view was that this did not make the statement capable of being defamatory in law: (p840).
Myroft v Sleight was not an informer case, but it has this in common with the other two cases: it involved an accusation of disloyalty. The plaintiff was a trawler skipper, and a trade union member, who had voted for a strike. He was accused by a fellow skipper, a union committee member, of attempting to secure a ship to go to sea. The allegation was held to be defamatory. McCardie J identified the charge as one of "trickery or of underhand disloyalty or of hypocrisy" (It seems likely that the plaintiff's legal team in Byrne v Deane drew on these words for the meaning complained of in that case.) McCardie J held that the behaviour attributed to the plaintiff would be condemned by "a just, fair-minded and reasonable citizen."
An allegation of disloyalty therefore may or may not arise, and if it does it may or may not be defamatory, depending on the context, and on the relevant collective standards of members of society at the time and place of publication. The principle that underlies the two informer cases is not that the reporting of wrongdoing is lawful, though of course that is so, as a rule. It is not the law that an imputation is not defamatory merely because the conduct it attributes to the claimant is lawful: see Sharp LJ's judgment in this case at [24]. The principle is that the question of whether a statement is defamatory must be answered by reference to the shared reasonable standards of society. Those standards may place the duty or responsibility to report unlawful conduct above any duty of loyalty that might be owed by the informer. If so, any imputation of disloyalty will not be a defamatory one. As Greene LJ put it in Byrne v Deane at p839, "if the allegation that he reported the matter to the police is not defamatory, in my judgment the allegation that in reporting the matter to the police he was guilty of disloyalty cannot be defamatory."
The need for the values that are applied in deciding whether a statement is defamatory to be values shared by society at large – what might be termed the consensus requirement - has been emphasised in more recent authorities: see Ecclestone v Telegraph Media Group Ltd [2009] EWHC 2779 (QB) [17] (Sharp J), Thornton v Telegraph Media Group (above), and Modi v International Management Group (UK) Ltd [2011] EWCA Civ 937, [30]-[33] (Thomas LJ). Thornton provides a particularly clear example of the application of the consensus requirement. One allegation complained of by the claimant, a writer, was that she had given 'copy approval' to a source. This was a practice of which both she and the defendant strongly disapproved. The allegation was however held not to be defamatory. Tugendhat J held at [98] that "the fact that the two parties to an action may both be members of a section of society holding particular views does not relieve the court of the obligation to try the case by the standards of society generally." He concluded that by those standards it was not defamatory to attribute this practice to the claimant.
Application of principles
In my judgment the Press Release is not defamatory of Mr Rufus, because the conduct that it attributes to him by way of innuendo is not conduct that would lower him in the esteem or opinion of right-thinking members of society generally. It is not the case that right-thinking members of the public generally would disapprove of that behaviour, which revealed the use of an unacceptable racist term by Mr Elliott, a trustee of an anti-racist organisation. That is so even though, in doing so, Mr Rufus disclosed a private message sent to him.
Mr Price characterised Mr Rufus's position on this issue as involving the proposition, "You shouldn't do anything to the detriment of your former mates". That was a parody, which did not do full justice to the argument. However, Mr Barnes did argue that the behaviour attributed to Mr Rufus was in breach of a "societal norm" not to betray or dishonour. Of course, such a norm exists, but I do not accept the argument that it places the duties implied by friendship above the desirability of holding to account a public figure whose private behaviour contradicts his public stance.
I add that if, contrary to that view, this conduct would be regarded as involving disloyalty, then even so it is disloyalty of a kind that is not in my view considered culpable or blameworthy by society in general.
There is today a strongly held consensus view in our society that discrimination against a person based on their race or colour is deplorable, in all its forms. The use of abusive discriminatory terms tied to race or colour such as, and perhaps especially, the word nigger is not tolerated but strongly disapproved of by society generally. That attitude extends to the use of the word by older people in society, who grew up at a time when different standards applied. They are expected at the very least to refrain from using unacceptable language with discriminatory overtones. There are few contexts in which society would regard the use of the word as acceptable. It will be apparent that in my view one such context is in a public judgment, in which it is important to state the facts with clarity and without euphemism. There are no doubt a number of others, but it is not easy to think of many.
It is an indication of the high degree of sensitivity attached to the use of the word generally that it only appeared in The Sun with asterisks. Mr Elliott used no asterisks in his text message. In my judgment society's disapproval of the use of the term extends to its use by one black person to another in many, albeit not all contexts. Those contexts include its use in the "–er" spelling, as a term of abuse designed to cause offence, in an aggressive message, as was the case here.
The words used by Mr Elliott in the Press Release reflect these points, in my view. He did not use the n-word itself, or even use asterisks. He referred to "a term which is widely known as being derogatory to my own community", and expressed his regret at its use. He described it as "inappropriate" and as sending out mixed messages. Reasonable members of the public at large would in my view have seen this as understating the position to a degree. Mr Rufus's own case is that Mr Elliott's use of the term "called into question the defendant's continued employment in a number of positions, including as a trustee of the Kick It Out campaign." Reasonable members of the public would, in my judgment, agree with that. So far as Kick It Out is concerned, they would share the somewhat stronger view expressed by Mr Elliott in the Press Release: that his use of the word "contradicts my position as a Kick It Out trustee". It is this inconsistency, and not the public exposure of his behaviour, to which the Press Release attributed his resignation. It would not be considered surprising, inappropriate, or wrong by the reasonable member of society that Mr Elliott felt compelled to resign from that position on account of having used the word towards Mr Rufus. The consequence could only follow if the private use of the word was made known in some way.
Society generally respects the privacy and confidentiality of private communications such as text messages, and friends – even former friends – are regarded as owing some obligations to one another. But I do not believe there is any consensus view that private messages to friends must always, in all circumstances, be kept secret or protected. On the contrary, there can be no doubt in my view that members of society generally believe that there are circumstances in which the ties of friendship, and a person's right to respect for the privacy of their communications, are overridden by other, more important considerations. Put more shortly, the consensus view is that it can sometimes be right to "out" what a person has said privately, and to do so in or through the news media. This is particularly so where the person is a public figure and/or has taken a public position on an issue which is at odds with their private behaviour.
Recent history includes a number of instances of sexist or racist language or conduct on the part of prominent figures being exposed in this way, several in the football context. Such exposés often involve suggestions of an inconsistency between a public stance and private behaviour, though that is not always the case. These are matters of fact, and do not necessarily say a great deal about the standards of right-thinking people generally. In my view, however, it is the consensus of reasonable members of the public generally that where the private conduct of an individual in a public position contradicts that person's public stance it is usually legitimate to disclose the private facts.
The present case is one in which Mr Elliott held a public position, as a Kick It Out trustee, explicitly endorsing an anti-racism campaign. His private use of language towards Mr Rufus would be viewed by reasonable members of society generally in the same way that Mr Elliott himself regarded it: inconsistent with that public position. I am confident that the consensus of "right-thinking" people would be that the disclosure of Mr Elliott's unacceptable private behaviour to the Kick It Out campaign, and to any other anti-racism organisation in which he played a role, would be legitimate and proper. The importance of integrity in public life and the maintenance of high standards would be seen as amply justifying such disclosure, even though the message was private and not intended by Mr Elliott to have any wider audience.
Some would take the view that disclosure should have stopped there, and not included the general public via the pages of The Sun. I do not, however, consider that this position is one that holds sway as a general consensus view. I do not consider that right-thinking members of the public generally would disapprove of "blowing the whistle" publicly on the use of an unacceptable racially offensive term by Mr Elliott, a public figure in his capacity as a trustee of an anti-racist organisation; and that is so, even though the message was sent to another black man and the disclosure (according to the words complained of) revealed details of a private message. Moreover, as Mr Price pointed out, this point would not lend support to the "disloyalty" point which is at the centre of the argument for Mr Rufus. The disclosure of the private message would have been deplorably "disloyal" on Mr Rufus's argument, even if it had only been made to Kick It Out.
READER RESPONSES
Mr Rufus's pleaded claim for damages relied on the content of a variety of messages that appeared on social networks after the Press Release was published. Some of these condemned Mr Rufus as "cynical" or as having "let down" Mr Elliott. In his skeleton argument Mr Barnes relied on such messages, as he did before Dingemans J and the Court of Appeal, as evidence that his client's case that the words defamed him was reflected in the response of "some at least apparently reasonable readers and followers of the story". Dingemans J took no account of these messages: see his judgment at [34]. The Court of Appeal made no reference to the point. Mr Price argued, as he had before, that such material was irrelevant and inadmissible.
I would be inclined to agree with Mr Price. Assuming evidence on meaning is admissible in principle in an innuendo case (a proposition doubted by Sedley and Hooper LJJ in Baturina v Times Newspapers Ltd [2011] EWCA Civ 308, [2011] 1 WLR 1536 [56]-[57]), I would question whether the court should rely on hearsay evidence from individuals, often unidentified, in circumstances where it is almost bound to be unclear quite what the individuals have relied on in forming the views expressed. I do not, however, need to resolve the issue of principle because, having read the material relied on, I concluded for two main reasons that it gave me no help in deciding the issues in this case.
The first reason is that in this case, probably more than others, the factual situation is far too complex to enable the court to make any reliable assessment of whether the comments represent the meaning or inferences that would be drawn, or the viewpoint of, the hypothetical reasonable person who read the Press Release knowing only the three facts relied on from the Sun article. This point is illustrated by one pseudonymous reader comment relied on by Mr Rufus, which responded to an article in The Telegraph, saying of Mr Rufus "If you read the story his motives are clear". Which "story" is unclear.
The second reason is that the selection of comments is just that: selective. This is inevitable given its purpose, but I note that even amongst the material put in evidence by Mr Rufus there is some that expresses the views that the use of discriminatory language is unacceptable regardless of context and made Mr Elliott's position untenable; and that it is no bad thing for the 'yen' of the British public to be for zero tolerance of racial epithets used in anger. In my view, the only fair and practicable way to reach a conclusion on the issues in this case is to do so without regard to material of this kind, and that is what I have done. |
The Honourable Mrs Justice Swift :
BACKGROUND TO THE CLAIM
On 13 May 2009, Mrs Lucia Sharma, who was aged 37 years and the mother of two small children, died as a result of a subarachnoid haemorrhage (SAH) from an aneurysm of the right middle cerebral artery whilst a patient at St George's Hospital, London (SGH). An earlier SAH from the aneurysm had caused her to experience a severe headache and to collapse at home on 5 May 2009. On that date, she was admitted to East Surrey Hospital (ESH), where a CT scan was performed and reported to be normal. She underwent no further investigations and no explanation for her collapse was found. It was thought she might be suffering from viral meningitis and she was discharged home without further treatment.
The Consultant Neurologist at ESH had had reservations about the CT scan and had arranged for it to be reviewed by a Consultant Neuroradiologist. The review did not take place until the early morning of 12 May 2009, i.e. a week later. The Consultant Neuroradiologist who undertook the review recognised that the CT scan showed evidence of a "bleed" (i.e. a SAH). Immediately after the review, arrangements were made for Mrs Sharma to be taken back to ESH, from where it was intended that she should be transferred as soon as possible to the specialist Neurosurgical Unit at SGH. In the event, it was not until about midnight on 12 May 2009 that she arrived at SGH. She immediately suffered a series of seizures, caused by a further catastrophic bleed resulting from the aneurysm. She was nursed on a life support machine and intubated, but was confirmed to be brain dead at 12.45hrs on 13 May 2009.
The Defendant is the NHS Trust responsible for ESH. Claims for damages were brought against the Defendant on behalf of Mrs Sharma's estate and her dependants and by her husband for nervous shock. It was alleged that those responsible for interpreting the first CT scan had been negligent in failing to detect the first SAH. The Defendant admitted liability for Mrs Sharma's death and settled those claims. The Defendant also admitted that, but for its negligence, Mrs Sharma would probably have survived. There was some dispute as to whether she would have made a full recovery; that dispute is immaterial for the purposes of this claim.
THE CLAIM
The claim with which I am concerned is brought by Mrs Julie Shorter, Mrs Sharma's elder sister, as a "secondary victim". She was aware of her sister's collapse on 5 May 2009 and of what happened thereafter. In particular, she was present with Mrs Sharma at ESH following Mrs Sharma's admission there on the morning of 12 May and she was also at SGH from shortly after Mrs Sharma's admission there until after she was pronounced dead on 13 May.
In the Claimant's Particulars of Claim, it is alleged that the Defendant, its servants or agents, were negligent in that they:
"(a) failed to report the CT scan performed on the 5th May 2009 accurately until the 12th May 2009.
(b) failed to diagnose the subarachnoid haemorrhage until the 12th May 2009.
(c) discharged Mrs Sharma home on 7th May 2009 when the CT scan performed on the 5th May 2009 should have led to her urgent transfer to a neurosurgical centre for treatment for her subarachnoid haemorrhage."
In its Defence, the Defendant admits those allegations of negligence.
As to the causation of her death, it is contended that, had the CT scan been correctly reported at the outset and had Mrs Sharma been transferred promptly for treatment for her SHA, the probability is that she would have survived and recovered well. In the Defence, it is admitted that, but for the Defendant's negligence, Mrs Sharma would probably have survived. However, it is averred that she would probably have been left with some residual injury and would have remained at risk of delayed ischaemic deficit. For the purposes of this claim, as I have said, these averments are not relevant.
The Claimant's claim is based on her close relationship with Mrs Sharma. The Particulars of Claim allege at paragraph 25, that, as a result of the Defendant's negligence, the Claimant suffered a number of different insults which:
"constituted a seamless single horrendous event starting with the news of the serious deterioration in Mrs Sharma's condition on the morning of the 12th May 2009 and that she had suffered a subarachnoid haemorrhage which had gone undiagnosed and untreated and concluding with her death which resulted in the Claimant sustaining … nervous shock …".
The nervous shock referred to was alleged to be a Major Depressive Episode.
In its Defence, the Defendant denied that the relationship between the Claimant and Mrs Sharma was sufficiently proximate to give rise to a cause of action for the alleged nervous shock. It denied also that the allegations were sufficient, even if proved, to give rise to a cause of action for nervous shock. Furthermore, it denied that, even insofar as any of the matters alleged may be found to be capable of giving rise to a cause of action for alleged nervous shock, the same caused the alleged or any injury or injuries.
At paragraph 19 of its Defence, the Defendant denied, inter alia:
"that there was a seamless single horrendous event starting on the morning of the 12th May 2009, which the Claimant directly witnessed, and/or which the Claimant was directly and intimately involved in by direct sight or sound, as distinct from a gradual realisation over a prolonged period of the probable consequences for her sister of the events that commenced on 4th or 5th May 2009, sufficient to give rise to a cause of action for alleged nervous shock".
It is that issue with which this claim is primarily concerned.
THE TRIAL
The trial on liability and quantum in this case was heard on 18-20 November 2014. The Claimant was represented by Ms Charlotte Jones, and the Defendant by Mr Julian Matthews. I was grateful to both Counsel for their assistance.
I heard oral evidence from the Claimant, her husband, Mr Howard Shorter, and Mrs Sharma's widower, Mr Hitesh Sharma. The written evidence of Mr Ronald Stocker, father of the Claimant and Mrs Sharma, and of Ms Nathalie Pearson, a Senior Nursing Sister who had worked with the Claimant for many years, was uncontroversial and therefore they were not required to give oral evidence. The Defendant was content also for the written statement of Dr Anna Fletcher, the Claimant's general practitioner (GP) to be read, whilst making clear that, to the extent that she had given expert evidence, such evidence was not agreed.
The Defendant called oral evidence from Dr Jeffery Kimber, Consultant Neurologist at ESH and SGH, who was responsible for Mrs Sharma's care at ESH between 5 and 7 May 2009 and on 12 May. Dr Ferrigan, who was a Specialist Registrar at ESH and examined Mrs Sharma on 5 May and 12 May, was unable to give oral evidence by reason of the fact that she was pregnant with twins and deemed by her treating doctor to be at high risk. Her written evidence was admitted as hearsay evidence. Mrs Tunya Duggan and Ms Gillian Lees, who were Nurses on the Tilgate Ward at ESH during Mrs Sharma's time there on 12 May, provided witness statements which were based on manuscript accounts of the relevant events; those accounts had been written in August 2009. Both of them gave oral evidence.
Expert evidence was provided by two Consultant Neurosurgeons and two Consultant Psychiatrists. For the Claimant, Professor Paul Marks, Consultant Neurosurgeon at the General Infirmary at Leeds and Senior Lecturer in Neurosurgery at the University of Leeds, provided a Report dated 27 August 2013, in which he gave his opinion on the neurosurgical history which led to Mrs Sharma's catastrophic re-bleed and death. Mr Richard Mannion, Consultant Neurosurgeon at Spire Cambridge Lea Hospital, reported for the Defendant on 9 September 2013. On 4 August 2014, Professor Marks and Mr Mannion provided a Joint Statement setting out the results of a telephone discussion between them on 2 July 2014. They did not give oral evidence.
Dr Stuart Turner, a Consultant Psychiatrist, who is now in private practice and has considerable experience in the field of traumatic stress and post-traumatic stress disorder (PTSD), gave evidence for the Claimant. He interviewed her first on 12 October 2011 and provided a Report dealing with Condition and Prognosis. On 16 October 2013, he provided a further Report, dealing with the issue of Causation and based on the Statements of Case, the witness statements of the Claimant and Mr Sharma and the statements of the Defendant's witnesses, together with the Reports of the Consultant Neurosurgeons. Following a further interview with the Claimant on 29 January 2014, he provided a third Report dated 13 February 2014, again dealing with Condition and Prognosis.
Dr R. W. Latcham, Consultant Psychiatrist, gave evidence for the Defendant. Until March 2014, he had practised at the Hinchingbrooke Hospital, Huntingdon, specialising in depression, grief disorder and PTSD. He provided a Report on Causation, Condition and Prognosis dated November 2013 for the Defendant. That Report was based on an interview with the Claimant on 12 December 2013. He also provided a Supplementary Report dated April 2014.
The Consultant Psychiatrists had a Joint Discussion by telephone, during which they addressed an Agenda of issues agreed by the parties. Their responses to those issues were recorded in the Note of the Joint Discussion. They both gave oral evidence at the trial.
THE CLAIMANT'S PERSONAL SITUATION
Her relationship with her sister
The Claimant was born on 3 December 1961 and is now 53 years old. Her sister, Mrs Sharma, was born on 30 December 1971 and was aged 37 years at the time of her death on 13 May 2009. There are also three brothers. It is clear from the evidence that this was a close family. The two sisters were particularly close to each other, with the Claimant, as the older, taking a protective role.
By 1989, when Mrs Sharma was 18 and still living at home with her family, the Claimant had already been married for several years and had two young children. She and her husband and children lived near to the family home and spent a good deal of time there. However, in 1989, the Claimant's mother, Mrs Stocker, became ill with leukaemia. There then followed a difficult period of about four years, during which Mrs Stocker had frequent admissions to hospital. Her illness culminated in her sudden death in October 1993 when, having been admitted to hospital for a blood transfusion, she suffered a multi-organ failure and died the following day.
Mrs Stocker's illness and death were distressing events for all members of her family, but especially for Mrs Sharma who was still relatively young (21 at the time of her mother's death) and living at home with her bereaved father. During this time, the Claimant provided considerable support for her sister, helping her to cope with the grief and depression she suffered following her mother's death.
Mrs Sharma had known the man who was to become her husband, Mr Hitesh Sharma, from her teenage years. In 2000, she became pregnant with his child. The Claimant took on a maternal role, supporting and advising her sister during her pregnancy and, once her baby was born, helping with his care. Subsequently, the Claimant assisted her sister with the arrangements for her wedding. In the years that followed, the two sisters remained close. In April 2008, Mrs Sharma gave birth to her second child, who was born only a short time before the Claimant's first grandchild. The Claimant helped both Mrs Sharma and her own daughter with the care of their young children. She lived near to her sister, saw her regularly and spoke frequently to her on the telephone.
In the circumstances, it is clear that the relationship between the Claimant and Mrs Sharma was a close and loving one, almost like mother and daughter. In recognition of this fact, by the time of the trial the Defendant had accepted that, for the purposes of this claim, the Claimant was within the class of persons who are eligible to bring a claim as a secondary victim.
Her work and health
At the time of her sister's death, the Claimant was working full-time as a Senior Sister in the Neuro-intensive Care Unit at the Hurstwood Park Neurosurgical Centre. She had been employed in that highly specialised field of work for more than 25 years. She was involved in the clinical care of patients suffering from neurological problems resulting from a variety of causes. Significantly for the purposes of this case, a large proportion of the patients with whom she dealt suffered from SAH. The Claimant was, therefore, very familiar with the condition and its treatment and was well aware of the possible outcome if treatment did not prove successful.
As a Senior Sister, the Claimant also had a managerial role, supervising and training the nurses on the ward, keeping records, ordering supplies and carrying out other administrative tasks so as to ensure that the Unit ran smoothly and efficiently. However, much of her work involved looking after individual patients and dealing with their anxious, and often distressed, families.
It is clear from her medical records that the Claimant has suffered from asthma for many years. She has had periodic episodes of this condition, which have been treated with oral steroids. In 2008, she had time off work due to her asthma.
In late 1993, following the death of her mother, the Claimant had several weeks off work and was prescribed medication to assist her sleeping. However, she was able to return to full-time work thereafter.
In 1997 and 1999, the Claimant had episodes of sciatica, necessitating short periods off work. In 2000, her sciatica became severe. For several months, she was unable to work or to undertake normal daily activities and was in constant pain. As a result, she became depressed with considerable difficulty sleeping. In January 2001, the cause of her sciatica was diagnosed and, in March 2001, she underwent an epidural which relieved the problem. Shortly afterwards, she returned to work part-time. By the end of July 2001, she was back at work full-time and her anti-depressant medication was gradually tailed off. Subsequently, she had several further episodes of back pain, notably in 2003, 2004 and 2006.
Her family position
The Claimant's husband, Mr Howard Shorter, suffers from rheumatoid arthritis, for which he takes regular medication. In 2008, he took voluntary redundancy, as a result of which he and the Claimant had some financial worries and he became depressed. A note made by her GP in November 2008 refers to the fact that she was suffering from "stress ++", presumably as a result of those factors. However, her evidence is that, nevertheless, she was in a "good place" before her sister's death.
THE EVENTS OF 5 MAY 2009
It is clear from the evidence that Mrs Sharma was in general a fit and healthy woman. However, on 2 or 3 May 2009, she began to complain of a mild headache, together with some neck pain. She and her husband attributed her symptoms to tiredness. Her second son was very young and she was getting a limited amount of sleep.
On the morning of 5 May 2009, Mrs Sharma's headache worsened. She was alone at home with her baby and became worried that she might collapse. She contacted her husband, asking him to return home. She then rang a friend who lived nearby and asked her to come round. She also called the emergency services, explaining that she had a "terrible headache" and was afraid that she might collapse. Before anyone arrived, however, Mrs Sharma recalled that she had blacked out and fallen, striking her face and causing bleeding to her nose and bruising to her face. She had also been incontinent of urine. When her husband arrived home, she had regained consciousness, but was shocked and disorientated. She was still complaining of a severe headache, together with neck pain.
The ambulance attended and Mrs Sharma was taken to ESH. The notes kept by the Ambulance Service recorded that she was complaining of pain at the side of both eyes and in the occipital region of the skull radiating down her neck and across her shoulders.
Once at ESH, Mrs Sharma was admitted to the Accident and Emergency (A & E) Department. Mr Sharma related that his wife continued to complain of a severe headache, neck pain and stiffness and was feeling nauseous, retching and vomiting bile. At 14.45hrs, Mrs Sharma was examined by Dr Levick. He recorded that she had "felt headache really bad behind eyes" and thought that she might have lost consciousness since she had hit her face (which was grazed) and urinated. He estimated the severity of her pain at the time of his examination as "8/10" (i.e. at a high level in the range 1-10). He recorded that she had no photophobia or neck stiffness, but was feeling very nauseous, although she had not vomited. Dr Levick's impression was that she might have had a seizure. He arranged for blood tests to be taken but the results were not available for several hours. Meanwhile, by 16.50hrs, Mrs Sharma was still in pain and vomiting and Dr Levick prescribed Cyclizine and ordered that, if her pain persisted, she should be given Codeine. She had been treated with Paracetamol at 14.00hrs. Both Cyclizine and Codeine were given some time later.
Mrs Sharma was transferred to the Tilgate Ward where, at 20.00hrs, she was seen by Dr Laura Ferrigan, Specialist Registrar. Dr Ferrigan recorded that Mrs Sharma had on occasion suffered headaches in the past, but none as severe as on that day. At the time of her examination, Mrs Sharma's analgesia was not settling her headache. Dr Ferrigan found her to be "comfortable at rest", although she still had "3/10 frontal headache". She arranged for her to have a CT scan of her brain that evening. Mrs Sharma had the CT scan which was viewed by a both a Radiographer and a Radiologist and was interpreted as normal. Some time later that evening, Mr and Mrs Sharma were informed that it had shown no evidence of a bleed in the brain and that the doctors would be investigating other reasons for her headache. They were told that she should stay in hospital where further investigations would be carried out, including a lumbar puncture.
The Claimant had known nothing of these events until about 20.00hrs, when she received a message from her father to say that Mrs Sharma had been admitted to ESH with a "collapse". She rang ESH and spoke to her brother who told her that Mrs Sharma had gone for a CT scan. The Claimant recounted how, later, at about 22.00hrs, she spoke to Mr Sharma on the telephone. He told her that the CT scan had been "all clear". The Claimant was relieved and reassured by this news.
THE EVENTS OF 6 MAY 2009
A short time before these events, Mrs Sharma had realised that she was pregnant once again. She believed that she was eight weeks pregnant. The events of 5 May 2009 obviously gave rise to some concerns about her pregnancy and Dr Ferrigan had arranged for her to undergo a foetal heart scan on 6 May and that was done. Later that day, she and Mr Sharma were told that there was no evidence of a foetal heartbeat, but that a further scan would be undertaken the following week, in case the pregnancy was less advanced than Mrs Sharma believed. If that were the case, it may be that the foetal heartbeat had not been detected on 6 May 2009. The second scan was scheduled for 15 May 2009.
After the foetal heart scan, Dr Zachariah examined Mrs Sharma in the course of a ward round. He noted that she had an ongoing headache and pain at the back of her neck. His plan was for her to remain on regular analgesics. He did not consider that there was any indication for a lumbar puncture at that stage, but recorded, "However, if symptoms do not settle, consider". It appears that Mrs Sharma was examined by another doctor during the same ward round. At 10.10hrs, Dr Acharya noted that Mrs Sharma had described the pain she had suffered the previous day as "felt like someone had hit her over back of head with a mallet" and had "spread all way round". His suggested diagnoses were SAH, migraine or viral headache. He considered that she would probably benefit from investigation by means of a lumbar puncture and requested that she should be reviewed by Dr Kimber, Consultant Neurologist. Meanwhile, he prescribed Codeine as well as Paracetamol.
Dr Kimber examined Mrs Sharma some time afterwards. He expressed the view in his note of the examination that her history of the events of the previous day was unclear. He suggested that she may have suffered a seizure, but regarded it as unlikely. He noted that the CT scan had showed no haemorrhage but raised a query about the appearance of the temporal horns, observing "but I'm not a neuroradiologist!" He recorded his impression thus:
"- I do not think this is a case of VST (venous sinus thrombosis) or a SAH
I think bacterial meningitis is unlikely
Viral meningitis is a possibility
I would not perform LP (lumbar puncture) (pregnant) unless worse
Review CT in XRay meeting
I would observe 24hrs ?if improving home".
In his witness statement, Dr Kimber explained that his plan was to observe Mrs Sharma for 24 hours and to discharge her home if she improved. He also indicated that he had asked for the CT brain scan to be reviewed at the next weekly Neuroradiology Meeting, which was scheduled for 12 May 2009. The reason for that request is evident from an email sent by Dr Kimber on 15 May 2009. By that time, Mrs Sharma had died and the Defendant was in the process of carrying out a Serious Untoward Incident Investigation to examine the circumstances surrounding her death. Dr Kimber had been asked for details of his involvement in her case. In the email, he indicated that, at the time of his examination of Mrs Sharma on 6 May 2009 (he stated that he saw her on 7 May 2009, but that was plainly an error), he had looked at the CT brain scan imaging and thought that it did not "look right". He had therefore arranged to review the scan with Dr Wai-Yung Li, a Neuroradiologist, at the Meeting on 12 May 2009. It is regrettable that the review was delayed for so long.
Mr Sharma was present when Dr Kimber examined his wife. According to him, Dr Kimber told them that there was no evidence of a bleed in the brain and observed that Mrs Sharma's pain and stiffness were not severe compared with other patients with serious conditions. He told them that he did not consider that a lumbar puncture was necessary. According to Mr Sharma, Dr Kimber told Mrs Sharma that the headaches were probably due to a virus and would improve over the next few days. He told her that she could be discharged home the next day. Mr Sharma said that he and his wife were surprised that no further investigations were to be undertaken. They were concerned that they had been given no real explanation of what had caused her collapse and that it might happen again. However, they accepted what they were told and were relieved that there appeared to be nothing seriously amiss. It does not appear that they were told about Dr Kimber's lack of certainty about the accuracy of the CT brain scan report or the fact that it was to be reviewed.
The Claimant arrived at ESH whilst Dr Kimber was with Mr and Mrs Sharma. She recalled being told by Mrs Sharma that Dr Kimber had said that he considered she probably had viral meningitis. The Claimant was relieved and reassured since, given Mrs Sharma's symptoms, the diagnosis of viral meningitis appeared to her to make sense.
THE EVENTS OF 7-9 MAY 2009
In the note of a ward round, timed at 12.40hrs on 7 May 2009, Dr Christopher Sloan recorded that Mrs Sharma "still has headaches" but that they were "no worse". He authorised her discharge from ESH and directed that she was "to return if it (presumably the pain) gets worse". Shortly afterwards, she returned home. According to her husband, she was still experiencing a headache, neck pain and neck stiffness and was unusually lethargic. She was taking Codeine and Paracetamol for the pain, but the dosage was limited because of the possibility that, despite the foetal scan results, she might still be pregnant.
On 7, 8 and 9 May 2009, Mrs Sharma remained at home, spending much of her time resting in bed or on the sofa. Her headache continued and became worse if she was exposed to strong lighting. She was unable to care for her children, receiving assistance from her husband and other members of the family. Throughout this period, Mrs Sharma was hoping that, with time, the virus from which she believed she was suffering would settle and her symptoms would cease. Meanwhile, the Claimant kept in touch with her sister by telephone. She saw her briefly on 8 May, when she appeared a little better, although complaining of photophobia.
THE VISIT TO THE WALK-IN CENTRE ON 10 MAY 2009
Mr Sharma's evidence was that, by the early morning of 10 May 2009, which was a Sunday, his wife was beginning to become agitated because her headache was not improving, the medication was not controlling her pain and she felt nauseous. He said that she "knew something was not right". They called the out-of-hours GP. The note of that call, made by the GP, records, "pain in head severe". The GP advised Mrs Sharma to attend at the local Walk-In Centre. It appears that she was seen there at about 09.27hrs. The note of that attendance records the severity of her headache at that time as "5/10". It was further noted that she was advised to stop Codeine, continue her Paracetamol, and go to her GP for follow-up after a repeat foetal heart scan. The doctor examining her considered that she also required referral to a Neurologist for "investigation re ? seizure".
Mr Sharma's evidence was that the doctor at the Walk-In-Centre was very concerned about his wife's collapse and was surprised at the lack of follow-up investigations. The doctor felt that she had probably had an epileptic seizure. He advised her to investigate the possibility of bringing forward the date of the repeat foetal heart scan (then scheduled for 15 May 2009) and to make an urgent appointment with her GP in order to get stronger painkillers for her headaches. Meanwhile, he advised her to stop taking Codeine, which might be causing her nausea. She continued to take Ibuprofen and Paracetamol.
Following her attendance at the Walk-In-Centre, Mrs Sharma returned home. She rested and, by 11 May 2009, her nausea was less severe, although she still had the headaches, neck pain and stiffness and was very tired. The Claimant spoke to her on the telephone in the morning and evening of 11 May. Her evidence was that her sister appeared brighter and reported that she had managed to bathe her son, which was an improvement.
THE EVENTS OF 12 MAY 2009
The telephone call from Dr Kimber
Mr Sharma's evidence was that, by the morning of 12 May 2009, "things took a sudden turn for the worse". His wife had told him during the night that her headache was stronger and her neck pain more intense. In the morning, she attempted to get up and help the children to get washed and dressed but had to return to bed because she felt nauseous and sick. Her headache was "getting worse and worse". He described her rolling her head on the pillow, trying unsuccessfully to get comfortable. He said she was crying with the pain, whilst retching. He was worried at her condition and telephoned their GP at about 09.00hrs to tell him of the urgent need for the cause of her collapse and head pain to be properly investigated.
As Mr Sharma's conversation with the GP was coming to a conclusion, he received a call from Dr Kimber at ESH. The Hospital records show that call as having been made at 09.30hrs. Mr Sharma's evidence was that Dr Kimber informed him that a Neuroradiologist (Dr Li) from another hospital had visited ESH and reviewed Mrs Sharma's CT scan. She had found evidence of a "small bleed" on the CT scan. It subsequently transpired that the "small bleed" was a Grade 1 SAH and that, if promptly and properly treated, the prognosis was likely to have been good. Dr Kimber advised Mr Sharma that he should take his wife to the ESH immediately.
Subsequent events
Now that it was known that the CT scan had showed a bleed, it was clear to Dr Kimber that Mrs Sharma needed to be in a Neurosurgical Unit where she could receive appropriate investigation and treatment. There was no such Unit at the ESH. Accordingly, Dr Kimber telephoned the Neurosurgical Registrar at the Atkinson Morley Wing of SGH with responsibility for admissions, in order to make arrangements for Mrs Sharma to be transferred from ESH to the Neurosurgical Unit at SGH. However, he was told that no such transfer would be possible until the Registrar at SGH had reviewed the CT scan taken at ESH and had authorised Mrs Sharma's admission to SGH. The system for linking CT imaging between the two Hospitals electronically was out of order. Dr Kimber therefore arranged to deliver a hard copy of the CT images on CD when he attended SGH later that afternoon. Meanwhile, Mrs Sharma would have to be cared for in the ESH. The delay in providing the CT imaging meant that a considerable period of time elapsed before Mrs Sharma was transferred to SGH.
Dr Kimber noted in Mrs Sharma's Hospital records that she had probably suffered a SAH and that, on her arrival at ESH, she should be started on Nimodipine, a medication used to treat SAH. He arranged for her to be admitted to the Tilgate Ward, where she had been treated the previous week. However, as he explained in his oral evidence, the practices at ESH made it necessary for her to be admitted to the A & E Department before being transferred from there to the Tilgate Ward.
Mr Sharma's telephone call to the Claimant
Mr Sharma's evidence was that, following Dr Kimber's telephone call, he was concerned that there may be something seriously wrong with his wife, although he did not understand the full implications of the presence of a "bleed". He was angry that it appeared that she had not been properly looked after and was in such a poor state. His evidence was that she was "in more and more pain", holding her head, telling him how bad her pain was and retching and rolling around with her head on the pillow. He described her state as worse than during the previous week.
Meanwhile, the priority was to get Mrs Sharma to ESH. Mr Sharma telephoned her father, Mr Stocker, asking him and his partner to come round and look after the Sharmas' children. He also telephoned the Claimant and told her what Dr Kimber had said. In his witness statement, he was clear that he did not tell her that Mrs Sharma's condition had worsened markedly. He explained that he had not done so because he was in a rush to get to ESH and was anxious to keep the conversation brief. By the time he gave his oral evidence, however, he had changed his mind. He said that he had mentioned to the Claimant that Mrs Sharma was in a worse state that day. His explanation for his change of heart was that he had remembered what had actually happened whilst listening to the Claimant's evidence during the trial.
The Claimant's evidence was that she was at work when she received Mr Sharma's call. She recalled that it was at about 10.30-10.45hrs although, if the Hospital's timing of Dr Kimber's call to Mr Sharma was correct, it must have been earlier. Mr Sharma told her that the CT scan had been reviewed, and showed a small bleed. She was adamant that he had also told her that Mrs Sharma's headache had "suddenly got a lot worse that morning". Although she did not mention the fact in her witness statement, she was also adamant in her oral evidence that he had told her that, as a result of Mrs Sharma's worsening condition, he had telephoned her GP. The Claimant described Mr Sharma as "really panicked". She said that she tried to reassure him but, in reality, she was in a state of panic herself. She knew that the "bleed" might be a SAH or, if not, a bleed from a tumour. Her own experience of nursing patients with SAH meant that she was fully aware of the possibility of a re-bleed if the original bleed was not properly and promptly treated. The delay of seven days in identifying the bleed was therefore worrying. As the Claimant put it in her witness statement, she "knew she (Mrs Sharma) was in the danger zone". She said that she was aware also that the fact that she knew that Mrs Sharma's condition had worsened made her worry even more acute. The Claimant described herself at this time as "really panicky" and "really frightened".
The Claimant related how she got authorisation to leave work in order to go to ESH to be with her sister. She was fully aware of the urgent need for Mrs Sharma to be transferred to a Neurosurgical Unit and that there was no such Unit at ESH. However, there was a Neurosurgical Unit at Hurstwood Park, the Hospital where she worked. So the Claimant went to the Neurological Department at Hurstwood Park, where she spoke to a Neuroradiologist and Nursing Sister about Mrs Sharma's condition. They suggested that she should get a copy of the CT scan from the ESH and bring it over to Hurstwood Park, where, if it did indeed show a bleed, Mrs Sharma could be accommodated and treated.
The Sharmas' arrival at the Accident and Emergency Department
After his conversation with the Claimant, Mr Sharma drove his wife to ESH. There is some uncertainty about the time of their arrival. Mr Sharma's recollection was that they got to the A & E Department at about 10.45hrs. Given the fact that the Hospital notes record Dr Kimber's call as having been at 09.30hrs and the drive from the Sharmas' home to the Hospital would have taken about 30 minutes, that seems realistic. It would also be reasonably consistent with the timing of the completion of the Nurse Assessment Form for Emergencies which was recorded at 10.35hrs. It seems to me that it is probable that they arrived at about 10.30hrs. That is far more likely to be correct than the stated arrival time of 11.30hrs which appears on another Hospital document entitled "Patient Information".
Mrs Sharma's condition
There was a significant issue between the parties as to Mrs Sharma's condition at the time of her arrival, and during her time in the A & E Department at ESH. Mr Sharma's evidence was that his wife was in considerable pain. Once in the A & E Department, she was placed on a trolley, where she was writhing around, trying unsuccessfully to get comfortable and was weeping. She was complaining of feeling nauseous and vomited. Mr Sharma said that he asked the Nurses whether she could have more painkillers but was told that, whilst there remained a possibility that she was still pregnant, she could have only a limited dosage. Thus, it would be necessary to await the results of the repeat foetal heart scan which would ascertain whether the foetus remained viable.
Once in the A & E Department, Mrs Sharma was assessed by a Nurse. The relevant record is timed at 10.35hrs. It refers to the fact that she was suffering from a "recurrent headache". She was described as "awake and alert". There is no indication in that document that the Nurse was informed that her condition had become markedly worse that day or that she was suffering from very severe pain.
A little later, a clinical assessment of Mrs Sharma was carried out by Dr Ferrigan, who had examined her on 5 May. The record of the assessment was timed at 12.00hrs, whilst Mrs Sharma was still in the A & E Department. Dr Ferrigan recorded Mrs Sharma's condition thus:
"- continues to feel unwell.
ongoing R (right) headache
Nausea. 0 (nil) photophobia (only when headache bad)
No focal weakness/speech/swallow deficits since
Bowels loose nil other GI (gastrointestinal) or systematic upset
Nil urinary symptoms …".
Dr Ferrigan recorded Mrs Sharma's general appearance as "comfortable" and her headache as being of "3/10 severity". In evidence, she said that Mrs Sharma had not appeared to be in severe pain at the time of the assessment; nor was she particularly distressed, upset or emotionally labile. She explained that it was her normal practice to ask patients to rate the severity of their pain on a scale of between one and ten, with one being hardly any pain at all and ten being the worst pain imaginable. Mrs Sharma had scored her pain as 3/10, which Dr Ferrigan had felt was consistent with her presentation. On examining Mrs Sharma, her findings were within normal limits. In particular, she recorded that there was no neck stiffness or photophobia at the time of her examination. She said that she would have asked whether Mrs Sharma had vomited and, if so, would have recorded the fact. No such record was noted, although she recalled that Mrs Sharma had complained of feeling nauseous. Her impression was that Mrs Sharma had suffered a SAH with ongoing right-sided headache. Dr Ferrigan took steps to expedite the repeat foetal heart scan and to arrange for blood tests to be conducted. Her plan was that, pending her transfer to SGH, Mrs Sharma's pain was to be controlled, with regular analgesia. She prescribed Co-codamol (a combination of Codeine and Paracetamol). It does not appear that Dr Ferrigan was aware of Dr Kimber's previous direction (given more than two hours previously) that Mrs Sharma should be given Nimodipine. It is not referred to in her notes. Co-codamol was given at 12.15hrs.
The point made by the Defendant was that the description of Mrs Sharma's condition contained in the nursing and clinical records was inconsistent with the account given by her husband and other members of the family. Reliance was placed on records which showed that Mrs Sharma's heart rate and respiratory rate were not at a level to be expected for someone who was in severe pain and distress. It was also pointed out that the records contain no reference to her condition having worsened markedly over the previous 24 hours. Mr Sharma's evidence was that, once he and his wife arrived at the ESH, they were not focussing on the extent to which her condition had worsened. They were primarily concerned about the news that there had been a "bleed". He also observed that the severity of his wife's headache was fluctuating all the time so that, when examined by Dr Ferrigan, she may have been in less pain than at other times. Overall, however, he was adamant that she was worse than previously.
The Claimant's arrival at the Accident and Emergency Department.
Meanwhile, the Claimant had left Hurstwood Park Hospital. She was panicky and did not consider that she was in a fit state to drive herself, so she returned home, from where her husband drove her to ESH. Her recollection is that they may have arrived at about 11.15hrs, although she was uncertain in her oral evidence. It appears that they probably arrived shortly after (or, failing that, shortly before) Mrs Sharma was seen by Dr Ferrigan at 12.00hrs.
The Claimant described how, when she arrived, she saw her sister rolling around on a trolley, crying with pain, clutching her head and saying that she was in agony. She considered that the degree of pain from which her sister was suffering was wholly inconsistent with the pain score of 3/10 recorded by Dr Ferrigan at 12.00hrs. That score bore no relation to what she saw. The Claimant said that she was very frightened by what she saw - which was unexpected - and by the fact that her sister was in a worse condition than when she had last seen her. The Claimant said that, despite her concern, however, she tried to keep calm for the sake of Mr and Mrs Sharma. The Claimant's husband, Mr Shorter, described Mrs Sharma as being in a great deal of pain and crying. He realised that his wife was very worried about her sister.
The Claimant spoke to a doctor (presumably Dr Ferrigan) in an attempt to get some information about Mrs Sharma's condition. She was told that her sister had had a subarachnoid bleed. Given her own professional experience, she realised that the delay in treating Mrs Sharma gave rise to a risk that she might suffer a re-bleed. Her evidence was that she realised that the fact that Mrs Sharma's condition had worsened made the risk even greater. She was told that Mrs Sharma would shortly be taken up to a Ward and would be examined by a Neurologist.
Transfer to the Tilgate Ward.
Mrs Sharma was transferred from the A & E Department to the Tilgate Ward at approximately 14.00hrs. One of the Nurses on the ward, Mrs Tunya Duggan (then Miss MacRobert-Smith), recorded her arrival in the Ward and the plan for her management. She noted that Mrs Sharma should be started on Nimodipine. It was, by this time, at least four hours since Dr Kimber had directed its use.
Shortly after Mrs Sharma's arrival in the Tilgate Ward, Dr Kimber visited her. His evidence was that she was alert and speaking although complaining of a headache, with some photophobia, and was lying on the bed with her eyes closed. She did not appear to him to be in severe pain.
Dr Kimber spoke to Mr Sharma and the Claimant. He explained to them that the review of the CT scan had shown evidence of a SAH. Mr Sharma's recollection was that Dr Kimber referred to the haemorrhage as a "subtle bleed" which "anyone could have missed". He told them that Mrs Sharma needed to be transferred to the specialist Neurosurgical Unit at SGH; he was awaiting confirmation that a bed was available, after which Mrs Sharma would be transferred there by ambulance. The Claimant informed him of the option of a transfer to Hurstwood Park Hospital, but Dr Kimber rejected that suggestion and informed her that the transfer would be to SGH. The Claimant said that she was frustrated at this because she well understood how urgent it was for the transfer to take place. Meanwhile, she said, her sister continued to be in severe pain and was also very frightened. The Claimant did her best to reassure her.
Dr Kimber then left ESH for SGH, taking a CD of the CT imaging with him. Before his departure, he made an untimed note in the clinical records, recording that Nimodipine should be started. He noted also that Mrs Sharma was to undergo a repeat foetal heart scan.
At some time during the afternoon, Mrs Sharma had the scan. It seems from the image of the scan in the Hospital records that it was probably done at 14.52hrs. The scan revealed no evidence of a foetal heartbeat and thus confirmed that a miscarriage had occurred. After that was known, Mrs Sharma was able to receive a stronger analgesic, namely Tramadol. There is some uncertainty as to whether, in fact, the Tramadol was given before or after the scan. The Hospital records appear to show that Tramadol was first administered at 14.40hrs, i.e. before the scan. It may be that, in fact, it was obtained for use at that time and administered immediately after the scan. According to the family, after she was given Tramadol, Mrs Sharma's pain lessened and she became calmer.
Mrs Duggan, assisted by Ms Gillian Lees, the Ward Sister, wheeled Mrs Sharma on her bed to the ultrasound scanner. Mrs Duggan described how Mrs Sharma chatted with them; her impression was that she was relaxed and that her head pain was under control even before the Tramadol. Ms Lees' recollection was that Mrs Sharma did not complain of severe pain whilst being wheeled to the scanner.
Both the Nurses recalled Mrs Sharma appearing relaxed during the afternoon. Ms Lees said that she had remained stable and had not given any cause for concern. She described Mrs Sharma and her relatives as "relaxed, chatty and making jokes". She did, however, recall that, at some point, Mrs Sharma had requested further analgesia and that Tramadol had been administered, in addition to the Co-codamol she was already having. Mrs Duggan's evidence was similar. She said that, during the afternoon, Mrs Sharma was sitting upright in bed and appeared relaxed. Members of her family (including her husband, the Claimant and Mr Shorter) were with her and, during the afternoon, Mrs Sharma was speaking on her mobile phone, discussing childcare arrangements with other members of the family.
The Claimant and Mr Sharma did not consider that Mrs Sharma had been "relaxed", as Mrs Duggan and Ms Lees suggested. They explained that, when Mr and Mrs Sharma were told that Mrs Sharma had suffered a miscarriage, it was, naturally, a source of regret to the couple. However, they related how Mrs Sharma had emphasised that her priority must be to get herself well for the sake of her remaining two children. Meanwhile, the Claimant and Mr Sharma were concentrating on reassuring Mrs Sharma and preventing her from becoming unduly distressed.
As time went on, Mrs Sharma's family – in particular the Claimant – became increasingly concerned at the fact that the transfer to SGH was not happening. They tried to keep Mrs Sharma calm and cheerful. At some point, they were told that she would soon be given Nimodipine. Despite the fact that Dr Kimber had ordered the prescription at about 9.30am, it had still not been administered.
Mr and Mrs Sharma's sons were being cared for by Mrs Sharma's father and his partner. However, Mrs Sharma was concerned about the babysitting arrangements overnight. She asked the Claimant to care for her younger son and, with reluctance, the Claimant and her husband went back to their home, leaving Mrs Sharma and her husband at the ESH, together with other members of the family. At about 17.00hrs, when she left, the Claimant was told that the nursing staff were waiting for the Nimodipine to come down from the pharmacy, after which it would be administered immediately. She was also told that Mrs Sharma would be leaving for SGH very shortly.
THE EVENTS OF THE NIGHT OF 12/13 MAY 2009
The wait at ESH Hospital
According to the accounts given by Mrs Duggan and Ms Lees, in the early evening, there was a telephone call from SGH to say that Mrs Sharma could be transferred there. Ms Lees then asked the Senior House Officer on duty, Dr Ben Warner, whether Mrs Sharma should travel "with a blue light". Dr Warner indicated that that was not necessary. Mrs Sharma was still awaiting transfer when Mrs Duggan and Ms Lees handed over to the night staff.
Mr Sharma described how he and his wife waited for her transfer to SGH. He was becoming increasingly concerned and frustrated at the delay. Shortly after the Claimant left the Hospital, he managed to get hold of the telephone number of the Neurosurgical Unit at SGH. He telephoned the Unit several times to enquire what was happening, but got no satisfactory response from either the staff there or from the staff at ESH. He got the impression that there was "no sense of importance or urgency at all". Meanwhile, Mrs Sharma was in less pain but, as he described it, "beside herself with worry".
The Claimant's telephone call with Mrs Sharma
Once at home, the Claimant waited for news from Mr and Mrs Sharma. Mr Shorter described how the Claimant was "really restless and anxious". She heard nothing until 22.00hrs, when she spoke to Mrs Sharma, who informed her that she was still at ESH. The Claimant's evidence was that she was most alarmed at this news. She described herself as "terrified", although she remained outwardly calm in an attempt to reassure Mrs Sharma. Her worry was that Mrs Sharma was not yet under the care of the specialist staff she required. She spoke to Mr Sharma and emphasised the need for him to chase up the ESH staff to ensure that his wife was transferred as soon as possible. This he agreed to do.
The Claimant's evidence was that, during the same conversation, Mrs Sharma told her that she had not yet had any Nimodipine. However, Mr Sharma's recollection was that Mrs Sharma was given Nimodipine during the evening and that this had happened because of the Claimant's enquiry about it just before she left the Hospital. Mr Sharma's recollection would be consistent with the Hospital records which state that Nimodipine was administered at 18.00hrs on 12 May.
The first telephone call from Mr Sharma
At about midnight, the Claimant received a call from Mr Sharma. He told her that he and Mrs Sharma had recently arrived at SGH, but that Mrs Sharma had suffered a seizure immediately on arrival. She had been given medication, had regained consciousness and been able to talk a little. The doctors wanted her to rest and she was now sleeping. The Claimant's evidence was that Mr Sharma was "in a real state of panic". She herself was very concerned to hear about the seizure, although she was relieved to hear that her sister was now in a specialist Unit where she would receive expert care. Moreover, the fact that Mrs Sharma had come round and was sleeping suggested to her that she had suffered a fit, rather than a re-bleed. Nevertheless, the possibility of a re-bleed remained. Mr Shorter described how the Claimant had "a look of fright" on her face as she took the telephone call and how she was extremely anxious, as well as angry that there had been such a delay in transferring Mrs Sharma to SGH.
Events after the first telephone call
In his witness statement, Mr Sharma described in detail the terrifying and distressing events which occurred after his wife's admission to SGH. He described the first seizure and how, after a short period of respite, Mrs Sharma began to have further seizures. His description of the effects of those seizures upon her, the attempts by the medical staff to treat her and his own feelings of distress, helplessness and confusion at what was happening was very moving. It was a dreadful experience for anyone to have to bear. He decided that he would telephone the Claimant to tell her what was happening and to ask for her help. He described himself as "in a total state of panic on the phone".
The second telephone call from Mr Sharma
The Claimant described how Mr Sharma telephoned her. As soon as the telephone rang she was, she said, "immediately struck with panic" and very frightened. He told her that Mrs Sharma had "started fitting" and that her pulse rate was "sky high". He was in what she described as "a state of confusion and panic". She described the telephone call as "a really frightening moment". The Claimant told Mr Sharma that she would telephone the nursing staff at SGH and attempt to find out exactly what was happening.
The Claimant then spoke to the Sister on the Surgical Ward at SGH. She explained her own clinical background and asked the Sister to tell her what was happening. The Sister told her that Mrs Sharma had suffered another fit and had just been taken to the Intensive Therapy Unit (ITU) where she would be intubated and would have a further CT scan. The Claimant asked whether the Sister believed that Mrs Sharma had suffered a re-bleed, whereupon the Sister replied, "Yes, I think so". The Claimant's evidence was that, at that moment, she knew that "this was really, really bad" and that they were now "in very dangerous territory". She had seen some patients recover after a re-bleed, but was well aware that, after a second bleed, the prognosis was very poor. She was, she said, "absolutely terrified".
After telephoning her father and brothers, the Claimant was driven to SGH by her husband. Mr Shorter's evidence was that, after the telephone call, he knew that "this was far worse than anything that had happened up to that point" because of the fear in his wife's eyes and in her voice. She was "shaky and struck with panic". The Claimant's evidence was that she was "terrified" on the journey to SGH. She said that she still had some hope; she still thought that her sister might be OK, that "they might be able to save her". She said that she still had "a glimmer of hope".
Events at St George's Hospital
The precise sequence of events immediately after the Claimant's arrival at SGH assumed considerable significance at trial. It is important therefore to examine the evidence in some detail.
The Claimant's evidence
In her witness statement, the Claimant did not make clear her precise movements on reaching SGH. She referred to the fact that her father had already arrived, but did not indicate whether she had actually seen him at that stage. The inference was that she had gone directly to the ITU. She described events as follows:
"As soon as I walked into the ward and saw Lucia in the ITU room, I looked at her and I knew that she was in a critical state. It was that sight which made it real and it hit me like a sledgehammer that we'd probably lost her. In that moment, I felt sick and horrified. It was devastating. I looked at the monitors, saw her lying there on the life-support machine, being intubated and attached to all the tubes and equipment. For me, seeing someone lying there in that condition is not the same as it is for someone who does not have medical knowledge of these patients – I knew what it meant and it hit me like a blow. Hitesh (Mr Sharma) looked at me and the colour had completely drained from his face. He was in total shock.
Although I have seen many people in that condition in ITU over the course of my career, this sight was horrific because I have seen so many like it and now it was my own sister, and it should not have been. I knew immediately what the implications were of the situation, so when I saw her lying in that bed it hit me in that moment how bad this truly was, and it was like my whole world came apart. It was not a case of the doctors breaking news to me gently about Lucia's prognosis, which happens with people who do not know the medical implications of the situation. I knew there and then that we had probably lost her."
In oral evidence, the Claimant was asked whether she had seen Mr Sharma in the day room before going into the ITU. It was pointed out to her in cross-examination that both her husband and Mr Sharma had said in their witness statements that she and her husband had first gone to see Mr Sharma in the day room. The Claimant denied this, saying that she now recalled that she had gone to put some bags in the day room (she had not mentioned that in her witness statement), but that she had not seen Mr Sharma at that stage and had not been told by him that her sister had "gone". She was certain that it was only when she saw Mr Sharma's face as she walked into the ITU that the reality came to her.
In her witness statement the Claimant went on to say that, when she arrived, a doctor was there (presumably in the ITU) and said that he would speak to her, Mr Sharma and her husband in a separate room. He then confirmed what she had already realised, namely that her sister had suffered a "massive re-bleed" and nothing further could be done for her. From her own experience of dealing with families in similar situations, the Claimant said that it was clear to her that the doctor was implicitly saying that her sister would not survive.
The Claimant's evidence was that, shortly after this discussion, her brothers and their wives arrived. Mrs Sharma was unconscious throughout, being kept alive by the machines to which she was attached. Members of the family took it in turns to sit in her room so that they could have some time alone with her.
Mr Sharma's evidence
In his witness statement, Mr Sharma said that, after his second telephone call to the Claimant, the first member of the family to arrive at SGH was the Claimant's father, Mr Stocker. A Senior Registrar came to speak to the two of them in what he described as the "side room" (i.e. in an area designated for the use of families, referred to in the Hospital records as the "day room"). He told them that Mrs Sharma had suffered a re-bleed and was "too far gone" this time. Mr Sharma recalled that he (i.e. Mr Sharma) had said to his father-in-law, "we've lost her". He went on to describe how, shortly afterwards, the Claimant and her husband arrived and, after that, the Claimant's brothers and their wives. Mr Sharma described how he told the family members that Mrs Sharma "had gone" and that they had "lost her". All the family were, he said, in "total shock".
In his oral evidence, Mr Sharma was uncertain about where he had been when the Claimant arrived at SGH. He said that he remembered Mr Stocker arriving and that the two of them waited for the Claimant. He said that he did have a recollection of the Claimant "coming to the ITU" after he had gone there with the Nursing Sister. However, he explained that he could not remember events "minute by minute". He said, "Being with Lucia is what I remember and people turning up". When asked in re-examination whether he had any recollection of the Claimant arriving and where he was at that time, he said, "I was by the bedside. I clearly remember that". That was, of course, wholly inconsistent with the account given in his witness statement.
Mr Sharma went on to describe how a doctor came to speak to the family. He told them that Mrs Sharma was in the ITU and on a life support machine. He prepared them for what she would look like, with the tubes attached to her. He explained that she had suffered a "devastating re-bleed" in her brain and that tests would be needed to see how much brain damage she had suffered. Mr Sharma said that it was clear that the doctor did not expect Mrs Sharma to recover. He thought that, at that point, questions were asked by the family about what had gone wrong, to which the doctor had responded that "it does appear that a window of opportunity has been missed". Mr Sharma said that members of the family then took it in turns to go and see Mrs Sharma, so that they could have some time alone with her. It may well be that Mr Sharma was mistaken about the timing of this conversation and that, as the Claimant believed, the family asked questions about what had happened when speaking to a doctor later on the morning of 13 May 2009.
Mr Shorter's evidence
In his witness statement, Mr Shorter described how, after he and the Claimant arrived at SGH, they went first to find Mr Sharma. He was in a state of utter shock. Mr Shorter said that he stayed with Mr Sharma whilst the Claimant went to see Mrs Sharma. Soon afterwards, Mr Shorter went into the ITU to join his wife. He said that he remembered the look of "total devastation" on the Claimant's face. She later told him that she had known, even before the brain stem tests were carried out, that her sister was brain dead.
Hospital records
The Hospital records include a document recording details of communications between members of the Hospital staff and members of the family. The document relates that Mrs Sharma was taken to the ITU, accompanied by the "crash team" and an anaesthetist. It records that Mr Sharma had been told of the results of the repeat CT scan and of the fact that his wife's prognosis was "not very good". It was noted that Mr Sharma had then requested to see his wife, but staff at the ITU had asked him to wait 15 minutes before doing so. Subsequently, it was recorded that Mr Sharma had told the Nurse who had remained with him in the day room that he would wait until Mrs Sharma's sister (i.e. the Claimant) arrived before visiting Mrs Sharma. However, he had subsequently changed his mind and went to visit Mrs Sharma. The Nurse accompanied him and remained with him in the ITU. Mr Sharma then went out of the building to smoke. The records indicated that, shortly afterwards, Mr Stocker arrived. The notes suggest that he and Mr Sharma remained together in the day room, waiting for the Claimant to arrive. No further information is given about the whereabouts of Mr Sharma or other members of the family.
Later on the morning of 13 May 2009
In her witness statement, the Claimant described how, at around 08.00hrs-09.00hrs on 13 May, the doctors, consultants and other clinicians working in the ITU did their rounds. They spoke to Mrs Sharma's family and told them that they were planning to undertake brain stem tests. They made clear that it was unlikely that the tests would disclose any hope of her survival.
The Hospital record of communications ends with an account of a meeting between two doctors and members of Mrs Sharma's family which is timed as having occurred at 10.00hrs on 13 May 2009. It relates that the family were told that the second haemorrhage had probably led to irreversible brain damage. The family agreed that brain stem tests should be carried out.
The family waited whilst the tests were carried out. The doctors then returned and confirmed that Mrs Sharma was "brain stem dead". They explained what would happen next, i.e. that they would switch off the life support machine, remove the ventilation tube and cease all other forms of treatment. Those were procedures with which the Claimant was only too familiar in the course of her work. The family did not choose to witness those procedures, but were soon told that Mrs Sharma was dead.
In her witness statement, the Claimant recalled a conversation which she recollected having had with the doctors shortly after her sister had died. She had expressed anger at the fact that the original haemorrhage had been missed and at the delay in obtaining a second opinion on the CT scan. She recalled that one of the doctors had responded, "It does appear that there has been a window of opportunity that has been missed". She understood him to mean that "something had gone wrong". In her witness statement, she observed:
"Normally, in this profession, the doctors will stick together, but there was nothing he could say to justify what had happened".
The Claimant described how, after this discussion, members of the family stayed with Mrs Sharma for a few more hours, going through the process of saying goodbye. Mr Sharma gave a similar account of events during this period. He also stated:
"We were asked if we wanted to have a Coroner involved but we said no to that as we knew it was the subarachnoid haemorrhage which killed her."
The Claimant summed up her feelings about her sister's death thus:
"I was absolutely heartbroken. I thought that losing my mum was terrible and in difficult circumstances, but that was nothing compared with this. In my mum's case, she was relatively young but not to the extent that Lucia was, and she had been fighting a protracted illness for a long period of time. As far as Lucia was concerned, she was so young, fit and healthy, and her death left me shocked, heartbroken and devastated. She had so much to live for. She had Hitesh and her two small boys and she was not given a chance. I felt that she had been failed at every step of the way. I deal with people who have family members in this situation on a daily basis at work, but you never expect it to happen to you. When I learned that Lucia was a good grade subarachnoid when she had the initial bleed, i.e. Grade 1, I had the knowledge that such patients can make good recovery with the right treatment. I have looked after so many Grade 1 subarachnoid haemorrhages throughout my career and they can do fantastically well with the right treatment, and Lucia did not get that chance. The knowledge that she should have survived has been incredibly hard to bear."
Nobody could fail to have the deepest sympathy for the Claimant and the other members of her family who have suffered the distress described by the Claimant in that moving passage.
THE CLAIMANT'S MEDICAL CONDITION FOLLOWING MRS SHARMA'S DEATH
The Claimant consulted her GP immediately after her sister's death. He certified her as unfit for work for a total of six weeks, during which time the GP notes described her as "absolutely devastated", "shattered" and "still in absolute shock". She returned to work on 30 June 2009. She had a further two weeks off work in August 2009. By September 2009, she was said to be "struggling" and was put on anti-depressant medication. She underwent counselling at work, the notes of which record, in October 2009, reference to "terrible memories and to flashbacks". She was also experiencing feelings of anger. Thereafter, she appears to have improved somewhat, although she continued to take anti-depressants and she had a flare-up of her asthma in March 2010. In October 2010, the Claimant's GP recorded that she was depressed although, at that time, her main concern related to her husband's moods.
In May 2011, it was the second anniversary of Mrs Sharma's death. That event, coupled with Mr Sharma's ongoing litigation in respect of his wife's death and problems with her husband, appear to have made the Claimant very low. Her dosage of anti-depressant medication was increased and, in June 2011, she was again certified as unfit for work by reason of bereavement and depression. She was tired, not sleeping and tearful. She was undergoing further treatment. By August, 2011, she was able to return to work on a graduated basis.
When Dr Turner examined the Claimant in October 2011, he noted that she was "extremely distressed" when speaking of the circumstances of her sister's death. She described herself as feeling miserable for most of the day about three or four days a week. She had a marked loss of enjoyment and of sleep. Her concentration had improved over the previous months although she was still finding it difficult to focus and experienced marked fatigue. She reported how she blamed herself for accepting without question the initial reassurances about the first CT scan. She said that she had found it hard to do clinical work since her sister's death; when she was at work and a patient was ventilated, it reminded her of Mrs Sharma's death. However, she said she had no problems with nightmares and does not appear to have mentioned any continuing flashbacks. The only reference to "flashbacks" was in the GP note of 30 October 2009.
Dr Turner considered that the Claimant was suffering from a Major Depressive Episode. He believed that, although symptom severity had fluctuated - worsening, for example, at the time of anniversaries of the death -the disorder had probably been present continuously ever since Mrs Sharma's death. He pointed out that, in September 2009, the Claimant had scored within the range of likely major depression on a Hospital Anxiety and Depressive Scale (HS-D) Questionnaire and, at other times, her symptoms had the characteristics of Major Depression.
Dr Turner noted that the Claimant had had anti-depressant medication and some psychological treatment, including Eye Movement Desensitisation and Reprocessing (EMDR). He took the view that the therapy had been insufficiently energetic and recommended a referral for further psychological treatment by an experienced Clinical Psychologist. He also recommended more active management of her drug treatment. As to the prognosis, Dr Turner considered that there was a long-term risk of further depressive episodes. He regarded her past periods of absence from work as entirely reasonable. He described her employment position as at October 2011 as "precarious". She was back at work and coming to the end of a phasing process. He considered that "it would not take very much to push her to the point that she needed to take sickness absence again."
Dr Latcham saw the Claimant on 12 December 2012. His Report of November 2013 was based on that interview and also on the Statements of Case, the witness statements in the case and the Reports of the Consultant Neurosurgeons. The Report dealt both with Causation and with Condition and Prognosis. He noted the medical history to which I have already referred. At the time he saw the Claimant, she was working full-time, doing both management and clinical work. She still had feelings of guilt and of anger at the Defendant's negligence. She also reported "flashbacks", described in his Report as "vivid memories of her sister's final illness and death by reminders at work at least once a week now." She reported continuing disturbance of sleep and increase in weight.
Dr Latcham considered that, for about six months after Mrs Sharma's death, the Claimant had been suffering from a depressive illness, partly caused by what he termed "abnormal grief reaction". The depressive illness was characterised by sleep disturbance, poor concentration, lack of enjoyment of anything and an inability to work for periods of time. He considered that the psychological treatment she had undergone had been of benefit to her, but that further sessions would not be of benefit until after this claim had been concluded. The symptoms of "abnormal grief" were continuing but, after the end of the litigation and further therapy, they should, he considered, resolve.
Dr Turner's Report of 13 February 2014 was based on an interview with the Claimant a fortnight earlier. She described herself as "doing quite well now". She had been suffering problems with her knee on and off since May 2012 and, in December 2013, she underwent a knee replacement. She had been off work for about eight weeks due to her knee problems prior to seeing Dr Turner. She was due to return to work on a part-time basis the following day, but found the prospect "daunting". She still felt low at times and her sleep was "not great". Her dosage of anti-depressant medication had been increased, which had helped her. She had also undergone some counselling. She still had emotional problems at work if she encountered a patient in a situation similar to that of her sister. She had had various family problems and a health scare which had fortunately been unwarranted. The Claimant reported that she felt miserable for most of the day about two days in the week, more if she was working, especially if she was dealing with a lot of patients with SAH. Her sleep was poor and she became very tired. She reported ongoing anger at what had happened to her sister. She had no marked degree of anxiety.
It seems that the Claimant had undergone further counselling in late 2013. The sessions focussed on enabling her to work through the complex grief that she was experiencing as a result of Mrs Sharma's death. It was noted that her work constantly evoked the circumstances of the death. However, as the main breadwinner of the family, she could not afford to consider a change of role. Dr Turner referred to two references by a Psychological Therapist whom the Claimant saw in July 2013 to the Claimant telling her that she had experienced "flashbacks" and would sometimes "freeze" at work.
Dr Turner's conclusion was that the Claimant's Major Depressive Episode was, by February 2014, in partial remission, i.e. there were still some clinically significant symptoms, but the full criteria for the condition were no longer met. He considered that, although there had been a number of other stress factors in the recent past (e.g. her knee problems), the dominant cause of her emotional problems had remained the shock she experienced at the time of her sister's re-admission to ESH and her death at SGH. Her work on a Neuro-Intensive Care Ward only served to remind her of this experience. He considered that it would not take very much to "tip her to the point that she could not continue". However, he took the view that her prognosis was likely to be good and should improve with further psychological treatment. He acknowledged that, even prior to her sister's death, the Claimant was likely to have had at least one further episode of depression in the future. However, her risk of such an episode had, he believed, been increased by her sister's death. He regarded the risk of having further depression attributable to the death was "well below the balance of probabilities". If it were to happen, she would probably need sickness absence of up to three to six weeks.
In his Supplementary Report, Dr Latcham commented on Dr Turner's Second Report. He noted that the Claimant had undergone counselling which had focussed on complex grief. He noted and accepted Dr Turner's view that the Claimant was doing "quite well now" and that the future prognosis was good, but that the likelihood of her suffering a further incident of depression had been increased by Mrs Sharma's death.
THE PSYCHIATRIC EVIDENCE
The nature of the Claimant's psychiatric condition
Dr Turner's opinion was that the Claimant had suffered a Major Depressive Episode which began in the aftermath of her sister's death, improved in November 2013, and was in partial remission in January 2014.
Dr Latcham considered that the Claimant had suffered a depressive illness following Mrs Sharma's death, which had lasted for about six months, after which she had suffered from abnormal grief. He acknowledged that the condition known as "abnormal grief" is not one of the formal psychiatric diagnoses recognised in the latest edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) or in the International Classification of Diseases:Mental and Behavioural Disorder:Clinical Descriptions and Diagnostic Guidelines (ICD-10). However, he pointed out that "abnormal grief" (described as "persistent complex bereavement disorder") is included in DSM-5 as a "condition for further study", together with proposed criteria for the condition. Dr Latcham considered that "abnormal grief" is a useful diagnostic formulation in a case such as this, where the Claimant's grief is caused by the death of her sister and the manner in which she died and is inextricably bound up with her psychiatric disorder. He said that, despite the fact that "abnormal grief" does not constitute a formal diagnosis, it is an expression that would be recognised by any psychiatrist. Dr Turner does not use the term "abnormal grief", because there is no universally accepted definition of it as a separate psychiatric disorder.
Despite the difference of opinion between him and Dr Turner, Dr Latcham accepted that it would be appropriate to describe the Claimant's condition as meeting many of the criteria for the recognised diagnosis of a "Major Depressive Episode". Thus, the experts agreed that she had suffered from a formally recognised psychiatric condition. They agreed also that, although she had some symptoms of the type seen in PTSD, she had not met the full criteria for that diagnosis.
In the circumstances, I accept that the Claimant suffered from the recognised medical condition of Major Depressive Disorder.
The cause of the Claimant's psychiatric condition
Dr Turner and Dr Latcham agreed that the Claimant had had a prior vulnerability to depression. That was evident from the period of depression she had experienced at the time of her back problems in 2000/2001. They noted that, in addition, her husband's unemployment, his depression and the unexplained seizure he had suffered in July 2010 probably amounted to additive factors.
However, they agreed that the episode of psychiatric disorder following Mrs Sharma's death had been caused by the series of incidents leading up to and including the death. Where they disagreed was as to which of those incidents were especially important.
Dr Turner did not consider that the events of 5 May were relevant to the issue of causation; the Claimant was reassured that there had been a CT scan and that no bleed had been detected. Dr Latcham considered that the events of 5 May had some relevance to her psychiatric disorder since she had subsequently (and wholly unjustifiably) blamed herself for accepting the assurance that all was well. Neither of the experts suggested that the events between 5 and 12 May had a significant causative effect, save that Dr Latcham pointed out that the Claimant would have been anxious about the diagnosis of viral meningitis, which is not a trivial illness. There is, however, no indication that the Claimant had particular worries during this period, other than a natural concern that her sister was still unwell.
In the Agenda given to the Consultant Psychiatrists for consideration during their Joint Discussion was a list of the incidents to which it was alleged the Claimant was exposed in the period from the morning of 12 May up to and including Mrs Sharma's death on 13 May. The list mirrored (with some amendments) the list at paragraph 24 of the Particulars of Claim, and was as follows:
(a) being advised of Mrs Sharma's sudden deterioration on the morning of 12th May 2009 (Mrs Shorter's and Mr Sharma's accounts) and that, contrary to the advice received previously, the CT scan performed on the 5th May 2009 showed subarachnoid haemorrhage;
(b) seeing Mrs Sharma during the day at the East Surrey Hospital in the condition Mrs Shorter and Mr Sharma describe in the knowledge that she had previously suffered a subarachnoid haemorrhage which had gone undiagnosed and therefore untreated, and in the knowledge of the consequences of this for Mrs Sharma;
(c) being advised by telephone of the first seizure on arrival at St George's Hospital;
(d) being advised by telephone of the further seizure at St George's Hospital and hearing Mr Sharma's panic and confusion;
(e) when she saw her sister upon arrival at St George's Hospital and hearing Mr Sharma's panic and confusion;
(f) being advised by medical staff that as a result of the final seizure, Mrs Sharma was unlikely to survive;
(g) Mrs Sharma's death.
The experts were asked to state what causal impact they considered each of those incidents had had on the Claimant's psychiatric disorder.
In the Note of the experts' Joint Discussion, Dr Turner expressed the view that (b) and (e) - i.e. the visual experience - were the two most important factors in causing the Claimant's psychiatric disorder. The first, and in Dr Turner's view the more important of these two, was (b), i.e. her visit to ESH on 12 May, seeing Mrs Sharma in pain, knowing (as a result of the previous telephone call from Mr Sharma) that a bleed had been detected and being aware (due to her own nursing experience) of the risk of a re-bleed and of the urgent need for Mrs Sharma to be transferred to a specialist Neurosurgical Unit. Dr Turner's identification of (b) as the most significant incident reflected the view expressed in his Causation Report, written in October 2013. That Report was of course based on the accounts of events given by the Claimant, Mr Sharma and Mr Shorter in their witness statements of July 2013. In that Causation Report, Dr Turner had emphasised the Claimant's feelings of responsibility and helplessness whilst at ESH and her additional vulnerability by reason of her own specialist knowledge.
Dr Turner identified the Claimant's experience at ESH as the main cause of her psychiatric disorder, although he did consider that later events, especially seeing her sister in the ITU at SGH, probably contributed. He suggested that the "flashbacks" to the scene in the A & E Department at ESH and in the ITU at SGH which the Claimant reported experiencing supported his view as to the significance of those incidents.
In her witness statement dated 20 July 2013, the Claimant had referred to having "flashbacks" when she could see her sister in the A & E Department at ESH on a trolley, writhing in pain and clutching at her head. In oral evidence, Dr Turner explained that the "flashbacks" to the scene in the A & E Department reported by the Claimant were caused by emotional memories. The Claimant had reported seeking to avoid visiting the A & E Department at ESH in order not to have those memories. In addition, Dr Turner, who had observed the Claimant give evidence, said that he had noticed three "hotspots" when she had become particularly distressed and nearly "lost it" whilst in the witness box. He explained how "hotspots" can be an indicator of exposure to emotional trauma which continues to cause stress. He regarded the "hotspots" as a significant indicator of the cause of her psychiatric disorder. He said that the first of these "hotspots" had occurred when the Claimant was speaking about her attendance at the A & E Department at ESH. Dr Turner attached so much importance to this incident that, in the Note of the experts' Joint Discussion, he expressed his opinion that:
"… the experiences in A & E were sufficient to cause the psychiatric disorder, even had Mrs Sharma in the end survived."
In oral evidence, he maintained that opinion, indicating that the "flashbacks" of the A & E Department scene which the Claimant reported and the "hotspot" when talking about it, indicated a type of emotional memory which would of itself have been sufficient to have caused her psychiatric disorder.
Dr Turner said that a second "hotspot" was evident when the Claimant was speaking of her journey with her husband to SGH. By that time, of course, she had received the telephone call from Mr Sharma, informing her of her sister's seizures. She had also spoken to the Ward Sister, who had told her that Mrs Sharma had probably suffered a re-bleed. She had told Dr Turner in 2011 that, "this is what she had been dreading would happen". She told Dr Latcham, that "the reality was horrific". She was aware that Mrs Sharma was now "in very dangerous territory" and she was "absolutely terrified". She did, however, manage to retain "a glimmer of hope". It was with those feelings, coupled no doubt with anger at the delay that had taken place, that she passed the journey to SGH.
In the Note of the experts' Joint Discussion, Dr Turner identified as the second of the two most important events in the causation of the Claimant's psychiatric disorder the incident when she saw her sister in the ITU at SGH. He pointed out that her specialist knowledge would have given her an immediate insight into the gravity of the situation. In oral evidence, Dr Turner expressed the view that the sight of her sister in the ITU would have had a significant emotional impact on the Claimant. That was, he said, evidenced in particular by the "flashbacks" which she experienced afterwards, especially in the course of her work, and by the distress she had demonstrated in her oral evidence (the third "hotspot") when speaking about this incident. Although he accepted that the Claimant would have had an anticipatory fear about Mrs Sharma's condition, he considered that it was the vision of her sister that brought home the reality that she had "gone".
Dr Turner considered that the direct witnessing and experiencing of the incidents in the A & E Department at ESH and in the ITU at SGH were important in the cause of the Claimant's psychiatric disorder. His view was that, had she not witnessed and experienced those incidents, she would have been likely to have had a normal "grief response", and would not have developed a Depressive Episode of the same severity or persistence. In oral evidence, it was suggested to him that the Claimant's vulnerability to depression, coupled with grief at her sister's death and anger at the fact that it had been caused by the failure of medical professionals, would have been sufficient to cause her to develop a Major Depressive Disorder, even had she not been physically present at the two Hospitals. Dr Turner did not accept that suggestion; he considered that she would not have developed a psychiatric disorder had it not been for the emotional impact of what she saw.
Dr Latcham's opinion was that the whole sequence of incidents, from the time of Mr Sharma's first telephone call on the morning of 12 May until her sister's death, had been important in causing the Claimant's psychiatric disorder. He emphasised in particular the telephone call informing her of the first seizure at SGH, the telephone call informing her of the further seizures and the fact of her sister's death. He pointed out that the Claimant had told him that, after the first telephone call on the morning of 12 May, she was alarmed, very anxious and panicky and was shaking. She knew that there was a risk of a re-bleed and that it was "bad". He accepted that seeing Mrs Sharma in the A & E Department was significant. However, he considered that it should not be viewed in isolation, but in the light of the knowledge the Claimant already had by that time. His opinion was that, had Mrs Sharma gone on to recover well following her admission to ESH, the Claimant would not have suffered any psychiatric disorder.
Dr Latcham did not accept that, had she not experienced the events at ESH and SGH, the Claimant would have had a normal grief response following Mrs Sharma's death. He considered that, even had the Claimant not been present at either the A & E Department at ESH or the ITU at SGH, she would still have developed a psychiatric disorder of similar duration and severity. In other words, he did not consider that the visual images which she had experienced had made any material contribution to her psychiatric disorder. The disorder would, he suggested, still have occurred as a result of grief at the death and at the cause of it, and as a result of guilt which the Claimant would have felt at not having been present when Mrs Sharma died. He pointed out that the Claimant had on several occasions expressed guilt at her own failure to do more to ensure that Mrs Sharma received proper care. He observed also that, in his experience, failure to be present at a death can add enormously to a person's grief.
In oral evidence, Dr Latcham was asked about the "hotspots" referred to by Dr Turner. Dr Latcham said that a "hotspot" was a technical term used in the diagnosis of PTSD to mean experiences that result in "flashbacks" and/or nightmares. He said that, during his interview with the Claimant and when observing her give oral evidence, he had focussed on those incidents which had caused her obvious distress. Dr Latcham considered that the most significant appearance of distress was when the Claimant was talking about the last telephone call from Mr Sharma and about seeing Mrs Sharma at SGH. He observed that, at that time, she had "simply showed distress". Before that, he considered that there had been a "tinge of combative anger" and a "slight edge" to her evidence. He said that her presentation at trial had been consistent with his interview in December 2012, when the only time she had cried was when speaking of seeing Mrs Sharma at SGH.
Dr Latcham's view was that the whole sequence of incidents on 12/13 May had caused the Claimant's psychiatric disorder. He said that it was not possible to "carve it up", i.e. to separate the events at ESH and SGH from the information received by the Claimant in the telephone calls from Mr Sharma and the SGH Ward Sister. He pointed out that the Claimant had described to him, and had said in evidence, how the telephone calls had had a considerable emotional impact on her.
Conclusions as to the cause of the Claimant's psychiatric condition
As I have already said, in his Causation Report and subsequently, Dr Turner identified the Claimant's visual experiences, in particular her visual experience at the A & E Department at ESH, as of the greatest significance in causing her psychiatric disorder. In doing so, he relied on the witness evidence of the Claimant, Mr Sharma and Mr Shorter, on the Claimant's descriptions of "flashbacks" of the scene there and on her distress when giving oral evidence about the relevant events.
I shall deal with my conclusions on the witness evidence in due course. However, it is to be noted that, in the Claimant's first account of the events of 12 May 2009, given in October 2011 for the purposes of Dr Turner's Condition and Prognosis Report, there is a reference to the fact that Mrs Sharma "was in a lot of pain" whilst at ESH, but no mention of a distressing scene such as that described in the Claimant's witness statement of July 2013. Furthermore, the only reference to "flashbacks" in that Report was in a GP note dated 30 October 2009, recording that the Claimant had "terrible memories of her sister's death" and "flashbacks". I consider it likely that the reference to "flashbacks" in the GP note was to images of Mrs Sharma in the ITU at SGH which had been experienced by the Claimant, particularly at work. I appreciate of course that the purpose of Dr Turner's first Report was to provide advice on Condition and Prognosis, rather than on Causation. However, if what the Claimant saw on her arrival at the A & E Department was such an emotionally charged incident and the most important factor in causing her psychiatric condition, one would have expected her to have described the event to Dr Turner and him to have included it in his Report.
Dr Turner expressed the view that the Claimant's experiences in the A & E Department were sufficient to cause her psychiatric disorder, even had Mrs Sharma in the end survived. I must say that I found that a very surprising assertion. Had Mrs Sharma survived, the Claimant would have been spared the grief of her loss, the anger of knowing it need never have happened, the feelings of guilt at not having done more to ensure Mrs Sharma's safety and the distressing experiences which she subsequently had at SGH. She would not have had to undergo the repeated reminders of the events at SGH when at work. Moreover, she had previously witnessed her mother's death, which took place suddenly and was what the Claimant described as "horrific", even for her as a nurse, without sustaining a psychiatric disorder. It seems to me highly unlikely that she would have suffered such a disorder had Mrs Sharma survived.
I found it surprising also that Dr Turner laid comparatively little emphasis on what the Claimant experienced in the ITU at SGH, when seeing her sister on a life support machine brought home to her the reality that she had "lost her". It was an experience which had caused the Claimant considerable distress when speaking of it during her interview with Dr Turner in October 2011 and when giving oral evidence. It caused – and continues to cause – regular "flashbacks" in the course of her work. Yet, he appeared to attach significantly less importance to that incident than to her experience in the A & E Department at ESH.
Dr Latcham, on the other hand, laid little emphasis on the events at ESH and SGH. He acknowledged that they had played some part in the Claimant's disorder, but considered that, even had she not been present at either the A & E Department at ESH or the ITU at SGH, she would still have developed a psychiatric disorder of similar duration and severity. That assertion was on the basis that the Claimant would have suffered significant guilt as a result of her failure to be with her sister. It gave rise to some debate in the oral evidence about the hypothetical circumstances in which the Claimant might not have attended the Hospitals, e.g. because it was not in her power to do so; by choice; or because she was not informed of her sister's illness; and whether or not, in each circumstance, she could be expected to have suffered guilt. Such debate was necessarily speculative and I did not find it helpful in determining the issue of causation.
It appeared to me that the stances adopted by the two Consultant Psychiatrists were significantly influenced by their knowledge that, in the case of a "secondary victim" such as the Claimant, visual experiences are key factors in the recovery of damages. Their causation evidence was focussed primarily on the part played by those experiences. Thus, Dr Turner asserted that it was the two visual experiences in the Hospitals – and in particular, the first – which were the key incidents. Dr Latcham acknowledged that it was not possible to separate the various incidents on 12/13 May, all of which had played a part in causing the Claimant's psychiatric disorder. However, he asserted that the events of least importance were the visual experiences. I did not find either of those stances compelling
I consider that it is clear, on a balance of probabilities, that the incidents which occurred on 12/13 May all made a contribution to the development of the Claimant's psychiatric disorder. I do not consider that it is realistic to carve up the incidents into those which did and did not play a part. In any event, as I shall explain, I do not accept that the visual experience which the Claimant had on her arrival at ESH was as dramatic as that described by her. The extent of her distress when giving evidence was much greater when she talked of the journey to, and the time spent at, SGH. That tends to support the fact that those incidents had a greater emotional impact than the time spent in the A & E Department at ESH.
THE NEUROSURGICAL EVIDENCE
In their Joint Statement, the Neurosurgical experts were required to address two topics in particular. The first concerned the serious deterioration in Mrs Sharma's condition on 12 May which had been described by her husband and the Claimant. The experts agreed that a deterioration in symptoms can be caused by a complication of the original bleed, caused by hydrocephalus or raised intracranial pressure. Even if no such complication occurs, however, it is typical, following a "good grade" SAH (i.e. when the patient remain conscious without any neurological deficit), to suffer headaches and related symptoms for many weeks. Within that period, there will be a natural fluctuation in symptoms, particularly in the first two weeks. The experts agreed, therefore, that the symptoms experienced by Mrs Sharma between 5 and 12 May were typical of the Grade 1 SAH which she had suffered.
As to the events of 12 May, the experts agreed that there was a seeming discrepancy between the accounts given by the Claimant and Mr Sharma of the severity of Mrs Sharma's symptoms and the impression created by the Hospital records and the witness statements of the ESH staff. They said that the two versions were not necessarily inconsistent because it was possible that the headaches were fluctuating in severity that day, being reasonably controlled at the times when observations were noted in the Hospital records, and more severe at other times which were more vividly recalled by the family. They pointed out that, until Mrs Sharma underwent the foetal heart scan, her headaches may have been under-treated with medication.
The second topic considered by the experts was the cause of the serious deterioration on the morning of 12 May, if it is right that such a serious deterioration occurred. The experts agreed that it could have been caused by a complication of the original bleed, such as hydrocephalus or raised intracranial pressure. However, it could also have been caused by a re-bleed. In that event, it would have had to be small re-bleed, which can result in a deterioration in the symptoms (e.g. headache, neck stiffness, photophobia, nausea/vomiting) already being suffered by the patient. Even if a re-bleed is small, however, any symptoms arising from it are likely to be rapid or instantaneous in outset and to cause a rapid increase in pain. If a re-bleed is large, it can result in a rapid deterioration to coma and death.
In Mrs Sharma's case, Professor Marks considered that the deterioration in her headaches on 12 May reported by Mr Sharma would probably have been caused by a small re-bleed on the morning of 12 May. However, Mr Mannion's view was that, as reported, the change in Mrs Sharma's symptoms was not entirely consistent with a re-bleed and would probably have been related to the effects of the original SAH.
The experts agreed that the questions of whether Mrs Sharma had suffered severe or mild pain on 12 May, and whether she had suffered a small re-bleed on the morning of 12 May had no bearing on the occurrence of her SAH on 13 May.
The two experts agreed that the only indisputable evidence of a second bleed came from the CT scan taken at SGH in the early hours of 13 May 2009, after Mrs Sharma had suffered a series of seizures. They agreed also that the first seizure that occurred immediately after Mrs Sharma's arrival at SGH was probably the result of a small re-bleed, and that the later seizures were caused by a further, devastating re-bleed.
I accept Mr Mannion's opinion that Mrs Sharma did not suffer a re-bleed on the morning of 12 May. I consider it probable that her condition on that day was attributable to the ongoing effects of the bleed which had occurred on 5 May. I consider that it is probable also that the first re-bleed occurred immediately after Mrs Sharma's arrival at SGH at or around midnight on 12 May.
The experts also agreed that the Claimant, with her specialist knowledge of neurosurgical patients and SAH, would have understood the seriousness of the situation and would have been aware of the risks of complications including re-bleed. She would have been aware, on hearing about the seizure, that this could represent a re-bleed, and her anxiety is likely to have been compounded by the recognition that the diagnosis had been missed on 5 May 2009 and that the events on 12-13 May 2009 had been avoidable if Mrs Sharma had been managed appropriately the previous week. The experts agreed also that the Claimant would have had an understanding about the poor prognosis in some patients with SAH, and that a re-bleed could result in a much worse SAH than had been first observed.
Conclusions on the factual issues
It is clear that, on 5 May, the Claimant was reassured by the news that the CT scan had shown no abnormality. I am satisfied that, during the days that followed, she accepted that Mrs Sharma's symptoms were consistent with the diagnosis (albeit a somewhat tentative diagnosis) of viral meningitis that had been made. She kept regular contact with her sister and saw her on 8 May. It is clear, however, that she was not unduly concerned about her sister's condition. If she had been, I have no doubt that she would have actively encouraged her to seek further medical advice and/or return to ESH.
The position changed on the morning of 12 May, when the Claimant received the telephone call from Mr Sharma telling her that a bleed had been detected. This must have come as a considerable shock to her. Furthermore, given her own experience, she was fully aware of the implications of the existence of a bleed, of the delay that had occurred and of the possibility that Mrs Sharma might have a re-bleed. At that stage, she described herself as "really panicky" and "really frightened"; she knew her sister was "in the danger zone".
I do not accept that Mr Sharma told the Claimant during that telephone conversation that Mrs Sharma's condition had worsened. In her first recorded account of events to Dr Turner in October 2011, the Claimant did not mention that he had given this information. Nor did she mention it to Dr Latcham in December 2012. Moreover, Mr Sharma was very clear in his witness statement that he had not told the Claimant of the deterioration and gave the reasons why he did not do so. I am satisfied that his change of mind in his oral evidence was strongly influenced by the evidence the Claimant had given, which persuaded him that he must have been mistaken. His oral evidence therefore did not reflect his own recollection of events. He may also have been influenced by a desire, conscious or unconscious, to do what he could to support the Claimant in her claim.
After the telephone call, the Claimant took practical steps to attempt to arrange for Mrs Sharma to be treated in the Neurosurgical Unit at Hurstwood Park Hospital. During the journey to ESH and throughout her time there, it is clear that the Claimant was highly conscious of the urgent need to get Mrs Sharma to a Hospital where she would receive the specialist care she needed.
Mr Sharma's evidence was that it was because of a serious deterioration in Mrs Sharma's condition overnight that he had telephoned her GP that morning. However, he may well have done so in any event, having regard to the advice given by the doctor at the Walk-in Centre on 10 May. It is noticeable that, at no point in the ESH records for that day, is there any indication that either Mr or Mrs Sharma had mentioned a significant and very recent deterioration in Mrs Sharma's condition. That is somewhat surprising if there had indeed been a recent deterioration of the extent described in the evidence. I appreciate that Mr and Mrs Sharma were focussing on the fact that a bleed had been detected, but they must have realised that a dramatic deterioration in Mrs Sharma's condition would be significant and that the Hospital staff should be informed. If there had been such a dramatic deterioration, it would also be surprising if the Claimant had not drawn attention to it. It is of course the fact that she was not present when Mrs Sharma was examined by the Nurse or doctors, but she did have private talk to a doctor (probably Dr Ferrigan) shortly after her arrival at ESH, and she also had a conversation with Dr Kimber soon after Mrs Sharma's move to the Tilgate Ward. She would have been aware that a sudden and serious deterioration in Mrs Sharma's condition might indicate that there had been a re-bleed and it is likely, therefore, if there had been such a deterioration, that she would have raised that possibility with one of the doctors.
I am satisfied that Mrs Sharma's condition on 12 May had deteriorated from what it had been when the Claimant saw her on 8 May. I accept that there was a time during 12 May when Mrs Sharma was in significant pain and she may well have been crying, from a combination of pain and of fear at the news of her bleed. Mr Sharma referred to the fact that her pain fluctuated during the day. That, as the Neurosurgeons have said, is typical of SAH. Her pain level was also no doubt influenced by the differing levels of analgesia she was taking at different times.
However, the Hospital records do not suggest that Mrs Sharma was in the state described by the Claimant, Mr Sharma and Mr Shorter. The notes made by the Nurse (timed at 10.35hrs) shortly after her admission to the A & E Department were very brief, but do not suggest that she was in such a condition. Readings of her heart rate and respiratory rate were not, as the Claimant herself conceded in evidence, at the levels which would be expected for a patient suffering severe pain and distress of the extent described.
Even more significantly, the record of Dr Ferrigan's examination is wholly inconsistent with a patient suffering the level of pain described by Mr Sharma and the Claimant. In particular, there is the record that Mrs Sharma had severity of head pain "3/10". According to Dr Ferrigan, that was a rating given by Mrs Sharma herself. If she had been in very severe pain, it is inconceivable that she would have rated herself at "3", or, indeed, that Dr Ferrigan would have done so. The Claimant's explanation that the doctor who examined her sister and who recorded the rating "must have been quite junior" was not plausible. First of all, Dr Ferrigan could not be described as "quite junior", since she was appointed as a Consultant Physician less than a year after these events. Second, if Mrs Sharma's condition had been as described by the Claimant, even a lay person (such as Mrs Sharma herself) would not have marked her at "3/10". Moreover, the note also records that Mrs Sharma had no photophobia at the time of the examination, "only when headache bad", and that she was "comfortable". That strongly suggests that the headache did not appear to be demonstrably "bad" to the extent described by the Claimant at that time. This examination took place at a time when the medication given to Mrs Sharma was limited by the fact that it was believed she might still be pregnant. However, Dr Ferrigan did prescribe Co-codamol, which suggests that she considered that Mrs Sharma was suffering a significant degree of pain at times, for which she required analgesic medication. The records show that the first dose was given at about 12.15hrs.
I have already found that the Claimant arrived in the A & E Department some time just before or just after Dr Ferrigan's examination. I have no doubt that, when she arrived, she was surprised and worried by the fact that Mrs Sharma was in a worse condition than she had been when she last saw her four days previously. That fact, coupled with her knowledge that there had been a bleed evident on the CT scan and a delay in treating the bleed, caused the Claimant to be very frightened. However, I do not accept that Mrs Sharma's condition was as visually distressing as the Claimant described in her witness statement or in her oral evidence. In October 2011, the Claimant told Dr Turner that her sister had been "in a lot of pain". Similarly, she told Dr Latcham that her sister had "a bad pain in her head" and that she herself was "terrified by the scan and because she (Mrs Sharma) had more pain". However, she did not describe to the Psychiatrists the dramatic scene which appears in her witness statement and those of Mr Sharma and Mr Shorter, all of which were written considerably later, in July 2013. Neither is there any mention of seeing her sister in the A & E Department in that distressing condition in the Letter of Claim submitted to the Defendant and dated 9 November 2011. The only reference in that document to this incident is to the effects on the Claimant of "being present with her sister waiting in hospital". By contrast, there was reference in the Letter of Claim to the effects of "seeing her sister in that condition" (i.e. a critical condition and not going to survive) at SGH. The description of the shocking and distressing visual impression at ESH appears for the first time much later.
I do not suggest that the Claimant has deliberately sought to exaggerate what she saw at ESH. On the contrary, I consider that she was an honest and impressive witness, who was doing her best to give an accurate account of what had happened. As I have indicated, I accept that there were times when Mrs Sharma was in pain and fear and also that it was upsetting and frightening for the Claimant to see her in a worse state than when they had last met, especially when she knew that Mrs Sharma was at risk of a re-bleed. However, it seems to me probable that, over time and after detailed questioning about her visual experiences for the purposes of this claim, the Claimant has reflected on what happened and has come to believe that she saw what she has described. The same considerations apply to the evidence of Mr Sharma and Mr Shorter. The events of the day were unexpected and upsetting for them all and it would not be surprising if their recollections were not entirely accurate.
I can well imagine also that, looking back, the Claimant can visualise her sister in the A & E Department and that, as a result, she has found it difficult to re-visit ESH when obliged to do so, e.g. when her husband suffered a seizure in July 2010. It must bring back bad memories of the time spent there with her sister and of the failures of care which took place.
Mrs Sharma was transferred to the Tilgate Ward at approximately 14.00hrs. At about 14.52hrs, she had the foetal heart scan. The Nurses who took her to the ultrasound scanner both gave evidence that she did not appear to be in severe pain and was chatting normally to them. I accept their evidence on this point. I am confident that they would have recalled if Mrs Sharma had been in real distress. Their impression was that the analgesia that was being given to her was controlling her pain. Ms Lees did, however, recall Mrs Sharma requesting further analgesia and that Tramadol was given. Despite the timing in the Hospital records, that is likely to have been after the foetal heart scan had confirmed that she had suffered a miscarriage. It is clear that, once she was given Tramadol, Mrs Sharma's pain lessened and she became calmer.
The Nurses described Mrs Sharma and her family as "relaxed, chatting and making jokes" during the afternoon. It may have appeared that they were relaxed, but I am confident it was an entirely false impression. They could not possibly have been truly "relaxed". Mr and Mrs Sharma had just learned that they had definitely lost their baby and all the family members were aware of the previous bleed and of the urgent need to get Mrs Sharma to SGH. The Claimant in particular was becoming more and more worried and frustrated about the failure to transfer her sister and to give her the Nimodipine that had been prescribed hours earlier. However, she, her husband and Mr Sharma were all making a valiant effort to appear calm; to conceal their internal feelings; to reassure Mrs Sharma and to keep her entertained to the best of their abilities. Their sensible and courageous attitude was misinterpreted by others. Meanwhile, Mrs Sharma, who herself appears to have been a practical and a stoical individual, was concerned about the welfare of her two children and was anxious to make suitable childcare arrangements for that night.
The Claimant and her husband left in order to assist with that task. Whilst the Claimant was reassured to learn that her sister would be leaving for SGH "very shortly" and would soon be given Nimodipine, she remained very anxious throughout that evening. Her anxiety was increased by the news given during a telephone call at about 22.00hrs, that Mrs Sharma was still at ESH. I accept that she was "terrified", as she described, when she heard that news.
The next telephone call at about midnight brought news of the first seizure. Whilst I accept that the Claimant was somewhat reassured by the fact that her sister had come round and was now at SGH, this news must have raised her level of anxiety. I accept her husband's evidence that she had "a look of fright" on her face and was extremely anxious.
The next telephone call, telling the Claimant of the renewed attack of seizures suffered by Mrs Sharma was plainly, as the Claimant said, "a really frightening moment". Even more frightening was her telephone conversation with the Ward Sister at SGH, who told her that Mrs Sharma had, in all probability, suffered a re-bleed. Given her knowledge of the likely consequences of a second bleed, it is not surprising that she was "absolutely terrified". She told Dr Turner that, "this is what I had been dreading would happen". She was well aware that the prognosis was very poor but, very naturally, still managed to maintain "a glimmer of hope". It is significant that, when speaking of the journey to SGH and of events there, the Claimant became very tearful in her evidence.
The events of the next few hours were distressing for the family members who were present and it is not surprising that the accounts of what happened differed as between individuals. I am satisfied that the accounts of the sequence of events given by Mr Sharma and Mr Shorter in their witness statements were correct. They are consistent with each other and with the Hospital records. It makes sense that the Claimant would have attempted to find Mr Sharma first, before going to the ITU. First, she would have wanted to ascertain the up-to-date position and, second, she would have wished to report to him the telephone conversation she had had with the Ward Sister.
Mr Sharma's insistence in his oral evidence that he had first seen the Claimant when he was in the ITU was, as I have already pointed out, wholly inconsistent with his witness statement. My impression was that, as with his evidence about the contents of his first telephone call to the Claimant on 12 May, he was persuaded by the Claimant's oral evidence that she must be correct and so gave oral evidence that did not reflect his own recollection of events. He may also have changed his mind by reason of a desire (whether conscious or unconscious) to support the Claimant in her claim. I am satisfied also that Mr Sharma told the Claimant and other members of the family on their arrival that Mrs Sharma "had gone" and that they "had lost her" and that it was after being told that news that the Claimant first went to see her sister. It seems probable that, as Mr Sharma and Mr Shorter stated in their witness statements, she went alone initially. Be that as it may, however, I have no doubt that, as the Claimant has said, it was only when she saw her sister unconscious on the life support machine that the fact of her imminent death became a reality. I can well understand also how that sight returns to haunt her and how she suffers "flashbacks" when, in the course of her work, she sees a patient in a similar situation.
It is unnecessary to refer in detail to the events of the next few hours. They involved further visits by members of the family to see Mrs Sharma before and after she was pronounced dead, distressing discussions with the doctors, decisions about difficult matters such as organ donation and the switching off of the life support machine. There were also the feelings of uncertainty and anger about how Mrs Sharma's death could have been allowed to happen. This period was especially difficult for the Claimant who was familiar with the various processes and knew at all stages what was about to happen. Once again, it is understandable that she experiences great difficulties when having to support and comfort members of patients' families who find themselves in a similar situation in the Neurosurgical Department where she works.
THE LAW
The authorities
Claims in negligence for mental injury (or what came to be known as "nervous shock") have to meet a stringent test. In McLoughlin v O'Brian et al [1983] 1AC 40, the House of Lords held that, in any successful claim for mental injury standing alone (i.e. not consequential on physical injury), the 'shock' resulting from the defendant's negligence must cause the claimant to suffer some medically identifiable psychiatric illness or injury. Such illness or injury is to be distinguished from emotional distress or injury to feelings, for which no successful claim can be made in the absence of physical injury. The term "nervous shock" can be misleading. It does not mean that the "shock" is the psychiatric injury caused to the claimant; what it means is that the claimant is claiming damages for the psychiatric injury caused by the shocking event. A more appropriate term than "nervous shock" is "psychiatric injury".
A successful claim for psychiatric injury alone can be brought by a claimant who is within the class of persons whom the defendant should have foreseen would suffer personal injury, whether a physical injury or a psychiatric injury, as a result of the defendant's negligence. Such a person is generally known as a 'primary victim'. It is now well-established that, in certain very limited circumstances, a person is also entitled to recover damages for psychiatric injury occurring as a result of the death or serious physical injury to a near relative, where that death or physical injury is caused by the negligence of a third party. A person bringing such a claim is termed a "secondary victim" and recovery is subject to a number of conditions. Those conditions have been developed over recent years in decisions by the Court of Appeal and the House of Lords.
The House of Lords appeal in McLoughlin concerned a road traffic accident caused by the negligence of the respondents which resulted in the death of one of the appellant's children and injuries to her husband and two other children. The appellant was informed of the accident about an hour after it had occurred by a friend, who then drove her to the hospital where her family members were being treated. There, she heard the news of her daughter's death and saw her husband and two surviving children, who were in a distressed and dishevelled state, with varying degrees of injury. Lord Wilberforce described the circumstances witnessed by the appellant as "distressing in the extreme and … capable of producing an effect going well beyond that of grief and sorrow". The appellant claimed damages as a secondary victim for nervous shock suffered as a result of what she had seen.
The trial judge had given judgment for the respondents, concluding that they owed no duty of care to the appellant because the possibility of her suffering injury by nervous shock was, in the circumstances, not reasonably foreseeable. The Court of Appeal upheld the judge's decision, but on different grounds. Stephenson LJ took the view that the possibility of injury to the appellant by nervous shock was reasonably foreseeable and that the respondents owed the appellant a duty of care. However, he held that considerations of policy prevented the appellant from recovering damages. Griffiths LJ also held that injury by nervous shock to the appellant was "readily foreseeable", but that the respondent owed no duty of care. The duty was, he said, limited to those on the road nearby.
The House of Lords reversed the decision of the Court of Appeal and held that the appellant was entitled to recover damages. The leading speech was given by Lord Wilberforce. He considered previous decisions in cases of nervous shock. He made clear that foreseeability could not of itself automatically give rise to a duty of care owed to a person or class of persons. Because of the fact that 'shock' by its nature was capable of affecting such a wide range of people, there was a real need for the law to place some limitation on the extent of admissible claims. He identified three elements which were inherent in any successful "secondary victim" claim:
a) The class of persons whose claims should be recognised; the closer the tie (not merely in relationship, but in care) the greater the claim for consideration;
b) The proximity of such persons to the accident, which must be close both in time and space. In relation to that element, Lord Wilberforce said (at page 422):
"It is, after all, the fact and consequence of the defendant's negligence that must be proved to have caused the "nervous shock." Experience has shown that to insist on direct and immediate sight or hearing would be impractical and unjust and that under what may be called the "aftermath" doctrine one who, from close proximity, comes very soon upon the scene should not be excluded."
c) The means by which the shock is caused. Lord Wilberforce said (at page 422-423):
"The shock must come through sight or hearing of the event or of its immediate aftermath. Whether some equivalent of sight or hearing, e.g. through simultaneous television, would suffice may have to be considered."
Alcock v Chief Constable of South Yorkshire Police [1982] 1AC 310, arose out of the Hillsborough Football Stadium disaster, when 95 people died and hundreds were injured as a result of the overcrowding on a terrace. The 15 claimants (then known as plaintiffs) were relatives of those on the terrace. Each of the claimants had either been present at the Stadium, but remote from the terrace, or had witnessed the event live on television or in later news broadcasts. The claimants claimed damages against the defendant who had been responsible for policing the match. One claimant had been just outside the Stadium and, having seen the events on the television, had gone in to search for his missing son. All the claimants alleged that the impact of what they had seen and heard had caused them severe shock resulting in psychiatric illness.
The judge at first instance found that nine of the claimants, who were either parents, spouses or siblings of the victims and who were eye-witnesses of the disaster or who had watched it live on television, were entitled to claim damages. The claims of the remaining six claimants were dismissed because their relationship with the victims was more remote or because they had heard about the disaster by some means other than the live television broadcasts. The Court of Appeal allowed the defendant's appeal and dismissed the unsuccessful claimants' cross appeal.
In his speech at p411F-412A, Lord Oliver identified the five elements which had been found in the reported cases to be the essential criteria that a successful claimant in a secondary victim case must meet:
"The common features of all the reported cases of this type decided in this country prior to the decision of Hidden J. in the instant case and in which the plaintiff succeeded in establishing liability are, first, that in each case there was a marital or parental relationship between the plaintiff and the primary victim; secondly, that the injury for which damages were claimed arose from the sudden and unexpected shock to the plaintiff's nervous system; thirdly, that the plaintiff in each case was either personally present at the scene of the accident or was in the more or less immediate vicinity and witnessed the aftermath shortly afterwards; and, fourthly, that the injury suffered arose from witnessing the death of, extreme danger to, or injury and discomfort suffered by the primary victim. Lastly, in each case there was not only an element of physical proximity to the event but a close temporal connection between the event and the plaintiff's perception of it combined with a close relationship of affection between the plaintiff and the primary victim. It must, I think, be from these elements that the essential requirement of proximity is to be deduced, to which has to be added the reasonable foreseeability on the part of the defendant that in that combination of circumstances there was a real risk of injury of the type sustained by the particular plaintiff as a result of his or her concern for the primary victim."
The five elements identified by Lord Oliver have since been described as the "control mechanisms" for limiting the class of persons who can recover damages for psychiatric illness as secondary victims. It has been recognised by the Courts that, in the absence of these "control mechanisms", the number of secondary victims who would be able to bring successful nervous shock claims would be virtually limitless.
Lord Oliver emphasised the importance of the element of proximity. He dealt with that element in this way at pp 416E – 417A:
"The necessary element of proximity between plaintiff and defendant is furnished, at least in part, by both physical and temporal propinquity and also by the sudden and direct visual impression on the plaintiff's mind of actually witnessing the event or its immediate aftermath …
… Grief, sorrow, deprivation and the necessity for caring for loved ones who have suffered injury or misfortune must, I think, be considered as ordinary and inevitable incidents of life which, regardless of individual susceptibilities, must be sustained without compensation. It would be inaccurate and hurtful to suggest that grief is made any the less real or deprivation more tolerable by a more gradual realisation, but to extend liability to cover injury in such cases would be to extend the law in a direction for which there is no pressing policy need and in which there is no logical stopping point. In my opinion, the necessary proximity cannot be said to exist where the elements of immediacy, closeness of time and space, and direct visual or aural perception are absent."
At p 401F of his speech, when discussing the relevant elements, Lord Ackner described the element of "shock" necessarily involved:
"… the sudden appreciation by sight or sound of a horrifying event which violently agitates the mind. It has yet to include psychiatric illness caused by the accumulation over a period of time of more gradual assaults on the nervous system".
When speaking of the claims being made by some of the Hillsborough victims, Lord Oliver observed at p 417C-E:
"As I read the evidence, the shock in each case arose not from the original impact of the transmitted image which did not, as has been pointed out, depict the suffering of recognisable individuals. These images provided no doubt the matrix for imagined consequences giving rise to grave concern and worry, followed by a dawning consciousness over an extended period that the imagined consequence had occurred, finally confirmed by news of the death and, in some cases, subsequent visual identification of the victim. The trauma is created in part by such confirmation and in part by the linking in the mind of the plaintiff of that confirmation to the previously absorbed image. To extend the notion of proximity in cases of immediately created nervous shock to this more elongated and, to some extent, retrospective process may seem a logical analogical development. But, as I shall endeavour to show, the law in this area is not wholly logical and whilst having every sympathy with the plaintiffs, whose suffering is not in doubt and is not to be underrated, I cannot for my part see any pressing reason of policy for taking this further step along a road which must ultimately lead to virtually limitless liability."
The cases of McLoughlin and Alcock remain the leading authorities on claims brought by secondary victims. However, I have been referred to a number of other cases decided since Alcock. Taylorson v Shieldness Produce Ltd [1994] PIQR P329 was a claim by the parents of a 14 year old boy who died almost three days after he had been crushed under a reversing vehicle. They were not present at the time of the accident but were informed of the accident soon after it had occurred. They went straight to the hospital to which their son was admitted and, thereafter, followed the ambulance which took him to another hospital. The boy's father glimpsed him in the ambulance and his mother saw him briefly as he was being rushed on a trolley to the Intensive Care Unit. For the next few hours, they were not allowed to see him. His father then saw him later that evening for a few minutes, but his mother did not visit until about 24 hours after the accident. The boy was on a life support machine and his parents stayed with him for most of the next two days. At the end of that period, it became obvious that he would not recover, the life support machine was switched off and he was pronounced dead.
The trial judge, Kennedy J, dismissed the parents' claim for damages in respect of psychiatric illness caused by reason of shock as part of the immediate aftermath of the accident. He observed that, having heard about the accident, the parents thereafter saw little of him. After that, they saw him with a dawning consciousness that they were going to lose him and eventually they did. He went on:
"So it can be said of the illnesses of Mr and Mrs Taylorson that to extend the notion of proximity to this more elongated process may seem a logical development, but it is a development, in my judgment, outwith the law. Mr May boldly submits that, despite what is said in Alcock's case, I am entitled to find in the present case that the immediate aftermath of the accident extended from the time when the parents learnt of the accident to the time when they left hospital after the boy died. I am not prepared so to find."
The judge also found that the real psychiatric damage to the parents had resulted from grief at their son's death, not the shock of what they observed at the hospital. The Court of Appeal agreed with Kennedy J's interpretation of the law and dismissed the appeal.
Galli-Atkinson v Seghal [2003] Lloyds Rep. Med 285 was a claim by the mother of a 16 year old girl, Livia, who was killed when a car mounted the pavement and struck her. Her mother (the appellant) claimed damages against the driver in respect of the significant psychiatric disorder which she had suffered following her daughter's death.
The appellant was not present at the time of her daughter's accident, which occurred on her way to a ballet class. An ambulance was called and the ambulance team, together with a doctor who had also been called, treated her at the scene. Despite every effort, she was dead within 35 minutes of the accident. She was taken straight to the mortuary. Her injuries were described by the Recorder who heard the trial as "horrific", so extreme that the paramedic who had treated her required treatment afterwards for the effects upon him.
Livia's father had become concerned when she did not arrive back from her ballet class. He drove to where it was held but she was not there. He telephoned the appellant, who insisted on driving to meet him. Livia's father then learned of his daughter's death from a police officer who was in an area which had been cordoned off because of the accident. The appellant arrived and was told of her daughter's death by a police officer, whereupon she screamed hysterically and collapsed to the ground. The Recorder concluded that she had been aware of the police cars at the scene, but not of an ambulance, and that she saw nothing of the consequences of the accident.
The appellant, her husband and Livia's sister, who had also arrived at the scene, then went to the mortuary, arriving about two hours and ten minutes after the accident. Livia's father went in and confirmed that the deceased was his daughter. The appellant fell to her knees and crawled into the mortuary where Livia was lying on a trolley. Although the worst injuries had been covered, her face and her head were badly disfigured.
The Recorder concluded that "the mental shock the appellant had suffered at the scene was not caused by anything she saw, but by the shocking news she was given as soon as she reached the police cordon, which the police of course put up at the scenes of accident to keep people away from the shocking things often to be seen in the immediate aftermath of accidents". He did not consider that the fact that the appellant was told of her daughter's death at the scene, rather than somewhere else, made any material contribution to her psychiatric disorder. He therefore, dismissed her claim. So far as the visit to the mortuary was concerned, he found that the purpose of it was to identify the deceased, and that it did not form part of the "immediate aftermath".
The Court of Appeal did not accept the Recorder's finding in relation to the visit to the mortuary. In addressing the question of whether the appellant's psychiatric condition was caused by shock resulting from her appreciation of an event or its immediate aftermath, Latham LJ said at paragraphs 25-27:
"In approaching that question, I do not consider that we are restricted by what Lord Ackner said in Alcock to a frozen moment in time. As Lord Wilberforce in McLoughlin recognised from the passage that he cited from Benson v Lee, an event itself may be made up of a number of components. This was accepted by this court in the case of North Glamorgan NHS Trust v Walters [2002] EWCA 1792. Likewise, in my judgment, can the aftermath, provided that the events alleged to constitute the aftermath retain sufficient proximity to the event. Indeed, the decision in McLoughlin's case can only be justified if the events in the hospital, when Mrs McLoughlin went to the hospital, are taken together as providing the trigger, if that is the right description, for the shock which produced the psychiatric illness.
In the present case, the immediate aftermath, in my view, extended from the moment of the accident until the moment that the appellant left the mortuary. The judge artificially separated out the mortuary visit from what was an uninterrupted sequence of events, quite unlike the visit to the mortuary under consideration in Alcock. The visit with which we are concerned was not merely to identify the body. It was to complete the story so far as the appellant was concerned, who clearly at that stage did not want – and one can understand this – to believe that her child was dead.
Accordingly, in my judgment the judge was wrong to have excluded what happened at the mortuary from consideration. If, therefore, it could properly be said, on the basis of the psychiatric evidence, that the whole of that sequence of events which was witnessed by the appellant played a part in producing the illness from which she undoubtedly suffered, then the appellant is entitled to succeed in her claim."
He went on to find, having considered the expert evidence, that the medical evidence supported a finding that the shock of what appellant saw in the immediate aftermath of the accident made a material contribution to her psychiatric condition. The Court of Appeal allowed the appellant's appeal.
All the cases I have referred to so far relate to accidents or (in the case of Alcock) a specific incident. However, I was also referred to three cases involving claims by secondary victims following different forms of negligent medical treatment.
The first case in time is Taylor v Somerset Health Authority [1993] PIQR P262. The claimant's (then the plaintiff's) husband suffered a heart attack whilst at work and died shortly after being taken to the defendant's hospital. The claimant went to the hospital within an hour and was told of her husband's death by a doctor about 20 minutes later. She was shocked and distressed. She then went to the mortuary and identified her husband's body. The defendant had been treating him for months and had negligently failed to diagnose or treat his serious heart disease. It was admitted that the claimant had suffered nervous shock (i.e. psychiatric illness) as a result of what she had heard and seen at the hospital. Auld J held that the death was the final consequence of negligence by the defendant many months earlier. He said that the "immediate aftermath" extension had been introduced as an exception to the general principle established in accident cases that a claimant could recover damages for psychiatric injury only where the accident and the primary injury or death caused by it occurred within the Claimant's sight or hearing. He continued at p 267:
"There are two notions implicit in this exception cautiously introduced and cautiously continued by the House of Lords. They are of:
(i) an external, traumatic, event caused by the defendant's breach of duty which immediately causes some person injury or death; and
(ii) a perception by the plaintiff of the event as it happens, normally by his presence at the scene, or exposure to the scene and/or to the primary victim so shortly afterwards that the shock of the event as well as of its consequence is brought home to him.
There was no such event here other than the final consequence of Mr. Taylor's progressively deteriorating heart condition which the health authority, by its negligence many months before, had failed to arrest. In my judgment, his death at work and the subsequent transference of his body to the hospital where Mrs. Taylor was informed of what had happened and where she saw the body do not constitute such an event."
In Sion v Hampstead Health Authority [1994] 5 Med LR 170. The circumstances giving rise to the claim started with a road traffic accident, when the appellant's son, who was 23 years old, was injured in a motor cycle accident. He was taken to a hospital administered by the respondent. The appellant went to the hospital and stayed with him throughout the time he was there. Over time, the appellant's son's condition deteriorated and, three days after the accident, he suffered a respiratory arrest and a cardiac arrest after which he fell into a coma. He died 14 days after the accident. The appellant's case was that his son's deterioration and death had been caused by the negligence of the hospital staff, who failed to diagnose substantial and continual bleeding from the left kidney. The allegations of negligence were denied by the respondent but, since the judge at first instance had been dealing with an application to strike out the claim, the allegations were assumed by him, and later by the Court of Appeal, to be correct. The claim was brought in respect of psychiatric illness said to have been caused by the traumatic events which had occurred during his son's time in hospital. In applying to strike out the claim, the respondent contended that it was doomed to fail.
The judge at first instance found that the facts set out by the appellant in his witness statement did not substantiate a finding that he had suffered the type of shock for which damages were recoverable. The Court of Appeal agreed. Staughton, LJ said:
"In my opinion there is no trace in that report of "shock" as defined by Lord Ackner, no sudden appreciation by sight or sound of a horrifying event. On the contrary, the report describes a process continuing for some time, from first arrival at the hospital to the appreciation of medical negligence after the inquest. In particular, the son's death when it occurred was not surprising but expected. "
The case of North Glamorgan NHS Trust v Walters [2002] EWCA Civ 1792 concerned the negligent treatment of the respondent's young baby. When he was aged ten months, he became unwell and was admitted to hospital. He was mistakenly diagnosed as suffering from hepatitis A. In fact, he was suffering from acute hepatitis which led to liver failure. The NHS Trust responsible for the relevant hospital (the appellant) admitted that he had not been properly diagnosed or treated and that, if he had been, he would have been given a liver transplant and would probably have lived.
In the event, the baby was kept in hospital whilst various tests were carried out, but was allowed home at weekends. One weekend, his condition deteriorated and his parents took him back to hospital. The respondent stayed with him there, sleeping in the same room. Two days or so after his readmission, the respondent awoke to hear the baby making choking noises in his cot. She saw a blood-like substance and his body was stiff. A nurse told the respondent that he was having a fit. He was transferred to the ICU and, shortly afterwards, the respondent was told by a doctor that it was very unlikely that the baby would have any serious damage as a result of the fit. She understood that he might at worse be slightly brain damaged; she did not consider it was life threatening. This information was, in fact, wholly wrong. The baby had suffered a major epileptic seizure leading to a coma and irreparable brain damage. A few hours later, after a CAT scan, the respondent was told that there was no damage to her baby's brain, but that he should be transferred to King's Hospital, London for a liver transplant. He was taken there by ambulance later that day and underwent a further CAT scan which showed diffuse brain injury consistent with a profound hypoxic ischaemic insult.
The respondent and the baby's father arrived at King's Hospital in the evening. There, she was told by doctors that the baby had suffered severe brain damage as a result of the fit and was on a life support machine. She was told that, if he had a liver transplant, the chances of success were only 50-50 and he would be severely handicapped. The respondent described herself as "numb, panic stricken and terrified" at what she was told. On the following day, she was told that the brain damage was so severe that her son would have no quality of life if he survived. The parents were asked whether or not they felt that it was in their son's interest to continue with life support. They made the decision that life support should be terminated, this was done shortly afterwards and the baby died in the respondent's arms.
The psychiatrists who gave expert evidence agreed that the respondent had suffered a recognised psychiatric illness, namely pathological grief reaction. They also agreed that, absent the events that were witnessed, experienced and participated in by the respondent over the period of her son's illness, her pathological grief reaction would not have occurred.
The trial judge directed himself that :
"… the essence of what the claimant must show is that the psychiatric illness was brought about through the sudden appreciation by sight or sound of a horrifying event that affected her mind. Although the psychiatrists are agreed that she suffered "shock" and I am satisfied that her mind was violently agitated, the question is whether what happened was a sudden appreciation by sight or sound of a horrifying event rather than an accumulation over a period of time of more gradual assaults on the nervous system and that it was that sudden appreciation that caused the pathological grief reaction."
He identified "the essence of the [respondent's] case" as being that the 36 hour period beginning with the moment at which she was wakened by her son's fit until the moment at which the life support machine switched off could be looked on as a "horrifying event" which she suddenly appreciated, in contradiction to the accumulation over a period of time of more gradual assaults on the nervous system. He held that an event could cover "in ordinary parlance something that occurs over several days".
Giving the leading judgment in the Court of Appeal, Ward LJ approved the trial judge's decision. At paragraph 34 he dealt with the meaning of the word "event":
"In my judgment the law as presently formulated does permit a realistic view being taken from case to case of what constitutes the necessary "event". Our task is not to construe the word as if it had appeared in legislation but to gather the sense of the word in order to inform the principle to be drawn from the various authorities. As a word, it has a wide meaning as shown by its definition in the Concise Oxford Dictionary as: "An item in a sports programme, or the programme as a whole". It is a useful metaphor or at least a convenient description for the "fact and consequence of the defendant's negligence", per Lord Wilberforce, or the series of events which make up the entire event beginning with the negligent infliction of damage through to the conclusion of the immediate aftermath whenever that may be. It is a matter of judgment from case to case depending on the facts and circumstance of each case. In my judgment on the facts of this case there was an inexorable progression from the moment when the fit occurred as a result of the failure of the hospital properly to diagnose and then to treat the baby, the fit causing the brain damage which shortly thereafter made termination of this child's life inevitable and the dreadful climax when the child died in her arms. It is a seamless tale with an obvious beginning and an equally obvious end. It was played out over a period of 36 hours, which for her both at the time and as subsequently recollected was undoubtedly one drawn-out experience."
At paragraph 36, when considering whether the event was "horrifying", Ward LJ said:
"For my part the facts only have to be stated for the test to be satisfied. This mother awakens to find her baby rigid after a convulsion. Blood is coming from his mouth. He is choking. Is that not as much an assault upon her senses as if her child had been involved in a road accident, suffered grievous head injuries as yet undetected and was found bleeding in the car seat? Her fear and anxiety was undoubtedly calmed not long afterwards when given an incorrect medical opinion that it was very unlikely and would be very unlucky if Elliot had suffered serious damage. Every mother would seize upon the good news for her comfort to reduce the impact of the horror. Consequently, all the more likely it is that she should have felt numb, panic stricken and terrified by the sudden turn of events when she arrived at King's College Hospital. That left her stunned. As the consultant observed she "responded as if half in a dream … in a state of emotional shock". Her hopes were lifted then they were dashed and finally destroyed when shortly thereafter she was advised to terminate treatment on the life support machine. That she should have felt that "this was a complete shock" seems to me to be inevitable. That her immediate reaction should have been one of anger is understandable. Anger is part of the grieving process. But the agreed medical evidence made it plain that the combination of events "witnessed and experienced" caused her pathological grief reaction and was different from a normal grief reaction. They must have been chilling moments, truly shocking events, as the experts agreed in answer to the seventh question put to them, and thus amply justifying the conclusion that this was a horrifying event."
Ward LJ then went on to deal with the element of "sudden appreciation of the horrifying event" which is an aspect of proximity necessary to establish liability. As he observed at paragraph 38:
"Without the sudden and direct visual impression on the claimant's mind of actually witnessing the event or its immediate aftermath, there is no liability".
He considered that the judge had been fully justified in coming to the conclusion that the respondent's appreciation had been "sudden". Being awoken by her baby's convulsion and seeing his state had been "a sudden assault on her mind". In the same way, the bad news given to her at King's Hospital and the following morning could, he found, be characterised as "sudden and unexpected assaults on her mind". He summarised the effects thus:
"The first … event in the series is her being woken by her child's convulsion. What she saw was unexpected. That amounted to a sudden assault on her mind. The next event is arriving at the hospital, hopes high. She is given news she did not expect and did not want. The reaction was to leave her stunned. That was a sudden and unexpected assault on her mind. The next day she is told she should switch off the life support machine. Perhaps she feared it might be so but does one doubt the consultant's evidence that she and her partner "found it particularly devastating because they thought they had been reassured prior to Elliot's transfer that his condition was treatable"? Each of these three events had their impact there and then. This is not a case of the gradual dawning of realisation that her child's life had been put in danger by the defendant's negligence. A consequence of that negligence was that the child was seized with convulsion. She was there witnessing the effect of that damage to her child. The necessary proximity in space and time is satisfied. The assault on her nervous system had begun and she reeled under successive blows as each was delivered. It comes as no surprise to me that when her new baby was ill she should suffer the flashbacks of 36 horrendous hours which wreaked havoc upon her mind"
The Court of Appeal dismissed the appeal against the judge's decision.
The most recent decision of the Court of Appeal to which I was referred was the case of Crystal Taylor et al v A Novo (UK) Ltd [2013] EWCA Civ 194. In that case, the claimant's mother had sustained injuries to her head and foot as a result of an accident at work caused by the negligence of the defendant. About three weeks later, in the presence of the claimant, she unexpectedly collapsed and died due to deep vein thrombosis and consequent pulmonary emboli which themselves were caused by the injuries sustained in the accident. The claimant had not witnessed her mother's accident, but claimed damages against the defendant for psychiatric illness (PTSD) caused by witnessing her mother's collapse and death.
The trial judge found that the operative "event" that caused the damage was the death, it being the second "event" caused by the defendant's negligence suffered by the mother three weeks earlier and that the claimant's injury was a reasonably foreseeable consequence of the defendant's negligence. He gave judgment for the claimant. The defendant appealed on the ground that the claimant had not been present at the scene of the accident which caused the death nor was she involved in its immediate aftermath. On behalf of the claimant, it was contended that the relevant "event" which should be considered for the purposes of deciding whether the claimant was a secondary victim was not the original accident, but the collapse and death that resulted from it.
Giving the judgment of the Court of Appeal, Lord Dyson MR reviewed the authorities, most of which I have already referred to. At paragraph 26, he observed that, in order to succeed as a secondary victim, the claimant would have to show that there was a relationship of proximity between herself and the defendant. He referred to the two distinct and different senses in which the term "proximity" is used in the relevant cases. The first describes the relationship between parties which is necessary in order to found a duty of care owed by one to the other. He referred to the point made by Lord Bridge in Caparo Industries Plc v Dickman [1990] 2 AC 605, 617-618:
"What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of 'proximity' or 'neighbourhood'….".
As to the second sense in which the word "proximity" is used, Lord Dyson said at paragraph 27:
"But in secondary victim cases, the word "proximity" is also used in a different sense to mean physical proximity in time and space to an event. Used in this sense, it serves the purpose of being one of the control mechanisms which, as a matter of policy, the law has introduced in order to limit the number of persons who can claim damages for psychiatric injury as secondary victims or to put it in legal terms, to denote whether there is a relationship of proximity between the parties. In a secondary victim case, physical proximity to the event is a necessary, but not sufficient, condition of legal proximity."
Lord Dyson MR went on to note that the defendant's single act of negligence had had two consequences. If the claimant had been in physical proximity to her mother at the time of the accident and had suffered shock and psychiatric illness as a result of seeing the accident and the injuries sustained by her mother, she would have qualified as a secondary victim on established principles. However, he continued at paragraph 29:
"But in my view, to allow Ms Taylor to recover as a secondary victim on the facts of the present case would be to go too far."
Lord Dyson MR gave two reasons for this view. In relation to the first of these, he said at paragraph 30:
"First, it seems to me that, if the judge is right, Ms Taylor would have been able to recover damages for psychiatric illness even if her mother's death had occurred months, and possibly years, after the accident (subject, of course, to proving causation). This suggests that the concept of proximity to a secondary victim cannot reasonably be stretched this far. Let us now consider the situation that would have arisen if Mrs Taylor died at the time of the accident and Ms Taylor did not witness the death, but she suffered shock when she came on the scene shortly after the "immediate aftermath". In that event, Ms Taylor would not have been able to recover damages for psychiatric illness because she (possibly only just) would have failed to satisfy the physical proximity control mechanism. The idea that Ms Taylor could recover in the first situation but not in the others would strike the ordinary reasonable person as unreasonable and indeed incomprehensible. In this area of the law, the perception of the ordinary reasonable person matters. That is because where the boundaries of proximity are drawn in this difficult area should, so far as possible, reflect what the ordinary reasonable person would regard as acceptable."
The second reason identified by Lord Dyson MR was public policy. At paragraph 31, he said:
"In my view, the effect of the judge's approach is potentially to extend the scope of liability to secondary victims considerably further than has been done hitherto. The courts have been astute for the policy reasons articulated by Lord Steyn to confine the right of action of secondary victims by means of strict control mechanisms. In my view, these same policy reasons militate against any further substantial extension. That should only be done by Parliament."
Lord Dyson MR approved the observations of Auld J in Taylor v Somerset Health Authority: see paragraph 184 above. The defendant's appeal was allowed.
Discussion
The Defendant has conceded that the close relationship between the Claimant and Mrs Sharma was such as to bring her within the class of persons who are eligible to bring a claim as secondary victims, i.e. to found a duty of care owed by the Defendant to the Claimant. The Claimant has also established that she has suffered a psychiatric illness, namely a Major Depressive Disorder. I have found that her illness was caused by the incidents which occurred on 12/13 May. However, she must also show that her psychiatric illness was caused by the sight or sound causing an assault to her senses. She must establish sufficient proximity to the event, a sudden and direct visual impression on her mind of witnessing the event or its aftermath.
The Claimant's case is that she was exposed to a "seamless single horrendous event" starting on the morning of 12 May which she directly witnessed and/or in which she was directly and immediately involved, either by direct sight or by sound. On behalf of the Claimant, Ms Jones submitted that the facts of this case were very similar to those in Walters. The Claimant had been exposed to the visual impression of her sister in the A & E Department and had the added distress of being aware, because of her professional experience, of the implications of the news that she had had a bleed. Ms Jones pointed out that the Court of Appeal in Walters had found that, once the "event" started, a period of 36 hours could be regarded as a "single seamless event"; the time period in the present case was, of course, considerably shorter. Ms Jones pointed out that, following the start of the "event" in Walters, the mother had been given 'good news' about her baby's prognosis, but later had the shock of learning that the information had been wrong and that the prognosis was very bad. The Court of Appeal had accepted that those incidents had formed part of the single "horrifying event". She submitted that, in the present case, the Claimant's knowledge of the risk of a re-bleed and of the need to get Mrs Sharma moved to a specialist unit - and the effects on her of this knowledge - should similarly be considered as part of the relevant "event". She argued that, in a similar manner to Walters, the assault on the Claimant's nerves had begun when she entered the A & E Department at ESH and saw her sister and that, thereafter, she had "reeled under successive blows as each was delivered".
For the Defendant, Mr Matthews argued that Walters was distinguishable. In that case, the mother had woken up and witnessed her son rigid, bleeding and choking. There was therefore a "sudden appreciation of the horrifying event". In the present case, he said, there was no such sudden "horrifying event". Rather, the Claimant's realisation of the danger her sister was in came gradually, as a result of telephone calls, her own concerns and the events at ESH. He submitted that the Claimant did not have the required degree of proximity to a specific and shocking "event".
Mr Matthews argued that the case was "on all fours" with Crystal Taylor. In that case, there were two consequences of the defendant's negligence, i.e. first the accident and then the collapse and death. He submitted that, in this case, there were also two consequences of the accident. The first was that Mrs Sharma was not treated and therefore the biological process continued unchecked and she was exposed to the risk of a re-bleed. The second, which could have occurred months or years later, was the discovery that she had suffered a bleed and might be at risk of a re-bleed. He drew attention to the observations of Lord Dyson MR in Crystal Taylor:
"But in my view, to allow Ms Taylor to recover as a secondary victim on the facts of the present case would be to go too far."
Mr Matthews suggested that precisely the same observations apply in the present case. Ms Jones disagreed. She submitted that Crystal Taylor was completely different in character. In that case, the first consequence of the defendant's negligence (the accident) was known. In this case, like Walters, the consequence of the negligence was unknown and unknowable until 12 May. The first part of the 'event' was the communication of the consequence of the negligence and the rest of the 'event' continued from there.
Conclusions
As the case law to which I have referred makes clear, the task of determining whether or not a claimant in a secondary victim case has satisfied the "control mechanisms" which must be surmounted in order to recover damages is not an easy one. It can also be a somewhat artificial exercise, involving as it does decisions about what constitutes an "event" or the "immediate aftermath" thereof and whether the claimant's experience of the event or its immediate aftermath can properly be described as "horrifying", "shocking" and/or "sudden and unexpected".
The early claims by secondary victims mainly concerned accidents, most often road traffic accidents. In those cases, it was comparatively easy to identify the relevant "event" (the accident) although, as the authorities show, it was often more difficult to determine precisely what constituted the "immediate aftermath" of an event.
Cases of clinical negligence present particularly difficult problems. The factual background of cases can be very different and often quite complex. The nature and timing of the "event" to which the breach of duty gives rise will vary from case to case. In Taylor v Somerset Heath Authority, the claimant's husband's heart attack and death occurred as a consequence of negligent treatment which had occurred many months before. The claimant did not observe the occurrence of the heart attack or death. She came onto the scene an hour later and viewed her husband's body at the mortuary. The trial judge found that there was no "qualifying event", just the final consequence of her husband's progressively deteriorating heart condition which the defendant, by its negligence many months before, had failed properly to treat. It was not the kind of external, traumatic event which, when perceived by a secondary victim, would give rise to a successful claim for damages. He further found that, even if the heart attack and death were to be treated as a qualifying "event", the claimant did not see her husband's body soon enough after his death to convey to her the shock of the heart attack as well as its consequence.
In the case of Walters, it is not clear how long prior to the baby's seizure the negligence had taken place. It is, I suppose, arguable that the negligence continued from the point when the wrong diagnosis was made right up to the time of the seizure. However, in that case, the Court of Appeal made clear (paragraph 34 of Ward LJ's judgment) that the "event" was a convenient description for "the fact and consequence of the defendant's negligence" and that it had begun "with the negligent infliction of damage", i.e. at the time of the baby's convulsion. That was the time when the consequence of the negligence first became evident. There would of course have been ongoing consequences affecting the baby's biological processes for some time previously but it was only at the time of the convulsion that those consequences became evident and impacted on the claimant. The Court of Appeal found that the "event" began at that time and continued for the 36 hours up to the baby's death.
In the present case, the negligence which gave rise to the claim started on 5 May and continued until, a week afterwards, both the fact of the negligence and of the potential consequences of that negligence became known. As with the case of Walters, in reality, of course, certain consequences (i.e. the biological processes which eventually led to the fatal re-bleed) had been ongoing throughout that period and had caused Mrs Sharma's symptoms to worsen. Within about 15 hours of the time when the fact and potential consequences of the negligence became known, those consequences - i.e. the fatal re-bleed, followed by Mrs Sharma's death - actually occurred.
The fact of the Defendant's negligence and of its possible consequences became known to the Claimant when she received the telephone call from Mr Sharma on the morning of 12 May. At that stage, there was no element of "physical proximity" to any qualifying "event". The factual information she received was communicated by telephone. The potential implications of that information were informed by the Claimant's own extensive knowledge and experience. She became "panicky" and "really frightened", to the extent that she did not trust herself to drive.
I have already dealt at some length with the Claimant's subsequent arrival at the A & E Department at ESH. I have found that Mrs Sharma was not in the dramatic state of pain and distress described by the Claimant and other witnesses in their witness statements and oral evidence. She was plainly unwell, in pain, and fearful about the news of the bleed. But I am satisfied that she was not in such a condition that to see her could be described as a "horrifying event" or to cause "violent agitation of the mind". I consider that, reflecting afterwards on what had happened, the Claimant could imagine Mrs Sharma in the A & E Department. However, I do not consider that, at the time, the sight of Mrs Sharma had the visual effect on the Claimant which was later described. In the case of Walters, the trial judge and the Court of Appeal laid considerable emphasis on the start of the "event", when the mother awoke to find her baby rigid and choking after a convulsion, with blood pouring out of his mouth. Ward LJ likened that to the "assault upon her senses" the mother would have suffered if she had seen her child bleeding in a seat after a road traffic accident. That sort of "assault upon the senses" is, it seems to me, of a very different order to the scene in the A & E Department at ESH on 12 May. Indeed, even if Mrs Sharma had for a short time been in the state described by the Claimant, I do not consider that the sight would have come within the type of "event" described in Walters and the other relevant authorities. Mrs Sharma's condition was fluctuating; she did not have obvious injuries; she was not – or at least did not appear at that stage to be – in any obvious or immediate danger.
I am well aware that the Claimant's professional background gave her an unusual degree of insight into her sister's medical situation. It was suggested that, as a result, she would have been more sensitive to the events at ESH and therefore more likely to find them "horrifying". However, it seems to me that it is necessary to be cautious in finding that the Claimant's professional expertise made the sight of Mrs Sharma more "horrifying" than it would have been to a person without that knowledge. I consider that the "event" must be one which would be recognised as "horrifying" by a person of ordinary susceptibility; in other words, by objective standards. After all, certain people would find it more frightening to have no medical knowledge and not to know what was going on; they may feel helpless and isolated. Others may have armed themselves in advance with medical information from the internet which leads them to feel far greater fear than is in fact justified. It would be unfortunate if secondary victims' claims were to become embroiled in debates about an individual claimant's level of medical knowledge and its effects upon whether an "event" should be classified as "horrifying".
During her time at ESH, the Claimant was of course aware of the potential dangers of her sister's condition and of the need for her to be transferred promptly to a specialist Unit. She did all she could to assist Mrs Sharma by talking to the doctors, enquiring when the transfer would take place and reminding staff about the medication that had previously been prescribed. Throughout this time, she was worried and frustrated at the delay.
After her departure from ESH, the Claimant remained anxious. All the information she gained over the next nine hours or so came from the four telephone conversations which took place. The first made her "terrified" because her sister had not yet been transferred to SGH. The second, informing her of the first seizure, frightened her, although she was somewhat reassured by the fact that Mrs Sharma had appeared to recover and was now at SGH. The third telephone call was, she said, "a really frightening moment". It informed her of the further seizures and, given her own knowledge, she was well aware of the dangers of the situation. By the time she had spoken to the Ward Sister at SGH, she knew that Mrs Sharma had probably suffered a re-bleed and was only too aware of what that meant. Understandably, however, she clung to the "glimmer of hope". That "glimmer" was, I have found, destroyed when she was informed by Mr Sharma that they had "lost" his wife. During the whole of that period of approximately nine hours, the Claimant did not see her sister and was not proximate to the events that were unfolding.
Even after her conversation with Mr Sharma, the Claimant could not quite believe that her sister would not recover. It was not until she saw Mrs Sharma on the life support machine that the reality became clear. That must have been a deeply upsetting experience for her and it is no wonder that she suffers "flashbacks" whenever she sees a similar sight in the course of her work. It was not, however, a sudden or unexpected shock. Her professional position makes the memory of that moment a great deal more difficult to bear. All the events that followed were also distressing for the Claimant and other members of her family. Again, she has suffered the additional pain of having to re-live those experiences in her working environment.
No one can fail to have the deepest sympathy for what the Claimant suffered during the period from Mr Sharma's telephone call on the morning of 12 May until – and indeed after – Mrs Sharma's death. However, in order to succeed in her claim for damages, she has to overcome the high bar of the "control mechanisms" which apply to cases such as hers. I have come to the conclusion that she cannot do so. It does not seem to me that what happened in this case can properly be described as a "seamless single horrifying event". There was a series of events over a period of time. The Claimant was proximate to some of those events, during the periods spent in ESH and SGH. However, much of her fear, panic and anxiety were caused by information communicated to her by telephone, or face-to-face by Mr Sharma, when he told her that her sister had "gone". I do not consider that any of the individual events within the series actually witnessed by the Claimant gave rise to the sudden and direct appreciation of a "horrifying event". Even when she witnessed her sister on the life support machine, her perception was informed by the information she had been receiving over the previous 15 hours or so and by her own professional knowledge. Mrs Sharma did not have the type of injuries suffered by the deceased in Galli-Atkinson, was not in obvious pain and had not been pronounced dead at that time. In the circumstances, it does not appear to me that the sight of her can be regarded as a "horrifying event"; nor was it sudden or unexpected. In my view, there was a series of different events on 12/13 May that gave rise to an accumulation during that period of gradual assaults on the Claimant's mind and resulted in her psychiatric illness.
It follows therefore that the Claimant's claim must be dismissed.
DAMAGES
In view of my decision, I can deal with the issue of damages quite shortly.
Pain, suffering and loss of amenity
I have described at paragraphs 98-108 the Claimant's medical condition following Mrs Sharma's death. At paragraphs 109-134, I referred to the views of the Consultant Psychiatrists. There is no doubt that the Claimant's Major Depressive Disorder compromised her ability to work, to pursue her day-to-day activities and her enjoyment of her social and family life. Prior to Mrs Sharma's death, the Claimant derived great satisfaction from her work. Now, it brings back bad memories in the working environment and she experiences fear and apprehension that this might happen at any time. In her witness statement, Ms Pearson described the problems encountered by the Claimant at work. Mr Shorter observed in his witness statement how the Claimant is often sad when she returns from work and how, since her sister's death, she "has just never seemed to get back on track". Happily, there does appear to be some improvement in the Claimant's condition, although the Consultant Psychiatrists agreed that she remains vulnerable to a further Depressive Episode and may need further therapy in the future.
I was referred to the Judicial College Guidelines for the Assessment of General Damages in Personal Injury Cases (12th Edition) 2013. For the Claimant, Ms Jones submitted that the case fell within the "moderately severe" bracket. In cases within that bracket, the injured person can be expected to have significant problems associated with:
i) The injured person's ability to cope with life and work;
ii) The effect on the injured person's relationships with family, friends and those with whom he or she comes in to contact;
iii) The extent to which treatment would be successful; and
iv) Future vulnerability.
The range of damages within the "moderately severe" bracket is £14,000-£40,300, with the majority of cases falling somewhere near the middle of the bracket. For the Claimant, Ms Jones argued that the Claimant's case had unusual features and therefore the Claimant fell within this bracket. She submitted that an appropriate figure would be £30,000, i.e. just above the middle of the bracket.
Mr Matthews submitted that the appropriate bracket would in ordinary circumstances be within the "moderate" bracket. Cases in that bracket will have the sort of problems associated with factors (i)-(iv) above, but, in these cases, there will have been a marked improvement by trial and the prognosis will be good. The range of damages for this bracket is £4,500-£14,000. Mr Matthews suggested that, in view of the unusual overlap between the Claimant's occupation and the circumstances of her sister's death, it would be appropriate to go a little way above the "moderate" bracket to the sum of £17,500.
The Claimant's psychiatric illness has caused a considerable loss of her enjoyment of life (in particular, her family life) and her work. It has had an effect upon her relationship with her family and with colleagues at work. Although her condition has improved and the prognosis is good, there remains the risk of a further Depressive Episode. In those circumstances, and in particular by reason of the effects she suffers at work, I consider it appropriate to place the case within the "moderately severe" bracket. It seems to me that an award for pain, suffering and loss of amenity (PSLA) of £25,000, i.e. just below the middle of the range, would properly reflect the Claimant's injury. To that will be added the interest payable thereon which amounts to £1,280.
Past Losses
Past loss of sickness pay is agreed at £14,595. Past loss of bank/overtime is agreed at £4,000 and past travel costs are agreed at £120. Interest thereon is agreed at £293.83.
Future Losses
As I have already noted, Dr Turner has expressed the view that the Claimant's employment status remains somewhat precarious. Whilst she is now working the same level of hours and taking the same responsibilities as she did prior to Mrs Sharma's death, Dr Turner takes the view, which I accept, that it would not take very much to "tip her" to the point that she could not continue.
The Claimant has refrained from seeking a move to an alternative field of nursing, largely because, as the main breadwinner at home, she feels obliged to remain where she is. In addition, she gains satisfaction and pride from working in such an important and specialist field. The Claimant claims future loss of earnings on the basis, first, that, in the event she is unable to continue in her present role, she would have to move to a less well paid role. Assuming that she moved to a job one salary band below her present band, that would result in an annual loss of earnings of £7,655 net. The Claimant has used a multiplier of 10.19 (taken from Ogden. 7, Table 10), calculated on the basis of retirement aged 65 years. In evidence, the Claimant said that she would hope to work to the normal retirement age. Applying the multiplier and on the basis of an estimated 40% chance of the Claimant having to move jobs, the figure claimed was £31,202.
By way of alternative, the Claimant sought a Smith v Manchester award of £30,000 to reflect the fact that, if she had to cease her present job, she would be at a disadvantage in the labour market.
In addition to either of those alternatives, the Claimant claimed £6,000 (i.e. 50% of the full value) by way of loss of congenial employment in the event that she has to move to a more junior post.
The total claim for loss of future earnings was therefore, £37,202 or £36,000, depending on which alternative was accepted. In addition, there was a claim for £10,000, representing the loss of pension that would be suffered by the Claimant if she were to have to move to a less well paid nursing post.
For the Defendant, Mr Matthews pointed out that the Claimant had managed to remain in her current employment for more than five years (apart from some absences) since her sister's death. In her evidence, she had expressed a desire to continue in her present job as long as possible. She had not investigated the possibility of moving to a job in a lower salary band. She had not yet considered whether to work until retirement age. She is job-sharing and has found a way to manage. He submitted that the risk of her changing her job and therefore losing earnings and/or her pension was small and should be reflected by a comparatively modest award of £5,000-£10,000.
I accept that, as a consequence of her own courage and determination, the Claimant has managed to remain in her job in the Neuro-Intensive Unit and is likely to be able to continue to do so. I do not consider that it is appropriate to approach her claim for loss of future earnings by reference to a multiplicand and multiplier. The claim is too speculative for that. Instead, I would award a single figure comprising her claims for loss of earnings, loss of pension and loss of congenial employment. In my view, an appropriate figure would be a total of £25,000.
The remaining claim for future loss, i.e. for future therapy costs, is agreed in the sum of £2,180.
The damages, if awarded, would therefore comprise:
PSLA : £25,000
Interest thereon : £ 1,280
Past losses : £18,715
Interest thereon : £ 293
Future losses : £27,180
Total : £72,468
FINAL OBSERVATIONS
Nobody could fail to have the deepest sympathy for the Claimant who suffered the distress of losing her much-loved sister in circumstances where, had she been properly treated, she would most probably have survived. I make it clear that my decision in this case is in no way intended to minimise the Claimant's distress, nor the serious and longstanding effects of the Defendant's negligence on the Claimant and other members of her family. The Claimant's courage and resilience in continuing with her important and highly specialised work for the National Health Service, in circumstances where she is exposed to daily reminders of the events leading to the death of her sister, are worthy of considerable admiration.
I have serious concerns about the catalogue of medical and other failures leading up to Mrs Sharma's tragic death. There was the initial failure to detect the original subarachnoid haemorrhage which, it subsequently transpired, could be seen on the CT scan. There was then a failure to carry out a further test (a lumbar puncture) to exclude the possibility that, notwithstanding the apparent lack of abnormalities on the CT scan, there was in fact a SAH. Mrs Sharma was discharged from ESH without any firm or proven diagnosis having been made. When there was concern as to whether the scan had been correctly interpreted, there was a lengthy delay of about six days in having it reviewed by an expert. During that time, the family was not made aware of the fact that there was any doubt about the interpretation of the scan, or that it was to be reviewed and when that would be done. When the fact of the bleed came to light, a week after the original CT scan, the system for electronically transferring the CT imaging between ESH and SGH was out of order, resulting in a delay of several hours before SGH was able to authorise the transfer of Mrs Sharma there. Even then, another few hours elapsed before the transfer actually took place. And, for a period of about eight hours, Mrs Sharma did not receive the medication which had been prescribed for her.
Very shortly after Mrs Sharma's death, the Defendant identified the death as a Serious Untoward Incident. It initiated a full investigation by clinicians and staff from ESH. Independent opinion and scrutiny was provided by a Consultant Neurologist from another of the Defendant's Hospitals. The resulting Report identified most of the deficiencies to which I have referred and set out the steps which should be taken to correct them. Copies of the Report were subsequently sent to members of Mrs Sharma's family. I can only hope that by now, almost six years on, the lessons have been learned from these sad events and that those deficiencies will not be repeated.
There is another matter which causes me concern. Mr Sharma's evidence was that, after his wife's death, the doctors at SGH asked members of the family if they wanted "to have a Coroner involved". Assuming that he is right about that, it was not a question which the family should have been asked. The fact is that the doctors at SGH must have been aware that (to use the words attributed to them) "a window of opportunity had been missed" and that it was at least possible that Mrs Sharma's death had been caused by the Defendant's negligence and was "unnatural". In those circumstances, it is not the function of doctors or members of the deceased's family to make a decision as to whether the death falls within the jurisdiction of the Coroner. It is a matter to be decided by the relevant Coroner. He or she may or may not decide that the death falls within his/her jurisdiction and may or may not elect to order a post-mortem examination and/or an inquest. However, he/she will be able to consider whether, in the particular circumstances of the death, it is appropriate to take any of these steps. It is of course understandable that Mrs Sharma's family members were content not to involve the Coroner. It is natural that a bereaved family might prefer not to face the potential delay and additional stress of involving the Coroner, particularly when the medical cause of death is clear. However, it is important in the public interest for such decisions to be taken, not by members of the family or by doctors, but by a Coroner. |
Sir Colin Mackay :
The Claimant, then aged 49, slipped on a wet pavement inside South Kensington tube station and fell awkwardly. Her left leg was bent underneath her, the force of her body was taken on the front aspect of the knee and the knee was twisted in the process. She brings a claim against the Defendant, who was her General Practitioner, for negligent examination of the knee on 16 February 2009.
It is accepted by both sides that in the course of that fall she suffered, among other injuries, a fracture of the head of her left fibula in the area to which the collateral ligament attaches to the head of the fibula bone. She also suffered bruising to the rest of the knee joint. It is her case that the failure by the Defendant to conduct a proper examination of her knee was a breach of duty on her part and caused the fracture to go undetected for several months resulting in pain and suffering. She says it also caused her to walk with a stick and adopt an antalgic gait which threw a strain on her low back, in which area there were longstanding but asymptomatic degenerative changes. These changes became productive of painful symptoms because of her need to use the stick and the gait she subsequently adopted as a result.
All components of the claim are in issue namely breach of duty, causation and loss.
It is said that there were two consequences flowing from the breach of duty and consequent delay in diagnosing this fracture. The first is increased knee pain and loss of mobility and the second is low back pain arising out of the fact that the Claimant had to use a stick for walking.
The claimant's previous medical history
The Claimant has a long, complicated and unhappy medical history. She has not been able to work for many years though previously she was a translator and had also worked for an airline. She lived alone in a small semi-basement bedsit on the Fulham Road in London. She is a highly intelligent woman and in my judgment was an essentially honest witness but she is quite understandably very much focused on her many illnesses which have dominated her life to a high degree. She has for many years suffered in varying degrees from neuropathic disorders variously diagnosed as post-viral syndrome, fibromyalgia, chronic fatigue syndrome and ME. She also has a persistent viral infection and has suffered from time to time with depression. These conditions affect almost all parts of her body with muscular and joint aching and pain, with feelings of fatigue and tiredness. She has been heavily dependant upon others to help her with the normal business of life.
Dealing with the aspect of back pain the two orthopaedic experts agreed that the question of causation "was inevitably bedevilled by Miss Sibaweih's ongoing inter-current problems of figbromyalgia, chronic fatigue and ME and her repeated assertions of aching all over". The same goes for the court's task, no less than for that of the medical experts.
Miss Power with great efficiency and industry has produced a 12 page summary of relevant medical events in the Claimant's life between 1989 and 2012 relating to her back pain and left knee. This is far from being a complete record of all her medical attendances which over those years must have run into the hundreds. I stress that Miss Sibaweih whilst understandably preoccupied by her constant health problems is an essentially honest witness and has at no time set out to deceive the court or the doctors so far as I can judge.
So far as the left knee is concerned she appears to have suffered some form of injury at or before the end of 1992 when she had a persistent painful inflammation in it making it necessary for her to use crutches. The left knee continued to be troublesome throughout 1993 and she said she could not walk without a stick in November of that year.
In 1994 an arthroscopy revealed gross chronic synovitis and arthrofibrosis of the left knee which was injected but continued to give pain and to be treated until the end of 1995. It was still causing her problems and she had further injections in March 1996. By the end of 1996 she was described as having "done reasonably well" over the past two years but was still complaining of some sharp pains.
The knee settled, it would seem, until in late 2005 after a period of squatting in her garden she had a flare up of symptoms which continued into 2006. Between the arthroscopy in 1994 and 2005 though she visited her GP for her other problems over 50 times there is no complaint of trouble in the left knee.
In July 2008 she was described as having "made a real benefit" since January 2006 and was now according to the Defendant in a note to the hospital walking independently, meaning without a stick.
So far as the back was concerned X-rays in December 1989 revealed mild scoliosis and she was complaining of pain in the low back. There were several occasions in 1993 when she complained of back symptoms, one of which had been brought on by a "twist in bed".
The next mentions of back pain are in 1998 when she experienced a lot of pain in her back and neck described as muscle soreness associated with weakness. The following year she described as "a lot of back pain especially on walking or standing". She made periodical claims of back pain in 2000-2003 but is described in July 2006 by the Defendant as "Improving! Walking without a stick!".
Also of relevance are the applications that she made for various benefits which required her to give an account of her levels of disability at the relevant time.
In February 2005 the Claimant was seen by a doctor in connection with her claim for incapacity benefit and a thorough examination took place. She was recorded as suffering from back problems and said she could only walk for three minutes due to back and lower limb problems and her knee problems and physical fatigue. She walked slowly with a limping gait and using a stick to stand, the doctor noted.
She made a further application on 5 March 2008. Her principal complaint then as before was her chronic fatigue syndrome and fibromyalgia but she also reported arthritis in both knees and in general terms pains all over her body. She reported very bad pain in her lower back and bouts of inflammation in her knees such that she could not walk at all. She sometimes used a walking stick.
In September 2008 she made an application for disability living allowance for which she had to fill in a 45 page questionnaire. The outcome of the application was that she was awarded the allowance with the mobility component at the higher rate and the care component at the lowest rate. Of interest are some of the descriptions she gave of her then condition. Again the general picture was one of diffuse pain in all parts of her body. She said she used a walking stick outdoors depending on the severity of her condition which was sometimes so acute that she could not pour water out of a kettle unaided.
She said at that stage that she could normally walk only 35-40 metres without feeling severe discomfort and it would have taken her two minutes depending on how she felt on the day to achieve even that. On bad days she did not go out at all as she could not manage walking out of doors. There were days her knees hurt very much and she had pain over all her body (bones and muscles) and a feeling of a heaviness and dragging in her legs and arms. "I also have back and neck pain all the time". Sometimes when she was walking outdoors her left knee gave way or her ankle twisted and she stumbled.
As to her requirement for care she said she suffered from physical pain and fatigue all the time and found standing or even sitting on a stool to prepare a meal very difficult. "I have lower back pain all the time and aching everywhere in my body…I am never free from pain and fatigue".
In her evidence she said that in the months following this application she was better. On the day of the accident itself she was able to go out and walked to South Kensington Station and down the stairs onto the platform, presumably, which it would seem is a distance of approximately a third of a mile.
In general terms, said Mr Morrison her orthopaedic expert, the picture painted by her records is part of her "generalised musculo-skeletal and neuropathological problems not related to the injury in 2009", the effects of which were quite different from the symptoms she had intermittently suffered from 1993 onwards.
The accident and its immediate consequences
The Claimant said that she slipped on a wet surface with her left leg bent underneath her and was helped up by a lady. Having sat for a while to recover she made her own way home with some difficulty. She agreed she could have gone to an A&E Department but did not at that stage think it was necessary. She waited 11 days to see the Defendant because she liked and respected her and did not take the opportunity offered of getting an earlier appointment with another doctor or use the walk in clinic at the surgery. Instead she rested for that period, took anti-inflammatories and as she put it "hobbled about the flat".
As to the defendant's examination, the Claimant's recollection was that she looked at the knee and saw the bruising and swelling, she did not palpate the area of the fracture nor did she flex the knee. She did check the stability of the knee by supporting it with one hand and moving the lower leg with the other, with the leg in a semi-bent position. As she put it if she had been palpated in the area of the head of the fibula that would have been very painful at that time as she could not bear even bear to wear trousers or be touched on the flesh.
The Defendant's evidence was that she was aware of the mechanism of the accident and in particular the fact that the left leg had been bent underneath the Claimant as she fell. The fundamentals of such an examination she said were "look-feel-move" and that is what she said she did. Though a flexion of less than 90º would be noticeable, she had not recorded that and said that meant she was happy that the flexion was within normal limits and for that reason did not note it. As to palpation she put her evidence this way. "I just had a good feel of it [which I took to mean the knee generally] I mean a good feel around". The Claimant did not exhibit or complain of pain when she did it.
In her notes of the consultation she recorded "no evidence of ligament tear. Bruised." The note is silent about range of movement or palpation. She dealt in the note with medication and said "refer to physio"; she did then complete an urgent physiotherapy referral form as a result of which the Claimant was given an early date of 24 February for that to take place.
The Defendant agreed that she had the possibility of a fracture in her mind but that it was not at the top of her list. She agreed that if there had been a possibility of a fracture she would have referred the claimant for X-ray because that is a better investigative technique for a suspected fracture than an MRI scan. She accepted that the accident as described was one clearly capable of causing this particular fracture, which I accept is otherwise generally speaking a rare event. The NICE Guidance of 2010, indicative as it is of good practice at the time, says that a fall onto a flexed knee can cause a fracture of the proximal tibia. It was not her practice to record negative findings in her notes although she accepted she did on this occasion record that there was no ligamentous tear evident.
The agreed fact is that there was at that time a slightly displaced fracture at the head of the Claimant's right fibula. I cannot accept the suggestion that at that stage, 11 days after the fall, had that spot been firmly pressed (a description of what is involved in palpation) it would not have elicited an immediate and unequivocal expression of pain on the part of the Claimant. The head of the fibula is easily accessible and evident even to a layman's eye. It is covered only by a layer of skin. The Defendant's experts sought to suggest that over this period of 11 days there would have been healing of the fracture and as Mr Quaile, the defendant's orthopaedic expert, put it there would not have been "exquisite pain" if it was palpated, but rather local tenderness to which, he accepted, the patient would still have reacted.
I note below that 6 weeks after the accident on 16 March 2009 a consultant orthopaedic surgeon Mr Strachan recorded that "she was tender around the pre-patellar area and also over the tibial tuberosity". Also on 22 June, over 4 months after the accident, Mr Molajo, an orthopaedic specialist registrar, found tenderness over the proximal fibula.
Mr Morrison found it "inconceivable" that a fracture of the fibula would not have given rise to acute tenderness on palpation on the day of the examination. There would have been from the date of the fall bleeding of the fracture, with swelling and bruising, and the whole area around it would have been tender. I found that view compelling.
I am satisfied on the balance of probabilities that the fracture was present on 16 February, that the Claimant never experienced or expressed any local pain at the fracture site in the course of the examination nor did she make any comment or complaint about it, and that if there had been proper firm palpation in that area she would have done so. I therefore conclude on the balance of probabilities that the Defendant did not palpate the head of the fibula at any stage.
Dr McCarthy, the Claimant's GP expert, said that with this injury the task of the examining GP would be to consider the differential diagnosis which should have included fracture and that the default position should have been to send the patient for X-ray unless she could exclude the possibility of a fracture. The differential diagnosis would have been, he accepted, an unlikely one in the absence of tenderness on palpation. There was really little difference between the experts on this particular issue at the end of the day.
Dr Crouch, the Defendant's GP expert, who also subscribed to the view that after 11 days the pain from the fracture would be "not quite as acute", thought there would still have been "some tenderness" and agreed that if there is a possibility of a fracture or if a fracture could not be excluded the GP was "duty bound to refer". This did not happen.
I therefore have concluded, with some regret, as I consider she is a good and caring General Practitioner, that Dr Bedford's failure to examine this fracture properly and in particular to palpate the area of the head of the fibula fell below the standard of care reasonably required of a reasonably competent General Practitioner in these circumstances. I record in fairness to her that the slight problem she has with her left hand has no relevance at all to the issues I have to decide.
Subsequent events in the management of the Claimant do nothing to disturb the opinion that I have formed. She was indeed seen by a physiotherapist on 24 February and he appears to have endorsed the finding that the only injury here was bruising and he recalls no tenderness at the accident site. An interesting feature of his report (which three of the four expert witnesses failed to detect until a very late stage of this litigation – probably because it was nearly unintelligible) was that he discovered restricted movement (0 to 90º limited by pain) which casts doubt in my judgment on Dr Bedford's assertion that the range of movement was tested by her and found to be normal, but I do accept that variation between visits to practitioners can occur. I do not find she was negligent in this respect.
Events following the consultation
Subsequently the claimant consulted the defendant on 2 March "increasingly distressed by left knee". She was depressed, and wanted a referral to Mr Strachan at Charing Cross Hospital, whom she knew and trusted. The defendant, consistently with her diagnosis, gave her instead a non-urgent referral to the MSK unit. In the event rather than wait for this the claimant paid for a number of private consultations with Mr Strachan on 15 and 19 March, 15 and 29 April and 11 May. She was complaining of persisting pain in the knee, limping badly with a stick and exhibiting tenderness over the tibial tuberosity. Mr Strachan seems to have concurred with the theory that all that was wrong with this knee was bruising hence his recommendation to have not one but two MRI scans which, as is agreed by the experts, would not be suitable for the detection of a simple fracture. Strachan was more interested in viewing the area of bruising within the knee, though in fact the second scan showed a fracture through the upper aspect of the fibula.
None of these subsequent events shake the opinion I have formed as to what happened and did not happen on 16 February. It is of interest to note that the claimant, who does not appear to be a wealthy woman and who was living on benefits at the time, spent nearly £1,000 of her own money on this exercise, which underlines the genuine nature of her claim to be suffering severe knee pain at this stage.
Meanwhile the defendant referred the claimant back to the Pain Consultant at Chelsea and Westminster Hospital where she was reviewed by the Specialist Registrar Mr Molajo. He reported on 22 June that a plain X-Ray had revealed the fracture which appeared to have healed but she still displayed tenderness over the proximal fibula.
Mr Morrison thought that by this stage all the knee injuries, bruising and fracture, were very much on the wane and the contribution from the fibula would have been "pretty small". I find that by 6 months from the fall the fracture had ceased to be productive of any symptoms.
However, more problems arose when the claimant had an acute onset of low back pain with sciatica at the beginning of July which was shown on MRI imaging to be caused by a loss of disc height and posterior bulging of the disc at L4/5 impinging on the nerve. Mr Morrison accepts that this event cannot be linked causally to the fall or the consequent antalgic gait problem.
She was given an epidural injection at the Chelsea and Westminster hospital which made matters worse. She continued to attend the pain clinic through early 2010 controlling the pain with analgesics. In July she was referred, again as a private patient, to the National Hospital, Queen's Square, where there were discussed with her various options including spinal fusion surgery, but by early 2011 the symptoms were clearly reasonably well controlled by drugs and that episode seems to have come to an end.
The case for the claimant is that thereafter she has suffered and continues to suffer from a long term chronic back condition, which carries with it a need for increasing care in her daily life.
Causation of damage and loss
The claimant accepts that her left knee is not now productive of symptoms and I have made a finding that it ceased to be so after about 6 months. I am satisfied that she has not exaggerated the high level of pain it caused, especially for the first 3 or 4 months, as she hobbled around on her stick with a non-immobilised displaced fracture. Her efforts to get to the bottom of it as a problem show this. Had this been the only injury she suffered I would have thought general damages in the region of £2,000 would have been appropriate. I take into account the fact that her quality of life apart from this event was significantly impaired, and to detract further from it with an additional pain burden was particularly unpleasant for this lady.
The back pain is more problematic. Her case is that had there been a correct diagnosis on 16 February she would have been referred to hospital and X-rayed, the fracture would have been detected, it would have been immobilised with a splint and she would have been given crutches for her mobility. Mr Quaile agreed unequivocally in his report about splinting and the prescription of crutches as an appropriate part of her treatment, and I so find.
The significant bruising that she had to the lateral condyle of the knee, the weight bearing lower end of the femur, would have caused her severe problems with her mobility even had there been no tibial fracture or if it had been correctly diagnosed by the defendant. I am however prepared to accept on a balance of probabilities that the additional pain burden from the unsplinted fibula added to her immobility and thus use of a stick, both in terms of intensity and duration and should be regarded as a significant cause of what flowed from it.
I accept that the back pain caused by the abnormal gait she adopted, protecting the painful knee and throwing undue weight on her right side, was different in kind from what Mr Morrison called the generalised aches and pains she had suffered over many years before this event. There were therefore two concurrent causes of back pain from July 2009 for about the next 18 months.
I am however entirely unpersuaded by the proposition that the back pain the claimant describes in her witness statement of March 2014 (pain on sitting for more than an hour; inability to walk for more than 10 minutes; problems with stairs; interrupted sleep; sometimes needing to use a stick) was any different from the problems she was experiencing at various times before the fall due to her complex chronic conditions.
There is also the problem of the acute disc prolapse and sciatica in July 2009 which were unrelated to the fall or the failure to diagnose the fibular fracture. The effects of this were disabling, arose as an acute flareup, and must be separated out from any continuing symptoms attributable to the use of a stick in 2009.
I do however consider that over a period of about 18 months to 2 years after the consultation the claimant was suffering a degree of back pain referable to the defendant's negligence, additional to albeit overshadowed by the acute disc related episode.
The defendant argues that this is at best an acceleration of symptoms case, and that what she now complains of in terms of her back is a facet joint syndrome which could have come on at any time without the accident. Mr Quaile estimated a period of 12-18 months after which he was saying these symptoms would have occurred. This is always a difficult exercise, but having found there is no probability that the use of a stick has caused lifelong disability I have to do the best I can on the material before me to see what period of back pain can be attributed to this. Mr Quaile's range is an estimate from an experienced and expert source and I believe I should adopt it as the most likely acceleration period.
I have considered JC Guidelines 12th Edition 7 (B) (c) (ii) and some authorities which Miss Power has put before me. The bracket is a wide one, and if this injury stood alone I would place it somewhere in the middle.
I therefore assess the total damages for pain suffering and loss of amenity at £6,000.
As for the care claim the evidence is very imprecise as it often is. The Local Authority pre-accident provision was always inadequate to meet her needs (1 hour cleaning and 1 ½ hours shopping per week) . Over the 18 months or so after the fall the principal provider was her near neighbour Ms Kooros who said in her 2014 witness statement that she had known the claimant since about 2007 and noticed that after the accident she was literally unable to do anything herself having developed severe pain in her back. She provided her with meals, daily shopping, any heavy domestic chores such as changing bed linen and accompanying her on her many medical appointments. She said she also talked to the claimant and spoke of her with evident kindness. Her ministrations tailed off from about 2 years after the fall. She saw very little of her now as she had had to take care of her sister who lived elsewhere. There were other friends who helped out but Ms Kooros was obviously the main provider at the time I am interested in.
Having considered the care experts' reports, their respective assessments of the hours attributable to the tort in the initial approximately 18 month period, and the evidence on Ms Kooros, inclined as she was to be modest about her efforts and I find, invaluable help I find that about 5 hours a week is a fair valuation of the help from all quarters. The commercial rate at the time was in the region of £6.80 per hour, which over an 18 month period, and discounting for a non commercial supply of care at 25% leads to a figure which I round up to £2,000, which I award for past gratuitous care in this case.
That leaves the cost of private treatment between 16 March and the end of May 2009 which is £980. The other items in the Schedule are not connected to the negligence I have found.
I would be grateful if counsel could draw a proposed draft order and include a calculation of interest based on my figures. |
Mr Justice Warby:
The applications
In this action the claimant sues for libel in respect of the publication in this jurisdiction of allegations of fabricating evidence, conspiracy to murder, and the bribery and corruption of the prosecutor and judges in criminal proceedings. The allegations complained of concern the case of Alexei Kozlov, a former business associate of the claimant. The defendant is a journalist, and the wife of Alexei Kozlov. Like the claimant, the defendant is a Russian citizen. She is resident in Moscow. So the claimant had to obtain the court's permission to serve proceedings on her. In December 2012, he did. Since then, steps have been taken to serve the proceedings on the defendant in Moscow, but the validity of those steps is disputed.
The defendant now applies for:-
i) a declaration that this court has no jurisdiction to try the claim brought against her, alternatively, that it will not exercise any jurisdiction which it may have;
ii) an order setting aside the grant of permission to serve the proceedings on the defendant out of the jurisdiction;
iii) a declaration that (in any event) the claim form and particulars of claim have not been validly served; and/or
iv) in consequence of (i) and/or (ii) above, an order that the claim form and particulars of claim be set aside.
The claimant cross-applies for:-
i) a declaration that valid service of the claim form has been effected in accordance with Russian law; or, if service has not been so effected;
ii) an order under CPR 6.15(2) retrospectively validating as good service the steps already taken to bring the claim to the attention of the defendant; or
iii) permission under r 6.15(1) to serve the proceedings on the defendant at the address of her former solicitors, given as her address for service in a notice of change dated 12 January 2015, and an extension of time for service of the claim form to allow this.
The defendant's case has been set out in a witness statement she made on 5 September 2014 in support of her application, and a letter dated 13 January 2015 from iLaw Legal Services Limited ("iLaw"), solicitors who acted for her until that date. She is now unrepresented. She has not attended to present her application or to resist the claimant's applications. She remains in Moscow. The claimant is represented by Hamlins LLP and Adrienne Page QC, and has filed a substantial body of evidence.
The first question that arose was whether the hearing should proceed in the defendant's absence. I decided that it should, for reasons I shall explain after setting out the key stages in the litigation history. For reasons that will become clear, this summary will omit some facts that are dealt with only in the evidence served by the claimant in February 2015.
A short history of the proceedings
The claimant is a businessman. He is a Russian citizen, and was a Senator in the Senate of the Russian Federation from 2002 to 2010. In April 2011 he emigrated from Russia to Israel where he founded, with others, the Israeli Jewish Congress ("IJC"), of which he is the President. He is a former Chairman of the Russian Jewish Congress, and former Vice-Chairman of the European Jewish Congress. The defendant writes for the Russian newspaper Novaya Gazeta, but also contributes to other publications.
The claimant complains that the defendant libelled him in four publications: a blog post written by her on the website of the Moscow-based radio station Echo Moscow ("the Blogpost"), two articles quoting her that appeared on the website of the Russian online newspaper gazeta.ru ("the Second and Third Articles"), and a programme broadcast on Radio Liberty ("the Programme"). The Blogpost and the Articles all first appeared on 15 November 2011. The Programme was first broadcast on 15 March 2012. The Blogpost, the Articles, and a transcript of the Programme are all said to have remained and to remain today available online. The claimant complains of republication on other websites and in print of the defamatory sting of the Blogpost and the Articles. All these publications were in the Russian language, though the Second and Third Articles were also published on the English language version of gazeta.ru.
The Particulars of Claim allege that these publications bore the following defamatory meanings:
i) The Blogpost: "that the Claimant had put a contract out for the murder of Alexei Kozlov, which was to be carried out whilst Mr Kozlov was being transferred to prison". This defamatory sting is said to have been republished on three Russian websites, newsru.com, og.ru, and NR2.ru on 15 and 16 November 2011, and on a fourth Russian website, kommersant.ru, and its print version on 1 December 2011.
ii) The Second Article: "that the Claimant had ordered the fabrication of evidence in the criminal prosecution of Alexei Kozlov and had put a contract out for the murder of Mr Kozlov, which was to be carried out whilst Mr Kozlov was being transferred to prison". This defamatory sting is said to have been foreseeably republished on newsru.com, og.ru and NR2.ru on 15 and 16 November 2011.
iii) The Third Article: "that the Claimant had threatened to kill Alexei Kozlov and had put a contract out for his murder, which was to be carried out whilst Mr Kozlov was being transferred to prison".
iv) The Programme: "that the Claimant had by means of bribes corrupted the head of the Presnensky Court, Evgeny Mikhailovich Naidenov, the public prosecutor and Judge hearing the appeal in Alexei Kozlov's case, Judge Vasyuchenko, and had issued instructions to them that Mr Kozlov's sentence of imprisonment was to be increased at his appeal hearing (whereas otherwise he would have been released) and was thereby guilty of an horrific perversion of the course of justice."
A pre-action protocol letter was written some three weeks after the fourth publication, on 13 April 2012. The defendant instructed iLaw who replied on 4 May 2012, making clear that they had no instructions to accept service. The claim form was issued on 9 November 2012. On 11 November an application was issued for permission to serve the proceedings outside the jurisdiction. It was supported by a witness statement of Mr Dawkins of the claimant's then solicitors, PSB Law LLP. The address for service given in the application was one in Zattonaya Street, Moscow.
On 12 December 2012 Master Yoxall granted the application, giving permission to serve the defendant at the Zattonaya Street address "or elsewhere in the Russian Federation." His order gave the defendant 21 days after service in which to admit the claim, or to file and serve a defence, or to file and serve an acknowledgment of service, in which case she would have a further 14 days to file and serve a defence.
On 11 January 2013 the claimant's solicitors wrote to iLaw, enclosing the Master's order and the application documents, and asking if they had instructions to accept service on behalf of the defendant. They were informed by letter dated a month later that iLaw had no such instructions, and that they expected to be instructed to challenge the jurisdiction "once you have served the English proceedings in Russia".
On 14 February 2013 the claim form, particulars of claim, and response pack were filed, with translations, at the Foreign Process Section of the Royal Courts of Justice. On 6 March 2013 the Senior Master made a formal written request to the Ministry of Justice of the Russian Federation pursuant to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters of 1965, Cmnd 3986 (1969) ("the Hague Service Convention"), for "prompt service" of those documents on the defendant. Whatever else may be said about service, it certainly was not prompt.
On 8 May 2013 the claimant's solicitor made a witness statement in support of an application to extend time for service until 14 February 2015. She explained that the Foreign Process Section had confirmed that the documents had been sent to the Russian Federation but had explained "that it could take up to 2 years for service to be effected there." The date chosen for the extension was therefore 2 years from the date on which the documents were first filed with the Foreign Process Section. The order extending time until 14 February 2015 was granted by Master Fontaine on 8 May 2013.
The defendant's witness statement records that the claim form and particulars of claim, in English and Russian, were received by her husband Alexei Kozlov, by recorded delivery at their address in Novospassky, Moscow, on 10 July 2014, having been sent by a Miss Krivosheeva, a private individual unknown to her. She asserts that this does not amount to valid service under Russian law and therefore does not amount to valid service under the Hague Service Convention. She states that the method of service in Russia under the Hague Service Convention is by summons to court, and that she was not summoned.
On 24 July 2014 an acknowledgment of service was filed by iLaw on behalf of the defendant indicating an intention to contest the court's jurisdiction. iLaw made clear in letters to the court and the claimant's solicitors that the acknowledgment had been filed without prejudice to the defendant's position that service on her had not been validly effected, and to her right to challenge the English court's jurisdiction. An extension of time for doing so having been agreed, iLaw filed the defendant's application disputing jurisdiction, and her witness statement in support, on 5 September 2014. A hearing date of 21 January 2015 was fixed.
On 8 January 2015, the claimant changed solicitors, instructing Hamlins, as a result of a breakdown in his relationship with his previous solicitors. On 13 January 2015 the defendant parted company with iLaw. On that date, at the same time as filing notice of change, iLaw wrote to the court at the defendant's request, stating that she could no longer afford the cost of representation, and setting out her position in respect of her application. The defendant's address for service given in the notice of change was iLaw's office address. On 14 January Hamlins, recently instructed as they were, sought an adjournment and, subsequently, asked for permission to adduce expert evidence. At a hearing on 21 January 2015 I granted an adjournment of the defendant's application, at the claimant's expense, in circumstances set out in my judgment of that date, [2015] EWHC 81 (QB). As that judgment records, the defendant did not appear and was unrepresented at the hearing. I gave directions adjourning the hearing to 27 February and setting a timetable for the service of evidence.
The order of 21 January 2015 as drawn up included the following paragraphs:
"2. Any evidence upon which the claimant wishes to rely in opposition to the Application is to be served upon the Defendant as soon as possible and in any event by no later than 4pm on 13 February 2015.
3. The Defendant's evidence in reply, if any, is to be served upon the Claimant by no later than 4pm on 20 February.
…
5. Upon the Application, no evidence may be relied upon by either party unless served in compliance with this order unless the court gives permission otherwise."
I also directed that any application for permission to adduce expert evidence was to be filed and served by 26 January 2015, with the defendant to have until 4pm on 2 February to file representations in opposition, and the application to be dealt with on paper, without a hearing. After the 21 January hearing, my written judgment was provided to the claimant's solicitors, who sent a copy to the defendant. The order was drawn up by the claimant's solicitors and provided to me for approval. It was sealed by the court on 23 January 2015.
On 26 January 2015 the claimant applied for (i) permission to adduce expert evidence at this hearing and (ii) an extension of time for service of the claim form until after the determination of the defendant's application. The defendant made no representations. On 4 February 2015 I granted each party permission to adduce expert evidence as to the procedural rules for valid service in the Russian Federation and whether those rules have been complied with in this case, whilst limiting the cost that could be recovered in respect of any expert evidence. The expert evidence, if any, was to be served in compliance with the timetable set out in my 21 January order. I extended time for service of the claim form as sought, in order to preserve the position pending the hearing.
On Friday 13 February 2015 the claimant filed with the court evidence consisting of five factual witness statements, and an expert's report. This evidence was not served on the defendant until about midday on Monday 16 February 2015, when it was delivered to the offices of iLaw. On 17 February the claimant's cross-application was issued. On Thursday 19 February 2015 the claimant served a copy of my order of 21 January on the defendant. On Friday 20 February the claimant issued an application to vary my orders of 21 January and 4 February so as to permit reliance on the evidence which had been served late, on 16 February, and for relief from sanctions. The application notice also sought, so far as necessary, relief from sanctions for failing to effect timely service on the defendant of my order of 21 January.
The defendant has filed no further evidence and, apart from a brief message of 19 January objecting to an adjournment and asserting that the claim should not be heard in England, she has made no submissions since iLaw's letter to the court of 13 January 2015. She has not responded to any of the claimant's solicitors' communications with her. In short, there has been silence from her since 19 January.
Proceeding in the defendant's absence
Where a party fails to appear at the hearing of an application the court may proceed in their absence: CPR 23.11. This is a power that must be exercised in accordance with the overriding objective. Ms Page properly referred me to authority making it clear that the court should be very careful before concluding that it is appropriate to proceed in the absence of a litigant in person who is seeking for the first time to adjourn a hearing: Fox v Graham Group Ltd (26 July 2001) (Neuberger J); SmithKline Beecham Ltd v GSKline Ltd [2011] EWHC 169 (Ch) (Arnold J), [6]. That is not the situation here, however. The defendant has not sought an adjournment. She opposed the claimant's application for an adjournment by email of 19 January 2015. Since then, she has said nothing.
Where a litigant fails to appear without giving a reason it is necessary to consider first whether they have had proper notice of the hearing date and the matters, including the evidence, to be considered at the hearing. If satisfied that such notice has been given, the court must examine the available evidence as to the reasons why the litigant has not appeared, to see if this provides a ground for adjourning the hearing. The evidence as to notice was contained in the third and fourth witness statements of the claimant's solicitor, Mr Hutchings. This satisfied me that the defendant had ample notice that her application was adjourned to be heard on 27 February 2015. Such notice was first given by the claimant's solicitors by means of their provision of a copy of my judgment of 21 January. That was not only emailed on that date, but also sent by post on 22 January to iLaw's address and to the defendant herself in Moscow. Notice of the new hearing date was also given by the service of the formal order of 21 January 2015, which also set out the evidence timetable I laid down. Although the claimant's solicitors did not serve this order until 19 February, I find that it was served by the court by posting it first class on 23 January 2015 (see the next section of this judgment).
Mr Hutchings' statements also establish that the claimant's evidence in response to the defendant's application was served on the defendant at iLaw's address on 16 February, and that the subsequent applications and evidence and the hearing bundle were served in a timely manner at the same address, as were the claimant's skeleton argument and chronology. An email from iLaw of Thursday 26 February 2015 confirmed that the claimants' solicitors' emails of that week had been forwarded to the defendant.
As to the reason for the defendant's non-attendance, I did not consider that this had anything to do with any failure in the process of serving documents. The defendant has not made any complaint about service on her. I concluded that the probability is that she had never intended to appear in person, but intended all along to rely solely on written materials in the form of her witness statement and iLaw's letter to the court of 13 January 2015. She is resident in Moscow. She does not wish to be served with English proceedings. When iLaw ceased to represent her, she instructed them to write to the court setting out her position. In doing so they asked for a copy of the letter to be placed on the court file "for the Judge to read at the start of the hearing on 21 January." Their letter concluded with an indication that the Defendant did not intend to provide further evidence in support of her case of justification, as sought by the claimant; and a request that the court consider the evidence she had already served and grant her application. The defendant did not appear at the hearing on 21 January or protest at having wasted money or effort in arranging to attend. She has not given any indication since that she would attend the adjourned hearing. I was satisfied, therefore, that it was appropriate to proceed in the defendant's absence.
Issues
The applications give rise to the following issues:
i) Should the claimant be granted permission to rely on the evidence served late, and relief from sanctions?
ii) Should the grant of permission to serve proceedings outside the jurisdiction be set aside (a) for material non-disclosure and/or (b) on the ground that England and Wales is not the proper forum for the claim?
iii) Should the extension of time for service of the claim form granted by the Master in May 2013 be set aside for material non-disclosure?
iv) Have the proceedings been validly served on the defendant?
v) If not, should the court authorise an alternative method and/or place of service by (a) ordering that steps already taken are good service, or (b) permitting service at an alternative place (and extending time for service to allow this)?
Permission to rely on late evidence/relief from sanctions
I can dispose shortly of the issue as to service of my order of 21 January 2015. There was undoubtedly an oversight by the claimant's solicitors. On the morning of 23 January they were notified by email from my clerk that the order had been taken to the associate for sealing and would be ready for collection that morning. They failed to collect it until much later, and Mr Hutchings' third statement explains and apologises for the fact that he did not serve the order on the defendant until 19 February 2015 (unsealed version) and 23 February 2015 (sealed version). However, the practical effect of CPR 40.4 is that the court serves orders unless agreed otherwise. This is done by first class post. A fourth statement of Mr Hutchings explains that, in response to enquiries made after he made his third statement, a Queen's Bench associate informed him that the court had served the order by posting it first class on 23 January 2015. The order was not received from the court by Mr Hutchings' firm, but the defendant has not disputed the assertion that it was sent to (and by implication received at) iLaw's address. That assertion was made in an email to iLaw of Monday 23 February 2015.
The position is different, however, when it comes to service of the claimant's evidence. By paragraph 2 of my 21 January order all that evidence should have been served by 4pm on Friday 13 February. It was somewhat faintly suggested by Ms Page that the expert evidence stood in a different category from the evidence of fact, because my order of 4 February granting permission to adduce expert evidence came later, and did not itself contain any debarring order such as that contained in paragraph 5 of my 21 January order. I reject that submission. Paragraph 2 of the 21 January order governed "any evidence" the claimant wished to rely on, and paragraph 5 applied to all such evidence. The mere fact that the claimant had not then obtained permission to adduce expert evidence is nothing to the point. The terms of paragraph 5 of the 21 January order therefore mean that the claimant needs permission to rely on any of the evidence served on 16 February 2015.
What the claimant's application notice seeks is an order varying the orders of 21 January and 4 February, and relief from sanctions. The former is inappropriate, but the latter is appropriate. Paragraph 5 of my 21 January order was in structure identical to the terms of CPR 32.10. That rule provides that if a party fails to serve a witness statement within the time specified by the court, the witness may not be called to give oral evidence without the court's permission. It is now clearly established that CPR 32.10 imposes a sanction, so that an application for permission is an application for relief from sanctions, which must be approached in accordance with CPR 3.9: Denton v TH White Ltd [2014] EWCA Civ 906, [2014] 1 WLR 3926 at [5] and [52].
CPR 3.9 provides that:
"On an application for relief from any sanction imposed for a failure to comply with any … court order the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders."
In Denton at [24] Lord Dyson MR and Vos LJ, referring to these specified matters as "factors (a) and (b)", explained the three-stage approach which the court should take:
"The first stage is to identify and assess the seriousness and significance of the "failure to comply with any rule, practice direction or court order" which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate "all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]".
The majority judgment cautioned at [27] against bringing context or circumstances that fall for consideration at the third stage into the first stage assessment of whether a breach is serious or significant. At [35] it emphasised that factor (a) "makes clear that the court must consider the effect of the breach in every case", and that if it has prevented the court or the parties from conducting the litigation efficiently and at proportionate cost that will be a factor in favour of refusing relief. Factor (b) emphasises that the old lax culture of non-compliance is no longer tolerated.
Ms Page submitted that the failure here was not serious or significant. The deadline was towards the end of Friday 13th, so the evidence was served only a matter of 3 or 4 working hours late. It was served in hard copy and it is likely, given the defendant's location, that nothing would or could have been done to convey the evidence to her before Monday in any event. The defendant had in all probability decided before that time on her evident policy of non-engagement. The failure has neither imperilled the hearing date or interfered with other cases competing for the court's attention. In my judgment, however, a failure to serve evidence for a substantial interim application by the deadline prescribed by an order with a debarring provision, albeit a qualified one, is properly characterised as a serious breach. The degree of seriousness, and the factors urged on the court by Ms Page, are circumstances which fall more appropriately for consideration at the third stage.
The evidence as to why the breach occurred is straightforward, but unimpressive. Mr Hutchings explains that "The failure to serve the evidence at or by 4pm on Friday 13 February was down to the fact that finalising the evidence to lodge with the court took up most of the day and our attention was then required on urgent cases including a privacy action going to trial on 2 March 2015 and preparation and service on 13 February of Particulars of Claim in another action." In short, a combination of late finalisation, mistakenly prioritising the filing of papers with the court over service on the defendant, and oversight due to other work. On this evidence Ms Page is entitled to say, as she does, that there is no question of the failure involving any deliberate flouting of the order or the rules. But she is right to accept that it is no excuse that the solicitors had too much work on. No good reason is provided for the breach.
One important point that was clarified by the judgment in Denton at [31]-[38] is that a serious default for which there is no good reason will not always lead to the refusal of relief from sanctions. Consideration of "all the circumstances of the case, so as to enable it to deal justly with the application", may lead the court to grant relief. Compliance is not an end in itself. A more nuanced approach is required. I decided to grant the claimant relief from sanctions, and permission to rely on the evidence served on 16 February, for these reasons. First, as the court observed in Denton at [26], there are degrees of seriousness. This breach was far from being at the extreme end of the scale. Secondly, it was not deliberate. Indeed, the evidence was available for service and if it came down to a choice between serving and filing it, the claimant's solicitors made the wrong choice. Thirdly, consideration of factor (a) tells in favour of granting relief. Apart from necessitating the application for relief – the costs of which will inevitably be borne by the claimant - the breach has not had any or any serious effects on the efficient progress or the cost of this litigation, or any other litigation. Ms Page's observation that the delay in service is very slight in terms of working hours is a fair one, as is her submission that the likelihood is that the papers would not have been sent off on the Friday in any event.
I bear in mind also that the timetable I set was a relatively generous one, so that service on Monday 16 February still left the defendant more than 4 working days in which to prepare evidence in response if she chose, and 8 clear working days before the hearing in which to consider the evidence. Further, the defendant has decided not to file any evidence in response. In practice, given the nature of the claimant's factual evidence, to which I shall come, there is little that she could have said by way of evidence in reply. As to the expert evidence, she was aware from my order of 4 February 2015 that she had an opportunity to obtain some of her own. I infer from her silence that she must have decided not to. I bear in mind that consideration of factor (b) would suggest that relief should be refused: the timetable for evidence was set in conjunction with an adjournment sought by the claimant, who was not ready to proceed on the original hearing date. Overall, however, the facts that the breach was not of a high degree of seriousness, was innocent not deliberate, and did not have any significant adverse effects on the efficiency or cost of litigation are enough to outweigh the factor (b) considerations, and to lead to the conclusion that it is just to grant relief.
Jurisdiction
By CPR 6.36 permission to serve proceedings outside the jurisdiction may be granted if, and only if, the case falls within one of the "gateways" specified in PD6B 3.1. The claimant must show a good arguable case that all aspects of his claim fall within at least one such gateway. The claimant must also show that the claim has a reasonable prospect of success: r 6.37(1)(b). CPR 6.37(3) provides that the court will not grant permission unless it is satisfied that England and Wales is "the proper place in which to bring the claim."
Here, the gateways relied on were and are PD6B 3.1(2), that a claim is made for an injunction ordering the defendant to refrain from doing an act within the jurisdiction, and 3.1(9), that a claim is made in tort where damage was sustained within the jurisdiction. The defendant does not take issue with the propositions that those gateways apply, nor does she suggest that the claim has no reasonable prospect of success (though she does assert the truth of what she alleged in the publications complained of). The defendant's position is that the proper place to bring the claim is the Russian Federation and not England and Wales. She also asserts that there was a failure to disclose material facts on the application to the Master. For those two reasons she applies pursuant to CPR 11 for the declaratory and other relief identified above, including an order setting aside the claim form and (if it has been served) its service upon her.
Section 9 of the Defamation Act 2013 provides that a court does not have jurisdiction to hear and determine an action for defamation against a person who is not domiciled in the UK, another Member State, or a Lugano Convention country unless it is satisfied that "of all the places in which the statement has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement". But by s 16(7) of the 2013 Act, s 9 does not apply to any action begun before its commencement on 1 January 2014. The general principles governing the defendant's application to set aside service on the grounds that Russian Federation is a more appropriate forum are those set out in The Spiliada [1987] AC 460. They may be summarised in this way:
i) It is for the claimant to persuade the court that England is clearly the appropriate forum for the trial of the action.
ii) The appropriate forum is the one in which the case may most suitably be tried for the interests of all the parties and the ends of justice.
iii) The court will first consider what is the "natural forum", the one with which the action has the most real and substantial connection.
iv) The court will normally treat as irrelevant any procedural advantages of England such as limitation.
v) If the court concludes that there is another forum as suitable, or more suitable than England, it may consider factors going beyond those which connect the case with England or a foreign jurisdiction, such as whether the claimant will obtain justice in the foreign jurisdiction.
It has long been held that the "natural forum" for an action in tort is, on the face of it, the jurisdiction in which the tort took place: The Albaforth [1984] 2 Lloyds Rep 91. In some jurisdictions, notably the USA, there is a "single publication rule" by which a clamant defamed in a mass publication has only one cause of action, regardless of the number of jurisdictions in which the material was published. Under that rule, the single tort will normally be considered to have taken place in the home jurisdiction of the publisher, as it is there that the majority of the publication will usually have taken place. But this rule has been rejected in England. In Berezovsky v Michaels [2000] 1 WLR 1004 two Russian claimants sued US publishers in England in respect of publication in this jurisdiction of 1,900 copies of Forbes magazine. The House of Lords affirmed the decision of the Court of Appeal, that the action should be allowed to proceed. It rejected a submission that English law should adopt a "global publication" rule, on the lines of the "single publication rule". The House held that according to long-established common law principles each publication is a separate tort. Thus, where a libel is internationally disseminated, its publication in England involves tortious conduct separate from any tort involved in its publication abroad. In applying The Spiliada principles to such a case the court should have regard to the principle in The Albaforth, that the courts of the place where a tort was committed are, on the face of it, the natural forum for a claim in respect of that tort.
An important limiting principle at common law is that a claimant must demonstrate that the publication in this jurisdiction amounts to a "real and substantial tort": see Berezovsky at 1012E (Lord Steyn) and Jameel v Dow Jones & Co Inc [2005] EWCA Civ 95, [2005] QB 946, [50]-[51] where Lord Phillips MR cited with approval this summary of the position by Roch LJ in Chadha v Dow Jones & Co Inc [1999] EMLR 724, 732:
"In my judgment once it is established that there has been an 'English tort' that is to say that there has been a significant publication of prima facie defamatory matter concerning the plaintiff within the jurisdiction, the English courts have jurisdiction with regard to that English tort. Where the perpetrator of the tort is not within the jurisdiction but is abroad, then leave to serve process abroad under Order 11 is required and the fundamental principle identified by the House of Lords in [The Spiliada] applies. If there is a substantial complaint with respect to the English tort, having regard to the scale of the publication within the jurisdiction and the extent to which the plaintiff has connections with and a reputation to protect in this county as against the inconvenience to the defendant of being brought her to answer for his alleged wrongdoing then service of the writ abroad is to be ordered."
When the court is considering whether the case discloses a real and substantial tort in this jurisdiction it is in principle irrelevant that there may have been more substantial publication in one or more other jurisdictions; English law permits a claimant to claim whatever is appropriate compensation and vindication in respect of publication here, provided that publication itself is sufficiently meaningful to satisfy the "real and substantial tort" requirement: see Mardas v New York Times Co [2008] EWHC 3135 (QB), [2009] EMLR 8, [39]. Publication abroad is not entirely irrelevant, however. The more tenuous a claimant's connection with this jurisdiction and the more substantial any publication abroad, the weaker the presumption in favour of England and Wales being the natural forum for the claim: King v Lewis [2004] EWCA Civ 1329, [2005] EMLR 4, [27] (Lord Woolf MR). Action taken in a foreign jurisdiction may also be of relevance. In Karpov v Browder [2013] EWHC 3071 (QB), [2014] EMLR 8 Simon J considered the fact that the claimant had attempted unsuccessfully to bring both criminal and civil proceedings in Russia suggested that this was the natural forum for any claim in respect of the allegations of which he complained.
As the law stands, the same principles apply to internet publication as apply to hard copy publication, except that the court's discretion in an internet context "will tend to be more open-textured than otherwise": King v Lewis, [31]. It is clear from the context in which Lord Woolf made that remark that he intended it to be taken as an indication that the Court should not be shy of allowing foreigners who publish via the internet to be sued in this jurisdiction, given that such publishers will have chosen to disseminate their information via a global medium. This emerges not least, but not only, from Lord Woolf's citation at [29] of the conclusion of the High Court of Australia in Gutnick v Dow Jones [2002] HCA 56, [192] that:
"If a publisher publishes in a multiplicity of jurisdictions it should understand, and must accept, that it runs the risk of liability in those jurisdictions in which the publication is not lawful and inflicts damage."
I note in passing that in King the Court of Appeal rejected "out of hand" a submission that the court should take into account whether or not the defendant had "targeted" this jurisdiction, concluding that this was too subjective and nebulous a criterion, liable to manipulation and "much more likely to diminish than enhance the interests of justice": see [34]. No point is taken on targeting in the present case however.
The principles identified above are applicable as much to individual publishers as they are to corporations or other business entities. That said, it does seem to me that in either case the court should consider any evidence of the parties' means as potentially bearing on the choice of appropriate jurisdiction. Evidence as to the parties' means, and any disparity of resources, will also be relevant of course to the exercise of the court's case management and costs management powers, if it concludes that the claim should be allowed to proceed in this jurisdiction. By evidence I mean of course more than mere assertion.
The witness statement of Mr Dawkins, submitted by the claimant to the Master in support of the application for permission, identifies the nature of the claim, explaining that the claimant's position is that the allegations complained of are entirely false. It identifies the gateways relied on, and proceeds to deal with the nature and extent of the damage alleged. It asserts that the claimant is well-known in this jurisdiction and that there has been substantial publication here. Both those assertions are expanded upon, giving detail. The extent of publication and republication here is covered in extensive detail, over 28 paragraphs. There then follows a section headed "The Defendant's reported position as to the legitimacy of the judicial system in Russia."
This section of Mr Dawkins' statement summarises the criminal proceedings against Alexei Kozlov as follows. In 2009 he was convicted and sentenced to 8 years' imprisonment, later reduced to 7 and then 5 years, for fraud. In 2011 the Supreme Court of the Russian Federation quashed the conviction and ordered a retrial. On 14 March 2012 the Presnensky District Court found Mr Kozlov guilty and sentenced him to 5 years imprisonment. The Programme was broadcast that same day. Mr Dawkins cites passages of the interview in which the defendant made clear her view that the judicial system was corrupt and illegitimate.
One of the defendant's statements was: "And hundreds or perhaps thousands of people have come away convinced that there is no court system in Russia, that we have a Constitution that is totally inoperative, and that we have a completely corrupt office of the public prosecutor, and, among other things, that there are completely corrupt people out there, including presiding judges and courts". The defendant also stated, according to the translation, that "It is with deep regret that I cannot recognise the legitimacy of the judicial system at all in Russia." It is the claimant's case that the interview accused him personally of involvement in this corruption, having bribed the head of the Presnensky court, the public prosecutor and Judge hearing his appeal. Mr Dawkins' statement says that the claimant is "concerned that were he to sue successfully in Russia, then the Defendant would allege that he was only successful because of corruption in the Russian courts."
Material non-disclosure
The criticism made by the defendant in her witness statement is that Mr Dawkins' statement failed to disclose to the court that in November 2011 (that is, shortly after the first three of the four publications complained of) the claimant had submitted a criminal complaint to the office of the Prosecutor General of Russia and the Russian Ministry of Internal Affairs, making allegations against the defendant of libel and false denunciation under the criminal code. She exhibits a media report of the complaint. The defendant's statement says that "to date, no action has been taken by the Russian authorities" but she makes the point that the claimant evidently considered it appropriate and worthwhile to seek vindication through criminal proceedings in Russia. She suggests that this would have been relevant to the court's decision on jurisdiction and ought therefore to have been disclosed. iLaw had written to the claimant's solicitors on 4 May 2012 referring to the duty of full and frank disclosure and identifying as one matter that should be disclosed "details of any actual or threatened proceedings in Russia or elsewhere concerning the postings/articles complained of".
The claimant's evidence confirms that he made a criminal complaint against the defendant, though it is said that this was in December 2011. His evidence is however that the Ministry of Internal Affairs decided, and on 26 January 2012 notified him, that it had decided not to initiate criminal proceedings. He exhibits copies of the relevant correspondence in Russian, with a summary of the sequence of events, prepared by his Russian and English lawyers. The claimant says he took the view at the time that the allegations were so serious, and unfounded, that they should be reported to the Public Prosecutor. But by the time the application for permission to serve proceedings outside the jurisdiction was made it had long been clear that the prosecutor would take no action, and he did not consider the fact that a complaint had been made and not taken up would have any bearing on the court's decision.
The relevant general principles are these:
i) An applicant for permission to serve proceedings outside the jurisdiction is under the duty of full and frank disclosure which applies on all applications without notice.
ii) The duty requires the applicant to make a full and fair disclosure of those facts which it is material for the court to know: Brinks Mat v Elcombe [1988] 1 WLR 1350, 1356 (1) and (2) (Ralph Gibson LJ). Put another way, disclosure should be made of "any matter, which, if the other party were represented, that party would wish the court to be aware of": ABCI v Banque Franco-Tunisienne [1996] 1 Lloyd's Rep 485, 489 (Waller J).
iii) Non-disclosure of material facts on an application made without notice may lead to the setting aside of the order obtained, without examination of the merits. It is important to uphold the requirement of full and frank disclosure.
iv) But the court has a discretion to set aside or to continue the order. Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues that were to be decided. The answer to the question whether the non-disclosure was innocent is an important, though not decisive, consideration. See Brinks Mat at pp1357 (6) and (7) and 1358 (Balcombe LJ).
v) In the context of permission for service outside the jurisdiction the court has a discretion to set aside the order for service and require a fresh application, or to treat the claim form as validly served and deal with the non-disclosure by a costs order: NML Capital Ltd v Republic of Argentina [2011] UKSC 31, [2011] 2 AC 495, [136] (Lord Collins).
Ms Page submits that in approaching the issue of full and frank disclosure on an application of this kind the court should bear in mind that it is unlike an application for a freezing order, or other interim injunction, the grant of which has an immediate and potentially severe impact on the defendant. But the court on such an application is being asked to bring a foreign defendant before the English court, exercising what is often called an exorbitant, meaning extraordinary or unusual, jurisdiction. I am not persuaded that the approach should be less strict in principle than it is in respect of other kinds of application.
It is submitted that the facts relating to the criminal complaint were not material facts. I would accept that the facts were immaterial to the approach which the claimant invited the court to take on his application. His case was not that he could not take action in Russia, or that the Russian judicial system would not reach a just result. His case was that he could not obtain vindication there because the defendant would simply denounce a judgment in his favour as a further illustration of the corrupt nature of the judicial system. That case depended on what the defendant had said in March 2012, which came some two months after the decision to take no action on the claimant's criminal complaint.
It is also true, as Ms Page submits, that the criminal complaint did not qualify, at the time of the claimant's application, as "actual or threatened proceedings in Russia", which iLaw had said should be disclosed. True, also, as Ms Page observes, the Master might have taken the view that the facts, as now explained by the claimant, tended to support his position. They demonstrate how seriously he took the matter, and rule out one means of obtaining vindication in Russia. But these considerations themselves suggest that the information was material in the sense explained in the Banque Franco-Tunisienne case. As a rule, it seems to me that the existence and status of a claim or complaint made in another jurisdiction is likely to be material on an application for permission to serve outside the jurisdiction. Here, I consider it very likely that the defendant would, if present, have wanted to rely on the complaint as an indication that the claimant himself saw Russia as an appropriate venue for a complaint over what she had said. The claimant would have had a ready answer, in the form of the defendant's own denunciations of the Russian judicial system, but that does not make the facts immaterial.
I accept, however, that the non-disclosure was innocent and, whilst I readily acknowledge the importance of upholding the requirement of full and frank disclosure, I cannot regard this omission as one that demands the immediate discharge of the order granting permission to serve outside the jurisdiction, without reference to the substantive merits of the jurisdiction issue. As Slade LJ observed in Brinks Mat at 1359C-D, "While in no way discounting the heavy duty of candour and care which falls on persons making ex parte applications, I do not think the application of the principle should be carried to extreme lengths". It is possible in my judgment to see clearly, before entering into the merits of the jurisdiction arguments as they now appear, that although the information about the criminal complaint was material in the sense that I have indicated above, it should not and would not have caused the Master to reach a different conclusion on the claimant's application.
The initial question for the Master was whether there appeared to be, at least arguably, a real and substantial tort in this jurisdiction. If so, his starting point would be that these courts are the natural forum for the claim in respect of that tort. The main factors of relevance to that initial question were the nature and extent of (i) the claimant's reputation here and (ii) publication here. The fact and extent of publication in Russia was of some relevance, as noted above; but it was not only self-evident, the details were before the Master. The key factor tending against regarding Russia as a reasonable alternative jurisdiction was whether proceedings there could vindicate the claimant. The first point on that score is that, as Ms Page submitted, it is far from clear that a claim in Russia could in principle serve to vindicate the claimant's reputation in the eyes of readers in this jurisdiction. But even if that is put to one side, the key – indeed the only - point advanced against regarding Russia as a suitable forum for this claim was the defendant's attitude to the Russian judicial system, as expressed in her interview of March 2012. The fact that the claimant had at an earlier stage sought to invoke the state's power to prosecute the defendant in no way undermined his case on that issue. For these reasons I exercise my discretion to leave the order of Master Yoxall in place despite the non-disclosure. It is of some relevance to note that although provided with the application documents as long ago as January 2013, the first mention of the non-disclosure by the defendant was in her witness statement of September 2014.
Is this the appropriate forum for the claim?
Both the authorities and experience suggest that whilst the relevant facts will sometimes be clear at an early stage this will not always be so. The claimant should normally be able to give adequate evidence of his reputation in this jurisdiction. Sometimes publication data will be clear, or agreed. In Berezovsky the scale of publication was agreed at 1,915 hard copies and 6,000 internet readers in this jurisdiction: see 1008B-D (Lord Steyn). In Jameel the court was able to proceed on the basis that the relevant words, which had been swiftly removed from the US defendant's website upon complaint, had been read by only five people. But there may, in particular in internet cases, be limitations on the information available at an early stage about the extent of publication, and genuine disputes about the inferences to be drawn from the evidence that is available. This case exemplifies the difficulty.
The court should be cautious about reaching firm conclusions on the facts about publication, where the evidence is contested. Although the court must not permit unjustified interference with freedom of speech by letting trivial claims proceed, it is the case, as Eady J observed in Mardas at [13], that care must be taken on applications of this kind not to deprive a litigant too readily of his right of access to the courts. When considering whether England and Wales is the natural forum the starting point is that "What matters is whether there has been a real and substantial tort within the jurisdiction (or, at this stage, arguably so)": ibid. [15].
As Karpov v Browder confirmed, a defamatory publication can in law amount to a real and substantial tort if it creates for a person a bad reputation where the person had none before. But this is not a case, as that was, of a claimant (a Moscow police officer) who was in practice unknown in this jurisdiction before the libel of which he complained. The claimant's evidence is that he has an international reputation which includes a substantial reputation and substantial connections in this jurisdiction.
i) Mr Dawkins' statement explains that as a result of his political role as a senator for 8 years the claimant is very well known amongst the Russian community in this jurisdiction. That community is very substantial. The figures given by Mr Dawkins, drawn from documents provided by the Office of National Statistics, are that in 2011 there were 41,000 individuals who were born in Russia living in the UK, 22,000 of these in London. The total number of individuals born in countries where Russian is spoken who were living in the UK at that time is 248,000. One must bear in mind of course that the UK is a larger area than England and Wales, but these figures give a reliable guide to the numbers of people within this jurisdiction who may know of the claimant via his role in Russian politics or as readers of the Russian language media.
ii) Mr Dawkins further states that the claimant's senior roles in Jewish organisations mean that he is also "very well known" by the Jewish community in this jurisdiction, and in London in particular. The claimant confirms these points whilst adding that his long support for Israel and his opposition to anti-semitism have given him a high profile, bringing him into contact with UK parliamentarians and organisations such as the British Jewish Leadership Council ("JLC", formerly the Board of Deputies of British Jews). He points to his role as a leader of the European Friends of Israel which has a membership of more than 1,500 parliamentarians across Europe, including a substantial number of British MEPs. He explains that he was named by the Jerusalem Post in June 2014 as one of the 50 most influential Jews in the world for that year. Simon Johnson, the Chief Executive of the JLC since October 2013, confirms that the claimant is known in the Jewish community as the President of the IJC, and that the JLC works regularly with the IJC, and co-operates with it on a range of issues. Mr Johnson met the claimant in that connection in May 2014 in Hendon, North West London.
iii) The claimant states that he is well known internationally as a successful business man, mainly dealing in real estate development in Russia. He also relies on witness statements from three individuals. The Hon. Robert Kissin is a businessman, a former solicitor who has had a career in merchant banking and business, including as a main board director of Guinness Peat Group plc. He describes the claimant as "a long-standing business acquaintance" whom he has known since the early 1990s when Mr Kissin was living in London, and they did business as partners. He describes the claimant as visiting London frequently and meeting a large number of business contacts at this time. He speaks of the claimant visiting London periodically throughout the 1990s. Martin Todorov, a Bulgarian Russian Speaker who has lived in London since 2009, has known the claimant for 10 years, and meets him in London when he is there on business.
iv) The claimant was the owner of a house in the Boltons, London SW10, from 2000. It was envisaged that this might be his wife's primary residence, where she would live with their children, with him visiting often. However, they went through a highly publicised divorce involving a ruling by the Family Division of the High Court in September 2012, which was covered in the national press (Daily Mail, The Independent and Daily Telegraph).
v) The claimant enumerates his visits to London over recent years: 9 visits between December 2011 and November 2012, visits in July and November 2013, and seven visits in 2014. Some of these visits related to his divorce but others to his business, to attend Jewish events, and to investigate the possibility of moving his family here. The claimant states that it remains his intention in the future to move his family to London "and it is therefore very important to me to have a good reputation in this country."
The defendant has responded to the evidence of Mr Dawkins but not to the statements of the claimant and the supporting witnesses I have mentioned above. She disputes the prominence of the role of Senator in the Russian Parliament, and suggests that the claimant's roles in Jewish affairs have been prominent, to the extent that they have, outside this country and mainly after the dates of the publications complained of. She points to the fact that the IJC was founded on 20 March 2012, after the initial publication of the words complained of. Some of these points have some force, but they do not in my judgment negate the overall impact of the claimant's evidence, which is to show a real and substantial reputation in this jurisdiction at the time of first publication, which is likely to have grown since. It is right also to bear in mind that publication has continued to date, and that the claimant is seeking an injunction.
The facts of the claimant's case are less striking than those of Berezovsky, but do bear some comparison. Mr Berezovsky was a Russian politician and businessman. He had an apartment here, and a wife and children here. But he was not resident here himself. He had visited London on 22 occasions in 1994/95 and 9 times in 1996/97. The claimant's links are not as strong but he has at this stage what I assess as a persuasive case that he had and has a substantial and widespread reputation in this jurisdiction. Where the present case seems to me to be stronger than that of Mr Berezovsky is in the scale, or at least the arguable scale, of publication here. The evidence on this topic comes from enquiries made by the claimant's former solicitors in May and June 2012 which are described by Mr Dawkins, and from the defendant's statement, which is based on enquiries made by her and her solicitors in mid 2014. It is convenient to deal with each publication and republication in turn.
The Blogpost. Echo Moscow told Mr Dawkins' firm that there were 16,973 visits from this jurisdiction to its website in April 2012 of which 2,051 took place on 25 April and 6,444 between 23 and 29 April. The defendant has obtained from Echo Moscow figures for visits to her blog between November 2011 and January 2012. The total is 231,945. The figures produced by the defendant show, as one would expect, that the great majority of visits were at or shortly after the time of first publication, with over 226,000 in November and December. Applying to the total figure the percentage given by Echo Moscow of visits to the site emanating from Britain (0.64%) the defendant arrives at a figure of 1,484.
Republication of the sting of the Blogpost. Mr Dawkins estimates that newsru.com has 29,494 visitors per day from the UK. He arrives at this by using figures from Statshow.com for the total readership and Alexa.com for the percentage visiting from the UK. Using the same technique he arrives at not less than 24 per day for og.ru, and 49,148 per day for nR2.ru, from the UK. The website kommersant.ru provided the claimant's solicitors with monthly data for page views and estimates for unique page views of the site from the UK in April and May 2012. The page views in May 2012 were 238,000. The unique page views per month from the UK are estimated to be between 21,441 and 59,500 (the estimate is that 20-25% of page views are unique page views). The defendant has no data to offer for og.ru or nR2.ru. For the other two sites, the defendant's solicitors' estimates, using data obtained in June 2014 from alexa.com and trafficestimate.com, are of 63,371 monthly visits from the UK to newsru.com and 38,075 to kommersant.ru. The former is much lower than Mr Dawkins' figure, but the latter is within the bracket he provides.
The Second and Third Articles. Mr Dawkins' evidence comes from gazeta.ru itself, which confirms 174,000 page views from this jurisdiction in March 2012 for the Russian language version and a further 1,500 for the English version. The defendant's estimate is of 58,241 UK visitors per month. As she says, the figures are not necessarily inconsistent; the difference may well be explained by the difference between page views and visitors, the latter being 1 in 4 or 1 in 5 of the former. For republication of the sting on newsru.com the figures provided by the claimant and defendant are as above. That is, the lower estimate is of 63,371 UK visitors per month.
The Programme. Radio Liberty broadcasts over the internet at svobodanews.ru. It is the Russian broadcasting arm of Radio Free Europe/Radio Liberty ("RFERL") which has an English website at rferl.org. Mr Dawkins' relies on figures obtained from a representative of the Russian website: approximately 20,000 unique page views per month from the UK. For the rferl.org site he has made an estimate using the technique described above, and arrived at approximately 12,798 visitors per month. The radio programme and a transcript were still available at the time of his witness statement. By February 2015 the programme had gone but the transcript remained. The defendant has also obtained figures from Radio Liberty. In response to a request made in August 2014 the station said that monthly traffic was approximately 2 million visitors with 0.7% from Great Britain, implying some 14,000 GB visitors per month. Figures for monthly unique visitors to the audio and text pages were given: 2,074 and 3,110. No data on visits from GB to the audio page were available, but 11% of visitors to the text page (346) were said to be from the GB. The defendant suggests that these are low figures, but on the face of the document from Radio Liberty which she produces these would be monthly figures for August 2014, over 18 months after first broadcast, and remarkably high in the circumstances.
The defendant's approach to the figures is twofold. First, she points out at numerous places in her statement that the proportion of overall traffic that originates from this jurisdiction is small, with Russia and, in the case of RFERL, the USA and other jurisdictions, accounting for a greater proportion. In paragraph 91 of her statement she says:
"...the proportion of web traffic to the Websites originating from the United Kingdom is exceptionally small, in almost all cases no more than 0.7% except in the case of the English-language www.rferl.org, in which case it rises to just 3.6%. The proportion of readership from elsewhere, in particular the Russian Federation, is significantly higher. On the basis of this data there has not been "substantial publication" of the Articles within the jurisdiction of England and Wales and it cannot be said to be the proper jurisdiction for Mr Sloutsker's claim."
This implies the "global tort" approach rejected by the House of Lords in Berezovsky, and misses the point. Under the law applicable to this case the fact that the defendant may have defamed the claimant to more people in Russia or the USA than in England and Wales does not provide the answer to the question whether she has committed a real and substantial tort here. Secondly, the defendant suggests that the absolute numbers of visitors to the various sites in question are so low that this is not the appropriate jurisdiction in which to try the claim. She points out with some justification that the traffic will have been lower in 2011 and 2012 than later on, and in particular at the time of her figures and estimates. This is because of traffic generated by events in the Ukraine. This may be so, but the claimant's figures and estimates were obtained and made much closer in time to the offending publications. The defendant also refers to material from Google Analytics which suggests that unique page view figures may overstate the number of visitors (because a single user will count as two if he or she visits a page during two separate user sessions.) This is a fair point, and should lead the court to take a slightly cautious view of unique page view figures.
In my judgment however the available evidence makes it plainly arguable at the very least that the claimant's claims concern real and substantial publications in this jurisdiction which, if the claims are sound, involve real and substantial torts. The claimant clearly has some reputation here to protect. On present evidence I am satisfied that his reputation is significant and widespread enough to make it likely that the substantial publication in this jurisdiction of seriously defamatory allegations would lead to serious harm. The claimant does not have to prove a good reputation, though he does provide some evidence to that effect. The defendant does not seek to present him as someone with a bad reputation.
There has to my mind unquestionably been substantial publication here. The claimant's figures, and in particular those for kommersant.ru, appear to me to be generally a more reliable guide than the defendant's estimates. Even on the defendant's figures, however, and allowing for the qualifications she puts forward, the sting of the allegations made on each of the Blogpost, the Second Article and the Third Article could easily have reached as many as 60,000 readers in this jurisdiction, and the Programme appears likely to have been heard or read here by several thousand at least. It has to be borne in mind that the assessment of whether there is a real and substantial tort is not a mere numbers game, and also that the reach of a defamatory imputation is not limited to the immediate readership. The gravity of the imputations complained of, which at this stage I treat as arguably conveyed by the offending publications, is a relevant consideration when assessing whether the tort, if that is what it is, is real and substantial enough to justify the invocation of the English court's jurisdiction. The graver the imputation the more likely it is to spread, and to cause serious harm. It is beyond dispute that the imputations complained of are all extremely serious.
The rival jurisdiction proposed by the defendant is the Russian Federation. It is surprising to say the least in the circumstances for the defendant to maintain that this claim should be brought in Russia, given what she has said about its judicial system. The claimant reiterates what was said by Mr Dawkins, explaining that he wishes to sue here because "if I were to win a civil case in Russia, the Defendant would simply dismiss a court verdict as a further example of my supposed power (which does not in fact exist) to control the Russian judicial process. From what the Defendant has written … it is clear to me that she would never accept a verdict of the Russian court." The defendant has not replied to this evidence. She did respond, in her September 2014 witness statement, to what Mr Dawkins had said in his statement. She did so in one brief paragraph. This did not deny that she had said she did "not recognise the legitimacy" of the Russian court. What it did say is this:
"I do not believe the Russian court is credible in the eyes of the Russian public. However, I have a good reputation in Russia. I am a political activist and I participate in public elections and campaigns. I believe that if this matter were heard in Russia it would be subject to significant publicity and public scrutiny, which will increase the legitimacy of the process."
Quite what this amounts to is, as Ms Page observed, unclear. She submitted that the defendant is in substance maintaining her refusal to recognise the legitimacy of the Russian judicial system, which is an insuperable obstacle to the defendant's present application. I would not go quite so far. However, this statement does not appear to me to be in any way a satisfactory response to the claimant's concerns. It clearly leaves it open to the defendant to denounce any unfavourable outcome as not, or not sufficiently, legitimate. This is a factor which arose in Berezovsky (see p1024D, Lord Hoffmann), and it is clear that the majority took into account as an important factor evidence which satisfied them that a favourable result in Russia "will not be seen to redress the damage to the reputations of the plaintiffs in England. Russia cannot therefore realistically be treated as an appropriate forum where the ends of justice can be achieved" (1014H, Lord Steyn). The defendant's stance seems to me to be a very powerful factor in favour of treating England as the appropriate jurisdiction in which to litigate a claim by this claimant for alleged libel published here by this defendant.
I should nonetheless go on to consider whether, despite this, England and Wales is not shown to be the appropriate jurisdiction. That might be so if the claimant could sue (or could have, sued) in Russia, and the defendant could reasonably and effectively defend herself there, but not here. The court should be wary of requiring a foreign defendant to engage in proceedings here which would be oppressive, by comparison with proceedings in a rival jurisdiction. Here, the claimant's own evidence confirms that Russia is in principle an available jurisdiction, and that it was available to him in respect of all the publications complained of until the limitation period expired in respect of the 2011 publications (a point to which I shall return).
The defendant maintains that Russia is the appropriate jurisdiction because she is there, the publications were in Russian, and a trial in Russia would be more convenient for the ends of justice. The defendant would maintain that what she wrote and said was true, and would rely on witnesses who speak Russian and are resident in Russia, and documents there, to support her defence. She suggests that proceedings here would be more complex and expensive due to the need for translation, and that in these and other ways her defence would be hampered by having to conduct it abroad.
I do not consider that the issue of language would pose a significant problem here. English courts are accustomed to dealing with foreign languages. In practice, translation issues are rarely tried, but usually agreed. The translations available now are enough to persuade me that there should be no real difficulty in this case. As to the case of truth, the defendant's evidence as it stands is not satisfactory. She says, in paragraph 13 of her statement that "I shall seek to establish, among other things, that Mr Sloutsker, or someone acting on his behalf, contacted an officer of the FSB, the Russian Federal Security Service, seeking to arrange for the killing of Mr Alexei Kozlov for payment of the sum of $300,000. The FSB officer refused Mr Sloutsker's offer and contacted Mr Dmitry Muratov, the chief editor of the Novaya Gazeta, to inform Mr Muratov of the offer that had been made and to publicise the threat against Alexei. Mr Muratov contacted me to inform me of the information he had received."
Despite being asked for details in correspondence the defendant has not said what "other things" she would seek to establish, so this statement leaves a number of the allegations complained of wholly unanswered. That is a striking omission when the interview she gave on the Programme asserted, according to the translation, that she and her husband had just "decoded" a conversation between the claimant, speaking from London, and the head of the Presnensky court, in which the claimant gave instructions to the judge. She also stated that there were witnesses to the conversation. Her statement says nothing about these matters.
The defendant suggests that her defence would require a substantial volume of documentary evidence, much of which would be documents obtained from the Federal Penitentiary Service, such as travel itineraries, investigation records and prison documents, all of which would require translation. It is not explained, however, how such documentation, which she concedes would be hard to obtain even if proceedings were in Russia, would support her case. Although she has provided a list of 10 intended witnesses, the defendant has not provided any proof of evidence or other document signed by or emanating from any of the named individuals. Nor has she explained with clarity what evidence those witnesses could give. On the face of her 2 page summary of the witnesses and the evidence they would give, it appears that she is not in a position to call anyone who could speak from personal knowledge of anything done by the claimant to arrange Alexei Kozlov's killing, still less of any steps taken to fabricate evidence, to bribe a prosecutor, or to bribe a judge.
The first named witness is Mr Muratov, who is said to have received information from unnamed third parties in the law enforcement agencies on "'the order' of K killing". The majority of the other named witnesses appear to have been involved in providing security for Mr Kozlov. When asked for further details in correspondence she has declined to give them citing, through iLaw, financial reasons. This is not the subject of any elaboration or evidence. Nor is it easy to understand, as she must have known the answers or some of them when she made her statement in September 2014. In this respect also the present case bears comparison with Berezovsky in which Hirst LJ observed, giving the judgment of the Court of Appeal [1999] EMLR 278, at 292:
"Where as here they foreshadow a defence of justification, and assert that a trial in England will present them with evidential difficulties, it surely behoves them, particularly where the allegations are so grave, to produce some evidential support for their plea, rather than trying to make bricks without straw."
I can see that evidence from Mr Muratov and the defendant might provide the basis for a defence of responsible publication on the lines of the defence that succeeded in GKR Karate UK Ltd v Yorkshire Post Ltd [2000] EMLR 410, but the information provided appears on the face of it an unpromising basis for a plea of justification. Even if that is wrong, I am not persuaded that the difficulties of conducting proceedings here are nearly as great as the defendant suggests. She states that several of her witnesses would have difficulties travelling, or obtaining permission to travel to this country. However, this is not said to apply to herself, or to Mr Muratov, who would be the principal witness in support of either of the defences to which I have referred. Most if not all of the other witnesses appear on the face of it to be irrelevant, or of peripheral or at best secondary importance. In any event, the court is well used to receiving evidence from foreign jurisdictions via video link, and no reason is provided why this would not be possible in this case, if required.
The claimant's evidence states that he would now be too late to sue in Russia on the November 2011 publications, as the limitation period of three years from first knowledge of publication has expired. That, however, is an irrelevant consideration of which I take no account in reaching the conclusion that England and Wales is clearly the appropriate place in which to try the claimant's claim in respect of publication in this jurisdiction. The evidence as to reputation and extent of publication discloses an arguable case of a real and substantial tort, so the starting point is that England and Wales is the natural forum. Russia, though it was an available forum, would not in all the circumstances be an appropriate forum for this claim.
It might well have been so, even for a claim in respect of publication in this jurisdiction, were it not for the nature of the allegations complained of and the defendant's refusal to accept the legitimacy of the Russian judicial system. For those reasons, however, the claimant is in my judgment justified in his submission that he could not expect to obtain vindication from proceedings in Russia. Conducting proceedings here will naturally pose challenges for the defendant, and for the court. The evidence in the claimant's exhibits suggests that there may be large disparities in resources. It is said that the defendant cannot afford representation. But that is not supported by evidence. In any event, I do not consider the difficulties to be insuperable. I consider on the evidence presently before me that the defendant can and will be given a fair opportunity to defend herself in this court and will not be prevented from putting forward any case that it is reasonably open to her to advance.
The extension of time for service of the claim form
The defendant complains in her witness statement of a failure to disclose the claimant's criminal complaint against her when application was made for an extension of time for service of the claim form in May 2013. No relevant relief is sought in her application form, however. In any event, whilst it is certainly the case that a duty of full and frank disclosure was owed, it does not seem to me that the complaint was a matter which was material to the extension of time applied for.
Has there been valid service?
The issue is whether service has been effected in accordance with the Hague Service Convention, to which the Russian Federation is a signatory. Service by any method permitted by the Hague Service Convention is authorised by CPR 6.40(3)(b). The factual and legal picture in relation to this issue has been expanded and clarified considerably by the claimant's evidence.
The facts
The story is told in the statement of Mr Aitkulov, the Russian expert, by reference to court documents. It can be picked up after Master Fontaine's order of 8 May 2013, extending time for service until 14 February 2015. According to Mr Aitkulov's statement and its accompanying documents, by July 2013 the request for service made by the Senior Master had made its way to the Simonovsky District Court in Moscow. That is the district court for the Zatonnaya Street address given to the Master. In July and again in September 2013 the Simonovsky court requested details of the defendant's current address from the relevant bureau (the Moscow Department of Address Enquiry Operations and Information Resources of the Russian Federal Migration Service). In September the court was told that the defendant lived at Novospassky, as she did. On 12 September 2013, therefore, the Simonovsky court requested the relevant District Court, the Tagansky District Court, to proceed with execution.
Judge E V Podmarkova of that court was appointed to execute the request and determined on 30 September 2013 that it should be done at a court hearing on 25 October 2013. The defendant was summoned to appear at that hearing by two methods: (i) A writ of summons was sent to the Novospassky address by registered mail. This was returned to the court due to "the expiry of the holding period". (ii) A telegram with acknowledgment of receipt was also sent to the Novospassky address, on 22 October 2013. It stated "I hereby summon you to appear at 15:00 on 25-10-13 before the Tagansky District Court" giving the address and court number. This was handed over to the defendant in person at 16:20 on 22 October 2013, according to a certificate provided by Operative Lisyanskaya to Judge Podmarkova and timed at 16:57 on that date.
The defendant did not appear at the hearing on 25 October 2013. Judge Podmarkova determined that she had been duly notified of the hearing at the Novospassky address, and decided to proceed with the hearing in her absence. The translation of the official record of the judge's determination goes on:
"The court, after deliberation, decided as follows. The said request demanded the service of judicial documents upon O Romanova but the latter failed to attend the relevant hearing, despite the court having notified her at her place of residence (her place of civil registration was established on the basis of a response to queries by the court) of the need for her to appear in court. O Romanova failed to appear before the court, nor was any petition lodged by O Romanova for adjournment of the matter to a later court hearing. Consequently, the court deemed it possible to conclude consideration of the request of the Royal Commercial Court of England and Wales for the service of judicial documents upon O Romanova without execution.
The court session was duly closed."
On 12 February 2014 Judge Podmarkova certified on the standard Hague Service Convention form that the claim form and accompanying documents had not been served "by reason of the non-appearance of O Romanova", and returned the original Request and enclosed documents to the Ministry of Justice of the Russian Federation. On 25 March 2014 the Ministry of Justice passed the documents back to the Senior Master "in connection with an inability to execute a request for the service of judicial documents upon O Romanova", stating that "the request was not executed owing to the failure of [the defendant] to attend the appointed court hearing".
It is after this that attempts were made by Ms Krivosheeva, who is a Moscow advocate acting for the claimant, to serve the proceedings on the defendant. Her evidence, corroborated by a further statement of Vladimir Lipatov who attended with her, is that the claim form, particulars of claim and order for service outside the jurisdiction were handed over by her in person to the defendant on 6 July 2014 at 22:40 Moscow time, in the defendant's office in Moscow, where the defendant was present with her husband. The defendant took receipt but declined to sign an acknowledgment. Ms Krivosheeva also arranged for the documents to be delivered by registered post to the Novospassky address, and she produces a confirmation of registered delivery showing that the documents had been received at the address in question by a Mr Kozlov on 10 July 2014. This is clearly the delivery referred to by the defendant in her witness statement.
This account goes beyond the version of events given in the defendant's September 2014 witness statement, however, and in one important respect is at odds with that version. The defendant, having identified the method of service in Russia pursuant to the Hague Service Convention as a summons to court, stated that "I was not at any point summoned to any court of the Russian Federation." The defendant has not responded to the evidence I have outlined above. She did not receive the writ of summons but I conclude that, contrary to her witness statement, she did receive the telegram. In doing so I bear in mind that the claimant said nothing in her witness statement about the visit from Ms Krivosheeva on 6 July 2014. It seems inherently probable, given the background and the admitted posting of the registered letter, that such a visit did take place. Ms Krivosheeva's evidence is corroborated, and unanswered. I conclude that the defendant has consciously failed to disclose the fact of that visit.
The law
As is well known, the general scheme of the Hague Service Convention is that each Contracting State designates a Central Authority which undertakes to receive requests for service emanating from other Contracting States, and to proceed according to the terms of the Convention. By Article 5 of the Hague Service Convention it is provided, so far as relevant, that the Central Authority "shall itself serve the document or shall arrange to have it served by an appropriate agency, either (a) by a method prescribed by its internal law for the service of documents in domestic actions upon persons who are within its territory …"
Two preliminary points are important. First, although Article 10 of the Hague Service Convention permits the sending of judicial documents by postal channels directly to persons abroad, provided that the state of destination does not object, the Russian Federation has objected to postal service. It is therefore accepted by the claimant that service by registered post was not valid service pursuant to CPR 6.40. Secondly, there is no suggestion that personal service by handing the documents to the defendant is valid service by Russian law. Accordingly, the fact that the defendant was handed the documents in person by Ms Krivosheeva is not relied on by the claimant as amounting to service.
Mr Aitkulov's evidence is that the Russian procedural rules (the Civil Procedure Code of the Russian Federation, "CPC RF") provide for the execution of a request for service from a foreign court pursuant to the Hague Service Convention as follows. A court is assigned to execute the request ("the Serving Court"). The Serving Court, having received the request from the Ministry of Justice, schedules a date, time and place for a hearing ("the Service Hearing") and then summons the person to whom the judicial documents are addressed ("the Service Recipient"). The summons is usually sent by registered mail, but Russian law also envisages other means of sending it, including by telegram.
Mr Aitkulov goes on to state that if the summons is delivered and received by the Service Recipient he or she is deemed notified of the date and time of the Service Hearing. If the Service Recipient refuses to accept the summons he or she is equally deemed notified. There is no separate procedure for actually serving the documents, says Mr Aitkulov. A person served has the right to review the case files and relevant documents. "If the Service Recipient does not appear at the Service Hearing having been duly notified, the Serving Court is not required to take any further steps to notify the Service Recipient and can proceed with the Service Hearing." In such cases, he says "the Serving Court terminates the case and returns the set of documents to the Central Authority, indicating the reason why the documents were not served on the Service Recipient."
Mr Aitkulov concludes that the procedural steps taken in the present case up to and including the service of the summons by registered post and by telegram "were sufficient and constitute effective service". It is his view that on balance the better view is that service of the Writ of Summons by registered post is effective even if the Service Recipient does not receive it, but in any event service on the defendant in person by delivery of the telegram was sufficient to provide notice of the Service Hearing. The court cannot compel her attendance, he says. It "could not have taken any other steps" before concluding the hearing and reporting on it. The effect of his evidence is that the available procedural means for notifying the defendant of the foreign proceedings having been exhausted, the fact that the defendant did not appear at that hearing is no obstacle to the conclusion that she is deemed served with the proceedings.
The obvious puzzle that arises from that opinion, and which troubled me during the hearing, is that Judge Podmarkova certified that the defendant had not been served. However, after being taken carefully by Ms Page through the relevant part of Mr Aitkulov's report and the key authority on which he relies, and reflecting on it after the hearing, I have been persuaded that in Russian law the steps taken would be considered sufficient to effect service on the defendant. The key passage is in paragraph 38 of Mr Aitkulov's report, where he refers to the Decree of the Federal Arbitrazh Court of the Urals District No F09-2357/14 dated 18 June 2014, which he summarises pithily as follows: "if a Service Recipient notified of the Service Hearing refuses to take receipt of the documents at the Service Hearing he/she is deemed served with regard to the court proceedings abroad." He goes on to state that from the standpoint of the CPC RF there is no difference between the situation in which a Service Recipient appears, but refuses to take receipt of the documents, and one in which the Service Recipient fails to appear at the hearing at all.
Examination of the decision relied on does in my opinion support Mr Aitkulov's first proposition. The case concerned proceedings to enforce a judgment of the Commercial Court of England and Wales given by Leggatt J on 8 March 2013 in Vis Trading Co Ltd v Nazarov & Ors [2013] EWHC 491 (QB). Sotsinvest Inc sought to challenge before The Federal Commercial Court a decision of the Commercial Court of Bashkortostan dated 17 March 2013, to issue a writ of execution for $5.9m against Sotsinvest, based upon the English judgment. One ground of appeal was that the court of first instance had been wrong to conclude that Sotsinvest had been "duly notified in a timely manner of the time and place of the foreign court's consideration of the case" pursuant to the Hague Service Convention. The Federal Court dismissed this ground of appeal.
The Court agreed that official notification of the foreign proceedings in accordance with the Convention was required by Russian law (save where some other treaty provided otherwise) before a foreign judgment could be enforced, but held that on the facts of the case the relevant requirements had been satisfied. The court observed that "the court of general jurisdiction took exhaustive measures for the proper enforcement of the court order on the serving of documents of a foreign court to the company Sotsinvest…" What had happened, according to the Federal Court judgment, was that the Serving Court notified the company by summons and by telegram of a court hearing on 29 July 2010. A representative attended the Service Hearing, but refused to accept the documents. The court record showed that this had occurred, and notification was sent to the Queen's Bench Division of "the inability to enforce the court order [sc. The request for service] due to the recipients' refusal to accept the documents." In other words, a negative certificate was sent out. As a result of this, the English Commercial Court made an order for service by an alternative method. However, the Federal Court held that valid service had taken place by virtue of the summons to court: "in this instance notification … about the trial … was conducted in a proper manner in compliance with the norms of the Hague Convention, and was effective."
On the basis of this decision and Mr Aitkulov's opinion my conclusion is that, despite appearances on the face of the Russian District Court's certificate, these proceedings have been served on the defendant pursuant to Russian law, and hence in accordance with the Hague Service Convention and CPR 6.40. All possible measures were taken to effect service on the defendant pursuant to the procedures outlined by Mr Aitkulov, and under Russian law that is sufficient to amount to valid service, even though the defendant declined to attend the Service Hearing. I am fortified in reaching that conclusion by the point made by Ms Page, that it would be a very strange and improbable gap in Russian procedural law if it permitted a defendant to evade effective service of proceedings by the simple expedient of not turning up at a Service Hearing. It is however a matter for consideration whether in these circumstances certificates issued by the Russian Court should take the form of the certificate issued in this case.
The defendant takes an additional point on service: that the documents sent to her by post did not include the Response Pack, in breach of CPR 7.8. This however is a point that relates only to the attempts at "service" carried out by Ms Krivosheeva and as I have said those are not relied on. (As it happens, there clearly was no prejudice. The defendant was represented and her then solicitors were able to and did file an acknowledgment of service.)
Service by an alternative method or at an alternative place/extension of time
Given my finding above, these issues do not arise. Without arriving at a conclusion on the issue, however, there does seem to me to be considerable force in the view that if all the steps taken to serve proceedings on the defendant were in law ineffective yet the proceedings do (as I have found) relate to a real and substantial tort in this jurisdiction, it would be undesirable to enable the defendant to avoid them as she (on this hypothesis) has managed so far to do.
Conclusions
I decided that it was fair to proceed with the hearing in the defendant's absence, and that the claimant should be relieved from sanctions for serving his evidence some 4 working hours late. Having considered all the evidence I have found that the claimant failed to disclose material facts on the application for permission to serve proceedings outside the jurisdiction, but I have rejected the defendant's application to set aside the Master's order for that reason. I have rejected, also, an implied suggestion by her – not the subject of an application - that the extension of time for service of the claim form should be set aside for material non-disclosure. I have concluded that the claim involves a real and substantial tort in this jurisdiction, and that England is clearly the appropriate place in which to try the claim. I have found that the steps taken by the claimant brought about service of the proceedings on the defendant in October 2013, which was valid and effective under Russian law and the CPR.
Next steps
The proceedings can now continue. Directions will be needed, and it will be appropriate to consider not just case management but also costs management. The claimant must by no later than 4pm on Friday 6 March 2015 serve a copy of this judgment on the defendant at her address for service and confirm to the court in writing that this has been done. I will allow the claimant until 4pm on Friday 13 March 2015 to file and serve written representations on the costs of these applications, a draft order, and proposed directions. The claimant must file and serve a costs budget by the same date and time. The defendant will have until 4pm on Friday 27 March to file and serve her response, to make her own proposals as to directions, and to apply if so advised for permission to appeal the decisions recorded in this judgment. The defendant will not be required, so long as she is a litigant in person, to file a cost budget. The parties should agree as much as possible and may agree that any remaining disputes should be resolved without a hearing. If they do the court should be informed, in writing. A hearing will be fixed for the first convenient date on or after April 2015 to deal with any matters that are not agreed or dealt with on paper. Either party may apply to vary these preliminary directions, which have been decided on without a hearing. |
Mr Justice Lewis:
INTRODUCTION
This is an application by the Society of Lloyd's ("Lloyd's") for an extended civil restraint order against Mrs Sally Rosemary Noel, or alternatively, a limited civil restraint order. The application is made in accordance with directions given by Popplewell J. following a hearing on 16 December 2014 of an application made by Mrs Noel for various orders. Popplewell J. struck out her application and certified that it was totally without merit. Lloyd's invited Popplewell J. to make an extended civil restraint order against Mrs Noel. Popplewell J. declined to make an order at that hearing as he considered that the appropriate course was to adjourn that application and to give directions as to how the application should be dealt with. That would enable Mrs Noel to have an opportunity to prepare what she would wish to say in opposition to that application.
The directions made by Popplewell J. required Lloyds to issue an application for an extended civil restraint order no later than 16 January 2015 and for that application to be listed for disposal no later than 1 April 2015 with a time estimate of ½ day. Lloyds issued the relevant application on 15 January 2015 and the application was listed to be heard on 12 March 2015. Popplewell J. also directed that Lloyd's and Mrs Noel file any evidence no later than 10 days prior to the hearing of the application and a bundle of document for use at the hearing be lodged with the court no less than 7 days prior to the hearing and skeleton arguments were to be lodged 2 days in advance of the hearing. Lloyd's did lodge its evidence, a bundle and a skeleton argument in accordance with the order. Mrs Noel attended the hearing, assisted by a Mckenzie friend. She had been unable to lodge her evidence or a skeleton argument in advance but I permitted her to rely on evidence and material she produced at the hearing and to make submissions about that material so far as relevant to the present application. Mrs Noel applied for an adjournment of the hearing at the outset. That application was refused and a separate judgment, setting out reasons, was given. The hearing proceeded. I am grateful for the courteous way in which Mrs Noel advanced her arguments before me as to why she resisted this application. I am also grateful to Mr Fisher, counsel for Lloyd's, who ensured that all relevant authorities were drawn to the court's attention. Mrs Noel was given an opportunity to make further written submissions if she wished following the hearing and Lloyd's were given the opportunity to reply. Mrs Noel submitted a number of documents. One was a single page entitled "Sally Noel's Submissions to Mr Justice Lewis". A second document comprised 5 pages, 4 of which were submissions and the fifth was a draft order. That appeared to have been prepared by Mrs Noel's McKenzie friend and, in the first document (prepared it seems by Mrs Noel herself) it is stated that Mrs Noel will not sign it as she considers that it is only partially accurate. The third document was an extract of proceedings before Cranston J. Mr Fisher, on behalf of Lloyd's supplied written submissions in reply. I have considered all the documents supplied subsequent to the hearing in reaching my judgment whilst bearing in mind the qualification that one document is only partially accurate.
THE BACKGROUND
The background to this application is set out fully in the judgment of Popplewell J in The Society of Lloyd's v Noel [2014] EWHC 4536 (Q.B). This judgment should be read alongside that earlier judgment. This judgment does not repeat all the matters set out in that earlier judgment but simply identifies those factual matters which are most relevant for the purposes of dealing with the application for an extended restraint order. The parties can be assured, however, that I have considered all the points made by each party.
Mrs Noel and Her Claim Against Lloyd's
Mrs Noel is a former underwriting member of Lloyds. She suffered severe financial loses. She has for some time disputed liabilities said to be owed by her in relation to the meeting of claims for asbestos-related injuries. Mrs Noel considers that she has been the victim of fraud or deception in connection with the claim that she was liable for those losses and also in connection with a subsequent settlement agreement and proceedings brought to enforce that agreement.
By way of background, on 9 November 1999 Cresswell J. gave directions in proceedings brought by Lloyd's against William Jaffra and others. One of the purposes of those directions was to require that all members of Lloyd's who wished to make allegations of fraud arising out of asbestos-related claims did so by a particular date. Failure to give notice would preclude any person from bringing such a claim without the permission of the court. Mrs Noel considers that her circumstances are different from those intended to be dealt with in the Jaffra proceedings. She did not give notice pursuant to the Jaffra order that she wished to make allegations of fraud. She did not apply for permission to bring proceedings alleging fraud.
Mrs Noel did commence proceedings for fraud against Lloyd's and previous chairmen of Lloyd's. That claim was dismissed. An application for permission to appeal was dismissed by the Court of Appeal. On 2 May 2007, the Court of Appeal gave judgment relating to four applications made by Mrs Noel. One application was for an order requiring Lloyd's to release a verification form for examination by a graphologist. Mrs Noel contended that that form had been relied upon by Lloyds as evidencing the transfer of certain liabilities but claimed that the signature on that form was not hers. The Court of Appeal dismissed all four applications and certified that the applications were totally without merit.
On 16 October 2007, Gross J. as he then was, dismissed an application made by Mrs Noel against Lloyd's alleging fraud in connection with her liability for asbestos-related claims. He certified that that application was totally without merit.
The First Extended Civil Restraint Order
Against that background, with a total of five applications having been certified as totally without merit, and critical observations made of other applications, Steel J. made an extended civil restraint order against Mrs Noel on 16 November 2007. Steel J. said at paragraph 9 of his judgment in Noel v The Society of Lloyd's [2007] EWHC 2979 (QB) that:
"This is an appropriate case in which to make a Civil Restraint Order in the light of the number of times Mrs Noel has sought to bring claims and to make applications in respect of Lloyd's alleged fraud and her liability of the Equitas premium and a whole range of other matters associated with her membership of underwriting at Lloyd's. Because the range of those applications is so broad, it is not appropriate to make a Limited Restraint Order. It is appropriate to grant an Extended Civil Restraint Order as defined in the Rules."
That order was to last for two years. It was subject to an exception enabling Mrs Noel to file and serve an opposition to a bankruptcy petition served by Lloyd's on 23 May 2007.
The Settlement Proceedings and the Injunction
Bankruptcy proceedings were commenced by Lloyd's against Mrs Noel to recover monies said to be due from her by virtue of her membership of Lloyd's. In due course, those proceedings were settled and the terms of the settlement are contained in a confidential settlement agreement. I do not propose to set out the terms of that agreement, save to observe that one of the clauses obliged Mrs Noel to cease and refrain from referring to Lloyd's whether directly or indirectly in a way considered to be critical.
Mrs Noel did not comply with the terms of the settlement agreement. She considers that she was forced to enter that settlement agreement under duress. Lloyd's brought an application for an injunction. The application was heard by Cooke J. on 28 October 2009. Mrs Noel attended part of the hearing before Cooke J. but then left due to health reasons and the need to attend hospital. A friend was acting as her McKenzie, friend. He remained throughout the hearing but Mrs Noel is of the view that he would not have been in a position to present the evidence of alleged duress relating to the settlement agreement. In any event, Cooke J. granted an injunction which, amongst other things, restrained Mrs Noel from publishing or disseminating information, documents or other material alleging fraud or dishonesty against Lloyd's where the allegations arose out of, or were based upon, amongst other things, her membership of, or underwriting at, Lloyd's. That prohibition is subject to certain exceptions. Cooke J. refused permission for Mrs Noel to appeal against his order, as appears from paragraph 7 of the order itself. Mrs Noel did not apply to the Court of Appeal for permission to appeal against the injunction imposed by Cooke J.
The Expiry of the Extended Civil Restraint Order in November 2009
The extended civil restraint order made by Steel J. expired in mid-November 2009. Lloyd's applied for an extension of that order. That application was considered and refused by Eady J. on 26 January 2010. His reasons are contained in his judgment in Noel v The Society of Lloyd's [2010] EWHC 360 (QB). Eady J. considered that it would not be appropriate to extend such orders automatically. He said this:
"23. I think in the context of a proposal to extend the civil restraint order, at the expiry of the period of two years, what the court would need to focus on particularly is evidence which suggests that there is good reason to apprehend vexatiousness and, in particular, persistent vexatiousness, for the future. That might be demonstrated by conduct or by threats, perhaps, but there must be, I would have thought, a reasonable apprehension that vexatious applications or claims will be made once the period expires or, in this case, when the undertaking expires following the court's ruling. That must be evidence based and, as I have indicated, the evidence relied upon here is that to be found in paragraphs 5 to 12 or Mr Demery's witness statement.
24. I have no doubt that the Society of Lloyd's and its representatives have a genuine apprehension or concern that trouble might break out, if I could put it that way, once the protection of the ECRO is removed. That is based on their past experience and on the background of vexatiousness in the past, all those matters which were taken into account by Steel J when he made the order in November 2007.
25. But their apprehension, based on the past, does not seem to me necessarily to make it appropriate to grant an extension of the order at this juncture. There must be something more solid in my judgment. The mere request for documents and information on 2 November would not justify such an apprehension. The mere negative failure to comply with the request for an assurance as to the future does not amount to a threat or solid grounds for an apprehension or fear as to the future.
26. It is said to be irrational on Mrs Noel's part that she turned down the offer that was made to her in November, which was that the outstanding costs order of £16,000 would not be enforced if she were to give such an undertaking. That was such a carrot, it is suggested, that she must have in mind an intention to make further applications or to launch further claims of a vexatious nature.
27. I think that is to infer too much from her limited conduct so far and I feel in all the circumstances, therefore, that the criteria have not been fulfilled to date. I would add, however, if evidence emerges in the future, in particular the near future, that there is an intention to make any vexatious claim, or an application launched, then the matter will be reviewed in the light of that further evidence."
Contempt Proceedings for Breach of the Injunction
Mrs Noel did not comply with the injunction granted by Cooke J. She has breached it on two occasions. In June 2010, Tugendhat J. found that Mrs Noel had been guilty of a breach of the injunction in a number of ways, including by publishing or disseminating information, documents, or other material alleging fraud and dishonesty against Lloyd's in the manner prohibited by paragraph 4 of the injunction. He ordered that there be no penalty for contempt. In informing Mrs Noel of his decision and the fact that he was not proposing to impose a penalty, Tugenhadt J. said this:
"But I do need to make very clear to you that you have not helped yourself today by returning to the underlying dispute and denying the validity of the settlement agreement. Cooke J gave a judgment. He considered these matters. You did not appeal. The order of Cooke J is what it is and it is binding. The more you write and tell this court and others that that is not binding, the more the court is going to fear that you will continue to breach the injunction. There has to be finality."
On 7 November 2013, Mrs Noel again was found to be in contempt of court by breaching the injunction granted by Cooke J. That finding was made by Jay J. In the course of his judgment, Jay J. observed that the purpose of the settlement agreement was, amongst other things, to bring the long-standing dispute between Mrs Noel and Lloyd's to an end and to prevent Mrs Noel from making allegations of fraud. He found that the injunction was intended to reflect the compromise agreement. He found that there had been a clear breach of paragraph 4 of the injunction in that Mrs Noel had sent correspondence to third parties which referred to Lloyd's in a manner which was critical and adverse to Lloyd's. He committed Mrs Noel to prison for a period of 28 days but he suspended that order for one year. That one year period expired on or about 7 November 2014. Mrs Noel did not commit further breaches of the order during the one-year period and the suspended committal order was not, therefore, activated.
On 27 January 2014, Mrs Noel filed a notice of appeal with the Court of Appeal. The notice sought to appeal against the committal order made by Jay J. Other sections of the notice of appeal also indicated that Mrs Noel wished to appeal against the injunction granted by Cooke J. The grounds stated that the order granted by Cooke J. on 28 October 2009, on which Jay J. relied, should be set aside as "it had been deceptively drafted by Lloyd's and that the injunction that had been granted had been procured by fraud". As Popplewell J. observed in paragraph 20 of his judgment, there was no application for permission to appeal against the order of Cooke J. nor any explanation as to why it was sought to bring the appeal so late. In any event, the Civil Appeals Office indicated that the appeal would be treated as an appeal against the committal order of Jay J. only. The Civil Appeals Office wrote to Mrs Noel on 20 February 2014 indicating that if she wished to seek permission to appeal against the order of Cooke J., she should file a separate notice of appeal and include within it an application for an extension of time. Mrs Noel did not file a notice of appeal and no application for permission to appeal the order of Cooke J. was ever made to the Court of Appeal. In relation to the appeal against the committal order of Jay J., Mrs Noel failed to progress the appeal and did not rectify defects to the appeal bundle. On 11 September 2014 Deputy Master Meacher ordered that the matter stand dismissed with costs.
Further Applications Made by Mrs Noel
Following the expiry of the extended civil restraint order, Mrs Noel has made further applications. An application dated 26 July 2010, and issued on 11 August 2010, was dealt with by His Honour Judge Mackie Q.C. on 28 October 2008. The application, in essence, sought to have the injunction granted by Cooke J. discharged on the basis that it had been obtained by fraud and in bad faith. It was alleged in the application notice that the settlement agreement, which the injunction was intended to enforce and which was itself intended to resolve the underlying dispute between Mrs Noel and Lloyd's, was an agreement that Mrs Noel had been entrapped into signing by duress. HHJ Judge Mackie Q.C. refused the application. By an order made on 28 October 2010, he certified that the "application is totally without merit". In the course of his judgment, see Society of Lloyd's v Noel [2010] EWHC 3165 (Q.B), he said this:
"If Mrs Noel wishes to challenge the decision of Cooke J (and I do not for one moment encourage her to do so because nothing in the material that I have seen suggests to me that Cooke J's order was anything other than wholly correct) then her remedy is not to go to Tugendhat J, and, still less, to me. Her remedy is to seek to appeal to the Court of Appeal out of time, giving reasons why her appeal has real prospects of success and explaining the delay. I re-emphasise, I am not encouraging her to take that step. Indeed I encourage her not to. For that reason, this court has no jurisdiction to deal with the matter. If the court had had jurisdiction, I would, based upon what I have seen and read, have refused relief on the grounds that Mrs Noel's claims are totally without merit."
That application was the first application since the expiry of the extended restraint order made by Steel J. which had been certified as being totally without merit.
By an application notice dated 1 November 2014, Mrs Noel applied for the following four orders:
"1). An Order permitting the FCA and the City of London Police to investigate Lloyd's crimes perpetrated against me in 2008, prior to the hearing of Lloyd's statutory demand for £21,689-20 and further bankruptcy proceedings, as suggested by Deputy Master Meacher in the order of 10 Sept 2014.
2). An Order to set aside the Injunction Order of 28th October 2009, on the grounds that it was obtained by fraud, in my absence, so that I can provide the evidence to support my claims to the FCA and Police, which will include recordings of blackmail that I was subjected to in 2008 and since.
3). An Order for a Judicial Inquiry and the hearing recommended by Lord Justice Clarke on 19th September 2003, in conjunction with this Inquiry prior to any further bankruptcy proceedings.
4). An Order for Lloyd's to release my 1978 Verification Form and 1979 Undertaking, for examination by a Graphologist."
That application was amended to add an additional fifth order that Mrs Noel was seeking. That order was expressed in these terms:
"5) An order granting me permission to plead fraud and conspiracy to pervert the course of Justice by Lloyd's Legal Team on the grounds that it is in defence of Lloyd's claim, and my pleadings fall outside Mr Justice Cresswell's Order in 1999 made in the Jaffray case"
That was the application considered by Popplewell J. on 16 December 2014. Popplewell J. dismissed the application. In relation to the application concerning the injunction granted by Cooke J, he said this at paragraph 25 of his judgment:
"That application is misconceived for a number of reasons. The first, as Mrs. Noel has been told by judges on a number of occasions, is that the correct procedural method of challenge to the Cooke Injunction is an application for permission to appeal out fo time to the Court of appeal. Mrs. Noel was reminded of this as recently as February 2014 by the Court of Appeal."
Furthermore, Popplewell J. considered the arguments put forward by Mrs Noel which were set out in a lengthy document entitled statement of case. That document, with some amendments, together with supporting material was the material produced by Mrs Noel at the start of the hearing before me on 12 March 2015. Popplewell J. explains in his judgment that the threshold for setting aside a judgment on the grounds of fraud is a high threshold and, in essence, requires the production of evidence of facts discovered since the judgment which show a reasonable probability of such fraud as would invalidate the judgment, that is fraud or misrepresentation which substantially contributed to the decision. Popplewell J. carefully considered the material produced by Mrs Noel and concluded that there was no such evidence in this case, setting out his reasons for that conclusion in detail.
By an order made on 16 December 2014, and stamped on 19 December 2104, Popplewell J. struck out the application made by Mrs Noel. He ordered that the "Application be treated as "totally without merit" for the purpose of CPR PD 3C". That is the second application, since the expiry of the extended civil restrain order made by Steel J., which has been certified by a judge as being totally without merit.
As indicated, Popplewell J. did not accede to the application by Lloyd's for the grant of an extended civil restraint order against Mrs Noel. Rather, he gave directions for such an application to made and heard. It is that application for an extended civil restraint order or, in the alternative, a limited civil restraint order, which was heard on 12 March 2015 and which forms the subject matter of this judgment.
THE LAW
CPR 2. 3 provides that a :
" "civil restraint order" means an order restraining a party –
(a) from making any further applications in current proceedings (a limited civil restraint order);
(b) from issuing certain claims or making certain applications in specified courts (an extended civil restraint order); or
(c) from issuing any claim or making any application in specified courts (a general civil restraint order)."
Pursuant to CPR 3.11, Practice Direction 3C - Civil Restraint Orders ("PD 3C") sets out the circumstances in which the court has power to make a civil restrain order against a party in proceedings. In relation to limited civil restraint orders, paragraph 2.1 of PD 3C provides that:
"2.1 A limited civil restraint order may be made by a judge of any court where a party has made 2 or more applications which are totally without merit".
Paragraph 3.1 of PD 3C provides that an extended civil restraint order may be made by, amongst others, a High Court judge, where:
"a party has persistently issued claims or made applications which are totally without merit. "
Paragraph 3.9 of PD 3Cprovides that:
"3.9 An extended civil restraint order –
(1) will be made for a specified period not exceeding 2 years;
(2) must identify the courts in which the party against whom the order is made is restrained from issuing claims or making applications; and
(3) must identify the judge or judges to whom an application for permission under paragraphs 3.2(1), 3.2(2) or 3.8 should be made."
There is provision for extending the duration of an extended civil restraint order. Paragraph 3.10 of PD 3C provides that:
"3.10 The court may extend the duration of an extended civil restraint order, if it considers it appropriate to do so, but it must be not extended for a period of greater than 2 years on any given occasion."
The purpose underlying the making of civil restraint orders is summarised in the following terms by Leggat J. in Nowak v (1)The Nursing and Midwifery Council and (2) Guy's and St Thomas' NHS Foundation Trust [2013] EWHC 1932 (QB):
"58 As explained by the Court of Appeal in the leading case of Bhamjee v Forsdick [2004] 1 WLR 88, the rationale for the regime of civil restraint orders is that a litigant who makes claims or applications which have absolutely no merit harms the administration of justice by wasting the limited time and resources of the courts. Such claims and applications consume public funds and divert the courts from dealing with cases which have real merit. Litigants who repeatedly make hopeless claims or applications impose costs on others for no good purpose and usually at little or no cost to themselves. Typically such litigants have time on their hands and no means of paying any costs of litigation – so they are entitled to remission of court fees and the prospect of an order for costs against them is no deterrent. In these circumstances there is a strong public interest in protecting the court system from abuse by imposing an additional restraint on their use of the court's resources.
"59 It is important to note that a civil restraint order does not prohibit access to the courts. It merely requires a person who has repeatedly made wholly unmeritorious claims or applications to have any new claim or application which falls within the scope of the order reviewed by a judge at the outset to determine whether it should be permitted to proceed. The purpose of a civil restraint order is simply to protect the court's process from abuse, and not to shut out claims or applications which are properly arguable."
THE MAKING OF AN EXTENDED CIVIL RESTRAINT ORDER – THE ISSUES
In the present case, Lloyd's seeks an extended civil restraint order against Mrs Noel. In accordance with paragraph 3.1 of 2CPD, there are, essentially, three issues that the court needs to consider before making an extended civil restraint order, namely:
(1) is the precondition for the making of such an order satisfied, that is has the individual "persistently issued claims or made applications which are totally without merit"?;
(2) if so, and if the court has power to make such an order, is it appropriate in the circumstances to make such an order?;
(3) if so, for what period of time, and on what terms, should such an order be granted?
THE PRECONDITION FOR MAKING AN EXTENDED CIVIL RESTRAINT ORDER
An extended civil restraint order may only be made where a party has persistently issued claims or made applications which are totally without merit. The case law gives guidance on the approach to determining what persistence means in such circumstances. In Karim v Charkham and others [2014] EWHC 497 (Admin) Griffiths Williams J. adopted the approach of Lord Bingham C.J. (as he then was) in Attorney General v Barker [2000] FLR 759 at page 764 to section 42 of the Senior Courts Act 1981 which provides powers to restrain a litigant who has "habitually and persistently and without any reasonable ground" instituted what were then called "vexatious" legal proceedings. Lord Bingham C.J said this:
"The hallmark usually is that the plaintiff sues the same party repeatedly in reliance on essentially the same cause of action, perhaps with minor variations, after it has been ruled upon, thereby imposing on defendants the burden of resisting claim after claim; that the claimant relies on essentially the same cause of action, perhaps with minor variations, after it has been ruled upon, in actions against successive parties who if they were to be sued at all should be joined in the same action; that the claimant automatically challenges every adverse decision on appeal; and that the claimant refuses to take any notice of or give any effect to orders of the court. The essential vice of habitual and persistent litigation is keeping on and on litigating when earlier litigation has been unsuccessful and when on any rational and objective assessment the time has come to stop."
Similarly, the Court of Appeal in Bhamjee v Forsdick and others [2004] 1 WLR 88 adopted a similar approach to civil restraint orders at paragraph 39 where the Court observed that:
"A civil restraint order is likely to be appropriate when the litigant's conduct has the hallmark of one who is content to indulge in a course of conduct which evidences an obsessive resort to litigation and a disregard of the need to have reasonable grounds for making an application to the court. Normally we would not expect a civil restraint order to be made until after the litigant has made a number of applications in a single set of proceedings all of which have been dismissed because they were totally devoid of merit. The characteristics of "vexatious" conduct set out by Lord Bingham of Cornhill CJ in his judgment in Attorney General v Barker [2000] 1 FLR 759 … may be a useful indicator of the need for a civil restraint order."
In relation to an extended civil restraint order, the Court of Appeal said this in Bhamjee v Forsdick [2004] 1 WLR 88 at paragraph 42:
"By the time the order comes to be made the litigant for whom the further restraint has been adjudged necessary will have exhibited not only the hallmarks of vexatiousness ….. but also the hallmarks of persistent vexatiousness ….. We do not include the word "habitual" among the necessary criteria for an extended civil restraint order, but there has to be an element of persistence in the irrational refusal to take "no" for an answer before an order of this type can be made. The duration of the order may have to be extended if this is considered appropriate, but it should not be extended for a period greater than two years on any given occasion."
The Court of Appeal in R (Kumar) v Secretary of State for Constitutional Affairs [2007] 1 WLR 536, referred to that approach to the meaning of persistence, whilst noting that, under the new rules, it was sufficient that the claims or applications were totally without merit and that the litigant had persisted in making them. The Court noted that there was no longer a requirement of vexatiousness.
In Courtman (Trustee in Bankruptcy) v Ludlam [2010] BPIR 98, Mr Bartley Jones Q.C. sitting as a deputy High Court judge specifically considered the meaning of "persistently" in PD 3C. He noted that paragraph 2.1 of PD 3C provided that a limited civil restraint order could be made where a party has made 2 or more applications which are totally without merit. He considered that the provisions for limited civil restraint orders and extended civil restraint orders reflected a graduated and proportionate response to the problem. He considered that it would therefore be logical to require that a litigant had made a higher number of claims or applications which were totally without merit before making an extended civil restraint order and suggested in paragraph 9 of his judgment that "three unmeritorious claims or applications must be the bare minimum for establishing 'persistence'". Henderson J. also proceeded on the assumption that there must be a minimum of three totally without merit applications for the jurisdiction to make an extended civil restraint order to arise: see paragraph 21 of his judgment in Winsor v Vale [2014] EWHC 957 (Ch). The Court of Appeal in Connah v Plymouth Hospitals NHS Trust [2006] EWCA Civ 1616, considered that the threshold for an extended civil restraint order, which required persistent totally without merit applications or claims, was higher than that for the grant of a limited civil restraint order, which required the making of two or more such applications. That was because the effect of an extended civil restraint order is more draconian.
Against that background, Mr Fisher, on behalf of Lloyds, submits that paragraph 3.1 of PD 3C does not, itself, require any minimum number of totally without merit applications to have been made before it can be said that the litigant has persistently made such applications. In any event, he submits that the court is entitled to have regard all such applications made by Mrs Noel, including those made prior to the making of the earlier extended civil restraint order. In those circumstances, Mrs Noel has made seven applications which have been certified as being totally without merit. He submits that that is well above the minimum envisaged by the case law and does establish the necessary persistent making of applications which are totally without merit. Alternatively, he submits that two such applications, at least where there has been an earlier extended civil restraint order, is sufficient to establish persistence for the purpose of PD 3C.
The first question in the present case is to establish whether Mrs Noel has "persistently issued claims or made application which are totally without merit". In the present case, Mrs Noel made five applications which were certified as being totally without merit prior to the making of the first extended civil restraint order by Steel J. Since the expiry of that order, Mrs Noel has made two further applications which have been certified as being totally without merit, namely the applications made to HHJ Mackie and Popplewell J. The first issue is whether a court, in accordance with paragraph 3.1 of PD 3C, is able to have regard only to totally without merit claims and applications made after the expiry of the latest extended civil restraint orders (in which case Mrs Noel has made two relevant totally without merit applications) or whether the court is entitled to look at the entirety of the litigation history to determine whether or not the pre-condition for making an extended civil restraint order is satisfied (in which case Mrs Noel has made at least seven such applications).
In my judgment, a court is entitled to have regard to all the claims or applications made which were totally without merit in deciding whether it has power to make an extended civil restraint order in accordance with paragraph 3.1 of PD 3C. The court is not limited to considering solely the claims and applications made since the expiry of the latest extended civil restraint order. I reach that conclusion for the following reasons.
First, the language of paragraph 3.1 of PD 3C requires a court to consider whether a party "has issued claims or applications which are totally without merit". There is nothing in the language to indicate that a court is only entitled to look at claims issued or applications made within a particular time-frame, for example, in the period since the expiry of the latest extended civil restraint order. There is nothing in the language of paragraph 3.1 which indicates that a court must leave out of account totally claims or applications which were totally without merit and which led to the imposition of an earlier extended civil restraint order. There is nothing in the language to suggest that the making of an extended civil restraint order, in effect, draws a line drawn under conduct occurring prior to that date or that persistence is only to be assessed by reference to conduct occurring after the expiry of the order. Rather, paragraph 3.1 is describing a state of affairs, namely that a party has persistently issued claims or made applications which are totally without merit. It is not prescribing or requiring that only applications made within a particular time scale, or after a particular date, can be considered in assessing persistence.
Secondly, an interpretation of PD 3C which permits the court to have regard to the past conduct of a litigant in making totally without merit applications is consistent with the purpose underlying the regime governing extended civil restraint orders. The purpose is to enable the courts to prevent abuses of the court system. That is achieved by providing that a court is to have a discretion to make an extended civil restraint order in cases where a litigant has persistently issued claims or made applications which are totally without merit. The fact that a person has in the past made such applications is relevant to the need for the court to have a discretion, exercisable in appropriate circumstances, to control future abuses. In exercising the discretion, the court will have to assess the risk of the individual making further applications which are totally unmeritorious. Past conduct is relevant to that assessment. Factors such as the number of totally without merit applications that have been made, and the length of time between the expiry of the last extended civil restraint order and the making of a further totally unmeritorious application may be relevant to the assessment of the level of risk of further totally unmeritorious applications being made and whether the discretion to make such an order should be exercised. Past conduct is, therefore, relevant both to the need for a power to control abuses and to the exercise of that power.
Indeed, it would, in my judgment, be illogical to leave earlier totally without merit claims and applications out of account. The fact is that the individual has made such applications or claims. The making of such claims or applications has led to the making of an extended civil restraint order. If on the expiry of that order, an individual resumes his or her ways and resumes the process of making applications which are totally without merit, it would be illogical to require the individual to make three or more such applications before the power to make an extended civil restraint order arises. Rather, the fact that the individual has in the past made applications which were totally without merit, and has begun to do so again once the extended civil restraint order expires, demonstrates both the need for the court to have a power to control abuses and may, depending on the circumstances, be highly relevant to whether it is reasonable to anticipate that the person will make such applications in the future. It would be logical, therefore, for the court to have regard to all the totally without merit claims and applications that have been made both in deciding whether the power to make an extended civil restraint order has arisen and in considering how to exercise that discretion.
Furthermore, the existing case law recognises that the making of earlier totally without merit applications is relevant to the discretion to make such an order (the second stage of the inquiry): see paragraph 10 of the judgment of Eady J. in Noel v The Society of Lloyd's [2010] EWHC 360 (QB). It would be illogical to say that the fact that the applicant has a history of making totally without merit applications is relevant to the exercise of discretion in deciding whether to make an order be made, but is not relevant to whether the power to make such an order has arisen.
Mr Fisher, for Lloyd's, very properly drew attention to the fact that there is, at present, no decided authority on whether totally without merit applications made prior to an earlier extended civil restraint order can be considered for the purposes of deciding if the power to make such an order has arisen. He also drew my attention to paragraph 10 of the judgment of Eady J. in Noel v The Society of Lloyd's [2010] EWHC 360 (QB). That case involved the question of whether an extended civil restraint order should be extended. The test for granting an extension is whether it is appropriate make such an order: see paragraph 3.10 of PD 3C. In the course of deciding whether or not to extend an existing extended civil restraint order, Eady J. observed that it was not the intention that extended civil restraint orders be renewed automatically on expiry. He observed that:
"It seems to me that it would be necessary in such circumstances for Lloyd's to demonstrate why it is now appropriate for a fresh order to be made. There cannot simply be a presumption of continuance. There must be evidence that the criteria are once again fulfilled. Of course, the background is important as background and the degree of persistence, in particular, prior to the original order being made would, no doubt, be a highly relevant factor. So too would the conduct of the relevant person after, the order was made; the extent, for example, to which he/she had sought to get round the order or made unmeritorious applications during its subsistence."
In my judgment, that paragraph, and the reference to the need to ensure that "the criteria are once again fulfilled", was not intended to indicate that the court could only have regard to totally without merit applications made after the expiry of the extended civil restraint order for the purpose of determining whether to make a new extended civil restraint order. The court there was dealing with the question of whether to extend the civil restraint order – where the test is whether it is appropriate to grant the extension. The court was not dealing with the question of whether to make a new extended civil restraint order – where the question is whether the individually has persistently made claims or applications which are totally without merit. In particular, the court was not seeking to determine whether the pre-condition for the existence of the power to make such an order could only be satisfied by reference to applications made after the expiry of the previous order. The whole tenor of the judgment is that the court cannot automatically extend an existing extended civil restraint order. It was in that context that the court considered whether the criteria for extending the order existed. As paragraph 23 of the judgment makes clear, the question that arose in the context of that case was whether, on the evidence, there was "good reason to apprehend vexatiousness and, in particular, persistent vexatiousness for the future". The court was not seeking to give an interpretation of paragraph 3.1 of PD 3C.
Mr Fisher also, very properly, drew attention to the dictum of Dyson L.J. (as he then was) at paragraph 23 of his judgment in Connah where he observed that the "vice at which the extended civil restraint order is directed is the litigant who issues and makes applications in more than one set of proceedings". In my judgment, Dyson L.J. was not seeking to lay down any rule, and was not seeking to interpret PD 3C, as requiring that applications must be made in more than one set of proceedings before the power to make an extended civil restraint order arose or could appropriately be exercised. Rather he was indicating that, generally, that is the position and, on the facts of that case, there was no indication that the litigant in that case would start other proceedings against the respondent or other parties. For that reason, on the facts of that case, only a limited civil restraint order, rather than an extended civil restraint, was justified. In appropriate circumstances, the requirements of PD 3C may be satisfied, and it may be appropriate to make an extended civil restraint order, where a litigant has persistently made totally without merit applications in one set of proceedings.
For all those reasons, I am satisfied that it is appropriate to consider the history of the claims and applications made by Mrs Noel in deciding whether the pre-condition for making an extended civil restraint order is satisfied. That includes having regard to the five applications which were certified as being totally without merit prior to the making of the extended civil restraint order by Steel J. and the two applications made since the expiry of that order which have been certified as totally without merit. Given the number of applications certified by the courts as being totally without merit, the court does have power to make an extended civil restraint order. Mrs Noel is clearly a person who has "persistently" made applications which are totally without merit. The real question is whether it is appropriate to make such an order.
THE EXERCISE OF DISCRETION
Assuming that the pre-condition for making an order exist, the court has a discretion, but is not obliged, to make such an order. Paragraph 3.1 of PD 3C provides that the court "may", not must, make an order. In exercising that discretion, the court must have regard to the purpose underlying the making of such civil restraint orders, namely that such orders should be made if, but only if, it is necessary to protect the administration of justice from abuse. That involves an assessment of the risk that the individual litigant will, unless restrained, make further applications or claims which are totally without merit and which will waste the time and resources of the courts, thereby consuming public funds and diverting the courts from dealing with other cases. The making, and the terms, of any order should reflect a proportionate response to the level of risk of future, unmeritorious proceedings. The exercise of discretion will, generally, involve an assessment of the level of risk that the individual poses of making further, unmeritorious applications in future. In considering that issue, as Legatt J. observed at paragraph 69 of his judgment in Nowak v Nursing and Midwifery Council and others [2013] EWHC 1932 (QB):
"The fact that the litigant has repeatedly issued claims or made applications which are totally without merit will itself almost inevitably demonstrate the existence of such a risk. But in considering the extent of the risk it may also be relevant to consider other factors, such as any statements of the litigant's future intentions, other aspects of the litigant's conduct and whether the circumstances which have generated the hopeless claims or applications are continuing or likely to continue."
In the present case, in my judgment, it is clear that, unless restrained, Mrs Noel will make applications which are totally without merit. First, the applications made prior to the previous extended civil restraint order related to Mrs Noel's belief that she has been the victim of fraud perpetrated on her in connection with her membership of Lloyds. That perception of injustice, and the belief that she had been the victim of fraud, led to the applications that were dismissed by the Court of Appeal and by Gross J. in 2007. The underlying litigation was compromised by the confidential settlement agreement between Mrs Noel and Lloyds. That agreement (as Jay J. recognised in giving his judgment in the second contempt application) was intended to bring the long-standing dispute to an end and to prevent Mrs Noel from making further allegations.
Secondly, Mrs Noel, however, was unprepared to accept the settlement agreement and that agreement had, ultimately, to be enforced by the injunction granted by Cooke J. in 2009. More recently, the focus of Mrs Noel's attention has been on seeking to discharge the injunction granted by Cooke J. That formed the subject matter of the application certified by HHJ Mackie Q.C. as being totally without merit. Furthermore, even though HHJ Mackie Q.C., and indeed, Tugendhat J. in the first contempt proceedings, and Jay J. in the second contempt proceedings, made it clear that the High Court could not hear applications to re-open the injunction granted by Cooke J., Mrs Noel made a further such application before Popplewell J. which, again was certified as being totally without merit.
Thirdly, even before Popplewell J., Mrs Noel sought again to obtain an order relating to the underlying dispute between her and Lloyds, notwithstanding the previous dismissal of applications in relation to those matters. Mrs Noel again sought, amongst other things, an order releasing a verification form for examination by a graphologist. As Popplewell J. observed at paragraph 43 of his judgment, that was an application which had been refused by the Court of Appeal and certified as totally without merit in 2007.
In my judgment, it is clear that the common thread underlying the repeated applications made by Mrs Noel is an attempt to re-litigate and perpetuate claims relating to her membership of Lloyds. On occasions, those applications are made directly in relation to matters relevant to the underlying dispute. On other occasions, they are made by means of applications intended to re-open the injunction granted to enforce the settlement agreement which was itself intended to settle the underlying claim. On yet other occasions, they are done by applications intended to enable her to continue to make allegations of fraud which the settlement agreement and the injunction were intended to prevent her making. It is clear that, unless restrained, Mrs Noel will continue to make applications that are totally without merit. It is clear that she will persist in making applications even when, as in relation to the injunction granted by Cooke J. , she is repeatedly told by judges in the High Court that that injunction is binding and cannot be re-opened in the High Court. There is an irrational, indeed obsessive, refusal to accept the rulings of the courts and to take "no" for an answer. In my judgment, there is a very high risk indeed that, unless restrained, Mrs Noel will continue to make totally unmeritorious applications relating either to her membership of Lloyds or to the injunction granted by Cooke J. Such applications would inevitably harm the administration of justice. If such applications were permitted, they would inevitably continue to waste the limited time and resources of the courts, consume public funds, and divert the courts away from dealing with cases which may have merit. Given the range of applications made by Mrs Noel, involving, on occasions, applications relating to alleged fraud by Lloyd's and, on other occasions, challenges to the injunction granted to enforce the settlement agreement, it is appropriate to grant an extended civil restraint order, not merely a limited civil restraint order. For those reasons, it is appropriate, just and proportionate to make an extended civil restraint order against Mrs Noel.
That conclusion is reinforced, in my judgment, by the following factors. On two occasions, Mrs Noel has been found to be in contempt because she has breached the injunction granted by Cooke J. Those contempts exhibit the same irrational inability to accept that the judgment of Cooke J. is binding and must be observed. As Tugenhadt J. observed in June 2010 when giving judgment in the first contempt application, Mrs Noel had not helped herself by returning on that occasion to the merits of the underlying dispute and denying the validity of the settlement agreement and Mrs Noel had to accept that the order of Cooke J. was binding. Nevertheless, three years later, in November 2013, Mrs Noel was again found guilty of contempt in breaching the injunction and again, before Jay J., sought to re-litigate the historic issues as appears from paragraphs 23 to 26 of the judgment on the committal application. Furthermore, at the hearing before me on 12 March 2015, Mrs Noel submitted a 25 page statement of case, and approximately 500 pages of documents, intended to demonstrate the wrongs that she perceives herself to have suffered over the years. That material, and the oral submissions made at the hearing, demonstrate that Mrs Noel will simply not accept that she cannot continue to make applications which are totally unmeritorious in the legal sense. Such is her sense of grievance that she simply cannot accept that she is unable, as a matter of law, to seek to re-litigate matters that have already been dealt with by the courts, no matter how unsatisfied she is with the outcome.
For those reasons, it is, in my judgment, appropriate to exercise the power to make an extended civil restraint order in the present case.
THE TERMS OF THE ORDER
The terms of any order made should be proportionate: see the observations of the Court of Appeal in Bhamjee v Forsdick [2004] 1 WLR 88 at paragraph 53(8). First, in my judgment, it is appropriate to make the order for the maximum term of 2 years. That is proportionate and just on the facts of the present case. Secondly, the order should be directed at preventing Mrs Noel from seeking to litigate matters arising out of, or connected with, her membership of Lloyds, the settlement agreement intended to compromise her claims against Lloyds, and the injunction granted to enforce that compromise agreement without first obtaining the permission of a High Court Judge. Thirdly, there should be an appropriately drafted exception permitting Mrs Noel to file and serve an application to set aside any statutory demand served by Lloyd's on Mrs Noel or to make an application in opposition to any bankruptcy petition presented by Lloyd's in respect of monies alleged to be owed by her to Lloyd's. Popplewell J. recognised at paragraph 45 of his judgment that it would not be appropriate to include such matters within the terms of an extended civil restraint order. In my judgment, an extended civil restraint order in the terms proposed will be a just, fair and proportionate order.
CONCLUSION
In considering whether a party has persistently issued claims or made claims which are totally without merit, a court is entitled to have regard to all such claims and applications including those made prior to the making of an earlier extended civil restraint order. In the present case, therefore, the court is entitled to have regard to the totally without merit applications made by Mrs Noel prior to the making of an earlier extended civil restraint order as well as those made after the expiry of that order. In the circumstances, given the fact that Mrs Noel had made seven applications which the courts have certified as being totally without merit, Mrs Noel had persistently made such applications and the court has power to make an extended civil restraint order.
Secondly, this is an appropriate case for making an extended civil restraint order. There is a very high risk that, unless such an order is made, Mrs Noel will continue to make further totally unmeritorious applications relating to matters connected with her membership of Lloyd's, earlier litigation involving Mrs Noel and Lloyds, the settlement agreement intended to comprise that litigation and matters relating to the injunction granted to enforce that settlement agreement. Mrs Noel has already made a number of such totally without merit applications. She has continued to make applications to the High Court to discharge the injunction granted by Cooke J. after being told by the High Court on a number of occasions that the High Court could not entertain such an application. Furthermore, her overall conduct in terms of the committals for contempt for breaching the injunction granted by Cooke J. to enforce the settlement agreement, and the submissions made at the hearing of the application for an extended civil restraint order, reinforce the conclusion that Mrs Noel will continue to make further, unmeritorious applications unless prevented by court order from doing so. The making of an extended civil restraint order, designed to prevent her from making such applications except with permission of the court, and subject to an appropriately worded exception to take account of possible bankruptcy proceedings, with a duration of 2 years, is an appropriate, proportionate and just order. Only such an order will prevent Mrs Noel from seeking to continue to use the limited time and resources of the courts on litigation which is totally without merit. For that reason, the application is granted and an extended civil restraint order is made. |
His Honour Judge McKenna :
Introduction
In this action, the Claimant, Mrs Heather Elizabeth Tait, whose date of birth is 22nd February 1981 and who is therefore now 34 years of age (28 at the time of the events with which this claim is concerned) seeks damages from the Defendant, the Gloucestershire Hospitals NHS Foundation Trust, in respect of injuries caused as a result of negligently delayed spinal surgery which eventually took place in the early hours of 8th July 2009.
Judgment was entered for damages to be assessed on 27th November 2012 and this Court is therefore only concerned with the quantification of those damages.
Background
The Claimant is married and has three children: Joshua whose date of birth is 29.9.05, James, whose date of birth is 9.3.07 and Lily whose date of birth is 17.5.13.
The Claimant and her husband met in the late 1990s when they were both working in media related jobs, she as a lighting technician and he as a conference organiser. After various jobs in the television and theatre world, the Claimant and her husband, Russell, worked together from about 2001 onwards as partners, organising and managing conferences for companies.
In 2003 they incorporated their conference organising business as Crystal Clear Productions Limited ("CCP") with profits and drawings being shared equally.
Whilst still working for CCP, the Claimant started up a photographic business in March 2007, Heather Tait Photography ("HTP") initially photographing toddler groups and nurseries and becoming the main photographer for a local magazine "Family Time." The income from this business supplemented the family income, but as the photographic business developed, the Claimant did less for CCP.
The Claimant suffered from low back pain from about 2007 onwards as is apparent from, for example, the entries in her medical records for the 12th February 2007 at page 1/143, 16th February 2010 at 3/442 and 31st March 2010 at 3/456 and sought regular treatment from a chiropractor.
On 5th July 2009, whilst staying with her parents-in-law, the Claimant suffered an acute episode of severe low back pain and was taken by ambulance to the Cheltenham General Hospital. Despite suspicions on the part of various clinicians that she might have nerve root compression caused by disc prolapse, and a plan that she should have an MRI scan, the Claimant was in fact discharged on 6th July 2009 without an MRI scan having taken place and she returned to her home in Sutton Coldfield.
Her condition deteriorated over night and the following morning she called a GP by whom she was sent to Good Hope Hospital in Sutton Coldfield where she was admitted. It was suspected that she had cauda equina syndrome. An MRI scan revealed a massive prolapsed disc at L5/S1. The Claimant then underwent emergency spinal decompression surgery at the Queen Elizabeth Hospital in Birmingham in the early hours of the 8th July 2009.
It is the delay in diagnosis and treatment of the Claimant's prolapsed disc that has caused the severe injuries with which this court is concerned.
The Defendant has admitted that the Claimant should have had an MRI scan at the Cheltenham General Hospital and that surgery should have been performed on 6th July 2009 and there is agreed evidence from the spinal surgeons (2/408) that if the Claimant had had surgery on that date then she would not have gone on to develop the severe cauda equina syndrome from which she now suffers but would have had :-
(1) some mild bowel and bladder symptoms that would not have impeded her ability to work and live a relatively normal life;
(2) some residual disturbance of sensation in the perineum, but not the severe loss of sensation she currently has; and
(3) mechanical back pain caused by degenerative disc disease at least at the same level as she had prior to her suffering her cauda equina injury and some residual weakness in the left leg which would have prevented her doing heavy lifting and heavy manual work. It would not, however, have stopped her pursuing a career in photography or event management and / or organisation.
It is common ground that the Claimant now has cauda equina syndrome, is doubly incontinent, has suffered a loss of sexual sensation and some psychiatric damage and some additional leg weakness and pain beyond that which she would have experienced in any event, the exact extent of which however is not agreed.
A significant issue between the parties is whether the back pain of which the Claimant complains is mechanical back pain consequent on degenerative disease or neuropathic pain consequent upon the delayed surgery. This issue is important both because, to the extent that the Claimant's physical limitations other than those attributable to her double incontinence are attributable to mechanical degenerative disease, they are not consequent upon any breach of duty on the Defendant's behalf and so do not sound in damages and so her claim, for example, for domestic assistance and equipment would be reduced, and because of the Defendant's reliance on the issue to suggest that the Claimant's claim more generally has changed over time and or has been significantly exaggerated.
An allied issue is the extent to which the Claimant's life and career would have been impeded by the mechanical back pain that she would have continued to suffer from even if the surgery had been performed when it should have been since, as I have already recorded, it is common ground that even if the surgery had been timely, the Claimant would have suffered some mechanical back pain and leg weakness which would have affected her ability to perform heavy manual tasks.
There is a useful summary of the financial consequences of the parties respective positions at 1/76 albeit that during his opening, leading counsel for the Claimant conceded that some downward revision was called for and, in the event, as it seems to me, the financial consequences of the neuropathic pain issue, if I can so describe it, are not so significant as at first appears. It can be seen that a further significant issue between the parties is loss of earnings, both past and, more particularly, future since, whilst the Claimant's actual current and future earning capacity has been agreed, there is a substantial dispute as to the question of how, but for the negligently incurred injuries, the Claimant's career as a photographer would have progressed.
In the circumstances, it seems sensible to deal with the issues raised in this claim in the following order:-
(1) Does the Claimant suffer from neuropathic pain and if so to what extent?
(2) How would the Claimant's life and career have been impeded by the mechanical back pain that she would have continued to suffer from even if the surgery had been performed earlier?
(3) How would the Claimant's career have progressed and what would she have earned but for the injury caused by the negligently delayed surgery?
(4) In the light of the above, what are the financial consequences in terms of the quantification of the claim?
Evidence
The Court has heard evidence from the Claimant herself and from the following witnesses whose evidence was principally concerned with the question of the Claimant's likely career progression as a photographer:-
Phillip Bray
Joanna Buick
Nicola Clement
Jonathan Harrison
Nicola Gough
Lisa-Joy Peake
Katherine Pearce
Julia Robinson
Helen Roscoe
Catherine Sealy
Glenn Taylor
Nathan Tromans
Katherine Winner
So far as expert evidence is concerned the Court has read reports from the following experts whose evidence was agreed and who therefore were not required to give oral evidence:-
Psychiatric Experts
Dr Trevor Turner for the Claimant
Dr Paul Dedman for the Defendant
Colorectal Experts
Miss Carolynne Vaizey for the Claimant and
Professor Scholefield for the Defendant
Urological Experts
Mr Julian Shah for the Claimant and
Mr Jonathan Ramsey for the Defendant.
In addition, oral evidence was heard from spinal experts; Mr James Wilson- MacDonald, Consultant Orthopaedic Surgeon for the Claimant and Mr. Paul Byrne Consultant Neurosurgeon for the Defendant; from care and occupational therapy experts Ms Emma Way (formerly Cullen) for the Claimant and Mr Albert Pace for the Defendant; from employment experts Mr Keith Carter for the Claimant and Mrs Mary Groves for the Defendant and from accommodation experts Mr. Cumbers on behalf of the Claimant and Ms Jane Bowden for the Defendant, all of whom have, of course, produced written reports and held joint meetings with a view to narrowing issues.
There are a number of helpful summaries of the various symptoms suffered by the Claimant in the trial bundle both in the various witness statements prepared by the Claimant herself and in the reports of the various medico- legal experts instructed by the parties. A particularly helpful description is to be found in the Condition and Prognosis Report of Miss Carolynne Vaizey dated 22 January 2013 at P2/496 as follows:
"BOWELS
Mrs Tait described her bowls as "vile". Prior to her cauda equina she said she passed a stool once a day and never thought about her bowels. Now she either has diarrhoea with incontinence or she has to digitate to pull her stools out.
Before she was pregnant she was, on advice, taking Picolax once a week. This gave her loose stools and leakage for the following 48 hours. Enemas make her faint. She now takes Senna Max Strength which is not very effective and she said she suffers with stomach cramps which makes her anxious as she does not know what they are for (constipated, diarrhoea or pregnancy related.) It takes quite a while to work and when it does it often comes as hard stools to begin with which are difficult to pass so she has to manually evacuate these and then she gets quite bad diarrhoea for anything up to several days after. Because of this she has not been using it that often and has left up to two weeks in-between using it as it is just so uncomfortable and awkward to take.
Several things can cause Mrs Tait to leak – it can be changing the bed, putting the children's shoes on to go to school, squatting down to empty the washing machine or just getting in the car. She said she never knows when the leakage is coming and doesn't know it is happening. Sometimes she does not know it is happened until she can smell it or feel it on the inside of her leg. Mrs Tait recently had a massage and this made her to empty her bowels – she was mortified. The leakage can also happen during intercourse so she said she tends to put her hand down at the anus as warning that something may have happened. She said she is constantly panicking during sex. The leakage also takes place at night. She also leaks on coughing and sneezing.
Mrs Tait only knows that she has leaked when she feels stool dripping down her legs or smells faeces.
If she has a bout of diarrhoea she is totally housebound. This happened recently when the boys caught a vomiting and diarrhoea infection. The Taits have toilets both upstairs and downstairs – Mrs Tait said she uses the one upstairs so she can use the shower afterwards.
She said that she can leak at night so uses protective pads in bed and still sometimes uses the children's bedtime pants to sleep in. She said:
"I don't like Russell seeing my pad so will wear pyjamas and will often wake in the night to go to the toilet and change the pad. I find I don't sleep very well, and feel embarrassed if Russell touches me or if the children see I am wearing a pad. I don't like any of them knowing this."
Mrs Tait's incontinence score is: 17/24
The St Mark's Score
Never
Rarely
Sometimes
Weekly
Daily
Incontinence for solid stool
0
1
2
3
4
Incontinence for liquid stool
0
1
2
3
4
Incontinence for gas
0
1
2
3
4
Alteration in lifestyle
0
1
2
3
4
NO
YES
Need to wear a pad or plug
0
2
Taking constipating medicines
0
2
Lack of ability to defer defaecation for 15 minutes
0
4
Never No episodes in the past 4 weeks
Rarely 1 episode in the past 4 weeks
Sometimes >1 episode in the past 4 weeks but< 1 a week
Weekly 1 or more episodes a week but < 1 a day
Daily 1 or more episodes a day
Add one score from each row
Minimum score =0 = perfect continence
Maximum score =24 = totally incontinent
Personal example problem:
Mrs Tait has been asked about the missed appointments – she said she thought the physiotherapy department had the wrong address.
BLADDER
Mrs Tait has stress incontinence. She said that she leaks on coughing and sneezing. She did self-catherise but this led to recurrent urinary tract infections. Now she guesses when her bladder is a bit full and then squeezes and pushes. She does not think she empties fully.
With the pregnancy she feels her bladder has been much harder to control and has started using the catheters again recently a few times a day as she has had some increased difficulty passing urine. She is seeing someone in Urogynecology at the Womens Hospital to discuss this.
WALKING
Mrs Tait feels a weakness of her left leg when she walks any distance. After about 100 metres she said that the leg seems to drag and she gets a limp. With the pregnancy she is also having issues with her left leg; it feels much weaker than normal and she has found that she cannot walk very far at all before she is struggling with her balance. It still feels numb in the same way but bearing her weight seems to be a bigger problem.
NUMBNESS
Mrs Tait said that she has saddle numbness slight worse on the left than on the right.
PAIN
Mrs Tait has problems standing for any length of time and she is therefore unable to queue up for anything.
She also has a pulling sensation which feels as if her organs are going to fall out of her back passage. This puts her off walking even if she is having a good day.
SEXUAL INTERCOURSE
Mrs Tait and I had a very emotional discussion about sexual intercourse. She said she is unable to feel any sensation. She has not been able to discuss her problems in full with her husband. She said this was initially inadvertent but she now realises that she finds it easier to keep "a part of her feelings from him." In reality she then said she knows he would be devastated if she said that she felt nothing every time they had sex. I asked her if she would prefer that I did not include this part of our conversation in the report. She said that she keeps much of her medico- legal correspondence away from her husband.
Mrs Tait described her previous sexual relationship with her husband –
-sex was previously a major part of their relationship
- she said their relationship was "tempestuous" with many arguments which were then resolved with passionate sex
Mrs Tait said that she had initially thought that "other areas would compensate for her lack of genital sensation". This has not happened and she now feels that, to a degree there is no point in having intercourse.
Additionally Mrs Tait has regular bladder leakage during intercourse. She also has bowel leakage if she has taken Picolax within the previous 3 to 4 days. She had passed some loose stools during intercourse but has also at times passed a fully formed stool. She then has to deal with the problem and her husband goes very quiet.
She became very emotional and said that all of the male doctors she has seen have brushed her sexual problems off and have not had any understanding.
Mrs Tait said that her lack of enjoyment of sexual intercourse has made her feel that her closeness with her husband has been jeopardised. She has tried to make up for this in other ways. Her need to have this baby may have been in part due to her feelings of inadequacy."
So far as the Claimant's psychiatric injury is concerned, in their Joint Psychiatric Report 2/462 which followed a telephone discussion on the 4th April 2014, Dr Turner and Dr Dedman agreed that in the aftermath of the index event of 2009 the Claimant developed psychiatric symptoms consistent with an adjustment disorder, as outlined in section F43.2 of the International Classification of Diseases (ICD-10) and that this consisted of predominantly depressive symptoms within the broader categorisation of Adjustment Disorders.
They also agreed that the consequences of the Claimant's physical limitations that persist have been the development of a marked lack of social confidence, a degree of social withdrawal thereby, a psychological fixation (when going out) to have ready access to a toilet (because of fears of leakage), alterations in her working and social activities, ready tearfulness, and a reduced sense of her own competence.
They also agreed that the Claimant might develop psychological reactions from time to time secondary to her ongoing physical status and limitations (e.g. depressive feelings or anxiety attacks) and would be more vulnerable to any kind of any further injury to herself or her children but that her current psychological state was not such as, in itself, to impair her ability to work.
Finally they also concluded that at present the Claimant's mental state was not reflective of a significant psychological disorder although Dr Turner considered that her pattern of intermittent anxiety and depressive symptoms was not inconsistent with a Mixed Anxiety and Depressive Disorder F31.2 ICD-10, but fluctuated depending on her physical and social situation.
There is a good deal of evidence from the parties' respective spinal experts and that evidence has, as it were, developed over time.
Mr Wilson-MacDonald for the Claimant in his Condition and Prognosis Report following an examination on 6 July 2012, 2/255, under the heading "Present Symptoms" records as follows
"49. After the surgery initially she did not experience the back pain. However she has had pain now in the back and radiating to both hips, more on the left than on the right radiating down as far as the left knee. Most days the pain scored 7-8 out of 10. At worst 8 out of 10, at best 4 out of 10. She cannot take strong painkillers because this makes her feel sluggish. Her current medication includes Codeine and Nurofen. She does not take sleeping tablets. The pain tends to be worse at night and she wakes 3-4 times a night. She is able to sleep for about 6 hours.
50. She has a numb left leg and a numb left foot mainly in the great toe and the lateral three toes. The sacral area is completely numb. She has numbness over the buttocks, worse on the left than the right.
51.The left leg is weak. She limps and has a foot drop and can only walk a 100 yards. She can only stop for two minutes. She can only sit for 30 minutes and fidgets. She is better slouching on a soft chair than sitting on a hard chair. She can manage a short flight of stairs. She does not wear any orthosis."
Later he continues as follows under the heading "Examination" 2/269.
61. On examination she had complete perineal numbness. I did not do a rectal or vaginal examination but she tells she has no anal tone . (I gather a neurologist has carried out a rectal examination as part of one of the medico-legal examinations). She had very markedly reduced sensation over the left posterior thigh and over the lateral and posterior aspect of the left lower leg. She had similar but less marked numbness on the right. In other words she had moderate sensory disturbance in L5 and severe sensory disturbance in S1-S4 worse on the left than the right. Sensation over the anterior thighs was normal.
62.The right knee reflex was normal, the left reflex marginally reduced, the ankle reflexes absent. There was no proprioception in the left foot.
63.On assessment of motor power the right side was much better than the left all muscles groups were grade 4 plus in the right lower limb apart from hip extension, adduction and abduction which were grade 4. On the left she was much more weak. Gluteal muscles were grade 2, abduction and adduction grade 3, quads grade 4, hamstrings grade 3. Below the knee all muscle groups were grade2.
64.On examination of the spine she could flex to touch toes, hyper extension was uncomfortable as was lateral flexion, there was a well healed 5 centimetres scar with tenderness at the lower end of the scar over the paraspinal region."
Mr Byrne for the Defendant in his Condition and Prognosis Report dated 23rd September 2013 following examination on 29th May 2012, 2/323, recorded as follows under the heading "Present Problems"
"3.1 Mrs Tait told me that she has some back pain and stiffness with her low back which fluctuates but this has not been a major problem to her for some time and not really been very bad since December 2011.
3.2 She told me that she had pain in her left leg which she described as "shooting" into the left thigh. The pain is worse on weight bearing. She says that she has no pain the right leg. She did not describe the pain in the left leg as neuropathic pain, with no features of burning or use of words such as "unpleasant".
3.3 She told me she had weakness of the left leg. She told me she dragged her foot when she was walking. She said she didn't like to weight bear on her left foot. She said she did not feel stable and that when she walked she thought she was pulling to the left. She told me she could not stand for a long time. She cannot run. She is worse on uneven ground. She trips frequently.
3.4 She told me that she had lost all feeling in the left leg apart from some preserved but reduced feeling in the left index toe.
3.5 She told me that she had decreased sensation in all of her saddle area with numbness perianally and around the inner part of her buttocks and in her perineum extending up to her bikini line. She told me that she had no sensation during sexual intercourse."
Under the heading "Examination" he recorded the following:-
"4.2. On examination she appeared straight forward, she became clearly emotional on several occasions during the interview and on occasions cried when she talked about her present problems.
4.3 Her gait was slightly slow and she appeared to be limping slightly on the left and at one stage held onto her husband for support.
4.4 She had a well heeled mid line lumbar scar. She had modest reduction in normal lumbar lordosis. She was tender just touching the skin. There were slight paravertebral muscle spasms. Lumbar spinal movements were reduced to about one third of normal in all directions limited by pain.
4.5 Straight leg raised was 80% and the right with negative sciatic stretch test and 60% on the left with positive sciatic stretch test.
4.6 She had reduced power of dorsiflexion and plantar flexion of the left big toe of 4/5 but otherwise normal power in the left limb and she was able to stand on her tip toes and on her heels.
4.7 She had an absent left ankle reflex, reduced but reproducible right ankle reflex and in tact knee reflexes. Plantar reflexes were. downgoing.
4.8 She had decreased sensation to pin prick and soft touch in all of the left leg compared with the right leg. All of the left foot was very numb but there was some limited sensation to pin prick and soft touch in the left index toe. Joint position sense was absent in the left big toe and apparently in the left ankle.
4.9 She had decreased perianal sensation over the S2 to S5 dermatomes. She had reduced anal tone and rectal examination and was unable to squeeze down."
Mr Byrne in his Opinion section concluded as follows:-
"12.1 Mrs Tait clearly developed caudia equina syndrome in July 2009.
12.2 Caudia equina syndrome is caused by compression of the lumbosacral nerve roots, the cauda equina, in the lumbosacral spinal canal and is usually caused by an acutely prolapsed lumbar disc. Most lumbar discs, when they prolapse, move laterally within the spinal canal and compress one or more nerve roots but not all the cauda equina and sciatica, that is pain in the leg, develops. Uncommonly a disc prolapse moves centrally within the spinal canal and then compresses multiple nerve roots causing bilateral sciatica, that is pain in both legs, and also causing compression of sacral nerves which supply the bladder and bowel causing loss of bladder and bowel function. This is unfortunately what happened with Mrs Tait.
12.4 Unfortunately Mrs Tait has been left with very unpleasant sequelae of cauda equina syndrome.
12.5 Mrs Tait has low back pain and stiffness which fluctuates but this has not been a major problem to her for some time.
12.6 Back pain and stiffness are likely to continue to be an intermittent problem but are not likely to worsen if she concentrates on posture and looking after her back.
12.7 She has "shooting" into the left thigh, worse on weight bearing, without a description of typical neuropathic pain with no features such as burning sensation. She said she has no pain in the right leg. She has lost all feeling in the left leg apart from the left index toe.
12.8 She told me she had weakness of the left leg and dragged her foot which she thought she was pulling to the left and didn't like to weight bear on her left foot. She feels unstable, cannot stand for a long time and says she cannot run.
12.9 Her pain and sensory loss and any weakness in her lower limb are likely to be permanent. I would not expect these symptoms to worsen in the future."
In their first Joint Statement in April 2014 at 2/406, the experts agreed the back pain and sciatica "has not been influenced by any delay in dealing with the cauda equina compression but instead has occurred as a result of constitutional disc change (see answer to 1.4 at 2/408); that there was no indication that the Claimant was exaggerating her symptoms or effects on her (see answer to question 7 at 2/409;) and in respect of neuropathic pain:-
"We note that this is Mrs Tait's account of her symptoms which will be a factual matter for the Court but this appears to be what she has reported. These symptoms are subjective so therefore are a matter to be determined as fact by the Court. We would note, however, that neuropathetic pain is a common complication of cauda equina syndrome and so these symptoms are consistent with her developing a severe cauda equina syndrome."
(Answer to 8.1 – 8.7 at 2/409).
Finally, the experts accepted at 2/414 in answer to question 22 that the Claimant did have neuropathic pain.
The issue was then revisited by Mr Byrne in his letter dated 17th June 2014 (2/378) where at page 379 he said as follows:-
"In my answer to question 22, my simple answer to "does the Claimant have neuropathic pain" of "yes" is misleading. My answer is yes if the Court accepts the description of the pain at paragraph 8.1 in the Agenda, but my answer is no if the Court accepts the account given to me when I examined the Claimant in 2012."
In his Updated Neurosurgical Report on Condition and Prognosis dated 30th September 2014 at 2/381, prepared after an examination of the Claimant on 28th July 2014 and after reviewing her statements of 26th September 2013 and of 19th June 2014 Mr. Byrne expressed the following in his opinion section:-
"6.3 Her statement of 19th June 2014 has been helpful in delineating the different types of pain that she now describes. Referring to her numbering; it is clear that "pain 2" is mechanical back pain; pain "4" is probably also a combination of referred pain from her back and possible radiculopathy as a result of degenerative disc disease;pains "1","3" and "5"are all consistent with neuropathic pain as a result of her cauda equina syndrome and both from reading her witness statements and talking to her it seems clear that these pains are the major problem in terms of pain now.
6.4 When I saw Mrs Tait on 29th May 2012 she did not give me the history that she is now giving. In addition I did not see such symptoms as she now describes in her medical records, with the medical records suggesting that she had problems as a result of mechanical pain from a constitutional degenerative disc disease. Mrs Tait explained to me that she is now better at describing her symptoms. On the balance of the history in 2012 I do not think there were significant symptoms of neuropathic pain, but there are symptoms now which are consistent with neuropathic pain.
6.5 I do not think Mrs Tait will deteriorate in the future but additionally I do not think that she likely to improve now. Mechanical back pain is likely to stay as it is now and whilst it might limit her to some extent it does not seem that it will be what is restricting her in activities such as being able to work and in her domestic activities, which are limited because of her incontinence and to some extent neuropathic pain."
In their second Joint Report following a telephone discussion on the 14th August 2014 (2/418) Mr. Wilson-MacDonald and Mr. Byrne dealt with a number of questions as follows:-
"1. Does the Claimant have neuropathic back pain as a result of her severe Cauda Equina Syndrome?
We agree that the Claimant did not report a history of neuropathic pain when she first came to see us; and the contemporaneous records do not contain reference to symptoms of neuropathic pain. If the Court accepts her present description of her symptoms, however, then these are consistent with neuropathic pain as a result of her cauda equina syndrome.
2. If the Claimant has neuropathic back pain, what do her symptoms consist of?
We agree she describes pain and discomfort between her buttocks, in her saddle area and in her hips, pains 1, 3 and 5 in the diagram attached to her witness statement of 19 June 2014 and these symptoms are consistent with neuropathic pain.
3. Does the Claimant have mechanical back pain?
We agree yes.
4. If the Claimant has mechanical back pain, what do her symptoms consist of?
We agree she describes back pain and shooting pain down her leg, pains 2 and 4 in the diagram attached to her witness statement of 19 June 2014 and these symptoms are consistent with her constitutional degenerative disc disease.
7. Have the Claimant's symptoms of back pain deteriorated since you last saw her in 2012? If so, to what extent?
We agree that her description of her symptoms has changed. She now says that when referring to back pain she meant pain in the back but in addition she included what she now describes, such as pain in the perineal region, and what describes as feelings such as if she is sitting on "rocks" or as if "something is pulling out of me".
8. Without her severe Cauda Equina Syndrome symptoms attributable to delayed surgery would her lumbar back pain limit the Claimant to the extent of preventing her from doing a)physical work, while allowing her to do reasonable lifting and physical activities and b)routine domestic work and activities (as to which please give examples)?
We agree that she would be limited in heavy manual work and heavy domestic duties because of mechanical back pain irrespective of any delay in dealing with her cauda equina syndrome.
In our previous Joint Statement we took the view that worsening back pain was mechanical in nature and would limit her in terms of needing assistance with heavy manual tasks, assistance with tasks that involve lifting and bending, assistance with completing tasks at low level, such as emptying a washing machine or unloading a dishwasher, need for gardening help and decorating help, and that there was a non-material contribution to these needs as a result of the cauda equina syndrome and any delay in its treatment. If the Court accepts that the worsening symptoms she now complains of, with the description she gives now, however, then she has neuropathic pain and by her account mechanical back pain has not worsened, so her needs are due to the neuropathic pain.
9. Are the majority of symptoms of discomfort and pain she experiences now due to the Cauda Equina injury and nerve damage rather than the pre-existing musculoskeletal abnormalities in her lumbar spine?
We agree that in our first Joint Statement we were of the opinion that her symptoms as reported to us and in the medical records, mechanical back pain, represented the majority of her pain and discomfort, and this was not due to cauda equina nerve damage, but if the Court accepts her current description of her symptoms then the majority of her symptoms of pain and discomfort are due to cauda equina nerve injury."
There is therefore a large measure of agreement between the spinal experts. Their starting point is that they believe what patients tell them and they accept that what the Claimant described latterly is not only consistent with neuropathic pain but is indeed a classic example of neuropathic pain but that this later description did not accord with what she had described during the preceding four year period and frankly they struggled to offer any explanation for the difference. They do however accept that if this Court accepts the Claimant's current description of her symptoms, then the majority of such symptoms of pain and discomfort are due to cauda quina injury.
The Claimant's Evidence
As is not unusual in such cases, the Claimant has, during the course of this claim, produced a number of witness statements dealing with aspects of her claim. They are dated respectively, 18th April 2013 which deals with the cause of action (1/78,) 11th August 2012 which deals with the Claimant's education and the development of her photographic business and the effects of her condition on that business (1/88,) 18th April 2013 which, among other things, deals in some detail with the consequences of the surgery in terms of how it has left the Claimant (1/100,) 26th September 2013 which responds to various observations made by the Defendant's care expert Mr Pace (1/127) and 19th June 2014 which deals specifically with the Claimant's ongoing back pain (1/131). In addition, during the course of the trial, an earlier draft of a statement which became the 18th April 2013 statement was produced which was signed on 20th November 2009 ("the 2009 statement").
It was the Claimant's evidence that she was born on 22nd February 1981, got married on 25th June 2004 and has three children, Joshua Anthony born on 29th September 2005, James Michael ("Jamie") born on 9th March 2007 and Lily born on 17th May 2013.
So far as back pain is concerned she had been seeing a chiropractor since before the birth of her children. She had always had what she described as a bit of a twinge in her lower back and when she was pregnant with Jamie she had had a lower limb loss of sensation. She noticed a loss of power as well as sensation and couldn't really feel the muscle. Matters had improved after the birth although she still had a bit of a bad back and would go to the chiropractor from time to time. She described having back pain periodically but it was neither severe nor constant until shortly before the spinal surgery in July 2009.
In her 2009 statement, at paragraph 5, she included a description of pain in similar terms to the way in which I have paraphrased her evidence above and continued as follows:
"37. I am perfectly fine doing day to day things about the house, getting myself up and so on. My problems concern taking the children out, looking after them and carrying anything.
38. I can't run or walk long distances as my left leg feels weak. I have a slight loss of power in my left leg. My right is ok. I am only aware of it when I have to apply pressure to my leg, for example on walking.
39. I think that presently as I try to do more I am becoming more aware of the limitations I have. Control that I thought I had before now seems to have gone.
40. I have pain occasionally and then suddenly it will become overwhelming and knock me sideways. Loss of feeling is the problem. The pain from my back is now not so bad.
41. By October it feels as though it is getting worse. For 3 days a week I am horribly uncomfortable. I feel a pulling sensation when walking from the area where I have no sensation. The lack of feeling makes me more aware of the area. In everyday life you are not aware of having sensation in every part of your body all the time. I am aware though continuously of not having sensation in my saddle area. I am also reminded of the lack of sensation when for example I sit, lean against something or play with the kids. It doesn't feel natural. A massive part of me is missing. It feels as though my insides are coming out from an intimate area. In some ways it is like the feeling in your face after a local dental anaesthetic. Having no feeling feels odd and uncomfortable. I now can't feel anything during intercourse."
In her statement of the 18th April 2013 (1/100) she describes the back pain as follows:
"4. If I had exerted myself the pain in my lower back would start to develop from an ache to severe pain. It became a hot searing pain which spread downwards to my coccyx, left hip and down my left leg and was accompanied by a feeling of numbness. This pain and loss of sensation then would worsen to the extent that I would find it almost impossible to use my left leg at all and it would restrict my mobility. The pain would continue until I took codeine. After a good night's sleep it would feel a lot better the next day. However on a couple of occasions the pain was so bad that I had to go to hospital and had a morphine injection, even before the pregnancy. They did contemplate giving me oramorph for breakthrough pain but I wasn't keen on this.
5. The back pain meant that I had and still have difficulty standing up straight. I get a pulling sensation and it feels as though my internal organs are being pulled out between my legs. As a result of this I generally not to stand for even short periods of time and either perch or sit down. I think this sensation is caused by weight bearing so I can still have it to some extent even if I am leaning on something. I have had to adapt activities as a result of this. For example, when I go to pick up the children from school I wait until the very last minute to get out of the car. I don't stand around chatting in the playground like the other Mums because this would involve standing up for a few minutes. Although I park in the disabled bay, by the time I walk from the car to pick up the children and then back to the car I was exhausted.
7. I also have strange sensations where there is a loss of feeling. This happened prior to and during pregnancy. It is hard to explain but feels like my bones are rubbing against my skin. If I touch the area I can't feel it, but I can feel internal sensations. When I sit for a long time it feels like I am sitting on raw bone because I can't feel the tissue in between.
8. I also have random itching sensations in the places which are numb. I understand this is related to the nerve damage. I find this peculiar because I can't feel these areas but still have sensations. I will try and scratch the itch but this doesn't help either because I can't feel the scratching. I can't do anything to alleviate these sensations."
In her statement of 19th June 2014 the Claimant elaborated on the nature and extent of her back pain. This statement was prompted by service of the Defendant's Counter Schedule which, whilst accepting that the Claimant would have had less weakness in her leg but for the surgery, asserted that she would have suffered the same degree of back pain, it being the Defendant's case that the shooting pain down her left leg was not neuropathic pain consequent on the surgery but in large part referred pain from the Claimant's lower back which she would have suffered from in any event.
It was the Claimant's evidence that until service of the Counter Schedule, she had not appreciated that there was a distinction between mechanical and neuropathic pain and she had, when referring to her back pain, used that expression as an umbrella term to include pain she said she experienced and the operation scar in her spine and the pain in her buttocks and around her coccyx and going down into her leg.
At paragraph 3 she exhibited a description of all the pain sensations she was experiencing together with an explanatory diagram as follows:-
"1. Pain in between my buttocks where I am unable to feel the tissue around the area if touched. This is around my Coccyx area. This is where I feel the most uncomfortable all the time. The sensation when sitting is like I am sat on a pile of rocks. It feels almost as though something is pushing up into me. I tend to shift my weight when possible to one side until that side feels numb and then shift over to my other side. I feel most comfortable lying down on my side. When standing it feels like something is pulling out of me with force and gets worse as I walk and continues until I stop and sit down and then after a short time is replaced by the other pain. This pain often gets so bad that I fantasize about scratching it away with a spoon. It feels like it should feel hot to touch. I do not get pain relief from this pain with the Pain killers I have they tend to just make me feel a bit better about it.
2. Back Pain, around where my scar is. It is tender to touch and aches most days and after long periods of heavy lifting and bending will hurt a lot more until very uncomfortable. Not really any more painful than the Back ache I had for several months leading up to the operation, possibly better. I will get stiff in this area. The Pain here will be relieved with mild pain relief so no longer there.
3. Saddle area. Similar to pain number 1. when sitting for long periods can feel like, when standing it feels like pulling. Can hurt during intercourse.
4. Shooting pain down my leg. Doesn't happen too often, mainly in the night or after long periods of being still. I generally will have a dull ache in this area as well as the back of my knee and gets worse when walking. I often get a shooting pain in my back when I walk too much on my leg or stand with my weight on it. There is a point on my left thigh that starts to hurt while sitting and seems to radiate outwards and will cause me to rub it now without thinking.
5. Hips. It can ache across my hips and down my bum and down to my legs. Often in the evening and at night. Will feel like they should feel hot to touch.
In parenthesis, it is common ground that what is described at paragraphs 1, 3 and 5 is neuropathic pain as appears from the Second Joint Report of the spinal surgeons at 2/418.
At paragraph 7 of her statement the Claimant explained that immediately after the surgery, the mechanical back pain disappeared completely until about December 2009 when it came back and was exactly the same as it had been prior to the surgery, save that she did not have the "stuck" feeling. The mechanical back pain has remained the same ever since.
The only other change in her symptoms was in September/October 2013 when she started to notice heaviness in her right leg with stumbling and twitching in her right big toe. This was, however, a short term problem and ceased shortly after she changed the side of the bed in which she slept which gave her more room in which to move around.
The Claimant was cross examined in some detail as to the nature and extent of her symptoms by reference to a significant number of her medical records. The import of the cross examination was to demonstrate that what she had been describing to the various doctors and other health care professionals was mechanical back pain consequent upon degenerative disease rather than neuropathic pain whereas it was the Claimant's evidence that she had excruciating symptoms from the outset and that she had been regularly reporting the same to the various health care professionals with whom she came into contact.
The Claimant places reliance on what she reported to her care expert, Ms Emma Way (formerly Cullen,) in an early draft of her Rehabilitation Cost Report, prepared following an assessment on 11th July 2012, which is dated 22nd August 2012 and which included the following passages:-
"Pain: Mrs Tait described various areas of pain:
Lower back
Mrs Tait informed me that she experiences a "constant ache" in her lower back which worsens throughout the day until by the evening "I could claw at my back with a spoon. The pain is unbelievably vile". This pain is exacerbated by sitting on a harder, level surface, completing tasks at a low level, such as emptying or loading the dishwasher, and walking, standing or sitting for any period of time. Lying on her side or sitting tilted to one side reduces the pain. Mrs Tait described the relief she experiences when she is in a swimming pool. "I feel weightless. I am pain free"
In Ms Way's 10th February 2014 Report (3/574) prepared following a telephone update on 7th February 2014, under the heading Physical/Psychological Restrictions, she reports as follows:
"Pain (updated): Mrs Tait described various areas of pain:
Below the Coccyx
Mrs Tait informed me that she experiences a "constant burning or shooting" at the very base of her spine, between her buttocks which worsens throughout the day until by the evening "I could claw at my back with a spoon. The pain is unbelievably vile". Mrs Tait believes that this pain has increased over time and is all consuming. It is not alleviated with medication.
This pain is exacerbated by sitting on a harder, level surface, completing tasks at a low level, such as emptying or loading the dishwasher, and walking, standing or sitting for any period of time. Lying on her side or sitting tilted to one side reduces the pain.
Mrs Tait described the relief she experiences when she is in the swimming pool. "I feel weightless. I am pain free"….
Internally
Mrs Tait described a constant, painful sensation as if "a bolder or a rock" was being pulled out of her insides. This pain has increased over time and can become excruciating. For her final 3 months of pregnancy she stated that it felt like a "bowling ball" was being pulled out and that it was agony."
Does the Claimant suffer from neuropathic pain and , if so, to what extent?
What is said on behalf of the Defendant is that neuropathic pain is constant the onset of which would have been within weeks or at worst a few months of the index event yet there is no reference to such symptoms in the medical records until January 2014. Furthermore, what those records contain is a clear and consistent picture of physical limitations accounted for by the Claimant's continuing mechanical back pain and limitations of movement attributable to degenerative disease as identified in the reports of Mr. Wilson-MacDonald and Mr Byrne to which I have referred and which is echoed in the report of Ms Way and that this picture is consistent with what the Claimant is recorded as saying to her GPs and others in the medical records.
In this regard the Defendant placed reliance on a number of references in the Claimant's medical records as follows:-
"15.4.10(3/444)- ongoing lower back pain – worse after going shooting
9.6.11(3/481)- she notices an increase in lower back pain and weakness of left leg which she describes as lazy
9.6.11(3/584)- severe left leg pain – resolved – continues to have dragging pain in her left leg walking – spasm in left leg. Also dull ache in back, which can become severe at times.
26.9.12(1/18@120)-Hamid QE2- occasional back pain- radiation into left leg- particularly after exertion.
26.12.12(1/181@124)- West Midland rehabilitation – worried that she has back pain.
4.4.13(1/181@131)- West Midlands- pain and altered sensation round her lower back – tolerates.
20.9.13(1/181@138)- Spasms of discomforts – increased numbness.
2.10.13(1/181@139)- Dr Saif-Stoke Mandeville- in addition left sciatic pain.
7.10.13- following road accident.
3/164-complaint of painful back due to recent RTA – increased lower back pain and right leg weakness.
3/666- lower back pain – GP
20.11.13(1/181@145)- Triage- thoracic pain
(3/666)-acute back pain thoracic upper backache in midline between scapula
44d- had twinges here before – fleeting pain down arms- tender over thoracic vertebrae."
Moreover it is said that the Claimant's GP records and associated correspondence are particularly telling in that the Claimant was seeing her GPs regularly and it is simply not credible that they would not have noted the Claimant's references to excruciating neuropathic symptoms which she maintains she had and described to them. Taken together the medical records are compelling and it is submitted that it is implausible to suggest that all the professionals concerned laboured under a misunderstanding or simply failed to record what the Claimant was saying to them. For that to be right, they would have had to omit the detail of what was being said either because they did not appreciate what was said or because they simply did not want to record it or because, as other problems settled, a particular problem might have become more prominent.
On behalf of the Claimant it was submitted that I should treat with great caution the allegation of exaggeration; an allegation of which the Claimant, it was said, did not have proper notice. Such allegations are all too easy to make, as are assumptions about inconsistencies in medical records when the makers of the records are not called, the context in which they are made is not examined in detail and the notes themselves were made a long time ago. By way of example, it was pointed out that Mr Wilson-MacDonald gave evidence that he thought he had erroneously assumed that the back pain he was told about was mechanical rather than neuropathic and it was submitted that others might have made similar assumptions. Equally the symptoms described by Mr Wilson-MacDonald at paragraphs 49-51 in his Report at 2/255, to which I have referred above, were according to him, neuropathic symptoms. There are other references in the material before the Court to neuropathic symptoms for example in the report of Mr Pace at 3/656 and Miss Vaizey at 2/498 and 2/506.
It is to be noted that the Defendant's Counter Schedule, whilst calling into question the extent of attributable symptoms, did not assert that the Claimant was deliberately exaggerating her symptoms and the assertion of exaggeration, either conscious or unconscious, was not specifically pleaded. Nor was it supported by any evidence from the Defendant's experts save in the sense that they acknowledged that what had been described in the early years did not accord with the Claimant's later description of her symptoms.
Thus, the Claimant, it was said, had no reason to suspect that this issue would be controversial until receipt of Mr Byrne's first Report in October 2013 yet, by then, she had reported some symptoms of neuropathic pain to a number of people including, as I have recorded, Ms Way and of course had prepared and signed her April 2013 statement as well as the 2009 statement.
Whilst Counsel for the Defendant sought to persuade me that the description in paragraphs 37-41 of the 2009 statement did not include symptoms of constant neuropathic pain of the type now described and that the description to which I have referred in the early version of Ms Way's report was not descriptive of excruciating pain emanating between the buttocks, I accept the force of the submissions made on the Claimant's behalf and I also take cognizance of the difficulties that the Claimant would have had in explaining and describing pain in an area which is numb as well as the Claimant's own understandable reluctance to discuss symptoms relating to intimate areas of her body exemplified by her attitude to her husband in this regard and that plainly, over time, her focus would inevitably have changed.
I note that the spinal surgeons have agreed that the Claimant gave no indication that she was exaggerating (2/409) and that neither expert had any difficulty in concluding that what she described in 2014 were classic symptoms of neuropathic pain and also that such pain was likely to occur with cauda equina syndrome and that the more severe the lesion, as here, the more likely it would be that neuropathic pain would occur. It is also of significance that there are in fact a number of references to referrals to a pain clinic in the Claimant's medical notes which would only be appropriate if neuropathic pain was being experienced as Mr. Byrne pointed out in his letter dated 23rd September 2013 (2/358).
Moreover I have to ask myself whether the Claimant is someone who would seek to exaggerate her symptoms for profit. My conclusion, having considered the totality of the evidence including her demeanour, is that she is not. To the contrary, all the evidence suggests that she is a high achiever who has worked extremely hard throughout her life. She left school at seventeen with 10 GCSEs to pursue a career in theatre lighting and media and she is, plainly, a capable, driven and ambitious woman, with proven business skills and is a talented photographer who has been the driving force behind the success of CCP, the turnover of which increased from £286,417 in 2002 to £602,645 in the 18 months to 31st March 2004 (although that turnover subsequently decreased following the birth of her first child) as appears from the figures exhibited to the statement of Catherine Sealy at 2/200 at page 205. If further evidence of her drive and ambition were required, it is to be found in the early success of the Claimant's photographic business, HTP, set up in 2007 whilst she was still working for CCP and looking after two small children and which is again highlighted in the figures exhibited to Ms Sealy's statement at page 208.
In addition and notwithstanding the effect of the negligently delayed surgery, the Claimant managed to complete the first year of her Master's Course at Birmingham City University and attempted to continue her photographic business. It is also to be noted that the Claimant has readily accepted that she had a residual earning capacity, notwithstanding the expert medical evidence that it would be unlikely that she would be able to return to a useful occupation.
To my mind these are not the character traits or indeed the actions of a malingerer or someone who is out to exaggerate her claim for financial gain. This view is reinforced by the evidence from the various lay witnesses called on the Claimant's behalf. Further if the Claimant were really attempting, deliberately, to exaggerate her symptoms of neuropathic pain, surely she would have given a history reflecting that neuropathic pain to the medico- legal experts when first examined and, am I really to conclude that she has actively sought to research typical examples of neuropathic symptoms and adopted them as her own?
On the balance of probabilities, therefore, I conclude that the Claimant has suffered and continues to suffer from neuropathic pain in the way she described in her witness statement of 19th June 2014 and that such symptoms are attributable to the negligently delayed surgery.
How would the Claimant's life and career have been impeded by the mechanical back pain that she would have continued to suffer from even if the surgery had been performed earlier?
I now turn to the second main issue of the nature and extent of the mechanical back pain which can be dealt with quite shortly. I have already referred to the physical limitations identified by the experts. It has been conceded on behalf of the Claimant that she would have required some domestic assistance and some assistance at work and that there would be some activities of a heavy nature which would have been beyond her.
As it seems to me, the starting point for consideration of the issue of what the Claimant could, but for the negligently delayed surgery, do is to be found in the evidence of what she was in fact doing prior to the index event to which I have already referred in this judgment. In short, she was looking after her family undertaking housework and working for CCP whilst building a photographic business from scratch.
I accept the submissions made on the Claimant's behalf in this regard and conclude, on the balance of probabilities, that whilst the Claimant would have had to avoid heavy lifting and heavy manual work, she would have been able to carry on with the vast majority of her activities both domestic and work related notwithstanding her mechanical back pain.
How would the Claimant's career have progressed and what would she have earned but for the injury caused by the negligently delayed surgery?
The Court has heard a great deal of evidence from the Claimant herself and from a number of lay witnesses as to the Claimant's work history, her character, drive and talent as a photographer and of her ambitions and motivation to make a success of a career as a photographer as well as from two employment experts. In addition the Court has had the opportunity of considering the Claimant's portfolio of work and a number of editions of a magazine called "Family Time" of which the Claimant was a contributor.
The Claimant's aspirations as a photographer were to build up to earnings of at least £50,000 - £60,000 net. If she had to go back to working in the conferencing field she estimated that her earnings would be in the region of £40,000-£50,000. It was her evidence that if she were to have been unsuccessful in her photographic business that is what she would have done, or alternatively she would have gone into logistics or event management.
It is common ground that the Claimant is a talented photographer and the lay evidence is littered with testimonials from various clients, all of whom speak of her talent and their willingness to recommend the Claimant to others. She plainly has energy, enthusiasm, drive, ambition and talent as well as being good with people and possesses acute customer service skills and has developed a good reputation. Moreover she had plainly done exceptionally well in her first full year of trading, particularly having regard to the family commitments and her health issues. Her personal tutor on the Masters Course at Birmingham City University, Mr Tromans, commented that the Claimant was different to other students because she already had a commercial practice and was already a competent photographer. She already had a client base and was attempting to broaden her horizons. She was efficient and competent and with a track record of delivering results which in was what clients wanted.
Glen Taylor, who had over 30 years of experience of photography and videography, was very impressed with the Claimant's work which he considered was exceptional, whilst Helen Roscoe, a freelance photographer, was particularly complimentary about the Claimant's family photography which she described as being fantastic such that she had recommended her to a number of people for weddings and family portraits.
Nicola Clement a Marketing Manager for a partnership called Elysia which is the UK Distributor of Dr Hauschka skin care products gave evidence to the effect that her organisation had used the Claimant for staff portraits and to take pictures of models at a Dr Hauschka casting session. She felt that the Claimant's photographs were of commercial quality and impressive, that she had a great eye for a picture and also a way with people. She was good at catching people in photographs and making them look their best. She also had a commercial edge, lacking in other photographers. She felt that, had the Claimant continued working, her business would have continued to thrive, not only as a result of a steady stream of income from portrait work, but also as a result of her having developed relationships with magazines and having developed her reputation as a creative, yet commercially minded, photographer. She had no doubt but that the Claimant would have been successful. To my mind, and on the balance of probabilities, but for the negligently performed surgery the Claimant would have made a success of HTP.
The lay witnesses also gave some evidence as to likely earnings so that, for example, Mr Taylor suggested figures of £350 - £450 per day and that an adequate photographer could probably earn between £45,000-£50,000 per annum gross although he has known other photographers that have earned substantial six figure sums . Miss Clement suggested a going rate of £400- £500 per day with a maximum for a local photographer of £600 per day whilst Miss Roscoe suggested that she was charging £1700 for two photographers for weddings and that if she was on her own she would charge £1200 per day with the going rate for weddings being between £1300 and £1800 with high end photography being over £2000 per day although she conceded that some photographers would charge less than £1000 although she wouldn't put the Claimant in that bracket.
It is plain from a consideration of the evidence of the respective employment experts that there is little solid evidence from external sources to assist the Court as to the Claimant's likely income and her career prospects. Indeed the experts agree as such at paragraph 9 of their Joint Statement at 3/851 and 852. Ms Groves, for her part, identified an industry survey undertaken by the British Photographic Council whilst Mr Carter relied on the National Union of Journalists recommended minimum rates for photographers and a study conducted by the Association of Photographers. Both have commented on the lay evidence.
Mr Carter came up with the following conclusions in his Report dated 27th September 2013 at 3/755:
"Table 9
Summary of possible earnings Summary of possible earnings Summary of possible earnings
Year Gross Profit Net Profit*
2008/09 £17,184 £10,287
2009/10 £27,926 - £29,281 £23,039 - £24,157
2010/11 £38,668-£41,378 £31,901 - £34,137
2011/12 £49,410 - £53,475 £40,763 - £44,117
2012/13 £60,152 - £65,572 £49,625 - £54,097
2013/14 £70,893 - £77,670 £58,487 - £64,078
*Assuming 17.5% deduction for expenses."
In arriving at his conclusions, Mr Carter relies heavily on the evidence of the lay witnesses and the figures are, in my judgment, highly speculative.
Ms Groves, in her Report dated 23rd December 2013 which begins at 3/762 at 3/775 under the heading "Summary and Conclusions" opines as follows:-
"34 Mrs Tait had begun a business as a photographer when in March sustained cauda equina syndrome as a result of a delay in treatment at an NHS hospital in July 2009.
35 Mrs Tait had very creative ideas and good contacts within the industry. She comes across as a person who was dedicated to her work and had high standards. She had potential to develop her business.
36 Her accounts show that in the year preceding the injury she had received a profit of £10,287 after costs. This equates to the median for surveyed female freelance photographers. She had undertaken some unpaid shoots to promote herself which is common in the industry due to the large number of would-be photographers.
37 In his report Mr Keith Carter has predicted rapid growth for the photographic business and earnings at the very highest end for photographers. He has not provided any comment on the statistical likelihood of achieving very high earnings or the number of hours work necessary to achieve this.
38 The physical strain of taking and editing photographs for long hours would need to be taken into account. This is a medical issue in regard to Mrs Tait's pre-existing spinal problems.
39 Mrs Tait had two children at the time of the injury and she has had a third child this year. It would be necessary to take into account the need for reliable childcare arrangements for a person working long and unpredictable hours as a high earning photographer.
40 The following table shows the result of the British Photographic Council's Industry Survey for Photographers 2010, relating to 1,698 photographers:
Average mean freelance profit
£18,821
19% of freelancers
£30,000+
29% of freelancers
£1 - £10,000
Median turnover/profit female photographers
£25,000/£10,000
Median turnover/profit male photographers
£39,471/£15,000
41 The majority of photographers earn modest incomes and many supplement this with alternative work. The extent to which Mrs Tait would have been able to succeed at the very top of the profession as indicated by Mr Carter will be a matter for the Court."
In my judgment, the extent to which the employment experts can assist the Court in this case is limited. Photography is plainly an uncertain profession and earnings are erratic and often modest as is apparent from the British Photographic Council's Industry Survey for Photographers 2010. True it is that the Claimant has real talent but there are many talented photographers and the industry is very competitive. On the other hand, the Claimant had clearly made a very good start to her photographic career as is apparent from the figures to which I have already referred and I remind myself of the Claimant's contribution to the early success of CCP in terms of increased turnover and income as further evidence of the Claimant's competence and her successful track record. It is also fair to record, as counsel for the Claimant submits, that the agreed residual earning capacity is at a level higher than the average annual female income recorded in Ms Grove's survey. I have also taken into account the evidence from the various lay witnesses as to possible future earnings and their consistent evidence as to the Claimant's talent, ability and commitment.
However, taking all matters into account and doing the best I can, I conclude that the figure contended for by the Claimant is extremely optimistic whilst that contended for by the Defendant is in all probability unduly pessimistic.
I am urged by counsel for the Claimant to adopt a broad brush approach to the question of the calculation of future loss of income and to fix a net overall figure. I accept the thrust of that submission as to the appropriate approach in the circumstances of this case.
It is common ground that the Claimant would have income from three sources, CCP salary, CCP dividend and HTP. For the purposes of the calculation of past and future loss of earnings, the parties have agreed a common approach to CCP salary and CCP dividend but in broad terms where they are at odds is as to the appropriate figure for earnings from HTP.
To my mind, having regard to the totality of the evidence and bearing in mind the many and varied imponderables, I conclude that an appropriate net overall annual figure is £45,000 i.e. inclusive of CCP salary and dividend but net of child care.
Financial Consequences
I turn now to a consideration of the various heads of loss by reference to the very helpful attachments to counsel for the Claimant's written closing submissions and trust that counsel will be able to incorporate the following figures into the various attachments to arrive at the total figure for special damages
Past Loss of Earnings - (Attachment One)
As it seems to me, in order to calculate past loss of earnings, the Court should adopt a straight line progression of the income of HTP from the figure of £10,287 in the year 2008/9 to £29,535 (net of child minding fees) by the date of trial. (£45,000 minus CPP salary and dividend).
Past Care – (Attachment Two)
I can deal with this aspect shortly. The Claimant relies on the report of Ms Way whilst the Defendant relies on the report of Mr Pace. The differences between the parties are accounted for by the Defendant's contention that the Claimant would have required assistance with childcare and housework in any event due to her mechanical back pain and a reduction in the hours for gratuitous care. In the light of my conclusions as to the nature and extent of attributable neuropathic pain and the effect of mechanical back pain, the sum sought in attachment two in respect of cleaning and child care including the au pair are properly recoverable whilst I would reduce the sum claimed in respect of gratuitous care to 30 hours per week at £8 per hour discounted by 25% (namely £1207.80) preferring as I do the evidence of Mr Pace.
Past Equipment – (Attachment Three)
In my judgment, save for those items to which I will refer specifically below, the Claimant is plainly entitled to recover the sums claimed in respect of past equipment, the Defendant's opposition being based in large measure on the contention that the neuropathic pain is not attributable.
It was conceded by counsel for the Claimant in closing argument that there is no medical evidence to support a claim for acupuncture and I would disallow this aspect of the claim. Nor am I satisfied that the cost of beds and mattresses for Joshua and James are properly attributable.
There remain however the issues as to the quantification of sums due in respect of incontinence products, additional bedding and leggings. So far as incontinence pads are concerned, the Defendant relies on the evidence of Mr Pace whose suggested figures are based on those advised to him as having been incurred to date whilst Ms Way, for the Claimant, suggests a higher figure based on the cost of what she considers more appropriate and expensive products than those in fact used. To my mind, the figures relied upon by Mr Pace are to be preferred since they compensate the Claimant for the actual costs expended. So far as bedding and leggings are concerned, both experts agree the need but differ as to quantum. I would adopt the itemised approach advocated by Ms Way.
Future Loss of Earnings
I have already dealt with the question of future earnings generally.
There is an issue between the parties as to the Claimant's likely retirement date with the competing submissions being 68 on behalf of the Claimant and 65 for the Defendant. The former being the official government retirement date and there appearing to me to be no good reason to depart from that date, I conclude that the appropriate date for calculation of loss is 68.
There remains however the claim for loss of a chance of higher earnings claimed in the sum of £164,876.20, adopting a calculation used in Langford – v – Hebran [2001] EWCA Civ 361. In that case, the trial judge awarded damages for future loss of earnings based on basic income plus the lost chance of higher earnings calculated by reference to the percentage chance of attaining the higher level of success. The Claimant claims for a 50% chance adopting the mid point of the gross figure set out in Mr Carter's report with appropriate deductions for childminding and tax. In principle this approach seems to me to be appropriate save that it does not seem appropriate to include in this calculation any sum in respect of CCP salary or dividend since, in order to have any prospect of earning the higher photographic earnings figure, the Claimant would have had to devote the whole of her time and effort to that aspect of the business. I would therefore award such sum as is calculated using the methodology set out in the Schedule of Loss save for the exclusion of CCP salary and dividend. Adopting that methodology, the relevant figure for highest achievable net annual income excluding CCP salary as set out in the Schedule of Loss is just under £85,000 which the Claimant has adjusted downwards in submissions to £72,080. Adopting a multiplier to age 68 of 19.3, the relevant figure, before deduction of the base level of future net income, is £1,391,260 and net of that base level is therefore £522,760. Given that what is being considered is, as I have found, a 50% loss of a chance of earning that level of income the relevant figure under this head of loss is £261,380
Future Care and Case Management – (Attachment Five)
So far as future care is concerned, I would adopt the child care calculations put forward by counsel for the Claimant in attachment five to the written closing submissions since I can see no proper basis for reducing child care costs when Lily attains 3 as opposed to 5 years of age and I accept the argument put forward by Ms Way that until Lily attains the age of 5 there should be a full time Nanny.
Once Lily has attained the age of 5, I accept the recommendation of Ms Way that two hours per day is required for child care but only one hour for domestic support at £10 per hour, the former only being until Lily attains the age of, say, 14, adopting the substance of Mr Pace's arguments on this aspect. Thereafter, as it seems to me, the requirement for child care will end. I can see no justification for the appointment of a personal assistant in the circumstances of this case.
So far as case management is concerned, I understand that past case management is agreed at £5701.06.
So far as future case management is concerned the Claimant seeks case management for life. In my judgment, there is no justification for any such award save in respect of the next three years until May 2018 to enable implementation of the various recommendations which have been made to take place and in particular to take the Claimant through any proposed move to a new home, accepting as I do the evidence of Mr Pace on this issue. The Claimant is an intelligent and articulate woman who is, in my judgment, more than capable of finding the necessary information to assist her. I would therefore allow a total of 100 hours at £98 per hour plus travel and mileage under this head.
Motorhome
The Claimant pursues a claim for the hire of a motorhome in the sum of £847. To my mind that claim is unanswerable.
Future OT related claims – (Attachment Six)
As I understand it items 1-3 inclusive in attachment six are agreed. As to item 4, breakdown cover, to my mind the Claimant would have had to have such cover in any event and the item is not properly recoverable in whole or in part.
I understand that item 5 is not pursued.
So far as showering and assorted items are concerned (item 6) need is agreed but cost is in issue. I accept the evidence of Mr Pace that there is no justification for two additional shower facilities in addition to whatever bathroom facilities a family of five would have had in any event. I would allow £2,500 for one shower with a 10 year replacement and £345 for a shower seat with 5 year replacement and grab rails at £100 and 10 year replacement together with a sum of £1,000 for installation.
So far as the swim spa is concerned (item 7), I am not persuaded that the medical evidence justifies this claim, the high point of which would appear to be Mr Byrne's comment at 2/358 that a swim spa "would be to help with back pain". The inclusion of such an item is, therefore, in my judgment, neither reasonable nor proportionate, but I will include an element in the figure for general damages to reflect loss of amenity in this regard that, being the Claimant's alternative submission.
So far as items 8, 10, 11, 12, 13 and 15 are concerned, they are recommended by Ms Way but opposed by Mr Pace on the basis that they would have been required in any event due to the Claimant's pre-existing mechanical back pain. In my judgment the need arises from neuropathic pain and or incontinence and they are therefore costs which are properly recoverable in the sums claimed.
I understand that items 9, 14 and 18 are agreed.
I turn now to occupational therapy (item 16) and physiotherapy (item 17). So far as the former is concerned, it does not seem to me that there is any established need for occupational therapy intervention at all. I have no doubt that the Claimant is more than capable of researching and acquiring for herself suitable equipment and I am wholly unimpressed with Ms Way's argument to the contrary (3/719). So far as the latter is concerned, it is fair to say that there is no expert evidence to support such a claim but it was submitted on behalf of the Claimant that it was doubtful whether the obtaining of such a report would have been proportionate in the circumstances of this case. Having regard to the totality of the medical and other evidence it is probable that the Claimant would benefit from the provision of physiotherapy and the extent and costings for such therapy suggested by Ms Way would appear to me to be reasonable (3/720).
So far as those items in item 19 which are not agreed are concerned I conclude as follows:-
Additional clothing and bedding
Plainly a sum is justified. The question is what sum. Doing the best I can in the light of the evidence of Ms Way and Mr Pace I would award £450 per annum
Prescriptions
I would allow £104 per annum to the age of 60.
Incontinence products
I would allow £600 per annum
Acupuncture
I accept the evidence of Mr Pace that to the extent that such an intervention is required, it is as a result of mechanical back pain and therefore not properly recoverable.
My conclusions are the same so far as the claim for heat pads are concerned.
So far as holidays are concerned (item 20), in the light of the concession made during the course of the trial that acquisition of a caravan for holidays is reasonable, I conclude both that the claim is justified in principle and that the various sums claimed are reasonable and proportionate. So far as any deduction for the cost of holidays in any event is concerned, notwithstanding the evidence of the Claimant, I conclude that Mr Pace's suggested figure of £1500 is, on the balance of probabilities, a more reasonable and accurate assessment.
Turning now to heating and laundry, I understand that laundry at £2,131.01 is agreed (see Defendant's closing argument paragraph 51). What is not clear to me is whether this agreement includes the cost of an additional washing machine, the need for which is agreed by the care experts. If not covered, then I would allow £150 per annum under this head.
So far as heating is concerned, the consensus of opinion of Ms Way and Mr Pace is that both whilst Lily is at home and after retirement, no additional heating costs will be incurred. I accept the thrust of that evidence and would limit the claim to £250 per annum from the age of 37 to the age of 60.
So far as home maintenance and gardening are concerned, it is plain in my judgment on the evidence that the Claimant's mechanical back pain would increasingly limit the Claimant's ability to undertake these activities, which historically, I accept have been undertaken by the Claimant. Doing the best I can I would award £1,000 per annum to the age of 60.
Accommodation – (Attachments Seven and Eight)
The parties rely on the evidence of their respective experts, Mr Cumbers for the Claimant and Ms Bowden for the Defendant whose Reports are at 3/867 and 3/924 and whose Joint Report is at 3/973.
The main issue between the parties is whether or not the Claimant requires single level accommodation. What is said on behalf of the Defendant is that the Claimant has been managing stairs for the past 5 years and in all the circumstances of the case it would be reasonable for the Court to conclude that accommodation which is predominantly at ground level but with possibly a spare room and bathroom at first floor level would not be unreasonable.
Not surprisingly counsel for the Claimant submitted otherwise, reminding the Court that the Claimant has physical difficulty using stairs but more importantly can and does suffer episodes of incontinence when using stairs as a result of the effort expended. Moreover it was submitted on behalf of the Claimant that Ms Bowden had agreed that if the Claimant was wheelchair bound she would recommend single level accommodation in order to promote and enhance, so far as possible, the user's independence and it was suggested the same principle should apply here so that whilst it might be possible for the Claimant to go up and down the stairs, to do so was to condemn her both to the risk of incontinence, (i.e. the worry) and actual incontinence with the usual consequences.
For my part I see the force in those submissions made on the Claimant's behalf and I conclude on the balance of probabilities that single level accommodation is reasonably required in this case and approach this aspect of the claim on that basis.
A further issue between the parties relates to the extent of the accommodation. It is agreed between the experts that the Claimant's current home provides approximately 131 square metres of accommodation. Mr Cumbers for his part suggests that a total of 154 square metres is needed whilst Ms Bowden considers 140 square metres to be adequate and reasonable. On this issue I prefer the evidence of Ms Bowden having regard to the factual background to this case and in particular to the evidence as to the actual property that the Claimant and her husband have been renting since 2005.
I turn now to the issue of the likely cost of acquisition of a single storey property. As Counsel for the Defendant points out, Mr Cumbers, in his Report, includes properties priced significantly above others whilst the average price of two bungalows currently on the market or, at least, on the market when the various Reports were prepared is £549,975.00. Ms Bowden's original Report at 3/935 suggested £480,000.00 as reasonable purchase price. This was revised in the Joint Statement at 3/974 to £539,955.00. In my judgment, it is reasonable and proportionate to work with a figure of £540,000 as the basic purchase price of a single level property which would be suitable for the Claimant's needs.
There is also a significant dispute between the parties as to extensions and adaptations as appears from the Joint Statement at 3/977 onwards. Having regard to my conclusions as to living space, I do not consider that any provision should be made for any extension. Equally, having concluded that a swim spa is not justified on the evidence, there is no need for provision for an annexe to accommodate a swim spa.
So far as a studio is concerned, the experts agree the likely cost. The Defendant submits that the Claimant would be likely to have had a studio in any event but to the extent that this need may have been more extensive and/or urgent as a result of the negligently delayed surgery, it would be reasonable to allow 50% of the cost (with a corresponding 50% attribution of betterment in the Roberts-v-Johnson calculation) whilst the Claimant submits that the whole sum should be allowed on the basis that the studio would be necessary to generate the income from the photographic business. On this issue it seems to me that the Defendant's argument is compelling and I would award 50% of the agreed cost of £75,994 namely £37,997.00 with a corresponding 50% attribution of betterment.
I turn now to the question of adaptations by reference to the Joint Statement at 3/971 and following. To my mind Mr Cumbers has taken a grossly extravagant approach to this issue and I agree with the submission made on behalf of the Defendant that he has inflated the Claimant's reasonable requirements which in my judgment has done the Claimant no favours.
By way of example, the suggestion that a bulk storage room should be created at a cost of £2,180 and the suggested costings relating to intruder and fire detection equipment and heating installation and for possible adaptations to the garage are to my mind grossly excessive. Moreover the case for £35000 of expenditure for torso level units in the kitchen and bedroom is simply not made out on the totality of the evidence. Ms Bowden has made allowance for additional work required to avoid bending due to incontinence and it has to be remembered that the Claimant would have had difficulties as a result of mechanical back pain and in so far as low cupboards and the like are concerned. Moreover the suggestion that a property finder at a cost of £7,500 should be included frankly beggars belief. I entirely agree with Ms Bowden that the Claimant and her husband are perfectly capable of choosing a family home without professional advice.
To my mind, Ms Bowden has addressed the issue of what is reasonably required systematically and sensitively and where there is any disagreement between her and Mr Cumbers I prefer the evidence of Ms Bowden and would adopt her calculations save so far as the cost of torso level units are concerned when she has plainly not allowed for the effects of neuropathic pain. Doing the best I can I would allow a figure of £21000.
So far as increased running costs are concerned I would allow £375 per annum, being the mid point between the parties, and for heating £72 (being 50% of £144 suggested by Ms Bowden in respect of the studio) and otherwise accept the figures put forward by Ms Bowden.
Future Medical Expenses - -(Attachment Nine)
I understand that so far as future medical expenses (attachment nine) are concerned, the Defendant agrees £3,000 in respect of cognitive behaviour therapy and a further sum of £21,242.65 (i.e. the sums claimed in attachment nine less the cost of the banding operation (£2,029.98)). Those figures seem to me to be reasonable and proportionate and I would adopt them.
General Damages
I turn now to the question of general damages. I was referred to the JSB table 6 (i) which gives a top level award for total loss of natural bowel function causing faecal incontinence of £110,300 while section 6 (j) gives an award of up to £103,250 for a complete loss of function and control of urinary incontinence. In addition, the Claimant also suffers additional pain and leg weakness and neuropathic pain there is some psychiatric injury and there is of course also the sexual dysfunction.
It was submitted on the Claimant's behalf, and I accept, that the Claimant's incontinence is likely to increase and it is to be noted the Claimant has a high incontinence score as appears in Miss Vaizey's Report at 2/497 and it was the Claimant's evidence, which I accept, that her entire day is dominated by her toileting needs and she relies entirely on incontinence pads, nappies and the like to manage that incontinence.
I remind myself, however, that it is not appropriate simply to combine awards for bowel and bladder incontinence and that there has to be some reduction for overlap. The respective parties' contentions are perhaps not surprisingly not that far apart. The Claimant contends for £140,000 whilst the Defendant contends for £120,000. In support of the higher figure counsel for the Claimant referred me to the decision of Mr Justice Otton, as he then was, in Routledge-v-McKenzie referred to at F5/001 in Kemp and Kemp where, updated, an award of £117,050 for a cauda equina lesion affecting the spinal and nerve roots L5 and S1 to 5 was made.
Taking into account the totality of the evidence and having regard to the JSB guidelines and the decision in Routledge-v-McKenzie,.I conclude that the appropriate figure by way of general damages to reflect the pain suffering and loss of amenity suffered by the Claimant as a result of the negligent delay in surgery is £140,000. In coming to this conclusion I have also taken into account the fact that, as I indicated earlier in the judgment, there has been a loss of amenity in terms of swimming.
Conclusion
I trust that I have dealt with all the issues on which the parties require a determination. If there are any matters in dispute where, inadvertently, I have failed to make a ruling I should be grateful if the parties would alert me to the lacuna, providing a short skeleton argument setting out their respective positions on the outstanding matter(s), and I will then endeavour to incorporate my conclusions into a revised draft.
Subject to that caveat, I hope that the parties will be able to agree the terms of an order that reflects the substance of this judgment.
I would like to take this opportunity to thank both counsel for their invaluable assistance in this case and finally would like to apologise to the parties and, in particular, to the Claimant for the delay resulting from the unfortunate adjournment of the hearing of closing arguments. |
Mr Justice Warby :
Introduction
The claimant and the defendant first met on the evening of 15 December 2014, at a Christmas Party at a city centre club. In the early hours of 16 December 2014, during a party at the home of a friend of the claimant known in this case as "Mr X", the defendant performed oral sex on the claimant. They have never met again, but a month later the claimant initiated an exchange of messages between the two, via their mobile phones, in the course of which he wrote to her, and she to him, about having sex together. The claimant sent the defendant explicit images, including photographs of his erect penis, and video of himself masturbating. She also sent him images, but nothing so intimate.
Because the claimant is a Premier League footballer, his sex life is of interest to newspaper readers, and on 13 February 2015 the defendant signed a contract to sell the publishers of The Sun "her full detailed and true story with particular reference to her knowledge and experiences of [the claimant] and all related matters". The agreement provided that she would make available "all photographs, film, documents, names and addresses and other items of evidence which are relevant to his/her account." The newspaper approached the claimant's club ("the Club") and his representatives came to know that publication was intended.
On 19 February 2015, an application was made to Walker J on behalf of the claimant, without notice to the defendant, for an interim order restraining the defendant from disclosing information to the effect that a sex act took place between the two, photographs sent by the claimant, any information to the effect that he sent her naked photographs of himself, and text messages sent by him or any summary of the information contained in such messages. The claimant's case was that disclosure of such information would represent a misuse of private information and, so far as the photos were concerned, infringement of copyright.
The evidence and submissions for the claimant also alleged that in dealings with Mr X, acting on behalf of the claimant, the defendant had sought to blackmail the claimant, demanding £100,000 as the price of her silence. This was the factor said to justify an application without notice, and was also relied on in support of the injunction, and the anonymity order. Walker J granted the interim non-disclosure order, an order anonymising both parties, and a reporting restriction order prohibiting the identification of either party or Mr X.
On 22 February 2015 an article was published on the front page of The Sun on Sunday, under the headline "Prem star's £100k sex blackmail". The story related to the claimant and the defendant. It described them as having had a sexual encounter, quoting a source as saying (inaccurately, by all accounts) that "the pair did everything that a man & woman can do together." It reported that the defendant had attempted to blackmail the claimant. But neither the identities of the parties, nor the images, nor the content of the messages between the claimant and defendant, were made public in that article. It is not suggested that the appearance of this story represented or flowed from a breach of the injunction. Its publication is accepted to have been consistent with the Judge's order.
The claimant's application to continue until trial the orders made by Walker J came before me on 26 February 2015. On the application of the claimant, unopposed by the defendant, I adjourned the application until this hearing, and continued the orders meanwhile. This is therefore the return date of the claimant's application for orders maintaining anonymity and restraining disclosure and until after judgment in the action. The order sought is in a slightly expanded form, to cover the video material. Between 26 February and this hearing the claimant has served Particulars of Claim, the defendant has filed evidence, and the claimant has filed evidence in reply.
The issues
Four issues now arise:-
i) Should the orders of 19 and 26 February 2015 be discharged for material non-disclosure on the part of the claimant? The defendant asserts that the factual picture was not fairly presented. In particular, she says that the sex act between them was not as private as made out, that the accusation of blackmail was false to the knowledge of Mr X, and that Mr X failed, deliberately it is alleged, to disclose a key message sent to him by the defendant, which is inconsistent with the charge of blackmail.
ii) Should there be any privacy injunction for the future? The defendant does not oppose the continuation of an injunction to restrain publication of the photos, or its extension to protect the video material, but she maintains that the court should refuse any injunction for the future. She relies on the claimant's material non-disclosure and what she submits is the weakness of his claim generally. In relation to this last point she highlights the dearth of evidence that the claimant would be distressed by any disclosure.
iii) If the information remains subject to an injunction and anonymity for the claimant, the defendant nevertheless seeks to lift the anonymity order so far as she is concerned, to "out" herself as TNO in order to tell her side of the story. She maintains that there neither was nor is any justification for anonymising her.
iv) The defendant also seeks, if restrained from disclosing information to the public, to be free nonetheless to disclose it to friends and family. A restraint on communication to that extent is unreasonable and unwarranted, she submits.
The hearing was conducted in public without identifying either party by name or otherwise. The orders, including the reporting restriction, granted by Walker J have remained in place pending this judgment, with an unopposed extension to prohibit publication of the video material.
The legal context
The threshold requirement of likely success
The test that has to be satisfied by the claimant on any application for an injunction to restrain the exercise of free speech before a trial is that he is "likely to establish that publication should not be allowed": Human Rights Act 1998 (HRA), s 12(3). This normally means that success at trial must be shown to be more likely than not: Cream Holdings v Banerjee [2004] UKHL 44, [2005] AC 253. In some cases it may be just to grant an injunction where the prospects of success fall short of this standard; for instance, if the damage that might be caused is particularly severe, the court will be justified in granting an injunction if the prospects are sufficiently favourable to justify an order in the particular circumstances of the case: see Cream at [19], [22]. But ordinarily a claimant must show that he will probably succeed at trial, and the court will have to form a provisional view of the merits on the evidence available to it at the time of the interim application.
Misuse of private information
In order to succeed at trial in a claim for misuse of private information a claimant must establish first of all that he has a reasonable expectation of privacy in respect of the information at issue. The test is an objective one, which depends on all the circumstances. These include "the attributes of the claimant, the nature of the activity in which the claimant was engaged, the place at which it was happening, the nature and purpose of the intrusion, the absence of consent and whether it was known or could be inferred, the effect on the claimant and the circumstances in which and the purposes for which the information came into the hands of the publisher": Murray v Express Newspapers [2008] EWCA Civ 446, [2009] Ch 481 [36]. Some general rules can be found in the authorities, to which I will return, but the determination is always highly fact-sensitive.
If a reasonable expectation of privacy is established, the court must then consider how the balance between privacy and freedom of expression should be struck in the particular circumstances of the case, taking into account the four principles identified by Lord Steyn in Re S (A Child) (Identification: Restrictions on Publication) [2005] 1 AC 593 [17]:
"'First, neither article [8 or 10] has as such precedence over the other. Secondly, where the values under the two articles are in conflict, an intense focus on the comparative importance of the specific rights being claimed in the individual case is necessary. Thirdly, the justifications for interfering with or restricting each right must be taken into account. Finally, the proportionality test must be applied to each. For convenience I will call this the ultimate balancing test.'"
In applying the ultimate balancing test other rights may fall to be taken into account, including any relevant privacy rights of third parties, and the right of the defendant to speak to others about their own life: see A v B plc [2002] EWCA Civ 337, [2003] QB 195 [11xi)]. The right to speak of one's own life is also an aspect of the autonomy protected by Article 8: Re Angela Roddy [2003] EWHC 2927 (Fam), [2004] EMLR 8. The process of striking the balance involves consideration of whether it is likely that the court at a trial would find an injunction to be a remedy which it is necessary and proportionate to grant, in order to protect the claimant's reasonable expectation of privacy.
Because the ultimate balancing test involves consideration of both sides of the case, and often enough other rights and interests also, it is probably a fruitless exercise to try to ascertain where the burden of proof lies. It is enough to say that "ultimately, in a matter such as this, it is plain that the burden rests on the applicant to satisfy the requirements of s 12(3), HRA, or fail": Hutcheson v News Group Newspapers Ltd [2011] EWCA Civ 808, [2012] EMLR 2 [31] (Gross LJ).
When considering whether to grant a remedy in a case affecting freedom of expression the court must have regard not only to the importance of that right but also to the extent to which the information at issue is or is about to be public, and whether it is to any extent in the public interest for it to be published: HRA, s 12(4)(a).
Anonymity
Anonymity orders are a derogation from open justice, and an interference with Article 10 rights, which must also be shown to be necessary in pursuit of the (inherently legitimate) aim of protecting privacy. The question to be answered when the court is asked to restrain the publication of names on the ground that this is necessary pursuant to Article 8 is "whether there is sufficient general, public interest in publishing a report of the proceedings which identifies a party and/or the normally reportable details to justify any resulting curtailment of his right and his family's right to respect for their private and family life.": JIH v News Group Newspapers Ltd [2011] EWCA Civ 42, [2011] 1 WLR 1645 [21](3), (5) (Lord Neuberger MR). There is no rule that anonymity is to be favoured over the main alternative, of naming the parties but not disclosing the information that is protected; each case will turn on its own facts: ibid., [39].
Anonymisation of the defendant does not automatically follow, even if it is appropriate to anonymise the claimant. The question needs to be considered separately. When considering this issue, the rights in play include not only the Article 10 rights of the general public to be informed about events in public courts but also the Article 8 and 10 rights of the defendant.
Blackmail
If free speech rights are misused to blackmail a claimant, or to extort, this will reduce the weight attached to free speech, and increase the public interest in favour of restraint. It will also weigh strongly in favour of an anonymity order. These points are by now well-established: see, eg, AMM v HXW [2010] EWHC 2457 (QB) [39]-[41]. Victims of blackmail or extortion deserve protection from the court; and the court must adapt its procedures to ensure that it does not provide encouragement or assistance to blackmailers, and does not deter victims of blackmail from seeking justice before the courts: see ZAM v CFW [2013] EWHC 662 (QB), [2013] EMLR 27 [35]-[36], [42]. It is necessary, however, for the court to proceed with some care when faced as it quite often is with an allegation that the defendant is blackmailing the claimant.
Evidence
A claimant who seeks an injunction to restrain misuse of private information is asking the court to attach more importance to his right to respect for his private life than to the defendant's free speech rights. Claimants are expected to speak for themselves, unless there is some good reason why they cannot do so. Ordinarily, therefore, at every hearing at which an order for non-disclosure is sought there should be evidence from the claimant. If the rights of any third parties such as partners are relied on, they too should ordinarily speak for themselves. If, due to urgency or for any other reason, evidence from these sources cannot be obtained in time, the court hearing an application without notice or on short notice will expect an undertaking to provide it when it can be obtained. If such evidence is still not available on the return date, the court will look for an explanation of why that is. All these points are well-known to practitioners in this field, and to a wider audience, at least since they were made by Tugendhat J five years ago in Terry v Persons Unknown [2010] EWHC 119 (QB); see in particular [27]-[36].
Full and frank disclosure
The ordinary rule is that applications for interim non-disclosure orders should be made on notice to the defendant, and others whom it is intended to serve with the order, and who may be affected by it. Application without notice may be justified, in exceptional circumstances, but if it is the applicant comes under a duty of full and frank disclosure. Mr Dean relies on the summary I gave in Sloutsker v Romanova [2015] EWHC 545 (QB) at [51] which, with adaption to the present case, is this:
i) An applicant for an interim non-disclosure order is under the duty of full and frank disclosure which applies on all applications without notice.
ii) The duty requires the applicant to make a full and fair disclosure of those facts which it is material for the court to know: Brink's Mat Ltd v Elcombe [1988] 1 WLR 1350, 1356 (1) and (2) (Ralph Gibson LJ). Put another way, disclosure should be made of "any matter, which, if the other party were represented, that party would wish the court to be aware of": ABCI v Banque Franco-Tunisienne [1996] 1 Lloyd's Rep 485, 489 (Waller J).
iii) Non-disclosure of material facts on an application made without notice may lead to the setting aside of the order obtained, without examination of the merits. It is important to uphold the requirement of full and frank disclosure.
iv) But the court has a discretion to set aside or to continue the order. Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues that were to be decided. The answer to the question whether the non-disclosure was innocent is an important, though not decisive, consideration. See Brink's Mat at pp1357 (6) and (7) and 1358 (Balcombe LJ).
Further points to be derived from Brink's Mat are:-
i) The duty applies to facts known to the applicant and additional facts which he would have known if he had made proper inquiries before the application (1356H, Ralph Gibson LJ).
ii) If material non-disclosure is established the court will be "astute to ensure" that a claimant who has obtained an injunction without notice and without full disclosure "is deprived of any advantage he may have gained" (1357C, Ralph Gibson LJ).
iii) The rule in favour of discharge also operates as a deterrent to ensure that those who make applications without notice realise the existence and potential consequences of non-disclosure (1358D-E, Balcombe LJ).
iv) The discretion to continue the injunction, or to grant a fresh one in its place, is necessary if the rule is not "to become an instrument of injustice"; it is to be exercised "sparingly", but there is no set limit on the circumstances in which it can be exercised (1358E-F, Balcombe LJ).
The application to Walker J
The evidence was contained in a single witness statement, made by Ms Feely, associate at Manleys solicitors, on 19 February 2015, the day of the application. The first paragraph of the statement said that its contents were within her own knowledge unless otherwise stated. Very little of it could however have been within her own knowledge. Paragraph 2 described the claimant, giving his professional roles and his age. The claimant was said to have "a long-term partner, with whom he lives a married life and who is the mother of his only child, a daughter." The statement gave no explanation of why there was no witness statement from the claimant. An explanation has since been given, to which I shall come. Nothing further was said about the claimant's partner or child or why, given that her rights were implicitly being relied on, the partner had not made a statement. No explanation for the absence of any such statement has been given since.
Paragraph 3 of Ms Feely's statement opened in this way: "My colleague Mark Manley ("Mr Manley") received a telephone call from the Claimant's agent ("the Agent") on Tuesday 17th February 2015 to request legal advice". This part of the evidence therefore seems to be Ms Feely's account of what Mr Manley told her he had been told by the Agent. Further degrees of hearsay are involved, as will be clear from the account given, which was as follows.
The Sun contacts the Club
On Saturday 14 February 2015 Andy Halls of the Sun emailed the Club's media relations manager ("the Manager"), advising that The Sun planned to run a story the following day, that the claimant and defendant had a sexual relationship after the Club's Players' Christmas Party ("the Party") and seeking comment. In a phone conversation with the Manager, Mr Halls outlined the story: that the claimant and defendant had had sexual intercourse after the Party, following which the claimant bombarded her with intimate and/or explicit text messages, some taken at the Club's team hotel. Told by the Manager that there was insufficient time to investigate, Mr Halls appeared to have been agreeable to delaying publication.
The Club contacts the Agent
Ms Feely's statement continues: "[The Manager] then notified the Agent, who discussed this matter with the claimant. He has explained as follows:" At this point in the statement, quite where the "explanation" comes from becomes less than crystal clear. However, it seems from the context and the other evidence that the "he" in this last sentence is the Agent, rather than the claimant, and that it was the Agent and not the solicitors who obtained the claimant's account of events. The facts and matters "explained" are then set out in ten sub-paragraphs:
i) The claimant attended his friend's house after the Party "together with a number of other players from the Club, and the defendant"
ii) "The defendant is known to a number of football players based in [the city]".
iii) "Whilst at his friend's house, the defendant performed oral sex on the claimant."
iv) Reference is then made to the exchange of "private explicit text messages including explicit picture messages". It is said that "The claimant only did so with a reasonable expectation that the messages and images would remain private and confidential between himself and the defendant and that she would not show them to, or share them with any third party – whether for financial gain or otherwise." As Mr Dean has observed, this statement is at best third hand-hearsay, but is more in the nature of a legal submission than a statement of fact.
v) "The claimant deleted this material sometime before The Sun contacted the Club".
vi) "The claimant discussed the matter with his friend", "Mr X".
vii) "The claimant, Mr X and the Agent all agreed that Mr X should invite the Defendant to attend a meeting with Mr X in order to establish the veracity of the Defendant's position, to keep the direct lines of communication open, and to ensure the Defendant was actually in possession of such material." It is notable that this account involves the claimant's representatives taking the initiative in making contact with the defendant.
viii) – x) Mr X made several attempts to contact the defendant, who eventually returned his call, and arrangements were made for the two to meet at a city centre hotel at 1pm on Monday 16 February. The contact described involves telephone calls and voicemail messages only.
"Meeting on 16th February 2015 at the [….] hotel in [the city]."
Paragraphs 4 to 13 of Ms Feely's statement appear under this heading. They are introduced with the words "I have been instructed as follows:" A solicitor is "instructed" by a client. But since the claimant was not present at the meeting on 16 February 2015, the information cannot have come from him. Indeed, it is clear from paragraph 11 of Ms Feely's third statement that it was not the claimant who gave these "instructions". The information came from Mr X, who was not Ms Feely's client but a witness. The statement did not explain why neither the Agent nor Mr X had made statements at that point. No explanation has been given since.
The account of the meeting given by Ms Feely was that it was attended by the claimant and her mother. Mr X began by asking the defendant what she wanted. She "stated that she was prepared to use this valuable incriminating (private and confidential) material for commercial advantage and that she had already entered into a contract with The Sun." This is unsatisfactory evidence. It is language that the defendant seems most unlikely to have used herself. The impression is of 'spin'. The defendant produced a copy of a written contract providing that she would receive a sum on publication on 22 February 2015. Mr X asked the defendant what she wanted from the claimant, and left her to consider her position. When he returned she said "£100,000 is what I want". Mr X wanted to keep lines of communication open, so told her that he would have to speak with the claimant and his representatives. At his request, the defendant "purported to contact an individual at The Sun to retract her consent", saying her family did not want her to proceed, Later, after the meeting, she sent Mr X a screenshot of an email sent to Mr Halls at 16:41 saying she did not want to proceed. It was left that Mr X would contact the defendant at around lunchtime on 17 February.
"Phone call between Mr X and the Defendant on 17th February 2015"
This is the heading to paragraphs 14 to 17 of Ms Feely's statement. She does not say where the information in this section comes from, but it seems inevitable that it must have come from Mr X. The statement says that on the morning of 17 February the defendant made several attempts to call Mr X, and that "after Mr X had fully updated the Agent, the Claimant and the Club" about the meeting the previous day, "the Agent, the Claimant and Mr X made contact with Mr Manley for legal advice." This is however at odds with paragraph 3 of the statement, which refers to a telephone call to Mr Manley from the Agent, which I assess as more likely to be the true position. There is no other indication that the claimant himself was involved at this stage.
Following the giving of legal advice, says Ms Feely "the Agent advised Mr X to call the defendant and record the conversation". Again, I note that there is no indication of involvement on the part of the claimant. The reason for the advice, according to Ms Feely, was that "at that point the claimant did not have any hard evidence of the financial demands she was making to the claimant, and that the Defendant was seeking to blackmail the Claimant." Evidently, by this stage somebody had suggested or concluded that this is what the defendant was doing. Ms Feely further explains that Mr Manley had acted in a previous "almost identical" incident and knew the police would want indisputable evidence if they were to bring blackmail prosecutions.
Mr X made the call, "in the presence of the Agent and a representative of the Club", whose identity is not given. The claimant evidently was not present. Mr X recorded the conversation on a handheld device. A transcript of the conversation is exhibited. Mr X told the defendant he was "sat in a meeting with erm some of the representatives now" and they were "not prepared to deal at £100,000 so I just need to know from your end where you wanna go from here?" She replied that "you told me to give, to give you something, so I did, so why don't you get back to me with something now?", to which Mr X responded that he had said he "needed a ball park as to what you want". She said "so what do they want to give me then why why why don't you tell me what they can offer to be because to be honest I'm getting sick of it now me [X], I can't be arsed with it." When told that "they're saying nothing…" the defendant responded "Right well fine then, just, well, we'll just leave it then, yeah, we'll just leave it as it is." The conversation proceeded with Mr X prodding further, asking "What do you want to do?"
The defendant replied: "Well my situation is just go to the papers on Sunday then yeah? Yeah I cannot be arsed with it, I'm sick to death of being messed about by everyone, you're asking me what I wanted and I said what I wanted and now you're saying no so why don't you come back with something to me then [X]?" He said it was difficult to comment but would come back in the next half hour. She rang off.
Evidently, the papers for the injunction application were prepared or finalised between this call, at around lunchtime on 17 February, and the morning of 19 February when the application was made.
Contact with The Sun
Ms Feely's statement explained that before 9am on the morning of 19 February 2015 Mr Manley had contacted Justin Walford, the in-house Counsel of the publisher of The Sun, and had given him notice of the application to be made that day. He had given Mr Walford an account of the events to date, including "that the defendant had met with a representative of the claimant and said that she wanted payment of the sum of £100,000 and was willing to cancel the contract if the claimant agreed to pay that sum". Mr Walford had called back and said that the newspaper would not wish to appear at the hearing, would comply with any order, and would not publish anything "other than possibly about a blackmail case if that did proceed." It is evidently these conversations which prompted the line taken by The Sun on Sunday when it published the article on 22 February alleging "blackmail".
The claimant's case of blackmail
Ms Feely's statement said this of the recorded conversation of 17 February: "Effectively the defendant is seeking to extort money from the claimant in return for the defendant refraining from selling embarrassing sexual, highly confidential and clearly private information and intimate photographs of the Claimant to the press." She spoke of "convincing evidence that the prospective defendant is seeking to blackmail the claimant" (present tense). She referred in this context to the defendant's conduct on 16 and 17 February coupled with her email retracting permission for the story. In her concluding observations she asserted that "What distinguishes this matter from an application for a standard privacy injunction is the element of blackmail."
The skeleton argument put before Walker J also placed emphasis on the allegation of blackmail. Outlining the facts, it referred to the transcript of the phone conversation of 17 February 2015, and quoted the defendant's words as set out in paragraph 30 above, saying of them that these were "her last words during the conversation." Under the heading "Misuse of Private Information" it was said that "a public interest defence would be unlikely to succeed … The public interest in preventing blackmail will generally outweigh the public interest in freedom of expression." Under the heading "The D's Motive" it was said that the defendant had maintained her threat to publish unless paid £100,000 during the phone conversation and that "She is therefore blackmailing the C by seeking the payment of money in return for not publishing his private information."
The hearing and judgment
The hearing before Walker J and the short judgment he gave were public, but subject to anonymity orders and reporting restrictions. At the outset of the hearing, having read the papers, the Judge explained that he was granting anonymity "because the claimant's account, if proved to be true, means that there is a hint of blackmail on the part of the defendant. If the name of the claimant was to become public knowledge that would mean that the blackmailer had achieved their threat". He indicated that he had concluded that on the basis of the application and supporting evidence the application should in principle be granted, subject to certain revisions to the draft order. In his short judgment after submissions he reiterated that anonymity was granted due to the "hint of blackmail", and concluded that he was satisfied that the relevant tests and authorities had been put before him and were satisfied.
The case develops
On 10 March 2015 witness statements of the defendant and her mother were served. The Particulars of Claim were served on 11 March. On 13 March a third witness statement of Ms Feely and a statement of Mr X were served on behalf of the claimant by way of reply. (Ms Feely's second witness statement dealt with attempts to serve the order on the defendant). There was no evidence from the claimant, his partner, or the Agent.
The events of 15-16 December 2014
The defendant's evidence is that on that evening the claimant behaved like a single man out on the town. He did not tell her he was married or in a long-term relationship. When they went back to Mr X's flat and she performed oral sex on him, the other four players present "kept coming into the room or trying to come into the room so they knew what was going on." She kept telling them to go away and they ended up moving from room to room. The act was "witnessed by several people." None of this is disputed in the reply evidence.
The messages
The defendant kept the messages that passed between the claimant and her, and copies are exhibited to her statement. As Mr Dean points out, not only did the claimant initiate the exchanges, it was he and not the defendant who sent explicit photos, he did so without any prior encouragement from the defendant. Mr Dean adds that he did so without making any express request for confidentiality.
The Sun contract
The defendant's evidence is that it was The Sun who approached her seeking a story, having learned of her encounter with the claimant from a third party. She signed a contract for £30,000 on 13 February 2015 and attended a photo-shoot at a city centre hotel between 10am and 3pm on Saturday 14th, with a view to publication the following day. During the day the price was negotiated down by Mr Halls, who said that the editor would not pay £30,000 but only £15,000. A revised deal was struck at £17,500. At the end of the shoot Mr Halls said the story would go out on 22 February. My conclusion is that the reason for this was the response of the Manager when called by Mr Halls whilst the shoot was in progress. That may also account at least in part for the reduction in price. The defendant's evidence is that she was not told about any conversation with the Club. It seems clear that by this stage the defendant had disclosed to The Sun a good deal, if not all of the information that she had.
Dealings between Mr X and the defendant
The defendant discloses that the first contact by Mr X was on the evening of Saturday 14 February, at 10.45pm. She exhibits a text from him sent at that time asking her to call him. He called her "a lot" on the following morning. They spoke twice during the afternoon. The defendant's friend recorded the conversations, which took place when the two were in the defendant's car. (The reason given for recording the calls is so that the defendant could show The Sun that she had not initiated contact with anyone else about the story). Transcripts are exhibited.
In the first conversation Mr X began by asking to "speak to you about a few things if that's alright?" The defendant responded "But I don't know who you are and I don't know what you want to speak to me about." Mr X offered to drop the defendant a line on WhatsApp "explaining a little bit about what it's about and so on and what we want to try and sort out." These last words indicate clearly that there was at this initial stage a plan on the claimant's side "to try and sort out" something. The second conversation took place before any WhatsApp messages. The start was not recorded but the transcript begins with Mr X saying "… can get out of it, trust me." He sought a meeting saying "I want it sorted… We'll talk, and we'll sort it out alright?"
The WhatsApp exchanges, which were not mentioned in Ms Feely's evidence, are exhibited by the defendant. They are fairly extensive. In them, after arrangements to meet have been made, the defendant asked Mr X "What we going to be doing tomorrow?" He answered "We just need a chat that's all I think. Try and help each other out I think … Sort some things out. Then we move on all being well."
Mr X does not dispute any of this evidence. Indeed, his statement, served after this evidence was put in, adds a factor to the reasons behind the meeting with the defendant which was not mentioned in Ms Feely's first statement. He refers to discussions with the claimant and the Agent and says "we all agreed that I should invite the defendant to attend a meeting with me to find out what it was that the defendant wanted, ..." (the emphasis is mine).
The defendant's account of the meeting at the hotel is that it was Mr X who was offering her money, and not her that demanded it. She says he told her she could get out of The Sun contract easily, and asked what the Sun had offered. He said "What do you want" and she said "I don't know". He kept saying "what do you want? Money is no object" and then, after making phone calls he whispered to her "£100,000" to which she said "yes, okay". She categorically denies saying "£100,000 is what I want". She says he told her men from another country were going to get the money in cash and bring it on 17 February. The defendant's mother's statement supports her account of events at the meeting stating, in particular, that in her presence and hearing Mr X whispered to the defendant the sum of £100,000, and said that the money would be paid in cash. Mr X accepts that it was he who asked what the defendant wanted, but he denies that it was he who mentioned the sum of money, or that there was any suggestion of payment in cash.
"Blackmail"
The defendant completely rejects this allegation, denying that she made any calls to Mr X on 17 February and maintaining that the true position is this: "after I had agreed to sell my story to The Sun, the claimant's representative contacted me and offered me £100,000 to renege on my agreement with The Sun. I agreed with that proposal, but then, after it became apparent to me that the claimant was trying to back out of that agreement I told his representative that I was not interested in any offers of money [from] him and asked him not to contact me again. I did this in a text message which was not shown to the Judge who granted the injunction."
The text, sent at 12:43 on Wednesday 18 February 2015, is exhibited to the defendant's statement. It said "Don't contact me again with any more offers I'm not interested please don't ring this number again!!!!!" Mr X admits that the text was sent. Although express complaint is made of its non-disclosure in the defendant's evidence, to which Mr X refers, his statement offers no apology or explanation for the fact that the message was not mentioned in the evidence for the claimant that was put before the Judge. He says "I believe that this message was to cover up the fact that she had requested the sum of £100,000 from the claimant, and had an idea that I had recorded our telephone call. There is no consistency in this 'WhatsApp' message compared with the others I had received, in terms of time and language used." Mr X does not explain why he believes this. What he means by his references to time and language is obscure, as there is nothing odd about the time or, on the face of it, the language of the message.
Ms Feely's third statement does not offer an apology or explanation for the omission of reference to this message, either. She denies the court was misled in any way. She says that the application "was made on the basis of the instructions received from the claimant and his representatives", and that the facts set out her first witness statement were "repeated as they were put forward to me by Mr X and the claimant's agent ... on behalf of the claimant (whose command of the English language is insufficient for him to provide adequate instructions without assistance.)". These two statements are different, and the former does not explain what part the claimant played in giving instructions. I have indicated my conclusion on that issue above.
Ms Feely states that "the text, WhatsApp messages and video clips were deleted by the Claimant". This is clearly a reference to the exchanges between claimant and defendant, and is repeated in the Particulars of Claim. Ms Feely states: "we provided the court with copies of the evidence we were in possession of." She does not say, nor does Mr X or the Particulars of Claim, that anyone had deleted the WhatsApp and text messages that passed between Mr X and the defendant.
Harm or distress
The defendant's statement notes at paragraph 50 that there was no mention in Ms Feely's first statement of any distress that would be caused to YXB by the release of any of the information. The response came in Ms Feely's third statement. The information in this statement was, like her first, said to be "derived from my own knowledge unless otherwise stated." At paragraph 18 she refers to the defendant's paragraph 50, describing it as "remarkable" to suggest the claimant would not be distressed. She asserts that it is "obvious that such would result from infringement of his privacy. For the avoidance of any doubt the publication of the claimant's confidential and private information would undoubtedly cause the claimant distress and embarrassment." This once again takes the form of a submission rather than a statement of fact based on what she has been told by the claimant. She goes on "The claimant believes that his sex life is and should remain private and that details of it should not be published to the world at large (whether for commercial gain or not)". This is not much better. Although it does refer to what the claimant believes, it does not state that she has spoken to him about the matter. I note that the statement of truth on the Particulars of Claim is not signed by the claimant but by Ms Feely.
Mr Dean made much in his argument of the deficiencies of the claimant's case in this regard, pointing to the lack of any real evidence as opposed to assertion that the claimant would suffer distress or other harm in the event of disclosure. He drew attention to the fact that the Particulars of Claim do not even allege that distress would be suffered. In the course of his submissions in reply, Mr Bennett told me on instructions from the Agent that "publication to the world at large of pictures of the claimant's penis and the texts would cause him embarrassment in the face of his friends, family and girlfriend."
Discussion
Material non-disclosure
Mr Dean focuses on three facts, which he submits I can safely conclude are made out, are material, and were not disclosed: the fact that the encounter at Mr X's flat was witnessed by others; the fact that the purpose of the meeting at the hotel was to find out the defendant's price for withdrawing from her contract with The Sun; and the text message sent by the defendant to Mr X. I agree that all three matters are established on the evidence before me, and that all are material facts which should have been but were not disclosed.
The fact that others interrupted the oral sex in the early hours of 16 December is not, as Mr Dean frankly accepted, the most important matter in the world for present purposes. Nonetheless, the extent to which information is already known to others and might be or might have been disclosed by them is a material issue. The fact that there were several other players who knew what had happened was not only unchallenged in itself, it is also something which on the undisputed evidence must have been known to the claimant. The evidence for the claimant does not convince me that any instructions on that, or indeed any issue were taken directly from the claimant. The closest the evidence comes to asserting as much is the passage from Ms Feely's third statement that I have quoted at 47 above, but her evidence as a whole and her reference to language difficulties suggests otherwise. The position appears to be that the claimant's account was given to the Agent and relayed by him to the solicitors. That may account for the fact that this point was not addressed. It was not suggested that this was a deliberate non-disclosure, but it seems to me obvious that it should have been made, and that the approach taken to obtaining instructions is likely to have been at the root of the problem.
The purpose of the meeting between Mr X and the defendant is a much more important point. Clearly, the meeting had more than one purpose, but the impression conveyed by the evidence put before Walker J was quite different from the one that emerges from the undisputed transcripts of the two calls between Mr X and the defendant, the WhatsApp exchanges between them, and the statement of Mr X. All of this material supports the conclusion that the main purpose of the meeting was to make sure the defendant's story did not get out, and to that end to find out how much evidence she had and what it would take to buy her silence. In my judgment it cannot sensibly be denied that the picture presented was materially inaccurate, given what Mr X has now said in his statement and the documentary evidence produced by the defendant.
Mr Dean goes further and submits that the fuller evidential picture now available makes clear that there had been nothing that could be described as blackmail, which requires an "unwarranted demand with menaces": Theft Act 1968, s 21. Here, there was no demand but rather an unsolicited offer by Mr X, accepted by the defendant, he submits; even on Mr X's version of events, in which the defendant named the figure, it was clearly he who invited her to do so. There were no menaces either, submits Mr Dean. The defendant had already agreed to and disclosed the information. She was initially encouraged and persuaded to retract consent to publication. She was not menacing the claimant with publication. Thirdly, even if she was menacing the claimant she believed she had reasonable grounds for doing so, as she had a contractual obligation to the Sun.
I see a good deal of force in the first and second of these submissions. However, the scope of the offence of blackmail is broad, and one must be careful not to take a narrow or literal view of the terms "demand" and "menaces". It is important also not to conduct a mini-trial of such an issue on an interim application, without hearing the recorded conversations, or cross-examination. What I can and do conclude is that the case for describing what took place on 16 and 17 February as blackmail is weak, and a great deal weaker than it was made to appear on the application to Walker J. In particular, the evidence gave an incomplete and therefore inaccurate account of the reasons for the approach to the defendant on 17 February. The fact that the purpose, or one main purpose of the meeting was to find out the defendant's price could and should have been obtained from Mr X, and was not. The existence and content of the WhatsApp messages between him and the defendant also could and should have been ascertained and disclosed. They strongly support the view that what took place was entirely initiated by the claimant's representatives, with a view to buying off the defendant.
What is entirely clear, so far blackmail is concerned, is that it was misleading and wrong to suggest to Walker J on 19 February 2015 that the defendant "is blackmailing" the claimant, without disclosing the WhatsApp message she had sent Mr X at lunchtime the previous day, saying that she wanted no further offers. If that message is accepted at face value it destroys any suggestion that there was blackmail at the time. The reasons belatedly given for suggesting this message was got up by the defendant as some kind of cover story do not strike me as very compelling. At any rate, it cannot seriously be disputed that this was a material item of evidence which ought to have been disclosed and, to his credit, Mr Bennett did not dispute it.
Mr Dean invites me to conclude that this was deliberate non-disclosure. It seems to me that it was on any view highly culpable because the text was plainly relevant to the issues that were going to be before the court the following day, and there was plenty of time available to ensure that it was dealt with. I accept the evidence of Ms Feely that it was not known to the claimant's solicitors. It follows that Mr X did not tell them of it. The conclusion must it seems be that either the claimant's solicitors did not take proper steps to ensure that Mr X informed them of any written communications between him and the defendant, or they did and Mr X nevertheless failed to disclose the message. The fact that neither the solicitors nor Mr X acknowledge any fault is troubling. Either way, the claimant must accept the responsibility and the consequences, since both the solicitors and Mr X were acting as his agents.
The fact that the message was not disclosed to the solicitors by Mr X had an unfortunate consequence. Counsel, also ignorant of the message, referred in his skeleton argument before Walker J to the defendant's "last words" in the telephone conversation of 17 February. This did not state that these were the defendant's last words to Mr X, but that conclusion was implicit, given the absence of any evidence of any subsequent communications between them. The implication was wrong.
In my judgment the importance of the duty of full and frank disclosure, and the seriousness of the material non-disclosure in this case, lead to the conclusion that the injunction, anonymity order, and reporting restriction granted by Walker J and continued by me must be discharged. In my view, the third item of material non-disclosure would of itself be sufficient to justify that conclusion. Taken together with the others, the case for discharge is highly compelling. There is little to put in the scales against it. I bear in mind that the main effect of discharging the orders as to the past is that the claimant will have to pay his own costs of the applications, as well as the defendant's costs of the application to discharge. There might in principle be an application for damages pursuant to the cross-undertaking. None of these consequences can be said to be unjust. There is no effect on the claimant's substantive position.
Re-grant?
The next question concerns the future. It is whether to exercise the discretion referred to in Brink's Mat to grant a fresh injunction. I have given careful consideration to this question, bearing in mind that the case is of the "kiss-and-tell" variety, and that there is in general no public interest in the disclosure of details about matters of this kind. However, the issue at this stage is not simply whether an injunction would be granted on the evidence as it now appears, although the merits are a relevant factor. It seems to me that I should approach the question of whether the discharge of the existing order should be accompanied by the refusal of fresh restraints on disclosure and identification by asking myself whether the refusal of further relief would in all the circumstances be a just and proportionate response to the non-disclosure. I have reached the conclusion that it would, and that I should refuse further restraint on disclosure of information.
The principal factors that I have taken into account in reaching that conclusion are these:
i) The importance of encouraging full and frank disclosure, and the need to deter others from future breaches of that duty, which mean that fresh injunctions should be granted sparingly.
ii) The images, in respect of which the claim is strongest, and to which it is clear that the claimant (understandably) attaches the greatest importance, will be protected in any event, given the defendant's concessions. The primary point made in the statement of Mr Bennett in reply is therefore covered. I add that it is hard to see an answer to the copyright claim in respect of the images. No copyright is asserted, however, in the wording of the text messages.
iii) The claimant's claim in respect of the information is a weak one.
a) Although information about sexual life will generally be a prime candidate for protection, the sexual relationship here was fleeting and involved a single act. The relationship involved no form of intimacy other than the sexual. Relationships of this kind may be accorded less weight than more established ones, when considering whether it is necessary to interfere with the freedom of the other party to speak about the relationship. The point is illustrated by Theakston v MGN Ltd [2002] EMLR 22 [63]-[64] and A v B plc [11(x)-(xii)], [45], [47].
b) The limited extent of the relationship means that the interference with privacy that publication would involve is correspondingly limited. Put bluntly, beyond identifying the claimant as the "Prem star" referred to in the Sun on Sunday, the defendant does not have a lot of new information to disclose.
c) The claimant's own attitude to the privacy rights relied on is a relevant, and important, factor. When applying an intense focus to the specific rights at issue in the individual case, the court can hardly be expected to attach great weight to the privacy rights asserted on the claimant's behalf if he fails, without justification, to give any evidence himself. The most remarkable feature of this case is the complete absence of any evidence from the claimant. I do not regard the language difficulties briefly referred to in passing by Ms Feely as coming close to an adequate reason for the absence of such evidence. It is not necessary to have evidence to know that Premier League footballers can afford to retain translators and interpreters if necessary. As it happens, the evidence necessarily implies that the Agent was able to obtain from the claimant personally an account of what took place between him and the defendant. Not only is there no statement from the claimant about his attitude to disclosure, there is not even any hearsay evidence of acceptable quality of what he has to say about the matter. What has been said by Mr Bennett on instructions suggests that the concern is embarrassment, and mainly directed at the images, which are to be protected anyway. This lends support to Mr Dean's submission that the claimant has not shown any great concern about privacy for his sexual conduct.
d) It is clear that this application has been primarily driven by others, and there are strong grounds for inferring as I do that commercial motives play a considerable role. I say that because of the very limited role played by the claimant himself, the extreme weaknesses of the evidence in support of a claim to privacy, and the leading role that has clearly been taken in events by the claimant's Agent on his behalf.
iv) I do not consider it likely that the claimant will establish at trial that the defendant blackmailed him. It can fairly be said, as it can of anyone selling personal information for publication, that the defendant's conduct is unattractive. However, assessing the case on the evidence now before the court the strong probability is that a court would find that the claimant's representatives decided to buy off the defendant, and sought to persuade her to name her price, and that her conduct did not amount to blackmail. I do not believe the policy arguments in favour of protecting blackmail victims are a weighty consideration in the circumstances of this case.
v) Nor is the claimant's claim materially bolstered by the rights of others. Although the claimant's partner/girlfriend has been mentioned in evidence and in Mr Bennett's statement on instructions, her rights are not in the end relied on. Rather, she is identified – after friends and family – as someone in whose eyes the claimant would be embarrassed by certain aspects of the publicity that could occur. I have to consider her rights, but without evidence from her, or information or evidence about her, other than that which I have described I do not think I can attach weight to them now. Nothing is said about whether she does or does not know of what happened between the claimant and defendant. I infer from what has been said that she probably does know, in which case publicity will not be news to her. Nor do the rights of the child in this case feature in the argument or the evidence, save to the very limited extent mentioned. I must assume that the view of the claimant and his advisers is that the child will not be adversely affected by publicity.
vi) Turning to the defendant's rights, she is entitled to be named, if that is what she wants. Although no explanation was offered for this in the without notice application documents it was in my judgment right to anonymise the defendant at that point, because publicity would have been unjust to her, when she had been given no opportunity to challenge the case against her: CPR 39.2(3)(e) and (g). However, I see no justification for anonymising the defendant at this stage. Mr Bennett advanced no submissions on this point in his skeleton argument, and was unable to do better at the hearing than to suggest that naming her might in some unspecified way lead to the claimant's identification. That is not good enough.
vii) If the defendant is named, a substantial part of the story will be in the public domain, attached to one name. There is likely to be speculation about the identity of the unnamed footballer. Others may unjustly be brought under suspicion. There is thus a degree of genuine public interest in ensuring that the story has an additional name attached to it.
viii) Although I do not see great weight in the defendant's argument that she has been defamed by the allegation of blackmail made in The Sun – she has not been identified to the public as the woman in question, but only to staff at The Sun - I would nevertheless accept that there is a modest degree of public interest in putting before the public the other side of the story.
ix) The claimant's Article 10 rights have some value in striking the balance. I would not place any substantial weight on her right to speak of her sexual experiences with the claimant as such. They are in the nature of gossip or "tittle-tattle", at a relatively low level on the scale: see CC v AB [2006] EWHC 3083 (QB), [2007] EMLR 11 [36]. Nor, given the limited identification of her so far, do I place great weight on the defendant's right to speak publicly at this stage of the falsity of the blackmail allegation against her. But the case for interfering with her Article 10 rights is not a strong one either.
x) If the claimant has a justifiable claim that disclosure would represent a misuse of private information, he will have a remedy in damages if it now takes place. Damages, if recoverable, would be proportionate to the harm caused: see Spelman v Express Newspapers plc [2012] EWHC 355 (QB) [114].
xi) Finally, I bear in mind two considerations about what might have been, had there been no allegation of blackmail. First, there might have been no application without notice or, if there was, the court might have declined to deal with the matter without notice. Secondly, the court might well have concluded that the appropriate order was one that restrained disclosure of the images and information whilst naming the parties and describing the information as related to a sexual liaison. In that way the fact that the claimant had a sexual relationship with someone who was not his partner would have been known, but without the intrusive detail. In the event he obtained an order that is substantially more restrictive. It is not unjust in the circumstances to deprive him of that potential benefit.
In summary, if the photos and video material are taken out of the equation what is left are relatively weak privacy claims, which are not substantially supported by blackmail arguments or third party rights, and which the claimant has not himself given evidence to support. The result is that even if non-disclosure, anonymity, and reporting restriction orders might otherwise have been continued until trial, a decision to discharge and not to re-grant the orders is in all the circumstances a just and proportionate response to the material non-disclosure for which the claimant must accept responsibility.
Conclusions
The evidential picture now before the court is materially different from that which was presented to Walker J, in a number of ways. In my judgment, the evidence on behalf of the claimant at that hearing failed fully and frankly to disclose all the information which was available to the claimant and could have been put forward had proper inquiries been made, and which it was material for the court to know. It is appropriate to discharge the orders made then and continued until this hearing.
The grant of injunctions to protect the images for the future is rightly conceded. Otherwise, it is not appropriate to exercise the discretion to grant fresh orders. The discharge of the past orders and the refusal of orders for the future is a just and proportionate response to the non-disclosure, having regard to the protection that there will be for the images, and the relative weakness of the remainder of the claimant's case.
In these circumstances it is unnecessary to address the question of a variation to allow disclosure to "friends and family", though I record that this was not opposed in principle and would have been granted in an appropriate form, as a blanket restriction would not be proportionate: see CC v AB at [35]. |
MRS JUSTICE SIMLER DBE :
Introduction
Mr Allen, Mr Monks and Mr Myson ("the Claimants") who are part of a much larger group of New Zealand and other overseas residents from a number of countries, claim damages for personal injury alleged to have resulted from being implanted with defective prosthetic hip implants manufactured by the Defendant and implanted in the course of operations that took place in New Zealand. The Defendant is a company registered in England and manufactured the prosthetic hip implants in England.
As the Defendant is domiciled in England, the Claimants are entitled as of right to bring their claims here, whether or not England is otherwise the appropriate forum. By a judgment in these proceedings reported at [2014] EWHC 753, Stewart J dealt with preliminary issues as to the applicable law in these proceedings and, if English law applies to any claim, whether the Consumer Protection Act 1987 applies. He concluded that pursuant to the Private International Law (Miscellaneous Provisions) Act 1995, the applicable law for the New Zealand Sample Claimants is that of New Zealand. Even if English law applied, he held that no Claimants would have the benefit of the provisions of the Consumer Protection Act 1987 as the supply and marketing of the product and the alleged injury, all occurred outside the EU and the Claimants had no connection with the EU.
Since the judgment of Stewart J the New Zealand Claimants amended their claims to plead New Zealand law and in particular, reliance on the provisions of the Consumer Guarantees Act 1993 ("CGA"). Under the CGA a consumer has a claim against a manufacturer if goods supplied are not of acceptable quality or fit for purpose. Where goods fail to comply with the acceptable quality guarantee there are rights of redress afforded by the CGA, including a remedy for loss and damage which was reasonably foreseeable (s.27 CGA).
Although the Defendant denies that the goods supplied are defective, it submits in any event that claims for damages for personal injury, whether under the CGA or otherwise, are precluded by the statutory bar in s.317(1) of the New Zealand Accident Compensation Act 2001 ("ACA 2001"). Section 317(1) provides that "no person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New Zealand, for damages arising directly or indirectly out of personal injury covered by this Act …". The effect of the statutory bar, and its proper characterisation for these purposes is challenged by the Claimants.
Consequently by order of Master Cook dated 2 July 2014, the trial of a further preliminary issue was directed in relation to four of the New Zealand Sample Claimants, as follows:
"whether under the substantive law of New Zealand, as applicable pursuant to the Private International Law (Miscellaneous Provisions) Act 1995, their claims are precluded by section 317 of the ACA 2001".
Following exchange of expert reports, the Defendant conceded the preliminary issue so far as Mr Fletcher, the Third Claimant is concerned, and the Defence was re-re-amended to reflect this. His claim is now stayed with the other New Zealand claims.
The parties agree that the preliminary issue raises two essential questions:
(i) Is s.317 ACA 2001 a substantive or a procedural rule? If the rule is characterised as procedural only it will be disregarded by this court. By contrast, if it is a substantive rule, it must be applied by this court.
(ii) If the rule is substantive, does s.317 remove the right of these Claimants to compensatory damages for personal injury in this case as a matter of New Zealand law? In particular, does s.317 require relevant conduct in New Zealand as the Claimants contend before it has any application?
If the preliminary issue is determined in the Defendant's favour it will bring the New Zealand Claimants' claims to an end. If it is determined in the Claimants' favour then they (and others) will be able to proceed with their claims in the English courts, under the CGA, applying New Zealand law.
I have been greatly assisted in dealing with the preliminary issue by written and oral submissions on both sides: Charles Dougherty QC and Alexander Antelme QC for the Defendant; and Hugh Preston QC, Professor Adrian Briggs, and Conor Dufficy for the Claimants. I am grateful to them all.
The expert evidence
It is common ground that a New Zealand court called upon to decide the circumstances in which s.317(1) applies would approach this as an exercise in statutory interpretation. The meaning of the enactment in question would have to be ascertained from the text and in light of its purpose.
Since foreign law is a matter of fact normally proved by expert evidence, expert evidence as to New Zealand law has been called on both sides directed at predicting the likely decision of a New Zealand court required to address the preliminary issue in this case. In addition to assessing the weight of the expert evidence it is common ground that I am both entitled and indeed bound to bring to bear my own judgement in reaching conclusions as to New Zealand law.
I have received expert evidence in the form of expert reports, a statement as to what is agreed and what is disputed and oral evidence that was subject to cross-examination from two eminently qualified experts in New Zealand law. I do not set out their qualifications or their evidence in any detail. Campbell Alan McLachlan QC, Professor of Law at Victoria University of Wellington, whose specialist area of expertise is private international law, and who was called to the Inner Bar in New Zealand in 2007 and has practised extensively both as a barrister and as an arbitrator appeared on behalf of the Defendant. In summary in his opinion where a person has cover under the ACA 2001 in accordance with its territorial scope, in respect of a personal injury, he or she has no actionable claim for or right to compensatory damages under New Zealand law. In his opinion, the bar in s.317(1) ACA 2001 has substantive effect and removes the right to pursue an action for compensatory damages for personal injury, whether in negligence, under the CGA or under any other cause of action as the quid pro quo for the comprehensive cover provided under the statutory scheme of the ACA 2001. Further in his view the ACA 2001 itself determines the scope of cover and therefore the scope of the operation of the statutory bar.
By contrast, David Goddard QC, admitted in 1989, appointed as Queen's Counsel in 2003 and recognised as one of New Zealand's leading barristers with particular expertise in private international law and with long standing experience of acting in cases concerning tort claims and the author of a number of publications and responsible for a Ministerial Inquiry into Accident Compensation Funding and Accreditation of Physiotherapy Services in 2007, appeared on behalf of the Claimants. In summary in his opinion as a matter of New Zealand law, s.317 does not extinguish any cause of action under New Zealand law or otherwise in respect of accidental personal injury, and does not prevent proceedings being brought in New Zealand or abroad claiming exemplary or punitive damages in respect of accidental personal injury covered by the ACA 2001. Rather it prevents claims for compensatory damages in respect of conduct in New Zealand by a defendant who may have contributed levies to the scheme and who can "reasonably expect" not to have to insure against such claims or face such proceedings. In his expert opinion, the answer to the question at issue is that however the provision is characterised (whether procedural or substantive) as a matter of statutory interpretation it does not apply to claims in an overseas court relating to conduct outside New Zealand. In any event, since he concludes that the bar operates to prevent proceedings being brought for compensatory damages for personal injury and there is no need and no good reason to treat it as having a more far-reaching effect, he considers it to be a procedural rule and not a substantive one: it bars proceedings for the recovery of damages leaving causes of action intact.
The New Zealand Accident Compensation Scheme
There is broad agreement between the experts about the origins, character and operation of the New Zealand Accident Compensation Scheme (referred to as "the Scheme") including the scope of cover and the claims process and administration of the Scheme.
The Scheme derives from a Royal Commission of Inquiry Report in 1967, known as the Woodhouse Report which recommended the creation of a comprehensive, universal and compulsory no fault compensation scheme and
"extinguishing present common law rights in respect personal injuries …" (paragraph 306(b)).
The Woodhouse Report identified common law actions for damages as hindering the rehabilitation of injured persons, and the fault principle as an illogical justification for the common law remedy in negligence, erratic and capricious in its operation (paragraph 485(1) and (2)). At paragraph 489 the Woodhouse Report dealt with the consequential changes that would result from the establishment of a no-fault scheme and at paragraph 490 the compulsory nature of the scheme, as follows:
"489 (1) Given a suitably generous scheme on the foregoing basis it follows automatically that previous ways of seeking to achieve the same or a similar purpose become irrelevant.
(2) Thus the common law rights in respect of personal injuries should be abolished and the Workers' Compensation Act repealed.
(3) …
(4) Such a scheme, involving the acceptance of community wide responsibility in respect of every injured citizen, must clearly be handled as a social service by an agency of the Government.
(5)….."
"490 (1) The scheme which has been outlined involves comprehensive entitlement. It must be given comprehensive support.
(2) Protection is not to be restricted to work accidents or to road accidents, or to any period of the day, or to any group in the community. Individual liability, moreover, will disappear in favour of national responsibility.
(3) If the scheme is to be universal in scope it must be compulsory in application. Accordingly there will be no place for special arrangements or for "contracting out". ..".
As a result of those recommendations, the Scheme was originally introduced by the Accident Compensation Act 1972 and has been continued by a succession of statutes: the Accident Compensation Act 1982, the Accident Insurance Act 1998, and the Injury Prevention, Rehabilitation and Compensation Act 2001. In 2010, the 2001 Act was renamed the Accident Compensation Act 2001 (or ACA 2001) and remains in force. The Scheme is administered by the Accident Compensation Corporation ("the Corporation"), a Crown entity administered by a Board appointed by the responsible Minister. Its duties are to determine cover, provide entitlements under the legislation, collect levies, manage the relevant accounts and administer disputes.
The purpose of the ACA 2001 as set out at s.3 is to:
"enhance the public good and reinforce the social contract represented by the first accident compensation scheme by providing for a fair and sustainable scheme for managing personal injury that has, as it overriding goals, minimising both the overall incidence of injury in the community, and the impact of injury on the community (including economic, social, and personal costs) …"
Coverage under the Scheme is dealt with by Part 2 of the ACA 2001. Cover is defined by s.8(1) as "cover for a personal injury" and generally depends on whether (i) the personal injury is suffered in New Zealand (s.20 ACA 2001); or (ii) if the injury is suffered outside New Zealand, the injured person is ordinarily resident in New Zealand at the time (s.22 ACA 2001).
The ACA 2001 deals specifically with "treatment injuries". Treatment includes the failure of a prosthesis (s.33(1)(g)). Cover in respect of a "treatment injury" exists when the injury is suffered in New Zealand (s.20(2)(b) ACA 2001) or where the treatment injury was suffered outside New Zealand if the victim was ordinarily resident in New Zealand at the time (s.22(3) and (4) ACA 2001). Both experts agree that for these purposes, an injury is suffered where the treatment took place and for all three Claimants, that this was in New Zealand. Accordingly they are all covered by the Scheme.
By s.67 ACA 2001 where a person is 'covered', he or she may be eligible for entitlements listed by s.69 and described in further detail by Part 4 ACA 2001. A covered person's eligibility for entitlements does not generally depend on the category of injury they have suffered (such as injury by accident or treatment injury), but on their assessed need in light of the actual injury. For example, s.70 provides that a person who has suffered personal injury for which he or she has cover—
"(a) is entitled to be provided by the Corporation with rehabilitation, to the extent provided by this Act, to assist in restoring the claimant's health, independence, and participation to the maximum extent practicable; but
(b) is responsible for his or her own rehabilitation to the extent practicable having regard to the consequences of his or her personal injury".
Compensation or eligibility for entitlements does not depend on the establishment of any wrong or on the acts of a third party. Accidental self-inflicted injuries are covered and the focus of the Scheme is on the injury rather than its cause.
Individuals seeking compensation under the ACA 2001 must lodge a claim (s.48) within the time limits prescribed, but the scope of the Scheme depends on the existence of cover and not on whether the person has lodged a claim in respect of a covered injury. In other words, a person may not avoid the operation of the ACA 2001 and chose instead to pursue a civil claim in respect of his or her injury by failing or declining to lodge a claim. Conversely, however, a person who is covered may lose their entitlement to compensation by failing to lodge a claim within the time limits prescribed.
The Scheme is funded by specific levies and general taxation. Entitlement to compensation under the Scheme does not depend on having made a contribution to it. There are levies collected by the Corporation which is required to maintain and operate five separate accounts: a Work Account; a Motor Vehicle Account; an Earners' Account; a Non-Earners' Account; and a Treatment Injury Account. As Professor McLachlan explains, the manner in which the Scheme is funded, consistent with its comprehensive no-fault character, is not correlated with any particular class of putative defendants. Rather it prescribes a set of levies which when added to general taxation are geared to ensuring adequate financial provision in the Accounts of the Corporation for all those personal injuries in respect of which there is cover under the ACA 2001.
The structure of the Accounts that the Corporation is required to maintain reflects the categories of cover provided under the ACA 2001 and the sources of the levies (where appropriate) that primarily fund that cover. So for example, the Work Account finances entitlements for employees or workers for work-related personal injuries, primarily funded by levies payable by employers. The Treatment Injury Account finances entitlements in respect of 'treatment injury' and s.228(2) describes how the funds for the Treatment Injury Account are to be sourced:
"(2) The funds for the Treatment Injury Account are to be derived from—
(a) any levies payable by registered health professionals or any organisation that provides treatment under this Act, or a prescribed class of such persons or organisations; and
(b) if there is no such levy or the levy relates only to funding part of the Account, from the Earners' Account (in the case of an earner) or the Non-Earners' Account (in the case of a non-earner); and
(c) in the case of injuries suffered before the prescribed date from which levies become payable, from the Earners' Account (in the case of an earner) or the Non-Earners' Account (in the case of a non-earner)."
The funds in the Treatment Injury Account must be applied to the treatment of 'entitlements in respect of persons who have cover for treatment injury' (s.228(4)). Although s.229 provides for the promulgation of regulations specifying the persons who are liable to pay levies (and in what amount) in respect of the Treatment Injury Account, no regulations have been promulgated, so that this Account is funded by levies from both the Earners' and Non-Earners' Accounts, the latter being funded by general taxation.
The quid pro quo of the right to statutory compensation under the Scheme is the statutory bar to proceedings for damages for personal injury that might otherwise have been available. The bar in s.317(1) on proceedings for damages for personal injury has the effect of precluding any claim for compensatory damages for personal injury in New Zealand where there is cover under the Scheme. The basis of the claim for personal injury does not matter and claims for negligently inflicted personal injury and claims under the CGA are equally affected by the statutory bar. The statutory bar does not preclude claims which fall outside the scope of cover under the ACA 2001 and furthermore, it is possible to bring a claim in trespass or negligence for exemplary damages in New Zealand, such damages not being compensatory in nature but punitive, and arising not out of the injury itself, but the outrageous manner in which the wrong was committed by the defendant.
The substance/ procedure divide
The first question for determination is whether s.317(1) is a rule of substantive law or a rule of procedure it being common ground that English private international law distinguishes between questions of procedure, governed by the law of the forum, and questions of substance, governed by the applicable law (or lex causae). If s.317(1) is properly characterised as a rule of substantive law, since the applicable law in this case has been held to be New Zealand law, it will apply even in proceedings brought in this court, (subject only to any further consideration as to its scope). If, however, it is a rule of procedure, English law will apply as the law of the forum. An English court will apply foreign substantive law but will apply English procedural rules, for example as to mode and form of trial, evidence and the availability of remedies.
The question of the characterisation of a statutory provision as substantive or procedural is a question for the law of the forum, and so is a matter of English law here. However in order to characterise the provision properly it is important to understand its effect under the applicable law. The distinction may not be clear cut. The proper approach is described by Dicey, Morris and Collins at paragraph 7–004 as follows:
".. regard should be had in each case to the purpose for which the distinction is being used and to the consequences of the decision in the instant context. The rule under examination must be considered as a whole, without giving undue weight to the verbal formula selected by previous judges, or by the draughtsman of a statute to introduce the rule. …..The mechanistic approach, sometimes found in English cases, of relying on the classification of the introductory verbal formula as used in a quite different statute, or of accepting a classification as procedural or substantive made for some purpose quite unrelated to the conflict of laws is now discredited. …"
Words or phrases used in a private international law context (such as substance, procedure, rights and remedies) may have a different meaning when used in other contexts. English common law has drawn a long-standing and a well-established distinction between matters that affect a claimant's cause of action (his rights) and those that affect the way in which those rights are enforced (the remedies available); the former regarded as substantive and the latter as procedural.
The leading case in England on the proper dividing line between substance and procedure is Harding v Wealands [2007] 2 AC 1 where the claimant was injured in a road traffic accident in New South Wales. The New South Wales Motor Accident Compensation Act 1999 ("MACA") placed floors and ceilings on compensation for injury and the question in proceedings commenced in England was whether those compensation provisions, contained in chapter 5 MACA, were substantive or procedural. The House of Lords affirmed the distinction between questions of actionability or liability (substantive) and questions of quantification and assessment which went to the availability and extent of the remedy (procedural). The House held that this distinction at common law was unaffected by the Act of 1995, rejecting the proposition that "questions of procedure" referred only to rules governing the manner in which proceedings were to be conducted. That meant that the floors and ceilings on compensation placed by chapter 5 MACA, did not apply because they were all procedural and therefore to be disregarded even though New South Wales law applied to the claim. At paragraph 24 Lord Hoffmann (with whom all other members of the House agreed) dealt with the substance/procedure distinction as follows:
"In applying this distinction to actions in tort, the courts have distinguished between the kind of damage which constitutes an actionable injury and the assessment of compensation (i.e. damages) for the injury which has been held to be actionable. The identification of actionable damage is an integral part of the rules which determine liability. As I have previously had occasion to say, it makes no sense simply to say that someone is liable in tort. He must be liable for something and the rules which determine what he is liable for are inseparable from the rules which determine the conduct which gives rise to liability. Thus the rules which exclude damage from the scope of liability on the grounds that it does not fall within the ambit of the liability rule or does not have the prescribed causal connection with the wrongful act, or which require that the damage should have been reasonably foreseeable, are all rules which determine whether there is liability for the damage in question. On the other hand, whether the claimant is awarded money damages (and if so, how much) or, for example, restitution in kind, is a question of remedy."
In reaching those conclusions, the House of Lords followed the approach of the majority of the Australian Court of Appeal in Stevens v Head (1993) 176 CLR 433 which had adopted this traditional view of the substance/procedure divide.
This distinction had earlier been considered and addressed in Boys v Chaplin [1971] AC 356, where the majority of the House of Lords held that the identification of heads of recoverable loss for the purposes of establishing civil liability for negligent infliction of a particular head of damage (pain and suffering) was a matter of substantive law going to the existence of liability. Once liability had been established however, the remedy available to a plaintiff who had established liability, was a matter of procedural law to be determined under the law of the forum.
Although the result in Harding was questioned by the Supreme Court in Cox v Ergo Versicherung [2014] AC 1379 where at paragraph 43 Lord Mance observed in relation to the relevant provisions contained within chapter 5 MACA that the "application of the difficult distinction between substantive and procedural issues may on the facts of that case appear in some respects questionable" it is common ground that it remains binding on me. (See also Lord Sumption at paragraph 15, where he expressed surprise "as regards some of them, such as the exclusion of economic loss, which would appear to be substantive according to Lord Hoffmann's test. This may be why in their concurring judgments Lord Woolf and Lord Rodger of Earlsferry justified this classification not only on the grounds given by Lord Hoffmann but on additional grounds. Lord Woolf at paragraph 11 considered that because the greater part of the provisions of the MACA relating to damages were procedural, the rest which were "arguably" substantive should be regarded as procedural also.")
It follows accordingly that:
i) the availability of heads of loss or kinds of damage is substantive; but
ii) once the substantive right or liability is established, the remedy or response is a matter of procedural law to be determined by the rules of the forum; and
iii) assessment or quantification of damages, (including limits, caps or floors) are all questions of remedy and procedural.
Section 317 in more detail
It is common ground between the parties and the experts that in New Zealand the process of statutory interpretation is governed by s.5 of the Interpretation Act 1999. This provides that the meaning of any enactment must be ascertained from its text and in the light of its purpose. The importance of considering both purpose and context in the process of statutory interpretation in New Zealand was emphasised by the Supreme Court in Commerce Commission v Fonterra Co-operative Group Limited [2007] NZSC 36 at paragraph 22 where the court held that even:
"if the meaning of the text may appear plain in isolation of purpose, that meaning should always be cross checked against purpose in order to observe the dual requirements of s.5. In determining purpose the Court must obviously have regard to both the immediate and the general legislative context. Of relevance to may be the social, commercial or other objective of the enactment."
Accordingly, I turn to consider first the text of s.317 in light of the expert evidence. It provides relevantly as follows:
"Proceedings
317 Proceedings for personal injury
(1) No person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New Zealand, for damages arising directly or indirectly out of—
(a) personal injury covered by this Act; or
(b) personal injury covered by the former Acts.
(2) Subsection (1) does not prevent any person bringing proceedings relating to, or arising from,—
(a) any damage to property; or
(b) any express term of any contract or agreement (other than an accident insurance contract under the Accident Insurance Act 1998); or
(c) the unjustifiable dismissal of any person or any other personal grievance arising out of a contract of service.
(3) …..
(4) Subsection (1) does not prevent any person bringing proceedings under—
(a) Section 50 or s.51 of the Health and Disability Commissioner Act 1994; or
(b) any of sections 92B, 92E, 92R, 122, 122A, 122B, 123,
or 124 of the Human Rights Act 1993.
(5) Subsection (1) does not prevent any person bringing proceedings in any court in New Zealand for damages for personal injury of the kinds described in subsection (1), suffered in New Zealand or elsewhere, if the cause of action is the defendant's liability for damages under the law of New Zealand under any international convention relating to the carriage of passengers.
(6) ….
(7) Nothing in this section is affected by—
(a) the failure or refusal of any person to lodge a claim for personal injury of the kinds described in subsection (1); or
(b) any purported denial or surrender by any person of any rights relating to personal injury of the kinds described in subsection (1); or
(c) the fact that a person who has suffered personal injury of the kinds described in subsection (1) is not entitled to any entitlement under this Act."
A number of points may be noted about the text of the provision at this stage. The statutory bar in s.317(1) operates on its strict wording by prohibiting a person from commencing proceedings for damages arising directly or indirectly out of personal injury in any court in New Zealand and does not expressly extinguish the underlying cause of action (albeit that this may be its effect). By contrast, in the original 1972 Act, the New Zealand Parliament chose to abolish expressly certain causes of action (for loss of services and loss of consortium), and the distinction between that approach of abolishing permanently a cause of action as the original 1972 Act did, and the approach adopted by s. 317(1) is relied on by the Claimants here. In agreement with Professor McLachlan however I do not consider that that distinction takes one very far in these particular circumstances. It is clear that the New Zealand legislature had no intention of abolishing causes of action entirely (for example in negligence) but rather intended to replace the availability of certain civil claims for personal injury with claims for compensation under the statutory Scheme where it applied.
Subject to the qualifications within s.317, the statutory bar operates automatically by force of law and coterminously with cover under the Scheme. In other words, a claimant either has cover for personal injury under the ACA 2001 in which case he or she will be prohibited from pursuing civil claims for damages for personal injury, or if there is no cover under the ACA 2001, the statutory bar will not apply and the claimant will be able to bring civil proceedings outside the scope of the ACA 2001. This is not a question of election as Professor McLachlan explains, since s.317(7) provides that the statutory bar applies irrespective of whether a covered person makes a claim under the Scheme, or has purported to deny his or her rights under the Scheme.
The conclusion that the bar operates coterminously with cover is consistent with the decision in Queenstown Lakes DC v Palmer [1999] 1 NZLR 549 where Henry J described the right to seek damages at common law as having been removed by the legislation, the quid pro quo being the right to compensation under the Scheme. At pg. 556 he said: "it follows from what has been said that the application of the Act and the corresponding scope for common law proceedings automatically adjust as and when the scope of cover provided by the act is extended or contracted. To the extent that the statutory cover is extended, the right to sue at common law is removed; to the extent that the cover is withdrawn or contracted, the right to sue at common law is revived. So it is in this case."
The bar in s.317 (1) does not have to be raised as a defence. It cannot be waived or contracted out of by parties subject to it: see s.299 and 317(7)(b).
Section 317 identifies a number of qualifications to the scope of the bar in s.317(1). Section 317(5) has been described as the only true exception to the application of statutory the bar since a person has both cover under the ACA 2001 and at the same time, a right to bring civil proceedings under this subparagraph. It can be explained as a specific exception by reference to New Zealand's international obligations relating to the carriage of passengers.
There are also express qualifications on the scope of the statutory bar contained in subparagraphs (2) and (4). By contrast, there is nothing in s.317 that addresses the question of where conduct takes place or that provides an express qualification to the application of the bar on that basis. As Mr Goddard accepts, the language of s.317 on its face applies to all claims before a New Zealand court regardless of where a defendant's conduct occurred.
Read literally s.317(1) appears only to apply to courts in New Zealand, and Mr Goddard has concluded that it should and would be read as not applying in an overseas court. He suggests that if the New Zealand Parliament intended the provision to have effect overseas, the choice of language adopted was particularly inept. On this basis, in his opinion it is unnecessary to decide whether the bar in s.317(1) should be characterised as procedural or substantive for private international law purposes. Rather, in his view, however the bar is characterised, as a matter of statutory interpretation, s.317(1) simply does not apply to claims in an overseas court by virtue of the words limiting it to "proceedings in any court in New Zealand". I shall return to this point below.
Section 319 deals with exemplary damages and was introduced following Donselaar v Donselaar [1982] 1 NZLR 289 (CA) in terms as follows:
"319 Exemplary damages
(1) Nothing in this Act, and no rule of law, prevents any person from bringing proceedings in any court in New Zealand for exemplary damages for conduct by the defendant that has resulted in—
(a) personal injury covered by this Act; or
(b) personal injury covered by the former Acts."
Section 320 affords the Corporation a right to be heard in proceedings in which the existence or extent of cover is in issue. It provides:
"320 Corporation to be heard
(1) This section applies to proceedings in which a question arises as to whether or not a person—
(a) has suffered personal injury for which he or she has cover; or
(b) has suffered personal injury covered by the former Acts; or
(c) has died because of personal injury of a kind described in paragraph (a) or paragraph (b).
(2) The court, tribunal, or other body hearing the proceedings may not make a determination unless the Corporation is a party to the proceedings or is given an opportunity to be heard."
Whilst s.320 is obviously a procedural provision, that cannot and does not affect the question whether s.317(1) is procedural or substantive. The same is true of s.321 which reflects the policy of the Scheme to avoid double recovery, but does not reflect on the scope of s.317 (contrary to the arguments advanced by the Claimants). It provides:
"321 Powers of Corporation when person has right to bring proceedings
(1) Subsection (2) applies when—
(a) any entitlement is required to be provided under this Act for personal injury to a person; and
(b) the person has the right to bring proceedings for damages in New Zealand or elsewhere for the personal injury.
(2) When this subsection applies, the Corporation may require a person to do one of the following things, at the person's option and at the Corporation's expense:
(a) to take all reasonable steps to enforce the right; or
(b) to assign the right to the Corporation, and to do all other things necessary to enable the right to be enforced by the Corporation, within a reasonable period.
(3) Subsection (4) applies when—
(a) any entitlement has been or is required to be provided under this Act for personal injury to a person; and
(b) the person has received a sum of money by way of damages, compensation, or settlement of any claim in New Zealand or elsewhere for the personal injury.
(4) When this subsection applies, the Corporation may, as the case requires,—
(a) deduct, from the cost of the entitlement required to be provided to a person, a sum equivalent to the net amount received by way of damages, compensation, or settlement; or
(b) recover from the person, as a debt due, the entitlement provided.
(5) …… "
Section 321 entitles the Corporation to step into the shoes of a covered person, where either the covered person is entitled to bring proceedings in New Zealand or elsewhere in respect of the injury (subsection (2)) or has received a sum by way of damages, compensation or settlement in respect of the injury (subsection (4)). In each case the Corporation is entitled to take the benefit of the injured person's rights or award.
Mr Goddard relies on this provision as a clear indication that the statutory bar in s.317 (1) was not intended to prevent proceedings being brought outside New Zealand in all circumstances. He points to the fact that this section expressly contemplates the possibility that there will be both cover in respect of personal injury under the Scheme and a right to bring proceedings in respect of that personal injury in New Zealand or abroad.
I do not consider that s.321 affords any basis for inferring that Parliament intended the bar to be inapplicable abroad. Section 321 is designed to ensure that the Corporation has the fullest ability possible to recoup a covered person's statutory entitlements and to avoid double recovery. It says nothing about the scope of s.317. Section 321(1) recognises that cover may be provided in circumstances where a foreign court does not regard New Zealand law as applicable to the claim so that the bar does not apply even if characterised as substantive by the foreign court – for example, in a case where a person ordinarily resident in New Zealand has cover for an accident suffered overseas where overseas law applies. Furthermore, s.321 might also apply (whether in New Zealand or abroad) to claims brought under international conventions on the carriage of passengers preserved by s.317(5). There is nothing inconsistent in s.321 recognising that proceedings for personal injury might be brought overseas (or in New Zealand) in circumstances where the statutory bar is not in issue and might result in a recovery and therefore providing for a mechanism to avoid double recovery (s.321(3)). The section as a whole simply ensures that if a covered person is entitled to recover damages wherever that may be and for whatever reason, the Corporation can take the benefit of that recovery: see by way of example of this happening, Schlaadt v Accident Rehabilitation and Compensation Insurance Corp [2000] 2 NZLR 318 (HC).
Moreover, the mere fact that s.317(1) is defined by reference to the New Zealand courts does not mean that the New Zealand legislature intended that foreign courts should not be able to apply it, as Mr Goddard accepted. I cannot see what purpose would have been served in allowing someone with cover under the Scheme in New Zealand, and a technical right to sue abroad (as a result of happenstance) simply to bypass the statutory Scheme. No evidence that this was the intention of the legislature has been produced, and no compelling basis for inferring such an intention on the part of the New Zealand legislature has been advanced. In reaching that conclusion I am supported by the decision in Rimini v Manning Management and Marketing Pty Ltd [2003] 3 NZLR 22 where in analogous circumstances Randerson J held that the statutory purpose of a similar provision was not to restrict the application of the relevant Act to New Zealand courts, it remaining open to the Australian courts to apply it in a case where performance of the contract took place in Australia, and though New Zealand law was the applicable law, the claim otherwise had no connection with New Zealand. Randerson J held that where a statute does not expressly or by clear implication exclude its application by foreign courts, it must be open to foreign courts to apply it.
In my judgment the language of s.317(1) in this regard is best explained, as Mr Dougherty submitted, on the basis that the New Zealand legislature did not regard itself as competent to give directions to foreign courts. However neither expressly nor by clear implication has the ACA 2001 excluded the application of the statutory bar by foreign courts, who may accordingly apply it.
Interpretation of effect of s.317(1) by New Zealand courts
In addition to Queenstown Lakes DC (referred to above), and Daniels v Thompson [1998] 3 NZLR 22 (where the Court of Appeal referred to the accident compensation legislation as having removed liability to compensate for causing personal injury), both experts refer to two particular decisions of the New Zealand courts interpreting the effect of the statutory bar in s.317 and its predecessor provisions, and each side submits that the relevant decisions support their arguments.
The two decisions are Donselaar (referred to above) and Couch v Attorney General (No.2) [2010] 3 NZLR 149 (SC). I deal with each in turn having summarised briefly what Mr Goddard had to say about them, and Professor McLachan's response. Mr Goddard states at paragraph 51 of his report that the New Zealand courts have held that the statutory bar does not extinguish the underlying cause of action in tort and that this interpretation was central to the reasoning of the Court of Appeal in Donselaar. In this regard, Professor McLachlan fundamentally disagrees. In the body of his report Mr Goddard refers only to the judgment of Richardson J in Donselaar who said that the statutory bar "is concerned with remedies and leaves rights of action intact".
In Donselaar, there were two other judgments to different effect on this issue, albeit agreeing in the result, and I find it surprising that no reference is made by Mr Goddard to these judgments. In the view of Mr Goddard, the decision in Donselaar reflects a concern on the part of the New Zealand courts that the statutory bar be given effect so far as necessary to preserve the integrity of the ACA 2001 but no further; the bar should not be read as curtailing rights of personal injury victims to a greater extent than necessary to give effect to the policy of the Scheme. Although Mr Goddard refers in his report to Couch in a footnote as approving an aspect of the reasoning in Donselaar, there is no further reference to it. Again, I find this surprising since Couch is a decision of the Supreme Court and as I shall explain, it directly addressed the question whether the underlying cause of action was itself affected by the statutory bar. Professor McLachlan regards Couch as conclusively supporting his approach to the character of the statutory bar in s.317(1) ACA 2001.
It is common ground that the question of the availability of exemplary damages in light of the statutory bar in s.317(1) (or its predecessor sections) was a controversial one, with decisions going both ways in the New Zealand courts before the decision of the Court of Appeal in Donselaar, some 10 years after the Act was introduced. The decision in Donselaar was itself controversial. It arose out of a dispute between two brothers where a trespass involving assault and battery occurred. Again, it is common ground that the cause of action relied on was complete without damage because the torts are actionable per se. There were two questions for the court on an application to strike out the claim in assault or battery as disclosing no cause of action. First, whether actions for exemplary damages for assault or battery could still be brought in New Zealand notwithstanding the provisions of the 1972 Act and secondly, the scope of the predecessor section to s.317(1). The Court of Appeal concluded that there was no basis for a claim for exemplary damages in Donselaar so that the remainder of the judgments are strictly obiter. However each member of the court concluded that the statutory bar did not apply to exemplary damages, arising as they did not out of any injury but out of the outrageous manner in which the defendant committed the tort, and in doing so made observations that have been referred to and relied on by the parties albeit to very different effect.
The first judgment in Donselaar is given by Cooke J who said at pg 107:
"All in all, in a situation where the right course for this court is far from self-evident I think that we should try to meet a problem occasioned by the Accident Compensation Act by consciously moulding the law of damages to meet social needs. The only feasible way of doing so, without intruding into the field of compensation which the Act has taken over, appears to be to allow actions for damages for purely punitive purposes; and to accept that as compensatory damages (aggravated or otherwise) can no longer be awarded, exemplary damages will have to take over part of the latter's former role.…."
Somers J adopted a similar approach to that of Cooke J stating at pg 116 that the
"substratum of compensatory damages has disappeared and with it all practical possibility of taking account of their award in estimating whether and to what extent there should be any addition by way of exemplary damages. A new approach is necessary. …. "
There is no suggestion in his judgment that compensatory damages remain available but in the background to be used in assessing an award of exemplary damages. Indeed if the bar was merely a bar to recovery as Mr Goddard suggests, then there should have been no difficulty in assessing the compensatory element (albeit that it could not have been recovered) and adding exemplary damages on top to reflect the punitive element that could be recovered.
If anything, it seems to me that these two judgments are consistent with all heads of compensatory damages (in other words economic and non-economic heads of damage) having been removed or having disappeared as a result of the statutory bar.
Richardson J took a significantly different approach. As Mr Goddard said in his report, Richardson J observed that the function of the bar was limited, its sole concern being to prohibit suits for damages in certain cases being "concerned with remedies and leaves rights of action intact." (at pg 109). This is interpreted by Mr Goddard as the judge drawing a careful distinction between damage and damages in the context of the bar on proceedings. I disagree. Donselaar was not concerned with that question since the tort at issue was actionable per se without proof of any damage, and he was not therefore dealing with actionability. It seems to me that Richardson J's concern is about how to assess exemplary damages where there are no compensatory damages and in the context of an actionable tort of battery or assault. Richardson J addresses the question whether it is possible to award exemplary damages without a substratum of compensatory damages; in other words, on a notional basis. But he does not suggest that those damages had in fact been suffered or that they would be actionable but for the bar. In any event, his observations received no express support from either of the other two members of the Court. They do not form part of the ratio of the decision.
In any event, the decision in Donselaar was overtaken by Couch v AG in the Supreme Court. This was also concerned with an application to strike out a claim as disclosing no reasonable cause of action. Ms Couch brought proceedings alleging negligence and claiming exemplary damages against the Attorney General on behalf of the Department of Corrections when she was severely injured by a prisoner released on parole. Her claim was based on tortious negligence and two questions arose. Firstly, whether the "damages" referred to in s.317(1) included exemplary damages. Secondly whether, since no claim could be brought for compensatory damages arising out of personal injury covered by the Act, exemplary damages could nevertheless be awarded on a stand-alone basis. The Attorney General argued that without actionable compensatory damages the tort of negligence was incomplete as damage is an essential ingredient and there was therefore no tort for which exemplary damages could be awarded. Accordingly the issue that lies at the heart of this dispute was raised squarely for decision by the New Zealand Supreme Court.
The Supreme Court held unanimously that the statutory bar on actions arising out of personal injury applies only to compensatory damages and did not bar an action for exemplary damages, nor was an action for exemplary damages barred by the fact that the plaintiff could not obtain compensatory damages. Although doubt was expressed about the decision in Donselaar described by Tipping J as a "debatable conclusion at the time", he held that too much water had since gone under the bridge to contemplate taking a different view and that since the decision in that case the New Zealand Parliament had had several opportunities to include exemplary damages expressly within the statutory bar but had chosen not to do so.
Importantly, at [89] Tipping J (with whom Elias CJ at [7], Blanchard J at [71] and Wilson J at [248] agreed) having identified the critical question at [85] held:
"Section 319 also has relevance to the second aspect of this first issue. Parliament has expressly provided that exemplary damages may be awarded despite the Courts inability to award compensatory damages. It is therefore no bar to a claim for exemplary damages for personal injury that no compensatory damages may be awarded. The ordinary need for there to be damage to complete the tort of negligence must for this purpose be satisfied by there being a case for the award of exemplary damages. The consequence is that there is no actionable tort of negligence for causing personal injury in New Zealand unless the case justifies exemplary damages."
In my judgment, the natural meaning of the last two sentences read together is that the tort of negligence for personal injury heads of damage in New Zealand is no longer available (or to put it another way, has been removed, replaced or extinguished where there is cover) except where the claim is for exemplary damages. In effect a stand-alone tort was created and thus like Cooke J in Donselaar, the Supreme Court fashioned the law of damages creating a special cause of action in personal injury cases where the only form of actionable damage is exemplary damage or damages.
I do not accept that this interpretation leads to absurd results as Mr Preston submitted. In order to advance a claim for exemplary damages a claimant would need to establish a duty of care owed to the individual, together with breach of that duty. The absence of injury beyond exemplary damage is not surprising in circumstances where exemplary damages are available in New Zealand law for a touch or a push, both of which are actionable per se. Nor do I accept the Claimants' case that the last sentence of [89] is merely stating that there is no actionable claim for compensatory damages in a remedies inclusive sense, so that the better view of the ratio of Couch is that the tort of negligent infliction of personal injury remains unchanged and intact, but only the availability of remedies for that tort is affected, compensatory damages not being available but exemplary damages being so available. In my judgment the Supreme Court redefined the nature of the loss or head of damage that would have to be established as a constituent element of the tort, and was not merely dealing with enforcement or recoverability of certain remedies.
Significant reliance was placed by Mr Goddard and Mr Preston on the judgment of McGrath J at in Couch [202] and [203]. I do not find these passages easy. In so far as McGrath J was suggesting that it was necessary to prove compensatory loss before claiming exemplary damages (thereby suggesting that the right to compensatory damages remained available even where the bar applied) he was clearly in the minority. However I have come to the conclusion that this is not what these paragraphs mean in any event. It seems to me most likely that he was merely saying that if what Tipping J said about the case for exemplary damages itself being sufficient damage is not correct, then the approach identified in Donselaar by Richardson J was available. In other words, he accepted the primary reasoning of Tipping J, but by way of alternative analysis, agreed that the notional exercise of assessing compensatory damages for the purposes of an assessment of exemplary damages, could be undertaken despite the fact that they could not be recovered.
Other authority
Although not binding, the Defendant also relies (as highly persuasive authority) on the characterisation of s.317(1) as a substantive provision by the Australian appellate courts when applying the ACA 2001 and its predecessor Acts at a time when Australian and English law on the distinction between substance and procedure (as set out in Stevens v Head (1993) at 453, and followed in Harding) were materially identical. Of most significance in my view, is a decision of the Court of Appeal in James Hardie and Company Pty Ltd v Hall (1998) 42 NSWLR 554 where a New Zealand domiciled claimant diagnosed with mesothelioma, with cover under the Scheme, sought to recover damages, not from his New Zealand employer, but in New South Wales from two New South Wales companies responsible for supplying and exporting the asbestos. Shellar JA (with whom the other members of the Court agreed) considered s.17 of the Accident Rehabilitation and Compensation Act 1992 (a predecessor provision to s.317(1) ) to be a substantive provision although read literally it merely barred an action to enforce a right to damages. He held (applying Stevens v Head) that the New Zealand accident compensation scheme is a "comprehensive system of exclusive compensation, replacing tort recovery" with statutory compensation. The relevant sections substituted cover under the Act for the right to recover common law damages so that in effect the Scheme extinguished the common law right to recover damages. Accordingly he held that the relevant provision (s.17):
"must be read as extinguishing any cause of action for damages arising directly or indirectly out of personal injury caused and arising in the manner therein described. While the language of the section in form bars an action to enforce the right to damages, its substantial effect, read in the context of the Act as a whole, is to substitute cover under the Act for the right to recover common law damages. It is a substantive law. … The section extinguished the plaintiff's common law right to recover damages for his injury. "
Although that judgment was followed by Spigelman CJ in Amaca Pty Ltd v Frost (2006) 67 NSWLR 635 at [65] I accept Mr Preston's submission that this decision was reached after the "no advantage principle" had been adopted by the Australian courts and is therefore of limited assistance in this respect.
Mr Goddard suggests that the Court of Appeal's decision in James Hardie was based on an incomplete analysis of the New Zealand legislation, not having been referred to the precursor to s.321 or to Donselaar (see paragraph 104 of his report). So far as the first point is concerned, I do not regard s.321 as shedding any light on the character of the bar in s.317 as I have already indicated. As to the latter, he is wrong: Donselaar was cited in argument and submissions – see pg. 556 of the report. More fundamentally, the decision is challenged on behalf of the Claimants on the basis that the legislation does not nullify or extinguish causes of action save where this is expressly made clear (for example in s.5(2) Accident Compensation Act 1972) but is concerned with remedies (see reference to substitution of the "right to recover common law damages"), leaving rights of action intact. The distinction sought to be drawn between damages and damage in this context appears to me to be semantic: the rights referred to by Shellar JA as having been extinguished are in effect rights to recover all heads of loss encompassed within the term "damages". Accordingly I am not persuaded by Mr Goddard's conclusion that this reasoning is unlikely to be followed by the New Zealand courts.
I was also referred to academic commentary in New Zealand on the effect of the statutory bar. Both sides referred to Tobin and Shoeman, "The New Zealand Accident Compensation Scheme: the Statutory Bar and the Conflict of Laws" (2005) Am J Comp L 493. At paragraph 105 of his report, Mr Goddard refers to an examination at pg.504 of the article of statements in a US case in 1982 Bennett v Enstrom (679 F 2d 630) to the effect that there is "simply no longer, under New Zealand substantive law, a common law tort action for persons covered". The authors describe this and like statements as "too wide" and he expresses agreement with those observations. However the criticism made by the authors is explained by reference to the continuing availability of a stand-alone tort action for personal injury for exemplary damages meaning it remains actionable but for that purpose alone. The ultimate conclusion reached by the authors supports the Defendant's contentions: namely that the statutory bar is properly to be regarded as having substantive effect and as having destroyed substantive rights. The authors state expressly that by denying recovery for a particular head of damage the bar is substantive so that although tort actions for personal injury have not been abolished because exemplary damages can be recovered, "compensatory damages, as a particular head of damage, cannot be recovered."
First issue: The proper characterisation of the statutory bar in section 317(1)
Against that background I turn to the proper characterisation of the statutory bar in the context of the purpose and objectives of the comprehensive no fault compensation scheme in New Zealand, on the premise that this court has already held that New Zealand is the applicable law.
Whilst the dividing line between substance and procedure can be clearly drawn and a bright line identified in the case of certain rules or statutory provisions, I do not consider that it is always an easy line to draw. In particular where common law rules on the availability of certain heads of damage or damages are concerned, the line between substance and procedure can be blurred because such rules can be seen as affecting both rights (regarded as substantive) and remedies (regarded as procedural).
Read literally the language of s.317(1) bars proceedings to enforce personal injury claims, but the language is not determinative and may be an uncertain guide. Subject to the exemplary damages exception, the language used to describe the effect of the statutory bar in the cases (and the academic material) to which I have referred above, is overwhelmingly consistent with the removal of civil liability for damages for personal injury within the scope of cover, and with that liability having disappeared and been replaced by cover under the Scheme. This is consistent with the concerns and recommendations in the Woodhouse Report which identified problems caused by common law personal injury litigation (both in terms of their negative effect on rehabilitation and uneven and capricious results) and recommended the abolition of common law rights in respect of personal injuries and their substitution for cover under the Scheme.
In my judgment, on its true construction, having regard to the purpose and objectives of the Scheme, the substantive effect of the statutory bar is to remove or render unavailable the right to recover common law (compensatory) damages for personal injuries, the phrase "compensatory damages" being shorthand for the heads of loss comprised by all non-economic and economic heads of loss (or damage) in a personal injury claim, but excluding exemplary damages. A claim for any such heads of loss no longer remains available because the basis for and scope of liability has been replaced by cover under the ACA 200. This is a matter of substantive law that determines for what there is liability. This conclusion that the statutory bar operates substantively is supported by the fact that it cannot be waived and operates automatically; that parties cannot contract out of its effect; and that courts and practitioners in New Zealand treat the statutory bar as a basis for striking out a claim in appropriate cases, as disclosing no reasonable cause of action.
Mr Preston placed significant reliance on a number of passages in Professor McLachlan's evidence where he suggested that Professor McLachlan accepted that the cause of action continues to exist but is not enforceable by way of a claim for compensatory damages. I do not accept this characterisation of Professor McLachlan's evidence. Both in his report and his evidence he states that there is no longer any "actionable claim for compensatory damages" and that the effect of the statutory bar has been to remove rights to compensatory damages where there is cover. A fair reading of his evidence shows that he treats the phrase "compensatory damages" as necessarily including economic and non-economic heads of damage or loss. In his expert opinion, the ACA 2001 takes away the whole cause of action for damages for personal injury (save in the special case of exemplary damages) and replaces it with cover under the Scheme.
In my judgment, whether viewed as extinguishing, abolishing, rendering not available or non-actionable, the effect of the statutory bar is that no heads of loss or kinds of damage for negligently inflicted or other personal injury remain where there is cover, subject to the exception for exemplary damages. This is not a rule that deals merely with remedy. The liability here (and therefore what is actionable) is for compensatory damages for personal injury. That is a substantive right, not merely a remedy. This is the kind of damage for which there is no longer any liability where there is cover, and rights of action are accordingly affected.
The fact that a cause of action for exemplary damages remains is not inconsistent with this conclusion. This remaining cause of action is a stand-alone cause of action for exemplary damages and does not entail the continued existence of an underlying cause of action for negligently inflicted (or other) personal injury compensatory damages. A defendant in such a case is only liable for exemplary damages, the effect of s.317(1) being to remove any liability such a defendant might otherwise have had for compensatory damages and the heads of damage encompassed within that phrase.
A similar point may be made in relation to the existence of other potential remedies, such as a declaration or an injunction, relied on by the Claimants. One cannot identify the existence of a theoretical remedy and extrapolate from that the continuing existence of a right to sue for personal injury. The mere fact that a declaration or an injunction might in future be awarded tells one nothing about the underlying cause of action or liability that might give rise to such a remedy. There has been no case yet (in 40 years since the Scheme's inception) where such a remedy has been granted – in Re Chase [1989] 1 NZLR 325, declarations were sought but not on the basis of personal injury claims, and none was granted in any event. Even if an injunction or declaration were to be granted, the underlying basis or cause of action supporting such relief would have to be identified, and it cannot be assumed that such a cause of action would involve personal injury. In any event, if a court decides that injunctive or declaratory relief may be available in a case that would (absent the ACA 2001) be a cause of action for accidental personal injury that would not lead to the conclusion that such a cause of action or liability has been preserved. Just as in Couch where the law was moulded or re-fashioned to support a stand-alone claim for exemplary damages, the same may be possible in a claim for injunctive or declaratory relief. The theoretical availability of these remedies accordingly, provides no support in my judgment for the contention that substantive rights of action for personal injury remain intact.
The Claimants point to the similarity of the language used in English limitation provisions (typically, "an action founded on… shall not be brought…") and other statutory provisions that bar rights of access to the courts (for example, s.34 Civil Jurisdiction and Judgments Act 1982, "no proceedings may be brought…") but leave substantive causes of action intact, and have been held to be procedural in nature, and contend that the statutory bar operates procedurally by analogy. I do not accept this analogy. There is a distinction between a statute of limitation which merely bars access to the courts for enforcement of the claim and a statute that removes or renders altogether unavailable a cause of action or head of loss. The former is obviously procedural, while the latter substantive. In the case of a limitation provision it is uncontroversial that the underlying cause of action remains and only the ability to bring a claim based on that underlying cause of action is removed by the expiry of the limitation period if it is relied on. The fact that the limitation period can be waived is itself confirmation that the underlying cause of action remains. I agree with Mr Dougherty that a limitation provision operates as an elected statutory defence that does not destroy the underlying right. Similar points can be made in relation to the other statutory provisions barring the bringing of proceedings relied on by the Claimants.
The fact that substantive rights are available to be revived if and when the scope of the statutory bar is altered is also relied on by the Claimants as consistent with the statutory bar being procedural, leaving substantive rights intact. Mr Preston contends that it is incompatible with the extinction of substantive rights as in those circumstances there would be nothing left to revive. Again, I do not agree. In the context of a unique scheme where the application of the statutory bar and the corresponding scope for common law proceedings automatically adjusts as and when the scope of cover extends or contracts, the language of revival is specific and says nothing about the nature of the statutory bar itself. The question of characterisation is to be answered in light of the existence of the statutory bar and having regard to its nature and effect; and not by looking at the position when the bar is adjusted or removed.
Second issue: Conduct outside New Zealand
On the basis that s.317(1) is a substantive provision, the next question is whether there is an additional requirement under New Zealand law before the statutory bar applies to preclude a claim for compensatory damages. On this question Professor McLachlan's position is that if there is cover under the ACA 2001, s. 317(1) applies without more and there is no basis for importing any additional requirements.
Mr Goddard takes a different view. He considers that in addition to cover under the Scheme, it is necessary to establish that the relevant "conduct" occurred in New Zealand before the statutory bar has application (see paragraphs 17 to 23 and 70 to 78 of his report) and this is how the New Zealand courts would interpret s.317(1). In other words, s.317(1) does not apply to claims relating to conduct outside New Zealand as a matter of interpretation.
In Mr Goddard's opinion any other interpretation would restrict claimants' rights of access to the courts to a greater extent than necessary to ensure the integrity of the Scheme. He considers that where a potential defendant engages in conduct in New Zealand, that person can reasonably expect that they will not be exposed to personal injury claims in respect of that conduct and can reasonably proceed on the basis that they do not need to insure against liability for personal injury claims in respect of that conduct. Where the person's conduct in New Zealand results in liability to pay levies to the scheme or general taxes, that person will have contributed to the costs of the scheme. Accordingly, they can reasonably expect not to have to pay damages or insurance premiums in those circumstances. In Mr Goddard's opinion the same cannot be said of a person engaging in conduct outside New Zealand. Such a person does not have a reasonable expectation that they will be protected from liability by the Scheme and does not have a reasonable expectation that there is no need to insure in respect of such liability. Such a person makes no contribution to the costs of the Scheme and if protected from liability in respect of conduct outside New Zealand despite not making any contribution whether directly or indirectly, would receive a windfall benefit. Moreover it would deny the victim the ability to recover losses caused by the overseas person's conduct, an ability expressly contemplated by s.321. Although Mr Goddard accepts that the language of s.317(1) on its face applies to all claims regardless of where a potential defendant's conduct occurred and accepts that some judges may be reluctant to read the provision down in the manner he has suggested, he concludes on balance that the likely approach of both first instance and appellate courts would be to read down s.317(1) in this way so that it does not apply to claims relating to conduct outside New Zealand.
I do not accept this argument. Quite apart from the fact that there is neither appellate or other authority for it, nor any academic support for it and it is rejected by Professor McLachlan, the ACA 2001 does not depend on the existence of a defendant or some third-party responsible for the injury, so that any focus on a defendant's conduct (or a defendant's reasonable expectation of being protected from liability) is irrelevant and inconsistent with the Scheme's purposes. It is the injury rather than its cause or the conduct that is in issue and that gives rise to rights to compensation.
The ACA 2001 carefully defines the scope of cover, addressing expressly its extraterritorial effect. It provides cover for those suffering personal injuries in New Zealand irrespective of the location of the conduct said to have caused that injury, and cover for New Zealand residents abroad. In both cases the focus is on the person injured and the location of the injury rather than on the conduct of a third party which is irrelevant to the scope of cover. Further, on the face of its terms, s.317(5) proceeds on the basis that s.317(1) does apply in relation to conduct overseas because if it did not there would have been no reason to refer to claims where the injury was overseas. Section 317 itself contains exceptions and qualifications but none relate to the conduct of a potential defendant. This would be a major exception from its scope and given that the Scheme has been amended on a number of occasions since its inception, it is significant that there has never been any amendment in this regard.
Moreover, there is no basis in the text or purpose of the statute for inferring that the New Zealand legislature intended the application of the statutory bar to depend on the "reasonable expectation" of a potential defendant in relation to protection from liability. The purpose of the statutory bar is to protect the integrity of the comprehensive no-fault compensation scheme by ensuring that covered persons are restricted to their entitlements under the ACA 2001. It is difficult to see any place for a concept of reasonable expectation in the context of this Scheme. In any event, it seems to me that the only reasonable expectation a person manufacturing and exporting goods to New Zealand from abroad can have is to expect to take the law as he or she finds it.
Conclusion
For the reasons given above, on a proper construction in light of its purpose and context, the statutory bar in s.317(1) has substantive effect. Its application is not limited to the courts of New Zealand. There is no additional "conduct" or other requirement under New Zealand law, beyond cover under the ACA 2001 before the statutory bar in s.317(1) applies.
The result is that the three Claimants who are covered under the ACA 2001 have no right to bring civil proceedings in England for compensatory damages for personal injury by reason of the statutory bar in s.317(1).
My answer to the question set by the preliminary issue is accordingly as follows: the claims of the New Zealand Sample Claimants are precluded by s.317(1) ACA 2001. |
Mr Justice Jeremy Baker:
Two of the mosques currently serving the Muslim community in Newport, Gwent, are known as the Al-Noor Mosque and the Jamia Mosque. The Al-Noor Mosque was the first mosque to be established in Newport in the early 1970s and its premises are in Harrow Road. By the early 1980s the Muslim population in Newport had grown to the extent that another mosque was required and the Jamia Mosque was established which has premises in Commercial Road.
For a number of years the mosques have been jointly managed by various individuals, including Abdul Rehman Mujahid ("the 2nd claimant"). These individuals have been selected rather than elected to their management roles, and more recently there has been a campaign by certain members of the congregations of these mosques for there to be democratic elections to these posts, together with more transparency and accountability in their management.
The first four defendants are all supporters of this campaign, which has styled itself as "The Sunni Muslim Welfare Association of Newport, S. Wales" ("the association"), and Manzoor Ahmad, ("the 1st defendant"), is the chairman of its interim committee.
On 15th September 2011 a meeting took place between representatives of the opposing sides in the dispute in order to see whether their differences could be resolved by way of mediation. The individual selected by the parties to be the mediator was Mohammed Asghar, ("the 1st claimant"), who is a member of the Welsh Assembly. The mediation itself appears to have been successful, in that both sides were content with its outcome. Unfortunately however, a dispute has arisen in relation to its implementation, which remains unresolved.
In early 2012 a number of documents were published which the 1st and 2nd claimants contend are defamatory of them. They allege that the defendants are responsible for these publications; a matter which is denied by the defendants. As a result the claimants have brought an action for defamation against the defendants, which is opposed by each of them.
History of the mosques
The original mosque in Newport comprised a converted garage at the rear of two properties in Harrow Road. It seems likely that the funding for the mosque came from donations within the local Muslim community, and by the early 1970s its management had become the responsibility of a small group of volunteers.
In 1976 the 2nd claimant entered the United Kingdom from Pakistan, settled in Newport and soon became one of those responsible for the management of the mosque.
In about 1979 the original mosque became known as the Al-Noor Mosque and the growing local Muslim community decided that there was a need to provide a second mosque in the Pill area, which was to be known as the Jamia Hanfia Rizvia Mosque. A site for the new mosque at 183 – 186, Commercial Road, Newport, was chosen and subsequently purchased.
The establishment of the new mosque appears to have caused some controversy within certain sections of the local Muslim community, and two bodies were formed. One was the trustees, which would hold the ownership of the new mosque on behalf of the local community, whilst the other was the management committee, which was at that stage responsible for the initial building of the new mosque and the raising of funds for that purpose.
The evidence of Sultan Ahmed suggests that the purchase price for the site of the new mosque was £8,000.00, which was raised from donations by a number of individuals, some of whom, including the 2nd claimant, had been responsible for establishing an organisation known as Anjuman Raza-E-Mustafa; a recently established organisation which he understood was to benefit the local Muslim community by organising its religious and educational services. The 2nd claimant suggests that this organisation was wholly responsible for funding the purchase of the site.
However, the contemporary documentary evidence suggests that the site was purchased in 1982 at a purchase price of £4,500.00, and its ownership was to be held by the trustees of a charity known as the Jamia Hanfia Rizvia Mosque. These being seven named individuals, most of whom do not appear to have contributed to the initial purchase price of the site. In his evidence the 2nd defendant states that he is currently one of the trustees of the mosque.
The subsequent funding of the building of the new mosque came from a variety of sources, including the Saudi Embassy, the Pakistan High Commission and the Local Authority, together with contributions from the local and other Muslim communities.
In due course a written constitution was established which provided for the governance of the new mosque and which, inter alia, required periodic elections to the management committee, which was also to be responsible for the day to day operation of the mosque. Although there is contemporaneous documentary evidence that in about 1994 an election took place, for reasons which are not entirely clear, there is no evidence that more recent elections have been held, such that the membership of the management committee has been by way of selection rather than election.
The building of the new mosque was not completed until about 2009/10, and in the intervening period there have been a number of disputes concerning the management of the two mosques. Contemporary documentation suggests that in 2002 there was a dispute about the holding of elections, and in 2007 there was a dispute between two committees which are described as the "Action" Committee and the "Unelected" Committee respectively; a member of the latter being the 2nd claimant. It is unclear as to whether, and if so how, these earlier disputes were resolved.
History of the present dispute
More recently, in 2011, a number of documents have come into the possession of certain members of the local Muslim community, including some of the defendants. These documents include: a transfer of whole of registered title from the Land Registry, showing that as from 31st January 2003 the 2nd claimant and two others became the registered proprietors of the Al-Noor mosque as trustees for the benefit of the Newport mosque; an official copy of register of title from the Land Registry showing that as from 30th November 2009 the 2nd claimant and four others became the registered proprietors of land to the east side of Mountjoy Road, situated immediately behind the Jamia Hanfia Rizvia mosque, as trustees of the charity known as the Jamia Hanfia Rizvia; a deed of declaration of charitable trust in relation to the "Anjuma Raza-E-Mustafa Trust UK" dated 1st December 2010, whereby the 2nd claimant and 4 others became its trustees. The trust is described as running the Al-Noor mosque; a deed of declaration of charitable trust in relation to the "Jamia Hanfia Rizvia Mosque Trust UK" dated 1st December 2010, whereby the 2nd claimant and 4 others became its trustees.
It is the contention of the first four defendants that the discovery of these documents caused their pre-existing concerns about the lack of democracy and transparency in relation to the governance of both of the mosques to be raised, to the extent that they became concerned that the 2nd claimant was seeking to personally benefit from the manner in which the mosques' assets were held by him and others.
As a result of these concerns, on 15th August 2011, the 1st, 3rd and 4th defendants, together with others from the mosques' congregations, sought some initial advice from charity lawyers, Geldards LLP.
Later that day a meeting took place at the Jamia mosque when around 80 – 100 individuals were in attendance. It would appear that despite the presence of the 2nd claimant, matters were not resolved. Therefore once he had left the meeting those in attendance decided that an interim committee should be formed to govern the mosques until elections could be organised for the selection of a management committee in accordance with the original written constitution. The 1st defendant was chosen as the chairman of the interim committee and the association comprised its supporters.
Thereafter a number of meetings took place, despite which the issues between the parties remained unresolved. Some of the concerns and requests of the association being encapsulated in a number of documents provided by the association to the 2nd claimant.
It was against this background that it was decided to submit the parties' differences to mediation and the 1st claimant, as a well known public figure and member of the Welsh Assembly, was selected to be the mediator. The mediation took place on 15th September 2011 and a number of persons were in attendance, including the 1st, 2nd and 3rd defendants and the 2nd claimant. At the conclusion of the mediation both sides of the dispute suggest that it had been a success, with an amicable agreement having been reached as to the future ownership and governance of the mosques. Equally however, each side contend that the other was responsible for the breakdown in the implementation of that agreement, which it contends is the reason for the lack of resolution of those issues. Although it is apparent how the 2nd defendant viewed the breakdown of the mediation from his letter to the 1st claimant dated 10th October 2011, the details of the views of the claimants have remained unclear.
Thereafter there was a period of quiescence, which may reflect such efforts as were being made by the parties to implement the terms of the mediated agreement. However by December 2011 matters were reaching a head, and it is alleged by the defendants that two events took place which prompted the 1st defendant on behalf of the association's interim committee to apply to the Newport County Court for what was described as an "anti social behaviour order injunction" against both the 1st and 2nd claimants. Both of the events are alleged to have taken place at the Jamia Mosque: the first involving the 1st claimant on 9th December 2011; and the second involving the 2nd claimant on the 16th December 2011. It is alleged that the former comprised the 1st claimant providing inaccurate information during the course of a speech which could have caused sectional violence within the Muslim congregation. It is alleged that the latter comprised the 2nd claimant disrupting a meeting being addressed by the 1st defendant, by snatching his microphone and thereafter removing a mobile phone from a member of the congregation.
The written application for the injunction was dated 18th December 2011 and was supported by witness statements made by the 1st and 2nd defendants. The hearing of the application initially took place on 20th December 2011 when the 4th defendant conducted the hearing on behalf of the association's interim committee. There was no attendance by either of the claimants, although it was recorded in the ensuing order that the application and witness statements had been provided to the claimants on the previous day. The order made by the court was to the effect that the application was adjourned until 22nd December 2011, but that in the interim both of the claimants were restrained from interfering with the peaceful offering of prayers at either of the mosques.
Once in possession of the order a number of people, including the 1st and 4th defendants, visited the offices of the Western Mail newspaper and provided a copy of it to its chief reporter, Martin Shipton. As a result of which on 22nd December 2011 the newspaper printed an article about the matter, with the headline, "Judge to rule on mosque ban on Tory AM."
On 20th December 2011 the 1st defendant wrote to both of the claimants informing them of the court order and the date of the adjourned hearing. This letter suggested that the original application had been provided to the claimants on 16th December 2011. Although I note that a letter was sent by the 1st defendant to the 1st claimant dated 16th December 2011, it made no mention of any application for an injunction.
The adjourned hearing took place on 22nd December 2011. By then, a number of other witness statements had been provided on behalf of the association, including those from the 3rd and 4th defendants. The parties compromised the adjourned application on a basis which appears to have involved the cessation of the interim injunction, the withdrawal of the application, the provision of mutual undertakings on behalf of the association and the 2nd claimant not to interfere with the conduct of religious worship in the mosques and to refrain from discussing the dispute concerning their ownership and management in the mosques.
On 16th December 2011, the 1st defendant on behalf of himself and the four other members of the association's interim committee, issued a notice to the congregations of the two mosques to the effect that the interim committee would be assuming responsibility for the welfare of the two mosques in place of the 2nd claimant and Arshad Rahman, who were the chairman and secretary of both the Anjuma Raza-E-Mustafa Trust UK and the Jamia Hanfia Rizvia Mosque Trust UK. The notice also informed the congregations of the intention of the interim committee to hold elections within the next 60 days for the positions of trustees and members of the management committee of the two mosques.
Thereafter a written notice of a meeting was issued by the 1st defendant, as chairman of the association's interim committee, which was placed in the mosques and a number of other locations in Newport.
On 8th January 2012 the meeting took place at the Newport Leisure Centre with those sitting on the platform, with the exception of the 3rd defendant and one other, compromising members of the association's interim committee. There are varying estimates of the number of those who were present in the audience ranging between 50 and 200 individuals. It is accepted that the 4th defendant was present in the audience and it appears that the 5th defendant was also present.
At the commencement of the meeting the 3rd defendant conducted prayers and made some introductions. Thereafter the 1st defendant made an oral presentation to the audience supplemented by reference to documents which were electronically screened. The 1st defendant focussed on the issues of apparent concern relating to the ownership of the two mosques. He described the history of the two mosques and the recent discovery of the documents concerning the individuals in whose names their ownership subsists, together with the establishment of the related charitable trusts. He mentioned the lack of accountability presently being provided in regard to the management of the mosques and stated the interim committee's intention to be caretakers until elections to the positions of trustees and membership of the management committee could take place, which would thereafter provide transparent and accountable ownership and governance of the mosques.
At the meeting, copies of a number of documents were available for members of the audience. Two of these documents are uncontroversial, namely an application form to join the association, and a petition expressing its concerns. However, in addition to these documents, copies of a document headed "Jamia & Al-Noor Mosques Newport Update" ("the update") appear to have been placed on the chairs provided for the audience prior to the commencement of the meeting. The update contains much of what the 1st defendant mentioned in his oral presentation to the meeting, and in addition the reasons why injunctive proceedings were taken against the 1st and 2nd claimants. The update is the first of the documents which form the basis of the defamation claim by the claimants against the defendants, who all deny being responsible for its publication.
On 18th January 2012 an article was published in an Urdu language newspaper called "Nawa-i-Jang". This is a newspaper which is not only provided in hard copy, but is also published on its website and is therefore available around the world. Indeed it claims to have the largest Urdu readership in the United Kingdom. The article repeated much of the substance of the matters contained in the update, but also alleged fraudulent conduct by each of the claimants in other contexts. As a result the claimants issued proceedings for defamation in the High Court under claim number 2CF93205, against both the proprietor of the newspaper, Nawaijang UK Limited, and two of those alleged to be responsible for its editorial, Muhammad Asif Saleem and Nadia Tuffail. In the course of the litigation the court struck out the parties' defences for non-compliance with an order to amend in accordance with the rules, and entered judgement for the 1st and 2nd claimants. Subsequently, in a judgment handed down on 9th January 2014, His Honour Judge Milwyn Jarman QC awarded each of the claimants damages in the sum of £45,000.00.
Later on in January 2012, the 1st, 3rd and 4th defendants went to the police and spoke with Superintendent Johnson about their concerns in relation to the ownership of the two mosques. It is alleged by the claimants that the officer was provided with a bundle of documents by the defendants who were present at the meeting.
On 26th January 2012, a meeting took place with Andrew Davies AM, the leader of the Conservative group in the Welsh Assembly. There were a number of persons present including the 1st, 3rd and 4th defendants. Initially the 1st defendant spoke at the meeting until the 4th defendant arrived, who thereafter took over the conduct of the meeting. It is alleged by the claimants that during the course of this meeting the 4th defendant provided Mr Davies with a dossier of documents ("the dossier") which he retained and subsequently provided to the 1st claimant.
The claimants allege that on 10th February 2012 they subsequently spoke with a police officer known as Mike Davies about their concerns in relation to the article in the Nawa-i-Jang newspaper, and he showed them the bundle of documents which had been provided to Superintendent Johnson, which the 1st claimant recognised as containing copies of the same documents which had been provided in the dossier to Andrew Davies.
The contents of the dossier are the second set of documents which form the basis of the defamation claim by the claimants against the defendants, who deny being responsible for their publication. The documents contained in the dossier include not only the original article in the Nawa-i-Jang newspaper, but a number of documents from the injunction proceedings, newspaper articles from the Western Mail, photographs and correspondence which in the main appears to emanate from the interim committee.
Subsequently the claimants have discovered that a website, for which the 5th defendant is alleged to be responsible, has posted a number of documents on it, including the original Nawa-i-Jang newspaper article and correspondence emanating from the interim committee. The address of the website is http://madinamosquecardiff.org.uk/. and the documents posted on it ("the website") are the third set of documents which form the basis of the defamation claim by the claimants against the defendants, who deny being responsible for their publication.
History of the litigation
On 10th February 2012 Messrs Syeds, solicitors, on behalf of the 2nd claimant and others, wrote to the 1st defendant complaining about the allegations made in some of these documents. On 9th March 2012 a further similar letter was sent by Messrs Syeds, on behalf of the 1st claimant, to the 1st defendant.
It is unclear as to what, if any, response was made to this correspondence, as by 17th April 2012 Morgan Cole LLP, on behalf of the trustees of the Jamia Hanfia Rizvia Mosque, was writing to the 2nd claimant and others requesting, inter alia, that the management of the Jamia Mosque be transferred to the association's interim committee, together with the legal title to the land on Mountjoy Road.
Principal Law Limited, solicitors, appear to have been instructed on behalf of the 2nd claimant and the management committee of the Jamia Hanfia Rizvia mosque, as on 5th July 2012 it wrote contesting the trustees' claims.
This correspondence culminated in a letter from Morgan Cole LLP dated 5th September 2012 intimating the commencement of legal action to resolve the legal issues concerning the ownership and management of the Jamia Mosque.
There are no details of any further relevant correspondence prior to the issue of the current proceedings for defamation by the claimants against the defendants on 14th December 2012.
The particulars of claim assert that the 1st, 2nd and 3rd defendants are all members of the association's interim committee and that the 4th and 5th defendants have worked together with the remaining defendants in their campaign to defame the claimants.
In relation to the update it is alleged that it was co-authored by the defendants and distributed by them throughout the Muslim community in Newport and Cardiff. It is asserted that it defamed the claimants because, inter alia, it falsely alleged that the 2nd claimant had obtained mosque property for his own personal benefit and knowingly described the trusts as being charitable in nature when they were for his own personal benefit. It is asserted that the 1st claimant is falsely alleged to have knowingly supported the 2nd claimant in these endeavours.
In relation to the dossier, it is alleged that it was co-authored by the defendants and published by them throughout the Muslim community of Newport and Cardiff, because their modus operandi was to spread false claims as widely as possible amongst the communities in order to bolster their position and weaken that of the claimants in regard to the control of the two mosques. In particular, they published the dossier to Mohammed Tariq, Andrew Davies AM and others named in the dossier. It is asserted that the documents in the dossier defamed the claimants because, inter alia, the copy of the Nawa-i-Jang which it contained: falsely alleged that the 2nd claimant had obtained mosque property for his own personal benefit and the 1st claimant had knowingly supported the 2nd claimant's endeavours; falsely alleged that the 2nd claimant sought to defraud an insurer of millions of pounds, that he was strongly believed to have been knowingly involved in passing counterfeit money, and knowingly using the mosque trust to obtain false work permits; falsely alleged that the 1st Claimant was banned from entering the mosque because he had breached the peace, that he sought to promote sectionalism for his own political benefit, that he was knowingly involved in financial scandals by receiving corrupt payments and money laundering, and the Newport Magistrates' Court had found that he was a liar. It is also asserted that another document entitled, "Three individuals put mosque property into own names as proprietors/owners" defamed the claimants because it falsely alleged, inter alia, that it is highly likely that a fraud has been committed by the 2nd claimant as a result of the 2nd claimant wrongfully placing the Al-Noor Mosque into his own name for his personal benefit, and the 1st claimant has aided and abetted the 2nd claimant in his endeavours, and has intimidated those who have sought to oppose the 2nd claimant. Moreover, it falsely alleged that the 2nd claimant had permitted the 1st claimant to use the mosque for political purposes in return for a corrupt payment.
In relation to the website it is alleged that the 5th defendant continued to publish copies of articles which defamed the claimants. These articles included the original Nawa-i-Jang article which contained the above mentioned false allegations, together with other pages on the website which expanded upon these allegations.
In the action the claimants sought both damages and injunctive relief against the defendants.
The 1st and 2nd defendants have been jointly represented throughout these proceedings. Their original defence comprised a denial of responsibility for the publication of any of the documents relied upon by the claimants. However on 16th July 2014 His Honour Judge Seys Llewellyn QC granted them permission to amend their defence. In their Amended Defence they continue to deny responsibility for any of the publications, deny that the update or the documents in the dossier defamed the claimants, and in the alternative, assert that the circumstances of any such publication affords them the defence of qualified privilege.
Until recently the 3rd defendant's defence was limited to a denial of responsibility for the publication of any of the documents relied upon by the claimants. However the parties had for some time been on notice of the 3rd defendant's application to amend his defence to include the defence of fair comment, which was granted at the commencement of the trial.
The 4th defendant has represented himself throughout these proceedings and his defence amounted to a denial of responsibility of any of the publications relied upon by the claimants. However, although not stated in terms, it appears to be implicit in his defence that he seeks to raise the defence of qualified privilege in relation to the contents of the dossier. His application to strike out the claims of the 1st and 2nd claimants was dismissed by His Honour Judge Seys Llewellyn QC on 16th July 2014.
The 5th Defendant has represented himself throughout these proceedings and denies liability, on the basis that, although he acknowledges having posted various documents on his website, he denies that he is thereby liable in defamation to the claimants.
On 18th July 2014 His Honour Judge Seys Llewellyn QC heard an application to adjourn the trial which was listed to commence on 21st July 2014. The adjournment was sought by the claimants on the basis that they had only recently obtained legal representation, and in any event the 2nd claimant was unable to attend at court due to his ill health. It was noted by the judge that, throughout the majority of the course of the litigation, the claimants had been legally represented and that the 2nd claimant had been present throughout the mediation process between 9.30am and 7.00pm on 9th July 2014 and had attended a court hearing on 16th July 2014. In these circumstances the court declined the application and the case was listed for hearing at Newport Crown Court on 22nd July 2014.
History of the trial
On 22nd July 2014 the 1st claimant was in attendance and represented himself and the absent 2nd claimant. The 1st and 2nd defendants were present and represented by Ms Kissin of counsel. The 3rd defendant was present and represented by Mr Leathley of counsel. The 4th defendant was present and represented himself. The 5th Defendant was absent and unrepresented.
The 1st claimant made a further application for an adjournment of the trial on the same grounds. I refused the application. In doing so I took into account, inter alia, that the notice of the trial date had been made known to the parties in March of 2014, and by May of 2014 it was known to the claimants that their legal representatives had ceased to act for them. Therefore the claimants had had more than sufficient time to have arranged for alternative legal representation, if they had chosen to do so. It was also clear that the 1st claimant was an intelligent and articulate individual, well versed in public speaking, who would be properly equipped and able to conduct the proceedings on behalf of himself and the 2nd claimant. In addition to the medical evidence which had already been considered by the judge on the previous occasion, namely medical reports dated 7th and 14th July 2014 to the effect that the 2nd claimant suffered from a number of medical conditions including "end term renal failure" and concluded that "I would be most grateful if you could take his health into consideration", I was also informed by the 2nd claimant's son, who was present in court, that although his father had been admitted to hospital on 21st July 2014 due to high blood pressure, the 2nd claimant had not been detained for any significant period and was presently at home.
In so far as the 5th defendant was concerned, the evidence before the court was that he was unable to attend the trial because he had been recently admitted to hospital. It was apparent, from a preliminary reading of the written evidence in the case, that the only publications which concerned him were the documents on the website, and that the remaining defendants would only be responsible for any such publication on the basis of joint responsibility. In those circumstances it was decided that it would be disproportionate to adjourn the trial in relation to the remaining defendants in order to await his attendance; all parties agreeing that no prejudice would be caused by his absence from the present trial in relation to the issues concerning each of them. In these circumstances that part of the action by the claimants against the 5th defendant was adjourned to be heard on a separate occasion.
On the second day of the hearing, 23rd July 2014, the 2nd claimant attended at court and has been present throughout the remainder of the trial; providing his evidence on 25th July 2014. Having observed the 2nd claimant throughout that and a more recent hearing, whilst I have no doubt he has some serious health issues, he gave no impression of being under any difficulty in participating fully in the court proceedings; to the extent that I have some misgivings as to the claimants' motives in seeking the original adjournment.
On 28th July 2014 Mr Bennett and Ms Grubb, of counsel, appeared in court for the first time in this trial on behalf of the claimants. They had very recently received instructions and have continued to represent the claimants during the remainder of the proceedings. Mr Bennett clearly had some familiarity with certain aspects of the matters emanating from the mosques' dispute, as I note that he had represented the claimants at the hearing before His Honour Judge Milwyn Jarman QC on 9th January 2014, when Mr Leathley represented the defendants in that case.
The claimants' evidence was concluded on 28th July 2014 and on the following day the Defendants' evidence was due to commence.
On 29th July 2014 the 4th defendant was absent from court having provided two medical notes dated 25th July 2014 and 28th July 2014. The former stating that the 4th defendant was suffering from "significant acute bronchitis" and was unfit for work for one week, whilst the latter stated that he was suffering from a chest infection and was unfit for work for the next 7 days. Understandably, due to the 4th defendant's attendance at court on both 25th and 27th July 2014, some of the parties were sceptical as to whether the evidence was sufficient to justify his absence from court. Although I shared some of those misgivings, it had been apparent during the course of the proceedings that although he had clearly been able to properly represent himself, he had been suffering from some degree of ill-health. In those circumstances I decided that the trial would have to be adjourned to allow for the attendance of the 4th defendant. Regrettably, due to the various pre-arranged professional commitments, the trial was not able to be resumed until December 2014.
On 15th December 2014 the part-heard trial resumed at Cardiff Civil Justice Centre; a date which had been notified to the parties at an early stage. The 4th defendant was again not in attendance and only that morning had sent to the court attachments to an e-mail comprising medical evidence, which included two medical notes, the first dated 24th November 2014 and the second dated 12th December 2014. The former stating that he was unfit for work for a period of 4 weeks due to "anxiety with depression", and the latter stating that he was unfit for work due to an "allergic reaction and stress reaction." I heard submissions from the other parties as to the implications of the 4th defendant's absence from court, all of whom wished the trial to proceed in his absence. Indeed I was informed by Mr Leathley that he had very recently been contacted by the 4th defendant who had informed him that he did not wish the trial to be adjourned, and was content for it to continue in his absence.
It appeared to me that the medical evidence was not in itself sufficient to justify the conclusion that the 4th defendant was unable either to represent himself or to give oral evidence at the part-heard trial. Moreover, that if this had genuinely been the position, then the 4th defendant would have made an application to the court at a far earlier stage of the proceedings, given both his knowledge of trial procedure and the length of time since his apparent medical condition had first arisen. After taking these matters into account, the history of the proceedings and his recent correspondence, I decided to proceed with the part-heard trial. In doing so I made it clear to the parties that, subject to the caveat that it had not been tested in cross-examination, I would take into account the written evidence of the 4th defendant which was already before the court, and indeed the various written submissions which had been made by him in the course of the proceedings.
Over the course of the following few days the 4th defendant provided to the court by way of e-mail attachments, not only further written evidence but also further written submissions including, in particular, a 226 paragraph document detailing his submissions upon the subject matter of the trial dated variously 15th and 17th December 2014, and a further written submission was provided to the court on 22nd December 2014; all of which have been provided to the other parties.
Law
Essentially, defamation is a tort involving strict liability. Therefore it is in general for the court, without reference to the intentions or knowledge of the publisher, to determine the meaning of the words which are the subject matter of the dispute, in order to determine whether they are defamatory of the particular claimant. In this regard the court should give the words their ordinary and natural meaning. (Charleston v News Group Newspapers [1995] 2 AC 65; Jeynes v News Magazines Limited [2008] EWCA Civ 130; Thornton v News Group Newspapers [2010] EWHC Civ 1414).
If those words are defamatory, then it will be necessary to determine whether the claimant has established to the civil standard whether the particular defendant whose case is being considered was responsible for the publication of the defamatory material. This may be on the basis that the defendant did so individually or on the basis of joint liability, intending that the defamatory material should be published. (Bataille v Newland [2002] EWHC 1692; Underhill v Corser [2010] EWHC 407; Dar Al Arkan Real Estate Development Co v Al Refai [2013] EWHC 1630).
However the law recognises that there are certain situations in which the publication of words by an individual, for which he would otherwise be liable for defamation, will be considered to have been privileged and thus provide the individual with a defence to an action for defamation. This privilege may arise in a variety of situations, albeit there is normally a requirement of reciprocity and mutuality between the interest of the individual in publishing the words to the other individual, and the interest of the other individual in receiving them. In the event that an individual is able to establish such a privilege, it may also extend to communications to individuals lacking such mutuality of interest, but only if the communication to them cannot reasonably be avoided, and is ancillary or incidental to the communication to those with such mutuality of interest. However, this privilege, if established, is not absolute, but conditional, and will be defeated upon proof of malice on behalf of the speaker. In this regard, malice will be established if it can be shown that the speaker had an improper motive for speaking the words, such as an overriding intention to harm the claimant, and such motivation may be able to be proved if it can be shown that the speaker did not believe the words he said to be true, or was reckless as to their truth; unless exceptionally he was under a duty to report them. However, a positive belief by the speaker in the truth of what he has said will normally be evidence that he has no such improper motive, unless he can be shown to have misused the occasion in which the words were spoken. (Adam v Ward [1917] AC 309; Kearns v General Council of the Bar [2003] EWCA Civ 331; Horrocks v Lowe [1975] AC 135).
In the event that a defendant is held liable for defamation, the purpose of damages is threefold: to compensate for damage to the claimant's reputation; to vindicate the claimant's good name; and to compensate for distress, hurt and humiliation. In this regard vindication involves not only compensation for past and future losses, but a sum sufficient to convince a bystander of the baselessness of the charge, and the court will normally arrive at a composite award of damages. (Broome v Cassell & Co. Limited [1972] AC 1027). Although a defendant should not be made to pay damages for conducting a proper, albeit unsuccessful defence, damages for defamation can be aggravated by unreasonable behaviour in the conduct of the defence which causes additional hurt to feelings. (Cairns v Modi [2012] EWCA Civ 1382).
The Publications
The update is written in English and includes the following statements within it:
"Recently the Newport Muslim community has learnt to their shock and horror, that three individuals by the name of Abdul Rahman Mujahid, Mohammed Arshad Rehman and Mohammed Ashraf aka Mohammed Aslam have put the Al-Noor Mosque into their own personal names as proprietors, and also a small piece of land recently purchased behind the Jamia Mosque. The same individuals have also put this piece of land, known as the mortuary, into their own personal names."
"Abdul Rahman Mujahid together with the other two people have also created their own private and personal trusts, namely Anjuma Raza-E-Mustafa Trust, and attached it this to Al-Noor Mosque, and they also made another trust, Jamia Hanfia Rizvia Mosque Trust and attached this to the Jamia Mosque Newport. They lead the charity commissioners to believe that these were official trusts of Jamia Mosque and Al-Noor Mosque, and obtained charitable status from the Charity Commission UK."
"Abdul Rahman Mujahid together with the other two people have under this charitable status been collecting money from Muslim public at large. To date the Muslim worshipping public have no knowledge of any accounts. No accounts have been provided for the public."
"The sad thing is that a Newport Assembly member Mohammed Asghar has been supporting these three individuals in their various endeavours at various times; this interference is totally unacceptable to the Muslim worshipping community. The Management Committee Chairman has sent official warnings to Mohammed Asghar AM and Abdul Rahman Mujahid to refrain from their unacceptable bad behaviour in the Mosque and towards the Muslim worshippers in the Mosque."
"When Mohammed Asghar AM and Abdul Rahman Mujahid's behaviour became intolerable the interim Management Committee felt that this type of behaviour will cause a breach of the peace and public disorder amongst the worshipping Muslim community. As a result the Management Committee had no other choice but to ask the court for an anti-social behaviour order (ASBO) in the Cardiff County Court. The order was granted in December 2011, banning Mohammed Asghar AM and Abdul Rahman Mujahid from causing trouble and not to interfere with the worshipping Muslim community in the two mosques."
"When the banning order expired and the Management Committee made an application to extend it Abdul Rahman Mujahid gave his undertaking that he, nor his two private trusts members, will no longer be interfering with the worshippers directly or indirectly in Jamia and Al-Noor Mosque. This also included Mohammed Asghar AM as the co-defendant in the Cardiff County Court. As a result of the undertaking the Management Committee Chairman Manzoor Ahmad withdrew the further application for an injunction under a mediation agreement."
I accept that these words are defamatory in that they suggest that the 2nd claimant and others have sought to gain personally from the mosques' property, and that the 1st claimant has encouraged them in their endeavours. Moreover, that the claimants have behaved badly at the mosques to the extent that the County Court banned them from causing trouble at the mosques, and at the expiry of those bans the claimants undertook not to interfere with the mosques' congregations.
The dossier includes documents written in Urdu in respect of which a translation has been pleaded by the claimants, the accuracy of which has not been contested by the defendants, which contain the following statements within them:
From the original Nawa-i-Jang newspaper article,
"Wales County Court has passed an injunction against Councillor Mohammed Asghar, (Assembly member) in suspicion of bad behaviour and affray, and prohibited him from entering the mosque"
"……..The local community believes that Councillor Mohammed Asghar, (Assembly member) has exploited different sects of Muslims and the mosque for his political interests."
"Local people claim that last year Councillor Mohammed Asghar (Assembly member) took part in Shia Muslims' procession and there is a video of that effect (Beating of the chest). However, he also supports sunni Muslim Abdurahman Mujahid in mosque trust for a ban on Shia Muslims, which proves that he is using both factions for his own political ends. Local mosque goers can not believe his double standards."
"…….Newport magistrates' court has found him a liar in respect of providing wrong information to the community about a meeting."
"The community also accuses him of supporting those three people who registered themselves as the owners of the mosque about which the mosque trustees…..are unaware. The three people include Abdurahman Mujahid……."
"The local community has said that Abdurahman Mujahid has been involved in the same kind of activity a few years ago when he showed a Cardiff mosque as a limited company and himself as its director…….He is accused of trying to make a false claim when a mosque in Cardiff was burnt……"
"People in the community also say that Abdurahman had a post office which was taken off him because of counterfeit notes were found…….."
"There is information that the Border Agency has been investigating Abdurahman and his two trusts and how he has been obtaining work permits in the name of his trusts…."
"Some claim that Councillor Mohammed Asghar (Assembly member) is involved in financial scandal and corruption………."
"There are rumours that police are investigating Councillor Mohammed Asghar (Member Assembly) for money laundering and other crimes."
"Councillor Mohammed Asghar (Member Assembly) is also accused of using a large sum of money to buy a butchery in Birmingham from David Hurst which was given to him by his brother, who obtained it in kick backs while he was in the Air Force…."
"Local people say that Councillor Mohammed Asghar (Member Assembly) is involved in Jamia Mosque and Al-Noor Mosque scandals. His personal support for individuals accused of creating personal trusts………."
From a document written in English entitled, "Three individuals put Mosque property into own names as proprietors/owners",
"The Welsh Muslim community is shocked to learn three men: Abdul Rehman Mujahid…..have put the Al-Noor Mosque…….into their own personal names, as proprietors (owners). These three individuals have also created their own private and personal trust and have been collecting money from the public. These funds to date are unaccountable. …….."
"……The matter has been brought to the attention of the police and other relevant authorities at the highest level. What has shocked the community more is that a Pakistani local politician Mohammed Asghar AM, supported the three individuals who acted without authority."
"……….It is alleged by the worshippers that Mohammed Asghar has been threatening individuals that the Pakistan High Commission is in his back pocket and it is believed he has been writing letters branding innocent respected individual members of the community as terrorists or promoters of terrorism, misusing his political status to support the three individuals……."
"……..Abdul Rehman Mujahid used the Mosque to canvas for votes for him. Mohammed Asghar rewarded Abdul Rehman Mujahid and the two imams by sending the three of them all expenses paid to Saudi Arabia. This has shocked and disgusted the Muslim worshipping community, that a Mosque which is a place of worship was used for political purposes for Mohammed Asghar. What is more disgusting is that they have received what the community call 'A Sweetener' or 'Backhander'……"
"When Abdul Rehman Mujahid and Mohammed Asghar did not listen and continued with their bad behaviour the Mosque officials had not alternative but to apply for an anti social behaviour injunction…….The court granted an injunction on Mohammed Asghar AM and Abdul Rehman Mujahid, banning them from causing troubles in the Mosque. …………"
"……..There may well be a criminal case of fraud and Mohammed Asghar AM could well be implicating in aiding and abetting the three individuals……"
I accept that the words are defamatory in that they suggest that the 2nd claimant sought to defraud an insurer, that he was strongly believed to have been knowingly involved in passing counterfeit money, and knowingly using the mosque trust to obtain false work permits; they falsely alleged that the 1st Claimant was banned from entering the mosque because he had breached the peace, that he sought to promote sectionalism for his own political benefit, that he was knowingly involved in financial scandals by receiving corrupt payments and money laundering, and the Newport Magistrates' Court had found that he was a liar. Also that it is highly likely that a fraud has been committed by the 2nd claimant as a result of the 2nd claimant wrongfully placing the Al-Noor Mosque into his own name for his personal benefit, and the 1st claimant has aided and abetted the 2nd claimant in his endeavours, and has intimidated those who have sought to oppose the 2nd claimant, and that the 2nd claimant had permitted the 1st claimant to use the mosque for political purposes in return for a corrupt payment.
The website includes, in addition to those matters contained in the original Nawa-i-Jang article, the following statements within other documents posted on it:
From the website's own article,
"………Naseem Babur, Chairman of Pakistan Society, Newport, South Wales.
'I have recently learnt that three individuals by the name of Abdul Rehman Mujahid……have secretly without any knowledge of the Mosque…….put the Al-Noor Mosque…….into their own personal names…………..The Jamia Mosque ……was never purchased for any individual sect or individual groups or individuals, or to be vested into their personal names as proprietors"
"Mr Abdul Rehman Mujahid is also involved in a serious problem of Madina Mosque Cardiff……."
I accept that the words contained in the re-published Nawa-i-Jang article are defamatory in that they suggest that the 2nd claimant sought to defraud an insurer, that he was strongly believed to have been knowingly involved in passing counterfeit money, and knowingly using the mosque trust to obtain false work permits; they falsely alleged that the 1st Claimant was banned from entering the mosque because he had breached the peace, that he sought to promote sectionalism for his own political benefit, that he was knowingly involved in financial scandals by receiving corrupt payments and money laundering, and the Newport Magistrates' Court had found that he was a liar. Also that it is highly likely that a fraud has been committed by the 2nd claimant as a result of the 2nd claimant wrongfully placing the Al-Noor Mosque into his own name for his personal benefit, and the 1st claimant has aided and abetted the 2nd claimant in his endeavours, and has intimidated those who have sought to oppose the 2nd claimant, and that the 2nd claimant had permitted the 1st claimant to use the mosque for political purposes in return for a corrupt payment. Also that the words contained in the website's own article are defamatory in that they suggest that the 2nd claimant and others have obtained mosque property for his own personal benefit.
Evidence at trial
In his witness statement dated 30th January 2014 the 2nd claimant stated that he was born and raised in Pakistan before settling in Newport in 1976. He joined the Al-Noor mosque, and in 1979 he co-founded an organisation known as Anjuman Raza-E-Mustafa, the object of which was to organise Muslim religious affairs in South Wales. He stated that it was this organisation which, in about 1980, was responsible for the establishment of the Jamia mosque. In the following year, 1981, individuals were appointed to hold the property upon which the mosque was to be built on trust for the benefit of the congregation, and he was elected onto the management committee which would be responsible for administering the affairs of the mosque. He stated that in about 1989 he became secretary of the management committee of both the Al-Noor and Jamia mosques, and in 2003 and 2009 respectively, he became a trustee of Al-Noor and Jamia mosques. He said that he always acknowledged that he and the other trustees held the ownership of the mosques on trust for the benefit of their congregations.
It was in September 2011 that the 2nd claimant stated that he began to experience problems with a number of individuals, including the first four defendants, who were seeking to challenge the ownership and governance of the two mosques. He said that despite providing explanations to them, the association which had been formed was not prepared to listen, and instead sought his own resignation from the mosques' management committee. He said that although the mediation meeting on 15th September 2011 appeared to have resolved the dispute, thereafter those representing the association reneged on their agreement. He said that he had had no notice of the application for an injunction against him and first became aware of it on 21st December 2011.
In so far as the meeting on 8th January 2012 is concerned, the 2nd claimant stated that this was extensively advertised in Newport, and that, although he was not present at the meeting, he was informed that the 1st defendant had circulated the update to those in attendance. Subsequently he was present when Mike Davies showed the 1st claimant a bundle of documents which had been provided to Superintendent Johnson, which the 1st claimant recognised as the same documentation contained in the dossier which had been provided to Andrew Davies.
He said that he considered that all of the defendants were educated people who understood the legal documentation concerning the ownership of the mosques, and therefore were aware that he only held the properties on trust. Moreover the 1st defendant was his brother-in-law, who for a long time has had a personal vendetta against him. He said that the defamatory material has had a major impact on his standing within the local community, which has caused him a considerable degree of distress. Although the 2nd claimant made no mention of the separate defamation action against the Nawa-i-Jang newspaper, he acknowledged that there had been a public meeting on 29th January 2012 at which the claimants had explained their position, as a result of which a new management committee had been formed. However despite this he said that the defendants continued to defame him.
In cross-examination at trial, the 2nd claimant acknowledged that the matters contained in the update, were ones which were being widely discussed within the Muslim community prior to its publication. He accepted that he and the 1st claimant had successfully sued those responsible for the publication of the article about them in the Nawa-i-Jang newspaper. He said that he was unsure as to whether what was contained in the dossier was largely repetitive of the contents of that article. He said that he had tried to contact some of those to whom it was suggested in the dossier that it had been sent, but that none of them had replied to him. He said that the reason why he had brought the present proceedings against the 1st defendant and others, rather than the remainder of the association's interim committee, was because it was the 1st defendant who had taken him to court in the injunction proceedings.
He accepted that one of the 1st defendant's main concerns appeared to be his perception that there was a lack of transparency in the management of the mosques. When he was asked about the production of the mosques' financial accounts, he appeared to have difficulty in recollecting when these had first been published; initially suggesting that they had not been published prior to about 2012, but subsequently stating that that they had always been published. He said that he didn't know who were the present trustees of the Jamia mosque, because the charitable trust of which he was a trustee had nothing to do with the mosque itself, rather it owned the land immediately behind the mosque. The 2nd claimant acknowledged that the 1st claimant had paid him the sum of £2,000.00 in order to fund a trip with a number of imams to Saudi Arabia to attend the Hajj, and he agreed that the imams had told the mosques' congregations to vote for the 1st claimant in the Assembly elections. He said that a number of years ago his own son had defrauded the post office where the 2nd claimant was the manager. However, despite extensive questioning he was unable to assist as to the amount that his son had stolen.
He said that on 16th December 2011 he had removed a mobile phone from a member of the congregation at one of the mosques because he was using its camera facility to record the 1st defendant during prayer time. It was suggested to him by the 4th defendant that after the dossier had been provided to the 1st claimant by Andrew Davies, either he or the 1st claimant had placed the letter dated 24th January 2012 in the dossier. He denied that this was the case. He also denied the suggestions, put to him by the 4th defendant, that he had held a long-term grudge against the 4th defendant, due to him having been in the British Army and having married a European woman. He said that although he had previously signed documents which appeared to provide for the cessation of one organisation called the Muslim Educational and Welfare Society "of Wales", and the inception of another called the Muslim Educational and Welfare Society "Wales", there had been no deception involved and he had not properly understood what he had signed when he was asked to do so.
In his witness statement dated 30th January 2014 the 1st claimant stated that he was born and raised in Pakistan before settling in Newport. He is a chartered accountant and since 2007 an elected member of the Welsh Assembly. He said that in September 2011 he agreed to act as the mediator in a dispute concerning the ownership and management of the two mosques. As far as he was concerned the mediation was a success. However subsequently the agreement had not been implemented because he had been accused of being partisan by those representing the association's interim committee.
He said that he had not had notice of the interim injunction application. The first time he was aware of it was on the evening of 20th December 2011. Thereafter he had arranged to be legally represented at the adjourned hearing a couple of days later.
He said that although he did not attend the meeting on 8th January 2012, he understood that the defendants who were present at the meeting had distributed the update to the audience. He said that the content of the update was false and would be likely to cost him his position as a Shadow Minister for Equalities and Sport. He stated that the similarity of the matters contained in the witness statements in support of the injunction proceedings and those contained in the subsequent Nawa-i-Jang newspaper article and the 5th defendant's website was such that he believed that all of the defendants were acting as a group intent on ruining his political career. He is a Conservative, whereas the defendants are Labour supporters. Moreover they are from a different Muslim sect to himself.
He stated that in February 2012 he had been provided with a dossier of documents by Andrew Davies, who stated that he had been provided with them by the 4th defendant. He said that subsequently on 10th February 2012, Mike Davies had shown him and the 2nd claimant a bundle of documents which had previously been provided to Superintendent Johnson and realised that they comprised the same documents.
The 1st claimant acknowledged that he and the 2nd claimant had successfully sued those responsible for the publication of the article in the Nawa-i-Jang newspaper, but said that publication of the false allegations about him, and in particular the re-publication of the Nawa-i-Jang article on the 5th defendant's website, has caused him a great deal of anguish and has put his life in danger. He does not attend the mosques as frequently as before, and it has adversely affected his political career.
In cross-examination at trial the 1st claimant acknowledged that Andrew Davies was the leader of the Conservatives in the Welsh Assembly, but did not accept that Andrew Davies was the appropriate individual to whom his constituents should bring their concerns about the 1st claimant. He accepted that after receiving the dossier, Andrew Davies didn't take any further action, leaving it to be dealt with by the 1st claimant. He also accepted that he had not sought to enquire of any of those to whom it was suggested in the dossier that it had been sent, whether they had received a copy of it.
The 1st claimant acknowledged that during the course of the injunction proceedings he became aware that a fellow Conservative party member, Mian Abdul Rashid, had made a witness statement against him dated 22nd December 2011, in which he expressed his disgust at the behaviour of the claimants. He accepted that he had subsequently informed Mian Rashid that he was going to take proceedings against the defendants and that Mian Rashid may be called to give evidence in those proceedings. He said that Mian Rashid had told him that he didn't want to go to court. It was in those circumstances that an arrangement was made for Mian Rashid to see the firm of solicitors who were then acting for the 1st claimant in order that he could revoke his earlier witness statement.
The 1st defendant denied the allegation that was put to him by the 4th defendant that he had effectively created the dossier, by inserting the documents within it. He also denied a further allegation that he had been responsible for distributing the update at the meeting on 8th January 2012. He said that, despite having acted as the mediator of the dispute between the two sides, he was not aware of the details of the ownership of the two mosques. He agreed that he had over the years been a member of a number of different political parties, including Labour, Plaid Cymru and the Conservatives. He said that politics was like a pyramid and that everyone wants to get to the top.
Mohammed Tariq provided evidence in relation to a series of meetings which took place between some of the parties between November 2011 and January 2012. He is a friend of both of the claimants, and a member of the Muslim Education and Welfare Society of Wales of which the 2nd claimant is the chairman; both of them sharing a financial interest in the organisation.
He said that the first meeting took place in November 2011 when the 2nd defendant took him to the Sen Barbeque restaurant in Newport. He said that the 2nd defendant was saying a number of detrimental things about the 2nd claimant and showed him some documents from the Land Registry concerning the ownership of the mosques. Although in his earlier witness statement dated 30th January 2014 he had said that the 2nd defendant had told him that they had prepared a bundle of documents, he agreed that he had not seen any other documentation at that meeting.
Mohammed Tariq said that the second meeting took place a few days later when he went to see the claimants with the 5th defendant. He said that the claimants had reassured him that none of the allegations which were being made against them were true, and that the 5th defendant had been very supportive of the claimants at that meeting.
He said that the third meeting took place about a week later when the 5th defendant asked him to visit the Mirchi restaurant in Cardiff with the 2nd and 4th defendants. In his witness statement Mohammed Tariq stated that during the course of the meeting the 4th defendant had told him that he was forming a group to discredit the claimants because he alleged that the 2nd claimant was involved in illegally bringing imams into the UK, stealing money from the mosques, unlawfully transferring the mosques into his own name and had been involved in counterfeit currency. However in his evidence he said that both the 2nd and 4th defendants had been putting these allegations to him. He said that at the end of the meeting the 4th defendant had gone to the glove compartment of the motor car in which he had been the passenger and taken out a bundle of documents, but agreed in cross-examination that these were not those which were subsequently included within the dossier. Although he had made no mention of it in his witness statement, in the course of his evidence at court Mohammed Tariq said that one of the documents that he was shown by the 4th defendant at this meeting said "update" on it.
The fourth meeting took place in mid-December at the Chicken Cottage restaurant in Newport at which the 1st, 2nd, 4th and 5th defendants were present. He said that during the course of the meeting the 1st defendant had a bundle of documents with him. He said that although he hadn't looked at the documents and there was no mention of a dossier, the 1st defendant had told him that they were preparing a file on the claimants. He said that it was at this meeting that for the first time the 4th defendant made allegations against the 1st claimant in relation to the Pakistan air force and a slaughterhouse in Cardiff.
He said that when he later read the article in the Nawa-i-Jang newspaper, a number of the allegations matched those which had been made by the 4th defendant during the course of the meetings with him.
The final meeting took place in January 2012 when the 5th defendant came to his shop in Cardiff and handed to him a bundle of documents which he told him had been compiled by the 4th defendant against the claimants. He later recognised that these were the same documents which were contained in the dossier when he was later shown a copy of it during the course of the assessment of damages hearing in relation to the separate defamation proceedings by the claimants against those responsible for the article in the Nawa-i-Jang newspaper. In cross-examination by the 4th defendant, Mohammed Tariq denied that he had been provided with a copy of the dossier by the 1st claimant, rather than by the 5th defendant.
He accepted in cross-examination that as far as he was concerned there was nothing to link either of the 1st or 2nd defendants to the dossier. He denied holding a grudge against the 4th defendant as a result of the latter's criticism of him having received an award from the police when he had previously been convicted of an offence for selling alcohol to underage individuals. Mohammed Tariq denied having asked the 5th defendant to post items on his website critical of the 4th defendant. Mohammed Tariq said that in fact the 5th defendant had also posted defamatory material about him on his website.
Mian Abdul Rashid was called to give evidence on behalf of the claimants. There was a witness statement which appeared to be signed by him on 22nd December 2011, which suggested that he was both shocked and disgusted at the behaviour of both of the claimants; the 1st claimant for supporting the 2nd claimant who had created private trusts in relation to the mosques' property. However, there was a further witness statement which appeared to be signed by him on 11th November 2013 in which he suggested that he had not provided or signed the first witness statement. When this was explored with him in cross-examination he said that he had made and signed the first witness statement which was true, and that he had signed the second statement because he had been told by the 1st claimant to go to a solicitor called Roshan Khan where he was shown the pre-prepared statement which he signed.
In re-examination Mian Rashid said that he had known the 1st claimant for about 40 years and had never had a quarrel with him. On the contrary they have been good friends. He said that he didn't like what the 2nd claimant was doing at the mosques in Newport and mentioned this to the 1st claimant, warning him not to get involved with the 2nd claimant. He said that after the 1st claimant discovered he had made his first witness statement, the 1st claimant had pressed him to go and see his own solicitor in order to sign the second witness statement.
Martin Shipton said that when the group of individuals visited him after the first injunction hearing on 20th December 2011, although he wanted to speak to the 1st defendant, it was the 4th defendant who had done most of the talking.
A number of witnesses were called on behalf of the claimants in relation to the meeting on 8th January 2012, namely, Mohammed Javed Mujahid, Omar Mian and Mushtaq Ahmed. Collectively they gave evidence to the effect that they had all attended the meeting together with about 50 – 70 others. The meeting was chaired by the 1st defendant, and they had picked up copies of the update from where they had been left on their chairs before they arrived, albeit Omar Mian stated that the update was also being handed out from a desk when people entered the meeting. Mohammed Javed Mujahid confirmed that he was the 2nd claimant's son and a fellow trustee of the Anjuma Raza-E-Mustafa trust. He said that between the two mosques there was a combined congregation in excess of 1000 people, and that the individual membership fee is £200.00 per annum. He accepted that a number of years ago he had been found guilty of committing an offence of fraud at the Post Office operated by his father, and although he too was unable to recall the amount involved, he had been sentenced to a term of 18 months' imprisonment. Omar Mian accepted that he was a joint committee member together with the 2nd claimant, having been selected to sit on the Jamia Hanfia Rizvia mosque committee.
I have also had the benefit of watching and listening to a video recording of the meeting itself in which, after introductions by the 3rd defendant, who, together with others, was sat on the platform, the 1st defendant gave an oral presentation in conjunction with electronic documents, concerning the ownership and management of the mosques. A transcript of the presentation has been prepared from which it is clear that the 1st defendant was alleging, inter alia, that the 2nd claimant and others had wrongfully placed mosque property into their own names for their own personal benefit, and obtained charitable status for their private trusts. He said that over the years there had been a lack of transparency in relation to the accounts of the mosques, and proposed that the solution lay in democratic elections for new individuals to be appointed as trustees and members of the management committee of the mosques. He also said that the 1st claimant had been asked to assist in resolving these matters at a meeting, but hadn't done so and instead had falsified the minutes of the meeting.
Andrew Davies said that he was unaware as to who had made the arrangements for him to hold a meeting on 26th January 2012. However a group of about a dozen or so individuals arrived and for the first couple of minutes he was addressed by the 1st defendant. However, as soon as the 4th defendant arrived he took over and thereafter dominated the meeting. He was the only individual who spoke at any length and that everyone else was "virtually a silent participant". Despite the suggestion put in cross-examination by the 4th defendant that he had not handed the dossier to him, Andrew Davies said he was "100% crystal clear" that during the course of the meeting the 4th defendant had produced the dossier of documents which was left with him at the end of the meeting.
He agreed that as the leader of the Conservative group in the National Assembly, he was the individual to whom someone could raise concerns about a Conservative Assembly Member. However, he said that during the course of a subsequent meeting with the 1st claimant, he concluded that the matters which had been raised in the earlier meeting were not of any party or political concern. Therefore he simply handed the dossier to the 1st claimant, so that he could sort out what he considered to be an internal dispute within the local community. That was the reason why he didn't refer the dispute onto either the Standards Commissioner for the Assembly or the Standards Committee. He said that the 1st claimant retained his support and had maintained his position in the shadow cabinet.
Sultan Ahmed had been a long standing member of the Muslim community in Newport prior to his removal to Newcastle upon Tyne. In his witness statement dated 30th January 2014 he had provided part of the history of the two mosques, and in his evidence he said that in his opinion, during the course of recent attempts to settle the ongoing dispute, whereas the 3rd and 4th defendants had been willing to do so, neither the 1st or 2nd defendants had been prepared to do so.
The 1st defendant provided a witness statement dated 31st January 2014 and gave evidence at trial. He had been born and raised in Pakistan, but settled in Newport in 1969, where he has worked and raised his family. He knows the 1st claimant as an accountant and local politician. The 2nd claimant is his brother-in-law and someone whom he considers has limited tolerance for alternative religious opinions. The 2nd defendant is a friend of his, and he met the 3rd and 4th defendants at the meeting at Geldards LLP, albeit he was previously aware of the 4th defendant and understood him to have some legal qualifications. The 5th defendant was someone with whom he had been acquainted a number of years ago, and his more recent acquaintance occurred when the 5th defendant sought to recruit him to align himself with the interests of the 2nd defendant.
The 1st defendant has been part of the Al-Noor mosque congregation for a number of years. He provided a history of the ownership and management of both this and the more recent Jamia mosque, which culminated in a written constitution, entitled "The Sunni Muslim Welfare Association of Newport S. Wales", providing for the appointment of trustees who would hold the ownership of the mosques' property and administer it in accordance with a democratically elected management committee. He said that despite the existence of this constitution, the ownership and management of the mosques has for many years been vested in a relatively small body of non-elected individuals, of which the 2nd claimant was its leading member. A matter which has caused some concern amongst the congregations as a result of a lack of accountability and transparency in the manner in which the mosques have been managed by them.
More recently the concerns of the 1st defendant and others have become heightened, when documentation came to their attention, from which it appeared that the ownership of the mosques' property had been transferred into the ownership of the 2nd claimant and others, and that charitable status had been granted to organisations associated with these individuals.
It was in this context that on 15th August 2011, the 1st defendant said that a group of individuals, including the 3rd and 4th defendants, sought advice from lawyers specialising in charity law, namely Geldards LLP. Thereafter in the course of a subsequent meeting attended by between 80 – 100 members of the mosques' congregations, at which the 2nd claimant had initially attended but then left, it was decided to form a group which would campaign to re-establish democracy within the management of the mosques. The name of the body, with reference back to the written constitution, would be the association and the 1st defendant was asked to be the chairman of its interim committee.
Subsequently on 15th September 2011, following failed attempts to seek to resolve the situation between the two opposing groups; the 1st claimant was asked to mediate. The 1st defendant s account was that the parties reached a settlement of the matter which envisaged, inter alia, that they would select the membership of an interim body which would manage the mosques' affairs and draw up criteria for the ownership of the mosques' property and democratic elections to a new management committee. However, when the 1st claimant sent the written minutes of the mediation to the parties, the 1st defendant said that they did not properly reflect the agreed settlement, as a result of which, on 10th October 2011, the 2nd defendant wrote to the 1st claimant reminding him of what had been agreed at the mediation. Subsequently on 10th December 2011, the 1st defendant wrote to the 2nd claimant requesting implementation of some of the terms of the settlement.
There followed the two alleged incidents at the Jamia mosque on 9th and 16th December 2011, the former of which resulted in a letter being sent by the 1st defendant to the 1st claimant on 16th December, and both of which were the subject matter of the injunction application which was heard on 20th December 2011. In cross-examination the 1st defendant said that the later incident did not take place during prayer time at the mosque, it occurred during a speech which he was making to the congregation, when the 2nd claimant shouted out that he was providing a lying account and snatched a mobile phone out of the hands of a member of the congregation who was using it to video record the speech. He said that despite the contents of the letter of 20th December 2011 which suggested that the application had been served on the 16th rather than the 19th December, he believed that the claimants had been notified of the injunction application on the latter date. He said that the 4th defendant conducted both the original application for the injunction and the adjourned hearing on 22nd December, because he was understood to have legal qualifications. Moreover the reason that both he and the 4th defendant visited the offices of the Western Mail following the first hearing was because the matter was of concern to the local community.
In cross-examination he said that prior to the court hearings he had not known what an "ASBO" was, and that although the record of the agreement reached between the parties at the second hearing did not include any undertaking by the 1st claimant, he had understood that as the lawyer representing the 2nd claimant was also representing the 1st claimant, they were both parties to the agreement.
The 1st defendant said that thereafter tensions within the mosques' communities were quite high and it was decided to hold a public meeting at which their concerns could be discussed. This took place on 8th January 2012 and he spoke of the concerns of the interim committee in relation to the ownership and governance of the mosques. He said that he had arrived late for the meeting and that most people were in attendance by the time that he got there. In cross-examination he said that the 3rd defendant's role was limited to that of introducing the participants, after conducting prayers, the latter of which is his normal role. He said that he had not noticed the update at the meeting, and that although the update mentioned some of the concerns of the interim committee, these were matters which were already well known within the mosques' congregations. He denied that he had had any part in the preparation of the update or its provision at the meeting. He pointed out that in contrast to all of the documentation which had been provided by the interim committee, the update lacked the association's title, and in fact had a different one, namely the "Jamia & Al-Noor Mosques Newport Update." Moreover, the update was neither signed by him, nor referred to the 1st defendant in the first person, and he had not mentioned the update in the course of his speech.
He agreed that because of the concerns of the interim committee he had attended a subsequent meeting with Superintendent Johnson. In cross-examination he said that although he had taken some documents with him concerning the ownership of the mosques' property, he didn't recall leaving the documentation with the officer. He said that the advice which he had received from Superintendent Johnson was that as far as he understood, this was more of a civil rather than criminal matter.
The 1st defendant said that he had been informed about the meeting with Andrew Davies on the day before it had taken place and had been asked to attend. He said that as far as he was concerned the purpose of the meeting was to raise the mosques' congregations' concerns that the 1st claimant was acting inappropriately and introducing politics into the mosques. He said that he had not previously seen the dossier of documents and had taken no part in its production.
In cross-examination he said that as far as he was concerned his only aim had been to seek to obtain more transparency within the management and ownership of the mosques. He said that he did not personally want to either own or manage the mosques, and had not volunteered to be the chairman of the interim committee. He had only agreed to do so in the interim, pending democratic elections for others to take over these responsibilities. He said that after he had been shown the documentation concerning the ownership of the mosques' properties he had had genuine concerns that the 2nd claimant and others were seeking to obtain a personal benefit from them, albeit he now appreciated that it would be wrong to suggest that they had acted fraudulently. He agreed that he had never thought the 1st claimant had acted fraudulently, but he believed that for his own political interests the 1st claimant had been prepared to support the 2nd claimant's position. It was expressly suggested to him in cross-examination on behalf of the claimants, that it was the 4th defendant who was spreading lies about the claimants, albeit the 1st defendant was content for him to do so. The 1st defendant denied that this was the position. He agreed that he had been asked to attend a single meeting with Mohammed Tariq. He did not believe that the 4th defendant was present and that the only reason he was there was to explain his concerns about the lack of transparency in the governance of the mosques and he had shown him some of the documentation concerning the mosques. It was expressly suggested to the 1st defendant on behalf of the claimants that the 4th defendant had a close relationship with the proprietors of the Nawa-i-Jang newspaper. The 1st defendant said that he had been unaware of this, and certainly hadn't been responsible for, or had any knowledge of, the source of the article in either that newspaper or the website.
The 2nd defendant arrived in the United Kingdom in 1965 when he was 10 years of age. He owns a restaurant in Newport where he lives with his family. He has been a Justice of the Peace since 2003, but has resigned that position due to the present proceedings brought against him by the claimants. He knows all of the parties in the case through his involvement in the local Muslim community, and has been the target of adverse publicity by the 5th defendant on his website due to the sale of alcohol at his restaurant. He said that over the past few years there has been increasing concern within the mosques' communities about the issue of their governance. Although the mosques are meant to be managed by democratically elected committees, they have been increasingly controlled by unelected bodies in which the 2nd claimant has played a leading role. Moreover, particular concern has arisen more recently when it was discovered that the mosques' property had been transferred into the ownership of the 2nd claimant and others who also purported to represent charitable bodies.
It was arising out of these concerns that following an unsuccessful meeting with the 2nd claimant on 15th August 2011, that the mosques' congregations appointed an interim committee to oversee their governance, pending the holding of elections of a full time committee. The 2nd defendant said that he was a supporter of this process as was a large section of the congregations, as shown by the number of members who subsequently signed the petition supporting the interim committee. However he was not a member of the interim committee and neither attended the meeting on 15th January 2012 where the update was available, nor the subsequent meeting with Andrew Davies. He had attended the mediation meeting on 15th September 2011, as had a large number of others, and believed that a compromise had been reached between the 2nd defendant and the interim committee. However when the minutes of this meeting were produced by the 1st claimant, he wrote to him on 10th October 2011 expressing his concern that the minutes failed to accurately record the agreement which had been concluded. He said that he received no reply to the letter and ultimately the agreement foundered because the 2nd claimant failed to honour the agreement.
The 2nd defendant said that the reason he had provided a witness statement in support of the application for an injunction against the 2nd claimant was because he had been present at the Jamia Mosque on 16th November 2011 and witnessed the disruption which had been caused by the 2nd claimant. He said that on this occasion the 2nd claimant had acted violently and aggressively with a member of the congregation who was simply recording a speech being made by the 1st defendant in which he had thanked the 2nd claimant for all his work at the mosque, but that he should now step aside in order to allow others to be elected to manage the mosques' affairs. He said that someone besides himself had added the initials "JP" after his signature on his witness statement dated 18th December 2011, and that this was one of the reasons why he had decided to resign as a Justice of the Peace, as he did not wish to cause any embarrassment to the Office.
The 2nd defendant said that he had not attended the offices of the Western Mail, and that contrary to the impression provided in the letter dated 24th January 2012 he had not attended upon Superintendent Johnson. He had neither signed the letter nor had any prior knowledge of it. In cross-examination on behalf of the claimants it was expressly suggested to him that the 4th defendant may have been the author of this letter. The 2nd defendant said that he was unaware if this was the case or not, albeit he knew that the 3rd defendant's command of English was not of a sufficient standard so as to have allowed him to do so. He said that he had not conspired with anyone either to produce the update, the dossier or the website. All he had desired was a peaceful resolution of the dispute at the mosques.
The 2nd defendant said that he knows Mohammed Tariq because they both run businesses and had seen him about twice towards the end of 2011. On the first occasion he had attended with the 5th defendant, and on the second with the 4th defendant. He said that on both occasions he had discussed the issue of the governance of the mosques with him. On the first occasion he had asked Aftab Ali to join them in order to show them some of the documents concerning the ownership of the mosques' property. On the latter there was a good deal of discussion between Mohammed Tariq and the 4th defendant about issues which they had in relation to one of the mosques in Cardiff.
The 3rd defendant is a married man living with his family in Newport. He normally attends the Jamia Mosque, where he sometimes leads the prayers. The 3rd defendant said that he was aware of the dispute at the mosques, and in particular that concerning the ownership of the mosques' property. However he had neither been involved with the publication of the update, the dossier or the website.
The 3rd defendant said in evidence that his first language is Urdu, and although he can write a little in Urdu, he does not write in English. He said that he had been present at the Jamia Mosque on 16th December 2011 when he saw the 2nd claimant grab a mobile phone from a member of the congregation who was filming a speech which was being made by the 1st defendant. He said that people often used their mobile phones to film speeches at the mosque and he had been upset by the conduct of the 2nd claimant and therefore agreed to provide a witness statement for the purposes of the application for the injunction against him. In cross-examination he said that his statement had been written by someone else for him to sign, albeit he could not recall by whom, but believed the contents to be true. He said that he had attended upon the claimants' homes in order to deliver the court papers on them, albeit he was unable to recall the date upon which this had occurred, but it may only have been after one of the court orders had been obtained. He said that his only role at the meeting on 8th January 2012 was to conduct some prayers at the commencement of the meeting and then introduce those who were to speak at it.
In cross-examination the 3rd defendant said that he along with many others had attended at the mediation meeting on 15th September 2011, which he believed had been successful and that arrangements were going to be made for elections to be held for the management committee of the mosques. Subsequently however the congregations became upset when the 2nd claimant said that he no longer wanted elections to take place. The 3rd defendant said that the whole of the Muslim community was discussing the matter and were concerned that the 2nd claimant had placed the mosques' property into his own and others' personal names, and that the 1st claimant appeared to be supporting him for his own political ends.
The 3rd defendant agreed that he had attended a meeting with the police and subsequently one with Andrew Davies, both of which had been attended by the 4th defendant, and the latter of which had been attended by about 20 others. However he had never written or signed the letter to Superintendent Johnson dated 24th January 2012, and he was not aware of who had written it.
The 4th defendant said in his witness statement dated 31st January 2014 that he knew both of the complainants and had spent most of his life undertaking voluntary work promoting community cohesion. It was in this capacity that he said he had been approached by various members of the mosques' congregations in order to assist with a problem which they had encountered in relation to the ownership of the mosques' property, namely that it appeared to be held personally by the 2nd claimant and others, rather than on behalf of the congregations, and that the 1st claimant appeared to be supporting the 2nd claimant. He said that he had agreed to assist the congregations, but that his only role had been to act as an advocate at the hearing of the application for an injunction against the claimants, and to attend upon Andrew Davies in order to report the misbehaviour of the 1st claimant in the Jamia Mosque, and the payment by him for the visit of the imams to Saudi Arabia. He said that he had not been involved in the publication of either the update or the website. Indeed, he too had been the victim of adverse material on the 5th defendant's website, published at the behest of the claimants.
In the documents, both witness statements and written submissions, provided by the 4th defendant during the currency of the adjourned hearing in December 2014, he gave varying accounts as to his involvement with some of the documentation and meetings; at one point alleging that although he may have provided some documents concerning the two mosques in a dossier to Andrew Davies on behalf of the community, the allegedly defamatory documents had been added to the dossier by the claimants; at another point he denied either having spoken at the meeting or having provided any dossier to Andrew Davies. His original defence stated that he had no recollection as to who it was handed the dossier to Andrew Davies. He alleged that Mohammed Tariq was lying about his involvement with the 4th defendant, because he had criticised Mohammed Tariq when the latter had received an award from the police for his work on behalf of the local community. He pointed out that one of the documents emanating from the 5th defendant confirmed the existence of a vendetta against him by Mohammed Tariq and the claimants.
Discussion and findings
With the exception of the 4th defendant, I have had the considerable advantage of both observing and listening to the various witnesses give evidence in this case over an extended period of time, and have reached general conclusions as to both their credibility and motivations. In reaching these conclusions I of course bear in mind any disadvantage to either the claimants or any other party from having been precluded from cross-examining the 4th defendant, and any disadvantage to the 4th defendant from him not having provided live evidence and submissions to the court, albeit that as a significant part of his own cross-examination of the other witnesses was prefaced with his own observations, I have been able to make a reasonable assessment of the manner in which he would have provided both his evidence and submissions, which I have read in the copious written documents with which he has provided the court, particularly during the course of the part-heard trial.
In so far as the claimants are concerned, as I have already observed, I have some misgivings as to their motivation for their repeated and unjustified attempts to seek an adjournment of the hearing of this case. In this regard I consider that there may well be some truth in the submissions made on behalf of some of the defendants, that the mere existence, rather than the resolution of these proceedings would, at the very least, effect a delay in the resolution of the concerns of a significant section of the mosques' congregations in relation to the governance of the mosques. On the other hand, I do not overlook the submission made on behalf of the claimants that any such concerns could in themselves have been sought to have been made the subject of litigation.
Moreover, to the extent that the motivation of some of the defendants is said by them to be borne out of genuine concern as to the governance of the mosques, I consider that the 2nd claimant's evidence has not assuaged these concerns. On the contrary, I found the 2nd claimant to be unhelpful in illuminating the manner in which the governance of the mosques operates. Even putting aside the issue of democracy, I was left with a distinct impression of lack of transparency and accountability in their management, together with a concomitant reluctance for there to be any alteration in the status quo.
In regard to the 1st claimant, he has no doubt been an effective politician. The impression which I gained from his evidence was that he had been rather flattered to be asked to act as the mediator in this dispute, and saw some advantage to be gained from acting in this capacity within the mosques' congregations. Equally however, the implementation of the mediated agreement having failed, for reasons which so far as the claimants are concerned remains unclear, he now finds himself in the uncomfortable position of having been perceived by some to have been partisan, and regrets his involvement. The 1st claimant is certainly articulate and extremely polite to those in perceived positions of authority. However with those of whom he has no such perceptions, including in particular Mian Abdul Rashid, I consider that he can be somewhat overbearing.
The clear impression which I gained from the 1st defendant's evidence was that whilst, when pressed, he was prepared to articulate a cause with some vigour, he would only do so, and did on this occasion, when he was genuinely concerned on behalf of the mosques' congregations that there had not only been a lack of transparency in their management, but that this lack of transparency coupled with the documentation which had recently come to light, drove him to the genuine belief that the 2nd claimant and others were seeking to gain personal advantage from their dealings with this property, and that the 1st claimant's attitude towards the implementation of the mediated agreement supported these endeavours. Although the 1st defendant had agreed to act as the chairman of the association's interim committee, I did not gain the impression that he had been enthusiastic in accepting the position; rather he undertook it out of a sense of duty. Moreover, I certainly didn't gain the impression that the committee ran as a well-oiled machine, rather a disparate group of amateurs doing their best; far from being able to organise, let alone orchestrate everything which may have been said or done by its supporters or others. As a witness to events, I found the 1st defendant to be honest and straightforward. I also detected no evidence of the alleged vendetta (the details of which were never provided by the 2nd claimant) or any other improper motive against either of the claimants.
None of the other defendants were members of the association's interim committee. The 2nd defendant appeared to be a liberal Muslim who was motivated by a desire to see both democracy and transparency brought to bear upon the governance of the mosques. He was clearly intelligent and measured in his response to questions, and whilst willing to support these causes did not wish to become overly involved in the campaign to promote them. Hence his lack of attendance at either of the meetings on 8th or 26th January 2012. Overall, I detected no improper motivation by him against either of the claimants, and consider him to be an honest and straightforward witness. The 3rd defendant appeared to be an individual of more traditional Muslim hue, regularly involved in matters of prayer at the Jamia Mosque. However, in addition to supporting the causes of democracy and transparency, he appeared to have been genuinely upset at the actions of the 2nd claimant at the mosque on 16th December 2011. That said, having heard him give evidence, I certainly didn't gain the impression that he would have been likely to have played any pro-active role in any campaign; at most he would have been a follower of events. He did not appear to have been improperly motivated against either of the claimants, and he too appeared to be an honest and straightforward witness.
Although there appeared to be a good deal of vocal and written support by the 4th defendant for the campaign to introduce more democracy and transparency into the mosques' governance, I am unconvinced that I detected any genuine desire for these goals in themselves; rather I was left with the distinct impression that the 4th defendant enjoyed acting as a self-imposed advocate for the campaign, and, for reasons which were not able to be explored in cross-examination, he was really motivated by a desire to injure the claimants by peddling his own agenda of more extravagant accusations of corruption against them. Hence whilst I remain suspicious, yet ultimately unpersuaded, as to the identity of the author and publisher of the update, I am quite sure that the compiler and publisher of the dossier was the 4th defendant. He was an extremely articulate advocate in court, and I have no doubt an equally articulate and vociferous advocate outside that arena. He clearly appeared to relish his time in court, cross-examining the claimants and their witnesses, and I have little doubt that unencumbered by any rules of court, he took the leading part in advocating his own agenda against the claimants. Ultimately however when the time came for his account to be challenged, given the history of the trial proceedings, including both the lack of justifying medical evidence and the voluminous written material which thereafter appeared, I consider that at least part of the motivation for the 4th defendant's absence from the adjourned hearing was due to his reluctance to be cross-examined about his own evidence.
In the absence of having seen the 5th defendant or fully considering his evidence, it would be inappropriate for me to provide any assessment of him; save perhaps to observe that the evidence which I have heard suggests that the use of his website to post derogatory remarks about individuals is well known, and is not confined to one side or other of the current dispute.
Turning then to the context in which the issues in this case fall to be decided, it seems to me that over the years leading up to 2011 and beyond, both democracy and transparency were lacking in the management of both the Al-Noor and the Jamia Mosques. It is not for me to determine whether the lack of democracy was a matter which offended against the rules regulating the affairs of the mosques, albeit there is some support for it in the contemporary documentation. However, the lack of transparency in relation to financial affairs is a requirement of a more general nature, and I am satisfied that both this and the lack of democracy was a matter of genuine and deep concern to a significant section of the congregations of both of these mosques. Moreover I am equally of the view that when the documentation in relation to the ownership of the mosques' property came to light, although it provides for the 2nd claimant and others to hold the property on trust for the benefit of the congregations, both the prior lack of knowledge of the existence of the documentation and the pre-existing lack of transparency and accountability in the management of the mosques, caused genuine and serious concern to members of the congregations that the 2nd claimant and others were seeking to personally benefit from the mosques' funds.
In this regard it is of relevance that not only is it clear that the mosques' membership fees generate significant sums, but that the purchase of the land to the rear of the Jamia Mosque appears to have been unknown to any outside those directly involved in its purchase. Whilst I appreciate that certain of the defendants had sought some legal advice about the matter, this has not been explored on behalf of the claimants and thus the nature of it is unknown, and may have been limited to an exploration of the charity documentation. Moreover the general lack of transparency, which has remained unexplained by the 2nd claimant in his evidence, will have only fuelled the impression which had been gained by the defendants, that the 2nd claimant and others had matters which they did not wish to disclose, as did, no doubt, the breakdown in the implementation of the mediated agreement; a matter which I have already observed remains unexplained by either of the claimants, and which in turn appears to have generated a belief amongst some, that the 1st claimant had knowingly supported the 2nd claimant in these endeavours.
It is in that context that I am satisfied that without putting himself forward, and in the absence of any ameliorating response from the 2nd claimant prior to August 2011, that on 15th August, the 1st defendant was asked and agreed to be chairman of an interim committee on behalf of a significant section of the mosques' congregations which wished to promote a movement towards both democracy and transparency in their governance; causes to which the 2nd and 3rd defendants were equally committed, and to which the 4th defendant aligned himself.
Thereafter whilst there is some documentation setting out the views of the defendants both before and after the mediation on 15th September 2011, in contrast there is none of any note from the claimants. Eventually it appears to have been appreciated, no doubt by both sides of the dispute, that the mediated agreement was not going to be implemented.
It was during this period between November 2011 and January 2012 that Mohammed Tariq says that a series of meetings took place between him and certain of the defendants. Having seen him give evidence, whilst I am prepared to accept the majority of his evidence, I consider it unlikely that in the absence of notes he would have been able to recall all of their detail, location or precisely who was at each of them. Moreover there is some embellishment upon the contents of the original witness statement for which there is no satisfactory explanation. In this regard, whereas it appears that there are some close connections between Mohammed Tariq and the 2nd claimant, I reject the suggestion made by the 4th defendant that this renders his evidence unworthy of belief. On the contrary, subject to the observations I have made I found his evidence in general terms to be both accurate and truthful.
There appears to have been an initial meeting with the 2nd defendant when the latter explained to Mohammed Tariq the concerns about the governance of the mosques and showed him some Land Registry documents concerning their ownership. The 2nd defendant agrees that this meeting took place, albeit at the behest of the 5th defendant and after Aftab Ali had collected the documents for him.
I accept that there was a further meeting which the 2nd defendant attended, this time in the presence of the 4th defendant. Whilst I am prepared to accept, as Mohammed Tariq had stated in his witness statement, that the 4th defendant made widespread allegations of corruption against the 2nd claimant outside the immediate context of the dispute in relation to the two mosques, I am not prepared to accept the embellishment made in his evidence that the 2nd defendant had joined in these allegations. Nor in fairness to the 4th defendant am I prepared to accept the embellishment to his witness statement that one of the documents which the 4th defendant produced, none of which formed part of the dossier, included a document with the word "update" upon it. It is of note that the 2nd defendant recalls a second meeting with Mohammed Tariq, and it was during the course of this meeting that he recalled the 4th defendant making some other allegations concerning the 2nd claimant, including an allegation in relation to one of the mosques in Cardiff.
I accept that a further meeting took place, at which the 1st and 4th defendants were in attendance. The 1st defendant was in possession of a bundle of documents, albeit there was no mention of a dossier, and the 4th defendant made further allegations of corruption, this time relating to the 1st claimant. This evidence, in so far as the 1st defendant's attendance at the meeting is concerned, aligns with that of the 1st defendant, albeit he didn't recall the presence of the 4th defendant. He stated that the documents were those relating to the ownership of the mosques, and I accept that this was the case.
I accept that when Mohammed Tariq later read the article in the Nawa-i-Jang newspaper, a number of the allegations matched those which had been made by the 4th defendant during the course of the meetings with him. Moreover that there was an occasion when the 5th defendant came to Mohammed Tariq's shop in Cardiff and handed to him a bundle of documents which he told him had been compiled by the 4th defendant against the claimants, and he later recognised that these were the same documents which were contained in the dossier when he was later shown a copy of it.
It seems to me that the general thrust of Mohammed Tariq's evidence, as he acknowledged, was that whilst it shows a clear connection between the 4th defendant and at least the contents of the dossier, if not the original Nawa-i-Jang article, although the 1st and 2nd defendants have met him and discussed issues surrounding the governance of the mosques with him, there is nothing to connect either of them with the production of the dossier. I am satisfied that the only documentation which the 1st and/or 2nd defendants had with them, and to which they referred, was that limited to the governance of the mosques. To any extent that either of them was present when the 4th defendant said anything of a more extravagant nature concerning wider corruption by the claimants, there is no evidence that either of them lent their support to those allegations, and I consider that they would not have done so.
To the extent that it is relevant in relation to these proceedings, I heard insufficient evidence upon which to reach any conclusion about the behaviour of the 1st claimant at the Jamia Mosque on 9th December 2011. However, I am satisfied that on 16th December 2011 the 2nd claimant did act in an aggressive manner towards a member of the congregation when, as he admitted in evidence, he grabbed a mobile phone from him in order to prevent him from using it to film the proceedings at the mosque, when the 1st defendant was updating the congregation about the governance issues at the mosques.
Whether, in response to these actions, it was appropriate for the interim committee to have thereafter decided to seek an injunction from the County Court in order to attempt to control those actions is another matter. However, I am satisfied that they were genuinely motivated by a desire to prevent what they perceived as disruptive actions by the claimants, and I note that the only assistance which they received appears to have been from the 4th defendant, who acted as their advocate at the two hearings. In this regard, it is of note that a significant section of the 3rd defendant's statement in support of the continuation of the interim injunction appears to be unrelated to the incidents at the Jamia Mosque, and deals with alleged harassment by the claimants against the 4th defendant. Although this is not a matter which was explored to any great extent at trial, such that I am not in a position to reach any determination about it, I retain a suspicion that the author of this witness statement may have been the 4th defendant. Moreover, as it was clear during the course of the trial that the 4th defendant has acquired some legal knowledge, I anticipate that some of the other documentation relating to these proceedings may well have emanated from him.
In relation to the subsequent visit to the offices of the Western Mail, whereas this may have lacked prudence, I do not consider that it is evidence of any improper motive on the part of the 1st defendant.
The update
I am satisfied that the purpose of the meeting which the interim committee organised on 8th January 2012 was to explain to the mosques' congregations, both what genuine concerns they had relating to the governance of the mosques, and their plans for the holding of elections to the alternative governance structure. Moreover, I am satisfied that not only did those who organised and spoke at the meeting consider that they had a moral obligation to explain those concerns to the congregations, but that they did have such an obligation, and that those whom they anticipated would, and did attend the meeting, had a reciprocal interest in understanding those concerns. It may of course be, as with any open event, that there were some individuals in attendance who had no connection with either of the mosques, and therefore had no such reciprocal interest in their affairs. However, not only do I consider that the notice publicising the event would have been unlikely to attract those without such an interest, but having seen the video of the meeting, the numbers in attendance appear to have been far nearer the lower end of the estimated range. Furthermore, there is no evidence that any of them were not members of the mosques' congregations.
In these circumstances I am satisfied that the meeting would have attracted the privilege necessary to protect the 1st defendant who spoke at the meeting from a claim for defamation, and that the possible presence of others who were not legally interested in the issues concerning the mosques would not have invalidated that privilege, because their presence could not reasonably have been avoided, and the communication to them was ancillary and incidental to the communication to those who shared such mutuality of interest. As I have already observed, I am satisfied that the 1st defendant genuinely believed in the truth of what he said about the 1st and 2nd claimants, and acted with no improper motive in doing so. In these circumstances had the claimants chosen to commence an action against the 1st defendant for slander arising out of this meeting, (the decision not to do so remaining unexplained at trial), I am satisfied that he would have been in a position to successfully defend such an action.
However, in the present action for defamation, based upon the publication of the update, I am not satisfied that the claimants have overcome the initial hurdle of establishing that any of the defendants were responsible, either personally or jointly with others, for its publication. I am of course conscious that much of what the 1st defendant said in his oral presentation to the meeting was reflected in the written update. However, as was acknowledged by the 2nd claimant, much of this was common knowledge within the mosques' congregations. I have no doubt that if the 1st defendant had either been responsible for the authorship of the update or knew of its existence, he would have been likely to refer to it during the course of his oral presentation. Moreover, if he had been responsible for its authorship, like other documents emanating from him on behalf of the interim committee, it would have been headed with the name of the association, written in the first person and signed by him.
Having seen the video, although the 1st defendant's oral presentation was well organised, as I have previously observed, I am not satisfied that the organisation of the meeting was sufficiently controlled either by the interim committee or any of the defendants so that it can be inferred that they would have been either directly or indirectly responsible for the publication of the update at the meeting on 8th January 2012. The preponderance of evidence is that copies of the update had already been placed on the chairs of those who would be attending the meeting, and I do not accept the evidence of Omer Mian that copies of it were being handed out at the door. His evidence is out of alignment with the other evidence on this point, and as copies of the update had already been placed on the chairs, there would have been no purpose to be served in handing copies of the update at the door.
The 2nd defendant was not present at the meeting, and although the 3rd defendant was present, I consider that his role was extremely limited. In these circumstances there is nothing in the remaining evidence from which it could be properly inferred that either of them had taken part in either the authorship or publication of the update. In relation to the 4th defendant, although he was present and was sufficiently motivated and equipped to have authored and published the update at the meeting, unlike the dossier, I am ultimately unpersuaded that there is sufficient evidence from which it can be properly inferred that he did so, albeit if he had, then I am satisfied that he would have lost the protection of any privilege from the occasion due to the improper motive that directed his actions towards the claimants.
The dossier
I turn then to consider the dossier. In relation to its compilation, I consider that it is of significance that its most potentially damaging content was the copy of the original Nawa-i-Jang article, and in this regard I accept the evidence of Mohammed Tariq that some of the allegations, which the 4th defendant made against the 1st and 2nd claimants in the course of his meetings with him between November 2011 and January 2012, were reflected in this article. Moreover, I also accept that at some point the 5th defendant showed Mohammed Tariq a copy of the dossier, which the 5th defendant told Mohammed Tariq had been given to him by the 4th defendant. Although I am mindful that I have not had the benefit of hearing from the 5th defendant in the trial, I am satisfied that it is likely that what he said to Mohammed Tariq on this occasion was true.
In these circumstances I accept that during the course of January 2012 the 4th defendant began to compile a bundle of documents which, motivated by his desire to harm the claimants by making more extravagant accusations of corruption against them, he decided to distribute to various individuals, including both Superintendent Johnson and Andrew Davies. I consider it likely that, knowing the character and motivation of the other defendants, he did not disclose the full content of what was ultimately to become the dossier to them. I have no doubt that they would have assumed, quite correctly, that the bundle contained within it documents relating both to the ownership of the mosques and the history of the dispute. However, I consider that it is likely that the 4th defendant deliberately withheld knowledge of the documents containing the more extravagant allegations from the other defendants, as he correctly anticipated that they would not have supported his ulterior intentions in this manner or at all.
Unfortunately I have not heard any evidence from Superintendent Johnson. However I consider it likely that when the 1st, 3rd and 4th defendants met with him, although the 1st defendant may well have had some of his own documents with him concerning the ownership of the mosques, as this was the reason why he and at least the 3rd defendant had attended the meeting, I am satisfied that at some point the 4th defendant left a bundle of other documents with the officer, which in due course were passed to Mike Davies and recognised by the 1st claimant to be copies of at least some of the documents to be found within the dossier. In this regard I am not satisfied that either the 1st or 3rd defendants were aware that the bundle contained any documents other than those relating to the subject matter of the dispute in the Newport mosques. As I have already observed, the 4th defendant is likely to have had good reason not to disclose this material to the other defendants. In this regard, although its resolution is not central to the issues in this case, I consider it likely that the author of the letter to Superintendent Johnson dated 24th January 2012 was not, as implied, the 3rd defendant, nor indeed the 2nd defendant who had not been present, but the 4th defendant who had been present at the meeting.
In relation to the meeting on 26th January 2012, I am quite satisfied that Andrew Davies had a clear and accurate recollection of the event. He was unsure who had made the appointment for the meeting, and I accept the evidence of the 1st defendant that he didn't do so. It is apparent that, in the absence of the 4th defendant, although, as chairman of the interim committee, the 1st defendant commenced discussions with Andrew Davies, it is equally clear that as soon as the 4th defendant arrived he took over the meeting, and it was he who produced the dossier and gave it to Andrew Davies. Once again, I consider it likely that both the 1st and 3rd defendants would have assumed that the dossier contained documents relating to the dispute at the Newport mosques, and had no reason to believe that it contained documents relating to any other matter. In this regard it was not explored with Andrew Davies as to the nature of the oral presentation made by the 4th defendant, beyond his recollection that the 4th defendant had led the discussion on the dossier, and at this remove of time it may well be that he would have had no such recollection. However in these circumstances there is no evidence that the oral presentation extended beyond discussions about either the dispute in relation to the mosques' property and/or the conduct of the 1st claimant in relation to that dispute. As I have already observed, it is likely that the 4th defendant deliberately avoided mentioning his more extravagant allegations, as he correctly anticipated that the 1st and 3rd defendants would not have supported them.
In these circumstances I do not consider that there is any sufficient evidence to establish that either individually, or jointly, the 1st, 2nd and/or 3rd defendants were responsible for either the compilation or publication of the dossier. On the other hand, I am satisfied, on the balance of probabilities, that the dossier was both compiled by the 4th defendant and published by him to Andrew Davies, and that some parts of its contents were provided to both the 5th defendant and Superintendent Johnson, albeit this latter publication, as the claimants concede, would have been absolutely privileged. In so far as the submission that the publication to Andrew Davies was an occasion attracting privilege, unlike the Standards Commissioner, I do not consider that there would have been sufficient mutuality of interest between Andrew Davies and the 4th defendant in relation to these matters. In any event, I am quite satisfied that the 4th defendant lost any such protection by reason of the fact that he had no honest belief in these more extravagant allegations, and in relation to the allegations concerning the dispute in relation to the mosques' property and the 1st claimant's conduct in relation to that dispute, the 4th defendant was in any event improperly motivated by his desire to injure the claimants by any means at his disposal. Furthermore, this was not a situation in which, exceptionally, the 4th defendant was under any duty to provide known defamatory material to Andrew Davies. In relation to the issue of the wider dissemination of the dossier to those individuals mentioned within it, there is no evidence before me from any of those individuals, and, in its absence, I am not prepared to infer its wider distribution. It seems to me that the naming of these individuals is as equally likely to be mere puffery on the part of the 4th defendant, as opposed to determined intent, let alone action on his part to distribute it to them.
The website
There is no evidence that the 1st, 2nd or 3rd defendants were involved in the publication of any of the items posted on the 5th defendant's website. Moreover, I am wholly unconvinced that there was, as alleged by the claimants, any concerted campaign by the 1st, 2nd or 3rd defendants to defame the claimants in order to secure control of the mosques.
The evidence against the 4th defendant comprises that of the witness Mohammed Tariq, who I am satisfied was honest and accurate in his evidence that, in January 2012 the 5th defendant handed him a bundle of documents which he told him had been compiled by the 4th defendant against the claimants, which he later recognised were the same documents as those contained in the dossier. As I have already observed I am conscious that I have not had the benefit of listening to the evidence of either the 4th or 5th defendants during the course of the trial. However, not only do I consider that there is no particular reason to doubt the truth of what Mohammed Tariq was told by the 5th defendant, but as I am satisfied that the 4th defendant was the compiler of the dossier, it is likely that he would have been the individual who provided the dossier to the 5th defendant.
However, that in itself is by no means sufficient to establish liability against the 4th defendant for the publication of the material on the website. In order to do so the claimants are required to prove that by providing the 5th defendant with the dossier, the 4th defendant intended to and did encourage the 5th defendant to re-publish its contents on his website.
In this regard, I am satisfied that the claimants are able to establish joint liability for the publication of those parts of the website which posted copies of the documents within the dossier, namely the posting of the original Nawa-i-Jang article. Although the article is undoubtedly one which is able to be obtained from a variety of sources, including the newspaper's own website, the 4th defendant was well aware of the 5th defendant's proclivity for posting material of a derogatory nature on his website (such material having been posted about various of the parties including the 4th defendant) and, given the 4th defendant's improper intention of causing injury to the claimants, I am satisfied, both that his intention in providing the material to the 5th defendant was to encourage him to publish the material on the website, and that it did encourage the 5th defendant to do so.
In this regard, the evidence of Mohammed Tariq is that at an earlier stage of the chronology of events in this case, the 5th defendant had been supportive of the claimants. However, after coming into possession of the dossier, it is apparent that his allegiances changed, and he posted the defaming material on his website. Indeed, given the correlation between the allegations which the 4th defendant had been making to Mohammed Tariq during his meetings with him, it is certainly open to question as to whether the 4th defendant was the source of at least some of the contents of the original newspaper article. However, I make it clear that the claimants have not sought either in the previous or present action to allege liability against the 4th defendant on this basis, and it forms no part of the assessment of any damages in this case.
Assessment of damages
I am of course conscious that the claimants have already been awarded substantial damages for defamation against the publishers of the Nawa-i-Jang newspaper article, albeit that despite significant attempts to do so, the claimants have been unable to recover payment. Indeed, in the course of the trial it was submitted on behalf of the 1st and 2nd defendants, and subsequently adopted by the 4th defendant, that in these circumstances the present action on behalf of the claimants amounted to an abuse of process, and I was referred to authorities on the point including, Jameel (Yousef) v Dow Jones & Co Inc [2005] EWCA Civ 75 and Cammish v Hughes [2012] EWCA Civ 1655. However, it seems to me given the role which the 4th defendant played in the publication of the defamatory material for which he has been found liable, his motivation, and the serious nature of the libel, the claimants have successfully pursued what has been a real and substantial tort committed against them by the 4th defendant.
I do bear in mind that in so far as the publication of the dossier to Andrew Davies is concerned, his evidence was to the effect that he took little notice of its contents, believing it to be of a personal nature which would not adversely affect the 1st claimant's standing in the Conservative Party, and if the publication had only involved this individual, then only a modest award of damages may have been appropriate. I also bear in mind that the most seriously defaming words for which the 4th defendant is responsible for having published, in both the dossier and the website, are those contained within the original Nawa-i-Jang article, and that the previous award of damages in relation to that libel took into account the newspaper's wide circulation. However, it is clear from Associated Newspapers Limited & others v Dingle [1964] AC 371, that this is not an end to the matter, as the fact that others have libelled the claimants in other articles does not necessarily mitigate the damage caused by the 4th defendant's publications, albeit re-publication of the same words to the same audience will inevitably tend to cause less harm than the original publication. In this regard it is necessary to isolate, assess and compensate for the damage caused by each separately. However, in the present case, I bear in mind that the website appears to have been targeted at the local Muslim community, many of whom will not have read the original Nawa-i-Jang article when it was first published, and which is of course the environment in which the claimants live and work, and accordingly will have the most impact upon them; arguably more so than the original publication of the newspaper article. Moreover, the publication of the defamatory material on the website has taken place over a prolonged period of time, and may indeed be continuing.
I have given careful consideration to the conduct of the 4th defendant in the course of these proceedings. I, of course, bear in mind that he represented himself. However, even allowing for a considerable degree of latitude, not only did he pursue a significant number of matters which were unrelated to the dispute concerning the mosques' property, but his manner of doing so was such that, to an extent, this ought to be reflected in the overall award of damages in this case, as I am quite satisfied that not only did it attract further adverse attention in the local media, but it caused a significant amount of further distress and hurt to the claimants.
In my judgment the re-publication to the local Muslim community of the original Nawa-i-Jang article which contained serious allegations of fraud and corruption, not just in relation to the dispute about the mosques' property, but in particular about serious and widespread corruption by the claimants in other circumstances, has caused very significant distress and damage to the claimants' reputation. It is necessary for the award to reflect a just and proportionate assessment of all of the matters for which each of the claimants is entitled to be compensated. Accordingly, and taking all of these matters into account, I consider that the appropriate award of damages in this case is that awarded to the claimants in the previous case which arose out of largely the same subject matter, namely in the sum of £45,000.00.
Conclusion
Accordingly there will be judgement for each of the claimants against the 4th defendant in the sum of £45,000.00, together with an injunction restraining the 4th defendant from further publishing the words for which he has been found liable or any similar words defamatory of the claimants. The claims against the 1st, 2nd and 3rd defendants are dismissed. |
Mr Justice Knowles :
Introduction
On 12 October 2004 Mr Chockalingam, a consultant orthopaedic surgeon, performed a right below knee amputation on the Claimant, Mr Robert Baker. The amputation had become necessary after Mr Baker had, the previous year, jumped or fallen from a building and then suffered an assault whilst recovering from that jump or fall.
At the time of the amputation Mr Chockalingam worked for Epsom and St Helier University Hospitals NHS Trust ("the Trust"). In these proceedings Mr Baker has alleged that the amputation was carried out negligently in four respects. These concerned (a) the length of the leg stump (b) cutting back the fibula (c) bevelling or rounding the tibia and (d) soft tissue cover over the bone end of the stump.
Liability and causation were ordered to be tried first, and this is the judgment following that trial.
Length of stump
The first issue was whether by reason of negligence on the part of Mr Chockalingam the amputation left Mr Baker with too short a stump.
The primary reference point taken on behalf of Mr Baker in relation to this allegation was Campbell's Operative Orthopaedics, 19th edition ("Campbell"). This text expressed the view that "a reasonably satisfactory rule of thumb" for selecting the level of bone section was to allow 2.5 cm of bone length for each 30 cm of body height, and that "usually the most satisfactory level is about 15 cm distal to the medial tibial articular surface."
Stump length can matter to the outcome of amputation and prosthetic rehabilitation. Among other things, it is or can, particularly in combination with other factors, be relevant to healing, knee function, muscle strength, gait, ambulation, energy use, walking pace, and the fitting and use of a prosthesis.
The typed operation notes prepared by Mr Chockalingam at the time record that the amputation was "about 16 centimetre [sic] from the articular surface of the knee". Having heard Mr Chockalingam as a witness I accept his notes as a reliable record. On examination of Mr Baker, Professor Robert Grimer (a consultant orthopaedic surgeon at the Royal Orthopaedic Hospital, Birmingham, and the independent expert called by the Trust) considered the stump length was 15cm, and, having heard him as a witness, I accept the reliability of that measurement.
These findings are sufficient to dispose of this part of Mr Baker's case. However I add the following:
a. It is clear from the extract from Campbell that length is a matter of judgment and approximation, rather than precision. This becomes more obvious still as one examines other practitioner texts. Mr Yell, for Mr Baker, acknowledged in oral closing argument that it was "nebulous" to try to identify precise consequences of the length resulting in the present case.
b. It is important to keep the context in mind. At the time of the operation, length will be marked on the outside skin surface of the leg. The measurement will be made relying on what one can feel below the skin surface. Nothing more sophisticated than a metal ruler might be used.
c. It must be appreciated that later measurements from X-rays and MRI scanners are made in a different environment. Even then I note that at one point the expert witnesses called by both parties were agreed that one of the X-rays indicated a 15 cm measurement.
d. It was also clear to me that differing measurements advanced were at times a function of different choices of start and end point for the measurement. I was quite satisfied that Professor Grimer's choices when reaching the measurement of 15 cm were acceptable.
e. The measurements based on X-rays also differ because there is some obliquity in the cut end of the tibia. Even if the aim is a transverse cut (see Campbell), some obliquity will be inevitable where, as here, it is not suggested that instruments ensuring a precise transverse cut are used. I am entirely satisfied that the effect of the obliquity in the present case is not material for the purpose of answering the question whether the stump in the present case was too short.
An attempt was made on Mr Baker's behalf to raise a different allegation, that the shape of the end of the tibia compounded problems with the stump. The statements of case do not include this as a particular of alleged negligence in these proceedings. Even had it been included, it was not substantiated on the facts of this case by the evidence at this trial. I accept Professor Grimer's evidence that the obliquity of the tibial cut was, in the present case, irrelevant.
Cutting back the fibula
It was accepted by the Trust that failure to cut back the fibula would be a breach of duty. Mr Baker's case was that it was negligent to cut back the fibula less than 1.2 cm proximal to the tibia. The reference to 1.2 cm is to be found in Campbell in the sentence "Next, section the tibia transversely and section the fibula 1.2 cm proximally".
The typed operation notes prepared by Mr Chockalingam at the time record that "the tibia was cut and then the fibular [sic] was cut more proximal". Again I accept that as a reliable record. I am quite satisfied that the fibula was cut back.
The notes do not however record by what length the fibula was cut back. The evidence of Mr Chockalingam at trial was, I find, honest, conscientious and reliable. He said he intended to make the fibula about 1.2 cm "sharper", or between 1 and 2 cm. He made clear that he would not routinely measure whether it was 1 or 1.5 cm before cutting. It was possible, he acknowledged, that he cut it shorter than 1.2 cm.
The aim of cutting back the fibula is to get the soft tissue over the end of the stump. Over a lifetime of practice in the field Professor Grimer had never measured the length exactly but had aimed for a centimetre. In this he was in the company of other professionals in the field. His opinion is that there is no evidence of what the correct length is for cutting back. I accept that opinion, which is reinforced by the fact that not all professional texts give the 1.2 cm figure that Campbell gives.
If (as I have found) the fibula was cut back, Mr Baker's argument was that a later X-ray measurement, of 11 November 2010, showed it to be cut back 0.68 cm. By contrast, Professor Grimer has measured 1 cm from an X-ray of 16 June 2006. But even if 0.68 cm was correct, Professor Grimer's opinion was that that would not indicate negligence. Having regard to the aim of cutting back the fibula, I agree. Mr Vesely, a witness of fact at trial, noted in an examination in 2010 that impingement appeared to be caused at the distal end, but I am not satisfied that impingement is to be attributed to the fibula being cut at 0.68 cm rather than 1.2 cm.
Bevelling the tibia
It was accepted by the Trust that it is necessary to round off the ends of the cut bones in order to leave a smooth anterior position. Mr Baker's case was that Mr Chockalingam failed to bevel the anterior aspect of the tibia, leaving a sharp prominence on the stump end. It became clear at trial that, for the purpose of Mr Baker's case, there was not a material difference between the words "round off" and the word "bevel". The important thing was work to avoid a sharp prominence.
The typed operation notes prepared by Mr Chockalingam at the time do not refer to rounding off or bevelling. In his evidence at trial Mr Chockalingam however described how he used a gigli saw (his choice of saw, others would have other choices), angling it in order to bevel. He was clear that it was his invariable and routine practice to bevel, describing bevelling as an integral part of the amputation procedure. I accept his evidence, including that he applied his routine practice on this occasion as on others.
A great deal of emphasis was laid on Mr Baker's behalf on different degrees of rounding or bevelling said to be shown by different X-rays taken at different times, including after revision surgery in 2010. From the discussion of these X-rays, with witnesses and in submissions, I formed the view that although some appeared to show clearer and more pronounced bevelling than others, and some may have shown more desirable results than others, all achieved the aim or purpose of avoiding a sharp prominence. Nothing persuaded me that any showed work that fell below the standard required so as to warrant an allegation of negligence.
Providing adequate cover
An amputation of the nature undergone by Mr Baker involves providing a posterior flap over the bone end of the stump.
It was accepted by the Trust that failure to provide adequate soft tissue cover over the end of the stump would amount to a breach of duty. Mr Baker's case was that Mr Chockalingam failed to ensure adequate cover of the calf muscles to make a soft, smooth and comfortable amputation stump.
The contemporaneous operation notes prepared by Mr Chockalingam record that "the posterior muscular flap was fashioned to cover the bony edges". Again I accept that as a reliable record.
A soft smooth and comfortable stump is relevant to the successful fitting and use of a prosthesis, even though different forms of prosthesis are designed so that weight is taken in different ways. A week after the amputation Dr Subesinghe, associate specialist in rehabilitation medicine, wrote without further comment that the amputation had a posterior flap myoplasty. Two months later he was to note that Mr Baker had successfully rehabilitated with a prosthesis, although he complained of severe phantom pains.
After the amputation (and before) Mr Baker was also a patient of Dr Sooriakumaran, a consultant in rehabilitation medicine and clinical director at the Roehampton Rehabilitation Centre. I heard and saw Dr Sooriakumaran give evidence. Had Mr Chockalingam failed to ensure adequate cover of the calf muscles to make a soft, smooth and comfortable amputation stump, I am quite sure that Dr Sooriakumaran would have referred to it when writing to Mr Baker's GP in July 2008. Instead what Dr Sooriakumaran then wrote was that Mr Baker "has been successfully fitted with a prosthesis to achieve full-time outdoor unaided mobility". He went on: "there are no significant problems in his residual limb or problems related to the fitting of his prosthesis".
Before the amputation there had been infection in Mr Baker's leg. Infections were experienced after the amputation too, and I think Professor Grimer was correct to regard an infection that followed the amputation and required intravenous antibiotics over a period in hospital, as of some seriousness. On the expert evidence of Professor Grimer, which I accept, infection can lead to retraction. That may well account for some change in the stump end over time.
I refer to Mr Baker's evidence below. I do not overlook the description of the condition of the stump at different times given by Mrs Elaine Baker, Mr Baker's mother and a nurse by profession. Mrs Baker gave honest evidence at trial, and her recollection was sincere, but on this fourth and remaining particular of alleged negligence I prefer the evidence to be derived from the specialists and records and to which I refer in the previous four paragraphs. I reject this fourth and remaining particular of alleged negligence.
A wider view, and later events
Mr Chockalingam was last involved in Mr Baker's treatment in January 2005. At that time Mr Chockalingam found Mr Baker had returned to work as a decorator.
In 2010, more than 5 years after the amputation, Dr Sooriakumaran suggested that the stump was "rather short" (he suggested it measured 13 cm). He noted "more importantly" that the bone ends were rather sharp and inadequately covered with soft tissues. Mrs Baker recalled Dr Sooriakumaran saying that he believed the operation had not been done correctly and that he "had never seen a stump like it". But she was not to know that Dr Sooriakumaran had expressed a different opinion in 2008.
Dr Sooriakumaran's suggestions in 2010 appear to be when the allegations the subject of these proceedings began to take shape. For any objective assessment of the relationship (if any) between what Dr Sooriakumaran noted then about bone ends and tissue cover and the amputation, it would have been very important to bear in mind what Dr Sooriakumaran had said in 2008.
Also crucial to any assessment of the amputation in the context of legal proceedings, would be independent expert opinion. On Mr Baker's behalf Mr Peter Morrison was asked to provide an opinion. Mr Morrison is a retired consultant orthopaedic surgeon, with a professional address at Bath Clinic. His report dated 3 October 2012 offered views supporting the allegation that the amputation was carried out negligently in the four respects that have been alleged on Mr Baker's behalf.
But in writing that report Mr Morrison neither considered nor took account of the contemporaneous typed operation notes from 2004, although they had been provided to him. In cross examination at trial he agreed they were "a critical document" and said "I think in missing this page I admit to carelessness".
As it turned out this was but one of a number of points that rendered Mr Morrison of no assistance to the Court as an expert witness. In a letter of 20 July 2014 supplementing his evidence Mr Morrison sought to support a point he was making by embellishing a quotation from the witness statement of a Mr Vesely, a consultant plastic surgeon who gave evidence of fact at the trial. Mr Vesely had said in his witness statement that certain matters "suggest[ed] that the result of amputation surgery was sub optimal". Mr Morrison's embellished quotation omitted the words "result of" and added the words "and unsatisfactory" after "sub optimal". In his report of 3 October 2012 he claimed that Campbell's advice was that the fibula should be cut "at least" 1.2 cm proximal to the tibia; the words "at least" do not appear in Campbell.
If I may turn to Mr Baker, it is my duty to record that I found Mr Baker's recollection as a witness impaired. There were many discrepancies in his evidence, and between his evidence and contemporaneous records, especially in relation to his recollection of how he was or what he could manage at what time.
I do not intend undue criticism in what I have just said. An amputation is a huge event, and this amputation has not been the success he and others had hoped for, including for his ambitions at work. To the suggestion put to him in cross examination, that the vast majority of trans-tibial amputations on adults achieve a satisfactory outcome, Professor Grimer responded that that was tragically not the case. Others have been more fortunate, and reference was understandably made to some of the wonderful outcomes that can be achieved and were illustrated at the Paralympics in London in 2012.
Mr Baker has had the misfortune to suffer from severe depression. Involvement with drugs and alcohol preceded the amputation, but also continued after it. These things will not have helped but are not unrelated to what he has been through. There is anger and frustration in Mr Baker about his circumstances; it seems a blessing that he has a supportive partner so that he is not left alone with these emotions.
In his search for answers, Mr Baker's belief, prompted in 2010, that there must have been negligence in 2004 will have been sustained by Mr Morrison's reports. That is a cruel consequence of the poor quality of Mr Morrison's contribution. In another example of his failure to appreciate the role and responsibility he had as an independent expert witness, Mr Morrison, referring to the first duty of a doctor being to his patient, said that he was here to "support" Mr Baker. But rather than help Mr Baker, Mr Morrison has effectively deprived Mr Baker of an independent expert opinion.
Mr Morrison has also reduced the range of independent expert opinion that might otherwise have been available to the Court to enable points to be tested and debated more thoroughly still. Fortunately for the Court, the genuinely expert and independent evidence of Professor Grimer has proved sufficient. Professor Grimer's evidence was notable for its frankness on all points, regardless of whether they might be for or against the Trust that called him as an expert witness.
There must moreover be real force in the point made by Mr Antelme QC in closing for the Trust that without Mr Morrison's report the case could not have proceeded. I cannot know how it is that the legal team instructed by Mr Baker have continued the case without fully addressing, and causing to be corrected, matters that would have been as obvious to them as to anyone, and in particular the matters referred to at paragraphs 29 and 30 above. Since providing a draft of this judgment to the parties I have been shown a letter dated 13 October 2014 from Mr Baker's solicitors to the solicitors for the Trust and received further representations by letter dated 15 April 2015 from Mr Baker's solicitors. In combination these seek to offer some explanations of the matters to which I have referred, but I am not left satisfied by those explanations.
In and since 2010 Mr Baker has undergone stump revision surgery. Phantom pain and neuromas are mentioned repeatedly in medical records over the year or so before that surgery. There is no suggestion that either was a consequence of negligence in the amputation undertaken in 2004. The records show unfortunately that Mr Baker continues even today to experience severe pain after the revision surgery. This is even though the revision surgery has left a stump end that has padding and is soft. In January 2012 Dr Sooriakumaran was to write to a consultant in pain management to the effect that even though there was "fairly adequate muscle padding over the bone ends", and "the new X-ray shows both tibia and fibula as being trimmed back and contoured well", and "the stump presents as adequate", Mr Baker was suffering pain and had "not been able to improve upon his prosthetic mobility" since revision surgery. Last year Mr Vesely wrote on several occasions to Mr Baker's GP with reference to the continued severe pain from neuromas.
Conclusion
Having heard and read the evidence at this trial I reach the firm conclusion that, although there is no question that Mr Baker has suffered a great deal since his fall or jump in 2003 and the attack he suffered after that, the amputation in 2004 was not carried out negligently. |
Mr Justice Warby:
This is an application for judgment for damages to be assessed in this action for slander and libel, which arises from a television broadcast in January 2015.
The Claimants are two of the three Labour MPs for the Rotherham area. The first Claimant has been the MP for the Rother Valley constituency since 1983. The second Claimant has represented Wentworth and Deane since 1997. The third Labour MP for the Rotherham area is Sarah Champion. She was elected at a by-election in November 2012, her predecessor being Denis MacShane, also of Labour.
The Defendant is the Councillor for the Rawmarsh Ward and the Leader of the UK Independence Party (UKIP) group on Rotherham Metropolitan Borough Council (RMBC).
The RMBC commissioned an Independent Inquiry into Child Sexual Exploitation in Rotherham. The Inquiry, conducted by Professor Alexis Jay OBE, reported in August 2014. It concluded that some 1,400 children had been abused over a sixteen year period.
On Monday 5 January 2015 the Defendant and Sarah Champion MP were interviewed live on air by Kay Burley of Sky News. The following exchanges took place:
"[Kay Burley] It was particularly unimpressive that UKIP used the fourteen hundred kids that had been abused over sixteen years for party political favour and actually put a poster together saying "1,400 reasons not to vote Labour". Haven't those kids suffered enough? Was that really appropriate?
[Caven Vines] The kids have suffered enough and whether it was appropriate or not I mean they did appalling …
[Kay Burley] Was it or not?
[Caven Vines] Well, I thought it was appropriate, yes. People need reminding. Those fourteen hundred kids had been abused and been let go by the Labour Council and the Labour MPs. They knew what were going off, most … not Sarah, because she's only the new girl on the block. But certainly the other two, not telling me they did not know. In fact MacShane in his book has openly said so. So yes people need reminding. We cannot forget that they let the kids down and they're still letting them down. There's still no arrests, what's going on? Nothing has altered so we need to get in there and blow it open. This has got to be done.
[Kay Burley] I don't know if Denis MacShane said that in his book, I'll take your word for it but I haven't read it.
…
[Kay Burley] How are you going to change things for the better?
[Caven Vines] We've got this CSE problem. We've got to help these girls. We've got to rid the streets of these perpetrators …"
I have set out in bold the words identified by Mr Millar QC as those of which the Claimants particularly complain. The response from Kay Burley is not relied on by the Claimants. The remainder of the exchange that I have set out is relied on by them as context.
The Claimants issued their claim form on 29 January 2015, two weeks after the broadcast, with Particulars of Claim attached. The Particulars are in conventional form, containing only 15 paragraphs. Paragraphs 1 to 8 plead the background facts that I have summarised at 2 to 4 above. Paragraphs 8, 9 and 10 plead the words complained of, which I have set out at 5 above. Paragraphs 8 to 10 of the Particulars of Claim allege that the words complained of were defamatory of the Claimants, and complain of their publication to Kay Burley and the film crew (alleged to be slander), and to a substantial number of viewers of Sky News via the live broadcast (alleged to be libel).
Paragraph 11 pleads the Claimants' case on meaning. This is that "in their natural and ordinary and/or inferential meaning" the Defendant's words "meant and were understood to mean":
"that the Claimants knew of child sexual exploitation involving 1,400 children in Rotherham over sixteen years but despite knowing this they let the sexual abuse of the children go on and are now failing to ensure that the perpetrators are arrested and brought to justice."
Paragraph 12 pleads that the words complained of were calculated to disparage the Claimants in their offices as MPs. Words which satisfy that criterion are actionable as a slander without the need to satisfy the ordinary common law requirement that they caused special damage: Defamation Act 1952, s 2.
The Defendant, who has represented himself with some limited legal assistance, filed a Defence on 10 February 2015. On 23 March the Claimants issued the applications now before the Court. They contend that the Defence discloses no reasonable grounds for defending the claim and/or is an abuse of the court's process. They apply to strike it out on one or both of those grounds, and for judgment to be entered for them accordingly. Alternatively, they seek a determination of the meaning of the words, and summary judgment pursuant to CPR 24 on the grounds that there is no real prospect of a successful defence to their claims and no other compelling reason for a trial. In either case, the Claimants seek an order for damages to be assessed.
Legal principles
The Claimant in an action for defamation normally needs to prove only three things to establish liability: (1) that the Defendant has published, or caused or authorised the publication of, words which (2) refer to the Claimant and (3) are defamatory of the Claimant. In an action for slander the Claimant also needs to prove that the publication has caused special damage or that the case falls within one of the exceptions to that common law requirement, such as the one relied on here, pursuant to s 2 of the 1952 Act.
A person who participates in an interview for broadcast will normally be responsible for the resulting publication by broadcast, as they will have caused or authorised it.
Whether particular words refer to a Claimant depends on whether an ordinary reasonable person knowing the Claimant would understand the words to refer to them.
Whether words are defamatory depends first of all on what meaning they would convey to the ordinary reasonable reader, or listener. The approach of the law to the determination of meaning is well-established and was set out by Sir Anthony Clarke MR in Jeynes v News Magazines Limited [2008] EWCA Civ 130 [14]:
"(1) The governing principle is reasonableness. (2) The hypothetical reasonable reader is not naïve but he is not unduly suspicious. He can read between the lines. He can read in an implication more readily than a lawyer and may indulge in a certain amount of loose thinking but he must be treated as being a man who is not avid for scandal and someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available. (3) Over-elaborate analysis is best avoided. (4) The intention of the publisher is irrelevant. (5) The article must be read as a whole, and any "bane and antidote" taken together. (6) The hypothetical reader is taken to be representative of those who would read the publication in question. (7) …. (8) It follows that "it is not enough to say that by some person or another the words might be understood in a defamatory sense." Neville v Fine Arts Company [1897] AC 68 per Lord Halsbury LC at 73."
Words are defamatory of a claimant if they (1) substantially affect in an adverse manner the attitude of other people towards the claimant, or have a tendency to do so (Thornton v Telegraph Media Group Ltd [2010] EWHC 1414 (QB), [2011] 1 WLR 1985, [96]) and (2) their publication has caused or is likely to cause serious harm to the reputation of the claimant (Defamation Act 2013, s 1(1)). These tests are concerned with the tendency and effect of the words only. The belief that words are not defamatory if they are true is a common misconception.
A Defendant may dispute all or any of the matters which the Claimant needs to prove. The Defendant may do so either by positively denying them or by putting the Claimant to proof of them. If, however, these matters are admitted or established the Claimant is entitled to judgment unless the Defendant establishes a substantive defence. A Claimant does not have to prove that the words complained of were untrue.
The substantive defences that could in principle be available in the circumstances of this case are those of truth, honest opinion, and publication on a matter of public interest, that are provided for by ss 2, 3 and 4 of the Defamation Act 2013 respectively. These replaced the common law defences of justification, fair comment, and Reynolds privilege, all of which were abolished by the 2013 Act. The defence of truth is made out by proof that "the imputation conveyed by the statement complained of is substantially true."
A Defendant who wishes to advance any of the defences I have mentioned must specifically plead it. The rules as to what needs to be pleaded by way of defence are set out in the Part 53 Practice Direction. This requires a defence of truth to specify the defamatory meaning the Defendant intends to justify and to give details of the matters relied on in support of that allegation: PD53 2.5. Similar requirements apply to the defence of honest opinion (PD53 2.6). The same in principle is true of the defence of publication on a matter of public interest, though the PD has yet to be updated in this respect; it currently refers to "a privileged occasion" (PD53 2.7) reflecting the Reynolds privilege defence.
A Defendant who is unable to establish a substantive defence may be able to mitigate damages in various ways. One of these is by means of a retraction and apology. Another is by reliance on facts proved in an unsuccessful attempt to prove a substantive defence. This second rule has often tempted defendants to put on record over-optimistic pleas of justification (now truth) in the hope that the plea would at least diminish damages. As the Court of Appeal pointed out in Burstein v Times Newspapers Limited [2001] 1 WLR 579, however, this is not a proper use of the court's process. The solution devised by the Court in that case was to permit proof in mitigation of damages of facts directly relevant to the contextual background to the publication, even where no substantive defence could be advanced.
The court may strike out a statement of case, or part of one, if it appears to the court that it discloses no reasonable grounds for defending the claim, or is otherwise an abuse of process: CPR 3.4 (2) (a), (b). Those are the grounds relied on by the claimants. The Court may also strike out a statement of case if it fails to comply with a Practice Direction: CPR 3.4(2)(c).
The court may grant summary judgement on a claim if it considers that the Defendant has no real prospect of successfully defending the claim, and there is no other compelling reason why the case should be disposed of at a trial: CPR 24.2. The jurisdiction is available in respect of all kinds of claim. In former times the fact that s 69 of the Senior Courts Act 1981 enacted a presumption of jury trial for defamation cases affected the approach to summary judgment applications in such cases, but now that the presumption has been reversed by s 11 of the 2013 Act the approach is as it would be in any other kind of case.
That approach is well-established and familiar. A "real prospect" is one that is not fanciful, and better than merely arguable. The court should not conduct a mini trial. It should not hesitate to decide a short point of law if all the relevant materials are before it. But it should be wary of granting summary judgment in areas of developing jurisprudence.
The Defence
The Defence consists of six paragraphs. In paragraph 1 the Defendant admits paragraphs 1 to 10 and 12 of the Particulars of Claim. The Defence therefore admits the publication by the Defendant of statements defamatory of the Claimants and disparaging of them in their positions as MPs.
Paragraph 2 of the Defence objects that some of the words from the interview which are set out in the Particulars of Claim should be struck out as immaterial and irrelevant to the issues. This objection does not apply, however, to any of the words complained of that I have set out in bold above. Paragraph 2 admits that the Defendant spoke the words attributed to him in the Particulars of Claim.
Paragraphs 1 and 3 of the Defence appear to take issue with the Claimants' pleaded meaning and to put forward lines of defence. In paragraph 1 the Defendant says "…it is denied that certain words appearing in paragraph 11 are defamatory (see paragraph 3)". The reference is of course to paragraph 11 of the Particulars of Claim. Paragraph 3 pleads as follows:
"The Defendant admits that in their natural and ordinary and/or inferential meaning the words complained of were meant to be understood to mean that at all material times the Claimants knew of child sexual exploitation involving approximately 1,400 children in Rotherham (whether over the age of sixteen years or not). The Defendant denies that he asserted either in fact or by innuendo that the Claimants or either of them let the sexual abuse of the children go on in the sense that they were in a position where they might have directly intervened in individual cases to have prevented its occurrence and puts the Claimants to proof of such an assertion. The Defendant admits that he did assert that the Claimants and both of them are now failing in the sense that they are still omitting to ensure that the perpetrators are arrested and brought to justice and pleads justification for this assertion of fact and asserts that no arrests or prosecutions have to date taken place and puts the Claimants to proof of what pressure they or either of them have/has exerted and which arrest or arrests and which prosecution or prosecutions have resulted to date; and the Defendant further pleads that such an assertion is not defamatory unless it can be shown that the Claimants or either of them were or are in a position to exert such pressure upon the police or the Courts by virtue of their respective offices or otherwise."
Paragraph 4 of the Defence puts the Claimants to proof of their allegations of injury to reputation, distress, humiliation and upset.
Paragraph 5 of the Defence denies all the matters pleaded by the Claimants in support of their claim for aggravated damages, with one exception. Paragraph 14(d) of the Particulars of Claim complains that the Defendant has refused to apologise publicly and has failed publicly to withdraw the allegations complained of. Paragraph 5 of the Defence says this:
"with regard to paragraph 14 d of the Particulars of Claim the Defendant now apologises for the words in the original interview with Kay Burley: … 'and they're still letting them down' which was a statement of opinion pertaining to the short period during which the Claimants could not reasonably have been expected to have had any material influence owing to the course and momentum of the enquiry into previous Council and other misfeasance which rendered them unable to rectify matters at this stage. The Defendant now formally retracts those words, but asserts that in the overall context those words were not capable of causing damage to the Claimants or either of them."
Paragraph 6 denies the Claimants' allegation that unless restrained by the Court the Defendant will further publish or cause the publication of the words complained of or similar words defamatory of the Claimants.
Evidence on the application
In a short witness statement in support of the claimants' application Mr Shamash of the claimants' solicitors refers to the admissions in paragraph 1 of the Defence and describes the remainder of it as "vague and incoherent". He speculates that the Defendant's case may be that the meaning complained of is present in the words complained of, but is only partly defamatory. He points out however that the Defence appears to assert a meaning that the words "were meant to" mean, that is to say what the Defendant's intention was. Mr Shamash says that none of the defences in ss 2-4 of the Defamation Act 2013 are advanced, and maintains that on the evidence the Defendant has no real prospect of defending the claim and that there is no other reason for the case to be disposed of at a trial.
In response to the application the Defendant has submitted a short witness statement with three exhibits. One is a transcript of the whole programme, accompanied by a recording, the second is his Defence, and the third is "my written and submitted defence evidence". He asserts that his evidence shows that "the Claimants have no reason or evidence to bring this case against me and it is them who have no reasonable grounds [on] which to bring a case against me to the courts." He claims that "judgment for damages to be assessed should therefore be entered in favour of the Defendant." He has also submitted an "Evidence script – particulars of claim – my answers in simple terms". The Defendant has also submitted a skeleton argument.
In his documentary submissions the Defendant made complaints about the way the case has been handled by the Claimant's solicitors. I was not persuaded that they have, as he complained, taken advantage of him. But I spent time at the hearing ensuring that the Defendant had a full opportunity to present his case, and he confirmed that he was satisfied that he had done so.
The Defendant's case
From the written material and his oral presentation I have determined what I now understand to be the essential features of the Defendant's intended defence case. These are as follows. First, he stands by the admissions made in paragraph 1 of his Defence and his denials of damage. Secondly, however, he denies the meaning complained of. What he said in the interview was intended by him to refer to the Claimants' conduct in the year 2012 and only that year, he says. As he put it in a letter to the claimants' solicitors on 16 January 2015 the substance of which was repeated in a statement issued later and reported in the Rotherham Advertiser on 23 January 2015 "to clear any misunderstanding or misinterpretation of my comments":
"I would like to take this opportunity to clear up any misunderstanding your clients may have with reference to my comments made on Sky TV on the 5th January 2015.
The comments I made were in reference to the publication in Mr MacShane's book .. in which Mr McShane makes reference to a meeting of Rotherham Councillors and MPs during which they discussed the articles published by Mr Andrew Norfolk in the Times Newspaper in 2012 relating to CSE in Rotherham.
In the Times articles both your Clients are named.
My comments on Sky TV were taken from Mr MacShane's book, to which I clearly referred when making them. I also referred to Sarah Champion as the 'new kid on the block' as she was elected in the same year, 2012 – that to which I was referring.
At no time did I insinuate any other period in time. All my references were made to Mr MacShane's publication of the article published in 2012 and my reference to Sarah Champion in the same year 2012."
The articles by Andrew Norfolk in The Times in 2012 are those which first brought child sexual exploitation in Rotherham to national attention. The reference to Mr MacShane's book is to 'Prison Diaries' published in 2012. The Defendant made clear to me that his case is not only that he intended his words to refer to 2012 and no prior point in time, but also that listeners will have understood this. The Defendant points out that it was not he but Kay Burley who referred to "sixteen years". He submits that nobody could have thought that the Claimants knew about the abuse for sixteen years, because it was only in 2012 that it emerged publicly, through Mr Norfolk's article.
Secondly, the Defendant maintains that what he said was true. The way he put his case to me in his oral submissions is that "in 2012 the claimants knew most of what was going off about child sexual exploitation in Rotherham and did nothing about it".
In support of his case of truth so far as the first Claimant is concerned, the Defendant relies on the following:
i) Mr MacShane's book, which he says clearly states that the first Claimant attended a meeting in Rotherham Town Hall in 2012 at which the Andrew Norfolk article was discussed, and that the first Claimant "aggressively denounced" the article. A page of the book, exhibited by the Defendant, says that at a Town Hall meeting the first Claimant "objected to Andrew Norfolk's reporting in The Times, which painted Rotherham in a black light."
ii) A statement made by the first Claimant in the House of Commons on 2 September 2014 and reported in Hansard at column 172, in which the first Claimant referred to meeting one of the victims and her parents over a decade earlier, and to deep concerns he had about inactivity on the part of the South Yorkshire police.
iii) The Defendant maintains that the first Claimant has also said that he kept in touch with the family and met them in Westminster on 14 June 2011 when they were campaigning for victims of sexual exploitation. In these circumstances the Defendant says the first Claimant cannot claim not to have known.
iv) The Defendant also refers to a speech by the Labour Party Leader Ed Miliband at Sheffield Hallam University and reported in the Sheffield Star in which Mr Miliband said "it was terrible what happened in Rotherham. Lots and lots of young people were terribly let down, including by Labour representatives". The first Claimant is one such representative, says the Defendant.
v) In his submissions to me the Defendant added that the first Claimant could and should have done more, by taking the matter up with the Chief Constable or the Home Secretary.
As for the second Claimant, the Defendant relies in support of his case of truth on the following:
i) A constituent wrote to the second Claimant in September 2012 saying that he and others were worried about the scale of the abuse and asking what he was going to do about, and whether he would call for an inquiry.
ii) The second Claimant responded by email on 5 October 2012 "admitting", as the Defendant puts it, that he had had a meeting on the subject with the Council leader and Cabinet (who certainly knew about the abuse, says the Defendant). The second Claimant's response to question about a call for an inquiry was to say "I am not sure an inquiry would help the girls and their families especially if it focuses solely on Rotherham and on Asian men grooming white girls. Unfortunately there are many examples of this kind of systematic abuse and exploitation."
iii) The Defendant criticises the second Claimant for this response, which became public in September 2014 via The Times. He says it shows that the second Claimant knew there was widespread abuse and yet resisted an inquiry.
iv) The Defendant points to a statement made by the second Claimant in the House of Commons on 2 September 2014 reported in Hansard at column 173, when the second Claimant said that "those who knew about that terrible abuse and did not do their job by protecting those children or prosecuting the offenders must now be called to account." The Defendant says that this applies to the second Claimant himself
v) The Defendant relies in relation to the second Claimant on Mr Miliband's speech at Sheffield Hallam University also.
The strike-out application
The Defence shows some signs that someone with pleading experience has had a hand in its drafting, and the Defendant told me that he had received some help with it. But the document – and in particular paragraphs 3 and 5 - also indicates that those responsible for its creation did not have a clear understanding of the basic framework of defamation law, as outlined in this judgment above. So far as the Defendant is concerned, that impression has been confirmed by his submissions at the hearing.
The Defence admits clearly enough that the Defendant published words which were defamatory of the claimants and calculated to disparage them as MPs. However, when it comes to paragraph 3 the position becomes both confused and confusing. Paragraph 3 appears to approach the issue of meaning on the basis, which is plainly wrong in law, that it depends at least in part on what the Defendant intended his words to mean. The Defendant's oral submissions displayed the same misunderstanding.
Paragraph 3 also purports to plead justification (the language of the common law) of a factual assertion that the Claimants and both of them are failing to ensure that the perpetrators are arrested and brought to justice, whilst at the same time asserting that this is not a defamatory meaning (in which case it would not be necessary to justify it) and purporting to place the onus of proof on the Claimants in this respect (when the onus lies on the Defendant). Paragraph 5 then appears to acknowledge that the very words that assert that the Claimants are "still letting them down" are unwarranted, to apologise for and to retract those words. Paragraph 5 also maintains that it was an expression of opinion, not of fact, and harmless. This is a muddle.
Mr Millar submits that the Defence asserts an alternative meaning but on a mistaken legal basis, and in any event pleads no substantive defence to any alternative defamatory meaning. He submits further that the Defence is so vague and incoherent as to justify striking it out on that basis in any event.
In my judgment the Defence is incoherent, fails to disclose any reasonable basis for defending this claim, and fails to comply with Part 53 Practice Direction. The admissions in paragraph 1 of the Defence are enough to entitle the Claimants to judgment, in the absence of any defence. No proper ground of defence emerges clearly or at all from the remainder of the pleading. To the extent that it seeks to dispute the meaning complained of, the Defence does so on a legally unsound basis and fails to make clear the extent to which and the basis on which it does so. In any event, taken overall, the Defence does not appear to me to contain any assertion that any meaning defamatory of either Claimant was true to any extent. It certainly fails to identify any defamatory meaning that is to be defended as true, and to specify the facts relied on in support. My reading of the mention of "justification" in paragraph 3, in context, is that it asserts the truth of the bare fact that the Claimants have not ensured that anyone is brought to justice, without attaching to that fact any defamatory imputation. Only in that way can it be reconciled with paragraph 5.
These are all defects which are, in principle, curable. Applications to strike out for the reasons I have given are often encountered in defamation actions, especially where a party is unrepresented. They are usually met by a proposal to amend, sometimes prompted by the Court. In this case it has become clear that the Defence does not set out the case which the Defendant would now wish to put forward in answer to the claim. Indeed, the case that he now puts forward is not only different from but in conflict with his pleaded case, in at least three significant respects.
i) First, he no longer says, as he appears to have done in paragraph 3 of the Defence, that he intended his words to mean that "at all material times the Claimants knew of child sexual exploitation involving approximately 1,400 children in Rotherham". He now says he meant only to allege knowledge from 2012.
ii) Secondly, he now asserts the truth of a different proposition from one of current failure to act that he said in his Defence (paragraph 3) that he would justify and (in paragraph 5) that he retracted and apologised for. He now asserts knowledge and failure to act from 2012 and, in the case of the first Claimant, earlier.
iii) Thirdly, whereas he previously called on the Claimants to prove that they were in a position to exert pressure, the Defendant now says positively that the Claimants are to be criticised for failing to act.
In those circumstances, if I considered that the Defendant had now put forward a defence case that had a realistic prospect of success at a trial, or which the Defendant should for some other compelling reason be allowed to put forward at a trial, I would allow him an opportunity to formulate an Amended Defence, rather than strike out and enter judgment at this stage. I would take the same course if I considered that a defence case was available to him which met those conditions, even if he had not himself raised it.
There would be no point in such an exercise, however, indeed it would be wasteful of valuable resources to adjourn for that purpose, if I was satisfied that the Defendant had no prospect of successfully defending the claims, and that there was no other compelling reason for a trial. Mr Millar's submission on behalf of the Claimants is that this is the position. I therefore turn to consider whether he has satisfied me that this is so.
The summary judgment application
Mr Millar invites me to rule on meaning and to proceed to grant his clients summary judgment. Mr Millar's submission is simple. As usual in actions for defamation the key lies in the meaning of the words. Applying the principles set out in Jeynes, the words complained of plainly bear the meaning complained of by the claimants, and the Defendant has put forward nothing that could conceivably amount to a defence to the claim.
As the Defendant is unrepresented I need to be careful that he is not unduly disadvantaged as a result. I need to make sure that I consider not only the points that he has raised, both in writing and after my questioning of him during the hearing, but also any other matters that might reasonably have been raised on his behalf had he been represented. As the case involves statements on political matters I need to proceed with caution, bearing in mind that the principle that the court in determining meaning should avoid over-elaborate analysis has particular resonance in such a context (Waterson v Lloyd [2013] EMLR 17 at [66] (Laws LJ)), and the importance of not allowing the law of defamation to stifle political debate. It is also important to have in mind that there may sometimes be reasons which justify a case going to a full trial, even if it appears that one party or the other cannot possibly succeed. One such reason is that the case involves a developing area of the law.
Bearing all those matters in mind I am satisfied, first, that it is just and appropriate for me to resolve the question of meaning. The relevant principles are clear and the issue is straightforward. The Defendant has had an adequate opportunity to put forward his case on the issue. I also consider the answer to be clear.
There is no dispute that the Defendant's references to the two Labour MPs were references to these claimants. In my judgment the ordinary reasonable viewer of Sky News who saw and heard the Defendant's interview will have understood him to be saying (1) that the claimants knew for years most of what was going on by way of large-scale sexual abuse of children in Rotherham, and let it go on despite such knowledge; (2) that they thereby let down the children; and (3) that they were still failing to ensure that the perpetrators were brought to justice. Applying the principles I have identified, there can in my opinion be no doubt that these meanings are defamatory.
It will be apparent that I do not fully accept the meaning pleaded on behalf of the claimants. The differences are, however, matters of emphasis and degree rather than fundamental matters. I agree with the Defendant to this extent, that the reasonable viewer will not have taken him to be saying the MPs knew about the abuse throughout the whole of the sixteen years that it was said to have gone on. But he did follow a question referring to that period, and to the 1,400 children abused over that period, by referring to "those 1,400 kids" as having been abused and "been let go" by "the Labour Council and Labour MPs". Referring to both groups, he then said that "they let the kids down". These statements plainly suggest that the MPs knew of abuse on a vast scale, which in turn implies a considerable period of time. The suggestion is clearly one of inactivity over a lengthy period despite that knowledge.
Whatever he may or may not have intended, the Defendant's suggestion that ordinary viewers will have understood him to be talking about the claimants' conduct from 2012 only is in my view simply untenable. The Times articles were not referred to. Mr MacShane's book was mentioned but not its date nor, in any detail, its contents. The contents of Mr MacShane's book are not matters of general knowledge. I note that they were unknown to Kay Burley; she said so immediately after the Defendant's reference to the book. I add that I am not persuaded from what I have seen that the book limits any room for criticism to that period. Even if it did, it would not follow that an informed viewer would take the Defendant to be limiting his criticisms in the same way.
The fact that Ms Champion had been elected only two years earlier was made known earlier in the programme. But I do not follow the Defendant's argument that viewers, knowing this, would have taken him to be limiting his criticisms of the claimants to the period in and after 2012. To my mind, the fact that the Defendant expressly exempted Ms Champion from criticism because she was so recently elected clearly implies that he was criticising the claimants for failures in the period before 2012, when she came on the scene, rather than at or after that time.
There was therefore nothing in what the Defendant said that stated or implied, nor was there any other matter that was known to his audience, that would serve to limit in the way he suggests the period of time to which his allegations that the Labour MPs knew "most" of what was "going off" would be taken to relate. On the contrary.
I turn to consider the matters which the Defendant has put forward by way of defence. Again, I am satisfied that I can do this fairly at this stage. In order to assess whether the matters put forward could amount to an answer to the claims it is necessary first to consider the extent to which they relate to the claimants' complaints. Next, it is appropriate to consider their nature: whether they are plainly factual or whether they are or might be found at a trial to be expressions of opinion. In so far as they are plainly factual I need to consider whether there is a real prospect of a defence of truth. In so far as they are or may be expressions of opinion I must assess whether, although he has not put one forward, the Defendant may have available a defence of honest opinion which might succeed. I shall deal separately with the public interest defence under s 4 of the 2013 Act.
As I have indicated, I regard the first meaning identified at paragraph 47 above as substantially similar to the first part of the meaning that is complained of by the Claimants. In my judgment this was plainly a factual allegation. The contrary is not arguable in my view. The second of my meanings is not reflected in the meanings complained of; it is in my view a comment on the facts as alleged by the Defendant, but one of which the Claimants do not complain. My third meaning is substantially identical to the final part of the Claimants' meaning. This was in my judgment clearly a comment, but one that plainly implied the factual assertion that the claimants were failing to take steps that were open to them to ensure that the perpetrators were brought to justice.
The Defence contains nothing that could support a defence of truth to the first, factual defamatory meaning I have identified. The matters which the Defendant has put forward since the service of his Defence as supporting a defence of truth could not in my judgment begin to establish the substantial truth of that meaning. Mr Millar was justified in characterising the Defendant's criticisms of both Claimants as quite different in kind from the imputations conveyed by his words in the interview.
The Defendant's criticism of the second Claimant is not that for years he knew of but failed to act on knowledge of abuse on a vast scale, but rather that he should have been more enthusiastic about a public inquiry in October 2012, when asked about it by a constituent. The Defendant's criticism of the first Claimant is not that he knew of and failed to act on knowledge of abuse on a large scale, but that he should have done more from 2003 about the case that he did know about, as that might have stopped the abuse. Such matters may be relevant and admissible in mitigation of damages under Burstein principles, but they could not support a defence that the meaning I have identified is substantially true.
The Defendant has no need of an answer to the second meaning I have found, as it is one of which the Claimants do not complain. It does not seem to me, however, that it could be defended. The Defendant does not assert the existence of a sufficient factual foundation for that comment. As to my third meaning, that the Claimants were still failing to act, this is not materially different from the last part of the Claimants' meaning. It is essentially the suggestion for which the Defendant has apologised, and which he retracted, in paragraph 5 of his Defence. The Defendant has not sought to defend anything of that nature at the hearing of the applications. I cannot detect in any of the material he has put before me any basis for criticising either Claimant for any failure to take action at the time of the interview in January 2015. Indeed, the Hansard extracts of September 2014 on which the Defendant relies show the Claimants speaking out publicly in favour of action.
In summary, therefore, the words complained of bore a defamatory factual meaning about both claimants which the Defendant says he did not intend to convey, which he does not seek to defend as true, and which in my judgment he plainly cannot defend as true on the basis of any facts that he has put forward. The words also conveyed a defamatory meaning which is or may be an expression of opinion about the claimants' alleged conduct, but is one of which the claimants do not complain. Thirdly, the words conveyed a defamatory opinion about the claimants' current conduct which the Defendant does not now seek to defend, but has withdrawn and apologised for. Thus far the case would appear to be one where the Defendant has no answer on liability even if he may have points to make in mitigation of damages.
I now turn to consider however whether the Defendant might have available to him a defence of publication on matter of public interest under s 4 of the Defamation Act 2013. The Defendant has not raised the defence, but as already noted he has had little legal assistance and it is clear that he has not so far been assisted by anyone with any detailed or up to date knowledge of the law of defamation. It is therefore appropriate that I should give some consideration to this issue.
It is, in general terms, a matter of high importance to afford political speech protection from the chilling effects which the law of defamation can have. As I noted in Barron v Collins [2015] EWHC 1125 (QB) at [54], this defence is potentially available to meet the need to allow trenchant expression on political matters. The defence can apply in cases where, as here, the defamatory statement contains allegations of fact which cannot be defended as true. In principle it seems it may be capable of protecting expressions of opinion even though the defence of honest opinion is not available – though commentators have observed that it is hard to envisage circumstances where this would be so.
Section 4(1) provides:
"It is a defence to an action for defamation for the Defendant to show that (a) the statement complained of was or formed part of a statement on a matter of public interest; and (b) the Defendant reasonably believed that publishing the statement complained of was in the public interest."
Section 4(2) requires the court to "have regard to all the circumstances" in determining whether the Defendant has shown these matters.
It is not necessary to receive more evidence about the circumstances than I have been provided with on this application to conclude that the first of the statutory requirements is plainly satisfied in this case. The question of how much politicians knew about the long-running child sexual abuse in Rotherham and whether they failed the victims to any extent are unquestionably matters of high public interest. The issue becomes considerably more complex when it comes to the second requirement of s 4(1).
Because the Defendant has not been advised to raise, and has not raised, this matter the evidence and information that I have about his state of mind and the other relevant circumstances is somewhat limited. He has said quite clearly and emphatically that he did not intend to suggest any knowledge or failures by the claimants before 2012. It might be said that he therefore cannot have believed, let alone reasonably believed, that it was in the public interest to make "the statement complained of", which bore a quite different meaning. It may well be, however, that in this context the term "statement complained of" means the words used rather than the imputation which they conveyed. "Imputation" is the word used in the 2013 Act to refer to what is otherwise referred to as "meaning". On this view, a reasonable belief that it is the public interest to make statement A could be the basis for a defence, even if the words used unintentionally conveyed meaning B. That would seem more consistent with the previous law.
I have expressed these views in somewhat tentative and provisional form for two reasons. First, because the defence under s 4 is a new statutory defence, which has yet to be the subject of any decision. Although the Explanatory Notes to the Act suggest that it was based on and intended to reflect the principles of the pre-existing Reynolds defence, there is inevitably some room for argument about its exact scope and application to particular facts. Secondly. on these applications there has been no such argument, for reasons that will be obvious from what I have already said. The evidence also may have been more limited than it would have been had the prospect of such a defence been considered by or on behalf of the Defendant. I am also conscious of the speed with which this matter has proceeded.
In the end, although I do not consider that any tenable defence has been put forward so far, I am left with a distinct feeling of unease at the prospect of granting summary judgment in a matter of this kind, against an unrepresented litigant, without giving him a further opportunity to take professional advice on the specific question of whether this as yet untested statutory defence may arguably be available to him. In all the circumstances I have decided to adjourn the claimants' summary judgment application for a suitable period of time, to enable the Defendant to take advice and, if so advised, to prepare and submit a draft Amended Defence and further evidence, limited to the one question that I have identified as potentially deserving of further consideration.
This seems to me to be step which is necessary for at least two of the purposes identified in CPR 1.1(2) as factors in dealing with cases justly and at proportionate cost. The first is "(a) ensuring that the parties are on an equal footing". The second is "(c) dealing with the case in ways which are proportionate … (ii) to the importance of the case [and] (iii) to the complexity of the issues". The case is one of importance to the parties and the wider public because of the national importance of the Rotherham child abuse scandal and the role of politicians in relation to the abuse. The complex issues in the case are, potentially, the applicability of the s 4 defence. That is also a matter of general importance. I am not satisfied that the case will have been dealt with in accordance with those requirements of the CPR in the absence of the adjournment.
I acknowledge that this decision may cause the parties to incur additional cost which may ultimately prove fruitless. I also appreciate that the Defendant has, as he told me, no financial resources that would enable him to pay for representation. Conditional Fee Agreements remain permissible in litigation of this nature, however, and it is not impossible that advice and representation on a pro bono basis could be made available. If further costs are incurred that ought to be paid by the Defendant but are irrecoverable by the Claimants because of the Defendant's financial position, that in my judgment is a proportionate price to pay.
Conclusion
I have concluded that the words complained of bore a defamatory factual meaning about each of the claimants which is substantially similar to the meaning complained of by them, and which the Defendant cannot defend as true. I have concluded that the words contained a defamatory expression of opinion about the Claimants which is substantially identical to the meaning complained of by them, which the Defendant accepts is untenable and has withdrawn. I would have granted summary judgment in favour of the Claimants for damages to be assessed, but for the fact that the Defendant is unrepresented and has not benefited from informed legal advice. In my judgment he should have a further, but final, opportunity to take professional advice on whether, although he has not raised it himself, he may have an arguable defence of publication in the public interest under s 4 of the Defamation Act 2013. I am adjourning the summary judgment application to allow that to be done.
Postscript
After the handing down of this judgment in draft, and having taken time to consider his position, the Defendant told me that he did not wish to take advantage of the opportunity I had decided he should have. Nor did he wish to appeal. He accepted my judgment. After questioning the Defendant I was satisfied that this was a fully informed decision made after consideration of his options, and in the knowledge of the implications of the position he was adopting.
Mr Millar then made an application for judgment for damages to be assessed, which the Defendant did not resist. Mr Millar did not seek an injunction, but invited me to adjourn that matter to the remedies stage of the action. I entered judgment for damages to be assessed on a date to be fixed, with any claim for a permanent injunction to be disposed of at the same hearing. I summarily assessed the claimants' base costs of the action in the sum of £15,000 inclusive of VAT. I extended time to pay to 28 days, with permission to the defendant to make an application within that period, supported by evidence, for a further extension and for a payment regime, if so advised. |
Mr Justice Warby:
This is the trial of preliminary issues in this action for defamation. The Claimants are all Labour Party MPs for constituencies in the Rotherham area. The first Claimant has been the MP for Rother Valley since 1983. The second Claimant has represented Wentworth and Dearne since 1997. The third Claimant is the MP for the constituency of Rotherham, having won a by-election in November 2012, as successor to Denis MacShane. All three are standing again at the forthcoming election. The Defendant is the MEP for Rotherham, a member of the UK Independence Party, and is the UKIP candidate for the Rotherham constituency.
The Claimants' claims for slander and libel arise from a speech given by the Defendant at the UKIP Conference on 26 September 2014, which was broadcast live on the BBC Parliament channel, and republished in whole or in part on the UKIP website, Twitter, and the Press Association Mediapoint wire service. The speech took as its main theme the sexual exploitation of children in the Rotherham area, which had become a national scandal following a report by Professor Alexis Jay, published in August 2014. The Defendant focused on the role of the Labour Party, including that of Rotherham Council and made reference to "the three Labour MPs for the Rotherham area".
The Claimants allege that the words I have just quoted will have been understood as a reference to each of them. Their case is that the speech meant, of each of them, that they "knew of the horrific sexual abuse of around 1,400 children in Rotherham over sixteen years but failed to act, keeping quiet and allowing the abuse to continue because it suited their political purposes." It is the Claimants' case that this is an allegation of fact.
The Defendant does not dispute that her speech referred to the first and second Claimants but, for reasons that I will come to, she denies that a reasonable person would have understood it to refer to the third Claimant. The Defendant disputes the Claimants' pleaded meaning which fails, she submits, to capture what her speech said about Rotherham MPs. Her case is that this was a political speech and that the words complained of, properly assessed, do not contain any allegation of fact about the Claimants. Rather, they expressed an opinion to the effect that the Labour MPs in Rotherham at the time the sexual exploitation was rife "are likely to have known that sexual exploitation was a serious problem in the area."
The Defendant says that if, contrary to her primary case, the words are factual they mean that "in light of the widespread knowledge amongst members of the Labour Party in Rotherham, which had been running the council for years, that child sexual exploitation was rife in the town, there are reasons to believe that the Claimants, as members of the same political party and MPs at the time, knew that sexual exploitation was a serious problem."
The preliminary issues for trial are, therefore: (1) the meaning of the words; (2) whether the words are fact or comment; (3) whether the words referred to the third Claimant. Those issues are tried as preliminary issues by the agreement of the parties, pursuant to a consent order covering issues (1) and (2), and a subsequent agreement to encompass the issue of reference.
Each of the three preliminary issues requires me to consider the words complained of, in their context.
The Defendant's speech
I shall set out the whole of the speech. The Claimants complain of certain specific words, which I shall underline, but they rely on the whole speech as relevant context for determining the meaning and effect of those words. It is, as ever, necessary in any event to consider the whole of a statement of which only parts are complained of.
The Defendant was introduced as "Our MEP for Yorkshire, and the next MP for Rotherham, Jane Collins". She then walked to the lectern and said this:
1. "Well, good morning Doncaster, and wow, I'm speechless. It's, it's amazing to see so many people here today and it's wonderful, it's absolutely wonderful.
2. The conference today is very much about a celebration of our party's bright future, about setting out our agenda for government with a raft of policies that will put the Great – they will put the Great - back into Great Britain.
3. But there's a great deal to do in order to repair our broken and unfortunately divided society, and my speech today will deal with an issue that highlights just how social engineering and political correctness has failed the most vulnerable people in our society today.
4. This issue highlights all the classic signs of failure that is in British politics at the moment. And the lack of backbone and the lack of moral courage of those individuals involved.
5. Earlier this year I was selected as the prospective Parliamentary candidate for the Rotherham Central constituency.
6. I knew it was going to be a hard fight. It has been in the grip of the Labour mafia for 80 years so I knew I had some work to do. But I didn't expect to be suddenly embroiled in a scandal that absolutely outraged the whole of the country.
7. At 12 o'clock on August 26th, Tuesday, I received a call giving me the first scant details of Professor Alexis Jay's report on child sexual exploitation in Rotherham. I sat at my desk listening as the call went on to outline the report. An estimated 1,400 children had been groomed, raped, trafficked for sex, over a period of 16 years. Mainly by Pakistani and Kashmiri men. I sat there totally dumbfounded and I thought to myself, well, surely there has been some mistake in the reporting of this issue. But there wasn't a mistake.
8. White girls had been targeted and abused by men of Asian origin, with little or no intervention from any of the town authorities.
9. Ladies and gentlemen, the details of the report are horrific, but the abuse had included children as young as 11 being trafficked, gang-raped, beaten, plied with alcohol or drugs, threatened with knives and guns, and one small child had petrol poured over them and said if they did not conform to what the gang wanted them to do they were going to be burned alive. Can you imagine the fear in a small child being told that?
10. Nearly every agency in Rotherham had grossly failed its duty to protect these children and this is despite the pleas from the victims and, please note, the frontline workers, who met a brick wall.
11. The report listed a catalogue of political, policing, and procedural failures in Rotherham that led to the police almost spending their time trying to disprove the victims' claims instead of actually trying to find the perpetrators and prosecute them for their crimes. It detailed how fathers tried to protect their children had actually been arrested in doing so.
12. Yet the abusers time and time again walked away, and why? It was because of their Asian origin.
13. It also explained that the Labour-run council and its officials had actually been given three separate reports on this over a period of time, but in 2005 had been sat down and given graphic details of what this abuse had actually been about - I wouldn't like to go into them because they are horrific - and still, and still there was no real positive action.
14. The report reiterated throughout warning after warning went unheeded in the town. And much of this was due, ladies and gentlemen, to political cowardness [sic] and worrying about keeping their vote.
15. My outrage as a mother, I can't explain today. It's beyond words stood here on this stage. The protection of children should never be about race, of the victim or of the offender. But it should instead be focused on stamping out these horrific crimes wherever and whatever community they are found in.
16. I am angry, very angry, with the perpetrators for treating the children in this way, but I am equally angry with those people in the position of power who could have intervened but chose not to through political correctness or, as shamed ex-Labour MP Denis MacShane - or MacShame as we call him - put it: 'because they are a bunch of liberal, lefties', too afraid to act through their own political selfishness.
17. But there is a great deal of work to be done in helping and supporting the victims of Rotherham. Something I am personally committed to getting involved with.
18. These young children and young adults deserve better, and I will do my best to provide what I can personally, but I am asking everybody here today: if you feel you can help me in any way, please, please, contact me after this conference because your help will be more than welcome.
19. From the outset of this scandal I called, and the party called, for resignations of all those directly involved. And we managed to bag a few, including that of Shaun Wright who was – pause for the boos - the Police Crime Commissioner who had served as a Council cabinet member for children's services. And Joyce Thacker the children's service director who led the persecution – and it was persecution – of the UKIP foster parents in 2012, while at the same time she allowed these horrific sex attacks to go on underneath her nose.
20. However there are many others that still have questions to answer, and possibly charges to face.
21. This includes the three Labour MPs for the Rotherham area. I am convinced that they knew many of the details of what was happening.
22. I am now calling for criminal charges to be brought against those who it can be proved knew about the abuse, who failed to act - because in failing to act they aided and they abetted the perpetrators and they are just as guilty.
23. I would also like to see far more perpetrators arrested than there has been to date because the conviction rate regarding victims is woefully low so we need some more convictions and more people identified.
24. However it's not all doom and gloom in Rotherham, and there is light at the end of the tunnel. There is hope in Rotherham.
25. On Friday after the Professor Jay's report was released I was privileged enough to accompany two South Yorkshire police officers in their duties on their evening patrol.
26. During the course of this visit I was introduced to a number of youth groups and their leaders. The patience, dedication and sheer hard work of those front line staff was inspirational and incredible to see. The positivity and zest for life in the children and the young people and their leaders was infectious and I left those meetings absolutely convinced that the children of Rotherham hold the key to the town's future.
27. From my experiences I can't stress enough that I do not hold the front line workers responsible for any of the problems that the town now faces, as I know that many of them did anything they could to expose what was happening in Rotherham and they actually hit that wall. In many ways they were let down by their leaders and they are now suffering the undeserved consequences and they really do need some more support.
28. We also need more support in tackling the continuous abuse that is going on in South Yorkshire, on an industrial scale. Today, tomorrow, it has to be stopped.
29. It's now up to us to make sure that Rotherham has a leadership with a clean pair of hands who can help and encourage the frontline staff in their work. The town needs leadership that will put its own political agenda aside and put the people first.
30. A town that will not distinguish between colour, creed, race or religion and will form a future for Rotherham.
31. This scandal is all about the children so let's enable the children to be part of the recovery. Give them the support and they will bring the pride back to Rotherham.
32. Take heed Mr Miliband, take heed. Together the Labour Party betrayed the children of Rotherham.
33. And as Mr Miliband put it, together they conspired to allow the abuse of children on an industrial scale; together, they failed to apologise, and they kept quiet to suit their political purposes.
34. Ladies and gentlemen I'm asking you here today: together, UKIP and everybody in this room will stop Labour ever, ever, getting the chance of doing that again.
35. Thank you."
This is a modified version of a transcript provided by the Claimants' advisers, broken down into paragraphs, with numbering attached. This is for ease of reference and explanation, but I bear in mind that this was a speech and not an article in a newspaper, or online, and that what each of the preliminary issues calls for is a decision on how the speech would strike the hypothetical ordinary reasonable viewer and listener hearing and seeing it once only. For the purposes of determining the preliminary issues therefore I have not focused my attention on the words on the page, or the paragraph breakdown. I have focused instead on the speech as delivered, its rhythm and emphasis, and its overall impact on the ear and eye. For that purpose I have relied on a high quality recording of the BBC Parliament channel broadcast.
Issues (1) and (2): meaning, and fact/opinion
Principles
The principles to be applied in determining these issues are not in dispute. The right approach to the determination of meaning was described by Sir Anthony Clarke MR in Jeynes v News Magazines Limited [2008] EWCA Civ 130 [14]:
"(1) The governing principle is reasonableness. (2) The hypothetical reasonable reader is not naïve but he is not unduly suspicious. He can read between the lines. He can read in an implication more readily than a lawyer and may indulge in a certain amount of loose thinking but he must be treated as being a man who is not avid for scandal and someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available. (3) Over-elaborate analysis is best avoided. (4) The intention of the publisher is irrelevant. (5) The article must be read as a whole, and any "bane and antidote" taken together. (6) The hypothetical reader is taken to be representative of those who would read the publication in question. (7) …. (8) It follows that "it is not enough to say that by some person or another the words might be understood in a defamatory sense." Neville v Fine Arts Company [1897] AC 68 per Lord Halsbury LC at 73."
Freedom of political expression is one of the most important freedoms. A consequence is, as Laws LJ observed in Waterson v Lloyd [2013] EMLR 17 at [66], that the third principle - that the court should avoid over-elaborate analysis when determining meaning - has particular resonance in the context of political speech. The seventh principle is also of particular importance in such a context.
In Yeo v Times Newspapers Ltd [2014] EWHC 2853 (QB). [2015] 1 WLR 971 [88]-[98] I considered the principles applicable to the determination of whether a statement is an opinion as opposed to a factual statement. Miss Wilson relies in particular on what I said at [88]:
"The statement must be recognisable as comment, as distinct from an imputation of fact: Gatley on Libel and Slander, para 12.7. Comment is 'something which is or can reasonably be inferred to be a deduction, inference, conclusion, criticism, remark, observation, etc': Branson v Bower [2001] EMLR 800, 12. The ultimate determinant is how the words would strike the ordinary reasonable reader: Grech v Odhams Press Ltd [1958] 2 WB 275, 313. The subject matter and context of the words may be an important indicator of whether they are fact or comment: Singh's case, paras 26 and 31."
This was a summary of the position at common law. The Defamation Act 2013 has abolished the common law defence of fair comment and replaced it with the statutory defence of honest opinion. However, neither Counsel suggests that this has altered the principles relevant to this case. Indeed, both Counsel have referred me to s 3(2) of the Act and its Explanatory Note 21 as endorsing the common law approach I set out in Yeo. Section 3(2) sets out the first condition for the statutory defence of honest opinion: "The first condition is that the statement complained of was a statement of opinion." The Explanatory Notes state at [21] that:-
"... condition 1 is intended to reflect the current law and embraces the requirement … that the statement must be recognisable as comment as distinct from an imputation of fact. It is implicit in condition 1 that the assessment is on the basis of how the ordinary person would understand it ..."
Ms Wilson also draws attention to the next sentence of the same paragraph of the Explanatory Notes: "As an inference of fact is a form of opinion, this would be encompassed by the defence." I agree that a statement expressed as an inference will often be an expression of opinion. This is reflected in the passage from Branson v Bower that I cited in Yeo at [88]. It is not submitted, however, and I do not understand it to be the law, that any statement about a matter, the facts of which cannot be within the personal knowledge of the speaker, is to be treated as an inference and hence a statement of opinion.
Ms Wilson has addressed me about the criterion of "verifiability" which has featured in some of the common law cases as a means of resolving the fact/opinion issue. She points out that this is not expressly reflected in the Act, or the Explanatory Notes. She warns against using this as a yardstick, drawing attention to Gatley on Libel and Slander, 12th ed at §12.10 in which the editors, having noted that the common law lacked clarity as to whether the verifiability of a statement is an applicable criterion, observe that, "If the ability of an audience to recognise words as comment is key, then it is not obvious why the verifiability or otherwise of the inference should be important".
Ms Wilson doubtless makes this point lest I conclude that the offending statement is verifiable, and for that reason a statement of fact. This is a potentially important issue. The European Court of Human Rights has repeatedly emphasised the importance of drawing a careful distinction between matters of fact and value judgments, holding that it is wrong to require a Defendant to prove the truth of a "value judgment" as these are not susceptible of proof: see, for instance, Lingens v Austria (1986) 8 EHRR 407 at para 46. However, it is not necessary for me to decide in this case whether verifiability has any part to play in the court's approach under domestic law, as Mr Millar QC has not invited me to adopt that criterion. The way the statement would strike the ordinary reasonable listener and viewer is a sufficient criterion, for present purposes at least.
It is common ground that the fact that the statement complained of is political speech has some bearing on the approach I should take to the fact/opinion issue. Ms Wilson relies on what I said in Yeo at [97] about statements made in a political context:
"the court should be alert to the importance of giving free rein to comment and wary of interpreting a statement as factual in nature, especially where as here it is made in the context of political issues. In drawing the distinction the court should consider what the words in their context indicate to the reader about the kind of statement the author intends to make."
Mr Millar does not dispute this, and acknowledges that the boundaries of political criticism are very wide. He points out, however, that the law does nevertheless protect politicians against defamatory imputations of fact. He reminds me of what the European Court of Human Rights said in Lingens at para 42: that the protection of reputation "extends to politicians too, even when they are not acting in their private capacity".
In identifying the issues for decision, and in setting out the applicable principles, I have dealt with the meaning issue, and the fact/opinion issue, in that order. This is convenient. However, in the Singh case that I mentioned in Yeo at [88] (British Chiropractic Association v Singh [2010] EWCA Civ 350, [2011] 1 WLR 133) the Court of Appeal pointed out at [32] that it may not always be appropriate to decide the issues in that order. To do so "may stifle the answer" to the second question.
Ms Wilson invites me to avoid that risk by approaching the question of whether the words complained of in this case are opinion before determining their meaning. I have been alive to the risk, to which I referred in Yeo at [96]. What I have done to cater for it in this case is to consider the two questions together. That seems to me to be the approach that will best reflect the experience of the ordinary viewer and listener of the Defendant's speech in September 2014.
Submissions
Counsel, whilst acknowledging the risks of over-elaboration, have presented me with competing analyses of the Defendant's speech. Mr Millar submits that it started by presenting in paras 2 and 3 the issue which the speech is going to be about, and making clear in para 4 that the issue offers – according to the Defendant – a specific example that is symptomatic of a more general "failure" of British politics. At paragraph 6 the Defendant referred to a "scandal", before going on to set out details of the abuse, drawn from the Jay Report. Mr Millar draws attention to the allegation of "political" failure in paragraph 11, which he says would lead the listener to expect detail of that failure to be given later. Paragraph 13 was aimed at the Labour run Council, and its failings, as explained in the report, but this does not serve to exclude other political failures, he submits.
Paragraph 16 expressed the Defendant's anger with "those people in the position of power who could have intervened but chose not to". This, submits Mr Millar, cannot be understood as limited to the local Councillors and officers in the light of what follows. At paragraphs 19 to 22 the Defendant told her listeners that there was a category of people "directly involved", some of whom have resigned, "others" of whom have not; and she presented the three Labour MPs as among the "others", and as people who knew about the abuse and failed to act. The words "I am convinced", which could in principle represent comment, are in their context presented as an inference of fact about the extent of the Claimants' knowledge. Paragraphs 33 and 34 ram home the message of the speech, says Mr Millar. The targets of the attack on "the Labour Party" in these paragraphs have been identified to the audience earlier, and include the three MPs. This is underlined by the three uses of the word "together" and the allegation that "they conspired".
In summary, submits Mr Millar, it is clear law that there is greater latitude for attacks on politicians than on others, but there are still some limits. The ordinary listener is not unfamiliar with hearing allegations of fact in political speeches. Here, the Defendant could have chosen her words so as to make clear that what she was saying was an inference or opinion, but she did not. He suggests that the political context has a double edge to it. The speech would have had less impact if it had been presented as opinion, "hedged around" with qualifications. The Defendant, he submits, cannot have it both ways. She was an MEP putting herself forward to the conference as a person who had studied and knew about the facts of the abuse scandal, who was making factual allegations directed clearly at the Rotherham MPs.
For the Defendant, Ms Wilson invites me to start by focusing on the nature of the occasion and the hypothetical reasonable audience member. She submits that the speech was a rallying call issued from the platform at a party conference, eight months before a general election, at a time when it was known there would be such an election. The immediate audience of UKIP activists, members, or sympathisers will have been aware of these circumstances, as will viewers of the BBC Parliament channel and others, who would all have been close observers of politics.
Ms Wilson submits that the speech divided clearly into parts. It set out some of Professor Jay's findings, making numerous references to "the report". Only then did the Defendant go on to set out her own views: first her personal reaction to those findings (at 15-18), and then her views as to what needed to be done going forward (19-31, which is where the reference to "three Labour MPs" appears). The speech did not conflate those who definitely knew about the scale of abuse with the MPs, submits Ms Wilson. It drew a distinction between the Councillors and the MPs. The Councillors "knew" (para 13) and were condemned at paras 7 – 14; but the MPs were amongst the "others" (para 21) who still had "questions to answer".
When the Defendant said she was "convinced" that the MPs knew details she was clearly indicating, Ms Wilson submits, that she could not believe, based on the background she had set out, that the local MPs at the time were completely ignorant of the scale of the problem. It would be clear to listeners that this was an inference from the fact that the MPs were in the same political party, representing the same constituents, and spending time in that constituency. No-one hearing the speech would have thought that the Defendant had information going beyond the report, or had conducted her own parallel investigation and unearthed evidence about the "three Labour MPs". Her words would have been seen as holding political opponents to account, questioning their record. The concluding passage in paras 33 and 34 were and would be understood as "political hyperbole", submits Ms Wilson, aimed broadly at the Labour Party without implicating the MPs individually.
Discussion
As Ms Wilson submits, it is important to have in mind from the outset the nature of the occasion, and the audience. The statements complained of were part of a rallying call to the 'party faithful' and the speech was made to audiences, reasonable members of which can be taken to have understood, and made allowance for the fact, that political expression will often include opinion, passion, exaggeration, and even inaccuracy of expression.
At the same time, party conferences are not occasions on which the audience expects, or is often given, impromptu speeches in which the words used are chosen in the heat of the moment. As a rule, the audience's expectation of a speech made in that context is that it will be prepared and considered carefully. The way this speech was delivered would not have suggested to its audience that it was any exception to this rule. The recording shows that the speech was delivered in a measured way, from a prepared script or notes, to which the Defendant referred frequently. In my judgment the reasonable audience member will have understood the Defendant's words to be ones that had been chosen, weighed, and considered before they were delivered.
Audiences at or of political party conferences are also used to hearing speakers make allegations against rival parties, their leaders and members. Where the speaker is due to contest an election it is usual, for obvious reasons, to hear criticism and allegations directed at those who are the speaker's opponents for a particular seat. Here, the audience knew from the introduction and the speech itself, if they did not know it anyway, that the Defendant was a prospective Parliamentary candidate, selected to fight for the Rotherham seat against an incumbent Labour MP at the coming election.
With these points in mind I viewed the BBC recording once, knowing from the application notice and the introductory parts of the skeleton arguments what the issues were, but before reading the meaning complained of, or the detail of Counsel's skeleton arguments. The clear impression I took from the speech was that the Defendant was deliberately making direct allegations against the three Labour MPs for Rotherham of knowing about the sexual abuse and choosing not to take any action. I made a note of the meanings that I took from the speech. There were three.
The first was that each of the three Rotherham MPs "knew many of the details of the scandalous child sexual exploitation that took place in Rotherham over a period of sixteen years, in the course of which an estimated 1,400 children were raped, beaten, plied with alcohol and drugs, and threatened with violence by men of Asian origin, yet deliberately chose not to intervene but to allow the abuse to continue."
The other meanings that I drew from the speech were that the MPs "acted in this way for motives of political correctness, political cowardice, or political selfishness", and that each "was thereby guilty of misconduct so grave that it was or should be criminal, as it aided and abetted the perpetrators and made the Claimants just as culpable as the perpetrators."
I arrived at these three separate meanings because, in the process of forming a view, I was conscious of the need to determine at the same time whether the words would be taken as expressing factual imputations or opinions. The first meaning represents the factual imputations I considered that the Defendant made in her speech. The other two meanings encapsulate what I considered to be expressions of opinion.
Having reached these initial views I have reconsidered them in the light of Counsel's skeleton arguments, and again in the light of the oral arguments presented at the hearing. I have not been persuaded to depart from my initial conclusions.
I do not accept Ms Wilson's central argument, that the speech drew a clear distinction between the allegations it levelled at local Councillors and officers, and those it aimed at the three MPs. The overall theme and message of the speech was that there were Labour Party politicians in positions of power in Rotherham who knew about the sexual abuse and chose to do nothing about it for political motives. The way the Defendant presented the matter was that the guilt of the local politicians had been exposed by the Jay Report, but the three MPs were also guilty in the same way.
Nor do I accept Ms Wilson's submission that the concluding passages of the speech were rhetorical hyperbole aimed not at the MPs but more generally at the Labour Party as a whole. In my judgment those concluding passages were, as is so often the case in any speech, the parts that were most significant in framing the overall message conveyed.
I do not agree with all of Mr Millar's submissions. It is in my judgment artificial to suggest that the "others" in paragraph 20 were presented as others "directly involved". However, my conclusions on the meaning of the Defendant's speech are similar to those he urged on me.
I would identify the essential features of my own response to the speech, drawing on the notes I made when first viewing it, as follows. Paragraphs 3 to 6 set the scene. They explained the Defendant's role as a prospective Parliamentary candidate for Rotherham Central, identifying her opponents as the "Labour mafia" which had held the constituency in its grip for 18 years, and identifying her theme as an issue involving "political correctness" and "lack of moral courage" which was a "scandal". This part of the speech set up the listener to expect criticism of national, not just local politicians.
The key section of the speech for present purposes then picked up at paragraph 16 where the Defendant identified the group with which she was angry: "people in the position of power who could have intervened but chose not to". That group clearly included the local Councillors and officers that she had referred to earlier, in particular at paragraph 13. But the Defendant made clear in paragraphs 19 to 22 that her anger did not stop with them.
It is true that some of the wording used in those paragraphs is indicative of expressions of opinion. The Defendant spoke of "questions to answer", and "possible" charges. But she also provided the answer to the "questions", when she said she was "convinced" that the MPs knew many of the details of what was happening. As she said this, the Defendant accompanied her words with emphatic pointing. Even then, if the Defendant had said no more about the abuse and the role of the Labour Party she might have left the audience with the impression that she was saying no more about the MPs than that (a) they had questions to answer about their role in respect of the abuse, and (b) in her opinion the answer was that they knew about it and that it should be a crime to take no action in such circumstances. The Defendant returned to her theme, however, in the concluding passages of the speech. These provided a rousing climax directed clearly, in my opinion, at the MPs as well as others.
I was struck by the Defendant's reference in paragraph 29 to the need for "us", that is UKIP, "to make sure that Rotherham has a leadership with a clean pair of hands" and "leadership that will put its own political agenda aside". I heard those as statements in which the Defendant contrasted herself as the prospective Parliamentary candidate, with clean hands, with the incumbent MPs. The speech then reached its finale with the references to the Labour Party in paragraphs 32 and 33. Those references, at this point, indicated to me and would in my judgment indicate to the ordinary reasonable listener the Labour Party politicians who have been referred to earlier in the speech. The use of the word "together", repeated three times in those paragraphs, naturally and clearly suggests that the Defendant is aiming her words at the Labour politicians collectively. The word "conspired" lends still greater weight to the collective nature of the allegation. Again, this part of the speech was accompanied by emphatic hand gestures.
As indicated in paragraph 33 above, I accept that the motives referred to in paragraphs 3, 4, 14 and16 of the speech were presented as matters of opinion. I accept that the same is true of the "political purposes" attributed in paragraph 33. But the allegations of a conspiracy to allow abuse and keeping quiet "together" were not presented as matters of opinion at all. They were presented as factual conclusions. Nor were those allegations qualified in any other way. I reject Ms Wilson's argument that the meaning was at Chase Level 2, which is not in my judgment a tenable view.
For these reasons I find that the words complained of bore the meanings I have set out in paragraphs 32 and 33 above, and that the first of those meanings is an allegation of fact, whilst the others are expressions of opinion.
Issue (3): reference to the third Claimant
Words can be the subject of a claim for defamation if, but only if, they would be understood by reasonable people who knew the Claimant to refer to him. It is usually enough if the Claimant is named. If not named, there may be a reference to some office or position held by the Claimant which would be enough to enable an ordinary reasonable person who knows the Claimant to identify them as the person referred to. The test is an objective one, involving once again an assessment of the response of the hypothetical ordinary reasonable reader, viewer or listener to the words complained of. The Defendant's intentions are not the criterion, although the issue could in principle be affected by what the words used would indicate to the ordinary reasonable reader about the Defendant's intentions.
Here, the third Claimant was at the time of the Defendant's speech one of the "three Labour MPs for the Rotherham area" (paragraph 21 of the speech). Mr Millar's first proposition is that in those circumstances the conclusion that the Defendant's words referred to her is so obvious as to be a "no-brainer". He elaborates this by pointing out that it is settled law that where defamatory words refer to a limited class of persons any person who shows that they fall within that class can normally sue for defamation. Ms Wilson accepts that in many contexts, the reference in para 21 to would suffice to refer to the third Claimant but submits that this is not so in the context of this speech.
Ms Wilson submits that those in the audience who knew the third Claimant, and knew she was Rotherham's MP at the time of the speech, would also have known that "she had only just arrived on the political scene" and that a major feature of the child abuse scandal in Rotherham was that it had gone on for many years until it attracted national publicity. This was general knowledge, in particular after the publication of the Jay Report, but it is, in any event, clear from para 7 of the speech submits Ms Wilson. The reasonable hearer/ viewer would therefore not have understood "Labour MPs" to refer to the third Defendant who "was running a hospice at the relevant time."
Although it has not been put this way it is implicit in these submissions that the ordinary reasonable reader would have taken the Defendant to be levelling her accusations at Denis MacShane, and not the third Claimant. In my judgment these submissions are ill-founded. That is because they depend, on a proper analysis, on adding to the store of knowledge of the audience facts which are not matters of general knowledge and which are not, at this stage, established to be matters of special knowledge possessed by members of the audience.
The principles as to reference are, as Counsel agreed, similar to those which apply to meaning. Both can be affected by the knowledge of the readership or audience. Words may be defamatory either in their natural and ordinary meaning, considered in the light of matters of general knowledge, or by way of true innuendo, that is, because of some particular special knowledge possessed by some or all of those to whom they are addressed. Equally, words may refer to a person on their face in the light of general knowledge, or by virtue of a "reference innuendo": because of some special knowledge possessed by some audience members. The same is true in reverse: special knowledge may cause words that are on their face defamatory to bear an innocent meaning (a "reverse innuendo"), or mean that words that appear to refer to A are taken instead to refer to B (a "reverse reference innuendo").
Here, the Defendant's words referred on their face to "the three Labour MPs for the Rotherham area". The third Claimant was one of those. It may be that there were audience members, it may even be that there were many, with knowledge of (a) the duration of the child sex abuse scandal (b) when the third Claimant was elected (c) what she had been doing before that (d) that her predecessor was Denis MacShane, also a Labour MP. It may be that a reasonable audience member who knew these things would have concluded that the Defendant was aiming her words at Mr MacShane and not the third Claimant. But I do not accept that any of these were matters of general knowledge, and none of them were spelled out in the speech.
The speech did tell the audience that the abuse had gone on over sixteen years, but not when it ceased. Although Denis MacShane was mentioned in the speech, and referred to as "MacShame", the audience was not told the cause of his shame, how and when the third Claimant came to be MP or any similar matters. Nothing was said to indicate to the listener that the Defendant was targeting her main allegations at the former Labour MP, as opposed to her current opponent for the Rotherham seat.
I therefore conclude that although it is open to the Defendant to seek to prove that by way of innuendo her words will have been understood by some – perhaps many - to refer to Mr MacShane and not to the third Claimant, those words in their natural and ordinary meaning referred to the third Claimant.
Concluding observations
This trial has required me to consider only how the Defendant's words would have struck the ordinary reasonable member of her audience. It has been no part of my task to determine whether the meanings that I have found the words to bear are, or may be, defensible. In deciding the preliminary issues I have applied well-established principles of law. As I have noted, the law relating to meaning, and to the distinction between fact and comment, makes some allowance for the need to give free rein to political speech. But the nature of the principles means that there are limits on the protection that can be given to political speech by those means.
The law must accommodate trenchant expression on political issues, but it would be wrong to achieve this by distorting the ordinary meaning of words, or treating as opinion what the ordinary person would understand as an allegation of fact. To do so would unduly restrict the rights of those targeted by defamatory political speech. The solution must in my judgment lie in resort, where applicable, to the defences of truth and honest opinion or in a suitably tailored application of the law protecting statements, whether of fact or opinion, on matters of public interest, for which Parliament has provided a statutory defence under s 4 of the Defamation Act 2013. |
Mr Justice Supperstone :
Introduction
The Claimant is an independent trade union. The Defendant is a commercial airline company operating flights into and out of seven airports in the United Kingdom and one overseas airport. Members of the Claimant are employed by the Defendant, inter alia, as pilots.
By a decision dated 18 November 2010 the Central Arbitration Committee ("CAC") declared that the Claimant is recognised by the Defendant as entitled to conduct collective bargaining on behalf of the bargaining unit comprising "All flight deck pilots employed by [the Defendant] up to and including Base Captains, thereby excluding the Director of Flight Operations; Chief Training Manager; Chief Pilot; Fleet Managers B757 and B737; and Fleet Training Managers B757 and B737" ("the pilots") in respect of the pilots' "pay, hours and holidays", pursuant to paragraphs 3(3) and 22(2) of Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992 ("the 1992 Act").
Thereafter, the parties having failed to reach agreement about the method by which such collective bargaining was to be carried out, the CAC by a further decision dated 19 May 2011 specified the method for collective bargaining, pursuant to paragraph 31(3) of Schedule A1 to the 1992 Act.
The method specified by the CAC ("the Specified Method") to a large extent follows the model method set out in the Schedule to the Trade Union Recognition (Method of Collective Bargaining Order) 2000 ("the 2000 Order"), which the CAC was obliged to take into account pursuant to paragraph 168 of Schedule A1 to the 1992 Act.
The issues raised by this claim relate to the proper construction and scope of the term "pay, hours and holidays" in the Specified Method. Essentially there are two issues for determination. First, whether the Defendant has complied with the Specified Method relevant to the scope of the obligation to negotiate on matters relating to pay, hours and holidays, in relation to the Defendant's rostering arrangements. Second, whether the Defendant has complied with the Specified Method in relation to pay, in particular as to whether announcements made by the Defendant in advance of pay negotiations taking place meant that what took place thereafter did not comply with what was required under the collective bargaining process.
The statutory regime
Section 70A of, and Schedule A1 to the 1992 Act (which were inserted by the Employment Relations Act 1999 ("the 1999 Act")) provide the mechanism by which a trade union may apply to the CAC to obtain compulsory statutory recognition.
The scope of collective bargaining for the purposes of such compulsory recognition is defined in paragraph 3 of Schedule A1 which provides, so far as relevant:
"3.(1) This paragraph applies for the purposes of this Part of this Schedule.
(2) The meaning of collective bargaining given by section 178(1) shall not apply.
(3) References to collective bargaining are to negotiations relating to pay, hours and holidays; but this has effect subject to sub-paragraph (4).
(4) If the parties agree matters as the subject of collective bargaining, references to collective bargaining are to negotiations relating to the agreed matters; and this is the case whether the agreement is made before or after the time when the CAC issues a declaration, or the parties agree, that the union is (or unions are) entitled to conduct collective bargaining on behalf of a bargaining unit."
The wider definition of collective bargaining under section 178 of the 1992 Act, which is expressly disapplied for these purposes by paragraph 3(2), includes negotiations relating to or connected with any of the following matters:
"(a) terms and conditions of employment, or the physical conditions in which any workers are required to work;
(b) engagement or non-engagement, or termination or suspension of employment or the duties of employment, of one or more workers;
(c) allocation of work or the duties of employment between workers or groups of workers;
(d) matters of discipline;
(e) a worker's membership or non-membership of a trade union;
(f) facilities for officials of trade unions; and
(g) machinery for negotiation or consultation, and other procedures, relating to any of the above matters, including the recognition by employers or employers' associations of the right of a trade union to represent workers in such negotiation or consultation or in the carrying out of such procedures."
By paragraph 31(4) of Schedule A1 the Specified Method imposed by the CAC operates as if it were contained in a legally enforceable contract made by the parties.
The earliest versions of the Bill laid before Parliament provided for the standard definition of collective bargaining in s.178 of the 1992 Act to apply to compulsory collective bargaining. That resulted in Government amendments being introduced at the Committee stage to limit the definition to negotiations relating to pay, hours and holidays. Mr Michael Wills, the Minister for Small Firms, Trade and Industry, explained the amendments as follows:
"[They] are designed to ensure that, as a minimum, collective bargaining covers negotiations about pay, hours and holiday. The union and employer can agree that other matters be included, but if they cannot agree, and the CAC imposes a bargaining method, it will apply only to pay, hours and holiday. The amendments ensure that the Bill achieves the policy set out in the White Paper. We tabled them because we realised that the original wording went wider than originally intended. The union and the employer are free to include other matters in the collective bargaining agreement – that is a deliberate feature of the legislation, to encourage voluntary agreements by giving the parties room for manoeuvre. A union may wish to bargain about occupational pensions, for example. The employer may be prepared to agree to that, provided that the union accepts the employer's proposal on, say, time off for trade union duties.
…
We are inclined to give the parties the maximum room to find compromises on their own. However, if they are unable to agree and the CAC has to impose a procedure, that procedure will be limited to pay, hours and holidays – the core terms of employment. That is a minimalist selection, which both employer and union are likely to find restrictive. They will both therefore have an incentive to agree a different arrangement that suits them better. At every stage, the procedure encourages voluntary settlements…"
The Government's White Paper on Fairness at Work (May 1998) set out the proposals which led to the 1999 Act. It emphasised that the starting point in the proposed system is voluntary agreement (para 4.15). It further stated that in the event of compulsory recognition being imposed, such recognition will cover only pay, hours and holidays (para 4.18).
The Specified Method (set out in Schedule B to the CAC decision of 19 May 2011).
The material terms of the Specified Method provide:
"The Purpose
2. The purpose is to specify a method by which the employer and the union conduct collective bargaining concerning the pay, hours and holidays of the workers comprising the bargaining unit.
The Joint Negotiating Body
4. The employer and the union shall establish a Joint Negotiating Body (JNB) to discuss and negotiate the pay, hours and holidays of the workers comprising the bargaining unit… No other body or group shall undertake collective bargaining on the pay, hours and holidays of these workers, unless the employer and the union so agree.
Bargaining Procedure
14. The union's proposals for adjustments to pay, hours and holidays shall be dealt with on an annual basis, unless the two Sides agree a different bargaining period. The settlement date for revisions to pay, hours and holidays is 1 April of each year…
15. The JNB shall conduct these negotiations for each bargaining round according to the following staged procedure. [There is a seven-step procedure. At step 4 the employer shall set out in a written communication all relevant information in his possession, which 'shall contain information costing each element of the claim and describing the business consequences, particularly any staffing implications, unless the employer is not required to disclose such information for any of the reasons specified in section 182(1) of the 1992 Act. The basis of these estimated costs and effects, including the main assumptions that the employer has used, shall be set out in the communication'].
17. The employer shall not vary the contractual terms affecting the pay, hours or holidays of workers in the bargaining unit, unless he has first discussed his proposals with the union. Such proposals shall normally be made by the employer in the context of his consideration of the union's claim at Steps 4 or 5. If, however, the employer has not tabled his proposals during that process and he wishes to make proposals before the next bargaining round commences, he must write to the union setting out his proposals and the reasons for making them, together with the supporting evidence. The letter shall provide information estimating the costs and staffing consequences of implementing each element of the proposals, unless the employer is not required to disclose such information for any of the reasons specified in section 182(1) of the 1992 Act. A quorate meeting of the JNB shall be held within five working days of the Union Side's receipt of the letter. If there is a failure to resolve the issue at that meeting, then meetings shall be arranged, and steps shall be taken, in accordance with Steps 6 and 7 of the above procedure.
General
32. The employer and the union shall take all reasonable steps to ensure that this method to conduct collective bargaining is applied efficiently and effectively."
The standard contract of employment for pilots
Clause 4 covers hours of work and provides:
"4.1 The flying hours you will work are dictated by the nature of the Company's business and there is no entitlement to work any specific minimum number of flying hours in any given period. Details of duty assignment will be in accordance with the Company Operations Manual and the Rostering and Crewing Policy (each as amended from time to time). You will be required to make yourself available at all times for duty assignments except during periods of authorised absence or pre-booked annual leave as detailed in the Rostering and Crewing Policy. Each day of the year, without exception, is a working day and accordingly rostering periods will include every day of the year, including Public Holidays and weekends. Copies of the Operations Manual and Rostering and Crewing Policy are available from the Flight Operations Department.
4.2 During rostered periods of standby duty, you must be contactable at all times and able to take up duties at your Base within 1.5 hours of being called out. If you are dual based you must be able to take up your duties at your Secondary Base within 2.5 hours of being called out."
Clause 7 covers holidays and provides:
"7.1 Your Holiday entitlement for each holiday year is 36 days (inclusive of all Public Holidays) (Holiday Entitlement)
7.2 Holiday entitlement shall be booked in accordance with the Company's applicable Annual Leave Policy, a copy of which can be obtained from the Rostering Department or in the Aircrew Handbook (as amended from time to time). In accordance with the Annual Leave Policy currently in force, during the defined Summer Peak period a limit of 7 leave days will apply. However, each year the Company may at its absolute discretion consider increasing the amount of leave to be made available to each Flight Crew colleague in the Summer Peak and if there is flexibility the 7 day limit may be increased. Details of the amount of leave days available and dates of the Summer Peak for each year will be published in advance."
The rostering and crewing policy
The rostering and crewing policy ("RCP") which came into force on 1 October 2010 was prepared by the Defendant "in consultation with" its Flight Deck Crew Council ("the Crew Council"). The material parts of the policy provide:
"Background
A. The Company and the Crew Council wish to document the basis and terms of the operation and management of the rostering and crewing of Flight Deck Crew Employees that have been in operation for several years, together with the improvements that have recently been put in place, and to all of which the Company is committing to in good faith.
B. This policy sets out the agreement, rules and parameters within which the Company and the Crew Council will operate so as to ensure the joint objectives of the efficient running of the Company and aiming to ensure a fair and equitable distribution of work amongst Flight Deck Crew Employees are achieved.
C. The intention of this policy is to improve and stabilise the quality of the working lifestyle of Flight Deck Crew Employees through the promotion of good rostering practices, avoidance of fatigue and roster disruption and ensure, so far as is practicable, fair and efficient distribution of duties.
D. The Crew Council acknowledges that there is an obligation on all Flight Deck Crew Employees to ensure all flights are fully crewed in order to comply with the operational requirements of the Company, provided such requirements are in accordance with the Company's Operations Manual Part A.
1.0 Implementation, applicability and review
Principle of fairness
1.2 Whilst the Company is committed to act in good faith in accordance with the terms of this policy, each of these terms is subject to variation or suspension by the Company if required at any time as appropriate due to Unusual Circumstances (as defined in clause 2.2 below) affecting the Company. Where any such variation or suspension is required the affected Flight Deck Crew Employees will be notified in the course of their duties.
Effective date
1.7 The terms of this policy will be effective and in force from 1 October 2010. There shall be an annual review of the policy by the Company in April of each year, save that the first such review will take place in April 2012. Any proposed changes will be discussed with the Crew Council.
Applicability
1.8 This policy is to be read and construed in conjunction with the Company's Operations Manual Part A, which sets out the legal basis on which the Company rosters Flight Deck Crew Employees.
1.9 This policy provides enhanced rights and operational procedures for Flight Deck Crew Employees to which the Company will endeavour to operate, except that where the Company cannot comply with this policy due to Unusual Circumstances it will continue to operate in accordance with the Company's Operations Manual Part A.
1.10 This policy will apply to all Flight Deck Crew Employees and is applicable to both the published roster and to any duties a Flight Deck Crew Employee is asked to undertake following roster publication, except the following:
1.10.4 this policy will not apply where, to maintain flexibility to meet operational requirements after a roster is produced, the Company imposes changes on an individual roster which are outside of this policy (but remain within the Company Flight Time Limitations Scheme contained in the Company's Operations Manual Part A section 7), in which case the details and frequency of such changes will be provided to the Crew Council in a monthly report for tracking and monitoring purposes; or
1.10.5 this policy will not apply in the event of the occurrence of Unusual Circumstances in which case the Company reserves the right, in its absolute discretion, to temporarily suspend the operation of all or any part of this policy with immediate effect (during which period the Company's Operations Manual Part A section 7 will apply). …
2.0 Definitions
Day Off Payment means:
£400 per day for a Captain; and
£250 per day for a First Officer or a Senior First Officer.
Unusual Circumstances means unusual or unforeseen operational or commercial circumstances, whether under or beyond the control of the Company, to which the company may be required to or wish to act in order to minimise impact to its operations or take advantage of opportunities, and which are designated as Unusual Circumstances by the Company's Operations Director or Flight Ops Director. Unusual Circumstances will include but not be limited to examples such as the volcanic ash cloud disruption or British Airways strike action opportunity.
3.0 Rostering and Crewing Practices
Days off
Basic entitlements
3.5 Permanent fulltime Flight Deck Crew Employees are entitled to a total of 122 Days Off (excluding annual leave) for the Leave Year. The Company will seek to ensure that Days Off are allocated as evenly as possible over the course of the Leave Year, except where the Company is not, in its absolute discretion, able to do so due to operational requirements.
3.6 Each Flight Deck Crew Employee who is not a permanent fulltime employee is entitled to the number of Days Off as specified in their contract of employment. However, each fulltime Flight Deck Crew Employee will always have a minimum of 9 (nine) Days Off for each calendar month they are rostered.
Rosters
Roster Changes
3.48 The Crewing Team is mindful of the effect that roster changes can have on a Flight Deck Crew Employee's lifestyle. Changes to rosters will be made in the safest, most cost effective and stable manner available.
3.49 There will always be day to day circumstances which require that roster changes be made in order to ensure that disruption of the Company's flight programme is minimised. The Company will always endeavour in the first instance to ensure that any changed rosters continue to comply with the terms of this policy. However, where it is not possible to make roster changes that comply with this policy despite the Company's endeavours, this policy shall not apply to such roster changes."
Discussion
Issue 1: whether there is an obligation to negotiate on rostering and other matters relating to pay, hours and holidays
The Claimant's pleaded case in relation to collective bargaining on pilots' rostering arrangements is set out at paragraph 20 of the Particulars of Claim served on 3 November 2014:
"Rostering arrangements – i.e. the shifts, hours and periods to be worked by pilots – are plainly 'concerning the pay, hours and holidays' of the pilots in the said bargaining unit. Specifically:
(a) The rostering arrangements have a direct effect on the hours to be worked by the pilots. The Defendants have adopted an incorrect and unreasonably restrictive definition of 'hours' restricting it simply to the number of hours worked per week, as opposed to when those hours are worked.
(b) The rostering arrangements also have a direct effect on the pay of pilots, as the working of different shifts potentially attracts different payments and bonuses.
(c) The rostering arrangements also have an obvious and direct effect on holidays since the shifts worked by pilots will dictate when holidays can and must be taken."
The Defendant's pleaded case is summarised at paragraph 44.5 of the Defence:
"… the concept of collective bargaining relating to pay, hours and holidays under the Specified Method does not encompass every aspect of the Defendant's operational rostering arrangements that may have some connection with or bearing upon pay, hours or holidays, but is limited to those aspects of rostering which are incorporated (or are in principle capable of incorporation) into pilots' individual contracts of employment."
The relevant legal principles are not in issue. Mr Bruce Carr QC, for the Claimant, accepts that where there is express incorporation of a document (here, the RCP) by reference into a contract of employment (see para 13 above), the court must still consider whether a particular part of the document is apt to be a term of the contract. In Alexander v Standard Telephones and Cables Ltd (No.2) [1991] IRLR 286 at para 31, Hobhouse J stated:
"Where a document is expressly incorporated by general words it is still necessary to consider, in conjunction with the words of incorporation, whether any particular part of that document is apt to be a term of the contract; if it is inapt, the correct construction of the contract may be that it is not a term of the contract."
Furthermore, as Auld LJ said in Keeley v Fosroc International [2006] IRLR 961 at para 31:
"On the question of construction, as Mr Brennan acknowledged, where a contract of employment expressly incorporates an instrument such as a collective agreement or staff handbook, it does not necessarily follow that all the provisions in that instrument or document are apt to be terms of the contract. For example, some provisions, read in their context, may be declarations of an aspiration or policy falling short of a contractual undertaking; see e.g. Alexander and others v Standard Telephones and Cables Ltd (No.2) [1991] IRLR 286, per Hobhouse J, as he then was, at paragraph 31; and Kaur v MG Rover Group Ltd [2005] IRLR 40, CA, per Keene LJ, with whom Brooke and Jonathan Parker LJJ agreed, at paragraphs [9], [31] and [32]. It is necessary to consider in their respective contexts the incorporating words and the provision in question incorporated by them."
In Malone v British Airways plc [2011] ICR 125, the Court of Appeal considered the question of whether "crew complement" levels contained within an airline Scheduling Agreement were apt for incorporation into an individual contract of employment and concluded that they were not. Smith LJ (with whom Jackson and Ward LJJ agreed) stated:
"38. At the heart of Mr Hendy's submission was the contention that the touchstone for incorporation was whether the provision in question impacted upon the working conditions of the cabin crews. If it did, it was likely to be apt for incorporation. If it did not so impact, for example because it was inherently vague or merely an expression of policy or aspiration or because it plainly dealt with such collective matters as conciliation arrangements, then it would not be apt for incorporation. This delineation was based largely on the words of Scott J in National Coal Board v National Union of Mineworkers [1986] ICR 736 and those of Keene LJ in Kaur v MG Rover Group Ltd [2005] ICR 625…
…
40. Mr Carr did not dissent from those principles although he submitted that there were other important considerations besides those mentioned by Mr Hendy. In particular, he submitted that it was important to examine whether a provision was in truth a collective matter rather than a personal one. But most important of all, the test for the court was what the parties must objectively be considered to have intended the provision to mean. That had to be decided on the basis of the words used, set in context and against the factual matrix. In addition, the meaning given to a provision must make business sense. Mr Hendy did not dissent from those principles. It seems to me that there was no disagreement as to the legal approach, only as to the result of its application."
The court was satisfied that crew complement levels do impact to some extent upon the working conditions of individual employees and that this was a pointer (together with other pointers) towards them being an individually enforceable term. However Smith LJ continued (at para 62):
"Set against that are the disastrous consequences for BA which could ensue if this term were to be individually enforceable. It seems to me that they are so serious as to be unthinkable. By that I mean that, if the parties had thought about the issue at the time of negotiation, they would have immediately said it was not intended that section 7.1 could have the effect of enabling an individual or a small group of cabin crew members to bring a flight to a halt by refusing to work under complement. So, if I apply the rule by which a term of uncertain meaning is to be construed, that of asking what, objectively considered in the light of the factual matrix against which the agreement was made, the parties must be taken to have intended the provision to mean, I am driven to the conclusion that they did not mean this term to be individually enforceable. I accept that there are pointers towards individual enforceability but these are not conclusive. In the end, I think that the true construction of this term is that it was intended as an undertaking by the employer towards its cabin crew employees collectively and was intended partly to protect jobs and partly to protect the crews, collectively, against excessive demands in terms of work and effort. I think that it was intended to be binding only in honour, although it created a danger that, if breached, industrial action would follow."
Mr Carr's primary submission is that the process of rostering is a contractual one. The standard contract of employment provides that "duty assignments" will be "in accordance with the Company Operations Manual and the Rostering and Crewing Policy". The Operations Manual sets out the regulatory maxima and minima applicable to a pilot's work. The RCP then sets out the basis on which particular hours will be required to be worked by the pilot. Mr Richardson, the Defendant's Head of Resource and Crew Planning, acknowledged that a pilot would look in the Operations Manual and the RCP to find his entitlement to days off. Further, the only places where a pilot can locate the rules that dictate the hours that he works are the Operations Manual and the RCP. Moreover the RCP is used for the purpose of making changes to rostering. From the perspective of the individual pilot, the process of rostering is about the Defendant creating an obligation for him to turn up and work particular hours.
There is, Mr Carr contends, a significant degree of flexibility within the RCP. There is a right to vary or suspend its operation due to "Unusual Circumstances" but that flexibility does not make the policy or its "rules and parameters" any less apt for incorporation.
In the alternative Mr Carr submits that even if the right to bargain collectively is limited to contractual matters only and some matters contained within the RCP in their present form are not apt for incorporation, the right to collectively bargain must extend to matters which the Claimant would wish to put forward as having contractual weight even if they do not do so at present.
Further, in the alternative, Mr Carr submits that even if the rules relating to rostering are not contractual they have a substantial impact on the hours when a pilot can be required to work and should therefore be regarded as falling within the scope of the right to bargain.
At the outset of his submissions Mr John Bowers QC, for the Defendant, notes that the significantly wider definition of collective bargaining under section 178 of the 1992 Act is expressly disapplied by paragraph 3(2) of Schedule A1. Parliament, he contends, has deliberately chosen to limit statutory collective bargaining to a narrow list of topics which are generally regarded as the core terms of employment. They, therefore, form the sub-set of the first part of s.178(a). There is no need to stipulate that they are contractual terms because the three items themselves carry that implication. It follows that the definition in paragraph 3(3) is intended to be a narrow one, excluding the wider aspects of the s.178 definition relating to non-contractual conditions, management, operations and bargaining machinery. Thus whilst s.178 and paragraph 3(3) are not mutually exclusive, matters which are not core terms of employment relating to pay, hours and holidays, but which fall within one of the other topics in s.178 that Parliament has excluded from paragraph 3 of Schedule A1, must necessarily be outside the scope of statutory collective bargaining pursuant to the Schedule.
The second general point Mr Bowers makes is that since the Specified Method has effect as if contained in a contract between the parties, in construing it regard should be had to the surrounding factual matrix particular to the business in question in order to ascertain the objective intention of the parties. Mr Carr observes that the statutory regime must apply equally to a supermarket and an airline. Mr Bowers accepts that that is so in terms of general application of the statute, but it does not, he submits, follow that the circumstances of the particular business in question are immaterial to the determination of what falls within the scope of statutory collective bargaining in an individual case. Rostering in an airline is a complex matter which, as Mr White, the Claimant's scheduling specialist, accepted in cross-examination, will always require retention of "flexibility on the day" (provided the minimum regulatory safety requirements are not breached). Mr Bowers submits that the enhanced operational provisions of the rostering policy are not, therefore, simple, clear, core contractual provisions; instead they are operational practices which are not apt for incorporation as contractual terms because of the potentially catastrophic consequences for the airline's business if an airline is not able to respond flexibly to circumstances as they arise (see Transcript: Day 2, 78:3-7).
The third general point that Mr Bowers makes is in relation to the structure of the Specified Method. The first sentence in paragraph 17 states:
"The employer shall not vary the contractual terms affecting the pay, hours or holidays of workers in the bargaining unit, unless he has first discussed his proposals with the union."
In order to form a coherent overall mechanism together with paragraphs 15 and 16, Mr Bowers contends, it is clearly intended that paragraph 17 should govern all contractual revisions to "pay, hours and holidays" outside the normal annual bargaining round. Revisions to pay, hours and holidays must be made either through the normal annual bargaining round under paragraphs 15 and 16, or through the exceptional procedure under paragraph 17. It therefore follows that in providing that the employer shall not vary "the contractual terms affecting pay, hours and holidays" other than through either the annual bargaining round or the exceptional procedure, the Specified Method contemplates that the subject matter of statutory collective bargaining is only contractual terms affecting pay, hours and holidays. The Specified Method provides no mechanism for negotiating about non-contractual changes that the Defendant may wish to make outside the annual bargaining round. Mr Bowers adds that even the exceptional procedure is a potentially lengthy one and as such inapt for making revisions to policies, practices or procedures that are day to day operational or managerial in character and therefore likely to require greater flexibility. Moreover variations to such policies, practices or procedures are also less likely to be capable of realistic costing. In this regard Mr Bowers refers to paragraph 32 of the Specified Method which imposes a general obligation on the parties to ensure that the Method is applied efficiently and effectively.
Addressing the core meaning of "pay, hours and holidays", Mr Bowers submits that the phrase "negotiations relating to pay, hours and holidays" in paragraph 3(3) of the Schedule is ambiguous. It is, he suggests, capable of a range of meanings, from a wide interpretation encompassing anything in a broad sense "related" to those topics, including decisions about the allocation of hours of work during the day and decisions about consenting to holidays being taken at particular times, through to a narrow construction limited to contractual basic pay, basic hours and amounts of annual leave. That being so reference can, he submits, be made to ministerial statements made during the Committee stage of the 1999 Act which bear directly upon this ambiguity and satisfy the criteria laid down in Pepper v Hart [1993] AC 593. Mr Bowers relies in particular on the Minister's reference to the procedure being limited to pay, hours and holidays ("the core terms of employment"), which the Minister described as "a minimalist selection, which both employer and union are likely to find restrictive" (see para 10 above).
Mr Carr does not accept that the wording ("negotiations relating to pay, hours and holidays") is ambiguous. Whether any such issues falls within that rubric, he submits, is a matter of assessment for the court. In any event he does not accept that the Ministerial statement relied upon by the Defendant bears on the question raised in this case. The Minister, he observes, was not asked and did not answer the question as to the intended scope of "pay, hours and holidays". There is, he suggests, nothing to indicate that it was the intention of Parliament to adopt a minimalist construction to the minimalist selection.
Mr Bowers acknowledges that core terms as to hours will be reflected in some airline rostering provisions. However airline rostering is not just, or indeed primarily, about hours. In paragraph 5 of his witness statement Mr Richardson outlines the three categories of policy/practices which affect the Defendant's rostering arrangements. They are minimum regulatory requirements, contractual terms which are more generous than the minimum regulatory requirements and non-contractual operational policies. The Defendant accepts that the second category (contractual terms) fall within the scope of the Claimant's recognition.
The first category (minimum regulatory requirements) comprise not only those requirements that are stipulated by statute, but also such as have to be agreed between the Defendant and the CAA and embodied in the Defendant's Operations Manual Part A in order to comply with Articles 83 and 145 of the Air Navigation Order 2009. Mr White accepted that the Claimant does not seek to negotiate in respect of these regulatory requirements.
As to the third category (operational policies and practices) Mr Bowers submits that they do not fall within the scope of collective bargaining for three reasons. First, they are not apt for incorporation as contractual terms and are therefore not within "pay, hours and holidays", properly construed. Second, and in any event, they are not apt for negotiation pursuant to the Specified Method and therefore cannot have been intended by Parliament to fall within the scope of compulsory statutory recognition. Third, there are adjectival or ancillary matters, not falling within the core terms relating to pay, hours and holidays.
The Defendant accepts that there are some parts of the RCP which are apt for incorporation as core contractual terms relating to pay, hours and holidays, for example those which set annual entitlements. However outside core contractual terms, it is the Defendant's case that there are wider provisions which are non-contractual because of the flexibility that is expressly provided for. In this regard Mr Bowers relies in particular on the following parts of the RCP: Background, paragraph D, and paragraphs 1.2, 1.9, 1.10.4, 1.10.5 (and the definition of "Unusual Circumstances"), and 3.49 (see para 15 above). Mr White was referred in particular to paragraphs 1.2 and 1.9 in cross-examination. He described the word "endeavour" as "too open-ended", and he said that he understood that it meant that it was not a binding obligation but an aspirational policy (Transcript: Day 2, 95:11-17; 96:4-7 and 97:1-6).
Mr Bowers submits that even more importantly the Defendant's rostering policy is not in principle apt for incorporation because of the catastrophic adverse consequences that such incorporation could have for the business. In cross-examination Mr White accepted the seriousness of those potential consequences, and the need for flexibility on the part of the Defendant, including the need to maintain "flexibility on the day". (See Transcript: Day 2, 73:4-23; 75:18-76:8; 78:3-7 and 78:25-79:18; and 102:12-104:8. See also evidence of Mr Doubtfire, the Defendant's Managing Director, Transcript: Day 3, 63:25-64:24; 68:6-11).
Mr Bowers submits that in any event the cumbersome mechanism of the Specified Method is not apt for the kind of development and modification through which operational policies and practices of this kind inevitably evolve over time. It is also difficult to provide the detailed costings for such evolving operational practices that would be required under the Specified Method.
Mr Dobson, the Defendant's Chief Pilot, and Mr Richardson were cross-examined on the basis that, if the Defendant is content to discuss rostering with the Pilots' Liaison Operations Group ("PLOG"), there is no reason why it could not do so with the Claimant instead. No doubt that is correct. However as Mr Bowers observes the issue in this case is not whether rostering is capable of being discussed or negotiated with the Claimant but whether it is apt for negotiation under the particular mechanism of the Specified Method as between the Defendant and the Claimant and whether the Defendant is required to do so as a matter of law. Mr Brandon, who was the Claimant's Full Time Officer responsible from 2010 until 31 August 2014 for members employed by the Defendant, acknowledged in cross-examination (Transcript: Day 1, 64:25-65:2; 70:24-71:1) that this is the only instance of statutory (as opposed to voluntary) recognition of which the Claimant has experience. Nevertheless Mr Bowers suggests that in making all of its proposals the Claimant appears to have adopted the same approach that it has under its voluntary arrangements with other airlines. Indeed Mr White accepted that the kind of rostering agreement that the Claimant seeks to negotiate with the Defendant can only be effectively operated if there is a Joint Monitoring Committee consisting of representatives from the Claimant and Defendant to "police" its operation and decide upon appropriate flexibility in response to operational circumstances (Transcript: Day 2, 110:7-111:24; 116:11-24).
Conclusions on issue 1
The issue of whether or not the Defendant is obliged to negotiate on rostering arrangements is one of construction. Accordingly the parties' subjective intentions are not material. Further, whether or not, as the Claimant suggests, there has been any change in the Defendant's position in relation to the negotiation of rostering is, in my view, irrelevant.
In my judgment the Specified Method is only concerned with contractual terms affecting the pay, hours and holidays of workers in the bargaining unit. I agree with the third general point made by Mr Bowers in relation to the structure of the Specified Method (see para 28 above). I consider that in providing that the Defendant shall not vary "the contractual terms affecting pay, hours and holidays" other than through either the annual bargaining round or the exceptional procedure, the Specified Method contemplates that the subject matter of statutory collective bargaining is only contractual terms affecting pay, hours and holidays.
Further I agree with Mr Bowers that whilst s.178 of the 1992 Act and paragraph 3(3) of Schedule A1 are not mutually exclusive, matters which are not core terms of employment relating to pay, hours and holidays, but which fall within one of the other topics in s.178 that Parliament has excluded from paragraph 3 of Schedule A1 are outside the scope of statutory collective bargaining pursuant to the Schedule.
To the extent that the phrase "negotiations relating to pay, hours and holidays" in paragraph 3(3) is ambiguous, I consider it is permissible to have regard to the Ministerial statement made during the Committee stage of the 1999 Act. Whilst I accept Mr Carr's observation that the Minister was not asked the question as to the intended scope of "pay, hours and holidays", nevertheless the Minister's reference to the procedure being limited to pay, hours and holidays which he described as "the core terms of employment" supports, in my view, the conclusion that it was Parliament's intention to limit the scope of statutory collective bargaining pursuant to Schedule A1 to the three main contractual terms of employment.
The Defendant correctly accepts that there are some parts of the RCP which are apt for incorporation as contractual terms (see para 34 above). However I agree with Mr Bowers that outside these core contractual terms the provisions in the RCP are non-contractual. In general, in my view, the words used in the RCP were intended to express an objective or aspiration and the provisions are not apt for incorporation; they fall short of a contractual undertaking. I have regard, in particular, to paragraph 1.2 and the use of the word "endeavour" in paragraphs 1.9 and 3.49 (see para 15 above).
Further, consideration of the words used in the RCP set in context and against the factual matrix supports this conclusion. The factual matrix includes three categories of policy/practices which affect the Defendant's rostering arrangements (see para 31 above). The Claimant does not seek to negotiate in respect of one category, the minimum regulatory requirements (see para 32 above). The Defendant accepts that another category, contractual terms which are more generous than the minimum regulatory requirements, fall within the scope of the Claimant's recognition. That leaves the third category, operational policies and practices, which in my view do not fall within the scope of collective bargaining for the reasons advanced by the Defendant (see para 33 above). The RCP provides for flexibility (see para 34 above). Mr White accepted the need to maintain "flexibility on the day" (see para 35 above). I am satisfied that the potentially adverse consequences are such that in principle the RCP is not apt for incorporation. Mr White accepted that the rostering arrangements that the Claimant would wish to negotiate with the Defendant can only be effectively operated if there is a Joint Monitoring Committee which can respond to operational circumstances (see para 37 above). In my view the mechanism of the Specified Method (see, in particular, paras 14-17) would not, if incorporated into individual contracts of employment, make "business sense" (see Malone at para 40).
I reject the two alternative routes put forward by Mr Carr to the obligation to consult on rostering. In my view the Defendant is only obliged under the Specified Method to negotiate in relation to matters concerning the core contractual terms of pay, hours and holidays. Further, what is proposed must be apt for incorporation. The Claimant cannot circumvent these obstacles by asserting that it intends its rostering proposals to have contractual effect. The Defendant is not obliged to negotiate in relation to a proposal that is not apt for incorporation as a contractual term and/or not apt for negotiation under the Specified Method. In any event as Mr White agreed the reality is that there is no real likelihood that the Defendant would accept the terms of the Claimant's proposed framework agreement (Transcript: Day 2, 109:23-110:4). Similarly the extent of the impact rostering arrangements may have on the hours when a pilot can be required to work makes no difference if, as I have concluded, the rostering arrangements are not apt for incorporation as a contractual term.
I agree with Mr Carr that, as he accepted in his closing written submissions, this issue of construction can be decided without recourse to ECHR Article 11. In my view the proper construction of the scope of Schedule A1 does not give rise to any relevant restriction of the Claimant's Article 11 rights.
The Defendant has now agreed that the following items fall within the scope for collective bargaining: Airport standby (limited to proposals to vary the maximum number of hours); Basic pay; Contactable day duties (limited to any proposals to change maximum hours); Day off payments; Days off (limited to proposals to vary annual entitlement to number of days off); Holiday pay; Maternity and paternity pay (not leave); Pilots' income protection; Rest breaks; Rostering around blocks of annual leave; Sector pay; Standby duties (limited to proposals to vary the maximum number of hours); and Summer and winter leave (amount). (See Summary Table of Items Agreed/Disputed and letter from Defendant's solicitors to Claimant's solicitors dated 3 March 2015).
I agree with the Defendant that the remaining items which are in dispute are not core terms and/or are non-contractual and/or not apt for incorporation due to the need for flexibility, in the main for the reasons given at paragraphs 84 and 85 of the Defendant's Closing Submissions. Only those aspects of rostering that relate to the core terms of employment (pay, hours and holidays) and are apt for incorporation as contractual terms fall within the scope of the Claimant's recognition. Counsel indicated that the parties are content to apply the principles that in my view are relevant.
Issue 2: pay increases and the Specified Method
The Claimant's pleaded case in the Particulars of Claim is as follows:
"13. In each of the years since the imposition of the Specified Method, the Defendants have unilaterally decided on the levels of basic pay and pay increases for the pilots in the said bargaining unit and have unilaterally announced the same to those pilots. No attempt has been made by the Defendants to comply with the requirements of the Specified Method or to collectively bargain with the Claimant on the issue of basic pay/pay rises before the pay rises were determined and announced.
…
15. The Defendants have acted, in each of those years, in breach of the provisions of, inter alia, paragraphs 2, 14, 15, 17, 30 and 32 of the Specified Method.
…
17. For the avoidance of any doubt, the Claimant avers that the contractual imposition of the Specified Method precludes the Defendants from: (a) unilaterally determining basic pay and pay increases (whether on a provisional basis or otherwise); and (b) announcing pay increases to the workforce prior to the conclusion of the contractual collective bargaining process, …"
I shall set out my findings of fact in relation to this issue, the material evidence, to a substantial extent, not being in dispute.
2012-2013
The 2012-2013 pay round was the first pay round in respect of which the Defendant was required to negotiate with the Claimant. On 6 September 2011 Mr Doubtfire wrote to the Defendant's Captains:
"I am pleased to tell you for your financial planning purposes next year, and to reflect our appreciation of your continuing support, that Captains' basic pay will increase by £6,000 (six thousand pounds) per annum (pro rated for non-100% captains) with effect from 1st April 2012. This is inclusive of any general salary review which may be applied in April 2012. As you are currently in receipt of annual incremental increases, you will also benefit from the relevant incremental uplift which will be applied on top of this, with effect from 1st April 2012."
Similar letters were sent to the Defendant's First Officers and Senior First Officers on 9 September 2011, the proposed increases for them being £2,250 and £3,250 respectively.
Mr Chambers, the Defendant's Human Resources Director, stated there were two reasons why these letters were sent out prior to negotiations taking place with the Claimant:
"First, the Company wanted to give the pilots a reasonable amount of notice in advance of the proposed pay rise to give them an opportunity to plan ahead. Second, if the Company was to be in a position to attract pilots to join the business and also to retain its existing pilot workforce in a competitive employment marketplace, it was important that it set out its intentions early in respect of what it proposed pilots' salaries would increase to with effect from 1 April 2012…"
On 30 November 2011 Mr Chambers, together with Mr Doubtfire, met with the Claimant in a JNB Meeting to discuss the business context in which the 2012-2013 Pay Claim would be assessed, pursuant to Step 1 of the Specified Method.
On 30 January 2012 the Defendant received the Claimant's 2012-2013 Pay Claim, which was divided into three sections – Pay, Hours and Holiday. In the "Pay Section", it explained the Defendant's proposed increase to its basic pay award and stated that
"the BALPA [Company Council] sees this as having been decided as a result of recruitment and retention and as such feel no need to further discuss this particular area of the financial claim and accept it as such."
On 1 February 2012 Mr Meeson, the Defendant's Executive Chairman, wrote to Mr Chambers and Mr Doubtfire, having received the Claimant's Pay Claim:
"My proposal is that we will a few days before your meeting write a carefully worded letter setting out our position in relation to what is within their remit and what is not and also our position.
Ian [Doubtfire] is worried that this may be seen to be bypassing negotiations. It is not. They have set out their position.
We can set out our position. We can then meet. What happens at the meeting is called negotiation. But we will give nothing."
Mr Brandon referred to the pay increase offered as a "market leading" pay increase. Mr Kris Heslop, Vice Chair of the Jet2.com Company Council, expressed the view: "As stated in our pay claim document, previous meeting and newsletters we wholly accept this generous offer and feel it would not benefit anyone to further discuss this matter as it has already been decided and accepted by both sides outside of the negotiation process". Mr Brandon's evidence was that if he had considered the offer not to be generous he would "quite possibly" have tried to negotiate (Transcript: Day 2, 16:4-7).
The various elements of the pay claim were discussed at meetings (in particular on 2 March, 25 May and 12 June 2012) and in correspondence.
2013-2014
Before the 2012-2013 pay round had concluded, the 2013-2014 commenced with a JNB Meeting on 10 December 2012 pursuant to Step 1 of the Specified Method.
On 11 January 2013 the Defendant sent letters to pilots in respect of the pay round for 2013-14. The letter from Mr Meeson stated:
"We are now preparing our Group wide budgets for the new financial year and, of course, included in that is the cost of the 1st April 2013 salary review. I am pleased to inform you that, other than due to unforeseen circumstances, we are planning a 3% increase in your basic pay and any applicable Qualification pay. Additionally we plan to increase Sector Pay for Flight Deck and Cabin Crew colleagues by 5%. All of these increases to be paid with effect from 1st April 2013."
Mr Chambers accepted in relation to the Defendant's position announced in January 2013 that it was a "pretty definitive view" that Mr Meeson was expressing.
The Claimant's 2013-2014 Pay Claim was received on 15 February 2013.
On 28 February 2013 Mr Chambers met with the Claimant in a JNB Meeting pursuant to Step 3 of the Specified Method.
On 21 March 2013 Mr Doubtfire wrote to Mr Brandon providing the relevant costings and explanations in response to the 2013-2014 Pay Claim (Step 4). In this letter Mr Doubtfire rejected the Claimant's proposed 5% increase to headline pay and by way of counter proposal suggested an increase to basic pay of 3%. Mr Doubtfire suggested 4 April 2013 for the Step 5 meeting.
Mr Brandon responded on 22 March. He stated that he could not attend a meeting on 4 April. Thereafter a mutually convenient date for the Step 5 meeting was agreed for 30 May 2013. On 25 April, as the 1 April pay increase date had now passed, Mr Doubtfire wrote to Mr Brandon:
"Any pay rises for colleagues take effect from [1 April] and as you know the proposed increased this year for all colleagues is 3%.
We are sure you would not wish pilots to be treated less favourably than their colleagues, so we are increasing their base pay by the same amount and their sector pay by 5%, with effect from 1 April 2013.
This does not mean we have pre-determined the outcome of the 2013/2014 pay claim which we are negotiating with you. Any increase above these rates will be in addition to the increase paid as from 1 April 2013. Conversely, if a lower increase is agreed, after negotiation, we will not seek to recover any sums already paid which are in excess of the agreed rate."
The Step 5 meeting took place on 30 May 2013. The minutes of the meeting are at 6/2296-2301. Mr Doubtfire addressed the 2013-2014 Pay Claim, explaining why the Defendant decided to maintain the 3% increase to basic pay and accept the Claimant's proposed 5% increase on sector pay. The meeting concluded with Mr Heslop confirming that "he would like to make a counter-proposal for the Company to consider".
Later that day Mr Heslop wrote to Mr Doubtfire and Mr Chambers stating:
"Following what we felt were useful discussions today, please find attached a copy of the amended proposal we discussed prior to the close of the meeting this afternoon. We genuinely hope that we can build on today's meeting and come to a mutually agreeable settlement for this year's pay claim and avoid the need to enter into stages 6 and 7 of the process."
The counter-proposal accepted the 3% increase in basic pay and 5% increase in sector pay and included a number of counter-proposals in respect of other points.
In order for the Defendant to respond to the counter-proposal, a second Step 5 meeting was arranged for 3 July 2013. The minutes record that Mr Doubtfire and Mr Chambers explained the Defendant's position in respect of each of the Claimant's proposals. At this meeting the parties agreed the increases to both basic and sector pay.
On 24 July 2013 a further meeting was held to discuss the outstanding matters (either a Step 5 meeting 3, or a Step 6 Meeting). The minutes of this meeting are at 6/2438-2440.
On 5 August 2013 Mr Doubtfire wrote to the Claimant setting out details of the Defendant's proposal, including those relating to the two issues still outstanding, namely Pilots' Income Protection ("PIP") and holiday pay. Acceptance of the pay offer was subject to a ballot of the Claimant's members.
On 9 August 2013 Mr Meeson wrote:
"We have trumped them by announcing our 5% pay rise for next April. They were talking about balloting their members.
From what I gather their members and the many pilots who are not members are very happy.
They are professional troublemakers."
On 27 August 2013 Mr Brandon wrote to Mr Doubtfire confirming the results of the ballot. The Defendant's pay offer was approved by 94% of those who voted.
On 6 September 2013 Mr Doubtfire wrote to Mr Brandon detailing the Defendant's interpretation of what had been agreed in the 2013-2014 pay round and requesting that he sign and return a copy of the letter to comply with the Specified Method which required that collective agreements following negotiations are set down in writing and signed by both parties. The letter was signed on behalf of Mr Brandon and returned on 9 September 2013.
2014-2015
On 2 August 2013 the Defendant had written to its pilots in respect of the pay round for 2014-2015:
"As I am sure you are aware we are now confirming Pilot appointments for the future and commencing our recruitment for next year in line with our planned fleet growth.
We are determined to keep our salaries highly competitive and I am therefore very pleased to let you know that out plan is to increase Flight Deck Crews' salaries by 5% next April, along with Sector Pay and Qualification Pay…"
On 15 August 2013 Mr Doubtfire wrote to Mr Brandon:
"As you may be aware we have notified our pilots of our plan to increase Flight Deck Crews' salaries by 5% next April along with Sector Pay and Qualification Pay. We intend to apply advanced payments for the proposed pay rise from 1 April 2014. As with this year we would not seek to recoup any advanced payments if the increase negotiated with BALPA is less than 5%."
On 22 November 2013 Mr Chambers and Mr Doubtfire met with the Claimant in a JNB Meeting in order to discuss the business context in which the 2014/15 Pay Claim would be assessed pursuant to Step 1 of the Specified Method.
On 28 November the Defendant received the Claimant's Pay Claim for the 2014-2015 pay year. The Claimant accepted the rise in headline pay of 5%, proposed that Sector Pay be increased by 5% in line with the increase in headline pay and made other proposals in respect of terms and conditions.
On 12 December 2013 there was a JNB Meeting pursuant to Step 3 of the Specified Method. The minutes of the meeting (7/2836-2839) record that the 5% increase in base pay was accepted by the Claimant. The other items included in the Pay Claim were raised and responded to by Mr Chambers and/or Mr Doubtfire.
Pursuant to Step 4 of the Specified Method Mr Doubtfire wrote to Mr Brandon on 7 January 2014 responding to the Claimant's Pay Claim, attaching a table setting out relevant costings and explanations as required by the Specified Method. Mr Doubtfire confirmed an increase of 5% in sector pay and also an increase of 5% in qualification pay which was not referred to in the Pay Claim but which had been confirmed in letters written to pilots on 2 August 2013. The Claimant's other proposals were rejected. Mr Doubtfire explained that the Defendant considered its proposed increases to be competitive and appropriate for rewarding their pilots and retaining existing employees and attracting new ones. The Defendant had agreed to pay increases totalling £2,151,062.80.
On 17 January 2014 a JNB Meeting pursuant to Step 5 of the Specified Method was held. The minutes of the meeting (8/2958/2963) record that Mr Chambers and Mr Doubtfire were asked a number of questions regarding the items which the Defendant had not accepted in the Pay Claim to which they responded.
A Step 6 meeting was held on 4 February 2014. The minutes of the meeting have not been agreed, but it is clear from the two versions of the minutes that have been produced that again the items included in the Claim were raised and discussed.
On 23 April 2014 the Defendant sent letters to its pilots confirming the increases to basic salary, sector pay and qualification pay, as it had done in the previous year.
Mr Chambers gave evidence that over the years, following discussions with the Claimant within the Specified Method, the Defendant had agreed increases in sector pay, qualification pay, a new day off payment for senior first officers, a holiday pay day rate for pilots, an uplift in pilot income protection cover and increases on day off payments (Transcript: Day 3, 164:17-165:19).
The parties' submissions
Mr Carr submits that the evidence makes clear that the strategy of the Defendant has been to remove any force from the collective bargaining process in relation to pay. The conduct of the Defendant, he suggests, has been cynical and calculated to ensure that the Claimant had no influence in pay determinations. He contends it follows that the Defendant has rendered the negotiation process an irrelevance and in so doing has not complied with the Specified Method.
In response Mr Bowers submits that there is nothing within the Specified Method which prevented the Defendant from communicating with its pilots in the way it did before negotiating with the Claimant. Further, the Specified Method imposes no obligation on the Defendant to have a particular state of mind before entering into discussions with the Claimant. It is, Mr Bowers submits, of the nature of negotiations that parties may have "negotiating positions" which may include "red lines". In fact, Mr Bowers contends the evidence establishes that the Defendant did negotiate with the Claimant as it was required to do under the Specified Method.
Discussion
Throughout this trial the Claimant has been at pains to establish the hostility of the Defendant, and in particular that of Mr Meeson, towards the Claimant. I do not consider it necessary in this judgment to detail the rather acrimonious relationship that the evidence suggests exists between the parties. It suffices to record that it is not in dispute that the Defendant opposed the Claimant every step of the way in its efforts to achieve recognition which led eventually to the imposition of the Specified Method. The Defendant does not wish to negotiate with the Claimant to a greater extent than required by law.
Mr Meeson has chosen not to give evidence. However his personal antipathy towards the Claimant is clear from the documents and not contradicted by the Defendant's witnesses. From his first intervention in June 2009 when uninvited he attended a meeting of the Claimant and stated that BALPA was "out to ruin this airline" and that he would "not deal with them", his attitude to the Claimant does not appear to have changed. He has variously referred to the Claimant as "a bureaucratic outside body" (letter to pilots dated 3 July 2010) and "professional troublemakers" (see para 69 above). Asked by Mr Carr as to whether Mr Meeson has a "disdain" and "contempt" for the Claimant and officials that work within it, Mr Chambers replied
"It is more for unions, rather than specifically BALPA as a sole union.
…
Mr Meeson has grown the business rapidly over a number—over a lot of years. He employs through Jet2 and Jet2 Holidays over 4,000 employees in the summer. He also has … grown the business significantly. So quite clearly he believes that's the way he's grown the business and manages the business, he wouldn't take too well for third parties coming in to get involved."
(Transcript, Day 3: 139:3-24).
Mr Bowers observes that it is clear the parties have conflicting subjective intentions. He acknowledges that the Defendant opposed the Claimant's involvement in its business and wished to minimise that involvement. However he adds, the charge applies equally the other way: there is no doubt that the Claimant's intention is to maximise the extent to which the Defendant is obliged to negotiate with it.
Mr Brandon claimed a desire to "build bridges" but some of his actions, in particular his proposal in January 2013 that the Claimant adopt a course of action of making public threats of industrial action and praising the Defendant's main competitor in order to "hit sales" of the Defendant illustrated, in my view, a willingness to resort to inappropriate measures. In October 2014 Mr Brade replaced Mr Brandon as the Claimant's national officer with responsibility for members employed by the Defendant. Mr Brade's evidence left me with the impression that at least in part the reason for his appointment arose from an appreciation by the Claimant that there was a need to improve working relationships between the parties.
I agree with Mr Bowers that ultimately the parties' subjective intentions are irrelevant because the obligation to negotiate under the Specified Method does not impose any obligation on a party to come to negotiations with a particular state of mind about any particular issue.
The Defendant is not prohibited by the Specified Method from communicating directly with its pilots about proposed pay increases. What the Specified Method requires is that the Defendant discuss pay with the Claimant before varying the employees' contractual terms about pay.
As a matter of fact this is what the Defendant did each year. I consider that it complied with its obligations in this regard. The Defendant has not implemented any variations to terms and conditions in relation to pay before discussions with the Claimant under the Specified Method.
I agree with Mr Bowers that the fact that the Defendant would in all probability have rejected any counter proposals on base ('headline' – see Transcript: Day 3, 145:11-22) pay does not negate the fact that no pay rise was brought into effect before discussions had been conducted with the Defendant under the Specified Method.
The Defendant did in fact, following discussions with the Claimant within the Specified Method, agree to introduce some changes to pay, hours and holidays (see para 81 above).
Conclusion on issue 2
In my judgment the Defendant has not acted in breach of the Specified Method.
Conclusion
For the reasons I have given this claim is dismissed. |
Mrs Justice Andrews:
On 21 July 2006 the Respondent Bank ("the Bank") issued proceedings in the District Court of Nicosia, Cyprus, against the Appellant ("Mrs Christofi") and her husband, Lambros Christofi, under action number 4900/2006. The proceedings related to sums alleged to be due under a loan agreement dated 4 September 2002 made between the Bank and Mr Christofi, and a personal guarantee and mortgage over certain property in Cyprus given by Mrs Christofi as security for that loan.
The proceedings were served personally on Mr Christofi on 31 July 2006. It is the Bank's case that this was valid service on both Mr and Mrs Christofi under the law of Cyprus. A firm of advocates in Cyprus, Kallis & Kallis, entered an appearance ostensibly on behalf of both Mr and Mrs Christofi, and defended the proceedings for around 4½ years, filing a defence and counterclaim. Eventually the proceedings were compromised in terms of a consent order made by the Cypriot Court ("the Settlement Order") under which it was ordered that Mrs Christofi, jointly and severally with her husband, pay:
a) The sum of €2,221,181.90 plus interest to the date of settlement and
b) The sum of €12,443 for costs, plus interest to the date of settlement, a fee of €102 for the settlement order and €1783.56 VAT.
The Settlement Order provided for a suspension of execution until 30 April 2011, on the basis that if Mr and Mrs Christofi paid the sum of €3,519,770.96 plus costs by that date the judgment would be deemed paid in full. However, no payment was made by the deadline. The Bank therefore started to take action to enforce the terms of the Settlement Order, first in Cyprus, and then in the UK. By the time that the Bank sought registration of the Settlement Order in the UK, the total amount due under it was calculated at €7,368,044.88. Credit was given for some relatively small amounts recovered in Cyprus.
On 14 May 2014, following a "without notice" application made by the Bank pursuant to CPR 74.3, Deputy Master Eyre registered the Settlement Order for enforcement pursuant to Council Regulation EC 44/2001 ("the Judgments Regulation"). He made two Registration Orders, it appears in order to cater for the alternative possibilities that Mrs Christofi was domiciled in England or in Cyprus, but nothing turns on this.
Article 34(2) of the Judgments Regulation sets out the limited grounds on which a judgment of another EU Member State shall be refused recognition. One of these is:
"where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so."
The purpose of Article 34(2) of the Judgments Regulation (and of its predecessor, Article 27(2) of the Brussels Convention 1968) is to ensure that a judgment is not recognized or enforced if the defendant has had no opportunity of defending himself before the court first seised (see e.g. Case 166/80 Klomps v Michel [1981] ECR 1593, at [9] and Case C-172/91 Sonntag v Waidmann [1993] ECR 1-1963, at [38]). The issue of whether a judgment or order is given "in default of appearance" is not determined by the rules of procedure of the Contracting State in which the judgment or order is obtained, or by the law in the Contracting State where it is sought to be enforced. It is treated as an issue of fact. Thus the fact that service was properly effected under the law of the court of origin, as the Bank contends it was, does not preclude re-examination of whether it was effected in sufficient time to enable the defendant to arrange a defence.
Mrs Christofi claims that the first time she became aware of the existence of the proceedings in Cyprus was when she was served with notice of the orders made by Deputy Master Eyre. She alleges that her husband deliberately kept the proceedings from her, that Kallis & Kallis had no authority to represent her in the Cypriot proceedings, and that the signature on a letter of retainer purporting to be her signature is a forgery (though she has adduced no expert evidence in support of that assertion). Thus she contends this case is similar to Case C-78/95 Hendrickman v Magenta Drug &Verlag GmbH, (10 October 1996) in which the Court of Justice of the European Union (CJEU) held that an order obtained against a defendant in Germany with the purported consent of a lawyer in circumstances where the defendant had not instructed the lawyer was to be treated as given in default of appearance because "where proceedings are initiated against a person without his knowledge and a lawyer appears before the court first seised on his behalf but without his authority, such a person is quite powerless to defend himself."
Mrs Christofi seeks to appeal the registration of the Settlement Order on those grounds, pursuant to CPR 74.8. Such an appeal does not require permission, but there are time limits for appealing. In this case, the time prescribed by Article 43(5) of the Judgments Regulation is two months from the date of service upon Mrs Christofi of the Registration Orders in person or at her residence, it being common ground that Mrs Christofi is domiciled in Cyprus. That time limit is reflected in CPR 74.8(4) which provides that:
"The appellant's notice must be served
a) where the appeal is against the granting of registration, within
i) one month; or
ii) Where service is to be effected on a party not domiciled within the jurisdiction, two months, of service of the registration order."
Although sub-paragraph (a) (ii) could be interpreted as referring to service of the appellant's notice on a respondent who is domiciled outside the jurisdiction, it is plainly intended to mean that where service of the registration order is to be effected on a party not domiciled within the jurisdiction, that person has two months from service on him in which to serve the appellant's notice on the opposing party. The upshot is that the non-UK domiciled appellant must both file the appellant's notice with the court and serve it on his opponent within two months of service on him of the registration order.
On 17 June 2014 the Bank obtained interim charging orders over Mrs Christofi's English properties. However, its solicitors, Charles Russell, were not notified of this by the court until after they sent a chasing letter on 7 July 2014. Further inquiries of the court office revealed that a hearing of the application to make the charging orders final was listed for 30 July 2014. Once Charles Russell were aware of the situation they acted with commendable speed. Mrs Christofi was served with copies of the Registration Orders and the interim charging orders on 11 July 2014, under cover of a letter from Charles Russell dated 8 July, which also enclosed a copy of the Settlement Order.
It is accepted by both parties that the time for filing and serving the appeal therefore expired on 11 September 2014. However, the appeal was neither filed nor served within that time limit. The appellants' notice was filed on 30 September 2014 and served on 3 October 2014, 22 days out of time. The evidence before me does not adequately explain why such a long delay occurred.
On 22 July 2014, Mrs Christofi's solicitors, Fletcher Day, wrote to Charles Russell to say that they had recently been instructed, and that their client had only received Charles Russell's letter of 8 July on 11 July. They said that the letter was the first their client knew of the Settlement Order, the Registration Orders or the interim charging orders, and complained that the Bank should not have taken steps to enforce the registered judgment until after the time limit for appealing the registration had expired (a complaint which Mr Warents, who represented Mrs Christofi on this appeal, sensibly did not pursue). They said that Mrs Christofi intended to commence proceedings in Cyprus to set aside the Settlement Order and had instructed Cypriot lawyers to do so; she would also be appealing against the Registration Orders "in due course".
Fletcher Day pointed out that the question whether the interim charging orders should be made final could not be resolved at a hearing on 30 July 2014 if Mrs Christofi was going to appeal against the Registration Orders. They proposed a consent order agreeing to the vacation of the hearing on 30 July, on the basis that their client should inform the Court if an appeal against the Registration Orders was filed, and if the Court were so informed then the Bank's application for final charging orders should abide the outcome of that appeal. In the event that Mrs Christofi did not file an appeal against the Registration Orders by 4pm on 11 September, the hearing of the Bank's application for final charging orders should be listed for the first available date thereafter.
It is clear from that proposal that Fletcher Day were well aware of the deadline for appealing. The reference to informing the Court if an appeal was filed was presumably to ensure that those responsible for listing the hearing of the application to make the charging orders final were kept apprised of developments. They would not necessarily otherwise know that there was an appeal pending, as appeals are dealt with administratively by a different section of the court office.
In their letter in response, sent on 25 July 2014, Charles Russell disputed Mrs Christofi's alleged lack of prior knowledge of the Settlement Order and contended that there was no basis for setting it aside, as it had been made by consent and the time limit for an appeal (in Cyprus) had expired. They noted the intention of Mrs Christofi to appeal the Registration Order "in due course". They then said that in the interests of saving costs, the Bank would be willing to agree to an adjournment of the hearing of the final charging order application on the basis that Mrs Christofi accepted that she had been served with, inter alia, the Registration Orders. They enclosed a draft Consent Order, which was subsequently agreed and signed.
The Consent Order, which is dated 29 July 2014, records the service of the Registration Orders on Mrs Christofi, and agrees to vacate the hearing on 30 July. It then provides that "the Defendant shall notify the Court and the Claimant no later than 4pm on 30 September 2014 if she has filed an appeal against the Registration Orders" (my emphasis). If such notification is given then the hearing of the application to make the Interim Charging Orders final will be adjourned until after the appeal is determined; if not, the Bank may apply to have the hearing relisted for the first available date after 30 October 2014.
The Consent Order is plainly directed at the practicalities of re-fixing the vacated hearing of the application to make the charging orders final. The timetable would depend upon whether or not Mrs Christofi had appealed the Registration Orders. It seems to have been envisaged that the court office would probably be fixing dates at least a month ahead, so that if the Bank wanted to have a chance of getting a hearing in November or December 2014, those responsible for the listing would need to be told by 30 September at the latest that there had been no appeal. If the Bank's solicitors then applied for a date, they would be in a position to fix a hearing for some time after 30 October.
At first sight, the requirement to notify the Bank of the filing of the appeal appears otiose, since Charles Russell would know if the appellant's notice had been served on them before 4pm on 11 September. However, Charles Russell would not know that Fletcher Day had confirmed to the relevant court office by the agreed date whether or not an appeal was pending, unless they were told. Since they were the party responsible for re-fixing the date for the hearing to make the charging orders absolute, a requirement that they be copied in to the relevant correspondence with the court would save them having to make their own inquiries, which might cause further delay.
Whatever the thinking behind it, the agreement was to notify the Bank if an appeal had already been filed. The Consent Order did not purport to extend the time for appealing, and could not reasonably have been interpreted as doing so. The evidence of Mr Hill of Fletcher Day is that at the time the Consent Order was entered into, and until shortly before 30 September 2014, his firm "was working on the basis that the last date for making the Appeal was 30 September 2014". That was a serious mistake.
There was no further correspondence from Fletcher Day until long after the time limit for appealing had expired. On 26 September, they wrote to Charles Russell to say that their client's "current instructions are to appeal the Registration Order and we have been working to this end" but that Counsel was away and that a conference call had been arranged for 29 September. They asked for agreement to "an extension of time in which to issue our client's appeal against the Registration Order until 4pm Friday 10 October 2014" and said they did not believe the extension would cause any prejudice to the Bank, since the case could not be relisted until after 30 October in any event.
This letter betrayed a number of fundamental misconceptions on the part of the writer, not least that the parties had the power to agree to extend time for appealing (contrary to the express provisions of CPR 52.6). Charles Russell's response was that their client was agreeable to the "short extension to 10 October 2014 requested regarding the deadline for your client to inform us of any appeal of the Registration Order to enable your client to take Counsel's advice" (my emphasis). The solicitor at Charles Russell appears not to have applied her mind to the question whether time for appealing had already expired, because the letter would not have been written in those terms if she had. In any event, presumably because the agreement did not go as far as they wished, Fletcher Day took steps to file the appellant's notice with the Court on 30 September. They were told by the Court office, correctly, that they were out of time. The time taken up in seeking to resolve the question whether they needed to formally apply for permission to appeal out of time led to the appellant's notice being served on 3 October, the next working day.
It was readily apparent at the hearing of this matter on 26 March 2015, nearly six months later, that it would be impossible for the Court to determine the substantive appeal within the allotted time; Mrs Christofi was not available for cross-examination and there was no order requiring her attendance. It is unusual for the Court to be asked to determine a dispute about the genuineness of a signature in the absence of expert evidence. In such circumstances, it would be essential for the Court to hear, see and evaluate the evidence of the key witness of fact. However, before one even gets to the merits of the substantive appeal there are two preliminary issues that have to be determined, namely:
i) Does the court have the power to extend time for appealing?
ii) If it does, should the court extend time in this case?
The first of these issues is plainly one of general importance; moreover, it appears to have been the subject of conflicting decisions by this Court. In the light of this, it is possible that the matter may require resolution by the Court of Appeal (which would be empowered to refer the matter to the CJEU if it considered it appropriate to do so). Therefore, both counsel proposed, and I agreed, that the sensible course would be for me to determine the two preliminary issues, and to leave over any decision on the merits of the substantive appeal to abide the outcome of any appeal from this judgment.
Question 1: Does the Court have the power to extend time for appealing?
The starting point in interpreting the provisions of Article 43(5) of the Judgments Regulation must be the policy underpinning the Regulation and its predecessors: see e.g. Case 148/84 Deutsche Genossenschaftsbank v SA Brasserie du Pecheur [1985] 3 ECR 1987 at [16] and [17], in which it was established that the Brussels Convention established an autonomous and complete system for the recognition and enforcement of judgments, including for appeals, which excludes the possibility of any separate challenges to an enforcement order under domestic law. Thus third parties affected by the foreign judgment could not be granted a right under the domestic law of the country of enforcement to appeal against its registration, as the only person granted such a right under the Convention is the defendant. Such a third party could only avail himself of any domestic remedy available at the stage of execution of the judgment or order.
The Preamble to the Brussels Convention refers to the undertaking by the parties to the Treaty establishing the European Economic Community "to secure the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals" and to the need "to introduce an expeditious procedure for securing the enforcement of judgments, authentic instruments and court settlements". This policy of simplicity and swiftness is reflected in the second Preamble to the Judgments Regulation which recognizes that differences between national rules governing recognition of judgments hamper the sound operation of the internal market. It states that provisions to "simplify the formalities with a view to rapid and simple recognition and enforcement of judgments from Member States bound by this Regulation are essential".
The Preamble goes on to explain how it is envisaged that this policy will be implemented in paragraphs 17 and 18:
"(17) By virtue of the same principle of mutual trust, the procedure for making enforceable in one Member State a judgment given in another must be efficient and rapid. To that end, the declaration that a judgment is enforceable should be issued virtually automatically after purely formal checks of the document supplied, without there being any possibility for the court to raise of its own motion any of the grounds for non-enforcement provided for by this Regulation.
(18) However, respect for the rights of the defence means that the defendant should be able to appeal in an adversarial procedure, against the declaration of enforceability, if he considers one of the grounds for non-enforcement to be present…"
It follows that a balance must be struck between the right of the defendant to challenge the recognition order by appeal on one of the limited grounds permitted by the Regulation, and the need for expedition. That balance is struck in Article 43(5) which provides that:
"An appeal against the declaration of enforceability is to be lodged within one month of service thereof. If the party against whom enforcement is sought is domiciled in a Member State other than that in which the declaration of enforceability was given, the time for appealing shall be two months and shall run from the date of service, either on him in person or at his residence. No extension of time may be granted on account of distance."
The language used ("is to be lodged" and "shall be two months") indicates that the time limits set are intended to be mandatory, which would accord with the underlying policy that enforcement should be rapid, and thus that there should be a limited (and relatively short) time for appealing. However it was recognized that a defendant domiciled in a Contracting State other than the State of enforcement may be disadvantaged in preparing a challenge within a month, and the draftsman made two express modifications to cater for those perceived disadvantages.
First, time does not start to run until there has been actual service of the order for enforcement on the party concerned in person or at his residence. That means delivering a copy of the order to a person who is present and empowered by law to receive it or, if there is no such person, to a competent authority (see the commentary in the Jenard Report, [1979] O.J. C59). This requirement avoids the danger that in consequence of the application of domestic rules of service, time for appealing will run out before the defendant becomes aware of the registration order.
Secondly, the period for appealing is twice the normal time prescribed – two months instead of one. The final sentence makes it clear that those two concessions are intended to strike the balance between giving the defendant domiciled in another Contracting State a fair opportunity to prepare his appeal and the need for uniformity and expeditious enforcement, by negating any prospect of a further extension of time to cater for the problems caused by distance.
That interpretation of Article 43(5) is consistent with the Jenard Report, which in its commentary upon Article 36 of the Brussels Convention (which is in identical terms) states that it draws a distinction between the situation in which the prospective appellant is domiciled in the State in which the decision to enforce was given, and the situation in which he is domiciled in another Contracting State. It says that in the former situation, (which I shall call Category A1) "the period is one month; the moment from which time begins to run is determined by the law of [the State of enforcement] from which there is no reason to derogate." Thus, for example, a person domiciled in England would not be able to complain about the impact on the commencement of the one month time limit of being served by first class post. In the latter situation, (which I shall call Category B) the period is two months, and runs from the date when the decision was served either on the party in person or at his residence:
"the purpose of this rule, which derogates from some national laws, is to protect the respondent and to prevent his being deprived of a remedy because he had not been informed of the decision in sufficient time to contest it. No extension of time may be granted on account of distance, as the time allowed is sufficient to enable the party concerned to contest the decision, if he is so minded."
The argument that by excluding the possibility of an extension of time only on grounds of distance, the draftsman has envisaged an extension being granted for other reasons makes no sense in the light of those underlying policy considerations and the explanation given in the Jenard Report. The judgment debtor domiciled in the State of enforcement should have no need of an extension of time, and is bound by the rules of that State regarding service. A person domiciled in a different EU Member State from the State of enforcement is being afforded a more generous time for appealing in order to cater for any disadvantages caused by his being domiciled elsewhere. If he cannot obtain a further extension on grounds of distance, and time cannot run against him without his knowledge, then it would seem perverse to allow a further extension on other grounds. Such a person is already considered to be adequately protected against the potential unfairness of a tight mandatory deadline for appeal.
The real problem is that Article 43(5) does not expressly cater for the position of a defendant who is domiciled outside the EU altogether. On the face of it, one might expect such a party to suffer from the same potential disadvantages (and thus to be put in at least the same position) as a party domiciled in a different Contracting State. However, on the face of it, the Regulation treats such a person as subject to the same rules and deadlines as a person domiciled in the State of enforcement. Jenard says this:
"If the party is domiciled outside the Community, the period within which an appeal may be lodged runs from the date when the decision is served or is deemed to have been served according to the law of the State in which the decision was given. In this case, the period of one month may be extended on account of distance in accordance with the law of that State."
Mr Warents submitted that this clearly indicates that a non-EU domiciliary is to be treated as subject to the same one month time limit which applies to a party domiciled in the State of enforcement, rather than the two month limit applicable to those domiciled in other EU Member States, unless that rule is modified by domestic law. Thus rather than being in a completely independent category, Category C, or being treated as falling into Category B by analogy, such a person falls into a sub-category of Category A (Category A2). I agree with that analysis.
It is envisaged by Jenard that the procedural rules of the State of enforcement can be used to extend time so as to cater for the disadvantages suffered by such a person on account of distance. It is not easy to discern from the language of the Convention or Judgments Regulation where that power comes from. It appears to emanate from the fact that the last sentence of Article 43(5), which precludes extensions of time on grounds of distance, expressly applies only to domiciliaries of other Convention States, for the reasons stated in the Jenard Report. Jenard appears to infer from this limitation (and the reasons justifying it) an acceptance in principle that, conversely, a State is permitted to legislate for an extension of the one-month period to cater for the potential disadvantages that distance would cause for a party domiciled outside the EU.
Mr Warents submitted that once it is conceded that there is a power to extend time for some persons falling within Category A, there is nothing in the Regulation itself to draw a distinction between different persons falling into that category, let alone between persons within Category A and persons within Category B. Thus, by necessary implication, there must also be a power to extend time for persons subject to the two month time limit, although not on grounds of distance. It seems to me that this argument suffers from a false logic, because the initial premise that all persons falling in Category A are to be treated alike is not established. Indeed, Jenard implies the reverse, by stating that there is no reason to derogate from domestic rules of service in the case of persons domiciled in the State of enforcement, i.e. those falling within Category A1. That suggests there may be a reason to derogate from those rules in respect of persons domiciled elsewhere (whether within or outside the EU); hence the express derogations provided for in a Category B case and the implicit right to derogate in a Category A2 case. Mr Warents contended that it is the language of the Regulation, not the commentary in Jenard that matters; however, the latter authoritatively informs the interpretation of the former.
Those who drafted the Judgments Regulation (and the Conventions that preceded it) were concerned to ensure that the right of appeal is not unfairly impeded, or rendered nugatory, by the defendant's distance from the State of enforcement. Plainly that concern would not apply to parties who are domiciled in the State of enforcement; they can have no excuse for not meeting the one month time limit on grounds of distance. Parties domiciled elsewhere in the EU are expressly catered for and need no further concessions. Jenard envisages that the State of enforcement may ameliorate the disadvantages for non-EU domiciliaries to the extent of providing for extensions of the one month time limit on account of distance. How such provision is made is a matter for the State concerned. However, it cannot be inferred that each State of enforcement has a free rein in granting extensions of time to such defendants because that would completely undermine the policy underlying the Convention and the Judgments Regulation spelled out in Brasserie du Pecheur, and it would be inconsistent with the system laid down for enforcement and appeals against enforcement orders being self-contained. The power to extend time in a Category A2 case must be exercised consistently with the policy in the Convention and the Judgments Regulation.
In my judgment, if that State were to make rules putting such a person in the same position as someone falling into Category B, it would not be acting contrary to the spirit and intention of the Brussels Convention or the Judgments Regulation. On the contrary, it would achieve a desirable degree of uniformity and certainty. In England and Wales, the Rules Committee has exercised that power by giving persons domiciled outside the EU the same time for appealing against the enforcement order as persons domiciled elsewhere in the EU. Thus CPR 74.8(4)(a)(ii) draws no distinction between persons domiciled in other States within or outside the EU; the time limit is two months from the date of service. That is deemed to be an adequate time for filing notice of appeal.
However the rules also specifically provide that if the judgment debtor is not domiciled within the EU, if "an application to extend time for appealing is made within two months of service of the registration order, the court may extend the period for filing an appellant's notice against the order granting registration, but not on grounds of distance" (CPR 74.8(3)). This express power to extend time for appealing is confined to persons domiciled in a non-EU State, which on the face of it (and consistently with the language of the Judgments Regulation) implies that the Rules Committee envisaged that there should be no such power in respect of persons domiciled within this jurisdiction or elsewhere within the EU.
Ms Lamont, on behalf of the Bank, submitted that this betrayed some confusion on the part of the Rules Committee, and that consistently with the Jenard Report, there should be no such prohibition: on the contrary, the rule should have permitted a further extension on grounds of distance. However, if the extension of the time limit from one to two months is perceived to adequately cater for the disadvantages caused by distance, as I consider to have been the intention, the prohibition of a further extension on those grounds makes complete sense. It is the fact that the rules envisage that a further extension may be permitted on other grounds that causes a difficulty. The Jenard Report only expressly refers to an extension of time on grounds of distance. The question whether the Regulation implicitly permits an extension on other grounds is a matter to which I shall return when considering the previous authorities. At this juncture, I simply point out that extending the time limit does not cater for the other potential disadvantage caused by domestic rules of service that the Regulation has expressly addressed in the case of persons domiciled elsewhere in the EU, as time could still start to run against a non-EU defendant at a time when he is unaware of the Registration order.
Thus, if the matter were free from domestic or EU authority I would interpret the time limit applicable to someone in Mrs Christofi's position as mandatory and strict, with no general discretion to extend time. The same would be true of a person domiciled in the state of enforcement (a Category A1 person). He will be taken to have agreed to be bound by the procedural rules concerning service of documents in the country of his own domicile. The distinction in treatment between these two categories is clearly drawn in the wording of the Brussels Convention and the Judgments Regulation, and the underlying policy behind the more favourable treatment afforded to someone domiciled in another Contracting State is explained by Jenard. The implicit power to extend time for appealing in the case of persons domiciled outside the EU on grounds of distance, referred to in the Jenard Report, recognizes that they may also be at a disadvantage by reason of distance and enables Contracting States, if they wish, at least to allow such persons the same period for appealing as is expressly afforded to those domiciled elsewhere in the EU. The power to extend time must be confined to Category A2 defendants, because fairness to the other categories of defendant is already sufficiently catered for.
I would add just one caveat. Even when there is a mandatory time limit for appealing under a domestic statute, and no power to extend time, this jurisdiction recognizes a limited class of case in which the courts may entertain an out of time appeal. That is where the application of the time limit would impair the very essence of the right of appeal, and strict adherence to it would infringe Article 6 of the European Convention on Human Rights: R (Adesina and Baines) v The Nursing and Midwifery Council, [2013] EWCA Civ 818, following the views expressed by Lord Mance in Lukaszewski and Pomiechowski v Poland [2012] 1 WLR 1604 at [33]-[37]. The discretion in the court to ameliorate the absolute approach in exceptional circumstances still requires the appellant "personally to have done all he can to bring the appeal timeously." In Adesina and Baines Maurice Kay LJ gave the examples of a person who falls seriously ill immediately upon receipt of the decision and remains in intensive care whilst the time limit expires, or a case in which the relevant document is sent by post and never arrives, but is deemed served on the day after it was posted.
In my judgment, by parity of reasoning, a similar exception would probably apply to the mandatory time limits under the Regulation, since the underlying policy is designed to be compatible with Article 6. However, the present case is far removed from the situation in which such a limited exception could arguably apply.
With that provisional view in mind, I turn to the previous European and domestic case law. The first case in time is Case 145/86 Hoffmann v Krieg [1988] ECR 645 ("Hoffmann"). An order had been made by a German court for a husband to make maintenance payments to his wife as a separated spouse. He then obtained a decree of divorce in the Netherlands. Thereafter, the wife registered the order for maintenance in the Netherlands. The husband was served with notice of the enforcement order, but did not appeal. At a later date, the wife obtained an order attaching his earnings and the husband sought to have that order discharged on grounds that he could have raised on an appeal against the enforcement of the German order. The CJEU was asked, among other matters, whether the scheme of the Brussels Convention precluded him from pleading those matters, and answered that question in the affirmative.
The court drew a distinction between enforcement, which was governed by the Convention, and execution of a foreign judgment or order once an order for its enforcement had been obtained, which was a matter for the domestic law of the State of enforcement. However it held that the procedural rules of the State in which enforcement is sought may not impair the effectiveness of the scheme of the Convention as regards enforcement orders. Allowing a person who had not appealed against enforcement to challenge the execution of the order would be tantamount to again calling into question the enforcement order after the expiry of the strict time-limit laid down by the second paragraph of Article 36 of the Convention, and would thereby render that provision ineffective. It added, at [31]:
"in view of the mandatory nature of the time-limit laid down by Article 36 of the Convention, the national court must ensure that it is observed."
That case therefore lends support to the proposition that the time limit applicable to someone in Category B is strict. It cannot be circumvented by the application of domestic procedural rules, and the national court must ensure its observance. Those dicta are inconsistent with there being any discretion to extend time.
The next case chronologically C-220/95, Van den Boogaard v Laumen, ("Van den Boogaard") was relied upon by Mr Warents, though Ms Lamont submitted it was either neutral or supported the Bank's position. This case again concerned a matrimonial dispute. The issue referred by the Netherlands court to the CJEU was whether a decision of the English High Court in proceedings for ancillary relief was to be classified as "a judgment given in matters relating to maintenance" or "a judgment given in a matter relating to rights in property arising out of a matrimonial relationship". The Court noted in paragraph [16] that it had been asserted that the husband had lodged an appeal after the two-month period laid down in Article 36 of the Brussels Convention for appealing against enforcement. It said that did not affect its jurisdiction to make a preliminary ruling on the issues referred to it by the Netherlands court. It was solely a matter for the national court to determine the need for a preliminary ruling and the relevance of the questions submitted to the CJEU.
I cannot see how that case provides any support for Mr Warents' contention that the court in the State of enforcement has a power to extend the time for an appeal. The CJEU was dealing with the contention that it would be pointless for it to rule on the reference because the appeal was out of time. It took the view that it would be inappropriate for it to question why the national court sent it the reference, or to refuse to answer the questions on the basis that the answers would be academic. The authors of Briggs and Rees, Civil Jurisdiction and Judgments (5th Edition) suggest in a footnote on page 710 that "it appears from this case that compliance [with] and violation of the time limits is a matter for the national court and not for the Court of Justice". I agree that this is a legitimate inference to draw from the reasoning deployed in paragraph [16]. The reasoning is neutral on the issue that I have to decide. There is no underlying assumption that the national court was not bound to apply the time limit if it concluded that the appeal was out of time.
The next case is the first of the English decisions, TSN Kunstoffrecycling v Jurgens (unreported, 16 February 2001), ("TSN") which was concerned with the enforcement in England of a default judgment entered in Germany against a Dutch national resident (and presumably domiciled) in England. The defendant had appealed against the registration of the German judgment on the same grounds that Mrs Christofi wishes to raise in the present case, namely, that it was entered in default of appearance in circumstances in which he was not duly served with the proceedings and had insufficient time to arrange for his defence. He made an application to the court appealing against the enforcement order within a month of service on him of the enforcement order. However in consequence of the provision of wrong information by the court to his solicitors, the wrong fee was enclosed, and the stamping and issue of the application was delayed until after the correct fee was sent. By then the 30 days for appealing had expired (this must have been a category A1 case, because if the defendant had still been domiciled in the Netherlands, the time limit would have been two months). The respondent opportunistically argued that the appeal was out of time and there was no power to extend the time limit. No point was taken in relation to the timing of service of the appellant's notice.
Jack J. held that on the true construction of the applicable domestic procedural rules, the application was made within time, because the application notice had been received by the court within the deadline (CPR 23.5), so the payment of the wrong fee was irrelevant. However, he went on to observe, obiter, at [17] that if the eventual date of issue of the application was the relevant date, the appellant would have been in some difficulty. He referred to Hoffman and said that whilst the court in that case was not directly concerned with the question whether time could be extended by a national court under its own procedures, the statement in paragraph [31] of that judgment (which I have quoted above) is in clear terms. It appeared consistent with the principle of exclusion of national law as a way of surmounting the provisions of Article 36 of the Brussels Convention (citing Brasserie du Pecheur) and was also supported by the Jenard Report. He said that the argument that, because the Article expressly precludes an extension of time on account of distance, it allows by implication extensions for other reasons in accordance with national law, would seem a bad one. If his "tentative view" was right, there is no power to grant such an extension.
The case went on appeal on a different point to the Court of Appeal [2002] 1 WLR 2459, which upheld Jack J but said nothing of any relevance to the issues I have to determine. The reasoning in TSN which led to Jack J's "tentative view" is consistent with the reasoning that I have deployed above.
The case on which Mr Warents understandably placed most reliance, Citibank v Rafidian Bank and another [2003] EWHC 1950 (QB) ("Citibank") was a category A2 case involving an Iraqi Bank adversely affected by the sanctions imposed after the invasion of Kuwait on 2 August 1990. The English court had granted an order for the enforcement of a judgment of the court of Amsterdam relating to a debt falling due under a letter of credit. The enforcement order was served on 21 March 2002 and the two months for appealing expired on 21 May that year, but the appellant took no steps to seek an extension of time for appealing until 13 June 2003. The application was refused by the single judge on paper, on the basis that there was no jurisdiction to grant the extension of time. The appellant renewed the application to an oral hearing before Tugendhat J. who decided that there was a power under CPR 74.8(3) to extend time otherwise than on account of distance, even if the application was made after the time for compliance had expired, but declined to exercise it.
Despite the fact that the appellant and the respondent were each represented by distinguished leading counsel from the Commercial Bar, none of the earlier authorities to which I have referred was cited to the judge. The respondent's counsel appears to have confined himself to citing the commentary in the notes in the White Book, which admittedly make some reference to the underlying policy of avoiding derogation from the Convention's object of establishing a simple and rapid machinery for the enforcement of judgments of other Member States (see the judgment at [19]).
No criticism is to be attached to counsel for the failure to cite TSN, which was (and is) unreported; in 2003 such judgments were by no means as easy to find as they are today. Moreover, Jack J's view was obiter and, as he himself characterised it, "tentative"; the subsequent decision of Tugendhat J could not be regarded as per incuriam because it did not pay regard to it. The failure to find and cite the European decisions, particularly Hoffman, is a little more difficult to explain, but in the context of an argument relating to a case falling within CPR 74.8 (3) is perhaps understandable, because that rule expressly provides that there is a power to extend time in a case where the judgment debtor is domiciled outside the EU, at least if the application is made within two months of service of the registration order. Thus the issue before the court was the relatively narrow one of whether that power could be exercised if it were invoked after the two months had expired, or, to put it another way, whether the time for making the application could be extended under CPR 3.1(2)(a) or whether the Brussels Convention "otherwise provided".
The judge was alive to the fact that three classes of potential appellant are identified in CPR 74.8, (and its predecessor under the RSC,) but only two classes are specifically referred to in Article 36 of the Brussels Convention. At [22] he rightly treated persons domiciled outside the EU as being subject to the one month time limit, and said it was not clear why they should have less than two months – an observation with which I respectfully agree. He then said that if the Convention were to be construed so strictly that the national rules governing procedure permitted no extension of time to be granted after the two month period granted by Part 74.8(3), it would also be for consideration whether Part 74.8(3) were not itself outside what is authorised by Article 36. Indeed, Article 36 does not contemplate that such parties should have two months in the first place.
Were it not for the Jenard Report, that would be fair comment; but the Jenard Report (to which the judge appears not to have been referred) makes it clear that Article 36 is to be interpreted as permitting the one month period to be extended on grounds of distance, albeit only in a Category A2 case – i.e. the only situation not already expressly catered for in which distance might pose a practical impediment to appealing within a month. Jenard is silent as to how long such an extension might be, but there could be no complaint about a rule or law permitting an appeal to be brought within two months to bring Category A2 defendants into line with defendants domiciled elsewhere in the EU. That two month period for appealing is both fair and compatible with Article 6 ECHR, as Tugendhat J rightly went on to find (at [47)].
However, Jenard does not go so far as to contemplate an extension of time, let alone an extension beyond two months, on any other grounds, and thus the point made by Tugendhat J about the compatibility of CPR 74.8(3) with the Convention and the Judgments Regulation merits further examination. If there were a general power to extend time for making the application even after the two months granted to a Category A2 defendant had expired, there would be little or no point in the Rules Committee expressly stipulating that the application must be made before the two months has expired, a point made forcefully by Ms Lamont. Moreover, an unfettered power to extend time in a Category A2 case, especially one exercisable after the time limit had expired, would undermine the integrity of the scheme of the Convention and Judgments Regulation for the reasons I have already given.
As I have already observed, the power of the State of enforcement to extend the one month time limit on grounds of distance that Jenard accepts to exist in a Category A2 case has already been exercised in this jurisdiction by making provision for a two month time limit for appeal in CPR 74.8(4)(a)(ii). However, that provision does not specify that the two months runs from personal service or service at the defendant's place of residence (indeed, that requirement has to be read into the rules in the case of an EU domiciliary). Nor does it draw any distinction between EU and non-EU domiciliaries. It is CPR 74.8(3) which caters specifically for persons falling within Category A2. So, are there any grounds compatible with the policy underlying the Judgments Regulation on which an extension of the two month period could be granted to non-EU domiciliaries other than distance?
The key to answering this question may lie in the recognition underpinning the first of the Category B modifications that domestic rules of service can operate in such a way as to deprive someone outside the jurisdiction of, or unfairly impair his right of appeal. The policy behind the requirement of actual service on an EU domiciliary, in person or at his residence, before time for appealing can start to run against him, is clearly spelled out by Jenard. It is to protect the defendant and to prevent his being deprived of a remedy because he had not been informed of the decision in sufficient time to contest it. Jenard does not expressly address the disadvantages that domestic rules of service may have for a non-EU domiciliary, but they are obviously the same as for someone domiciled in another Contracting State. Such a person cannot be said to have accepted any potential disadvantages caused by domestic procedural rules of service by choosing to make his home permanently in the State of enforcement.
Suppose that a non-EU domiciliary does not in fact have the sufficient time in which to appeal envisaged by the Regulation, because despite being deemed served under the procedural rules of the State of enforcement, he is unaware of the enforcement order. It must be at least arguable that an extension of time may be granted to him by that State without violating the policy underlying the Judgments Regulation, at least if the extension of time does no more than put him on the same footing as someone domiciled in another EU State by allowing him two months from the date of actual service of the enforcement order on him in person or at his residence. The same process of reasoning might also justify extending time so as to allow two months from the date on which he was actually notified of the order. In principle there seems to me to be no reason to justify Category A2 defendants, who may be domiciled as far away as Australia, being treated less advantageously than someone domiciled in another part of the EU.
Therefore, the provision in CPR 74.8(3) for an extension of time in a Category A2 case for reasons other than distance may have been designed to enable the court to put the non-EU domiciled defendant on the same footing as an EU defendant in circumstances in which he was deemed to have been duly served, but was not informed of the enforcement order in sufficient time to contest it. If that analysis is correct, and the Regulation is to be interpreted as allowing the State of enforcement to equate the position of all parties domiciled outside its jurisdiction for the purpose of appealing, then there is a powerful argument that in principle there is no reason to compel the appellant to seek the extension of time within two months of service, because that time limit might itself operate unfairly if the manner of service did not bring the enforcement order to his attention until after it had expired.
It is arguable on the basis of the reasoning deployed by the CJEU in Verdoliva v JM Van der Hoevan, discussed in paragraphs 65-70 below, that because the Regulation does not stipulate the means of service in a non-EU case, certainty requires that in such a case the period for appealing must start to run from the date of due service under domestic rules, and the date when the defendant finds out about the enforcement order is irrelevant. Therefore there is no power to grant any further extension of time, and CPR 74.8(3) does indeed go beyond what is permissible. Whilst I acknowledge the force of that argument, Jenard acknowledges that the Regulation does distinguish between persons domiciled in the State of enforcement and those domiciled elsewhere, and it does so for good reason. The power to extend time is confined to Category A2 cases, and it seems to me that in principle the envisaged power to ameliorate the harshness of the one month limit in such a case must be exercised in a way that is compatible with the underlying policy that led to the express concessions given in the Convention and the Judgments Regulation to persons domiciled elsewhere in the EU.
I would therefore favour an interpretation of the Regulation which allowed the State of Enforcement to modify its domestic procedural rules to prevent a non-EU defendant from being deprived of a remedy because he had not been informed of the enforcement decision in sufficient time to contest it within the one month, or in the case of this jurisdiction two months, lawfully provided for. However it seems unlikely that the power could be legitimately exercised in a manner which went beyond the concessions expressly made in the Regulation itself to persons domiciled in other Contracting States (subject only to the caveat in paragraph 41 above, which applies to all defendants irrespective of where they are domiciled).
Had Tugendhat J been shown Hoffman and the Jenard report, and addressed on the need to strike a balance between maintaining a uniform procedure for rapid enforcement and ensuring that the defendant is given a fair opportunity to appeal (which depends on his having knowledge of the enforcement order and sufficient time to initiate the appeal procedure) he may have reached a different conclusion. However he could still have reached the conclusion that he did on the specific issue that he had to decide, by deploying slightly different reasoning. It is unnecessary for the purposes of this appeal for me to decide whether Tugendhat J's conclusion in Citibank was right, since this case is not concerned with a Category A2 situation or with the interpretation and effect of CPR 78.4(3). What does seem clear to me is that the issue before Tugendhat J was confined to the ambit of that procedural rule and whether the terms of the Convention compelled the conclusion that applications for a further extension of time could only be brought within the period allowed for appealing against the enforcement order.
Whatever the scope of the residual power to extend time in a Category A2 case, Citibank is not authority for the proposition that the time limits imposed by the Convention and the Judgments Regulation in Category A1 and Category B cases are not mandatory. It was not necessary for Tugendhat J to make such a finding in order to decide the narrow issue in the case. However, if and to the extent that Tugendhat J's finding at [23] that Article 36 of the Convention does permit an extension of time to be granted otherwise than on account of distance is to be read as extending to cases outside Category A2, he was clearly wrong.
Case C-3/05, Verdoliva v JM Van der Hoevan, ("Verdoliva") was decided by the CJEU on 16 February 2006. The issue in that case was whether the time for appealing against an order for enforcement in a Category 1A case ran from the date of due service under domestic rules, or the date on which the prospective appellant was notified of the existence of the enforcement order. The Court ruled firmly in favour of the former.
The judgment creditor obtained a judgment in the Netherlands which he sought to enforce in Italy, which was the defendant's place of domicile. An initial attempt to serve the enforcement order at the defendant's place of residence in Italy was unsuccessful because he had moved. Under Italian procedure, in those circumstances service can be duly effected by lodging a copy in the town hall of the defendant's last place of residence, and by the bailiff attaching another copy to the notice board there. Mr Verdoliva sought to appeal after the one month prescribed for appealing had expired. He contended that service was ineffective, because he had not been personally served and the order had not been lodged at the town hall. The Italian court held that the appeal was nonetheless time-barred because it was brought more than 30 days after he had been served with a document notifying him of the existence of the enforcement order.
The CJEU held that because Article 36 of the Brussels Convention does not include any express condition for validity of service save where the party against whom enforcement is sought is domiciled in another Contracting State, its provisions must be interpreted in the light of the scheme and aims of that Convention. After referring to the aims of the Convention and to the fact that it is not permissible to achieve them by undermining the right to a fair hearing, the Court referred to the time limit of one or two months for appealing depending on whether the appellant is domiciled in the Contracting State in which the decision authorising enforcement was given. It said (at [32]):
"That time limit is of a strict and mandatory nature (Case 145/86 Hoffmann [1988] ECR 645, paragraphs 30 and 31)."
It then referred to the fact that, by contrast, the Convention imposes no time-limit on an appeal by the party who has been refused enforcement.
In considering whether the mere fact that the prospective appellant has notice of the decision will suffice in a case where service is defective, the CJEU acknowledged that the requirement that the decision authorising enforcement be served has the dual function of protecting the rights of the party against whom enforcement is sought and allowing, in terms of evidence, the strict and mandatory time-limit for appealing to be calculated precisely. It said that double function, coupled with the aim of simplification of the formalities to which enforcement of judicial decisions delivered in other Contracting States is subject, explains why the Convention makes transmission of the decision authorising enforcement to the party against whom enforcement is sought subject to procedural requirements that are more stringent than those applicable to transmission of that same decision to the applicant ([34]-[35]). If the sole issue were whether the enforcement order had come to the attention of the other party, it would render the requirement of due service meaningless [35]. Moreover it would make the exact calculation of the time limit under Article 36 more difficult, thus thwarting the uniform application of the provisions of the Convention [36].
Thus the court concluded that Article 36 was to be interpreted as requiring due service of the decision authorising enforcement in accordance with the procedural rules of the Contracting State in which enforcement is sought. It is clear that the court envisaged that in a Category A1 case, this could include some form of substituted service of the kind provided for in Italy, rather than personal service or service at the party's place of residence. As in Van den Boogaard, the CJEU left it to the national court to decide whether in fact there had been compliance with the domestic rules of procedure.
The whole rationale of that decision depends on the time limit for appealing being strict and mandatory, as the CJEU said in terms that it was, endorsing the approach in Hoffman. That was the reason why it was so important that the starting point for time to run was clearly defined, and that the same rule should be applied consistently throughout the EU. In my judgment Verdoliva provides strong support for the proposition that there is no general power to extend time – because if such a power existed, the ability to calculate the period with precision would not assume such fundamental importance.
That view was shared by Slade J in Taylor-Carr v Howkins & Harrison LLP [2014] EWHC 3479 (QB) ("Taylor-Carr"). That case concerned a French judgment for fees said to be owing to the respondent, a firm of estate agents. Again it was a category A1 case, with a one-month time limit, as the appellant, Mrs Taylor-Carr, was domiciled in England. The appellant was served with the enforcement order on 10 June 2013 but the appeal was only issued on 17 February 2014, some eight months out of time. Mrs Taylor-Carr was unrepresented. Counsel for the respondent very properly referred the judge to all the authorities that I have considered thus far, apart from Van den Boogaard, though he does not appear to have specifically addressed the Jenard Report.
In an ex tempore judgment that is both clear and concise, Slade J. decided that the approach of Hoffman, Verdoliva and TSN to the question of whether there is a discretion to extend time for an appeal was to be preferred to that of Tugendhat J. in Citibank. She said at [25] that whilst Hoffmann and Verdoliva were not directly on point they clearly emphasised the mandatory nature of the time limit provisions; and that she preferred Jack J's approach and his view expressed tentatively that there is no power to grant an extension of time.
Mr Warents submitted that Slade J provides no in-depth analysis or explanation for her failure to follow Tugendhat J's decision, which convention required her to follow unless she was persuaded it was "clearly wrong". He also submitted that I should follow the earlier decision in Citibank, as it was based on full legal argument from leading counsel and it was a reserved judgment. It does not follow from those features that the reasoning in that case should be preferred, especially as the judge was not taken to all the relevant authorities. Slade J had the advantage in that respect, though she did not have the advantage that I have had of hearing counsel arguing the case on each side. However, as I have already said, on proper analysis the decision in Citibank is not necessarily out of line, as it is only what is said at [23] that is potentially in conflict with the rationale in other authorities, and even then, only if it is interpreted as extending beyond a Category A2 case and confirming the existence of a general power under the Convention or the Regulation to extend time for appealing other than on grounds of distance. Verdoliva, which was decided subsequently to Citibank, and by a higher court, the CJEU, is inconsistent with the existence of such a power, as is Hoffmann.
There is no authority directly addressing the issue in a Category B case; however the overwhelming majority of the cases (including Hoffman, which is a Category B case) support the initial view that I took on the construction of the Regulation alone, with the assistance of the Jenard Report, bearing in mind the underlying policy considerations. A general discretion to extend time for appealing would subvert that policy, introducing uncertainty as well as departing from the intention of creating a uniform and self-contained system of speedy and simple enforcement throughout the EU. The time limits were designed to strike the necessary balance between effective and speedy enforcement and protection of the legitimate rights and interests of the defendant.
Category B defendants such as Mrs Christofi have the double protection of a requirement of actual service before time starts to run, and twice the normal time for bringing their appeal; and those safeguards are deemed sufficient. Category A1 defendants do not generally need those safeguards but, as the CJEU makes clear in Verdoliva, they are entitled to insist on due service in accordance with the procedural law of their state of domicile which is also the State of enforcement, and time for appealing will only start running once they are duly served, irrespective of their state of knowledge. It appears to have been left to the Member States to decide whether (and if so, how) to put Category A2 defendants on exactly the same footing as Category B defendants. Whether our domestic procedural rules have gone further in that regard than is permissible by the Judgments Regulation, or whether they should be interpreted more restrictively in line with its policy, are matters for another day.
The answer to the first question is therefore that there is no general power to extend the mandatory two month time limit for appealing in this case. The Court is obliged to enforce that time limit strictly, subject only to the residual power to extend a mandatory time limit in the rare case where its application would impair the very essence of the right of appeal, and strict adherence to it would infringe Article 6 ECHR.
Question 2: If the Court has such a power, should it be exercised in this case?
The domestic case law on relief from sanctions, most notably Denton v TH White [2014] 1 WLR 3926, does not directly address failure to comply with a time limit prescribed by a statute or by a directly applicable EU regulation which has the same effect as a statute. I am not persuaded that the guidance given in cases concerning non-compliance with a court order or procedural direction or with the rules of court pertaining to domestic litigation, including appeals, is wholly apposite in this context, though of course it is of some relevance. The underlying policy considerations in a case such as this, to which I have already referred, go well beyond those affecting decisions on matters of pure case management.
In the present case, the failure to meet the time limit was serious; this is plain when one places the delay of around three weeks in the context of a two month time limit which is twice the time allowed to a party domiciled within the jurisdiction and which is regarded, as a matter of policy, as being sufficient to safeguard the legitimate interests of a party domiciled elsewhere in the EU. The period for appealing is deliberately short. Whilst the delay was nothing like as long as it was in Taylor-Carr or Citibank, it cannot be described as minor.
Mr Warents contended that the delay has had no practical impact on the execution of the judgment, because the Bank had agreed that the hearing of its application for the charging orders to be made final would not take place until after 30 October 2014, and the consent order provided that the Court would not be informed whether or not an appeal had been lodged until 30 September at the earliest. There was no evidence that the 22 days' delay in appealing would have had any impact upon the listing of the hearing to make the charging orders final, let alone that it would be delayed by three weeks.
That may well be right. However, if the appeal had been brought within time, the hearing of the appeal may have been listed earlier than 26 March. Even if it could not have been listed earlier, there would have been no necessity to deal with these preliminary issues, with the substantive appeal being adjourned to a later date pending the outcome of any appeal against my decision, an inevitable concomitant of the appeal being out of time. All of this delay is bound to have a knock-on (and adverse) effect on the Bank's ability to enforce its judgment and is directly contrary to the policy underlying the Judgments Regulation. It is nothing to the point, though it affords the Bank some comfort, that in the meantime its position is protected to some extent by having security in the form of the interim charging orders over Mrs Christofi's English properties.
In any event, as the Court of Appeal made clear in Denton v White at [26], the seriousness of a breach or failure to comply with an order or rule of court is not to be determined exclusively by its impact on the efficient progress of litigation (or, by analogy, on the expeditious enforcement of an EU judgment). The requirement is that the delay is serious or significant (or both). I regard the delay as serious whether or not it was significant in the sense of making a material difference to the date on which the Bank would have had its hearing of the application for final charging orders over the property, or the date on which the appeal was listed for hearing.
There was no good reason for the delay, as Mr Warents realistically accepted, though he submitted that the muddle by Fletcher Day was a relevant factor at the third stage of the analysis when looking at all the circumstances and determining whether it was fair to grant the extension of time. The Bank's opposition to the application for an extension of time cannot be characterised as opportunistic; this was no technical slip, and no blame can be attached to the Bank or its legal representatives for what happened. If Mrs Christofi's solicitors thought they had until 30 September to file the appeal that still does not explain why they apparently left matters until the very last minute.
Although the seriousness of the delay and the absence of any excuse for it both militate strongly against the grant of relief, the Court may nevertheless exercise a discretion in favour of an extension of time if in all the circumstances the justice of the case requires it. The merits of the underlying appeal are irrelevant to that consideration, because this is not a case in which they are sufficiently clear to justify their being taken into account. So, would the justice of the case require an extension of time for appeal if I had the power to grant it?
Mr Warents relied upon R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633, in which the parties had agreed to an order adjourning the application for permission to appeal (which was later granted) without also seeking an extension of time for filing the appellant's notice, as they should have done. Relief was granted despite a similar period of around 3 weeks' delay, for which there was no good reason, chiefly on the basis that the delay had no significant effect on the proceedings [51]. It was also found to be of "critical importance" that the respondent had suffered no prejudice (see [53]). However, the exercise of judicial discretion in a given case is highly fact-sensitive. Hysaj was a case in which the point raised on the appeal was one of considerable importance not only to the parties but to the wider public, permission to appeal had been granted, and where it was clear that the respondent was labouring under the same misunderstanding as to the effect of the agreed order for an adjournment as the appellant. That was not the case here; and unlike Hysaj, this was not a case in which there was an understandable but inexcusable oversight or misapprehension as to what the rules required, but a case in which Mrs Christofi's solicitors were not only aware of the two month limit for appealing, but initially proposed a consent order premised on the correct assumption that time ran out on 11 September 2014.
Hysaj was also a case concerning the normal rules pertaining to appeals from first instance decisions to the Court of Appeal. There was no background of a complex and supposedly self-contained international Treaty or directly effective European regulation with the policy of simple, expeditious recognition and enforcement of judgments of other Contracting States at its heart, a deliberately tight timetable set for appeals on very restricted grounds, and a regime that was designed to strike a fair balance between the rights of the judgment creditor and protection of the legitimate interests of the defendant. Viewed in that context, there is no obvious justification for condoning a three week delay by someone who knows of the existence of the Enforcement order in ample time to appeal. Indeed, given that the balance between the competing interests is already fairly struck by the terms of the Judgments Regulation itself, in my judgment any interference by the Court with that balance in circumstances such as this would be unwarranted and unprincipled. It is not good enough to say "there was no harm done" because, even if that were true (which it is not) it loses sight of the bigger picture.
For those reasons, even if I had a discretion to extend the time for appealing, I would decline to exercise it in favour of Mrs Christofi. The second preliminary issue must also be answered in the negative. It follows that the application for an extension of time must be dismissed.
Postscript
In the light of the provisions of CPR 52.13 it is debatable whether I have power to grant permission to appeal against this judgment, even though this is not a typical "second appeal" situation because the original order was made "without notice," and the only inter parties contested hearing has been the hearing before me. I understand that Mr Warents has taken the pragmatic view that he should apply to the Court of Appeal for permission to appeal. I would unhesitatingly have granted permission to appeal had I the power to do so. Despite the fact that I would have exercised my discretion against Mrs Christofi if I had the discretion to extend time, I consider that there is an important point of principle or practice involved in this case. Moreover, although I have sought to reconcile the decision in Citibank, on the one hand, with the tentative view expressed by Jack J in TSN and the decision of Slade J in Taylor-Carr on the other, it is at least arguable that the reasoning in those decisions is in conflict. Indeed the question whether CPR 52.13 applies in this specific context is in itself an important point of practice that has not yet been decided. |
Mr Justice Warby:
These are the reasons for the orders I made at the hearing on 23 April 2015.
Introduction
Before the Court are application notices issued by the Defendant in these two defamation actions on 4 September 2014, 3 October 2014, and 14 April 2015, by which he seeks orders striking out some of the claims, and directions that certain issues in the claims that would remain should be tried as preliminary issues.
The Defendant is represented by Ms Kate Wilson of Counsel. The Claimant represents himself in both actions. He has not appeared at the hearing, for reasons which will become clear. Ms Wilson has advanced her client's case with scrupulous fairness, assisting me by identifying the points which, if he had been represented, the Claimant would be likely to have argued. It is because of his absence from the hearing that I have thought it best to give this written judgment rather than require the Claimant to go to the trouble and expense of obtaining a transcript of a judgment delivered orally.
The first matter I have to deal with is an application by the Claimant for the hearing of the Defendant's applications to be adjourned, on the grounds of the Claimant's ill health.
Background
The background to the actions is a dispute between the parties in their capacities as committee members of the Crawley Boxing Club. The Claimant was the Club secretary. The Defendant was the Club Chairman. There was a falling out between them which, according to the Claimant, began when he announced in 2013 that he would stand against the Defendant for election as chairman at the next annual general meeting.
It is unnecessary for present purposes to go into the details of the dispute that arose and continued over the following months. It is enough to say that it is alleged by the Claimant that the Defendant took steps, the validity of which the Claimant disputes, to amend the club constitution and to remove the Claimant. The Claimant not only disputed the validity of such steps but also referred matters to the sport's governing body, England Boxing.
The first of the Claimant's two actions was started by a claim form issued on 8 August 2014. This made three defamation claims. The first concerns words spoken in March and April 2014 to four individuals; the second concerns an allegation of crime made to the police in April 2014; the third arises from an email sent by the Defendant in April 2014 to a national officer of England Boxing. The Claimant describes these as the First, Second and Third Claims, and I shall do the same.
The Defendant's application notice of 4 September 2014 sought an order for the trial of preliminary issues in relation to the Third Claim. This was followed by a long and detailed letter of 8 September 2014 in which the Defendant's solicitors explained why they maintained that the First and Second Claims made by the Claimant were liable to be struck out. In relation to the First Claim it was objected that the Claimant had failed, deliberately and without justification to identify the publishees of the words the subject of that claim; and that the claim could not succeed in any event because the Claimant could not show that the publication had caused or was likely to cause serious harm to reputation. In relation to the Second Claim it was said that the plea was deficient for failure to set out the actual words complained of, and that in any event the occasion of the publication was absolutely privileged.
The Claimant replied the following day over six pages, stating that he would "deal with your points seriatim", which he then did, rejecting the objections raised. A hearing of the Defendant's application notice was fixed for 30 September, before Deputy Master Eyre. On 26 September 2014 a Skeleton Argument prepared by Ms Wilson was served on the Claimant. He prepared a detailed Skeleton Argument of his own. The battle lines were therefore drawn, in writing. I have been able to review and absorb both Skeleton Arguments in the course of this hearing – though Ms Wilson's latest Skeleton Argument has some updated legal references.
In the event, Deputy Master Eyre released the application for hearing by a Judge dealing with defamation matters.
On 1 October 2014 the Defendant served a Part 18 Request seeking the missing details in respect of the First Claim. On 3 October the Defendant's second application notice was issued, seeking an order striking out the First and Second Claims. On 8 October 2014 the Claimant replied to the Request for Further Information saying, among other things:
"I have obviously spent some time considering the proper response to the RFI. I would draw your attention to the Particulars of Claim (para 17 line 7-8) which expresses my concern that the individuals may suffer prejudicial treatment if their names are revealed …
… I believe the welfare of members (particularly where they are minors) supersedes my need for witnesses therefore I have decided not to comply with your RFI on that ground.
This, of course, means that your Application to strike out the First Claim has a far greater chance of success – indeed it will be difficult to resist. It therefore seems sensible, and will save time and cost, to agree not to proceed with the First Claim."
The Claimant did not however do anything more to withdraw the claim.
The question of when the Defendant's two application notices could be heard then had to be dealt with. On 13 October 2014 the Claimant wrote, referring to a medical procedure that he was due to undergo on 29 October 2014 for a "longstanding issue" and which he said would disable him from attending a hearing for three weeks afterwards, that is until 21 November, "perhaps longer". He said that even if fully fit by then he had childcare commitments during December that meant "any date prior to the end of the year may turn out to be problematic". He proposed any afternoon date on or after 5 January 2015.
The response was to the effect that the hospital stay and convalescence did make it sensible not to ask for a hearing in November, but that more than six weeks notice was sufficient to enable the Claimant to make arrangements to be available "for some dates in December". On 22 October 2014 the Claimant replied saying that "I can only repeat that I am likely to be unavailable prior to 5 January 2015. I am happy to provide a medical certificate in support to the Court in due course if required." The Claimant's correspondence was then placed before the court by the Defendant's solicitors and a date of 10 December 2014 was fixed.
A dispute then arose, accompanied by some ill-tempered correspondence on the Claimant's side, about whether the Defendant's solicitors had acted fairly over the matter of listing. Eventually the Claimant applied for a decision to be made without a hearing, to adjourn the hearing date on medical grounds. The Defendant's solicitors had agreed that if the medical information was private they did not need to see the medical evidence, though they did require to see all correspondence with the Court. An order adjourning the hearing was made on the papers by Turner J, and the hearing was re-listed for 12 February 2015.
On 28 January 2015 the Claimant wrote stating that "I have had the results of further medical tests, and I regret I will be unfit to prepare for and attend the hearing … I have been given a further medical certificate until 23rd March 2015, by which time I hope to be fully recovered and will continue the case." The Defendant's solicitors again did not oppose the proposal. They asked to be copied in on correspondence but said that "as before, we do not require copies of confidential medical information to be provided to us at this stage." The final three words are to be noted. As a result of the Claimant's communications with the court at this point the February 2015 hearing date was vacated and the applications were listed for this hearing date.
The second of the Claimant's defamation actions was begun by claim form issued on 25 March 2015. The claim is for damages for slanders allegedly spoken by the Defendant on three separate occasions during a boxing dinner show on 28 March 2014. I shall therefore call these the Fourth, Fifth and Sixth Claims. Those claims were made by separate action in order to ensure they were brought within the limitation period, without the complexities that could have resulted from amending the claim in the first action. The claim form records that the Claimant paid a Court fee of £10,480.
On 8 April 2015 the Defendant's solicitors wrote stating that they believed a preliminary issue trial in respect of these matters would further the overriding objective and that they would be applying for an order to that effect. They enclosed a copy of the recent decision of Nicola Davies J in Lachaux v AOL (UK) Ltd [2015] EWHC 915 (QB) in which the Judge set out and applied the relevant principles, in the context of two related defamation claims. On 10 April the Claimant replied, stating that he was "required to have another overnight stay in hospital on May 11th", and inviting agreement to an adjournment. The Defendant declined to consent, and informed the Claimant by letter of 13 April that he would have to make an application.
On Tuesday 14 April the Defendant's latest application notice was served on the Claimant by post and email. On Wednesday 15 April the Defendant's solicitors sent the Claimant a complete copy of the hearing bundle they had prepared. On Monday 20 April they sent him by email a copy of Counsel's Skeleton Argument and copies of each of the authorities relied on, together with a letter reminding him that the hearing remained effective. The letter pointed out that the Claimant had not applied for an adjournment nor confirmed that he did not intend to do so. It made clear that if he did apply the Defendant required to see the medical evidence and intended to serve evidence in response. The letter also said that
"…even if you consider there are proper reasons why you cannot attend, then in light of your recent expenditure on Court fees … it appears that there is no financial reason why you cannot instruct Counsel through the Public Access system … The applications to be heard on Thursday are straightforward and there is still more than sufficient time for Counsel to prepare."
The Claimant's Application to Adjourn
On Tuesday 21 April 2015, just one clear day before the hearing date, the Claimant issued the application notice now before me, seeking to adjourn. It asked the Court to make an order for an adjournment without holding a hearing. The Claimant's application came before me late on the afternoon of 21 April and I made an order on the papers on the following morning, 22 April 2015. It was apparent that the application was likely to be opposed. I directed that the Defendant's applications should remain listed as they were, and that the Claimant's application should be dealt with at the same hearing.
I also directed that the Claimant should serve his medical evidence on the Defendant, which had not at that stage been done, and that the Defendant should file any evidence to be relied on as soon as possible. Those directions have been complied with. The Claimant has also added to his evidence and has made submissions in writing. He has asked the Court to deal with his application in his absence, stating that he is not well enough to attend. It is clear that if the matter is not adjourned the hearing will proceed in the Claimant's absence. Plainly, his application is the first order of business.
Principles
The decision whether to adjourn a hearing, and the decision whether to proceed with a hearing in the absence of a party, are both case management decisions. The court is required to exercise a discretion, in accordance with the overriding objective, in the light of the particular circumstances of the individual case. The authorities provide valuable guidance, however.
A court faced with an application to adjourn on medical grounds made for the first time by a litigant in person should be hesitant to refuse the application (Fox v Graham Group Ltd, The Times, 3 August 2001 per Neuberger J, as he then was). This, however, is subject to a number of qualifications. I focus on those which seem to be of particular relevance in the present case.
First, the decision is always one for the court to make, and not one that can be forced upon it. As Norris J observed in Levy v Ellis-Carr [2012] EWHC 63 at [32]:
"Registrars, Masters and district judges are daily faced with cases coming on for hearing in which one party either writes to the court asking for an adjournment and then (without waiting for a reply) does not attend the hearing, or writes to the court simply to state that they will not be attending. Not infrequently "medical" grounds are advanced, often connected with the stress of litigation. Parties who think that they thereby compel the Court not to proceed with the hearing or that their non-attendance somehow strengthens the application for an adjournment are deeply mistaken. The decision whether or not to adjourn remains one for the judge."
Secondly, the court must scrutinise carefully the evidence relied on in support of the application. In Levy v Ellis-Carr at [36] Norris J said this of the evidence that is required:-
"Such evidence should identify the medical attendant and give details of his familiarity with the party's medical condition (detailing all recent consultations), should identify with particularity what the patient's medical condition is and the features of that condition which (in the medical attendant's opinion) prevent participation in the trial process, should provide a reasoned prognosis and should give the court some confidence that what is being expressed is an independent opinion after a proper examination. It is being tendered as expert evidence. The court can then consider what weight to attach to that opinion, and what arrangements might be made (short of an adjournment) to accommodate a party's difficulties. No judge is bound to accept expert evidence: even a proper medical report falls to be considered simply as part of the material as a whole (including the previous conduct of the case)."
Norris J's approach in Levy v Ellis-Carr was expressly approved by Lewison LJ in Forrester Ketley v Brent [2012] EWCA Civ 324 [26], upholding a decision of Morgan J to dismiss an application to adjourn on medical grounds. It was followed by Vos J (as he then was) in refusing an application to adjourn the trial in Governor and Company of the Bank of Ireland v Jaffery [2012] EWHC 734 (Ch) [49].
In the context of what amounts to proper medical evidence it is pertinent to note two points made by Vos J in the Bank of Ireland case. At [19], referring to a GP's letter running to some 11 lines which confirmed that the defendant had been signed off work for three weeks, he said this: "It is important to note that a person's inability to work at a particular job is not necessarily an indication of his inability to attend court to deal with legal proceedings. It may be but it may also not be." At [58] Vos J indicated that he took into account the contents of the defendant's litigation correspondence, observing that he "has been communicating with the court and with the claimants over a lengthy period in the most coherent fashion. He is plainly perfectly capable of expressing his point of view, taking decisions and advancing his case".
The third main qualification to Neuberger J's observations in Fox v Graham is one that is implicit, if not explicit in what Norris J said in Levy v Ellis-Carr: the question of whether the litigant can or cannot participate in the hearing effectively does not always have a straightforward yes or no answer. There may be reasonable accommodations that can be made to enable effective participation. The court is familiar with the need to take this approach, in particular with vulnerable witnesses in criminal cases. A similar approach may enable a litigant in poor health to participate adequately in civil litigation. But the court needs evidence in order to assess whether this can be done or not and, if it can, how.
Fourthly, the question of whether effective participation is possible depends not only on the medical condition of the applicant for an adjournment but also, and perhaps critically, on the nature of the hearing: the nature of the issues before the court, and what role the party concerned is called on to undertake. If the issues are straightforward and their merits have already been debated in correspondence, or on previous occasions, or both there may be little more that can usefully be said. If the issues are more complex but the party concerned is capable, financially and otherwise, of instructing legal representatives in his or her place and of giving them adequate instructions their own ill-health may be of little or no consequence. All depends on the circumstances, as assessed by the court on the evidence put before it.
The fifth point that may be of significance here is that, sometimes, it may appear to the court at the outset or after hearing some at least of the rival arguments that in truth the matter before it is one on which one or other side is bound to succeed. The closer the case appears to one or other of these extremes the less likely it is that proceeding will represent an injustice to the litigant. Thus, in Boyd & Hutchinson (A Firm) v Foenander [2003] EWCA Civ 1516 the Court of Appeal proceeded with the hearing of an appeal on the basis that it would refuse an adjournment if it concluded, as it did, that the appeal had no real prospect of success. This appears consistent with the conclusions of Neuberger J in Fox v Graham that where the court refuses a litigant in person an adjournment it may proceed in his absence if satisfied either (a) that it is right to grant the applicant the relief sought or (b) that the application is plainly hopeless.
I accept the point made by Ms Wilson, in order to assist the court, that when considering an adjournment application the court's approach should to an extent be affected by whether the matter involves applications of a case management nature, or final determinations on the merits such as an order striking out a statement of case or part of it, where Article 6 of the Convention is engaged. The court will need to be more cautious in cases failing within the second category. Nonetheless, the factors I have identified above are relevant in both contexts.
It is with these principles in mind that I approach the question of whether, as Ms Wilson put it, it is necessary to adjourn these applications, in this case, because of the ill-health problems of this claimant.
The evidence
The Claimant's application notice contains this statement of the relevant facts, over a statement of truth:
"I was diagnosed with Mononucleosis (glandular fever) at the end of last year. The illness causes severe fatigue and cognitive problems, particularly to persons over 40. In addition an MRI scan in January revealed micro haemorrhages which may contribute to the cognitive and memory retention issues. There was no improvement so I was recently referred to a specialist hospital for an overnight brain activity scan. This revealed more than 300 involuntary spasms leading to 75 episodes of arousal from sleep during the night. I was recalled into hospital for a further overnight stay last Monday 13th April which confirmed the disturbed sleep problem, treatment for which is I believe a type of 'anti-spasm' drug that will prevent the sleep disturbance that appears to be a significant contributor to the cognitive problems. I expect a further appointment with the neurologist will be scheduled this week and I will be prescribed this drug. Alongside that it is hoped that the effects of the mononucleosis will also diminish (I understand fatigue from this infection can last for years.)
I have provided a copy of my current Medical Certificate that certifies the diagnosis of mononucleosis and cognitive impairment covering the period up until 21st June 2015, however I hope my cognitive abilities will recover earlier than that therefore I am requesting the adjournment for the next available date after June 8th. Before that time it would be difficult for me to follow proceedings at a hearing, or to prepare effectively."
Attached to the application notice is a medical certificate dated 21 April 2015 made out by Claimant's GP, Dr Anderson. This states that the Claimant is not fit to work, giving two reasons: "infectious mononucleosis" and "cognitive impairment". Following my order of the morning of 22 April the Claimant wrote to the Court during the afternoon attaching five further documents in support of his ill-health claim, which he also sent to the Defendant. These are:
1) A letter 23 February 2015 to the Claimant's GP from a Dr Venn, Clinical Director of the Sleep Disorder Centre at Queen Victoria Hospital East Grinstead, referring to a clinic on 18 February 2015 at which it would appear that Dr Venn saw the Claimant. Dr Venn says this:
"Thank you for your letter dated 1st December 2014 asking us to see Mr Decker whom we saw in 2010 and started on CPAP but was lost to follow-up in 2012. He had an overnight respiratory study carried out in 2010 which showed features of mild sleep disordered breathing…
I definitely think he ought to have a neurological assessment because he has a number of features, one of which is numbness in the left ulnar nerve distribution from the elbow downwards, and also quite marked deterioration in intellect with forgetfulness of significant things such as his children's names. …
… I will ask my colleague Dr Angus Nisbet to see him; he is a Neurologist who works with us here in the Sleep Disorder Centre and I have copied this letter to him.
In the meantime we will carry out full overnight polysomnography and I will then assess him with the results to see what we should do with regards to further management and treatment. …"
2) An appointment letter dated 18 February 2015 for an overnight stay at the sleep disorder centre from 23-24 March 2015. This is consistent with Dr Venn's letter but no clinical information.
3) A document dated 26 February 2015 said by the Claimant to be a "pulse/oxygenation record" and to show "several desaturations during sleep associated with a high heart rate". The document does not have the Claimant's name on it, but I assume it relates to him. It is however unclear where this comes from or precisely what its significance is.
4) A print out of some graphs which evidently show the results of tests carried out at the Sleep Disorder Centre during the Claimant's overnight stay on 23 March 2015. These give figures for sleep disturbance which the Claimant says evidence a total of 79 occasions of arousal from sleep. The figure 79 is certainly on the graph. Whether it represents 79 occasions when the Claimant was aroused from sleep is a great deal less clear.
5) An appointment letter dated 31 March 2015 for a further overnight stay at the hospital's sleep disorder centre from 11-12 May 2015. This adds no clinical information.
On the Defendant's behalf, his solicitor Mr Deans has submitted a witness statement in which he makes three main points in support of an assertion that the Claimant is capable of dealing with the Defendant's applications. First, he points out that in this litigation the Claimant has represented himself throughout and has written numerous lengthy and detailed letters. By way of example he refers to a letter dated 6 March 2015 running to three sides of A4 which I have read, and which is a well-structured, highly articulate example of litigation correspondence. From my own review of the correspondence in this litigation, to much of which I have referred above, those characteristics are typical of the Claimant's writing.
Secondly, Mr Deans refers to correspondence sent by the Claimant over the last two months, threatening others with legal action, copies of which he exhibits. The exhibits show that on 17 February 2015, the day before visiting Dr Venn at the Sleep Disorder Centre, the Claimant sent a detailed three-page letter before action to one Traci Thorne, complaining of alleged false and defamatory statements made by her about him on various occasions between 1 September 2014 and 1 February 2015. Ms Thorne replied by email at around 2.30pm on 18 February 2015. On the same day the Claimant wrote a further letter in reply consisting of three pages of closely-argued single spaced text. The Claimant's letters to Ms Thorne are ordered, logical, clear, and articulate. They betray no indication of any form of cognitive impairment. In addition to this correspondence, on 17 February 2015, at 13:44, the Claimant sent a detailed e-mail to the Defendant's son, Rees Hopcraft, relating to the boxing club.
Thirdly Mr Deans refers to the Claimant having been fit enough to be Master of Ceremonies at a boxing show on 6 March 2015 for a period of one half hours. He exhibits a DVD, but in the event I have not seen it. That is because the Claimant has accepted that he is physically fit enough to attend court, and it is therefore unnecessary for the Defendant to rely on the DVD for that purpose.
Mr Deans makes two further points. First he says that the Defendant is 70 years old and recently diagnosed with Parkinson's disease and has had this litigation hanging over him for nine months already. The Defendant has other health problems. He has had heart surgery in the past and continues to take medication related to that surgery. He is evidently anxious to ensure that matters are progressed. Secondly, Mr Deans produces some email correspondence from 2013 in the course of which the Claimant said "I enjoy the sport of suing people …"
In his prompt and detailed letter of response to my order of 22 April the Claimant seeks to address some of the matters raised by Mr Deans. He did so in advance of Mr Deans' witness statement, but knowing from exchanges with Mr Deans some of the points that Mr Deans was in due course to make. The Claimant says that he is sometimes able to deal with correspondence immediately "particularly if it is a fairly simple reply", but that he has made errors and omissions due to his illness and that this is known to the Defendant's solicitor. He says "I usually hope to write lengthy substantive letters in three days sometimes it's shorter sometimes it's longer dependent upon fatigue".
The Claimant admits threatening proceedings against Ms Thorne, but says that he has not pursued it due to the difficulty of running several claims at the same time. He says fatigue does not stop writing letters "particularly where these are effectively from letters following a standard format from easily available templates, and when I can break the task down over several hours or days" the Claimant explains his ability to act as MC at the boxing show on 6 March 2015 on the basis that it is not an intellectual challenge to read two names from a card into a microphone every so often during a show and then read the winner's name. He asserts that after that event he was confined to bed for three days. His main difficulty is in any complicated processing of information that requires short-term memory and alertness.
In a letter sent on the morning of the hearing date, 23 April 2015, the Claimant has provided a further reply to Mr Deans' points, after sight of his evidence. His detailed four-page letter combines matters of evidence and submissions. So far as evidence is concerned, he states that his correspondence has been executed extremely slowly, taking less than two hours each day. He suggests that he could not cope adequately with a "lengthy hearing where I would be required to deliver coherent arguments in response to arguments made by a skilled barrister", saying that "normally I would be confident in such an encounter given the merits of my case but for some months I have felt as if half my IQ has disappeared – my brain currently is simply not capable of keeping up with proceedings." He then addresses Mr Deans' evidence in a series of numbered paragraphs, focusing on "some of the more contentious matters he raises". He states that his letter of the previous day took some 3 hours to complete, and that his current letter has been "almost impossible to complete cogently".
Submissions
The principal submission of the Claimant, set out in his most recent letter, is that the Defendant "cannot succeed in opposing this Application without challenging the submitted letters and reports written by medical professionals." The Claimant points to the absence of any medical evidence addressing the "compelling evidence" adduced by him, and to the absence of any "submissions with regard to the two specific conditions stated on that [GP's] certificate, nor made any reference to" the Claimant's evidence. He adds that the DVD is of no significance as "in my case I am not physically incapacitated nor unable to perform basic cognitive tasks." He concludes that it seems perverse for the Defendant to oppose his application when such compelling medical evidence has been provided.
Ms Wilson makes five main points on behalf of the Defendant. First, she points to the undesirability of delay and the inevitable additional costs attendant on repeated delays. She submits this matter is clearly in the nature of a small claim, has been delayed for many months, and should be dealt with promptly if at all possible. She also expresses concern about the recoverability of costs, though this is based on speculation as to the Claimant's means. Secondly, she refers to the impact on the Defendant of this matter hanging over him, though she fairly asked me not to place too much weight on what is said about his health, in the absence of medical evidence. I place some but only slight weight on that.
Thirdly, Ms Wilson submits that the Claimant's medical evidence falls short of showing why this Claimant cannot attend this hearing on this particular day. She fairly invites me to accept, as I do, that the Claimant is suffering some cognitive impairment. But she submits that the Sleep Clinic appointment letters are of no help, and the records of 26 February and 23 March of no real assistance, in the absence of medical evidence explaining their significance. The closest the evidence gets to being adequate, submits Ms Wilson, is the certificate of Dr Anderson. This, however, is a sick note for work purposes. It does not address whether the Claimant is capable of turning up in Court, with the Court making allowances. Nor does the 23 February letter from Dr Vines. That letter does recognise some intellectual impairment, but it also makes clear that the problem is one of long standing, dating back to 2010.
Fourthly, Ms Wilson refers to the Claimant's conduct of this litigation and other correspondence. In addition to the documents cited by Mr Deans, Ms Wilson refers to the letter of claim of 4 March 2015 which she submits shows that he was at that time perfectly capable of putting forward a closely-argued position in respect of his claim. It is organised, and refers to remedies, evidence and procedure. Reference is also made to the Particulars of Claim, both well organised coherent documents. Finally, Ms Wilson asks me to take into account in assessing whether the Claimant could cope with this hearing that on these applications every issue raised in her Skeleton Argument for this hearing has been flagged up in correspondence or in a previous Skeleton Argument and the Claimant has been able to respond. She also points out that a whole day has been set aside for the hearing, which would allow the proceedings to be taken slowly, with breaks if necessary.
Without Prejudice Save as to Costs material
In his letter to the Court of 22 April the Claimant explained his delay in filing an application notice. One point was that he had overlooked the Defendant's letter of 13 April, which was one of two attachments to an email. The second point relied on attachments to his letter in the form of without prejudice correspondence. In relation to this he wrote that "There is another compelling reason why I did not file an Application at that time; I believe this may be considered if you are not hearing the cases therefore I have set this out in a separate letter and attachments prefaced 'WP'". I made sure not to read any of this material before the hearing, arranging for it to be kept safely in another room. My initial view was that I need not look at it in any event, as it went only to the lateness of the application to adjourn and that was unlikely to determine or significantly influence my decision. Ms Wilson, knowing the content of the correspondence, has however told me that she feels duty bound to draw attention to its content, in the Claimant's interests, if I am otherwise minded to refuse the adjournment.
When I indicated that on the basis of the matters I have dealt with so far I was minded to refuse the adjournment, Ms Wilson has told me in outline what the correspondence, which was Without Prejudice Save as to Costs, showed. She told me that it includes an offer by the Defendant and a purported acceptance by the Claimant, but that her client does not accept that this has given rise to a concluded agreement. That is for two reasons: the offer is said to have been withdrawn before the purported acceptance, and the acceptance is said not to match the offer. Having learned this much, I decided that I did not need to and should not read the correspondence itself.
The lateness of the Claimant's application was a factor in my decision to refer it to a hearing, allowing the Defendant an opportunity to respond, but I do not in the end consider it to be a factor of any significance to my decision whether to adjourn. So any explanation that the correspondence might offer for delay would not matter. It is not clear to me quite what the Claimant's position is about the offer and acceptance. However, he has not so far suggested to the Court that there is a concluded settlement so that it would be wrong to hold this hearing. If he were to take that position in future, and his position was accepted, it would be a matter going primarily to costs. The Claimant's position would not be adversely affected, unless he had to pay out costs which could not be recovered. I have no reason to believe that there would be any difficulty in reversing the effect of costs orders I make on these applications, and if there were any reason to believe it the Claimant has time to put it forward after this hearing.
Discussion and conclusions
My decision must be taken in accordance with the overriding objective of dealing with cases justly and at proportionate cost. In my judgment Ms Wilson is right to characterise this as a small claim. As such, it is particularly important that it should be managed efficiently and without avoidable delay.
The Claimant is physically fit to attend. The issue relates to his intellectual capacity. There are substantial reasons to be sceptical of some of the Claimant's contentions as to his cognitive difficulties. He is clearly capable currently of functioning at a high level, and that has plainly been the position over recent months. His correspondence in relation to this action up to date, including his present application and his most recent correspondence suggest a lively intelligence operating effectively. The correspondence in respect of other matters to which I have referred is of the same nature. His explanations for his ability to write long, complicated and detailed letters do not strike me as convincing. It seems perfectly clear, for example, that his letter of 18 February 2015 to Ms Thorne was not a standard form letter, and that it was composed within a few hours.
The medical evidence the Claimant has produced to substantiate his claims is in my judgment unimpressive, on a proper analysis. So far as cognitive impairment is concerned, I have no evidence at all that is directed to the Claimant's ability to conduct a hearing such as the present. The only evidence I have on the question of cognitive impairment which is independent of the Claimant himself is the GP's certificate, which uses the words "cognitive impairment" but does not elaborate in any way, and the letter of Dr Venn. The GP's certificate is designed to justify absence from work but I am not told what work the Claimant is or would be engaged in, and it does not follow from the GP's opinion on that topic that the Claimant would be unable to cope with this hearing. Dr Venn's letter does speak of intellectual problems, evidently involving short-term memory. However it is two months old. In addition, the documentary evidence shows that the Claimant was able at the same period of time to compose lengthy and complex correspondence on legal matters, at some speed. That ability appears to me undiminished since 18 February 2015, as evidenced by the Claimant's prompt, fulsome and eloquent correspondence over the past few days. I accept Ms Wilson's characterisation of the previous correspondence.
I accept as I have indicated that the Claimant is suffering some cognitive impairment, but I do not regard the evidence he has provided as establishing such an impairment that it is necessary in order to deal justly with the matters raised by the Defendant's applications to grant him an adjournment. I do not consider that the evidence shows that the Claimant is or would be so impaired that he could not conduct this hearing adequately with, if necessary, reasonable accommodations for any difficulties he would experience.
Important factors in reaching that conclusion are the nature of the applications that are before the Court; the fact that their merits have been debated in Skeleton Arguments and correspondence already; and what appear to me to be the merits of the Claimant's position on those applications. The applications for preliminary issues raise procedural matters which will not determine any rights or obligations. To the extent that the applications seek final determination of rights or obligations I bear in mind the need for caution which Ms Wilson has highlighted but the issues have been clearly identified and the parties' positions identified well in advance of this hearing and, for reasons to which I shall come, they are in my view matters the appropriate resolution of which is so plain and obvious that it could not be said that the Claimant suffers any relevant prejudice by reason of his ill-health.
For these reasons I refuse the application for an adjournment. In reaching that conclusion I repeat that I place little weight on the Defendant's health. I also leave out of account the 2013 email relied on by Mr Deans, which seems to me a point that in itself carries no weight in the present circumstances. Applying the principles I have outlined above I also proceed in the Claimant's absence. I do so because in my judgment he has voluntarily absented himself although he is fit enough to participate in these proceedings today – albeit he might need some breaks - and because I consider the right orders to make are so clear that it is not unjust to proceed in his absence.
The Applications to Strike Out
The applications to strike out are made under CPR 3.4(2). The applications are put on the basis that the matters targeted for strike-out disclose no reasonable basis for a claim, and/or are an abuse of process and/or, in the case of the First Claim, fail to comply with a Practice Direction.
The First Claim
The First Claim is pleaded in this way:
"16. The Defendant stated to two of the Claimant's friends and colleagues, as well as two parents of members of the club during March and April of 2014 that the Claimant had deliberately and maliciously promoted a different boxing club's annual show in preference to his own club's show. All four reported the remarks to the Claimant independently which included several almost identical phrases, being:
16.1 "he got lots of our boxers to go to the Battlebridge show instead of ours" and;
16.2 "he was telling sponsors to get a table at the Battlebridge show last month and they bought tables because they thought it was our show.""
CPR 53PD 2.2(2) and 2.4 set out requirements of pleading in a slander action. They require the Claimant to identify the publishees, which words were spoken to whom, and when publication took place. The Claimant recognises this, and deals with the point in para 17 of the Particulars of Claim:
"While CPR 53 2.2 and 2.4 require the persons reporting these comments to be named, 2.4 also states 'as far as possible' in this regard. The Claimant understands that, as members of the club and parents of members of the club, the four individuals may suffer prejudicial treatment until this matter is concluded (and, perhaps, afterwards) The Claimant humbly submits that this part of the Claim not be considered for striking out, as the Defendant has not denied making these comments when they were put to him by the Claimant in his email of 3rd April 2014 or in the subsequent Letter of Claim of 4th June 2014, or indeed in the draft Witness Statement of 26th June 2014."
At paragraph 20 the Claimant pleads as follows:
"The Claimant's reputation is likely to have suffered damage from the conduct of the Defendant. While the four persons who reported the conversation back to the Claimant did not believe the statements made by the Defendant, it seems likely that he has repeated the same statements to other persons unknown, who may in turn have repeated the falsehoods to others associated with the club or local people. This adversely affects the Claimant's standing in the Club, the boxing community and the local community. The comments made by the Defendant have caused the Claimant considerable pain, suffering and loss of amenity and the Claimant humbly asks the Court [to] consider an award of General Damages in this regard."
There followed the Part 18 Request to which I have referred above, and the Claimant's reply of 8 October 2014 explaining that he had decided not to answer it. It would appear that the Defendant was at that point accepting that in the absence of compliance by him with the requirements of the Practice Direction, the First Claim was bound to be struck out if he did not withdraw it. It would appear that his intention then was to withdraw it, but he has not done so.
Ms Wilson submits that this claim falls to be struck out on two separate and independent grounds. The first is the failure, indeed refusal, to provide details of the publishees. In some cases a Claimant may be allowed to proceed with a defamation claim despite being unable to plead full particulars. If the facts are not within the Claimant's knowledge, but may be discovered in the course of the action, it may be proper to allow the claim to go ahead: Gatley on Libel and Slander 12th edn paras 26.6-26.7. This is not such a case, however. The Claimant knows the details but is refusing to provide them. Nevertheless, I might have been inclined to make an order that the claim be struck out unless the Claimant provided the particulars, thus allowing him a final opportunity to make good the omission. I do not need to decide that point however, because Ms Wilson's second submission is in my judgment unanswerable and this claim could not succeed in any event.
This claim manifestly cannot satisfy the requirements of s 1(1) of the Defamation Act 2013, by which "a statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant." It is the Claimant's own pleaded case that the unidentified people to whom the words of which he complains were spoken "did not believe them". What this comes to in substance is that so far as those four individuals are concerned the Claimant's case is that his reputation has not been caused serious harm.
The claim cannot be salvaged by reliance on the alleged "likelihood" that the Defendant has repeated the statements to others. On its face this is purely speculative. It is trite that a claim for defamation must be specifically pleaded, and cannot be framed in such a way. In my judgment Ms Wilson is clearly right to submit that a claimant cannot satisfy the serious harm requirement of s 1(1) by alleging that it is "likely" that the Defendant has published words to some unknown people on some unknown occasion and that it is "likely" that this has caused serious harm to the Claimant's reputation. An averment of harm or likely harm to reputation must be tied to a properly pleaded claim.
I agree with Ms Wilson's subsidiary submission, that this claim would have been struck out as an abuse of process even before the Defamation Act 2013 came into force, pursuant to Jameel v Dow Jones & Co Inc [2005] QB 946. which set a threshold which was easier for claimants to satisfy than the one set by s 1 (see Defamation Act 2013, Explanatory Notes, para 11).
The Second Claim
This is pleaded at paragraphs 22 – 24 of the Particulars of Claim in the following terms:
"22. The Second Claim concerns a false and misleading crime report made by the Defendant on or about 15th April 2014 to Sussex Police regarding the 'theft' of club keys.
23. The Defendant knew there was well-founded dispute that was documented in several emails where the Claimant specifically referred to key holders and their rights, and that the matter of keys and authority to act on behalf of the club would be decided once the England Boxing complaint had been decided (it is likely that either England Boxing or the Charities Commission will order the club to re-run the AGM elections allowing all 235 members to vote).
24. In what would appear to be a malicious act designed to cause harm to the Claimant, the Defendant telephoned Sussex Police to make a criminal complaint alleging the Claimant had unlawful possession of a door key."
Ms Wilson again makes two points. First, she says this claim should be struck out pursuant to CPR r3.4 as it does not identify the words complained of and/or raises an unwinnable case. In a libel action, the Claimant must set out the statement complained of: Wissa v Associated Newspapers Ltd [2014] EWHC 1518 (QB) [29]. The Particulars of Claim fail to do so. In any event, she submits, it is clear that this claim is in respect of a complaint made by the Defendant to the police that an offence may have been committed, so that the Defendant has a complete defence of absolute privilege,
In Westcott v Westcott [2009] QB 407 the Court of Appeal, upholding a decision of HHJ Parkes QC sitting as a Judge of the Queen's Bench Division, held that the absolute immunity from suit which applies to out of court statements, which can fairly be said to be part of the process of investigating a crime or possible crime with a view to prosecution, is not confined to persons subsequently called as witnesses but applies to others including those, such as the defendant in that case, who make unprompted allegations to the police that others have carried out criminal acts. Ward LJ, with whom Sedley and Stanley Burnton LJJ agreed, put it this way at [34] and [36]:
"Because society expects that criminal activity will be reported and when reported investigated and, when appropriate, prosecuted, all those who participate in a criminal investigation are entitled to the benefit of absolute privilege in respect of the statements which they make. That applies whether they are informants, investigators, or prosecutors. …
In my judgment, any inhibition on the freedom to complain will seriously erode the rigours of the criminal justice system and will be contrary to the public interest. In my judgment immunity must be given from the earliest moment that the criminal justice system becomes involved. It follows that the occasion of the making of both the oral complaint and the subsequent written complaint must be absolutely privileged."
Stanley Burnton LJ added a number of observations as to why it was right as a matter of legal policy for the privilege to be absolute. The second was this (at [43]):
"… particularly where the crime is alleged to have taken place in private, the protection afforded by qualified privilege is more apparent than real. If the alleged perpetrator alleges that the victim has lied and made up her allegation, the alleged lie, if established, may well be sufficient evidence of malice. Thus, in the present case, the appellant contends that the fact that the respondent's allegation is false is evidence of malice sufficient to overcome a defence of qualified privilege: he pleads, in para 12 of his amended particulars of claim, "The allegations were made by the defendant maliciously, in that she knew that they were not true." The defence of qualified privilege in such a case does not protect against the risk of being sued, with the attendant costs of litigation, and in practice adds little to the defence of justification."
The failure to set out the words complained of as founding the Second Claim would not necessarily have been a fatal defect at this stage. The Claimant pleads that he has been unable so far to discover the exact wording of the report initiated by the Defendant. As with the First Claim I might well have made an order that the claim be struck out unless the Claimant pleads to the best of his ability the statement of which he complains. The objection on the ground of absolute privilege is however a complete answer to this claim. It is an objection that appears on the face of the Particulars of Claim, which expressly plead that the words complained of consisted of a crime report.
When this point was first raised on behalf of the Defendant the Claimant's response was to suggest that "the appeal decision [in Westcott] seems finely balanced in a case where there is considerable doubt whether there was malice in the original report she [the defendant] made to Police." The Claimant asserted that there was no doubt in this case that the Defendant had reported the matter maliciously. This was to miss the point about absolute immunity, which is that it is absolute and not qualified. Malice is no answer to it. The Claimant's response well illustrates the point made by Stanley Burnton LJ in Westcott. If the privilege were qualified only, the Second Claim might have survived a strike-out. As it is, I shall strike it out as a claim which is on its face plainly and obviously unwinnable as a matter of law. In doing so I bear in mind that there may be, within the way the case is pleaded, an allegation of republication within the police service following and consequent upon the Defendant's initial report. But the absolute immunity would extend to protecting the Defendant against any liability for such republication.
Paragraphs 43 – 44
The third application to strike out relates to the claims for injunctive relief in paragraphs 43 and 44 of the Particulars of Claim. Paragraph 43 says as follows:
"The Claimant submits that litigation is a direct result of what the Claimant believes was an ultra vires attempt by the Defendant to alter the club's Constitution in an effort to favour the Defendant and his family. Given that the casus belli is established, the Claimant requests the Court remove that 'cause of the war' by injunction to reverse the situation back to the positions prior to March 2014."
Paragraph 44 then requests the Court to consider granting three injunctions:
"44.1 The Defendant be required to comply with the club Constitution as adopted in 2009 and in use in that form until February 2014, and
44.2 The Defendant take the necessary steps to restore the Claimant's position on the Committee, and
44.3 The Defendant facilitate a compliant AGM and new election allowing all 235-odd members of the 2013-14 season to vote for their chosen candidates."
The stated basis for seeking this relief is that the "casus belli" is before the court and it is convenient to deal with these issues, arising from the background of dispute over the Club's rules and the Defendant's alleged breach of them, that is outlined in the introductory paragraphs of the Particulars of Claim.
Ms Wilson submits that this relief cannot be granted in this action as it is an action for defamation and these remedies are not available in such an action. It is true that these are not remedies that the Court can grant on proof of actionable defamation, but that does not mean that a Claimant may not combine more than one cause of action in a single claim, or that the Court may not permit a cause of action which is separate and distinct from defamation to be pursued alongside a defamation claim. It seems to me that there is some room for argument that this is what the Claimant is seeking to do here. In other words, in addition to claims in defamation the Claimant claims remedies to enforce the Club's rules against the Defendant.
Whether or not that claim is sound or even arguable is not a matter addressed in Ms Wilson's Skeleton Argument. She had not foreseen the point I have mentioned. When I raised this point Ms Wilson addressed me at the hearing, submitting that the claim is clearly pleaded as one in defamation alone; and that the Particulars fail to set out facts that would give rise to a cause of action against the Defendant. All of this was new, however, and the Claimant has not addressed argument to this point.
In those circumstances I do not consider it appropriate to strike out these paragraphs of the Particulars of Claim. I shall adjourn that aspect of the application with liberty to restore, and without prejudice to any application that may later be made to require any claim based on the Club rules to be pursued separately from any defamation claim.
The Applications for Trial of Preliminary Issues
In relation to the Third Claim the Defendant seeks an order for the trial as preliminary issues of (i) the meaning of the statement complained of, (ii) whether the statement is fact or opinion, and (iii) whether the Claimant satisfies s 1 of the Defamation Act 2013. The Defendant also applies to strike out those paragraphs of the particulars of claim that seek orders requiring compliance with the club's constitution.
In relation to the Fourth, Fifth, and Sixth Claims the Defendant applies for an order that the following five issues be tried as preliminary issues in the Second Action: (a) whether the Defendant spoke and thereby published the statements complained of and if so; (b) whether the statement is actionable without proof of special damage; (c) the natural and ordinary meaning of the statement; (d) whether the statement is fact or opinion; and (e) whether the statement has caused, or is likely to cause, serious harm to the reputation of the Claimant within the meaning of section 1 of the Defamation Act 2013.
Defamation actions have historically been notorious for length, complexity and undue expense. Orders for the early determination of issues, including the actual meaning of words, whether they are factual or opinion and, more recently, the question of whether the claim crosses the threshold of seriousness, have increasingly come to be recognised as an appropriate means of giving effect to the overriding objective.
Ms Wilson relies on what I said in Ames v The Spamhaus Project Limited [2015] EWHC 127 (QB), [2015] EMLR 13 at [101] about the desirability of preliminary issues, as opposed to summary judgment or strike-out applications, as a means of deciding whether claimant has a viable claim:
"In my judgment it is likely in today's legal context to be preferable to address issues of serious harm or Jameel abuse by means of preliminary issues, with any disputes as to meaning being resolved at the same time...At a trial of preliminary issues the court can decide the relevant issues once and for all. In Ansari v Knowles [2013] EWCA Civ 1448, the issue of whether the claim represented Jameel abuse was tried as a preliminary issue: see [9]. This approach is all the more appropriate in the light of the change in the law by s 1 of the 2013 Act. In Cooke [v MGN Ltd [2014] EWHC 2831 (QB); [2014] EMLR 31] the issue of what meaning the words bore and the question of whether the publication had caused or was likely to cause serious harm were tried together as preliminary issues. For the purposes of a preliminary issue trial disclosure can be ordered if and to the extent necessary and proportionate in the circumstances. There may be cross-examination. In Cooke there was none, and Bean J observed that it would have been inappropriate in that case: see [24]. It may not always be so, however, and this case may well be an example of one where cross-examination would be appropriate."
As Ms Wilson points out, in Lachaux v AOL (UK) Limited (above) Nicola Davies J agreed with the above approach and applied it to the two cases then before her. At [22] Nicola Davies J said of the proposal to try identification, meaning and harm as preliminary issues in those cases:
"Such a hearing would be at one with the ethos of the 2013 Act namely early identification of issues, where appropriate determination of the same, with consequent saving of time and money. A contention by the claimant that in this case such a course does not take account of the concept of cost budgeting and that such a hearing should await service of further pleadings and a case management hearing, flies in the face of common sense and the aims of the overriding objective."
Ms Wilson submits that it is highly desirable for the issues identified by the Defendant to be tried as preliminary issues here. She says that if required to serve a Defence to the Third Claim the Defendant intends, in addition to denying that s 1 is satisfied, to advance defences of truth, honest opinion, and common law qualified privilege. The costs of such a Defence and litigating those issues may be avoidable, and may prove wholly unnecessary if the claim does not satisfy s 1 of the 2013 Act. Alternatively, she submits, it will be more efficient and effective for any substantive defences to be addressed to meaning(s) which the words have been found to convey. A trial of the above three issues should be relatively straightforward and not, of itself, time consuming. She estimates a day at most.
As for the Fourth, Fifth and Sixth Claims, Ms Wilson says that the Defendant will "among other matters" deny that he spoke the words alleged by the Claimant and will deny that the claim satisfies s 1 of the 2013 Act. Determination of these issues will establish whether the Claimant has a viable claim and serve the same beneficial ends as in the first action: to save unnecessary expense and manage the litigation proportionately.
The Claimant's position when the question of whether preliminary issues should be tried in respect of the Third Claim was raised before the Master on 30 September 2014 was set out in his lengthy Skeleton Argument. He disputed that the issues required determination before a Defence was served. The thrust of his written submissions on this point was that the meanings of the words are obvious, and the meanings are obviously factual as opposed to comment; this case would not be tried by jury, so that earlier authorities on the benefits of preliminary trials have less relevance; here the preliminary issue trial proposed would only cause delay and extra cost, when the real issue is whether the Defendant has any defence to the claims.
My conclusion is that the trial of the preliminary issues identified on behalf of the Defendant is a course of action which is fair to both parties and furthers the overriding objective. These are, looked at objectively, small claims. They concern words spoken or written over a year ago. A proportionate procedure is required to resolve them. The time estimate for the trial of all the preliminary issues on the Third to Sixth Claims inclusive is two days. That is on the generous side, but still short. A timetable can be set for disclosure (not likely to be substantial) and exchange of witness statements (likely to be few) which may well allow a trial of those issues in June or July 2015. The alternative of proceeding to service of a Defence or Defences, and disclosure, witness statements and a full trial on all the issues would involve a considerable amount of additional time, expense, and delay.
The trial of preliminary issues in these actions is in my judgment a course which may save costs, by resolving one or more of the claims against the Claimant without the need for Defences to be pleaded, or for disclosure or witness statements on the issues which would arise if Defences were pleaded. Even if it does not finally resolve any of the claims the preliminary issue trial would not be likely to waste expense. It would resolve in short order questions which would have to be determined at a trial in any event. If those issues are resolved against the Defendant, that may enhance the prospects of settlement. Even if it does not it will as Ms Wilson submits, ensure that any defences of truth or honest opinion are directed at meanings which the court has found the words to bear rather than some different meanings. |
INTRODUCTION
22 May 2014 was Election Day throughout the United Kingdom. There was a nationwide election for members of the European Parliament. Many local authorities had council elections and a few local authorities had mayoral elections. The London Borough of Tower Hamlets had all three. While undoubtedly making practical sense to hold all the relevant elections on the same day, conducting three simultaneous polls necessarily presented considerable challenges for returning officers, both in ensuring that polling proceeded in an orderly and lawful manner and in arranging for three different sets of ballots to be correctly counted.
In Tower Hamlets there was a full council election with all 45 seats in 20 wards being contested. Between the 2014 election and its preceding election in 2010 there had been a wholescale re-drawing of the ward boundaries and the number of wards had been increased from 17 to 20. In most of the wards, there were candidates from six main parties, Conservative, Liberal Democrat, Labour, the Green Party, UKIP and a party local to the Borough known as Tower Hamlets First (THF).
In the election for Mayor, there were ten candidates, one from each of the six parties listed above, one from the Trade Union and Socialist Coalition and three Independent candidates.
The Mayoral election is conducted on the transferable vote system. Each elector has two votes and chooses his first and second preferences. The ballot paper, therefore, lists the candidates in alphabetical order with two columns of corresponding boxes for the voter to mark first and second preferences. When the votes come to be counted, the first step is to count the first preference votes for each candidate. If, at the conclusion of that process, a candidate has received more than half of the first preference votes cast, that candidate is elected. If no candidate has received more than half of the first preference votes, the second stage is, in essence, a run-off between the two candidates with the most first preference votes. The remaining candidates drop out of the race and the ballot papers showing their names as first preferences are re-examined to determine the second preferences shown on those ballot papers. Second preference votes for candidates other than the two front-runners are disregarded and the second preference votes for those two are counted and added to their first preference votes from the initial round. The first and second preference votes for the two front-runners are then totalled and the candidate with the higher total declared the winner.
The drawback of this system is that it is possible for candidate A to receive 49.9% of the first preference against his main rival B's 20% (or even 10%) but for B to receive all the second preference votes of the eliminated candidates and to be elected. In effect the election is won by the voters' second choice of candidate.
The Tower Hamlets Mayoral election of 2014 turned out to be a two-horse race, the principal contenders being Mr John Biggs, the Labour Party candidate, and the outgoing Mayor Mr Lutfur Rahman, the THF candidate.
At the count following the poll, the first preference votes for those two candidates were:
Mr Rahman: 36,539 (43.38%)
Mr Biggs: 27,643 (32.82%)
The candidate coming third, Mr Christopher Wilford (Conservative), totalled roughly 8.5% and no other candidate received more than 6%. The second preference votes shown on the ballot papers of the eight eliminated candidates (to the extent that they were for Mr Biggs or Mr Rahman) were then counted and added to the total. Though Mr Biggs received approximately eight times as many second preference votes than Mr Rahman it was not sufficient for him to make up the gap from the first round. The final result was
Mr Rahman: 36,539 (first) + 856 (second) totalling 37,395
Mr Biggs: 27,643 (first) + 6500 (second) totalling 34,143
Mr Rahman was thus re-elected Mayor of Tower Hamlets.
As will be seen, both Mr Rahman's campaign and his election had proved very controversial within the Borough and on 10 June 2014, the four Petitioners presented a Petition to have the election set aside on several grounds, principally the alleged commission by the First Respondent (Mr Rahman) or his agents of corrupt and illegal practices contrary to the Representation of the People Act 1983 ('the 1983 Act'). The Petitioners also alleged that the Second Respondent, the Returning Officer Mr John Williams, had failed to conduct the election in accordance with electoral law and that the election should be set aside on that ground independently of their case against Mr Rahman.
On 15 July 2014 the First Respondent applied to dismiss the petition under Rule 13 of the Election Petition Rules 1960 and/or the inherent jurisdiction of the court for want of particularity and abuse of process. That application was heard by the Divisional Court[1] on 28 and 29 July 2014. The Court rejected the application to strike out the Petition and directed that the Petition should be heard by an Election Commissioner appointed under the 1983 Act.
On 29 July 2014 I accepted the appointment as Election Commissioner to try this Petition.
Between 3 and 6 November 2014 I conducted the Scrutiny to examine the original ballot papers and to extract certain ballot papers and other documents in relation to allegedly false or illegal votes. I thereafter issued my formal report on its findings.
The hearing of the Petition commenced on 2 February 2015. On the first day of the hearing, counsel for the Petitioners and for the Returning Officer announced that their respective clients had reached an agreement whereby the Petitioners would no longer pursue their allegations against the Returning Officer and the Returning Officer undertook that, in the event that the Petitioners were successful against Mr Rahman, he would not seek an order for his own costs against them.
Consequently, the case against the Returning Officer, which mainly turned on his conduct of the count, was not proceeded with and a great deal of evidence dealing with the events at the count did not need to be adduced or challenged. This judgment, therefore, will not need to explore the Returning Officer's conduct or do more than contain a cursory account of the events following the close of poll at 10.00 pm on 22 May 2014.
The trial occupied the court from 2 February to 13 March 2015. Written final submissions were served on 20 March 2015 and final oral submissions were heard on 24 March 2015.
The principal counsel for the parties were:
The Petitioners: Mr Francis Hoar
The First Respondent: Mr Duncan Penny QC
The Second Respondent: Mr Timothy Straker QC
I trust both leading counsel will forgive me if I do not repeat 'QC' on each occasion I mention them in the remainder of this judgment.
THE LAW
The law: election courts and their procedures
Election petitions
Before dealing with the law relating to election petitions, it is necessary briefly to rebut the criticism made in certain quarters after the high profile case of Watkins v Woolas[2] (referred to hereafter as 'Woolas') in which the election of Mr Philip Woolas as Member of Parliament for Oldham East and Saddleworth in 2010 was set aside by an election court on the ground that Mr Woolas had committed an illegal practice contrary to s 106 of the 1983 Act (which will be discussed in detail later in this judgment).
The criticism is usually voiced in terms of 'unelected judges unseating democratically elected politicians', the obvious implication being that this process is itself undemocratic.
There are two answers to this criticism. First the resolution of disputed elections by the courts is not a power the judges have arrogated to themselves. It is a task laid upon them by Parliament, a task, what is more, that the judiciary originally resisted tooth and nail. As the history of election courts set out in Woolas in the Divisional Court shows[3], when, in 1868, it was proposed that election disputes should be referred to the courts, the then Lord Chief Justice, Sir Alexander Cockburn Bt (ironically the country's leading expert in electoral law), wrote a stern letter of protest to the Lord Chancellor and earned himself an unflattering cartoon in Punch for his pains[4]. All to no avail. The reason is obvious: if, as Parliament believed, and has continued to believe, politicians cannot be trusted to resolve election disputes fairly, then who is left but the judiciary? Election courts have thus lasted from 1868 to the present.
The second reason is that the criticism itself begs the question. If a candidate is elected in breach of the rules for elections laid down in the legislation, then he cannot be said to have been 'democratically elected'. In elections, as in sport, those who win by cheating have not properly won and are disqualified. Nor is it of any avail for the candidate to say 'I would have won anyway' because cheating leads to disqualification whether it was necessary for the victory or not. In recent election cases, for example, it has been proved that candidates were elected by the use of hundreds (in Birmingham, thousands) of forged votes: would anyone seriously claim that those candidates had been 'democratically elected'?
A local election may be questioned by a Petition under s 127 of the 1983 Act which provides:
An election under the local government Act may be questioned on the ground that the person whose election is questioned -
(a) was at the time of the election disqualified, or
(b) was not duly elected,
or on the ground that the election was avoided by corrupt or illegal practices or on the grounds provided by section 164 or section 165 below, and shall not be questioned on any of those grounds except by an election Petition.
In this case, the court is not concerned with the first two grounds set out in s 127 for setting aside an election, namely the fact that the candidate was disqualified or the fact that he was not 'duly elected'. Although it could rightly be said that any candidate whose election can be set aside for any reason connected with the election was 'not duly elected', in practice this provision is largely confined to cases where, on re-examining the votes and removing on the ground of formal defects any votes previously admitted, the candidate ceases to have a preponderance of the votes. Neither of these grounds was raised in the current Petition and the court need not deal further with them.
The ground that 'the election was avoided by corrupt or illegal practices' brings into play further sections of the 1983 Act. Section 159(1) provides:
If a candidate who has been elected is reported by an election court personally guilty or guilty by his agents of any corrupt or illegal practice his election shall be void.
The reference to reporting relates back to s 145 and 158. Section 145(1) states:
At the conclusion of the trial of a Petition questioning an election under the local government Act, the election court shall determine whether the person whose election is complained of, or any and what other person, was duly elected, or whether the election was void, and the determination so certified shall be final to all intents as to the matters at issue on the Petition.
Thus the first duty of the election court trying a petition seeking to set aside an election on the ground of corrupt or illegal practices is to determine whether they occurred. It then has a duty to report contained in s 158:
(1) The report of an election court under ... section 145 above shall state whether any corrupt or illegal practice has or has not been proved to have been committed by or with the knowledge and consent of any candidate at the election, and the nature of the corrupt or illegal practice.
(2) For the purposes of sections 159 and 160 below-
(a) if it is reported that a corrupt practice other than treating or undue influence was committed with the knowledge and consent of a candidate, he shall be treated as having been reported personally guilty of that corrupt practice, and
(b) if it is reported that an illegal practice was committed with the knowledge and consent of a candidate at a parliamentary election, he shall be treated as having been reported personally guilty of that illegal practice.
(3) The report shall also state whether any of the candidates has been guilty by his agents of any corrupt or illegal practice in reference to the election; but if a candidate is reported guilty by his agents of treating, undue influence or any illegal practice, and the court further reports that the candidate has proved to the court-
(a) that no corrupt or illegal practice was committed at the election by the candidate or his election agent and the offences mentioned in the report were committed contrary to the orders and without the sanction or connivance of the candidate or his election agent, and
(b) that the candidate and his election agent took all reasonable means for preventing the commission of corrupt and illegal practices at the election, and
(c) that the offences mentioned in the report were of a trivial, unimportant and limited character, and
(d) that in all other respects the election was free from any corrupt or illegal practice on the part of the candidate and of his agents,
then the candidate shall not be treated for the purposes of section 159 as having been reported guilty by his agents of the offences mentioned in the report.
These provisions are not entirely straightforward. Section 158(1) is clear enough. The court is to report whether a corrupt or illegal practice has been committed by or with the knowledge or consent of the candidate and, if so, which. I shall deal later with the question of the agents whose acts bind the candidate, but the distinction should be made between s 159(1) (above) which requires the corrupt or illegal practice to have been committed by the candidate or his agents before the election can be avoided and s 158(1) which requires the election court to report 'whether any corrupt or illegal practice has or has not been proved to have been committed by or with the knowledge and consent of any candidate at the election' which is a slightly different concept.
Under s 158(2)(a), if a corrupt practice is proved to have been committed not by the candidate himself but with his knowledge and consent, then he is personally guilty of the corrupt practice unless the corrupt practice involves treating (see below) or undue influence, in which case, to be reported as personally guilty the candidate himself must have participated in the commission. The candidate, however, is personally guilty under s 158(2)(b) of any illegal practice committed with his knowledge and consent even if not participating personally in it.
Section 158(3) legislates for the case where corrupt and illegal practices are proved to have been committed by the candidate's agent but not with his knowledge and consent. The effect of the subsection is that where corrupt practices do not involve treating or undue influence, the candidate remains personally guilty of the offence; but where the corrupt practice involves treating or undue influence or the allegation is one of an illegal practice, then the candidate does have a statutory defence. This is one of the few areas in the 1983 Act where the onus is placed on the Respondent to a Petition to prove a defence[5] and, to succeed, the candidate must prove all four of its ingredients. The sting is in the tail: ingredient (d) requires that 'in all other respects the election was free from any corrupt or illegal practice on the part of the candidate and of his agents', so that if, for example, the candidate's agents are found to have been guilty of personation under s 60 or of postal vote fraud under s 62A (even without the candidate's knowledge or consent) then not only is the candidate guilty of that corrupt practice but he cannot avail himself of what would otherwise be a defence to allegations of treating, undue influence or illegal practices.
Thus the process is:
a) the court determines that the candidate has, by himself or his agents, been guilty of corrupt or illegal practices - s 145;
b) the court reports that finding - s 158;
c) that finding renders the election void - s 159.
The consequences for a candidate of being found guilty by himself or his agents of corrupt or illegal practices are serious. In addition to having the election declared void, under s 160 that person is incapable of
a) being registered as an elector for any national or local election;
b) being elected to the House of Commons;
c) holding any elective office (including being a Mayor or councillor).
This disqualification lasts, in the case of corrupt practices, for five years and, in the case of illegal practices, for three years.
These penalties are entirely separate from any criminal sanctions that might be imposed if the candidate concerned is prosecuted to conviction for an electoral offence. If, by any chance, the conviction precedes the election court, the candidate is obliged to vacate his office under s 173 of the 1983 Act.
An important feature of this ground for avoiding an election is that the petitioner does not have to prove that the corrupt or illegal practices were likely to have affected the result of the election. Mere proof of the practices by the candidate or his agents is sufficient to avoid the election. Thus, to take an extreme example, a person elected to Parliament with a majority of 20,000 in his constituency who is proved to have arranged only one bogus vote to have been cast through personation, will forfeit the election and suffer disqualification for five years under s 160.
The final grounds for avoiding an election are the grounds provided by ss 164 and 165. Section 165 is irrelevant here.
Section 164 is usually referred to as 'general corruption' and states:
(1) Where on an election Petition it is shown that corrupt or illegal practices or illegal payments, employments or hirings committed in reference to the election for the purpose of promoting or procuring the election of any person at that election have so extensively prevailed that they may be reasonably supposed to have affected the result –
(a) his election, if he has been elected, shall be void, and
(b) he shall be incapable of being elected to fill the vacancy or any of the vacancies for which the election was held.
(2) An election shall not be liable to be avoided otherwise than under this section by reason of general corruption, bribery, treating or intimidation.
(3) An election under the local government Act may be questioned on the ground that it is avoided under this section.
This section replaces what was once the common law rule relating to general corruption. In the past, particularly in the nineteenth century, it would happen that an election had been tainted with corruption or other illegal conduct but those seeking to set it aside could not prove any actual involvement in the wrongdoing by the candidate or his agents. Thus a body of law evolved to the effect that an election could be avoided on this ground but only if it could be shown that it was likely to have affected the result of the election.
Consequently, the ingredients of s 164 which have to be proved by a petitioner seeking to avoid an election under that section are that:
a) corrupt or illegal practices or illegal payments, employments or hirings were committed by someone;
b) they were committed at an election for the purpose of promoting or procuring the election of a candidate at that election[6]; and
c) they prevailed so extensively that they may be reasonably supposed to have affected the result of the election.
The key points to note about s 164 are:
a) the petitioner does not have to prove that the corrupt or illegal practices were committed by the candidate or his agents - only that they were directed to securing his election; but
b) the petitioner does have to prove that the corrupt or illegal practices are likely to have affected the result; and
c) avoidance of the election under s 164, while not involving the lengthy period of disqualification that attends findings of corrupt or illegal practices against the candidate himself, nevertheless rules out the candidate from standing at the re-run of the election.
The functions of the court
An election court is, in some ways, a unique tribunal. Election petitions are presented and pursued in a very similar manner to claims made in the civil courts and, procedurally, the basic rules to be applied are those of the Civil Procedure Rules ('CPR'). Accordingly election proceedings have an adversarial character. Nevertheless, election petitions differ in a number of ways from civil actions.
An election judge occupies an intermediate position between that of a civil court judge, whose function is (in general) to determine the issues as between the parties to the action being tried, and a coroner, whose function is an inquisitorial function to determine the cause of death and surrounding circumstances. A civil judge has little or no inquisitorial powers: he is trying an adversarial dispute between the parties. A coroner's inquest is not (or should not be) an adversarial process, although coroners usually permit interested parties to participate either in person or through legal representatives.
An election court possesses elements of both systems. The election judge must hear and determine the issues between the Petitioner and the Respondent: to that extent he is a civil court judge. He must also enquire more widely into possible electoral malpractice both in the electoral area in question and in the wider electoral area. In the present case the questioned election, as it happens, encompasses the entirety of the electoral area (the Borough of Tower Hamlets) but where the petition concerns only one or two wards within a larger electoral area, the election judge is charged under s 145(3) of the 1983 Act with the duty to state 'whether any corrupt practices have, or whether there is reason to believe that any corrupt practices have, extensively prevailed at the election in the area of the authority for which the election was held or in any electoral area of that authority's area'. It may be recalled that, in my judgment in the Birmingham Election Case[7], I reported that the wholesale falsification of postal votes had not been confined to the wards of Aston and Bordesley Green, the subject of the Petitions, but had been widespread in those wards of Birmingham where the Labour Party was attempting to counteract the collapse of the Labour vote in the Muslim Asian community following the invasion of Iraq in 2003.
The practical consequence of the combined adversarial and inquisitorial nature of an election court is that an election judge must necessarily be more interventionist than would normally be the case. In criminal cases, judicial intervention during evidence is usually kept to a minimum and, in civil cases, though the level of intervention is often higher (particularly if the case involves technicalities which require explanation), it is still not an important part of the process. In election cases, however, the inquisitorial function, though falling well short of the control of proceedings exercised by a coroner, does mean that judges ask a lot more questions than would be the norm in civil cases.
In the present case, as in many Petitions, the resources available to the protagonists were limited. Indeed the Petitioners conducted the case throughout with the aid of counsel, Mr Hoar, instructed under the direct access scheme, but without the help of solicitors. There was necessarily, on both sides, a considerable amount of what I described as 'DIY evidence gathering', made more difficult by the number of potential witnesses for whom English was not their first language (in some cases, a language not spoken at all). The focus of the parties being, quite properly, the pleaded issues, it was left to the court to examine the wider picture.
I felt that at some times Mr Penny, who, as a leading criminal practitioner, was perhaps more used to the cloistered calm of the Old Bailey, found the level of judicial intervention somewhat unsettling (though he concealed his understandable irritation admirably). Such is, however, the inevitable nature of an election court.
Burden and standard of proof
In general terms, an election court is a civil court not a criminal court. Many of the matters it has to consider, however, involve conduct which amounts to the commission of criminal offences under the 1983 Act or other electoral legislation.
The general burden of proof both in respect of the charges of corrupt or illegal practices and in respect of the allegation of general corruption must necessarily rest on the Petitioner. Although there are instances when the burden may shift to the Respondent (such as under s 158(3) cited above), they do not affect the general rule itself.
There was no controversy at the hearing about the standard of proof the court must apply to the charges of corrupt and illegal practices. It is settled law that the court must apply the criminal standard of proof, namely proof beyond reasonable doubt. This was definitively decided by the Court of Appeal in R v Rowe, ex parte Mainwaring[8], a decision binding on this court
In respect of general corruption, there are two aspects to the case under s 164:
a) proving that there has been general corruption designed to secure the election of the candidate;
b) showing that this may reasonably be supposed to have affected the result.
My rulings in this regard having been unchallenged to date, I shall apply the criminal standard of proof to the issue of whether there has been general corruption and the civil standard of proof to the issue of whether it may reasonably be supposed to have affected the result.
Thus the court will apply
a) the criminal standard of proof to the charges that Mr Rahman and/or his agents have been guilty of corrupt or illegal practices;
b) the criminal standard of proof to the question of whether there has been general corruption; but
c) the civil standard of proof to the question of whether the general corruption may reasonably be supposed to have affected the result of the election.
The law: agency
The general rule in election cases is that in respect of corrupt or illegal practices a candidate is responsible for the actions of his agents, even if those actions are committed without his knowledge and consent or, indeed, contrary to his express instructions. This general principle is then limited by provisions, such as those contained in s 158 cited above, which afford a candidate a defence if, in relation to some practices, he did not have the requisite knowledge and consent of the actions of his agents. The starting point remains, however, that a candidate is, until a mitigating factor is established, responsible for the acts and omissions of his agents.
All candidates are required by the 1983 Act to have an official election agent. In the present case, the official election agent for THF and Mr Rahman as Mayoral candidate was Mr Alibor Choudhury. In general terms, whatever the position of agents in the wider sense, the election agent is treated as the candidate's agent for all purposes and it is to be noted that under s 158, for example, it is the knowledge and consent of the candidate or his election agent that is determinative of the candidate's personal responsibility.
Electoral law has always drawn the concept of agency very widely. In the days when those standing for election (particularly to Parliament) would be members of the upper classes, it was not supposed that they would do their own electioneering. It was taken for granted that others would carry out the hard work of persuading voters. In an era before political parties were professionally organised, the candidate would collect a body of dedicated supporters who would campaign on his behalf. Electoral law took the position that those who participated in the candidate's campaign would be treated as agents for the candidate. By contrast, members of the wider public who merely manifested support for the candidate would not be 'agents' for electoral purposes.
The increasingly professional organisation of political parties crystallised the distinction between agents and public. Where a political party set up a campaign team, the members of that team would prima facie be treated as the candidate's agents. The candidate might not know all the individual members of the team and might not have any idea of what they were getting up to: none the less, the members of the 'team' would be his agents.
The locus classicus of the definition is a case arising out of the General Election of 1874 the Wakefield Case XVII[9]:
By election law the doctrine of agency is carried further than in other cases. By the ordinary law of agency a person is not responsible for the acts of those whom he has not authorised, or even for acts done beyond the scope of the agent's authority ... but he is not responsible for the acts which his alleged agents choose to do on their own behalf. But if that construction of agency were put upon acts done at an election, it would be almost impossible to prevent corruption. Accordingly, a wider scope has been given to the term 'agency' in election matters, and a candidate is responsible generally, you may say, for the deeds of those who to his knowledge for the purpose of promoting his election canvass and do such other acts as may tend to promote his election, provided the candidate or his authorised agents have reasonable knowledge that those persons are so acting with that object.
'Agent' is thus not by any means restricted to the candidate's official election agent but covers a wide range of canvassers[10], committees[11] and supporters[12]. The candidate is taken to be responsible for their actions even though he may not have appointed them as agents. Knowledge of what they are doing does not need to be proved against a candidate for him to be fixed with their actions.
The Great Yarmouth case cited above sets out the principles very clearly[13]:
There are principles, and the substance of the principle of agency is that if a man is employed at an election to get you votes, or, if, without being employed, he is authorised to get you votes, or, if, although neither employed nor authorised, he does to your knowledge get you votes, and you accept what he has done and adopt it, then he becomes a person for whose acts you are responsible in the sense that, if his acts have been of an illegal character, you cannot retain the benefit which those illegal acts have helped to procure for you … Now that is, as I apprehend, clearly established law. It is hard upon candidates in one sense, because it makes them responsible for acts which are not only not in accordance with their wish, but which are directly contrary to it.
Clearly agency connotes some connection between the agent and the candidate. If, unknown to the candidate and without his consent, members of the public who support his candidature (or his party) engage in corrupt or illegal practices to ensure his election, those unofficial 'supporters' may well not, in law, be deemed to be his agents, although this might set up a situation of general corruption under s 164. What the law is designed to achieve is to make a distinction between the candidate's 'team' of supporters and canvassers and wholly unconnected members of the public who may support the candidate and engage in unsolicited acts of a corrupt or illegal nature on his behalf.
It must be said that, in practice, where electoral malpractice is established, particularly in the field of vote-rigging, it is very rare indeed to find members of the general public engaging in DIY vote-rigging on behalf of a candidate. Generally speaking, if there is widespread personation or false registration or misuse of postal votes, it will have been organised by the candidate or by someone who is, in law, his agent. Though the burden of proof is not thereby altered, a court is entitled to work on the basis that systematic vote-rigging is overwhelmingly likely to be the work of the candidate or his agents.
As is customary in election cases, there has been considerable controversy in the present case as to who may properly be taken to be Mr Rahman's agents for election law purposes and who may not. Understandably Mr Hoar has sought to cast the net as widely as possible and, equally understandably, Mr Penny has sought to narrow the field. I shall deal with the factual question of agency when I discuss the history and structure of THF.
The law: corrupt and illegal practices
Most election petitions concentrate on one aspect of corrupt and illegal practices: in recent years, the emphasis has been on the corrupt and illegal practices surrounding the falsification of votes, particularly postal votes. The current case, however, raises a host of allegations of corrupt and illegal practices made against Mr Rahman.
The Petition alleges the following practices ('C' = corrupt; 'I' = illegal):
a) Personation contrary to s 60 of the 1983 Act (C);
b) Voting when not entitled to do so contrary to s 61(1) (I)
c) (Possibly) double voting contrary to s 61(2) (I);
d) Postal vote offences contrary to s 62A (C);
e) Tampering with ballot papers etc, contrary to s 65 (I);
f) Making false statements about a candidate (in this case Mr Biggs) contrary to s 106 (I);
g) Payment of canvassers, contrary to s 111 (I)
h) Bribery contrary to s 113 (C);
i) Treating, contrary to s 114 (C);
j) Undue influence involving the threat of spiritual injury contrary to s 115 (C);
k) Undue influence involving intimidation at polling stations, voters going into polling booths together or leaving campaign material inside polling booths contrary to s 115 (C)
l) Undue influence involving the misleading of voters by claiming that Mr Rahman was a Labour Party candidate contrary to s 115(C);
m) 'General corruption' in the Borough designed to secure Mr Rahman's election.
Personation and related ballot offences
Personation is, in essence, the casting of a vote unlawfully. In its original form it involved a person who was not entitled to vote assuming the identity of a voter registered on the electoral register and casting that voter's ballot. In the days of a very limited franchise, even small amounts of personation could have serious consequences, though that was mitigated by the fact that, with a tiny electorate, detecting a non-voter trying to cast someone else's vote was relatively easy. The huge increase in the electorate brought about by universal franchise made personation less attractive, in that the risks involved remained the same but the number of false votes likely to be needed to sway the result had greatly increased.
By the 21st century, however, a combination of the extremely lax rules relating to the registration of electors and the introduction of postal voting on demand made personation once again viable. The ease of postal vote fraud and the difficulty of policing it led to such a great upsurge in personation that, in the Birmingham Case, the number of false votes was virtually half of all votes recorded as having been cast for the winning candidates.
Section 60 of the 1983 Act provides:
(1) A person shall be guilty of a corrupt practice if he commits, or aids, abets, counsels or procures the commission of, the offence of personation.
(2) A person shall be deemed to be guilty of personation at a parliamentary or local government election if he –
(a) votes in person or by post as some other person, whether as an elector or as proxy, and whether that other person is living or dead or is a fictitious person; or
(b) votes in person or by post as proxy -
(i) for a person whom he knows or has reasonable grounds for supposing to be dead or to be a fictitious person; or
(ii) when he knows or has reasonable grounds for supposing that his appointment as proxy is no longer in force.
(3) For the purposes of this section, a person who has applied for a ballot paper for the purpose of voting in person or who has marked, whether validly or not, and returned a ballot paper issued for the purpose of voting by post, shall be deemed to have voted.
A conviction for personation after trial on indictment carries a maximum sentence of two years imprisonment[14].
The significance of s 60(3) is that the offence of personation in the case of postal votes requires the personator to return the ballot paper. Merely applying for and receiving a postal vote in a false name does not constitute personation under s 60(3): the ballot paper must actually be returned. Personation at a polling station, on the other hand, is fairly obvious.
Section 61 creates two offences potentially relevant here:
(1) A person shall be guilty of an offence if -
(a) he votes in person or by post, whether as an elector or as proxy, or applies to vote by proxy or by post as elector, at a parliamentary or local government election, or at parliamentary or local government elections, knowing that he is subject to a legal incapacity to vote at the election or, as the case may be, at elections of that kind; or
(b) …
(c) …
(2) A person shall be guilty of an offence if-
(a) he votes as elector otherwise than by proxy either-
(i) more than once in the same constituency at any parliamentary election, or more than once in the same electoral area at any local government election …
Section 62A was introduced in response to the problems caused by postal voting on demand. The relevant parts of s 62A read:
(1) A person commits an offence if he -
(a) engages in an act specified in subsection (2) at a parliamentary or local government election, and
(b) intends, by doing so, to deprive another of an opportunity to vote or to make for himself or another a gain of a vote to which he or the other is not otherwise entitled or a gain of money or property.
(2) These are the acts -
(a) applying for a postal or proxy vote as some other person (whether that other person is living or dead or is a fictitious person);
(b) otherwise making a false statement in, or in connection with, an application for a postal or proxy vote;
(c) inducing the registration officer or returning officer to send a postal ballot paper or any communication relating to a postal or proxy vote to an address which has not been agreed to by the person entitled to the vote;
(d) causing a communication relating to a postal or proxy vote or containing a postal ballot paper not to be delivered to the intended recipient
....
(5) A person who commits an offence under subsection (1) or who aids, abets, counsels or procures the commission of such an offence is guilty of a corrupt practice.
This offence carries the same penalty as that created by s 60[15].
The ambit of s 62A is deliberately wide. It encompasses false registrations because the person who uses the name of a falsely registered voter to apply for a postal or proxy vote will either be using the name of 'some other person' under s 62A(2)(a) or (if the person applying does so in his own name but knowing that he is falsely registered) be 'making a false statement' under s 62A(2)(b).
Finally under this head comes tampering with documents under s 65. Section 65(1) reads:
(1) A person shall be guilty of an offence, if, at a parliamentary or local government election, he-
(a) fraudulently defaces or fraudulently destroys any nomination paper; or
(b) fraudulently defaces or fraudulently destroys any ballot paper, or the official mark on any ballot paper, or any postal voting statement or declaration of identity or official envelope used in connection with voting by post; or
(c) without due authority supplies any ballot paper to any person; or
(d) fraudulently puts into any ballot box any paper other than the ballot paper which he is authorised by law to put in; or
(e) fraudulently takes out of the polling station any ballot paper; or
(f) without due authority destroys, takes, opens or otherwise interferes with any ballot box or packet of ballot papers then in use for the purposes of the election; or
(g) fraudulently or without due authority, as the case may be, attempts to do any of the foregoing acts.
Before considering these various offences, regard must be had to the rules for determining who is entitled to be registered to vote in an election. Patently a wholly fictitious person whose name had been entered on the register cannot be entitled to vote and anyone who uses the identity of such a person commits personation. What, however, is the position where the person who is entered in the register does actually exist but may not be entitled to be registered at that address?
'Ghost voters' and the right to be registered
In my judgment in the Slough Election Case[16], I used the term 'ghost voters'[17] to encompass people whose names were entered on the electoral register where either they did not reside at the address stated or, in some cases, did not exist at all.
Section 2 of the 1983 Act provides:
(1) A person is entitled to vote as an elector at a local government election in any electoral area if on the date of the poll he -
(a) is registered in the register of local government electors for that area;
(b) is not subject to any legal incapacity to vote (age apart);
(c) is a Commonwealth citizen, a citizen of the Republic of Ireland or a relevant citizen of the Union; and
(d) is of voting age (that is, 18 years or over).
Section 4 provides:
(3) A person is entitled to be registered in the register of local government electors for any electoral area if on the relevant date he-
(a) is resident in that area;
(b) is not subject to any legal incapacity to vote (age apart);
(c) is a qualifying Commonwealth citizen, a citizen of the Republic of Ireland or a relevant citizen of the Union; and
(d) is of voting age.
…
(6) In this section-
… 'qualifying Commonwealth citizen' means a Commonwealth citizen who either—
(a) is not a person who requires leave under the Immigration Act 1971 to enter or remain in the United Kingdom, or
(b) is such a person but for the time being has (or is, by virtue of any enactment, to be treated as having) any description of such leave;
… 'the relevant date', in relation to a person, means-
(a) the date on which an application for registration is made... by him...
Residence is covered by section 5:
(1) This section applies where the question whether a person is resident at a particular address on the relevant date for the purposes of section 4 above falls to be determined for the purposes of that section.
(2) Regard shall be had, in particular, to the purpose and other circumstances, as well as to the fact, of his presence at, or absence from, the address on that date.
For example, where at a particular time a person is staying at any place otherwise than on a permanent basis, he may in all the circumstances be taken to be at that time-
(a) resident there if he has no home elsewhere, or
(b) not resident there if he does have a home elsewhere.
The Representation of the People (England and Wales) Regs 2001[18] ('the 2001 Regs'), Reg. 26, requires a person applying for registration as an elector to state in his application (inter alia) the address in respect of which he applies to be registered and 'at which he is resident on the date of the application' and to sign a declaration that the particulars are true.
Thus in order for an elector lawfully to vote at a local election for a particular local authority ward, he must meet the eligibility criteria and have a 'residence' within the boundaries of the Ward. A temporary visitor cannot lawfully register and vote. Similarly someone who, in the words of s 5 has 'a home elsewhere' cannot put himself on the register of a ward for the purposes of an election without residing in that ward. Relatives from abroad who are over in England for a short holiday cannot lawfully register and vote.
Consequently, the device of moving individuals (even if otherwise eligible to vote somewhere else) into a property shortly before an election, registering them to vote and moving them out immediately after the election constitutes a clear breach of the residence qualification. Those people are not 'resident' in any sense of the word and, in the vast majority of cases, will be found to have had a 'home elsewhere'. It goes without saying that, if such persons only pretend to move in for the purpose of being registered and voting, and do not set foot in the premises, their registration is undeniably fraudulent.
In this context, it should be noted that under s 13D(1) of the 1983 Act, providing to a registration officer any false information for any purpose connected with the registration of electors is a criminal and thus an electoral offence.
Summary of the position concerning ballot fraud
Where a non-existent person is registered on the electoral register, anyone who casts the vote of that person, whether in person or by post, commits the offence of personation under s 60.
Where a person who does exist but who does not reside at the address stated (or who would be ineligible to vote even if he did so reside) is entered in the register, then
a) if his vote is cast by someone else, that person commits personation;
b) if he casts the vote himself, he is guilty of an offence under s 61(1).
If a person is legitimately registered at two addresses within the same electoral area and casts both votes, he is guilty of double voting contrary to s 61(2): furthermore if one of the addresses is not legitimate because he does not reside there, then the vote cast from that address would also amount to an offence under s 61(1). If that person induced someone else to cast one of his two votes while he cast the other, then both he and the user of the second vote would be guilty of personation in respect of that second vote.
Inducing a genuine voter to hand over the documents necessary to register a postal vote in order to complete the application for a postal vote with false particulars and subsequently to use the postal vote supplied is a corrupt practice under s 62A.
Inducing a postal voter to hand over a completed Personal Voting Statement ('PVS') and a blank ballot paper and subsequently completing the ballot paper and submitting the PVS and ballot to the Returning Office constitutes personation under s 60 and an illegal practice under s 65.
Intercepting a completed postal ballot and altering the votes shown on the ballot paper is an illegal practice contrary to s 65.
Making false statements about a candidate
This is a relatively unusual ground for setting aside an election. The relevant parts of s 106 read as follows:
(1) A person who, or any director of any body or association corporate which-
(a) before or during an election,
(b) for the purpose of affecting the return of any candidate at the election,
makes or publishes any false statement of fact in relation to the candidate's personal character or conduct shall be guilty of an illegal practice, unless he can show that he had reasonable grounds for believing, and did believe, the statement to be true.
(2) A candidate shall not be liable nor shall his election be avoided for any illegal practice under subsection (1) above committed by his agent other than his election agent unless-
(a) it can be shown that the candidate or his election agent has authorised or consented to the committing of the illegal practice by the other agent or has paid for the circulation of the false statement constituting the illegal practice; or
(b) an election court find and report that the election of the candidate was procured or materially assisted in consequence of the making or publishing of such false statements.
(3) A person making or publishing any false statement of fact as mentioned above may be restrained by interim or perpetual injunction by the High Court or the county court from any repetition of that false statement or of a false statement of a similar character in relation to the candidate and, for the purpose of granting an interim injunction, prima facie proof of the falsity of the statement shall be sufficient.
(4) . . .
(5) …
(6) A candidate shall not be liable, nor shall his election be avoided, for an illegal practice under subsection (5) above committed by his agent other than his election agent.
The first point to note is that it is an offence and an illegal practice for anyone to make a false statement about a candidate under s 106(1). The person making the statement does not need himself to be a rival candidate or otherwise concerned in the election.
The normal rule, however, that a candidate is responsible for the defaults of his agents is limited in the case of s 106 by s 106(2). If the false statement is made by the candidate himself or his election agent, then, clearly, he remains liable for it. In cases where the statement is made by his agents in the wider sense of the term, it must be shown that
a) the candidate or his election agent authorised or consented to the making of the statement; or
b) the candidate or his election agent paid for the circulation of the statement; or
c) the court is satisfied that the making or publishing of the statement 'procured or materially assisted' the election of the candidate'.
The court does not need to consider these provisions in detail because it is common ground in this case that the statements about Mr Biggs of which the Petitioners complain were made or published by Mr Rahman or his election agent Mr Choudhury. It is also a common ground (and commented upon by Mr Penny) that Mr Biggs did not avail himself of the right to apply for an injunction restraining repetition under s 106(3).
What then are the ingredients of the offence?
a) the statement must relate to a 'candidate';
b) it must be a statement of fact
c) in relation to his personal character or conduct;
d) it must be made for the purpose of affecting the return of the candidate;
e) it may be made 'before or during' the election.
If these matters are proved, the onus is then on the maker of the statement[19] to show that
a) he genuinely believed the statement to be true and
b) he had reasonable grounds for that belief.
The first question is thus: who is a 'candidate'? Considerable stress was placed by Mr Penny on s 118A of the 1983 Act[20] which is headed 'Meaning of Candidate'.
The relevant parts of s 118A read:
(1) References to a candidate in this Part[21] of this Act shall be construed in accordance with this section (except where the context otherwise requires).
(2) ...
(3) A person becomes a candidate at an election under the local government Act-
(a) on the last day for publication of notice of the election if on or before that day he is declared by himself or by others to be a candidate at the election, and
(b) otherwise, on the day on which he is so declared by himself or by others or on which he is nominated as a candidate at the election (whichever is the earlier) ...
This is more precise than the provision it replaced – s 118 of the original 1983 Act –
"candidate" ... in relation to an election under the local government Act, means a person elected or having been nominated or having declared himself a candidate for election, to the office to be filled at the election
The effect of s 118A seems to be that, if a person has declared himself (or been declared) as a candidate, his candidature commences on the 'last day for publication of notice of the election'. If between that date and nomination he declares himself (or is declared), then his candidature commences on the earlier of the date of declaration and the date of formal nomination. Either way, a person cannot be a 'candidate' as defined by s 118A earlier than the 'last day for publication of notice of the election'.
In the present case, the 'last day for publication of notice of the election' was (by common consent) 14 April 2014. Mr Penny therefore argued that, for the purposes of s 106,
a) a false statement could only be made about a 'candidate';
b) Mr Biggs only became a 'candidate' on the 'last day for publication of notice of the election' (14 April) and thus
c) only statements made about Mr Biggs on or after 14 April fell to be considered under s 106.
That said, this argument would not by itself dispose of the Petitioners' case under s 106 because Mr Penny accepted that press releases issued by Mr Rahman and Mr Choudhury on 15 April and 23 April 2014 would come within the relevant period (although, of course, he disputed that those press releases were contrary to s 106). It would mean, however, he argued, that any press release or other communication made by Mr Rahman or Mr Choudhury prior to 14 April 2014 could not contravene s 106 and must not therefore be taken into consideration.
Does the definition of a candidate under s 118A restrict the ambit of s 106? There is no doubt that the draftsmen of the 2000 Act which inserted 118A were not directing their minds to the application of s 106. The main purpose of s 118A, as the explanatory note to the 2000 Act indicates was to fix with precision the period during which the rules relating to candidates' expenses were to apply. Nevertheless, as s 118A applies to the whole of Part II of the 1983 Act and thus to s 106, it can be said that a section drafted for one purpose has affected a section not intended to be affected whether the draftsmen wanted to or not.
Were Mr Penny's argument to be correct, it would lead to very unfortunate consequences. It would mean that s 106 had to ignore the fact that, for wider purposes, a person is usually declared as a candidate well before the 'last day for publication of notice of the election' (or, in the case of a Parliamentary election, the dissolution of Parliament). In the current case it was obvious from (at the latest) mid-2013 that Mr Rahman would stand for re-election to the Mayoralty and by that time Mr Biggs had already been adopted and declared as the official candidate for the Labour Party. The restricted meaning sought to be placed on s 106 in the light of s 118A would mean that nothing these gentlemen said about each other, however false or scurrilous, would attract the sanctions of s 106 or entitle the victim of the calumny to apply to an injunction under s 106(3). The person defamed would thus be much worse off than he would have been prior to the 2000 reform because, prior to that, he would have been a 'candidate' from the moment he had declared himself as such.
Secondly, of course, it would mean that, on the day before the 'last day for publication of notice of the election', one declared candidate could publish a gross falsehood about another declared candidate (for example that he had been convicted of some offence meriting real public disgust, such as child abuse). This could cause a substantial number of electors to refuse to vote for the defamed candidate with the result that his traducer is elected but the former would have no redress under the s 106 of the 1983 Act. Common sense would revolt against such a construction of s 106 unless the wording of ss 106 and 118A forced the court into such a position.
In the event, I consider that Mr Penny's argument, though cogently reasoned, is wrong. The key words in s 118A are 'except where the context otherwise requires' and the context of s 106 clearly does so require. Section 106 covers statements made 'before and during an election'. Now, 'during an election' is clearly intended to cover the period between the dissolution of Parliament in the case of a Parliamentary election or the 'last day for publication of notice of the election' in the case of a local election and the day of the poll itself. That period is thus coterminous with the period during which, for the purposes of election expenses and the like, a person is a 'candidate' within s 118A. If, therefore, a relevant statement for the purposes of s 106 is capable of being made 'before' this period, it must be capable of being made before the date on which a person becomes a 'candidate' within s 118A.
Furthermore, the wording of s 106(1)(b) is deliberately wide: 'for the purpose of affecting the return of any candidate at the election'. Although s 106 usually refers to statements made to the detriment of a candidate, the wording is wide enough to encompass a false statement made in favour of a candidate (for example, that he was a substantial philanthropist or had been awarded a medal for bravery) which might affect his electoral chances, albeit positively rather than negatively.
Under the definition of 'candidate' existing prior to 2000, there was no apparent conflict between s 106 and what was then s 118. A person who had declared himself a candidate was a candidate for the purposes of s 106 and that was that. This position has been preserved, perhaps by the back door, by the insertion of the words 'except where the context otherwise requires' into s 118A.
Thus, in my judgment, Mr Biggs was a candidate from the time he was formally selected as the Labour Party candidate and declared himself as a candidate for the 2014 Mayoral election.
What, however, if this is a misreading of ss 106 and 118A and that a court can only have regard to statements made about a candidate in the narrow period immediately preceding polling day? Would this require the court to disregard all that had gone before? Clearly not. Statements, even if made within the limited period contended for, must be regarded in context. If the context is that those statements are simply the latest statements in a long-running campaign to publish falsehoods about the candidate, the court can and should view the statements within the prescribed period in the context of the campaign as a whole.
To take a simple example: if, in the week before the start of the period, Candidate A publishes a press release containing a false statement about Candidate B and a week after the start of the period says 'I stand by everything I have said about Candidate B', the court must view the later statement in the context of the former and treat is as repeating by reference or incorporation the earlier falsehood.
If, therefore, the court were to conclude in the present case that there had been a campaign mounted by Mr Rahman and Mr Choudhury against Mr Biggs involving the repetition of the same falsehoods both before and after the 'last day for publication of notice of the election', the court would have to take the statements made after that date in the context of the campaign as a whole and not in isolation.
In that event, the question whether the effect of s 118A is to restrict the ambit of s 106 to the period when a person is a 'candidate' for the limited purposes of s 118A would become somewhat academic because the earlier statements would form part and parcel of the campaign as a whole.
The next requirement is for the statement to be a statement of fact relating to the 'candidate's personal character and conduct'. This was considered by both the Election Court and the Divisional Court in Woolas. In some ways Woolas was a mirror image of the current case. In the current case, the allegation is that one of the false statements made about Mr Biggs was that he was encouraging extreme racists such as the so-called English Defence League ('EDL'). In Woolas it was said that Mr Woolas (Labour) had accused his Liberal Democrat opponent Mr Watkins of encouraging and seeking the support of extreme Islamist fundamentalists. In the event, the Election Court and the Divisional Court held that the statements made about Mr Watkins had impugned his personal character and conduct and had been false. The Election Court had made these findings about three different statements but the Divisional Court, for reasons that will be explained, agreed with the Election Court that two of the three statements engaged s 106 but differed from that Court as to the effect of the third.
The upshot was that the decision of the Election Court that Mr Woolas had been guilty of an illegal practice was upheld by the Divisional Court. His election was set aside and he was automatically debarred from standing or voting in an election for three years.
The Divisional Court, in a magisterial judgment by Thomas LJ (as he then was) carried out a careful analysis of the reported cases on s 106 of the 1983 Act and its predecessors back to 1895 when the provision was introduced. The Court drew a distinction between statements made about a candidate in his political capacity and those made about his personal character and conduct. The Court accepted, however, that a statement might start out as being purely political but might go further and attack the candidate's personal character.
This is well illustrated by the Divisional Court's own findings as to the statements made. The first statement considered was one that Mr Watkins had reneged on a promise to live in the constituency. Disagreeing with the Election Court, the Divisional Court held that, although this statement did carry with it the obvious imputation that Mr Watkins was an untrustworthy man who did not scruple to break promises, this was a matter relating to his political position not his personal character. The Court pointed out that politicians are frequently accused (fairly or unfairly) of going back on promises made and that to treat these accusations as coming within s 106 would be a substantial curtailing the right of free political debate. Consequently, although this statement was false, it did not qualify for consideration under s 106.
The two other statements considered amounted to an accusation that Mr Watkins was not only 'wooing' the Islamic extremist vote but was prepared 'to condone threats of violence in pursuit of political advantage'[22]. In respect of one of the statements[23], the Court found:
that Mr Watkins had not rejected the endorsement of him by those who advocated violence and was refusing to condemn their threats of violence, this was again a statement that Mr Watkins was a man whose personal character was such that he refused to condemn threats of violence. In the same way as the statement in "The Examiner[24]" it ceased to be a statement about the political support he was wooing, and became a statement about his personal character as a man who refused to condemn threats of violence[25].
Thomas LJ went on to say[26]:
There is in our judgment a very significant difference between a statement that goes to the political conduct of a candidate and one that goes beyond it and says something about his personal character. We can think of no reason why Parliament cannot have intended that, where a statement was made about the personal character or conduct of a candidate, it did not intend due care to be exercised. Freedom of political debate must allow for the fact that statements are made which attack the political character of a candidate which are false but which are made carelessly. Such statements may also suggest an attack on aspects of his character by implying he is a hypocrite. Again, imposing a criminal penalty on a person who fails to exercise care when making statements in respect of a candidate's political position or character that by implication suggest he is a hypocrite would very significantly curtail the freedom of political debate so essential to a democracy. It could not be justified as representing the intention of Parliament. However, imposing such a penalty where care is not taken in making a statement that goes beyond this and is a statement in relation to the personal character of a candidate can only enhance the standard of political debate and thus strengthen the way in which a democratic legislature is elected.
This Court has thus gratefully adopted and applied the distinction laid down in Woolas, a decision, of course, binding upon it.
Woolas is also very helpful as to the interaction of s 106 and Article 10 of the European Convention on Human Rights which enshrines the principle of freedom of speech. The Divisional Court was not persuaded that s 106 was incompatible with Article 10 – indeed it was not argued in such stark terms.
The Divisional Court rejected any suggestion that Art 10 would grant immunity to a statement that was made by someone who knew that the statement was false or did not believe it to be true, for such a statement would be dishonest. The Court held[27]
The right of freedom of expression [under Art 10] does not extend to the publishing, before or during an election for the purpose of affecting the return of any candidate at an election, of a statement that is made dishonestly, that is to say when the publisher knows that statement to be false or does not believe it to be true. It matters not whether such a statement relates to the political position of a candidate or to the personal character or conduct of a candidate when the publisher or maker makes that statement dishonestly. The right to freedom of expression under article 10 does not extend to a right to be dishonest and tell lies, but section 106 is more limited in its scope as it refers to false statements made in relation to a candidate's personal character or conduct.
What, though, of statements made by someone who believes them to be true but has no reasonable ground for that belief, a situation characterised by the Divisional Court as one of negligence as opposed to dishonesty? The Court did not go so far as to hold that Art 10, so to speak, trumped s 106 in such a way as to remove from the ambit of the section all statements made honestly but negligently. The answer was much more nuanced. The Art 10 right to freedom of speech is to be balanced against the candidate's right to reputation under Art 10(2). The court must make what Thomas LJ calls a 'value judgment'[28] and act proportionately.
If the manner in which a false statement relates to the personal conduct or character of the candidate is in reality insubstantial, though on its ordinary reading s 106 might apply, it may well be inconsistent with Article 10 for a court to construe s 106 as applying to it.
Finally, the statement must be made 'for the purpose of affecting the return of any candidate at the election'. This need not detain us. The statements in the present case were admittedly made for the purpose of dissuading the voters of Tower Hamlets from voting for Mr Biggs.
No apology is made for the lengthy disquisition on the provisions of s 106 of the 1983 Act. The case under s 106 has occupied a great deal of the trial and of the evidence called. Mr Rahman has sought by argument and evidence not simply to establish a genuine and reasonable belief in the truth of the statements complained of but also to establish their essential truth. This part of the Petition can only be satisfactorily disposed of if the Court proceeds from a clear statement of the legal principles engaged by s 106 and applies those principles in accordance with the guidance laid down in Woolas.
Payment of canvassers
Section 111 of the 1983 Act may be considered self-explanatory:
If a person is, either before, during or after an election, engaged or employed for payment or promise of payment as a canvasser for the purpose of promoting or procuring a candidate's election-
(a) the person so engaging or employing him, and
(b) the person so engaged or employed,
shall be guilty of illegal employment.
The Petitioners' allegation is that, in the course of the election, canvassers were spoken to who alleged that they had been paid to canvass for Mr Rahman and THF. If proved, this would be an illegal practice.
Bribery
The relevant parts of s 113 read
(1) A person shall be guilty of a corrupt practice if he is guilty of bribery.
(2) A person shall be guilty of bribery if he, directly or indirectly, by himself or by any other person on his behalf--
(a) gives any money or procures any office to or for any voter or to or for any other person on behalf of any voter or to or for any other person in order to induce any voter to vote or refrain from voting, or
(b) corruptly does any such act as mentioned above on account of any voter having voted or refrained from voting, or
(c) makes any such gift or procurement as mentioned above to or for any person in order to induce that person to procure, or endeavour to procure, the return of any person at an election or the vote of any voter,
or if upon or in consequence of any such gift or procurement as mentioned above he procures or engages, promises or endeavours to procure the return of any person at an election or the vote of any voter.
For the purposes of this subsection--
(i) references to giving money include references to giving, lending, agreeing to give or lend, offering, promising, or promising to procure or endeavour to procure any money or valuable consideration; and
(ii) references to procuring any office include references to giving, procuring, agreeing to give or procure, offering, promising, or promising to procure or to endeavour to procure any office, place or employment; and
(iii) ...
(3) ...
(4) ...
(5) A voter shall be guilty of bribery if before or during an election he directly or indirectly by himself or by any other person on his behalf receives, agrees, or contracts for any money, gift, loan or valuable consideration, office, place or employment for himself or for any other person for voting or agreeing to vote or for refraining or agreeing to refrain from voting.
(6) ...
(7) In this section the expression "voter" includes any person who has or claims to have a right to vote.
Although not incorporated into electoral legislation, it is helpful in this context to compare this section with s 1 of the Bribery Act 2010 ('the 2010 Act'), the current criminal statute on the topic. This Act was much referred to by Mr Penny and it is clearly sensible to see to what extend the two provisions are congruent.
The 2010 Act s 1 reads:
1 Offences of bribing another person
(1) A person ("P") is guilty of an offence if either of the following cases applies.
(2) Case 1 is where--
(a) P offers, promises or gives a financial or other advantage to another person, and
(b) P intends the advantage--
(i) to induce a person to perform improperly a relevant function or activity, or
(ii) to reward a person for the improper performance of such a function or activity.
(3) Case 2 is where--
(a) P offers, promises or gives a financial or other advantage to another person, and
(b) P knows or believes that the acceptance of the advantage would itself constitute the improper performance of a relevant function or activity.
(4) In case 1 it does not matter whether the person to whom the advantage is offered, promised or given is the same person as the person who is to perform, or has performed, the function or activity concerned.
(5) In cases 1 and 2 it does not matter whether the advantage is offered, promised or given by P directly or through a third party.
The 2010 Act is directed to different ends from the 1983 Act. The bribe must relate to the performance of a 'relevant function' though this is widely defined by s 3 and includes 'any function of a public nature'. It is not suggested that bribery under the 1983 Act is coterminous with bribery under the 2010 Act but the latter is useful as to the modern concept of what activities do and do not constitute bribery.
Bribery was the original reason why Parliament decided to hand over the resolution of disputed elections to the courts. In the 19th century and before, bribery was a relatively simple matter of banknotes (or, more probably, sovereigns) being pressed into the greedy hands of voters on their way to the poll, remembering, of course, that, in 1868, the poll was still an open declaration of vote and not a secret ballot. Similarly the class of person likely to be a candidate would normally have at his disposal jobs that could be offered to wavering voters in return for their suffrage.
Clearly, we have long since moved on from those halcyon, though corrupt, days. It would be very rare nowadays to find a candidate handing over cash to individual voters, and employment has become a great deal more complex.
In essence the allegation against Mr Rahman is that considerable money was paid to organisations (including media organisations) operating within the Bangladeshi community by way of grants, with the corrupt intention that those who belonged to or benefited from those organisations would be induced to vote for him and for THF.
Consequently what is alleged is potentially covered by s 113(2)(a): 'directly or indirectly' 'gives any money ... to or for any other person in order to induce any voter to vote or refrain from voting' and s 113(2)(c): 'directly or indirectly' 'makes any such gift or procurement as mentioned above to or for any person in order to induce that person to procure, or endeavour to procure, the return of any person at an election or the vote of any voter'.
Mr Penny is surely right to argue that bribery under s 113 of the 1983 Act involves proof of intention: recklessness (a fortiori negligence) would be insufficient. The intention must be that of the person paying or causing the money to be paid over[29]. In this case the intention would have to be that of Mr Rahman or his agents.
The bribe must operate on the mind of the person bribed at the time of the election[30] and, of course, it is open to the briber to withdraw the offer of the bribe before polling day. Clearly the longer the period of time that elapses between the payment of the alleged bribe and the election itself, the more difficult it becomes to prove a corrupt intention to bribe voters on the part of the briber and the requisite effect on the mind of the person bribed.
Nevertheless, as a matter of law, it is open to a court considering s 113 to hold that a payment of a sum of money to an organisation made with the intention of inducing the members or beneficiaries of that organisation to vote in a particular way is capable of amounting to a bribe contrary to the section. Whether that can be established in the current case is another matter and that will be discussed at the appropriate place in this judgment.
Treating
Treating, like bribery, was once an election offence at common law but is now made an offence by s 114 of the 1983 Act. Also like bribery, it was a regular feature of 18th and 19th century elections, made possible by a limited electorate and the absence of a secret ballot. In essence, treating consists of corruptly plying electors with food and drink to obtain their votes and is amusingly (though accurately) portrayed by Dickens in Pickwick Papers when Mr Pickwick attends the Eatanswill Election.
Section 114 provides
(1) A person shall be guilty of a corrupt practice if he is guilty of treating.
(2) A person shall be guilty of treating if he corruptly, by himself or by any other person, either before, during or after an election, directly or indirectly gives or provides, or pays wholly or in part the expense of giving or providing, any meat, drink, entertainment or provision to or for any person-
(a) for the purpose of corruptly influencing that person or any other person to vote or refrain from voting; or
(b) on account of that person or any other person having voted or refrained from voting, or being about to vote or refrain from voting.
(3) ...
The two key elements are:
a) the treating must be done corruptly, in the sense that it is done intentionally, knowing that what was being done was wrong and with the object of inducing votes;
b) at least one person 'treated' should have been corrupted and induced to vote for the candidate for whose benefit the treating was provided.
Undue influence: general
The offence globally referred to as 'undue influence' is alleged in various forms in the Petition. These allegations may, however, be roughly divided into two categories: undue spiritual influence and misconduct of several types at polling stations.
Undue influence is contained in s 115 of the 1983 Act:
(1) A person shall be guilty of a corrupt practice if he is guilty of undue influence.
(2) A person shall be guilty of undue influence--
(a) if he, directly or indirectly, by himself or by any other person on his behalf, makes use of or threatens to make use of any force, violence or restraint, or inflicts or threatens to inflict, by himself or by any other person, any temporal or spiritual injury, damage, harm or loss upon or against any person in order to induce or compel that person to vote or refrain from voting, or on account of that person having voted or refrained from voting; or
(b) if, by abduction, duress or any fraudulent device or contrivance, he impedes or prevents, or intends to impede or prevent, the free exercise of the franchise of an elector or proxy for an elector, or so compels, induces or prevails upon, or intends so to compel, induce or prevail upon, an elector or proxy for an elector either to vote or to refrain from voting.
It will be recalled that undue influence is covered by s 158 which is discussed above and that s 158 affords a candidate a defence where the undue influence is committed by his agents without his knowledge or consent.
Undue influence within s 115 is linked to the law relating to undue influence developed in civil cases whereby transactions such as contracts, gifts or wills may be set aside on proof that undue influence has been exercised on one of the parties to the transaction.
As framed in s 115, the corrupt practice of undue influence includes both undue influence strictly so called, where the mind of the voter is overborne by moral or religious pressure (or by deception) on the part of someone perceived by the voter to possess authority, and what may be better characterised as duress, where physical means are used to prevent or impede the voter from exercising a free choice. The Petitioners' case falls within both categories. It is said that undue religious influence was exercised so as to convince Muslim voters that it was their religious duty to vote for Mr Rahman and THF, and it is also said that physical intimidation occurred at polling stations (along with other misconduct at polling stations).
At this point in the judgment, I propose to carry out a measure of pruning. Earlier I listed the allegations made by the Petitioners under s 115 as consisting of:
a) undue influence involving the threat of spiritual injury;
b) undue influence involving intimidation at polling stations, voters going into polling booths together or leaving campaign material inside polling booths;
c) undue influence involving the misleading of voters by claiming that Mr Rahman was a Labour Party candidate.
Bearing in mind the burden and standard of proof relating to corrupt practices, I could not be satisfied that the allegations of voters going into polling booths together or of THF supporters leaving campaign material inside polling booths were capable of amounting to undue influence and I do not propose to discuss the extent to which these practices might or might not have been within s 115.
Similarly the evidence relating to voters being told that Mr Rahman was the Labour Party candidate was much too flimsy to amount to a viable case of 'fraudulent device' contrary to s 115(2)(b). I do not propose to discuss this allegation further.
The two aspects of undue influence which do merit serious discussion of the law are:
a) spiritual influence;
b) intimidation at polling stations.
Undue influence: 'spiritual injury'
The court was aware, and, even if it had not been, it would have been frequently reminded by counsel, that election cases involving allegations of spiritual influence have been very rare since 1900. Even before that time, cases of spiritual influence in mainland Britain were few and far between. It is very tempting (and Mr Penny did not shrink from the role of tempter) to regard undue spiritual influence as a historical anomaly, designed to counter the baleful influence of the Roman Catholic clergy of (largely the southern counties of) Ireland over elections in the late 19th century. Can it be supposed, ran the rhetorical question, that undue spiritual influence can have any meaning in the secular society of 21st century Britain?
The court must, however, resist the siren voices. What is now s 115 has a long legislative history. On each occasion that election law has been consolidated and updated its provisions have been re-enacted. Section 115 is itself a re-enactment of the Representation of the People Act 1949 s 101 so that it can be said that these provisions have been considered by Parliament at least twice since the Second World War and it was not thought appropriate to delete reference to spiritual injury. There have also, of course, been several Acts of Parliament, including within the last decade, which have amended or added to the 1983 Act. This part of s 115 cannot properly, therefore, be considered a dead letter or obsolete.
It should also be stated that the general rule of English law is that, if a statutory provision is considered and construed by the courts in reported cases, then when that provision comes to be re-enacted or consolidated, Parliament has a choice. It can either reject the construction placed on the provision by the courts and replace the provision with one which represents Parliament's true intentions or it can re-enact the provision unchanged. If Parliament chooses the latter course, it is taken to have adopted the provision with its judicial construction, so to speak, built in. As, therefore, the provision in relation to undue spiritual influence has been carried forward from statute to statute for well over a century, Parliament must be assumed to have approved the construction placed on it by the courts during that period.
Furthermore, before considering the Irish cases from the 19th century, it is necessary to stress that the law relating to undue spiritual influence is not and cannot be construed as applying only to the Christian religion (a fortiori only to the Roman Catholic branch of it). Patently in the United Kingdom of the 1880s and 1890s no religion other than some form of Christianity was sufficiently represented in any part of the country to be psephologically significant. It is therefore inevitable that the decided cases should arise out of instances where the spiritual influence alleged was that of the Christian church. In considering those cases, therefore, it is necessary to strip out those elements which are peculiar to Christianity and, more particularly, to Roman Catholicism, in order to ascertain the basic legal principles being applied by the courts.
Accordingly, just as undue spiritual influence under s 115 of the 1983 Act is not confined to Christianity, it is equally not confined to religions which have the Christian sacraments or an equivalent, the threat of withdrawal or refusal of which can be used by clergy to influence voters. Similarly, it is not an essential ingredient of the section that the spiritual influence should be that of a monotheistic religion or of a religion which contains a belief in an afterlife where punishments and rewards are meted out for conduct in this life. In an appropriate case undue spiritual influence could be created by what some might regard as a cult, such as Mr Moon's 'Unification Church' or even 'New Age'.
When the problem of clergy influencing votes first arose, the courts were minded to take a relatively indulgent view. In County of Longford[31] Fitzgerald J said:
In the proper exercise of that influence on electors, the priest may counsel, advise, recommend, entreat, and point out the true line of moral duty and explain why one candidate should be preferred to another, and may, if he think fit, throw the whole weight of his character into the scale; but he may not appeal to the fears, or terrors, or superstition of those he addresses. He must not hold hopes of reward here or hereafter, and he must not use threats of temporal injury, or of disadvantage, or of punishment hereafter. He must not, for instance, threaten to excommunicate, or to withhold the sacraments, or to expose the party to any other religious disability, or denounce the voting for any particular candidate as a sin, or as an offence involving punishment here or hereafter. If he does so with a view to influence a voter, or to affect an election, the law considers him guilty of undue influence.
By 1892, however, attitudes had hardened, both on the part of the clergy and on the part of judges trying election cases. Outside Ireland, few except historians of 19th century politics now remember Charles Stewart Parnell, the founder and leader of the Irish Parliamentary Party and the standard-bearer of Irish nationalism in the 1880s. Indeed he tends to be remembered more for his fall from grace following a sensational divorce suit brought by his mistress's husband in 1890. At the time, however, Parnell's advocacy of Home Rule and the agitation for land reform through the Land League were hugely controversial. Although the Roman Catholic clergy of Ireland were in general supportive of Home Rule, they were appalled by the conduct of Parnell and none more so than Dr Nulty, the Bishop of Meath.
The General Election of 1892[32] resulted in a number of election cases, particularly in the County of Meath. Both Northern Division of the County of Meath[33] and Southern Division of the County of Meath[34] resulted in the respective elections being set aside on the ground of undue spiritual influence. Dr Nulty, having preached sermons on the topic, issued a pastoral letter which was read out from the altars of the churches in his diocese on 3 July 1892 and, in an interesting echo of the present case, published in the local newspapers. Dr Nulty did not pull any punches. He condemned Parnellism (despite the fact that the unfortunate Parnell had died in 1891) in the most extreme terms:
Now Parnellism strikes at the root, and saps the very foundations of the Catholic faith ... all the successors of the Apostles[35] have solemnly warned and taught their respective flocks that Parnellism was unlawful and unholy, that it was in distinct, direct, and essential antagonism with the principles of Christian morality, and even dangerous to their faith as Catholics, and consequently that they should shun and avoid it. They who refuse to accept that teaching or that principle on the unanimous authority of the whole Irish hierarchy deprive themselves of every rational ground or motive for believing in the truth of any of the other doctrines of religion ... [N]o intelligent or well-informed man can continue and remain a Catholic so long as he elects to cling to Parnellism... I earnestly implore you then, dearly beloved, to stamp out by your votes at the coming election, this great moral, social and religious evil[36].
In Meath South Andrews J provided the court's response to Dr Nulty:
Having spent my life in Ireland, I well know the weight which a since member of the Roman Catholic Church attaches to what emanates from his clergy – the credence he desires to give to their teaching, the trust he reposes in their guidance, and the sanctity with which he regards their sacred office – and I cannot entertain a shadow of doubt that the powerfully written pastoral of the Bishop of Meath was calculated, in this Roman Catholic constituency, to seriously interfere with the free will of the electors in the exercise of their franchise at the late election...
I shall not occupy time in going through the pastoral in detail, and, as has been done so frequently, repeating the passages of it, which plainly threaten with spiritual injury and loss those electors who should vote in support of the Parnellite candidate, and are as plainly directed to induce the electors to refrain from so voting, and to vote for the chosen candidate of the clergy.
Both the Catholic Church's preferred candidates were duly unseated and suffered the pains of a finding of corrupt practices.
What principles emerge from the Irish cases? The first is that, while clergy of all religions are fully entitled, as are all citizens, to hold and to express political views and to argue for or against candidates at elections, there is a line which should not be crossed between the free expression of political views and the use of the power and influence of religious office to convince the faithful that it is their religious duty to vote for or against a particular candidate. It does not matter whether the religious duty is expressed as a positive duty – 'your allegiance to the faith demands that you vote for X' – or a negative duty –'if you vote for Y you will be damned in this world and the next'. The mischief at which s 115 is directed is the misuse of religion for political purposes. A strong case can be made out for saying that the rule against misuse of religion is even more necessary in a country which prides itself on being a secular democracy than it might be in a state where there is a universal and dominant religion which is part of the fabric of society. It is noticeable that other democratic countries, such as France, operate rules against the misuse of religious influence on electors.
The second thing we get from the Irish cases is that the question of spiritual influence cannot be divorced from a consideration of the target audience. Time and again in the Irish cases it was stressed that the Catholic voters were men of simple faith, usually much less well educated than the clergy who were influencing them, and men whose natural instinct would be to obey the orders of their priests (even more their bishops). This principle still holds good. In carrying out the assessment a distinction must be made between a sophisticated, highly educated and politically literate community and a community which is traditional, respectful of authority and, possibly, not fully integrated with the other communities living in the same area. As with undue influence in the civil law sphere, it is the character of the person sought to be influenced that is key to whether influence has been applied.
Very little argument was directed to the potential effect of Art 10 of the ECHR on this aspect of electoral law or as to its interaction with Art 9 (religious freedoms) and Art 3 of the Protocol (free and fair elections). The court proposes to adopt the approach of the Divisional Court to Art 10 in Woolas discussed above. As Thomas LJ points out, the right of free speech in Art 10 is not absolute: it is subject to 'such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society'. In applying Art 10, therefore, a balance must be struck between the right of free speech itself and the competing rights and obligations that arise in a democratic society.
In the case of undue spiritual influence, the balance is very well articulated by the judgment of Fitzgerald J in Longford (above) albeit written some three-quarters of a century before the ECHR was even contemplated. The priest or other religious authority has the right of the ordinary citizen to hold and express political views and the law will protect that right. There is, as has been said, a line beyond which the priest may not go and that line is reached when the priest uses his religious and moral influence to attempt to 'appeal to the fears, or terrors, or superstition of those he addresses', to 'hold hopes of reward here or hereafter', or to 'denounce the voting for any particular candidate as a sin, or as an offence involving punishment here or hereafter'.
I shall examine the claims of undue spiritual influence later in this judgment but at this stage it is sufficient to say that, if the principles laid down by the decided cases are applied, it is quite open to a court to find that there has been undue spiritual influence even in the Britain of May 2014. Equally, in applying those principles, it is irrelevant which religion is engaged, provided that the tests are met.
Undue influence: intimidation
The word 'intimidation' itself does not appear in s 115 of the 1983 Act. It does occur, however, in s 164, but in a somewhat negative way. Intimidation per se was undoubtedly a ground for questioning an election at common law and was much invoked in the 19th century[37]. Section 164 (the general corruption section) covers 'corrupt or illegal practices or illegal payments, employments or hirings committed in reference to the election' but provides in subsection (2) that 'An election shall not be liable to be avoided otherwise than under this section by reason of general corruption, bribery, treating or intimidation'.
Unless, therefore, intimidation amounts to a corrupt or illegal practice under some other section of the 1983 Act, it cannot be invoked in support of a case brought under s 164.
Intimidation must thus come within the wording of s 115 in order to amount to a corrupt practice.
Stripping away the words that are not apt to apply to intimidation, the relevant paragraphs of s 115(2) would read:
(a) if he, directly or indirectly, by himself or by any other person on his behalf, makes use of or threatens to make use of any force, violence or restraint, or inflicts or threatens to inflict, by himself or by any other person, any temporal … injury, damage, harm or loss upon or against any person in order to induce or compel that person to vote or refrain from voting, …
(b) if, by … duress …, he impedes or prevents, or intends to impede or prevent, the free exercise of the franchise of an elector … or so compels, induces or prevails upon, or intends so to compel, induce or prevail upon, an elector …either to vote or to refrain from voting.
Under paragraph (a) therefore there must be the use (or threat of the use) of force, violence or restraint, or the infliction (or threat of infliction) or injury, damage or harm, and this must be directed towards inducing or compelling a person to vote or abstain. The requirements of paragraph (b) are perhaps somewhat less onerous but even here it must be shown that some person by duress (ie physical duress) impedes or prevents (or intends to do so) the 'free exercise of the franchise of an elector'.
Consequently the section requires a high degree of physical intimidation to be applied to the voter, which is perhaps why intimidation cases under s 115 have been relatively rare in the 20th and 21st centuries. It is not necessary for the person complaining of intimidation to prove an actual assault or the physical barring of electors from polling stations. If the level of force or violence is such as induce a voter to change his mind as to his vote or to refrain from voting altogether, the section is satisfied. It is not essential to prove that any individual voter did change his vote because s 115(2)(b) makes an intention to induce the voter so to act an offence. Nevertheless, the intimidation must reach quite a high level before s 115 is engaged. Whether the situation at the polling stations reached that level will be examined later in this judgment.
From what has been said above it will be apparent that the issues raised by this Petition comprise several electoral offences (including general corruption under s 164) and the law relating to those offences is often complex. It is now necessary to deal with the history of the events leading up to this Petition and to examine whether the facts proved do establish one or more of the offences alleged.
BACKGROUND
In dealing with the facts in this case, the court will employ the terms 'Bangladeshi' and 'Bengali' to describe residents of Tower Hamlets where they or their families originated in what is now Bangladesh and are thus what may be described as being of 'Bangladeshi heritage'. These were the terms universally used in the Petition by the parties and the witnesses, and they cover, of course, both those born in Bangladesh and those born in Britain to Bangladeshi families.
It is a truism to say that Tower Hamlets is a multi-racial community. The area now covered by the London Borough Hamlets has always been one of the most multi-racial areas, if not the most multi-racial area of the United Kingdom. In the Middle Ages, weavers from northern Europe moved into the parishes east of the City of London and their numbers were greatly increased by the influx of French Huguenots following the Revocation of the Edict of Nantes in 1685. Although weaving declined in the 18th century, the area retained its connection with cloth and the clothing industry and, in the 19th century, Jews moved into the Hamlets, refugees from persecution in Central and Eastern Europe, a high proportion of whom were engaged in that industry.
Along the Thames, the development of the Port of London took off in the 18th century with the beginning of the construction of the huge docks that dominated the area for two centuries. Like all ports, the Thames-side area became very cosmopolitan, with South Asian seamen (known as Lascars) and Chinese moving into docklands. In the 19th century, in common with many port areas at the time, Tower Hamlets acquired an unenviable reputation for poverty and crime, culminating in the notorious murders perpetrated in Whitechapel by 'Jack the Ripper' in 1888.
Twenty-first century Tower Hamlets contains a wide social mix, with areas of relative deprivation in the poorer parts of the Borough and areas of middle-class affluence, particularly in the area of the former St Katherine's Dock. Canary Wharf is, of course, one of the major financial centres not only of London but of the world. The Borough also contains, of course, the Tower of London itself.
It is true to say that the area has a long history of electoral problems. A disproportionate number of reported election cases relate to Tower Hamlets and it is significant that the First Respondent's list of authorities contains two Tower Hamlets cases out of a total of 27, the earlier being back in 1895. The Metropolitan Borough Councils which were incorporated into Tower Hamlets when the Greater London Council was formed in 1965 (Bethnal Green, Poplar and Stepney) also had a history of political conflict with central Government, particularly the Borough of Poplar which, under George Lansbury, led what was described as a 'rates revolt', and the Borough of Stepney, of which Clement Atlee, later Prime Minister, was Mayor in the 1920s.
Tower Hamlets has had a Bengali population since at least the 18th century and by the 1920s there was a significant Bengali population, caused by Bengali seaman being paid off, or jumping ship, in London's docks, particularly in the aftermath of the Great War. The main influx of people from East Pakistan (after 1971, Bangladesh) came in the 1960s and 1970s. Of those immigrants, the majority hailed from the Sylhet Division in the north-east of Bangladesh, famous for its tea plantations[38]. The language (other than English) spoken by almost all the Bangladeshi community is Bengali, with many using the Sylheti dialect. Almost universally Bangladeshis adhere to the Muslim faith.
Bangladeshis are not the only Muslim residents of Tower Hamlets but they make up the overwhelming majority. There are other Muslim communities (notably Somalis) but their numbers are not particularly significant from an electoral perspective.
The Borough is believed to be the local authority area with the highest percentage of Muslims in the United Kingdom. The court was told that today some 35% of the residents are Muslim. Indeed, in the 2011 census 35% said they were Muslim, 27% said they were Christian and 34% said they had no religion or refused to state a religion. The Borough's once thriving Jewish community was down to less than 1%, smaller than the Hindu or Buddhist communities.
The 2011 census showed that the Bangladeshi population of Tower Hamlets was 32% of the total, which compares with the figure of 3% for London as a whole and less than 1% for England. The census reported that 'Tower Hamlets has the largest Bangladeshi population in England'. Residents describing themselves as 'White British' amounted to 31% of the population: black ethnic groups made up 7%. The conclusion of the census was that 'More than two thirds (69 per cent) of the borough's population belong to minority ethnic groups (ie not White British): 55 percent belong to BME (Black and Minority Ethnic) groups and a further 14 per cent from White minority groups'.
These official statistics are relevant to the court's approach to the politics of Tower Hamlets. Whatever may be the position in the rest of London or in the country at large, in Tower Hamlets Muslims in general and Bangladeshis in particular are not in any real sense a 'minority': in both instances they are the largest community in comparison to other religious and ethnic groupings. Although, therefore, Mr Rahman and his associates constantly refer to the Bangladeshi community of Tower Hamlets as if it were a small beleaguered ethnic minority in a sea of hostile racial prejudice, the court must look at the reality of the religious and ethnic makeup of the Borough.
Some things were common ground between the parties and may therefore be approached by the court as being uncontroversial. The first is that the Bangladeshi community is a closely-knit community with a very strong sense of identity and solidarity. The second is that, in general, the community may be described as imbued with a respect for the traditional social framework as it existed in Bangladesh. This is, of course, not universal. There are, no doubt, many (particularly among the young) who reject the traditional ways of the older generation and wish to adopt the more relaxed social mores of the other communities in the Borough. None the less, the traditionalist element in the Bangladeshi community is strong – far stronger than would be the case in, for example, the segment of the population describing themselves as 'White British'.
Thirdly this conservatism (the lower-case letter 'c' is vital in this context) is bolstered by the fact that a significant proportion of Bangladeshis do not speak English as a first language, including Bangladeshis who were born in Britain and, in some cases, whose parents were born in Britain. It seems not uncommon to find residents who are British citizens, fully entitled to vote, but who do not speak English to any real extent. This is not intended as any criticism of the community: it is simply a matter of observable fact. Experience teaches that, in any community, the inability to communicate readily with members of other communities is bound to be more inward-facing. The sense of community cohesion and solidarity is increased but at a cost of increasing alienation from other communities.
Fourthly, and this, too, was not in dispute, a very substantial proportion of the Bangladeshi community is genuinely and devoutly religious, certainly to a far greater extent that would be found in most non-Muslim communities. The court was told that there were some 45 mosques in the Borough and the community is also well-served by clergy. As will be seen, a letter was written to the press, which will be discussed in more detail later, signed by no fewer than 101 imams and religious teachers and it was not suggested that this was the totality of the Muslim clergy within the Borough. It was accepted on both sides that the Muslim community, especially the older, more traditional, members of the community, would tend to treat religious leaders with considerable respect, particularly when pronouncing on matters of faith.
On this topic, it is again right to say that Islam, like many other religions, places considerable emphasis on loyalty and obedience: disloyalty to the faith – a fortiori apostasy – is treated with great seriousness. It would be wrong, therefore, to treat Tower Hamlets' Muslim community by the standards of a secular and largely agnostic metropolitan elite.
The result of all this is that, rightly or wrongly, politicians in Tower Hamlets have tended to regard the Muslim community in general and the Bangladeshi community in particular as potentially forming a relatively coherent voting bloc. A politician who 'secures the Muslim vote' may consider himself well on the way to being elected by an electorate where Muslims represent the largest religious group and account for over one in three of the population. Whether it is fair or unfair of politicians to regard Tower Hamlets' Muslim population as possessing such homogeneity is something which may be debatable but what is not debatable is that that this is precisely how politicians have regarded the Borough's Muslim population in the past. As will be seen, these considerations played their part in the bizarre series of events which led to Mr Rahman being de-selected as the Mayoral candidate of the Labour Party in 2010.
Now it must be emphasised that, in discussing the nature of the Muslim and Bangladeshi communities of Tower Hamlets, what we are concerned with is the mainstream of those communities. No doubt there are in the Tower Hamlets Muslim community, as in other Muslim communities, those who have adopted a very extreme form of Islam and who regard terrorism and acts of violence as being justified in the name of the faith. Throughout Mr Rahman's political career, his political enemies have, from time to time, attempted to suggest that he has links with extreme Islamist organisations and is happy to solicit their votes. As will be seen, this, too played a part in Mr Rahman's deselection in 2010.
It should therefore be stressed that this court has not heard a shred of credible evidence linking Mr Rahman with any extreme or fundamentalist Islamist movement, something he himself has always denied. Such suggested links have played no part in this case and form no part of the court's findings. Accordingly, the only permissible approach is that Mr Rahman is not associated with extreme radical Islam and neither openly nor covertly seeks its support.
HISTORY
Tower Hamlets in the 1990s
Normally an election court is charged with examining events in the immediate run-up to an election. Recently, courts have concentrated on voter fraud which is, inevitably, a last-minute affair. In this case, however, the court has heard a great deal of evidence of political life in the Borough for the last three decades – indeed back to a time well before Mr Rahman entered politics. Much of this ancient history is concerned with the attempt to discredit Mr Biggs.
Sadly, it must be said that the history of events in Tower Hamlets does not show the Labour Party in a favourable light. For much of the period the Tower Hamlets Labour Party was in what was described as some form of 'special measures' which meant in practice that major decisions such as the selection of a candidate for Mayor were taken at regional or national rather than at local level.
All political parties are prone to a degree of in-fighting but this seems to have been carried to considerable lengths in the Labour Party from (at least) the mid-1990s to the present. One of the more surprising aspects of the case has been the willingness of members of the Labour Party, including members of its National Executive Committee ('NEC'), to campaign against the Party and in favour of rival candidates. This has been combined with the willingness, even eagerness, of people who are still members of the Labour Party to attempt to destroy the reputation of the Party's official Mayoral candidate, Mr Biggs, who is currently an official Labour Party member of the London Assembly.
In the early 1990s control of the Borough was in the hands of the Liberal Democrat Party under the name 'Liberal Focus'. It was at this time (1993) that a member of the British National Party ('BNP') called Derek Beackon was elected a councillor for the Millwall ward at a by-election. Beackon was the BNP's first councillor ever. He was not particularly effective, largely because he was shunned by all the other councillors and vilified by the media, and he was duly unseated when, a few months later, in 1994 there was a 'whole council' election. No further member of the BNP or of any far right racist party has ever thereafter come remotely near winning a seat in the Borough and, by 2014, the BNP had for many years been a completely spent force in Tower Hamlets.
It is fair to say, however, that Beackon's election was accorded a reaction bordering on hysteria both among other politicians in Tower Hamlets and in the national and local media. It was used, for decades afterwards, to justify the claim that racism stalked the Borough and that only constant vigilance would prevent Tower Hamlets from becoming a fascist, not to say Nazi, outpost in the East End. As will be seen the BNP and later the EDL have proved a very useful bogeyman with which to affright the citizens, especially the non-white citizens, of Tower Hamlets. In reality the political support for these organisations has long been negligible, verging on the non-existent, and the court was not told that either organisation had even contested a seat in 2010 or 2014.
The election of 1994, which saw the end of Mr Beackon's brief and inglorious career as a councillor, proved a triumph for the Labour Party which was returned with a working majority. Mr Biggs had been the leader of the Party in opposition and even his political adversaries conceded, albeit reluctantly, that he was entitled to the credit for mustering the electoral forces to unseat Beackon and, as it turned out, to keep far right extremists off the council from that day to this. In view of the later attempts to brand Mr Biggs a racist, it is significant that, back in 1994, he was seen as the spearhead of the anti-racist movement in the Borough.
If anyone expected, however, that the Labour Party would relish its triumph at the polls and settle down to govern the Borough in accordance with its socialist principles, they would have sadly misjudged the Tower Hamlets Labour Party. Within months of taking office, the Labour Party had split down the middle. Mr Biggs, now Leader of the Council, represented the right wing of the Party (though he himself would say – indeed did say – the 'centre' of the Party) and was faced with a very militant and vocal left wing anxious to displace him.
The Labour takeover of Tower Hamlets resulted in them dismantling some of the administrative structures that had been put in place by Liberal Focus, in particular the administrative division of the Borough into groupings of wards. The details are no longer relevant but this re-organisation of structures necessarily led to a re-organisation of staff, especially at senior levels. Mr Biggs wished to preserve a degree of continuity and was mindful of the requirements of employment law. He therefore proposed that those who had been in senior posts under the former régime should be assured of at least an interview for the new posts which would be needed under the new dispensation. The left, by contrast, wanted to have somewhat of a clear-out of the old staff (as being 'tainted' with their service for the old régime) and their replacement by, one might say, more sympathetic employees. This dispute was, for some reason, referred to as the 'assimilation issue', although, as all parties conceded, it had no connection with assimilation in the sense of members of ethnic or cultural minorities being 'assimilated' into mainstream British life.
There was, however, an inevitable racial angle. The left argued that a wholesale purge of old staff and replacement by new would enable the Council to increase the number of employees recruited from the Bangladeshi community. This meant that what was essentially a dispute about staff re-organisation could be presented by the left as a dispute about race. Anybody who supported Mr Biggs's plan for staff re-organisation could be denounced by the left as racists, trying to keep Bangladeshis from being employed at the Town Hall. Although this dispute was pursued with the utmost personal vituperation, which one has little doubt many in the Party, particularly in the left faction, thoroughly enjoyed, it had, of course, absolutely nothing to do with racism whatsoever. Accusations of racism were the common currency of left/right infighting in the Labour Party but, viewed objectively, none of the participants was remotely racist in any sense that would be understood by a person not in the emotionally over-heated committee rooms in the Town Hall.
As will be seen, a feature of all these left/right disputes is the ubiquity of the phrase 'dog-whistle politics'. The wise folk of the Oxford English Dictionary fight shy of defining this term but as good a definition as any may be found in Wikipedia:
Dog-whistle politics is political messaging employing coded language that appears to mean one thing to the general population but has an additional, different or more specific resonance for a targeted subgroup. The phrase is used only as a pejorative, because of the inherently deceptive nature of the practice and because the dog-whistle messages are frequently themselves distasteful, for example by empathising with racist or revolutionary attitudes. The analogy is to a dog whistle, whose high-frequency whistle is heard by dogs, but is inaudible to humans.
The advantage of the cliché is that one may take a completely innocent, indeed anodyne, statement of a political opponent and claim that it contains a 'coded' message often, as Wikipedia remarks, of a racist nature. It is a cliché much employed by the media-political class but it must be remarked that, in real life, it is usually invoked to accuse political opponents of saying something which they had not said and had had no intention of saying. In short, the 'code' often exists only in the mind of the person crying 'dog-whistle politics' at his adversary.
This political dog-fight, to retain the canine metaphor, within the Labour Party of 1994/5 would probably have been long since forgotten but for a bizarre episode which was exhumed by Mr Rahman's team during the 2014 campaign in circumstances which will be detailed below.
The affair of the bogus fax
In October 1994, as part of the internecine strife in the Tower Hamlets Labour Party, somebody went into a newsagents and used a pay-fax machine to send a fax. This fax purported to have been sent by Councillor Pola Uddin, later Baroness Uddin, who was, at that time, politically associated with Mr Biggs. Though the fax itself has disappeared, it is clear that it contained strongly worded, not to say scurrilous, accusations of racism against Mr Biggs and others of his faction. It was quickly established that Ms Uddin had not been the author of the fax and knew nothing about it. The finger of suspicion was pointed at Councillor Jalal Ahmed and he was made the subject of disciplinary proceedings.
These proceedings polarised the factions. A leading member of the left wing faction was Mr Michael Keith. Pausing there, Mr Keith is one of two people who loom large in this case without either side wanting to call him as a witness[39]. Mr Keith is an academic who was in a relatively junior post in 1995 but has now risen to be a Professor at the University of Oxford and holds, amongst other posts, that of Director of the ESRC Centre on Migration Policy and Society. Mr Keith was a Councillor and a very active member of the Labour group. He took the view that the accusations against Councillor Ahmed were unjustified and that the disciplinary procedures were unfair.
Three days before the disciplinary hearing, on 17 February 1995, Mr Keith wrote a strongly worded letter to all members of the Labour Group and to others, including the local Labour MPs. This was accompanied by a four-page memorandum. At this point it must be stressed that the letter and memorandum were written by Mr Keith in his personal capacity as a Councillor and member of the Labour Group and were directed to persuading those conducting the disciplinary hearing not to take action against Mr Ahmed.
As has been said, Prof Keith was not called to give evidence or to explain these two documents and any criticism that may be made of them is made in the consciousness that their author has had no opportunity to defend them or his position.
Mr Keith, as he then was, engaged in a task familiar to lawyers, namely that of saying that on the one hand it was not proved that Mr Ahmed had sent the hoax fax so he should be 'acquitted' of the charge but, on the other hand, the contents of the hoax fax were entirely justified in any event.
By any standards other than that of political infighting, both the letter and the memorandum would appear to an outside observer to be a little intemperate. Mr Keith accuses senior party members of 'bad faith' and describes the proceedings as 'one of the most disreputable episodes that I have ever come across in over fifteen years of working in the Labour Party'. The memorandum is entirely concerned with what Mr Keith sees as 'coded' messaging. I hope Mr Keith will forgive me if I were to say that the memorandum is a document that could only have been written by a professional academic.
Mr Keith's view of what constituted 'coded' racist references is very much all-embracing. For example, he regarded the term 'Eastenders' as a racist term as connoting only the white inhabitants of the East End, a view which might appear somewhat eccentric to devotees of the popular and long-running soap opera of that name whose cast is far from exclusively Caucasian.
One of the targets of Mr Keith's ire was a leaflet that had been put out by the Liberal Focus team. Entitled 'Focus Fights for Mrs X' it related how an elderly lady living on 'possibly Wapping's most dangerous estate' was, in essence, living in fear of attacks by thugs and nothing was being done to help her. The vice in this leaflet was that it contained a photograph of a large black man in a very aggressive pose. It was said to be the boxer Mike Tyson but this is not easy to verify from the photocopies that remain. At all events, it was described as 'the Mike Tyson leaflet'. It was just about tenable to describe this leaflet as playing to racial fears.
Mr Keith, however, took this as a starting point in an examination of the supposed racism of the Labour Group and, in particular, Mr Biggs's faction of it. As Mr Keith rightly pointed out, what should have been an internal dispute had been externalised by the parties by frequent 'leaks' to the local media. The battle was thus being fought out in the press as well as in the committee room. In October 1994 Mr Biggs had, in an internal memorandum that was immediately leaked to the press, referred to his opponents as 'the loony left' and compared them to the very left wing council of the Borough of Lambeth. 'Loony left' as a term of abuse is now very vieux jeu but in 1995 it was capable of raising hackles. It certainly raised those of Mr Keith.
Mr Keith's memorandum contains the following passage:
In the same way as I believe the Liberals spoke racism through the coded images of the Black boxer (the Mike Tyson leaflet) and the coded language of 'Eastenders' (as a code for whiteness) it is equally the case that the use of the term 'loony leftism' has long been a code in the tabloid press for local authorities that wish to address issues of racism (and also sexism and homophobia). In this context it is proper to see John Biggs' use of the loony leftism accusations in the same light, they cannot be freed from their bigoted connotations, as the East London Advertiser made clear when they subsequently went to town in their usual poisonous way when John Biggs' assimilation memo was 'leaked' to them. In short I would also accuse John Biggs of racism, no more and no less than those who put together the Mike Tyson leaflet or the Labour party equivalent that I shall refer to below.
What this rather extreme passage appears to mean is this: 'Loony Left' is a term of abuse used by tabloid newspapers for left-wing councils. Left-wing councils oppose racism, sexism and homophobia. Ergo, those who use the term 'loony left' are encouraging racism, sexism and homophobia. Ergo, by using the term 'loony left' Mr Biggs has aligned himself with those who encourage racism, sexism and homophobia. Ergo, Mr Biggs is as much a racist as those responsible for the Mike Tyson leaflet. All this was, of course, in the context of a defence of Mr Ahmed on a charge of sending a bogus fax.
The logic of this passage does not survive scrutiny but the passage was the only part of the memorandum in which the accusation of racism is specifically levelled at Mr Biggs. The context makes it clear that Mr Keith is not accusing Mr Biggs of racism in any sense other than his own, very special, sense that the use of the term 'loony left' implies lack of sympathy with those who oppose racism, sexism and homophobia. It could not be said that Mr Keith was accusing Mr Biggs of racism in any sense that would be comprehensible to the man in the street.
Later in his memorandum, Mr Keith mentioned a leaflet produced by the Labour Party itself. This leaflet has also been preserved. It was entitled 'Tower Hamlets Labour News'. Under the title 'A PRISONER IN HER HOME' the leaflet stated that the East End had become a 'dangerous place to live', that pensioners live in fear of attack and that 'drugs, crime and racial violence blight our estates'. The page ends 'Labour – for a safer East End'. This, one might think, is very much the common currency of political leaflets in areas where crime is a problem. Far from being 'racist' it stigmatises racial violence. But it was illustrated by a photograph of an elderly woman sitting in her kitchen with a cup of tea but with a black bar obscuring her eyes and the woman was white. Now while it might be said that, in 1995, the majority of the Borough's elderly residents would have been white, the colour of this woman struck Mr Keith as being racist – again in the very special sense in which he appears to have understood the term. Presumably had the woman been Bangladeshi, it would have been seen as a racist slur on, say, the Afro-Caribbean population. In real terms, this leaflet, unlike the 'Mike Tyson leaflet' could not conceivably been seen as racist by anyone other than a far left political activist pursuing an internal party war.
One thing can be said about the Labour leaflet, however: Mr Keith does not lay the responsibility for it at Mr Biggs's door.
To summarise the memorandum:
a) the memorandum was not an official or 'Labour Party' memorandum; it was a personal document produced by Mr Keith for a very specific and limited purpose and, to be fair to Mr Keith, he has never claimed anything else;
b) the only passage in which Mr Biggs is stigmatised as a 'racist' is, in context, no more than an expression of Mr Keith's view that there are racial connotations in the use of the term 'loony left';
c) even if the Labour leaflet referred to in the memorandum could by any stretch of the imagination be described as 'racist', Mr Keith is not accusing Mr Biggs of involvement in its production.
The sequel can be quickly stated. The hearing took place. Mr Ahmed failed to convince a majority of the committee of his innocence and a motion was proposed for him to be suspended from the party for three months. When Mr Ahmed gave evidence before this court, he maintained he had not been responsible for the rogue fax but astonished everyone by saying that he had himself voted in favour of the suspension. He explained this by saying that he was seeking adoption as a Parliamentary candidate and, if he were only suspended for three months, he would have, so to speak, 'served his time' before the selection process took place. It must be said that Mr Ahmed was not a satisfactory witness. He admitted to bearing Mr Biggs a grudge arising from what he saw as Mr Biggs having blocked his, Mr Ahmed's, Parliamentary ambitions and his evidence was vituperative. Whether his account of supporting his own suspension was true or false is not something the court has to decide.
Eventually Mr Biggs's opponents were able to oust him from the leadership of the Council and, some years later, Mr Keith himself was able to assume that rôle.
One might have thought that the affair of the hoax fax was dead and buried but, as will be seen, memories of long ago intra-party battles last for ever amongst the politically committed.
It is important to remember, though, that 1995 was well before Mr Rahman became a Councillor.
MR RAHMAN'S POLITICAL HISTORY
Mr Rahman enters politics
Mr Rahman was born in what is now Bangladesh in 1965 and his family moved to England when he was still a child. The court was told that he went to school in Tower Hamlets and has lived most of his life in the Borough. He obtained a law degree and qualified as a solicitor, practising with Maxwells from 1993 to 2002 and thereafter at McCormacks, where he became a partner specialising in children and family law, remaining a partner until 2010.
Mr Rahman's curriculum vitae shows him as having joined the Labour Party in 1989 but it was not until 2001 that he was selected as a ward candidate. In 2002 he was elected as a Labour Councillor for the Spitalfields and Banglatown Ward and represented that ward continuously until he was elected Mayor in October 2010. In 2007 he sought selection as a Parliamentary candidate for the Bethnal and Bow constituency but was defeated by Ms Rushanara Ali, who won the seat in 2010.
In 2008 Mr Rahman became leader of the Labour Group and, as Labour held a majority of Council seats, Leader of the Council. This being the Tower Hamlets Labour Party, however, Mr Rahman had scarcely become leader when a faction arose within the party determined to oust him. The leading light in this faction was Mr Helal Abbas, who had been Council Leader in the early 2000s. The faction, again inevitably, used the media in its campaign, suggesting that Mr Rahman had links with Islamist extremists. At the same time, Mr Rahman's espousal of what were seen as left-wing policies earned him the obloquy of the right-wing media which were ready to accept the allegations of his flirting with extremism.
Mr Rahman was the subject of a leadership challenge from Mr Abbas in 2009 which he managed to defeat. By 2010 less than two years after his becoming leader, Mr Rahman was at odds not only with Mr Abbas but also with Mr Joshua Peck, his deputy Leader
Whilst all this must have been unpleasant and disruptive for Mr Rahman, it is also true to say that it was not helped by his own attitude. Mr Rahman, both in his evidence before the court and in his conduct as Council Leader and later as Mayor, has shown himself to be someone who perceives racism everywhere. Any criticism or any opposition is necessarily racially motivated, whatever the context. Any organisation with which he is in dispute is, equally necessarily, 'institutionally racist', whether it is the Labour Party or the BBC. This attitude has been adopted by his close associates, for whom a cry of 'racist' is usually the first reaction to any criticism of Mr Rahman.
In 2010 the question arose whether Tower Hamlets should have an elected Mayor. The Labour Party at national and regional level was not keen on a Mayor for Tower Hamlets and the Borough Labour Party was instructed by Mr Ken Clark, the Party's regional director, to oppose the proposition. Mr Rahman, on the other hand was keen on an elected Mayor, considering himself (not unreasonably) as potentially fitted for that rôle. He therefore campaigned in support of the petition. Although there were widespread suspicions that some of the names supporting the petition were bogus, the petition reached the necessary level for a referendum to take place as to whether there should be an elected Mayor. Again the regional Party instructed the local Party to oppose the referendum and again Mr Rahman campaigned in its favour.
In May 2010 Tower Hamlets, therefore, had its first three-fold election, something which, as Mr Williams ruefully admitted, is every Returning Officer's nightmare. In this year there was the General Election and there was also a full council election. The third election was the referendum as to whether Tower Hamlets should have an elected Mayor. The local elections were a resounding success for the Labour Party which secured three quarters of the available seats. It was also a success for the pro-Mayor party because the voters of Tower Hamlets endorsed the proposition for a directly elected Mayor by nearly two to one. The Mayoral election was subsequently fixed for October 2010.
Mr Rahman resumed his seat as but no longer as Council Leader[40] because he had set his sights higher. What he wanted was to become Tower Hamlets' first elected Mayor. As will be seen, however, Mr Rahman had racked up an impressive tally of enemies, not least in the upper echelons of the Labour Party. What happened thereafter cannot be said to reflect any credit on that Party.
THE 2010 MAYORAL ELECTION
As Leader of the Council and as someone who had just led his party to a resounding election victory, Mr Rahman might reasonably have supposed that he would at least have been shortlisted for the selection of the Labour Party's Mayoral candidate. The shortlist was, however, controlled by the Party at regional and national level and, as has been said, Mr Rahman had ruffled too many feathers. Consequently, when the shortlist was published it consisted of Mr Biggs and two candidates from the Bangladeshi community, neither of whom were well-known locally. Mr Rahman suspected that the local Party was going to be faced with a 'Hobson's choice' of Mr Biggs.
Mr Rahman did not take this lying down. He consulted his solicitors. They challenged the shortlist as having been drawn up in breach of the Party's own rules. The Labour Party decided to run the selection procedure again and to institute a new appeal process. Mr Rahman attended a second selection panel and was again refused admittance to the shortlist. He appealed. At first he was told his appeal was successful and he held a launch event only to be told later that his appeal had, in fact, been rejected and he would not be on the shortlist. Mr Rahman started legal proceedings in earnest. The Party appeared to cave in. A consent order was made by the High Court whereby the Party's General Secretary gave an undertaking that Mr Rahman would go forward for selection and the Party agreed to pay Mr Rahman his £35,000 costs.
The selection took place on 4 September 2010. A transferable-vote ballot was held among members of the Party in Tower Hamlets. The other candidates included Mr Biggs, Mr Helal Abbas and Mr Keith. Mr Rahman was successful and his candidature was announced by Mr Clark (clearly through gritted teeth). But Mr Rahman's adversaries had not finished there.
On 17 September 2010 a nine-page document was submitted to Labour's National Executive Committee described as a 'statement' of Mr Helal Abbas. It contained as astonishing catalogue of very serious allegations against Mr Rahman. They may be summarised as follows. Mr Rahman was said to have:
a) procured his selection as candidate by fraud, including ghost voters and voters not resident in the Borough (names and addresses were given);
b) grossly abused his position as Council leader by (inter alia) getting rid of the Chief Executive, appointing unsuitable staff and intimidating those who were not overtly devout Muslims;
c) maintained links to the Islamic Forum of Europe ('IFE') which was said to be an extremist Islamist organisation;
d) made threats of violence to Mr Abbas and his supporters;
e) colluded with the IFE to obtain a positive vote in the referendum in direct opposition to Labour Party policy.
Mr Abbas gave evidence for the Petitioners. He was unable to provide any explanation as to why he had not raised any of these complaints earlier, in particular during the period when Mr Rahman was attempting by the use of legal proceedings to obtain a place on the shortlist. One might have thought that the time to make the accusations was before the vote to select the candidate but in fact this document was produced nearly a fortnight later by Mr Abbas (who had come a poor third in the contest). Unsurprisingly, Mr Abbas did not inform Mr Rahman of his accusations before sending the document to the NEC.
What happened next was a meeting of the NEC on 21 September 2010. The meeting was attended by several very senior members of the Labour Party including Ms Harriet Harman, Ms Angela Eagle, Mr Keith Vaz, Mr Jack Dromey and Mr Dennis Skinner[41]. Also amongst those attending was Ms Christine Shawcroft, a long-standing member of the NEC, who may, I think fairly, be described as on the far left of the Labour Party. She gave evidence and made no secret of the fact that she was and is very supportive of Mr Rahman and is very critical of, indeed hostile to, Mr Biggs. Ms Shawcroft is one of those mentioned above who are happy to campaign for Mr Rahman against their own Party and its official candidate.
Ms Shawcroft is a methodical person and, after the NEC meeting, she came home and wrote up a detailed memorandum – virtually unofficial minutes of the meeting. This document was put in evidence. I had no hesitation in accepting Ms Shawcroft's evidence about the meeting and the accuracy of her minutes. They do not make happy reading.
First and foremost, despite Ms Shawcroft's strong advocacy of Mr Rahman, there was no decision to confront Mr Rahman with Mr Abbas's allegations or to ask him whether he had any answer to them. Indeed the NEC itself did not trouble to communicate Mr Abbas's statement to Mr Rahman. He only discovered it later through the agency of his supporters on the Committee. The Committee did not even decide to hold an investigation. It did not summon Mr Abbas and ask him to justify his serious allegations.
A resolution was passed to suspend Mr Rahman, unseen and unheard. Next, the NEC decided, then and there, to select and impose a new candidate. There was no suggestion that the Tower Hamlets Labour Party might be consulted, still less that there might be a new ballot. It was not even suggested that, as Mr Biggs had come second in the original ballot, he might, so to speak, move up to become the candidate. The NEC simply decided ad hoc that it would vote, then and there, between Mr Biggs and, of all people, Mr Abbas, whose accusations could have been, for all the NEC knew about it, a complete tissue of malicious falsehoods. 16 voted for Mr Abbas and 2 for Mr Biggs. The upshot of the meeting was thus that Mr Rahman, completely unaware of the accusations and given no opportunity to counter them, was summarily sacked as candidate and his accuser substituted.
Ms Shawcroft believed that the selection of Mr Abbas was motivated by the desire 'not to leave themselves open to the charge of deselecting a Bangladeshi and replacing him with a white man'. Given Mr Abbas's lack of support in the previous ballot, Ms Shawcroft's belief has a lot going for it.
Although this judgment will have to be critical of Mr Rahman in many respects, in the matter of his deselection the court cannot but sympathise with him. His treatment by the NEC was, by any standards, utterly shameful and wholly unworthy of the Party which, rightly, prides itself on having passed the Human Rights Act 1998.
Mr Rahman fights back
The NEC did not trouble to tell Mr Rahman of its decision immediately. According to Mr Rahman, whose evidence on this point I accept, he did not learn of his deselection until a week later, 24 or 25 September 2010. By this time, the Mayoral election was less than a month away, having been fixed for 21 October. If, however, the NEC believed it had thwarted Mr Rahman's ambitions, they had mistaken their man.
With the deadline for nomination fast approaching, Mr Rahman mobilised his supporters. He obtained sufficient signatures to be nominated and got his nomination papers in before the deadline. Clearly he had to stand as an independent candidate and his 'party organisation' was no more than he was able to cobble together in the few days remaining before the election.
In the event, Mr Rahman's revenge was complete. On 21 October, very unusually for a transferable-vote election, he obtained more than 50% of the first preference votes and twice as many votes as Mr Abbas. He was duly elected Mayor.
Whatever else may be said of Mr Rahman – and much will be said – his courage and resolution in standing and winning the 2010 deserves considerable admiration.
Mr Rahman and the Labour Party
Perhaps the saddest, indeed most pathetic, aspects of this case is the attitude of Mr Rahman to the Labour Party. One might have thought that, after the indefensible way in which he had been treated in September 2010, Mr Rahman would have wanted nothing further to do with the Labour Party. The contrary is the case. Despite his ignominious deselection and his heavy defeat of the official Labour candidate at the poll, Mr Rahman dreamed that, once the dust had settled, the Party would beg him to return and he would be re-born as the Labour Mayor of Tower Hamlets. This was not wholly unreasonable. Mr Rahman has always had before his eyes the example of Mr Ken Livingstone who was deselected as Labour candidate for the 2000 London Mayoral election, stood as an independent, was elected and was thereafter welcomed back into the Labour fold. Mr Rahman is, however, no Ken Livingstone.
Notwithstanding four years as Mayor when his relations with the Tower Hamlets Labour Party were poisonous and a 2014 election campaign which his own counsel called 'a dirty campaign', Mr Rahman still believes that the call will come. Indeed he told the court that he was convinced that, but for the current Petition, he would already be back in the Party.
When taxed with the shambolic organisation or, more strictly, lack of organisation of THF when it was set up as a party, Mr Rahman's explanation was that he regarded the formation of THF as only a temporary measure, designed to last for only a few months, whereupon he and the THF Councillors would be re-admitted to the Labour Party.
MR RAHMAN AS MAYOR
Some aspects of Mr Rahman's running of the Borough between 2010 and 2014 are relevant to this Petition, in particular the question of the allocation of grants and the use of council facilities for his own political purposes. Similarly the court has heard evidence about the polarisation of politics during his Mayoralty and the increasingly confrontational behaviour of his close associates, especially Mr Alibor Choudhury. To the extent that those matters bear on issues in the Petition, they will be examined here.
What the court will not do, however, is conduct an assessment of Mr Rahman's administration in general. Mr Rahman's supporters have waxed lyrical as to the virtues of his government, citing education, housing and the like. His opponents have damned him as an egotistical autocrat whose every action is designed for his own personal or political benefit. As the court stressed more than once, this is the trial of an election petition and not a public enquiry into the governance of Tower Hamlets.
To some extent there was an enquiry, albeit not a public enquiry, into the running of the Borough when, in circumstances that will be related below, the Secretary of State for Communities and Local Government appointed PwC to carry out a 'Best Value' investigation of certain aspects of Mr Rahman's government, in particular the allocation of grants. Insofar as the PwC report[42] is relevant to the issues in the Petition, it will be treated as a source of factual information.
Mr Rahman's level of control
To a large extent, the criticisms of Mr Rahman as an autocrat are well founded. As it was agreed that, on this point, the PwC report was factual, it seems sensible to quote the relevant passage:
2.112 Under current local government legislation, any function is an executive function, unless it is specifically reserved (in whole or in part) to the Full Council. Within the framework provided by relevant statutes, the Mayor has reserved to himself substantially all of the decision making powers which it is legally possible for an executive mayor to exercise. Accordingly, in relation to large areas of the Authority's activities, including the areas of focus for the Inspection, the Mayor has ultimate decision making power. Even where the Mayor chooses to delegate decision making powers over particular matters, he retains the right to make decisions on those matters.
2.113 Since July 2012, the Authority has had no Chief Executive. One of the Authority's Corporate Directors has since that time (with a short hiatus) fulfilled the role of Head of Paid Service, as required by statute, however the Head of Paid Service has not had the full powers of a Chief Executive delegated to him under clause 3.5.5 of the Authority's constitution. These powers have remained with the Mayor. This means that, for most purposes, the Head of Paid Service, other statutory officers (being the Section 151 Officer and the Monitoring Officer), as well as other Corporate Directors are all directly accountable to the Mayor.
2.114 The Mayor presides over a Cabinet of up to nine elected Members chosen by him. The Mayor has delegated to members of the Cabinet decision making powers over matters within their portfolio, subject to consultation with the Mayor and to his having no objection to the decision proposed; in other words the Mayor has effectively retained a veto. To date, we understand that these delegations have not actually been used.
Mr Hoar was therefore justified in his comment that, in practice, Mr Rahman's power as Mayor is greater than that of any other elected executive mayor in Britain. This power is consolidated by the fact that his cabinet has been chosen from his close cronies, some of whom, it must sadly be said, have little to recommend them beyond blind loyalty to their leader.
Mr Rahman's right-hand man is and has for some time been Mr Alibor Choudhury who serves as the cabinet member for resources, in effect the Borough's Chancellor of the Exchequer. He is also, as we shall see, the Treasurer (indeed the only officer apart from Mr Rahman himself) of the political party THF. Mr Rahman's relationship with Mr Choudhury came out quite clearly in the course of the lengthy period during which both men gave evidence.
I shall consider Mr Rahman as witness at a later stage but it seems wise to examine Mr Choudhury at this stage before looking at his various rôles. Mr Choudhury was a very unsatisfactory witness. He was arrogant, indeed cocky, and did not hesitate to tell bare-faced lies in the smug assurance that the mere lawyers listening him would not have the wit to see through them. He also came over as an immature man who possessed, and did not shrink from expressing, outrageous views. The court was told that he had, in his youth, been convicted of some criminal offence but what it was was never revealed and it played no part in the case. In making the assessment of Mr Choudhury's character and credibility the court had more than sufficient material to go on without dredging back into his past: his supposed conviction was disregarded.
In describing Mr Choudhury as Mr Rahman's right-hand man, perhaps the slang term 'hatchet-man' would be more appropriate. The modus operandi of the two men would be that Mr Rahman would retain a statesmanlike posture, making sure that he always said the right thing – particularly in castigating electoral malpractice – while what might be called 'the dirty work' was done by Mr Choudhury. This was especially apparent in the campaign against Mr Biggs which will be discussed below, in which, on the surface at least, Mr Choudhury would be responsible for the attempted character-assassination of Mr Biggs while Mr Rahman claimed to have had no input into – indeed, on occasion, not even to have read – the press releases put out in his name.
As has been indicated earlier in this judgment, however, electoral law does not permit the candidate to sit back, smiling benignly, while his associates get on with electoral malpractices in order to procure his election. The candidate is liable for the actions of his agents, especially his election agent. Mr Choudhury was Mr Rahman's official election agent.
Mr Rahman gathers support
As an independent Mayor, Mr Rahman originally stood alone. He had no party and he faced a Council with a large majority from the party that had rejected him. Over the months following his election, however, a number of Councillors decided that their personal loyalty to Mr Rahman outweighed their loyalty to the party under whose banner they had been elected and, one by one, they declared themselves to be 'independent'. In reality they had formed a loose and unofficial political party whose common theme was support for Mr Rahman as Mayor. They were not exactly unrewarded for their defection. Like all mayors, Mr Rahman had a cabinet whose membership was entirely in his gift. By the end of his Mayoralty the cabinet consisted of his close associates.
Now we come to the more sensitive areas. The bald fact is that all the defecting Councillors were Bangladeshi. The Mayor's unofficial party was seen as being a Bangladeshi party and, it must be said, (contrary to the protestations of the Mayor and his witnesses), the party came to see itself as the Bangladeshi party. Although stoutly denied by Mr Rahman's partisans in evidence, the reality is that the focus of the Mayor and his cabinet became more and more on the Bangladeshi community. This perception was heightened by the policy adopted by Mr Rahman towards grants of Council money and it was not assisted by the fact that, on one view of the figures, the Council's housing budget had been skewed toward those areas of the Borough (mainly in the western wards) where support for the Mayor and his associates was strongest.
As time passed and criticism of the Mayor and his administration mounted both within the Borough and in the national media, the Mayor and his close associates withdrew into their bunker. In their minds, they were being targeted because they were Bangladeshi and Muslim: so their critics were necessarily racists and Islamophobes. The Mayor's refusal to engage with Councillors (other than those of his unofficial party) became more marked. This led to two incidents which were explored in evidence.
The first incident occurred when Mr Rahman was being pressed in the Council Chamber to answer Councillors' questions but refused to do. The Council's Monitoring Officer (in effect, Head of Legal) intervened to say that requiring him to answer questions was in breach of his rights under the European Convention on Human Rights. The court was asked to accept that the Monitoring Officer had come up with this preposterous advice entirely off her own bat but common sense would seem to indicate that she would never have intervened in this way unless she had been put up to it by Mr Rahman. Needless to say, her intervention did not convince the Mayor's critics and the court remained baffled by this interpretation of the ECHR.
Secondly, the Councillors who were not aligned with Mr Rahman became so exasperated that they proposed a motion to attempt to compel him to answer questions in the way that all other elected mayors answer questions. At this point, the Deputy Mayor, Councillor Ohid Ahmed shouted that the motion was only being proposed because Mr Rahman was Bangladeshi. Once more the cries of 'racist' were heard.
Usefulness of the EDL
All parties agreed – and it is probably a matter on which judicial notice may properly be taken – that the EDL was an overtly racist organisation, particularly hostile to Muslims. It was also agreed that it is an organisation which does not shrink from violence or attempting to provoke violence in others. In Tower Hamlets and indeed, in the UK, political terms it is wholly negligible. As far as can be ascertained, it does not often seek democratic election and, when it does, its level of failure is absolute. Its membership is tiny, though undoubtedly noisy.
The EDL's modus operandi appears to be that, from time to time, it proposes a march, usually through an area with a large BME, preferably a large Muslim, population. A march by the EDL in Tower Hamlets in September 2013 featured in the evidence. Once the march is proposed, all the political and community organisations in the area normally vie with each other in demanding that the march be banned. If it is not, then, they plan a large counter-demonstration. Pausing there, this is (certainly on the evidence before the court) an opportunity for each group to castigate the supposed half-heartedness of the others and to adopt a 'more anti-fascist than thou' posture. The march occurs: the assembled political and community groups stage their counter-protest. Sometimes a few heads get broken. The police and (subsequently) the street cleaners deservedly earn substantial overtime. The dogs bark and the caravan moves on. Everyone congratulates themselves that they have 'seen off the fascists'.
No apologies are made for this somewhat cynical view of the EDL's activities, because the uses to which the EDL was put by Mr Rahman and THF were equally cynical. Apart from causing a brouhaha once a year or thereabouts, the power and influence of the EDL is, in somewhere like Tower Hamlets, non-existent.
But the EDL does have its uses. Because it dislikes Mr Rahman – undoubtedly, in the case of the EDL, because he is non-white – the EDL seizes on any criticism of Mr Rahman and repeats it on social media. This enables Mr Rahman and his cohorts to argue as follows: criticisms of Mr Rahman by his political opponents are adopted and repeated by the EDL: the EDL is a racist organisation: therefore anyone who criticises Mr Rahman is giving aid and comfort to the EDL: therefore anyone who gives aid and comfort to the EDL is himself a racist: therefore it is racist to criticise Mr Rahman. This series of propositions informed all the responses of Mr Rahman and his team to criticisms and may be taken to be an epitome of the thought processes of Mr Alibor Choudhury.
Truly, in Tower Hamlets, if the EDL did not exist, like Voltaire's God, it would be necessary to invent it.
THE FORMATION OF THF
In the summer of 2013 it appeared that Mr Rahman and the Councillors who supported him were not going to be invited to re-join (or, in some cases, to join) the Labour Party in the immediate future. It was therefore decided that the unofficial party of Mr Rahman and his team ought to be constituted as a formal political party in order to contest the 2014 Mayoral and Council elections. Although the name chosen was Tower Hamlets First the constituent documents of the party made it clear that it was the party of Lutfur Rahman and that its primary objective was to secure his re-election as Mayor.
The requirements for registration of a political party are laid down in the Political Parties, Elections Referendums Act 2000 ('PPERA'). Section 22 provides that no person may stand as a candidate on behalf of a party unless that party is registered with the Electoral Commission. The relevant parts of s 24 read
(1) For each registered party there shall be-
(a) a person registered as the party's leader;
(b) a person registered as the party's nominating officer; and
(c) a person registered as the party's treasurer;
but the person registered as leader may also be registered as nominating officer or treasurer (or both).
(2) The person registered as a party's leader must be-
(a) the overall leader of the party; or
(b) where there is no overall leader of the party, a person who is the leader of the party for some particular purpose.
(3) The person registered as a party's nominating officer must have responsibility for the arrangements for-
(a) the submission by representatives of the party of lists of candidates for the purpose of elections;
(b) the issuing of such certificates as are mentioned in section 22(6); and
(c) the approval of descriptions and emblems used on nomination and ballot papers at elections.
(4) The person registered as a party's treasurer shall be responsible for compliance on the part of the party-
(a) with the provisions of Parts 3, 4 and 4A (accounting requirements and control of donations, loans and certain other transactions)
(b) unless a person is registered as the party's campaigns officer in accordance with section 25, with the provisions of Parts V to VII (campaign expenditure, third party expenditure and referendums) as well.
Section 26 of PPERA states:
(1) A party may not be registered unless it has adopted a scheme which-
(a) sets out the arrangements for regulating the financial affairs of the party for the purposes of this Act; and
(b) has been approved in writing by the Commission.
(2) The scheme must in particular determine for the purposes of this Act whether the party is to be taken to consist of-
(a) a single organisation with no division of responsibility for the financial affairs and transactions of the party for the purposes of Part III (accounting requirements), or
(b) a central organisation and one or more separate accounting units, that is to say constituent or affiliated organisations each of which is to be responsible for its own financial affairs and transactions for the purposes of that Part.
(3) In the latter case the scheme must-
(a) identify, by reference to organisations mentioned in the party's constitution, those which are to constitute the central organisation and the accounting units respectively; and
(b) give the name of each of those organisations.
(4) The scheme must in every case include such other information as may be prescribed by regulations made by the Commission.
(5) Where a draft scheme is submitted by a party for the Commission's approval, the Commission may either—
(a) approve the scheme, or
(b) give the party a notice requesting it to submit a revised scheme to them, as they think fit.
Under s 28, in order to be registered, a party must send to the Commission an application complying with Schedule 4 to the Act and accompanied by a declaration under s 28(2) that it intends to contest one or more elections. Under s 28A the party may include a request for the registration of up to 12 descriptions to be used on nomination papers or ballot papers (though the Commission has the power to disallow inappropriate or misleading descriptions) and s 29 permits a request for up to three emblems to be used on ballot papers, Section 41 provides
(1) The treasurer of a registered party must ensure that accounting records are kept with respect to the party which are sufficient to show and explain the party's transactions.
(2) The accounting records must be such as to-
(a) disclose at any time, with reasonable accuracy, the financial position of the party at that time; and
(b) enable the treasurer to ensure that any statement of accounts prepared by him under section 42 complies with the requirements of regulations under subsection (2)(a) of that section.
(3) The accounting records must in particular contain-
(a) entries showing from day to day all sums of money received and expended by the party, and the matters in respect of which the receipt and expenditure take place; and
(b) a record of the assets and liabilities of the party.
Schedule 4 sets out the requirements for an application. It must state the party's registered name and the address of its headquarters. It must give the name and home address of the leader, the nominating officer and the treasurer and (if there is one) the campaigns officer. Importantly, the application must be accompanied by a copy of the party's constitution and a draft of the financial scheme proposed to be adopted under s 26. The leader, the nominating officer, the treasurer and (if applicable) the campaigns officer must all sign the application and, if anyone has two capacities it must be made clear that he is signing in both capacities.
Given that THF had indubitably been registered as a political party by the Electoral Commission on 18 September 2013, during cross-examination questions were directed to Mr Rahman about this. After all, if Sch 4 had been complied with, he must at least have seen and signed the relevant documentation.
Accordingly the court asked him about the party's constitution and received this reply:
Q. As I understand it, an application for registration must be
accompanied by a copy of the party's constitution?
A. Sure.
Q. So, there is a constitution?
A. I do not believe there is a constitution, so I do not know how
they got over that. (Laughter)
MR. HOAR: There is no constitution?
THE WITNESS: There may be aims and objectives set out, I do not believe there is a constitution.
Mr Rahman was equally numb and vague about the existence of a financial scheme under s 26.
When it was explained to him that there must have been some kind of constitution and financial scheme for the Commission to have permitted registration, Mr Rahman replied blandly that he had left everything to Mr Alibor Choudhury.
Eventually the constitution and financial scheme were unearthed and Mr Choudhury gave evidence about them.
What may be said with certainty is that whatever the documentation necessary to be produced to satisfy the Electoral Commission to permit registration, that documentation formed no part of the running of the party. At all times the party had two officers and two officers only: Mr Rahman, the leader, and Mr Choudhury, the treasurer. When asked who the nominating officer was, Mr Rahman said it was Mr Choudhury. Reference to s 24 of PPERA above will show that it is permissible for the leader to be nominating officer or treasurer (or both) but it does not permit the treasurer to be nominating officer. Thus the party should have had a separate nominating officer if Mr Rahman was not prepared to undertake the task, and it is a sign of the complete disregard for PPERA manifested by Mr Rahman and Mr Choudhury that these formalities were not even paid lip service.
The financial arrangements were even more bizarre. It can be said that because the Commission rubber-stamped the application for registration it may be inferred that the Commission was satisfied. All one may say, with the greatest of respect for the Commission, that the enquiries into the structures of THF cannot have been excessively rigorous.
The reality is that there was no responsible financial scheme whatsoever. Mr Rahman and Mr Choudhury admitted quite freely in evidence that the party had never had (or even proposed to have) a bank account. The court was told an elaborate rigmarole of how party donations were logged in some kind of Excel spreadsheet and they were called off in kind rather than in cash by asking 'donors' to pay the party's bills. Although donations and expenditure are statutorily required to be made through the treasurer, this rule was conveniently ignored.
Despite frequent requests made by Mr Hoar and the polite raising of judicial eyebrows at the apparent lack of documentation, neither Mr Rahman nor Mr Choudhury produced any books of account or even the much-mentioned Excel spreadsheet.
In short, the financial affairs of THF were, at best, wholly irresponsible and at worst, dishonest. While documents were produced apparently showing that 'donors' had paid some expenses of the party, those payments had obviously not passed through the treasurer or been recorded in any books of account. True returns of expenses were made to the Electoral Commission (incomplete as it turned out in the case of the party's most generous donor) but beyond a few invoices addressed to people who were not officials of THF, which they seem to have paid, the finances of THF were shrouded in mystery.
Again, the excuse given for the chaotic nature of the party's structure and finances was that re-admission to the Labour Party was just around the corner so it wasn't worth bothering for a couple of months or so. Although the court accepts that Mr Rahman would like to be re-admitted to the Labour Party, it does not accept that, in the summer of 2013 – or indeed at any time thereafter until the election in May 2014 – Mr Rahman or Mr Choudhury had entertained any serious belief that the invitation would arrive. As will be seen, they embarked on a political campaign, largely targeting the Labour Party, their principal rivals, which their own counsel described as 'dirty'. No rational person, viewing the campaign waged by THF against Labour in 2013-4, would have regarded it as a campaign designed to achieve a reconciliation with the Labour Party.
Was THF in real terms a 'one-man band'?
This was a major plank of the Petitioners' case. In both opening and closing they submitted that the reality of THF was that it was a vehicle for re-electing Mr Rahman as Mayor and for obtaining as many Councillors as possible who would be linked to him by personal loyalty alone. Is this fair?
The starting point must be the history of the 'defections' from other parties to Mr Rahman during the course of his first Mayoralty. These defections were not wholly from the Labour Party and many of the 'defectors' had had a varied political history, including membership of the Respect Party and (in one case) of the Conservative Party.
Even before THF was formally registered, it would have been hard to detect any factor linking the informal grouping of 'independent' Councillors beyond personal support for Mr Rahman. Again, it is very difficult to ascertain any coherent policy being followed by Mr Rahman and his supporters beyond promoting the interests of the Bangladeshi community. Insofar as Mr Rahman's politics can be crudely categorised as 'right' or 'left', they are clearly on the mid- to far-left of the spectrum. To that extent, it would be virtually impossible to distinguish them from the policies that Mr Rahman and his colleagues pursued when they were the controlling Labour group on the Council or from the policies (absent the Bangladeshi element) that would have been followed if Labour had won the Mayoral election in 2010. It was certainly not any discernible ideological programme that bound the 'independent' group together. Again it must reluctantly be said that the 'defections' were not without an element of personal ambition as a number of the defectors ended up with cabinet posts which would have been unlikely to come their way had the Labour Party remained in power.
When questioned about the shambolic nature of THF, both Mr Rahman and Mr Choudhury expostulated that theirs was a brand-new party and could not be expected to have the level of organisational sophistication to be expected of the national Labour or Conservative Parties. What was also lacking was any coherent political agenda beyond the personal aggrandizement of Mr Rahman and the well-being of the Bangladeshi community.
None of this was concealed when the party was registered. The 'descriptions' contained in the application for registration under s 28A of PPERA were seven:
a) Mayor Lutfur Rahman's Team
b) Lutfur Rahman's Team
c) Lutfur Rahman's Progressive Alliance
d) The Mayor's Team
e) Mayor Lutfur Rahman's Independents
f) Mayor Lutfur Rahman's Community Alliance
g) On Your Side in the East End
An earlier version of the list had some eight out of eleven names involving either 'the Mayor' or 'Lutfur Rahman' or both.
Selection of candidates
In the course of cross-examination it was pointed out to Mr Rahman and to Mr Choudhury that the party's constitution contained a mechanism for selecting candidates: this seemed to come as a considerable surprise to both. In evidence, both made it quite clear that no such procedures were ever followed.
There was considerable exploration of this issue at trial but the upshot can be briefly stated. There seems to have been no selection process for any of the current 'independent' Councillors who wished to stand as candidates for THF. Subject to obtaining Mr Rahman's approval if they wished to select a new ward following the boundary changes, these Councillors were free to stand as THF candidates if they wished.
As for new candidates, the selection process was very simple. The prospective candidate was vetted by Mr Rahman with the assistance of Mr Choudhury, and occasionally the odd other Councillor, and then approved or disapproved by Mr Rahman personally. There was no selection procedure and no appeal. Not all the chosen candidates were members of the Bangladeshi community. Some, like Mr Stephen Beckett and Mr Stuart Madewell had come over to Mr Rahman from the Labour Party. It was suggested in cross-examination of Mr Rahman that these non-Bangladeshi candidates were selected in wards where their election was unlikely or even highly improbable while the Bangladeshi candidates were selected for the winnable seats. Whether that suggestion is fair or unfair the court does not need to decide. As it turned out, the only THF candidates to be elected were members of the Bangladeshi community: the non-Bangladeshi candidates were unsuccessful.
In reality, the selection of candidates was made by Mr Rahman personally on the basis of the prospective candidate's commitment to Mr Rahman personally. Tellingly, in the course of his evidence, Mr Rahman, more than once, referred to THF's candidates as 'my candidates' and that is what, in reality, they were.
Electioneering
The court was told a great deal about the presentation of THF before and during the election. Again, it is unnecessary to go into this in enormous detail. Virtually every press-release was focused on Mr Rahman as was virtually all the coverage in the media, particular in the Bangladeshi media which were, for the most part, strongly supportive of him and his re-election.
The election literature, even when ostensibly directed towards the election of THF candidates in the wards, majored on the re-election of Mr Rahman as Mayor and stressed that the public should vote for THF candidates as Councillors so that they could assist Mr Rahman in his governance of the Borough. In general, perhaps somewhat crude, terms, one may trawl through the literature for a long time and still not come up with any statement of policy or ideology for THF beyond that of securing the re-election of Mr Rahman and the election of a body of loyal Councillors who would do his bidding.
A short extract from the witness statement of Mr Madewell about his campaign to be elected as Councillor for Wapping and St Catherine's Ward says it all:
At all times when we knocked on residents doors we introduced ourselves as:
"Tower Hamlets First – supporters of Lutfur Rahman"
We made it clear in our conversations with residents that we were campaigning on behalf of the Mayor and were not employed by the Council.
Conclusions as to the nature of THF
The evidence in this case all points in one direction. THF was the personal fiefdom of Mr Rahman. He directed its operations, he selected his candidates, and those candidates campaigned on the basis that their job, if elected, was to give personal support to him. THF had no other aim, objective or ideology beyond the continuation of Mr Rahman in the office of Mayor of Tower Hamlets. The accusation of the Petitioners that THF was a one-man band has been fully made out by the evidence, much of that evidence coming from Mr Rahman himself and from his witnesses.
THE EVIDENCE
In general, where this judgment needs to resolve a conflict of evidence, this will be done in context. Two aspects of the evidence, however, should be dealt with in a separate section before addressing the issues raised by the parties.
Mr Rahman's evidence
Mr Rahman himself gave evidence for four days and, even then, the court had to 'guillotine' Mr Hoar's cross-examination. Although faced with searching, hostile and, it must be said, occasionally mildly offensive questioning, Mr Rahman was unfailingly courteous and polite. With regret, that is the only positive thing that can be said about his evidence.
Election courts deal with politicians. As a generalisation, politicians do not welcome questions unless from friendly sources. It is a well-recognized trait of politicians, especially when questioned by the media, to avoid answering the question and to say, instead, what they conceive their 'message' to be. Even when feared interviewers ask the same question repeatedly – the name of Mr Jeremy Paxman comes to mind – it rarely elicits anything but the prepared non-answer. While this may make for entertaining broadcasting, it is sometimes less than helpful in a court of law.
Mr Rahman exemplified this trait to an extreme level. Faced with a straight question, he proved himself almost pathologically incapable of giving a straight answer. He was also extremely discursive so that his non-answer to the question would often ramble on until interrupted by a repetition of the question or, occasionally, an attempt (normally unavailing) for the court to obtain an answer by re-phrasing the question. Mr Hoar's complaint that the length of his cross-examination was due to the failure of Mr Rahman to answer questions was by no means unjustified.
In short, Mr Rahman was evasive and discursive to a very high degree.
Sadly, it must also be said that he was not truthful. In one or two crucial matters he was caught out in what were quite blatant lies. They will be instanced at the appropriate point in the judgment.
On matters that were uncontroversial (largely matters of past history) I saw no reason not to accept his account as being substantially correct. On any matter that was controversial, however, I felt obliged to treat his evidence with considerable caution and, in most instances, where his evidence conflicted with that of other witnesses, I preferred their testimony to his.
Again, and with regret, it must be said that his grip on reality was not always 100%. This judgment has already instanced his long-running fantasy that tomorrow would bring an invitation to re-join the Labour Party. His evidence as a whole displayed a tendency to close his mind to any version of the facts that did not accord with his world-view.
Though it genuinely pains me to say so, I did not find Mr Rahman to be a reliable witness.
Interpreters
A large number of witnesses for both the main parties gave evidence through interpreters. The overwhelming majority of these witnesses were clearly people for whom English was not the first language and, in some cases, not a language they spoke at all. These witnesses needed an interpreter and it was right that they should have one.
There were, however, one or two witnesses for whom the interpreter was obviously a tactical manoeuvre. These witnesses are always easy to detect because they cannot stop themselves from showing that they have fully understood the question in English before any translation is provided. Often they forget entirely and answer the question (in English) before the interpreter has had the chance to open his mouth. Employing an interpreter, however, gives such a witness the opportunity to assess the question and to work out his answer in, so to speak, slow-motion rather than having to come out with it immediately where hesitation or an unguarded reply might adversely affect the evidence.
It may be necessary to indicate when dealing with such a witness's evidence whether this tactic was employed, though it must be said in this context that when an interpreter was requested by the editor of a newspaper which publishes in English, one felt that one's credulity was being pushed to its outermost limits.
AGENCY
Mr Rahman's 'agents'
The nature of the party is relevant to the determination of who is to be regarded as being Mr Rahman's agents for the purposes of electoral law. The very wide ranging nature of agency in electoral law has already been discussed. The very personal nature of Mr Rahman's government of the Borough and of the campaign for his re-election means that the net of agency is spread very wide, certainly wider than might be the case with an established mainstream political party. The party's candidates were hand-picked by Mr Rahman alone and the numerous party activists regarded their primary loyalty as being a personal loyalty to Mr Rahman.
It seems incontestable that the candidates selected by Mr Rahman to contest the ward seats must be taken to be within the category of his agents. Insofar, therefore, as they engaged in electoral malpractice on behalf of THF, while that malpractice will have been directed towards securing their own election, it will also have been directed towards securing the re-election of Mr Rahman as Mayor. To the extent therefore that they engaged in personation, false registration, double-voting or tampering with ballot papers, they did so as the agents in electoral law for Mr Rahman and the fact that he did not know the extent of these activities and made many lofty pronouncements castigating electoral malpractice will not assist him.
Similarly there is no doubt that Mr Rahman made wide use of the facilities and staff of the Council to carry out electoral activities on his behalf. Statements were issued by 'the Mayor's Office' which had no bearing on the running of the Borough but were obvious electioneering. Those members of staff who engaged in these activities were probably agents in the common law sense of Mr Rahman and they must be taken to be his agents for electoral purposes.
But, as the discussion of the law of agency above makes clear, the category of agents is wider still. Canvassers are agents, as are supporters who are equipped with rosettes or T-shirts and sent off to campaign outside polling stations. And, as will be seen, members of the wider community who commit themselves to the re-election campaign and work alongside Mr Rahman and his close associates may properly assume the status of agents for electoral purposes.
PERSONATION AND OTHER VOTING OFFENCES
The evidence clearly showed that there was personation and that other voting offences took place. The questions were first how widespread were those offences and secondly could it be shown that they had been committed by Mr Rahman or those considered by electoral law to be his agents.
False registration
False registration is often the first step in vote-rigging. Ghost voters are registered which are, as said above, either fictitious names or persons who exist but who do not reside at the address concerned. The latter category comprises those who have no connection at all with the property at which they are registered and those who have a connection with the property but are not resident there in the sense that the law requires.
In an electoral area with a huge electorate such as Tower Hamlets, identifying ghost voters is a difficult task. It is time-consuming and faces the problem that what the investigator is trying to achieve is, essentially, to prove a negative, to establish that Mr X does not reside at the address shown in the electoral register. The time and resources available to an election petitioner are always going to be very limited and, however hard he tries, the petitioner is unlikely to do more than scratch the surface of false registration. This, of course, enables a respondent to say – as Mr Penny did say repeatedly – 'the Petitioners have only proved a handful of false registrations in an electorate running well into six figures: treat it as de minimis'.
While it may be true that, for the purposes of establishing 'general corruption' under s 164 of the 1983 Act, numbers matter, and the paucity of proved ghost voters may be fatal to proving that they affected the result of the election, this is not true where the responsibility for the false registration can be laid at the door of the candidate. As explained above, one bogus vote, if arranged by the candidate or someone who is in law his agent, will unseat the candidate, however large his majority.
A number of witnesses gave evidence that they had visited properties to make enquiries as to whether those whose names appeared on the register in relation to those properties actually lived there. One of those witnesses was Mr Andrew Gilligan, who is a well-known journalist, albeit one who has always been very critical of Mr Rahman. His evidence, which was only half-heartedly tested in cross-examination, was to the effect that he had visited a number of properties and discovered that those registered were not known there or even, in one case, that the property appeared to be completely unoccupied (312 The Highway). I saw no reason not to accept Mr Gilligan's evidence about these properties.
I do not propose, in what is a long judgment, to go through the properties at which false registrations were proved. The numbers of false registrations was not large, certainly well under 100. In seems more fruitful to concentrate on those properties where there is an ascertainable link between the registration and those who are the agents of Mr Rahman.
The first of these properties is Flat 16, Prioress House, Bromley High Street, E3 3BD. This property cropped up more than once and appears to have been used as an accommodation address for THF candidates. In this context it will be recalled that THF candidates are incontestably agents of Mr Rahman for electoral purposes and that it is irrelevant whether the candidate's primary motive is his own election and the election of his chief only a secondary motive. The candidate is bound.
The first candidate was Monir Uzzaman (aliter Monirazzuman) Syed who stood for THF in Bromley North. Also registered at this flat were four people, two people with Italian names, one with a Lithuanian name and one with an Asian name. In a witness statement Mr Syed claimed to have lived there at the time of the election but to have moved away immediately afterwards for personal reasons. He was not called to give evidence to support his witness statement and it is noticeable that the address he did furnish on one statement was in Ilford. Mr Syed had an interesting relationship with this property. In 2013 he applied to be a candidate for the Labour Party but I was told by Mr Chris Weavers, the Labour Party electoral agent, whose evidence I accept, that Mr Syed had been turned down (inter alia) on the ground that he could not satisfy the Party that he genuinely lived at that address. Mr Syed then tried his luck with THF whose selection processes (ie interview with Mr Rahman) seem to have satisfied that party that he was indeed resident at 16 Prioress House. It is remarked by the Petitioners that Mr Syed, being an estate agent, would have access to information about likely properties whose address could be used for electoral purposes.
One of the more curious witnesses in the case was a man who stood as a THF candidate in the May election as Aktaruz Zaman in St Peter's Ward. At that time he gave his address as 312 The Highway, to which we shall return. He was unsuccessful. He then decided to stand, again for THF, in the election for the ward of Blackwall and Cubitt Town in the election that had been postponed from May 2014 because of the death of a THF candidate. Mr Zaman told the court that he decided that being called 'Zaman' was not a good idea because it meant he came last on the ballot paper (this being alphabetical) and he also decided that he needed a change of air. Consequently he changed his name to 'Mohammed Aktaruzzaman' and suddenly decamped from The Highway to 16 Prioress House (within days of the May election). He must presumably have moved in just as Mr Syed was moving out. Sadly for this man, moving his name to the other end of the alphabet did him no good. He was not elected for Blackwall and Cubitt Town either.
When canvassing for the election Khales Uddin Ahmed (the successful Labour candidate for Bromley North Ward) visited a number of properties including 16 Prioress House. His evidence, which I accept on this point, is that, in May 2014 the only resident was a European male and that Mr Syed did not live there. When Mr Gilligan called, in June 2014, he found that no person whose name appeared on the register lived at that address.
I am completely satisfied that neither of these two THF candidates ever resided at 16 Prioress House. Their registration was false and it follows that, when they voted in the election (as it is not contested they did), they were guilty of an offence under s 61 of the 1983 Act. Now, clearly, when Mr Zaman voted in the postponed election he cannot have voted for Mr Rahman who had been elected back in May. Nevertheless Mr Zaman's mendacity in respect of 16 Prioress House did not bode well for his attempt to convince me that he resided at 312 The Highway at the date of the May election, at which he had also voted.
The reality was that at all material times Mr Zaman was the owner of a house in Shoreham-on-Sea where he lived with his wife and family. When taxed with this he said that he had split up with his wife and that the Shoreham property had been repossessed by the mortgagees (Santander) in 2012. This did not quite explain why he had registered himself at The Highway in 2012 but, having failed to answer correspondence or the canvass for two years had been removed from the register. He did not re-register himself at The Highway until 7 March 2014. A plethora of documentation was produced piecemeal during the trial relating to the Shoreham property, much of it contradictory. What the documents did include, however, was the office copy entry of the title at the Land Registry. This showed that Mr Zaman continues to be the owner of the property to this day and that there had never been a registered mortgage (as opposed to a court charging order which had been made for another purpose).
I was satisfied that Mr Zaman had lied about the Shoreham Property and, taken with the other evidence about the condition of 312 The Highway, had lied about ever being resident there. His was a false registration and his votes for himself and for Mr Rahman unlawful.
Next we have Mr Kabir Ahmed. He is one of several brothers and is an active member of the Mayor's team. Mr Ahmed was a Labour Councillor in the previous administration and was one of those who had 'defected' to Mr Rahman and become an independent. He was 'selected' as a THF candidate for Weavers Ward in 2014 and stood unsuccessfully.
For some time Mr Ahmed had given his address as 236a Bethnal Green Road, E2 0AA, a flat above a shop. This was said to be a property with four double en-suite bedrooms and a shared living room. The other occupants were said to be: Mr Ahmed's wife Sibly Rahman, his brother Mohammed Ansar Hussein, a Mohammed Mokit and Ala Uddin, who was said to work in the shop on the ground floor. According to Councillor Mohammed Abdul Mukit MBE, who knew Mr Ahmed well, he was not actually resident at that address, although he undoubtedly used it as an address for receiving mail. Both Mr Mukit and Mr Gilligan stated that the room allegedly occupied by Mr Ahmed and his wife was completely bare except for one bed, one chair and one desk.
Mr Ahmed's non-residence in the Borough was a matter of some notoriety. Councillor Peter Golds, an indefatigable letter-writer had written to various people to complain about this more than once and had raised it in open council. Councillor Mukit confirmed that Mr Ahmed actually lives at 52 Gants Hill Crescent, Ilford IG2 6TT[43]: he had attended his wedding, the invitation to which had given that property as Mr Ahmed's address. Mr Ahmed admitted in cross-examination that he paid no rent for 236a Bethnal Green Road and that he spent a lot of time in Gants Hill visiting his elderly parents.
Mr Gilligan told the court that Tracesmart and credit records he had checked also showed Mr Ahmed and his wife as resident in Gants Hill.
Applying the statutory test of residence set out above, I am quite satisfied that 326a Bethnal Green Road was not such a 'residence' as would entitle Mr Ahmed to be registered to vote from that address and I am equally satisfied that this was a mere accommodation address, used for administrative purposes. I did not accept that Mr Ahmed had any genuine belief that this was his residence: he quite clearly knew that the falsity of the residence was well-known to his political opponents and he continued to use that address.
It follows that Mr Ahmed's registration was a false registration and that his votes were unlawful.
At this point I should mention the mysterious case of Mr Shahed Ali. He was registered as being resident at two separate addresses, Flat 38 Welstead House, Cannon Street Road, E1 2LJ and 17 Harkness House, 101 Christian Street, E1 1RX. Both these addresses were in the same division of Whitechapel Ward (WH3) whose polling station was Henry Gosling Primary School. Mr Ali, though submitting a witness statement on behalf of Mr Rahman, was not called as a witness.
Absent any explanation being tendered to the court, it would appear that Mr Ali had himself registered twice in the ward in which he was standing (indeed stood successfully) as a THF candidate. On the face it, both addresses cannot have met the residence test and the inescapable inference is that at least one of them is false.
In dealing with the case of Mr Shahed Ali, the court is in no way embarrassed by the refusal of the parties to adduce his evidence or other evidence concerning his electoral behaviour. During the course of the Scrutiny, representatives of the Metropolitan Police removed the two ballots cast from these addresses in the Mayoral election and, it is understood may have obtained by another route the ballots cast in the ward and European elections. Mr Ali was arrested but it was decided that there was insufficient evidence to charge him with an electoral offence.
The court, both before the hearing and at the hearing, indicated that the case of Mr Ali should be investigated and that, absent explanations being tendered, the court was entitled to draw adverse inferences from the evidence about Mr Ali's conduct. Given the inquisitorial functions of the court, as was made clear, this was a course open to the court.
Were Mr Ali's the only instance of a THF candidate being involved in an apparent false registration, the court would have hesitated to come to conclusions but, as it is, putting it at its lowest, his conduct is at least prima facie of the same pattern as that of Messrs Syed, Zaman and Ahmed.
What we get from this is that, out of 44 THF candidates standing in the ward elections, three can be shown to have been guilty of false registration (Mr Zaman twice over) and a fourth potentially so. Mr Rahman cannot escape the consequences of these electoral frauds committed by his hand-picked candidates: they are his agents.
In the circumstances it is unnecessary to examine the other properties where false registration was discovered by witnesses such as Councillor Mukit and Mr Gilligan. I accept that the amended 'Ghost Voter' schedule annexed to the final written submissions of the Petitioners is, in general terms, accurate. That schedule, in its final form, is confined to registrations where it can be shown from documents extracted at the Scrutiny that votes were cast for Mr Rahman.
The false registrations are sufficiently numerous to demonstrate that false registration was not the random action of over-enthusiastic members of the public. The false registrations must have been organised. As the beneficiary of the organisation was THF, both Mr Rahman and his candidates in the wards, it would be wholly unrealistic to hold that the organisation of these registrations was other than in the hands of THF supporters, agents within the terms of electoral law. If there were no evidence of Mr Rahman's own candidates engaging in this practice, then it might just have been possible to deliver a Scottish verdict of 'not proven' as, in effect, Mr Penny invites the court to do. In the real world there is no meaningful alternative to a finding that most, if not all, of the false registrations were organised by persons who were agents.
Personation
Anyone who votes in the name of another person who is falsely registered commits personation. Anyone who has falsely registered himself and then votes commits an offence under s 61(1) of the 1983 Act.
Sufficient has already been said to show that, apart from the first three candidates mentioned (whose offence was under s 61(1)), there was an appreciable number of false registrations, each one of which, if a vote was cast in that name, amounted to personation under s 60.
At this point I shall return to Councillor Shahed Ali. He was registered at two addresses in the Whitechapel Ward. Two polling cards were issued and, on polling day, two people turned up at the WH3 polling station and voted – for Mr Rahman. Now one can quite understand the dilemma of the police. In order to charge someone with an offence, there must be evidence that points to that offence. Unlike civil proceedings where one may plead a case in the alternative, the criminal prosecutor must be able to put forward a case that has a realistic prospect of conviction. Charge someone with offence A, it may well be a complete defence for him to say 'Ah, but I was committing offence B: I am innocent of offence A' and, with some exceptions, to be acquitted.
This court is not so limited. The fact that two votes were cast in the name of Mr Ali means one of two things: either Mr Ali voted twice – an offence (thus an illegal practice) under s 61(2) – or someone else cast his second vote which is undoubtedly personation under s 60 whether or not he did so with Mr Ali's knowledge or consent. Either way an electoral offence is committed.
If the second vote was cast by someone other than Mr Ali, would it be with his knowledge and consent? It is theoretically possible that the occupant of the property where Mr Ali was not living found the polling card and said to himself 'this gives me the opportunity to cast an additional vote for Mr Rahman and his party' but the likelihood cannot be great. First, of course, it would be undoubted personation which carries serious consequences if detected. Secondly, given that Mr Ali was one of the candidates in the ward, the mystery voter would be taking a considerable risk that someone at the polling station would unmask him, particularly as the polling stations were beset by eager supporters of THF and, indeed, the candidate might also be known to the polling officers at the station.
Viewing this realistically, it is inconceivable that the second vote was cast by a member of the public without the knowledge and consent of Mr Ali. The court can be satisfied that one of two things must have happened:
a) both votes were cast by Mr Ali – illegal practice under s 61(2)
b) second vote was cast by someone else with Mr Ali's connivance – personation (corrupt practice) under s 60.
Conclusion on false registration and personation
It follows that the court is satisfied that false registration, false voting contrary to s 61(1) and personation by persons who are in law the agents of Mr Rahman has been proved to the requisite standard.
Other voting frauds
Unlike other recent election cases, postal vote fraud has not played a major part in this Petition. That is not to say, however, that such fraud was absent.
One of the drawbacks of election petitions, as has been said above, is that (in general) neither party has large resources to conduct investigations or to amass evidence. Consequently at the Scrutiny the court tends to be presented with a list of suspect properties at which it is said there may be false registrations and false votes cast in those names. The list is usually very short, in comparison with the number of electors, though it may be sufficiently large to exceed the majority of the winning candidate. Clearly, with an electorate the size of that for the Mayoral election, any list for the Scrutiny would represent a drop in the ocean.
Even at the Scrutiny, though, the court is only concerned with those names from the list of suspect addresses where the name was used actually to cast a vote and to cast it for the candidates whose election is being challenged. The court thus ends up with a modest tally of suspect ballot papers, for which the accompanying documents can be found (such as application to be registered, application for a postal vote or the voter statement that accompanies the postal ballot). Even if voter fraud is established, neither the parties nor the court have any idea whether it is the tip of a large iceberg or the few rogue items in an otherwise impeccable poll - or somewhere in between.
Voter fraud does, however, display certain patterns and, if those patterns are found and no coherent explanation advanced to negative the inference to be drawn from them, a court is entitle to draw an adverse inference from the patterns.
Furthermore, if it can be shown that there has been systematic voter fraud in favour of a particular candidate which goes beyond the occasional random fraud, then it is legitimate for a court to draw the inference that those committing this fraud come within the wide category of 'agents' for whom the candidate is responsible even if it is impossible for the individual fraudsters to be identified.
The allegations of postal vote fraud take two forms:
a) obtaining from postal voters incomplete postal vote documentation, completing it and using it to cast a ballot: this is personation contrary to s 60 of the 1983 Act and a corrupt practice;
b) obtaining completed postal vote documentation from a postal voter (with or without his knowledge or consent) and altering the votes shown on the ballot paper: this is the illegal practice of tampering with a ballot paper contrary to s 65(1) and, if the altered vote is accepted by the returning officer, personation.
The former of these frauds can be achieved in more than one way. The first is to make an application for a postal vote ('ATV') on behalf of an existing person, to complete the details with one's own particulars and thereafter to use the postal voting documentation to cast the ballot. This is not only personation under s 60 but a corrupt practice in itself under s 62A.
The second is to obtain a copy of the voter's ATV and to use it to complete his personal voting statement ('PVS') which must accompany the postal ballot before submitting the PVS and the ballot paper to the returning officer.
The third is to persuade the voter to hand over a completed and signed PVS but a blank ballot paper, to complete the ballot and submit both to the returning officer.
The latter of the frauds is self-explanatory. It does not matter whether the voter is persuaded to hand over his completed PVS and ballot paper to the fraudster for onward transmission to the returning officer or whether the fraudster simply intercepts the documents between the voter and the returning officer.
The principal evidence of the former frauds was the testimony of Councillor Mukit and, to a smaller extent, Mr Gilligan, and the expert evidence of Mr Robert Radley.
It has already been indicated that Mr Gilligan's veracity and reliability were not put in issue by Mr Rahman's counsel. I accept his evidence, though it is limited on this topic.
The reliability of Mr Mukit was put in issue. Unfortunately for Mr Rahman, Mr Mukit was cross-examined on his instructions about one episode (the Water Lily wedding event, set out below) where it was suggested to Mr Mukit that his evidence was deliberately untruthful. Mr Mukit stuck to his guns. Subsequent evidence was turned up that completely vindicated Mr Mukit's account and, at the same time, established that the account of the same incident given by Mr Rahman had not been the truth.
The court accepted Mr Mukit as a truthful and reliable witness.
Mr Mukit knows the Weavers Ward well, having lived there for over thirty years. For the 2014 election he canvassed a large number of properties in the ward. He discovered a considerable quantity of addresses where there appeared to be no trace of the voter whose name appeared on the register. Though some of his evidence was admittedly hearsay, it painted a pattern of postal voters having been asked by supporters of Mr Rahman to hand over their postal votes and of voters having handed completed ATV forms to Mr Kabir Ahmed and his brothers. Mr Mukit was astonished to discover several voters who told him that they had voted by post at a time when the postal votes had not yet been sent out. It turned out that these voters had been induced to hand over their completed ATV forms in the belief that they were actually voting. Mr Mukit discovered evidence that at one address, 7 Bacon Street E1 6LF, seven postal votes had been 'collected by Mr Rahman's men' which apparently meant that they had collected the completed PVSs but uncompleted accompanying ballot papers.
One of the voters mentioned was an elderly lady, Gulab Bibi. This lady gave evidence in response to a witness summons (properly using an interpreter). Other members of her family also gave evidence. Both she and her family were adamant that she had cast her postal vote herself. A chance question from the Bench, however, revealed that what she had done was to sign a document and hand it over (clearly the PVS) and she denied ever having put a cross on a piece of paper. On the face of it this was a further instance of the first of the two frauds having been perpetrated on this lady (and the electorate).
Mr Gilligan told the court:
We also visited another address, 37 Cavell Street, E1, a small block of about twelve flats reserved for elderly Bangladeshi people, where I was told that a number of the residents had had their blank ballot papers taken from them against their will by supporters of Lutfur Rahman and Tower Hamlets First. Through the translator, one resident told me that this had indeed occurred. She said: "A woman came and said, we are here from Lutfur Rahman's party. Many people of your age have voted for him already, so I'm here to take your vote. They came to me and took my signature and then took the blank ballot paper from me. I normally go to the polling station. I told them I was used to doing it myself and didn't understand why it was different this year. I am a long-term Labour supporter and would never have supported Lutfur Rahman…"
Mr Radley is a very senior and well-respected document expert. He was initially appointed as the parties' joint expert pursuant to Directions Order No 6. He was subsequently asked by the Petitioners to conduct further tests and, in this matter, he was regarded as instructed by (and was paid by) the Petitioners. At a later stage Mr Rahman's legal team posed a large number of questions to Mr Radley, mainly asking him to comment on extracts from articles and textbooks on various aspects of questioned documents. The time limits for Mr Radley to examine and report on the documents were inevitably conditioned by the times fixed for the hearing and the court is fully aware that he was not given anything like the full amount of time he would have preferred to complete the tasks laid on him. That he managed to produce a series of reports as detailed as he did is a tribute to his professionalism under pressure.
His findings were, understandably, not challenged by either side although, quite properly Mr Rahman's counsel submitted that the conclusions to be drawn from them were very limited.
At this point it must be emphasized that the core documentation on which Mr Radley was asked to work consisted of ballot papers extracted at the Scrutiny and the documentation supporting those ballots. In the event he reported on 15 ballots from Lansbury Ward, 14 from St Katherine's and Wapping Ward and 105 from Weavers Ward.
Much was made in cross-examination of Mr Radley by Mr Penny of the fact that very few institutions maintain what might be terms a 'library of inks', in other words a database of all available inks with their chemical analysis so that any questioned ink can be compared with the library and identified, much in the way that, say, DNA or fingerprints are identified. Most, if not all, of those institutions round the world are governmental bodies and are not available to document examiners in the private sector such as Mr Radley. Though this is undoubtedly the case, it was not determinative of the conclusions that could properly be drawn from Mr Radley's findings as to the inks deployed on the questioned documents.
What Mr Radley discovered was that, of the sample analysed, two groups of documents, each roughly one quarter of the total appeared, in each case, to be written in the same ink. Thus 50% of the documents displayed only two types of ink. Mr Radley considered this, in his experience, to be unusual, particularly bearing in mind, of course, that each of the individual documents ought, in theory, to have been produced by a different person.
Mr Hoar, in his final submissions, frankly accepts that the findings about the inks 'cannot in and of itself be conclusive' and he is right, but, as he also points out, this is not the sum total of Mr Radley's findings.
The next strange feature was that many of the documents showed indentations (known as 'ESDA impressions') that were inconsistent with what one would expect to find if all the voting documents had been completed by their ostensible authors.
Mr Radley examined a large number of PVS which had the feature that the date of birth was written in a firm hand but the signature and the X marks on the ballot paper appeared to be in a shaky or slow and methodical hand, thus indicating that they had been completed by more than one person. This was an unusual feature and one that should not have been found if all the documents had been genuine.
The examination of the X marks on the ballot papers displayed an unusual feature described as 'touching up' by adding a foot to the X. Mr Radley, whose experience of examining ballot papers is considerable, considered this to be striking. The numbers involved were certainly not consistent with mere coincidence.
Many of the unusual features were present in groups of documents ostensibly emanating from the same household, a finding which is consistent with documents from several voters in one household coming into the hands of a third party who later completed them.
It is not without significance that a large proportion of the questioned documents came from Weavers Ward where there was already the evidence of Councillor Mukit as to the activities of Mr Kabir Ahmed and his brothers and as to other voter irregularities within the ward.
None of these pieces of evidence is necessarily conclusive in isolation. The question is whether, taking all the evidence of the first category of voter fraud mentioned above, the court can be satisfied to the appropriate standard that voter fraud in this category had occurred. In my view it can and I am so satisfied.
Furthermore the pattern and number of the irregularities, particularly in Weavers Ward is such that, in my judgment, it would be perverse to come to any conclusion other than that these frauds were organised by persons who meet the criteria of agent described above.
The court is therefore satisfied that agents of Mr Rahman were guilty of breaches of s 62A of the 1983 Act and thus of corrupt practices.
Turning to altered voting papers, one can be somewhat briefer. The Scrutiny extracted all the voting papers which had been altered so as to change the original first preference vote for another candidate to a first preference vote for Mr Rahman. Time did not permit the extraction, though requested by Mr Hoar, of the ballots where the second preference had been so altered.
The returning officer's solicitors then prepared a very helpful schedule of the altered ballots. 46 altered ballots showing a change from another vote to a first preference for Mr Rahman had been accepted into the count. 26 had been altered from a first preference vote for Mr Biggs to a first preference vote for Mr Rahman. Based on experience of this type of fraud, I felt that it was on the borderline of showing a pattern of fraud, particularly as, given the virulent nature of the campaign, the likelihood of any voter choosing Mr Biggs and then changing his mind to Mr Rahman (or vice versa) was very low.
Even, however, with the other evidence of interception of ballot papers between the voter and the returning officer, I considered that there was insufficient evidence to satisfy the court to the criminal standard that the second category of voter fraud had occurred.
Conclusions on other voter frauds
With regard to the unlawful completion and use of voting documents by third parties, the court was satisfied that both corrupt and illegal practices had taken place and had been committed by persons who were, in electoral law, the agents of Mr Rahman.
With regard to the unlawful alteration of ballot papers already completed, the court could not be satisfied to the requisite standard that corrupt of illegal practices had taken place and no finding is made on that issue.
FALSE STATEMENTS CONTRARY TO s 106 OF THE 1983 ACT
The case advanced by the Petitioners can be summarised quite shortly. They say that, virtually from the moment Mr Biggs was adopted as the Labour Party's Mayoral candidate, Mr Rahman and Mr Choudhury decided to run their campaign on the basis of portraying him as a racist. This, it is said, was a crude but ultimately successful attempt to persuade the Muslim and, in particular, the Bangladeshi electorate, that the Labour candidate was racially prejudiced, inherently hostile to those of non-white ethnicity and to those of the Muslim religion. If he were elected, he would use his powers to the detriment of ethnic 'minorities' whom he did not believe were truly 'British'.
A useful starting point is the Oxford English Dictionary in which can be found:
Racism
A belief that one's own racial or ethnic group is superior, or that other such groups represent a threat to one's cultural identity, racial integrity, or economic well-being; (also) a belief that the members of different racial or ethnic groups possess specific characteristics, abilities, or qualities, which can be compared and evaluated. Hence: prejudice, discrimination, or antagonism directed against people of other racial or ethnic groups (or, more widely, of other nationalities), esp. based on such beliefs.
Racist
An advocate or supporter of racism …
There can be no doubt that to call a man a racist is to make 'a statement of fact in relation to [his] personal character or conduct' (s 106). In the multi-racial, multi-cultural society that is 21st century Britain there can be few more damaging statements to make about anyone. To make such a statement about a white candidate in an electoral area that had a majority of BME citizens would be a serious matter indeed.
When put on the spot by the court, Mr Penny, somewhat grudgingly, admitted that to call a man a racist was a statement about his personal character or conduct. He submitted, understandably, that Mr Rahman and Mr Choudhury had not branded Mr Biggs a 'racist' tout court. They had merely criticised him for making 'racially insensitive remarks', and those criticisms were true, alternatively were genuinely and reasonably believed to be true by his client.
The court must therefore examine what was said about Mr Biggs in the course of 2013/4 and, in particular, what was said about him on and after 14 April 2014.
Much of what occurred in 2013 may safely be dismissed as the cut and thrust of local politics where quarter is neither sought nor given. To that extent, it is well outside the ambit of s 106. Two incidents in the summer of 2013 highlight the line taken by Mr Rahman and his supporters that any critic of the Mayor is playing into the hands of the far right EDL and is therefore engaging in 'dog-whistle politics'. The obvious sub-text is that those who criticise Mr Rahman are covertly seeking support from those within the Borough who sympathise with the EDL or who are racists.
The first of these incidents was, undoubtedly, started by the Labour Party. On 15 May 2013 it issued a press release headed 'Mayor targets Decent Homes funding to his supporters'. This document contained a table, the figures in which tended to show that the refurbishment of homes under the Decent Homes programme had been concentrated in three wards, Shadwell, St Dunstan's and Stepney Green, and Whitechapel. It was said that these were the wards 'mainly represented by the Mayor's supporters'. As Mr Biggs pointed out, this was not, on its face, a claim that Mr Rahman's administration was favouring the Bangladeshi community in general because the table showed that a number of wards with a large Bangladeshi population had missed out on the housing programme. It was a claim, rightly or wrongly, of what Mr Penny, with great daring in the circumstances, referred to as 'pork-barrel politics'. The court will adopt that term faute de mieux.
'Pork-barrel politics' is a 19th century American expression and, as a phenomenon, such politics are as old as democracy itself. In essence the phrase means that those in power channel public money, projects and jobs to areas either occupied by their existing supporters or occupied by people who might become supporters if the pork-barrel came their way. As will be seen when we consider bribery, all pork-barrel politics is, ethically, a form of bribery of the electorate, its ethical dubiousness in no way diminished by its universal practice by politicians of all stripes. It is when we come to draw the line between pork-barrel politics (unethical but legal) and bribery (unethical and illegal) that the difficulties start to arise.
That the figures quoted by the press release were correct was confirmed by Councillor Rabina Khan, the Cabinet Member responsible for housing. There was much cross-examination as to whether the criticism of cronyism in the housing programme was fair or unfair. Fortunately the court is not concerned with the rights and wrongs of the dispute save to say that Ms Khan's assertion that, in allotting housing money, the Mayor always followed the advice of his officials fell a little flat in the light of the evidence of his attitude to council officials when it came to allocating grants.
What is of interest, however, is the Mayor's reaction. On 18 June 2013 his office issued a press release stating in terms that the Labour press release was 'inflammatory', had been adopted by the EDL and was pandering to racist prejudice. The press release contained a quotation from Ms Khan:
The irresponsible and dangerous claims made by Labour have found their audience and are now doing the rounds with the EDL to stoke up fear within the community that some residents and areas are more deserving than others… In a crucial election year, residents expect responsible leadership from John Biggs and Labour and that they wouldn't resort to the 'dog whistle' politics of the far right.
Though still within the safety zone of legitimate political debate, this was a harbinger of things to come.
The second incident actually concerned the EDL, which had announced one of its periodical marches for Tower Hamlets earlier in the year. Well before the date of the march had been announced, the local Labour Party had fixed to hold an evening barbecue for its members on Saturday 7 September 2013. As ill-luck would have it, the EDL later announced it would hold its march on the afternoon of 7 September. This coincidence provided Mr Alibor Choudhury with an opportunity that was too good to miss.
A press release was issued by Mr Choudhury on 27 August 2013, suggesting that, instead of coming out on to the streets in protest against the EDL march, Labour would be having a 'fun day'. Mr Choudhury quoted himself as saying 'while a diverse community coalition gathers to show the EDL that Tower Hamlets is no place for hate, John Biggs and his Labour chums will be letting their hair down over nibbles'. The press release re-visited the housing dispute of May/June and repeated the charge that this was fuelling EDL propaganda.
By itself this could be regarded as a justifiable piece of tail-tweaking by the Mayor but it did tie into the underlying theme that Labour and Mr Biggs were not averse to wooing the racist vote.
More seriously, on 23 August 2013 Mr Rahman had organised a letter to be published in The Guardian demanding that the Home Secretary ban the proposed EDL march. The letter had a great number of signatories, including local Members of Parliament, clerics of various religions other prominent citizens. Mr Rahman took good care however to ensure that Mr Biggs was neither informed of the letter nor asked to be a signatory. When the letter was published by the Guardian therefore the absence of the Labour Mayoral candidate stuck out like a sore thumb, as was the intention. Again, legitimate politics – just – but part of the pattern.
On 22 September 2013 the London edition of the BBC's Sunday Politics programme carried a feature on Tower Hamlets. In the course of it, Mr Biggs was interviewed standing in the street and he made the following comment à propos Mr Rahman:
All his councillors are from the Bangladeshi community and the primary focus of his policy making has been on the Bangladeshi community. A very important community in Tower Hamlets but not the only community in Tower Hamlets. My vision is about a more outward looking borough where different communities work together, live together and maximise our opportunities. The real tragedy of Tower Hamlets is that we've got masses of high value jobs coming into the area but not a lot of local people getting them. That's the real story. And what we don't want to have is small communities that are separate from each other and are very inward looking because the world will pass them by.
The first two sentences were later said by Mr Rahman and Mr Choudhury to be 'racially insensitive'. What is the reality? The first part of the first sentence was indubitably true. All the Councillors now under the THF banner were Bangladeshi. Was the second part of the sentence true? The answer has again to be 'yes'. Jumping ahead in time, the factual state of affairs disclosed by the PwC investigation established beyond question that public money had been massively channelled into the Bangladeshi community and that the lion's share of grant money had been awarded to Bangladeshi organisations.
The court was asked to take Mr Biggs's sound-bite as being racist but of course it was nothing of the kind. The proposition can be tested by reversing the facts. Assume that, in this multi-ethnic borough, a white man had been elected Mayor and had thereafter appointed only white people to his Cabinet and had given a preponderance of grant money to organisations run by and for white people. If a non-white politician in the Borough had then criticised this, who would be considered the racist – the white Mayor or his non-white critic? The question answers itself. It is important to realise that racism is not the exclusive property of those whose skins are white.
The court was also asked to accept that this broadcast had immediately caused enormous outrage among the Bangladeshi community. This was the opposite of the case. The immediate reaction was in fact non-existent. Some time later Mr Rahman posted a blog on the website Huffington Post and on 4 October 2013 Mr Rahman wrote a long letter to Mr Iain McNicol, the General Secretary of the Labour Party. This letter made a number of complaints about the Tower Hamlets Labour Party and Mr Biggs, going back to the housing row and including as the sixth item on the list Mr Biggs's sound-bite. Inevitably the letter alleged that this was encouraging the EDL and, equally inevitably, out came the dog-whistle – 'These smears, of which the best are mere falsehoods and the worst are nasty, cynical blasts on the proverbial dog whistle that have demonstrably stirred up racial tensions, fall gravely beneath the standard I expect of a party I myself joined in 1989 and served loyally for many years.' The letter concluded by demanding that the Labour Party carry out an investigation and provide an 'informed and thorough response'.
This letter, which by implication invited the national Labour Party to disown, or, at least, to distance itself from Mr Biggs, was a clever letter, as one would expect from an intelligent lawyer. Interestingly, unlike most communications on all sides in this election, it was not leaked to the media or published as a press-release. It was put to Mr Rahman that he cannot sensibly have expected a response and his answers were, as ever, evasive. The cleverness of the move is obvious. If the Labour Party were to distance itself from Mr Biggs that would, naturally, be a victory for Mr Rahman: if it rejected the complaints, it was supporting racism and dog-whistle politics: if it said nothing, it was deliberately shutting its eyes to the racially inflammatory conduct of its Mayoral candidate.
Nor was this accidental, because hand-in-hand with the campaign to depict Mr Biggs as a racist went a campaign to describe the Labour Party as a whole as being 'institutionally racist'. This court is not concerned with that campaign and, in any event, s 106 of the 1983 Act does not stretch to false statements about a political party. In considering what followed, however, it should be borne in mind that the accusation that Mr Biggs was a racist was made in the context of saying that the party he represented was itself racist.
Returning to the absence of outrage, this was surprising. Tower Hamlets has a very large and very active Bangladeshi press in both English and Bengali as well as no fewer than eight television channels broadcasting in Bengali. These media are all strongly, vehemently and occasionally intemperately supportive of Mr Rahman and hostile to his political opponents. Surely the sound-bite would have been a gift - but protest came there none.
On the last day of evidence this gap was sought to be filled by calling Pola, now Baroness, Uddin. This was not a good idea. She did not succeed in supporting the thesis that the broadcast had caused immediate outrage and her credibility was comprehensively demolished by cross-examination about the six-figure expenses defalcation that had led to her suspension from the House of Lords.
Even Mr Alibor Choudhury was silent in the autumn of 2013. He later claimed that Mr Rahman had told him not to use the broadcast for political purposes for the time being, but why this was so was never explained. At all events, Mr Choudhury did keep quiet for some five months and the broadcast did not surface again until February 2014.
Press release 19 February 2014
At some point in February 2014 it is clear with the benefit of hindsight that Mr Rahman and Mr Alibor Choudhury decided to run their campaign by branding Mr Biggs as a racist. The peg on which to hang the campaign was going to be the September broadcast which had lain dormant for five months.
Consequently, on 18 February 2014 Mr Choudhury sent a letter to the complaints department of the Equality and Human Rights Commission ('EHRC'). As will be seen, at this stage any response from the EHRC was irrelevant: what was important was that the letter had been written. The letter complained, in terms, that the local Labour Party 'appear to be centring their campaign to unseat Lutfur on racial grounds'. He quoted the first sentence of the sound-bite (but not the remainder) and, having protested that he was 'as British as Mr Biggs is', stated that the sound-bite was 'a clear appeal to racial prejudice' and linked it to the (previous) EDL march.
The letter went on to state that on 25 September 2013 there had been a bomb threat at the East London Mosque (in fact it had turned out to be a false alarm) and on the following day 'a suspicious package' arrived at the Town Hall (if true, which is unclear, another false alarm) and he suggested that 'these sinister incidents were the work of extremists whipped by Mr Biggs's outburst. The letter went on to make a number of other allegations and demanded a 'prompt and thorough response'.
The following day, before any response had been or could have been received, Mr Choudhury went public with a press release over the headline 'John Biggs: Dividing the East End. Labour Mayoral hopeful reported to the Equality and Human Rights Commission over inflammatory and divisive comments.'
The release started 'Pressure was today mounting on Tower Hamlets Labour Mayor hopeful John Biggs after he was referred to the Equality and Human Rights Commission for remarks made on the BBC's Sunday Politics programme.' There followed lengthy quotations from Mr Choudhury (perhaps unsurprising, given that he was the author of the press release). It contained the following remark: 'John might want to think of me as a foreigner but I was born here and am as British as he is.' This appears to have been entirely gratuitous as nothing Mr Biggs had said (or even that Mr Choudhury had alleged that Mr Biggs had said - by no means the same thing) had remotely suggested that Mr Choudhury and his fellow Bangladeshis were not British.
Mr Choudhury then decided to go back in history.
The comments reported to the Commission are the latest in a long line of racially charged comments by the Labour Mayoral hopeful. In 1998, he campaigned against the creation of Banglatown and in 2013 his dog-whistle claims on housing were picked up and gleefully used as propaganda by the EDL who marched on the borough just a couple of months later.
Finally there was the suggestion that Mr Biggs had caused 'far right patrols on our streets and bomb threats to the Town Hall and East London Mosque.'
The reference to Banglatown was a distortion of the facts. Back in 1998 there had been a campaign to rename the ward of Spitalfields as Banglatown. Mr Biggs had objected to losing the name Spitalfields because of its long and historic connection with the East End and the current Borough. In reality, as Mr Choudhury was fully aware, a typical British compromise was reached whereby the ward became 'Spitalfields and Banglatown' as it has remained to this day. None the less this was being represented in the press release as a racist attack on the Bangladeshi community.
Now, unlike the broadcast, this press release did cause outrage and the local Labour politicians, including both the local MPs[44] issued a joint statement condemning what they described as 'lies and character attacks'.
Mr Alibor Choudhury was in no way abashed and went on social media referring to Mr Biggs as 'John Bigot'.
'Black cardigans'
The next episode was both deeply unpleasant and mildly ludicrous. In this context it should be said that Council meetings, especially those open to the public, are by no means places of dignified quiet. I was told by Councillor Golds that any criticism of Mr Rahman or his colleagues or indeed any attempt to ask questions would habitually be met with shouts of 'racist' or similar from the Mayor's party. Nor were members of the public silent. The public gallery was, the court was told, often filled with raucous supporters of the Mayor who would shout abuse at those opposed to him, frequently in unacceptable terms. For example Mr Golds was subject to abuse both because he is Jewish and because he is gay. Though one might have thought that any Mayor would discourage anti-semitic homophobic abuse, no attempt seems to have been made by him to curb the activities of these supporters.
On 26 February 2014, at a Council meeting open to the public, Mr Choudhury lost control of himself: he pointed to a Labour Councillor and former (non-elected) Mayor, Ms Ann Jackson, and shouted 'Oswald Mosley had his blackshirts, John Biggs had his black cardigans.' This outburst was extraordinary in itself but Mr Rahman made no attempt to ask Mr Choudhury to withdraw the remark or to apologize. In the end, the Council voted to remove Mr Choudhury's right to speak.
What made the incident even more indefensible was that Ms Jackson was wearing a black cardigan because she was in mourning for a relative.
Mr Choudhury was subsequently asked (in private) by Mr Rahman to apologize to Ms Jackson but it was made clear that the apology was only tendered because she had been in mourning. The most he would say was that his remarks had been 'ill advised'.
Needless to say the outburst was fully reported in the local press and on social media.
When Mr Choudhury was cross-examined about this deplorable and puerile episode he was entirely unrepentant and as his evidence progressed became more and more extreme. He asserted that he had been entirely justified because Mr Biggs was no different from Sir Oswald Mosley and had started a 'race war' in the Borough. His evidence at this point did him –and his leader – no favours. It must be said that Mr Rahman himself seems to have maintained press silence on this episode.
The EHRC's responses
One suspects that Mr Choudhury had had little hopes that the EHRC would actually help him – it was the letter of complaint itself that fuelled the press release. Fortune does sometimes favour the bold, however, because a senior solicitor of the EHRC wrote a very ill-advised response. The relevant paragraph read:
The Commission agrees that you are rightly concerned about the remarks made by the Labour Mayoral candidate on the BBC's Sunday Politics show. However such remarks should more appropriately be reported to the police. Whilst the Commission is the regulator of the Equality Act 2010 for matters concerning discrimination and human rights, incitement to racial hatred is a police matter as it was made a criminal offence by the Race Relations Act 1976 and is not covered by the Race and Religious Hatred Act of 2006. Similarly, the publication of material that is likely to incite racial hatred may be a criminal offence under the Criminal Justice and Public Order Act 1994.
While the letter contains no more than statements of the applicable law, it does not take much imagination to see how it may be represented as being an acceptance by the EHRC of Mr Alibor Choudhury's complaints.
It is at this point that we meet the other significant figure whose presence was sensed throughout the trial but who was not called as a witness. Mr Ted Jeory is the News Editor of the Sunday and Daily Express Online. He has a keen interest in Tower Hamlets and makes clever use of his somewhat unusual surname to produce a blog entitled 'trialbyjeory'. Having received a copy of the EHRC letter from Mr Choudhury, and realising that it was going to be used to claim that the EHRC was agreeing he had a case, Mr Jeory took up the cudgels on Mr Biggs's behalf and wrote to the Commission pointing out the use to which its letter was likely to be put.
When Mr Jeory's intervention reached the EHRC, it hit the panic button. Its Chief Legal Officer was wheeled out to issue a strong retraction in a letter dated 11 April 2014:
In our letter, we expressed a view about remarks made by John Biggs on the BBC "Sunday Politics" broadcast on 22 September 2013. Mr Biggs is the Labour mayoral candidate for Tower Hamlets. I have now had the opportunity to review this letter and to discuss with colleagues. On re-assessment, in my view, this letter was inaccurate in going outside the remit of the Commission and in appearing to proffer an opinion in a situation where, as the letter makes clear, the matter is property the remit of other authorities, who are appropriately placed to address any issues arising.
The date of this letter is important as will be seen.
Press release 15 April 2014
On any view of s 118A of the 1983 Act this release appeared at a time when Mr Biggs was incontestably a 'candidate'. It has to be read, however, in the context of the preceding press releases and, in particular, to that of 19 February to which it is the follow-up.
What had happened in the interim was that on 31 March 2014 the BBC had broadcast an edition of Panorama which detailed the results of its investigation into the channelling of grant money predominantly to Bangladeshi organisations. The immediate result of the programme was that on 4 April the Secretary of State appointed PwC to carry out a Best Value investigation of the Council and, in particular, its policies with regard to allocating grants and the sale of Council properties. It should be said that Mr Biggs took no part in the programme. The programme was made by John Ware, and Mr Gilligan played a part in it. The parties did not, in the end, insist that I should watch the programme and I have not done so.
I shall return to the programme when I consider bribery.
The 15 April press release initially concerned with the broadcast but was headed 'John Biggs urged to distance himself from divisive journalists and apologize for Bangladeshis only remark.' The first part contains the statement that Mr Ware and Mr Gilligan had claimed that the Mayor had channelled money into Islamist extremist organisations: whether it is correct that this was claimed I do not know. The release contained a quotation from Mr Rahman in which he condemns the allegations of links to extremists and continues: 'They are divisive nonsense that smears the entire Muslim community in the East End and I urge John Biggs to distance himself from those peddling them and to retract his own offensive comment that I am working only for one community.'
There is, inevitably, a quotation from the author of the release, Mr Choudhury: 'Cllr Alibor Choudhury reported Biggs' remarks that Mayor Rahman was only working for the Bangladeshi community to the Equalities and Human Rights Commission who stated that he was "rightly concerned" but that the issue appeared to be a hate crime and therefore a matter for the police.' Mr Choudhury then went into direct speech: 'John Biggs needs to apologize for his own divisive remarks and distance himself from those journalists and pundits coming in from outside to damage our sense of community and cohesion in the lead up to the elections.'
What this press release was clearly implying was that the EHRC had substantiated Mr Choudhury's complaint and confirmed that what Mr Biggs had said was a 'hate crime' and a matter for the police. But, by the time he drafted this press release, Mr Choudhury knew perfectly well that the EHRC had retracted its earlier letter and had distanced itself from the view expressed in that letter. Mr Choudhury knew therefore that what he was saying about the EHRC was no longer true.
To imply that a man has been guilty of a hate crime and that this has been endorsed by a body such as the EHRC clearly meets the test of being a statement about the candidate's personal character and conduct. And it was false. And Mr Choudhury knew it was false. To use the admirably robust term employed by Thomas LJ in Woolas, it was dishonest.
The press release of 15 April 2014, therefore, did amount to a breach of s 106 of the 1983 Act. But there was more to come.
Press release of 23 April 2014
The previous press releases had been much repeated, expanded upon and embellished on social media. There were those in Mr Rahman's camp who felt that the racism charge needed a bit more body. One of Mr Rahman's hand-picked candidates who was not Bangladeshi was Mr Stephen Beckett, another former member of the Labour Party. With the elephantine memory of the political activist he recalled the (otherwise) long-forgotten spat about the bogus fax some 19 years earlier. He fossicked in his archives and found Mr Keith's letter and memorandum, together with a photocopy of the two leaflets discussed and a clip of press cuttings from the period – though not, alas, the bogus fax itself. These were duly dusted off and handed to a delighted Mr Choudhury.
What Mr Choudhury concocted was the press release of 23 April 2014.
FORMER LABOUR LEADER ACCUSED JOHN BIGGS OF RACISM
LEAKED INTERNAL MEMO REVEALS BIGGS' QUESTIONABLE 20 YEARS RECORD ON RACE
Labour Mayoral hopeful John Biggs was facing mounting criticism today on his questionable record on race issues as a leaked internal memo from the Labour Party revealed that concerns had been raised regarding Mr Biggs's apparent prejudice as early as 1995.
Professor Michael Keith, now Director of the Centre for Migration Policy and Society at Oxford University and a former Labour council leader in the borough, wrote to Labour Councillors and MPs saying:
"In short, I would accuse John Biggs of racism" after Biggs was apparently involved in the production of an inflammatory election leaflet.
This is not the first time Biggs has been mired in a face row. In 1998 he campaigned against the creation of Banglatown to be added to Spitalfields Ward and in 2013 his Labour Group made false claims that housing allocations were being targeted to Mayor Lutfur Rahman's supporters – claims that were gleefully used as propaganda by the EDL.
Recently, Biggs caused controversy with irresponsible remarks on the Sunday Politics show claiming Mayor Rahman was only serving the Bangladeshi community, at a time when the EDL were planning to march through Tower Hamlets.
Cllr. Alibor Choudhury of Tower Hamlets First, who reported Biggs to the Equalities and Human Rights Commission for the remarks said:
"John Biggs' 20 year record of dubious racially-charged remarks is there for anyone to see. This latest revelation shows that he doesn't have the cultural sensitivity to run a diverse borough like Tower Hamlets."
One can leave aside for the present the issues of Banglatown and the housing figures. On the subject of the Sunday Politics show, it need only be said that the press release was demonstrably and deliberately false in suggesting that the broadcast had preceded the EDL march and thus, by implication, might have encouraged it.
What is this press release conveying? The answer is straightforward. What the release is intended to convey is:
a) John Biggs is a racist;
b) his colleagues in the Labour Party have known he was a racist for 20 years;
c) he was denounced as a racist in a 'Labour Party memorandum' 20 years ago;
d) he was expressly called a racist by a prominent member of the Labour Party, now an Oxford Professor;
e) he was involved in producing an 'inflammatory' (in the context, meaning 'racist') leaflet.
Mr Penny attempted unavailingly to convince me that all this press release meant was that Mr Biggs occasionally said and did things that were considered 'racially insensitive'. It did not mean that. The reader of that release would get the message loud and clear: 'John Biggs is a racist – and his own party think so too.'
This was the final official blast in the campaign to brand Mr Biggs as a racist. Mr Rahman and, in his quieter moments, Mr Choudhury, denied that there was any such campaign, but a straight question to Mr Beckett let the cat out of the bag:
THE COMMISSIONER: Mr. Beckett, why did you disinter this document
and give it to Mr. Alibor Choudhury?
A. At the time, your Lordship, I was very concerned about the remarks that Mr. Biggs made on the Sunday Politics Show.
Q. That was in the September of the year before; yes?
A. That is right. I can remember speaking to Alibor Choudhury and asking whether or not we had received an apology or an explanation for Mr. Biggs' remarks, which I understand we hadn't. It prompted me to look back in my files at the time when I shared Labour group membership with Mr. Biggs. In looking through my files it helped prompt my memory and, of course, this document is very helpful for the court today.
Q. In what way?
A. It indicates that John Biggs has a history of racially insensitive language.
Q. So the purpose of giving the document to Mr. Alibor Choudhury would be, as it were, to support an argument that Mr. Biggs was a racist?
A. Yes. Fundamentally, yes, that is what it does.
Now, to be fair to Mr Beckett, he went on to say that he himself did consider Mr Biggs to be a racist, though he graciously conceded that he did not consider Mr Biggs to be a Nazi or someone who might have enlisted in the Gestapo.
Returning to the press release and comparing it with the analysis already carried out of the letter and memorandum of Mr Keith, it is apparent that the press release contains a number of serious factual misrepresentations and is a gross travesty of what Mr Keith had said. First and most importantly, no honest person reading Mr Keith's memorandum and doing so in its express context, would consider that Mr Keith had accused Mr Biggs of being a racist in a sense that would be understood by the ordinary reader.
Secondly, the quotation 'I would accuse John Biggs of racism' was not only taken completely out of context (the remainder of the sentence having been deliberately excised) but was factually untrue because Mr Keith was not, at that point, referring to the allegedly 'inflammatory' leaflet.
Thirdly, neither the paragraph quoted nor the memorandum as a whole contained any statement connecting Mr Biggs with the production of the leaflet – even if it could properly be called inflammatory (which is extremely dubious).
Fourthly, the clear suggestion made by the press release was that this was a 'Labour Party' memorandum with some sort of official seal of approval instead of being, on its face, a personal document written to persuade a disciplinary committee not to discipline Councillor Ahmed.
That this press release was a gross and intentional travesty of the truth is not simply the view of the court. When Professor Keith saw the press release, he hit the roof. The following day he said publicly:
To dredge up out of context comments that were made almost twenty years ago to smear someone's character scrapes the gutter. I've known John Biggs for decades and, while we have had our differences at times, there is no doubt in my mind that he works for the benefit of the whole community in Tower Hamlets. To try to paint him as a racist is a cynical act of electoral dirty politics. He is the best candidate to represent all the communities of the borough in these difficult times and I am happy to support him.
Inevitably, having been given the Lie Direct by Professor Keith, Mr Choudhury did not issue a retraction. He let the press release do its work. As it did. The media loved it. Social media had a field day. And there was credible evidence that canvassers on the doorstep and THF activists at polling stations were saying 'John Biggs is a racist' to anyone (particularly in the Bangladeshi community) who would listen.
The release spawned wild allegations which, thanks to social media, went the rounds. Perhaps the wildest was the allegation that, if elected Mayor, Mr Biggs would close down mosques. Now it is easy to display a loft disregard for this kind of rumour. Clearly any reasonably educated person would know that a Mayor would not have the power to shut down mosques and, even if he had it, would not commit political suicide by attempting to do so in a borough with a 35% Muslim population. Such rumours, however, do have traction amongst the less sophisticated members of a community which had been cynically encouraged by Mr Rahman and his friends for several years to see itself as isolated, under threat and victimised.
At this point, the question has to be posed: is Mr Biggs a racist in the way that any ordinary person would understand the term? I need waste little time on this. Mr Biggs's political record speaks for itself and I have had the advantage of seeing Mr Biggs give evidence under testing cross-examination.
At the end of the day, not even Mr Rahman's counsel was prepared to argue that Mr Biggs was a racist. The highest he was able to put it was that, from time to time, Mr Biggs makes remarks which his political opponents claim are 'racially insensitive'. And Mr Rahman himself was not prepared to call his opponent a racist. One may trawl through Mr Rahman's lengthy witness statements but nowhere will one find a statement remotely approaching an expression of belief that Mr Biggs is a racist. When faced in the witness-box with a straight question from the court as to whether he considered Mr Biggs a racist, Mr Rahman, as was his wont, evaded the question and commenced a lengthy discourse on the subject of Mr Biggs's unfortunate remarks.
In short, neither Mr Rahman nor his counsel was prepared to say 'John Biggs is a racist.'
Consequently the claim that Mr Biggs was a racist was always false and, put in that stark form, Mr Rahman knew it was false. For what it is worth, the court has grave doubts as to whether even Mr Choudhury ever really believed Mr Biggs was a racist. He made exaggerated and ever more absurd allegations in the witness-box and his astonishing outburst in the Council Chamber in the 'black cardigans' episode equally shows him to be lacking in self-control. The court has no doubt, however, that, in compiling the press release of 23 April 2014 Mr Choudhury knew exactly what he was doing and what he was doing was deliberately concocting a wholly dishonest case for proclaiming Mr Biggs a racist, based on a distortion of a nineteen-year old document.
The court is satisfied, therefore, to the requisite standard that the press release of 23 April 2014 contained false statements concerning the personal character and conduct of Mr Biggs and that Mr Rahman did not have a genuine belief in the truth of those statements and neither he nor Mr Choudhury had any reasonable grounds for belief in their truth.
Consequently, even if Mr Penny's arguments as to the effect of s 118A of the 1983 Act were to be correct and the court were restricted to statements made on or after 14 April 2014, both the press release of 15 April and the press release of 23 April 2014, whether viewed in isolation from what went before or even in isolation from each other, were both breaches of s 106 of the 1983 Act. On this aspect, therefore, the Petitioners' case succeeds.
PAYMENT OF CANVASSERS
The next series of allegations to be considered is payment of canvassers, contrary to s 111 of the 1983 Act.
It must be said that the evidence here was limited. Ms Sabina Aktar, an unsuccessful Labour candidate in Stepney Green, and her father, Mr Faruk Ali told the court that, while out canvassing, they had encountered two women canvassing for THF who were from West Ham. When taxed with why they were canvassing in Tower Hamlets, they said they were being paid to do so by Mr Alibor Choudhury but might change to canvassing for Labour if made a better offer. The women were later seen canvassing in the vicinity of Redcoat Youth Centre polling station[45] on election day. Ms Victoria Obaze, another unsuccessful Labour candidate in Stepney Green claimed to have met someone after the election who claimed to have been paid by THF to canvass. Mr Miftah Uddin said that from time to time he saw a group of THF campaigners in the Stepney Green ward, where he lives, and, on speaking to them on one occasion, he was told that they were from East Ham and were being paid by Alibor Choudhury.
It is noticeable that Stepney Green was the ward where Mr Choudhury himself was the THF candidate and another senior member of Mr Rahman's circle, Mr Oliur Rahman[46] was his running-mate.
It is also noticeable that Mr Choudhury was the party treasurer and, as has been seen, the man through whose hands the finances of the party passed, involving no bank account and, so far as documentation produced to the court is concerned, no records or books of account of any kind.
The court accepts that, as Mr Penny argued, none of the 'paid' canvassers has been identified and Mr Choudhury stoutly denies making any such payments. By the same token, three of the witnesses are clearly partisan, being Labour candidates or a close relative. On the other hand, it seems an extraordinary story for these witnesses to have invented and, as there are three separate incidents, to have invented independently.
Although it was well tested by cross-examination, the court sees no good reason to disbelieve these witnesses.
There was also evidence involving text messages said to have been sent from the Mayor's Office from which it was said the court could infer use of paid council staff to canvass for THF. This evidence was unclear and somewhat confused and did not establish a separate breach of s 111.
In respect of the payment of canvassers evidence by the four witnesses listed above, the court is satisfied that there was a breach of s 111 of the 1983 Act.
BRIBERY
There are two aspects to the case of bribery. The first concerns the substantial grants made by the Council to organisations representing or serving the Bangladeshi or other Muslim communities. The second concerns the use of Council money to pay a Bengali language television channel and its chief political correspondent to promote Mr Rahman's campaign.
Grants
As for the facts relating to grants, the court is entitled to rely and does rely on the factual conclusions of the PwC report. This is a document in the public domain and, where I summarise its conclusions or quote its own summaries, the details can easily be accessed by those interested.
What the report shows is that:
a) a high proportion of grant decisions were made by Mr Rahman personally, aided by one or two close associates, normally Mr Choudhury and Councillor Asad;
b) in an abnormally high number of instances, the decisions substantially altered or completely ignored the results of the investigation and recommendation procedures carried out by officers of the Council;
c) enormous sums of public money had been paid to organisations in excess of that which Council officers had recommended and, in many instances, to organisations that had not even applied for grants;
d) the reason offered by Mr Rahman and Mr Choudhury for these discrepancies was that they were applying 'local knowledge', though what that 'local knowledge' involved other than local knowledge of the needs of their own political careers was never made clear to the court;
e) the processes by which the final figures were reached were largely undocumented.
By way of an example, one may cite two paragraphs of the PwC report:
4.71 Of the 327 applications that were successful in the final MSG 2012-2015 awards, a total of 15 applications receiving aggregate funding of £243,500 did not meet minimum eligibility criteria and so were not scored by officers. Officers did not recommend any applications for awards that did not meet the minimum eligibility criteria, rather recommendations for funding were made by Members in
September 2012 for all bar one of these 15 ineligible applications. The remaining ineligible application was one of the 32 increases to recommended awards following the final review process where the applicant had not requested a review, as discussed in 4.54 above.
4.72 Further, 21 applications totalling £455,700, which did meet the minimum eligibility criteria, but did not meet the minimum quality threshold score of 40, were successful in the final awards. This was 18 applications and total awards of £407,700 more than those recommended by officers, as discussed in paragraph 4.36 above. We note one organisation, which was recommended by officers but did not meet the minimum quality threshold, was not successful in the final awards.
By way of another example, grants totalling just under £100,000 were handed out to ten organisations, all Bangladeshi or other Muslim organisations, for lunch clubs when none of them had even applied for a grant[47].
The so-called '954 Fund', apparently taking its name from the fact that the initial amount available for grants from the Fund was £954,000, was again criticised by PwC who said[48]: 'Of the £522,000 approved awards from the 954 Fund, £352,000 was awarded without an open application process and [the balance of] £170,000 related to the Mela[49]…'
PwC analysed the increases between officer recommendations and the final sums fixed by the Mayor in two maps of the Borough by ward showing which wards had had their grants increased (in some cases massively increased) and which wards had had their grants reduced from officer recommendations. A comparison of those maps with how people voted in 2014 shows an interesting correlation between how much money was channelled to the ward and how many voters turned out for THF. In Stepney Green, the total recommended by officers was £99,708. By the time it had been signed off by Mr Rahman and Mr Choudhury, the grant total had become £258,500 (an increase of over 150%). Of course, it may be pure coincidence that Stepney Green happened to be the ward where Mr Choudhury was the THF candidate.
Shadwell's grant increased from £204,386 to £460,750. Shadwell returned two THF candidates, one of whom was Ms Rabina Khan. Bow East, on the other hand, saw its grant reduced from the officers' recommendation of £99,397 - cut by roughly a third to £67,000. But then, Bow East returned three Labour Councillors.
PwC attempted to marry up the grants to the known levels of deprivation in the Borough but could not find any real correlation:
The Authority has stated that the "Authority has provided PwC with a wealth of analysis demonstrating clearly that resource has followed need". The Authority have stated also that there are "clear and direct references to relevant needs analysis within the grant specification documentation". Figure 6 below, when reviewed in conjunction with the overall award data presented in the table at paragraph in 4.68 above, and our knowledge of the decision making process as a whole, does not clearly demonstrate the basis on which relative deprivation has been a consideration in the decision to make the final MSG 2012-2015 awards. This is in light of the fact that certain areas in the east of the Borough, with levels of deprivation equal or greater to those wards situated in the west, were awarded less monies in the final MSG 2012-2015 awards than had been recommended by officers in August 2012.
Evidence was given on this topic by Mr Rahman, Mr Choudhury, Councillor Asad and Councillor Mahum Miah. Mr Miah was ostensibly the Chairman of the Corporate Grants Programme Board (CGPB). His evidence was that he regarded his function as simply that of chairing the meeting. He claims to have taken no real part in any decision making and left everything to other people (usually Mr Choudhury). Mr Miah was not an impressive witness. When Mr Hoar opened his case, he stated that the allegations of malpractice against Mr Miah were so grave that, if they were established, it would be necessary formally to name him in the report. Having seen Mr Miah and having heard his evidence, it is clear that he is not (whatever he may feel) a major player in the Mayor's inner circle. He struck the court as a man who would essentially do what he was told by anyone with a stronger character than himself. While the allocation of grants that occurred under this supposed chairmanship was certainly grossly improper and possibly (the court does not need to decide this) unlawful under local authority law, he seems merely to have nodded the decisions through without making any waves.
When Mr Rahman, Mr Choudhury and Mr Asad gave evidence, they sought to convince the court that the process had not been improper. They had applied their knowledge – their 'local knowledge'- to the applications. Where organisations had failed to meet the eligibility criteria or to achieve the minimum point score, they had invited the organisations to apply for the grant to be reconsidered and this was how organisations deemed totally ineligible or who had failed, so to speak, to 'make the cut' had found themselves the grateful recipients of tens of thousands pounds of public money.
To cut short what was often detailed and lengthy examination of this question, it is sufficient to say that none of the three men concerned gave credible evidence about the processes whereby, by the time that the Mayor made his final decision, eligible organisations had substantially increased their original entitlement, while ineligible organisations had suddenly and inexplicably become eligible for large sums of money. Though the court was told that documents existed which would explain the process, none were produced to the court and, more significantly, none were produced to PwC which remained as much in the dark as the court. Not that it would have helped if documents had been offered to the court which had not produced to PwC because the court had been assured by Mr Robin Beattie, the official co-ordinating the data being supplied to PwC (patently a reliable witness), that PwC had been provided with all the relevant documentation.
The matter, however, did not rest there. The Petitioners called Ms Deborah Cohen. Ms Cohen now has a senior post with an NHS Foundation Trust but, at the relevant time, she was a senior officer of Tower Hamlets Council. Her final title was Service Head for Commissioning and Health, Education, Social Care and Welfare. One of her functions was overseeing grants programmes in her field.
Ms Cohen had first-hand knowledge of the Mayor's buccaneering approach to grant-making and his total disregard of the established rules and procedures of his Council. Ms Cohen decided to become a 'whistle-blower' – not this time a dog-whistle. She provided material to the makers of the Panorama programme and, when the PwC inspectors came on the scene, she gave valuable information to them and is acknowledged as so doing (albeit anonymously) by the inspectors. Unfortunately for Ms Cohen, her identity was revealed to her employers: the programme-makers had engaged a young woman of Bangladeshi heritage to act as an undercover reporter, posing as a grant applicant or similar. At one point they sent this woman a copy of the material they had obtained from, amongst others, Ms Cohen, whom the material named. The woman seems to have decided that her loyalty to the Bangladeshi community translated into loyalty to Mr Rahman and she turned the material over to his office.
Though Ms Cohen, as a whistle-blower, could hardly be sacked, her life was made intolerable and, in September 2014, having assisted the inspectors to the best of her ability, she left for Cambridgeshire.
She gave evidence in particular of two incidents. The first occurred in October 2013. The officers had prepared a spreadsheet containing their recommendations for grants. Councillors Choudhury and Asad asked for the document, saying they needed to show it to Mr Rahman. About a week later the two Councillors returned, sat Ms Cohen down and dictated to her what Mr Rahman had decided. The results were dramatic. What Ms Cohen saw as good and useful programmes, such as the grant to the Alzheimer's Society, had been slashed in order to free substantial funds for organisations that officers had either declared ineligible or eligible only for modest grants. All three men on oath flatly denied this episode and said that Ms Cohen was lying and the document she had written up[50] was, in effect, a forgery. PwC confirmed that the changes said to have been dictated to Ms Cohen had been the ones implemented[51].
The second incident occurred in mid-December 2013. Mr Rahman called for a list of all organisations that had been shortlisted for contracts in the Domiciliary Care programme. At a meeting with Ms Cohen, attended by Councillors Asad and Choudhury, Mr Rahman handed her the list with crosses marked against those whom he had arbitrarily decided to exclude. Ms Cohen wrote on the document 'X are written by Mayor'. Ms Cohen was somewhat shaken by this high-handed procedure. The following day, she consulted her superiors and members of the Council's legal team. Immediately after these meetings she wrote a manuscript note and later typed it up as a file note. The note contains the following:
I told RMG[52] that it was really difficult and I felt quite shaky and found it impossible to challenge what the Mayor was asking me to do in front of 2 other councillors. RMG was sympathetic and said it was bordering on bullying. I said that the Mayor had been very pleasant throughout … and he said that this was an 'informal meeting' at which he was 'trying to help me and my officers' as he knew things about some organisations eg that some of them were shams just set up for the tender'. However he was also clear about some organisations that he on no account wanted put through to tender stage and this was totally inappropriate and outside procurement rules.
What is important about this incident is not the merits or demerits of the conduct of Mr Rahman and his Councillors, although it may be remarked in passing that public contracts are strictly governed by European law and UK regulations, all of which seem to have been flatly ignored. What is important is the evidence of Messrs Rahman, Asad and Choudhury who denied that the meeting had ever taken place and asserted that the contemporaneous documents, including the list with the 'Xs' were false and concocted. These allegations were put to Ms Cohen in cross-examination by Mr Penny, with increasing desperation, as it became obvious that Ms Cohen was a totally honest witness.
In order to justify the attack on her, it was suggested, both in cross-examination and in the evidence of Mr Rahman and Mr Choudhury, that Ms Cohen was lying because she bore the administration a grudge either for not promoting her or, though the evidence on this was very confused, for criticising her for delays in signing contracts. Mr Choudhury teetered on the brink of suggesting that Ms Cohen was another member of the ranks of racist or, indeed, fascist enemies by whom Mr Rahman was encircled.
Having heard the evidence of Ms Cohen, Mr Rahman, Mr Asad and Mr Choudhury on these incidents, I had not the slightest doubt that Ms Cohen was telling the court the truth and that the three men were quite deliberately lying.
In closing, Mr Penny, as a realist, obviously recognised that he had a problem with these incidents but submitted (albeit in much more elegant language) 'so what?' Did Ms Cohen's evidence do any more than confirm the Mayor's approach to grants and contracts which is already abundantly documented in the PwC report? In short, was Ms Cohen's evidence important in considering the bribery allegation?
Mr Penny's argument is not without merit. Ms Cohen did little beyond confirming, though emphatically, the fact that the making of grants and the allotting of contracts was in the hands of Mr Rahman and that he exercised his powers in disregard of the Council's officers, the members of the Council and, arguably, both local authority and public procurement legislation.
The importance of her evidence, however, goes beyond the narrow issues of the two incidents described. Faced with evidence about incidents which might, on one view, be peripheral to the central case, the men involved could have attempted to explain them away or to adopt Mr Penny's line of questioning the importance or relevance of the incidents. They did not choose to go down this route. Instead they chose to lie and lie blatantly and to instruct counsel to make wholly gratuitous allegations of perjury and forgery against a blameless civil servant.
Given that, on these and other issues, the court has been asked to accept the evidence of Mr Rahman and Mr Choudhury as being truthful, it is not without significance that they have been caught out in obvious and, ultimately, unnecessary falsehoods.
Where does this bring us when considering this aspect of bribery? What has been proved may be summarised as follows:
a) the administration of grants was firmly in the personal hands of Mr Rahman, assisted by his two cronies, Councillors Asad and Choudhury;
b) in administering the grants policy, Mr Rahman acted in total disregard of the Council's officers, its members and, almost certainly, the law;
c) grants were increased, substantially and unjustifiably, from the amounts recommended by officers who had properly carried out the Council's investigation and assessment procedure;
d) large grants were made to organisations who were totally ineligible or who failed to meet the threshold for eligibility;
e) grants were made to organisations that had not applied for them;
f) the careful attempts of PwC to marry up grants to ascertainable levels of deprivation and need in the Borough had resulted in the conclusion that it was impossible to do so: grants were not based on need;
g) the lion's share of grants went to organisations that were run by and/or for the Bangladeshi community;
h) the main thrust of Mr Rahman's political campaigning both as leader of the Council and later as Mayor was to target the Bangladeshi community and to convince that community that loyalty to the community meant loyalty to him;
i) even within the Bangladeshi community, grants were targeted at the wards where support for Mr Rahman and his candidates was strongest while wards where their chances of success were slim lost out.
Conclusions on bribery by grant
It must be confessed that this is by far the aspect of the case that has occasioned the court the most difficulty. Bribery by grant is, patently, some distance away from the simple and straightforward bribes paid by aspiring politicians in the days of Mr Disraeli's first ministry.
Some questions may easily be answered. Was it a purpose (albeit not the only purpose) of these grants to convince the beneficiaries of the activities of the organisations concerned that the Mayor was looking after their community and the continuance of this benefit depended on his being re-elected in 2014? The answer to this question is undoubtedly: yes.
Were those grants which were improperly made (whether by increasing the grant from the officers' recommendations, or by making grants to those deemed ineligible, or by making grants to those who had not sought them) targeted at the Bangladeshi community in general and at that community in the wards likely to vote for Mr Rahman and to return THF Councillors? Patently, yes.
Was the making of those grants corrupt? Again, this seems inescapable.
Clearly by any ethical or moral standards this is bribery: but is it bribery contrary to s 113 of the 1983 Act? It is this which has greatly exercised the court's mind.
To return to s 113(2)
(2) A person shall be guilty of bribery if he, directly or indirectly, by himself or by any other person on his behalf-
(a) gives any money or procures any office to or for any voter or to or for any other person on behalf of any voter or to or for any other person in order to induce any voter to vote or refrain from voting, or
(b) corruptly does any such act as mentioned above on account of any voter having voted or refrained from voting, or
(c) makes any such gift or procurement as mentioned above to or for any person in order to induce that person to procure, or endeavour to procure, the return of any person at an election or the vote of any voter,
or if upon or in consequence of any such gift or procurement as mentioned above he procures or engages, promises or endeavours to procure the return of any person at an election or the vote of any voter.
The grant money was obviously not given directly to the voters and it is probably right to say that it was not given to another person 'on behalf of any voter'. Was it, however, given 'to or for any other person in order to induce any voter to vote or to refrain from voting'? Section 113(2)(a) does not require that the recipient of the money – the 'other person' - should be the person doing the inducing of the voter: that is covered by paragraph (c). Under paragraph (a), if payment by the candidate to X induces Y, the voter, to vote for the candidate (or not to vote for his rival), then this paragraph is met.
The court was particularly interested in those instances of grants being paid to those who were ineligible and, to an even greater extent, to those who had not applied for them. Leaving aside the impropriety of distributing largesse to those who had not asked for it, one may ask, what is the purpose of this exercise? The lunch clubs are a very good example. They were given money without having applied for it. The beneficiaries tended to be older and less well-off members of the Bangladeshi community. There was cogent evidence, which the court accepted, that close supporters of Mr Rahman would make it clear to those attending the lunches that they owed their good fortune to Mr Rahman, with the pretty obvious inference that the only way it was going to continue would be if Mr Rahman remained in office.
I have, therefore, and not without some hesitation, come to the conclusion that the requirements of paragraph (a) have been met.
The next stage is to consider the opening words of the section. As has been said, Mr Rahman did not provide the grant moneys 'directly' – that is to say, out of his own pocket. Did he, however, 'indirectly … by any other person on his behalf' give money to the favoured organisations? That he indirectly gave the money and did so 'by any other person' seems indisputable. The 'other person' was his own Council and the local taxpayers who funded it.
The question that has caused the court the most trouble is whether the grant payments may be said to have been made 'on behalf of' Mr Rahman. At one level, they are made 'on behalf of' the Council but, on another level, if they are deliberately channelled in certain directions by the man who has de facto control over who gets what and are done so with the purpose of inducing those who benefit from the grants to vote for him, the payments can be said to be made 'on his behalf'.
Here the court is assisted by a comparison with the Bribery Act 2010. Channelling public or company money to a recipient in order to induce him to perform a relevant function is precisely what s 1 of that Act is penalising. Arms company X promises the Defence Minister of Ruritania that, if the Ruritanian army acquires twenty of X's new tanks, the contract will contain a 'commission' or 'finder's fee' paid to Y Limited, a company nominally controlled by the Minister's brother-in-law. This is indeed the basic stuff of international bribery and precisely the mischief at which the 2010 Act is aimed. The key element is, however, that the money is paid indirectly (in this case by the Minister's own government) and received indirectly and the money involved will not be the money of the payer (because the bribe will be found out of the money paid by the army for the new tanks).
Mr Penny argued very attractively that, even if the court concluded (contrary to his main argument) that Mr Rahman had indeed abused his position to channel grant money to organisations run by or for the Bangladeshi community and had done so, in part at least, in order to secure their votes, then this should properly be regarded as being an example (albeit a serious example) of 'pork-barrel politics' but not bribery contrary to s 113 of the 1983 Act. In short, his conduct fell on the right side of the line that separates the two.
Attractive though the argument was, the court was unconvinced. The difference between 'pork-barrel politics' and bribery is that the former is not in the hands of a single individual or directed to the election of an individual candidate. The reason why Mr Rahman's conduct is on the wrong side of the line is because he was, in reality, the sole controller of the grant funds and he manipulated them for his own personal electoral benefit.
A man in control of a fund of money, not his own, who corruptly uses his control to make payments from the fund for the purposes of inducing people to vote for him is, in the judgment of the court, within the opening words of s 113(2) and thus guilty of bribery.
It follows that the court is satisfied that the conduct of Mr Rahman and his agents Mr Asad and Mr Choudhury in making grants does amount to the corrupt practice of bribery under s 113 of the 1983 Act.
Bribery and the media
There is no doubt that the relationship between Mr Rahman and the Bengali media has always been very close. Most of that media is strongly – in the case of the London Bangla often intemperately – partisan.
There is also no doubt that sums of grant money were disbursed to media organisations, sometimes for worthy causes. It is noticeable, though, that all these grants were made to media organisations serving the Bangladeshi community: the court was given no evidence of any grant of public money to any media organisation serving any other community. Mr Rahman's counsel made much of the fact that a grant once thought to have been made to the Bangla Mirror was in fact made to a sister organisation the British Bangladeshi Who's Who, though why it should be thought proper for public money to be spent on a publication in which, unsurprisingly, Mr Rahman himself featured prominently, was never explained.
Though the payments to press organisations may (just) colourably come the right side of the line that separates ingratiating oneself with the press from outright bribery, payments to the Bengali televised media went further, and, once more, the factual conclusions of the PwC report confirm it.
2.99 On 21 January 2013 the Office of Communications ("Ofcom"), which, amongst other things, regulates the content of television broadcasts, issued a bulletin in which it set out findings against five separate broadcasting companies; ATN Bangla UK Limited, Bangla TV (UK) Limited, Prime Bangla Limited, Channel S Global Limited and Runners TV Limited. The subject matter of these findings was a broadcast each of the companies had aired which purported to be for the purposes of disseminating information about services of the Authority to sections of the community within the Borough. The findings were that the advertisement was in breach of section 321(2)(b) of the Communications Act 2003 and Rule 7.2.2(g) of the Code of Broadcast Advertising as it constituted political advertising. Ofcom concluded "we considered that the advertisement served to portray the Mayor of Tower Hamlets, Lutfur Rahman, in a positive light".
2.100 In response to a Members Enquiry, the Service Head for Communications and Marketing disclosed that the Authority had made payments to each of the five companies as a fee for the broadcast.
2.101 The Authority has stated that it did not agree with Ofcom's ruling, but it did not in fact challenge it. Therefore, the facts indicate that Authority monies were used to pay for an informational broadcast that was ruled by the responsible regulator to be intended to "promote the image and reputation of the Mayor" in breach of various codes including the Authority's own.
2.102 The Authority has asserted that it has made a number of process improvements subsequent to this Ofcom Broadcast Bulletin, including introducing a Communications Protocol.
What PwC is reporting can be summarised as follows. Mr Rahman caused the Council to pay public money by way of 'fees' for broadcasts which were ostensibly about the Borough and its administration but which were in fact personal political broadcasts on behalf of Mr Rahman, promoting him to the Bengali-speaking electorate of Tower Hamlets. In the context that Mr Rahman fully intended to stand for re-election when his first term of office expired, the broadcasts cannot be regarded as other than intended to promote his political career. Furthermore, despite earlier adverse rulings from Ofcom, both Mr Rahman and the television companies persisted in publicising Mr Rahman and earned further adverse rulings from Ofcom when they did.
Channel S seems to have been a particular favourite of Mr Rahman and it is noticeable that it was paid more than its four rival channels.
Does this meet the criteria of s 113 of the 1983 Act? It involves a payment made 'indirectly' 'by or on behalf of' Mr Rahman to 'another person' in order for that person to induce voters to vote for Mr Rahman. It was undoubtedly corrupt in the sense that Mr Rahman knew that it was wrong for him to spend public money in this way and he persisted even after the initial Ofcom rulings.
In the circumstances, the court must find that, in relation to payments to the media, Mr Rahman was guilty of bribery.
The chief political correspondent of Channel S was a man called Mohammed Jubair. The dealings with Mr Jubair were murky in the extreme. Mr Rahman seems to have arranged for him to be employed by the Council (at taxpayers' expense), apparently to advise on media relations with the Bangladeshi community. It is pointed out that, while there was an advisor in relation to the small Somali community (though not covering media relations with that community), there was no advisor (media or otherwise) in respect of any other of the Tower Hamlets communities and no media advisor engaged to deal with community relations as a whole. It is difficult not to see this as a further example of Mr Rahman's administration being heavily skewed towards his own community rather than the entire Borough.
The payments made to Mr Jubair were subjected to the scrutiny of PwC and did not come up to that scrutiny. They were, to a significant extent, unaccounted for and some £20,000 of expenditure was not represented by time sheets.
Mr Jubair was not called to give evidence. Beyond Mr Rahman's evidence, there was no evidence before the court to show that Mr Jubair had carried out any work on behalf of the Council. The reality is that Mr Jubair's function was to publicise Mr Rahman and his achievements and to ensure that favourable coverage continued in the media, particularly Channel S with which he remained closely associated.
In the view of the court, public money was misused to pay a publicist for Mr Rahman.
Given Mr Jubair's close connection with Channel S[53] and the links between that company and Mr Rahman, it seems sensible to regard Mr Jubair's appointment as being part of the corrupt relationship between Mr Rahman and Channel S rather than a free-standing episode of bribery.
TREATING
As originally framed the case on treating was quite widely spread but, by the conclusion of the trial, this came down to two episodes. The first in time appeared when Mr Choudhury gave evidence about election expenses and disclosed documents showing that a Women's Eid Reunion was held at the Mulberry School for Girls in Richard Street E1 on 1 December 2013. Invitations for this event were issued in the name of Mr Rahman and food was provided to the ladies for free. Mr Rahman attended and made a speech. But for the fact that Mr Choudhury had declared the cost of this event as election expenses, however, there would be nothing to raise a suspicion of treating. The court heard nothing else about this event and such evidence as exists is all too shadowy to justify a finding to the requisite standard of proof of treating.
The second event was much more significant. It was indubitably a political event because, putting it neutrally, a declaration of expenses relating to this event was made by Mr Choudhury to the Electoral Commission.
In the Canary Wharf complex is a venue known as the East Winter Gardens. ('the EWG') The EWG is owned by Canary Wharf Group plc and is let out for functions, its facilities and situation making it a fairly expensive and upmarket venue. Mr Howard Dawber is the company's strategic advisor, responsible for (inter alia) the company's external relations with national and local politicians, corporate social responsibility and, in 2012, the company's involvement with the London Olympics.
The company, the court was told, makes regular and generous political donations. All of these are fully declared and entirely within the law. In January 2014 it acceded to a request from, putting this again neutrally, Mr Rahman and his associates to host a substantial dinner for some 600 guests. Mr Dawber agreed that the company would provide the venue and the staff and, after further representations from the Town Hall, agreed to pay the cost of the catering at the event. Ostensibly, the event was to celebrate Mr Rahman's three years in office as Mayor and his achievements in that office.
In reality, it was a political promotion event in support of Mr Rahman's candidacy in the forthcoming Mayoral election. There was a PowerPoint presentation and an accompanying brochure. These concentrated virtually exclusively on Mr Rahman whose photograph appeared on almost every page. Mr Rahman made a speech in which, to be sure, his re-election was not omitted. The event was attended by what might refer to as the Great and the Good of Tower Hamlets. There were representatives of local religious communities most of whom, to be fair to Mr Rahman, had benefitted substantially from Council largesse, irrespective of denomination. Prominent among the guests was Mr Hafiz Moulana Shamsul Hoque[54], the Chairman of the Council of Mosques of Tower Hamlets, whom we shall be encountering again under 'spiritual influence'. Those attending were even given a 'party bag' consisting of political promotional items such as promotional mugs.
Canary Wharf Group did not stint its guests. Although the final figures are not entirely clear, the total cost to the company (fully and properly declared and appearing in its accounts) was well in excess of £40,000. Mr Choudhury declared the political donation to the Electoral Commission at a much lower figure, later claimed this was a mistake and put in a revised figure during the course of the trial (and after Mr Dawber had given his evidence as to the real cost of the event).
Mr Rahman and Mr Choudhury made two assertions about this event. The first was that it was organised by Mr Choudhury acting as the (at this stage unofficial) agent of Mr Rahman and thus purely in a political capacity. This was untrue. It turned out that it had been almost entirely organised by a paid official of the Council who had arranged it in his working hours. Again small and unnecessary lies.
The other assertion was that this was a fundraising event and had raised the sum of £56,000. This story got somewhat embellished along the line and, by the time Mr Choudhury had finished with it, guests were sponsoring tables for the benefit of the Mayoral campaign. The overwhelming majority of the evidence was to the effect that this event had not been a fundraising event and that the guests had neither paid nor been asked to pay for their tables. Mr Rahman was able to call one witness, Bashir Choudhury, who claimed to have paid for two tables. He was very weak on the details and said he had 'paid' for the tables by meeting one of THF's printing bills some months later. Beyond that there was no evidence of actual funds raised at all. Given that THF had no bank account into which sponsorship or other donations could be paid and that there were no books of account through which the money could pass, the court was entitled to take – and did take – this story with a large pinch of salt.
Those who attended the dinner saw no evidence of any fundraising. Mr Dawber did not, nor did Fr O'Brien (representing the Roman Catholics) nor did Mr Silver, a senior and respected member of the Jewish community. These witnesses were accepted as being truthful and reliable.
The clear conclusion of the court is thus that this was a political dinner, at which food and drink were served, for the sole purpose of promoting Mr Rahman and his Mayoral campaign. The guests did not pay for their meal. To that extent, the event ticks the boxes for the offence of treating. And yet. And yet…
This event was four months before the election. There was no evidence that any of the guests who were not previously committed to Mr Rahman's cause were persuaded by this hospitality, however lavish, to award him their vote. As has been said, the more distant the episode relied on as treating from the election itself, the more difficult it is to establish that an electoral offence has been committed.
Though I am sure that a sterner and more rigorous judge than myself would harden his heart and find this to be treating, I am inclined to give Mr Rahman the benefit of the doubt.
Consequently the court is not satisfied to the requisite standard of proof that Mr Rahman has been guilty of treating and this part of the Petition does not succeed.
UNDUE SPIRITUAL INFLUENCE
This is, without any doubt, the most troublesome part of the case. In the Britain of 2015 anything that concerns Islam is extremely sensitive. Whatever this judgment says on the subject of spiritual influence is likely to prove controversial and may cause offence, either genuine or feigned. As has already been pointed out, when this judgment discusses the relevant law, it would have been easy to evade the issue by holding that, notwithstanding the clear words of the statute, spiritual influence should be treated as obsolete.
To evade an issue or to reach a 'fudged' solution in the hope of avoiding offence would be an abdication of the judicial function. It may sound pompous to cite the old Latin tag fiat Justitia ruat caelum (let justice be done though the heavens fall) but a court that works on any other principle and does so for fear of the consequences is betraying the trust that the public reposes in it.
It is accepted, therefore, that this section of the judgment cannot help but be controversial.
The Petitioners' case may be summarised as follows. In formulating his campaign, Mr Rahman, as well as playing the race card, was determined to play the religious card. The campaign would be targeted at Tower Hamlets' Muslim population with a stark message: 'Islam is under threat: it is the religious duty of all devout Muslims to vote for Mr Rahman and his party.'
It was not, the Petitioners said, the first time that the religious card had been played. There was a persistent history of Mr Rahman attacking his opponents who happened to be Muslim by claiming that they were not, unlike himself, devout and pious Muslims. When leader of the Council, Mr Rahman had caused controversy by issuing a formal invitation from the Council, seemingly without consulting his colleagues, to the Imam of Mecca to pay a visit to the Borough. Clearly the Imam of Islam's holiest place is a man who would be accorded the highest respect, even reverence, by the faithful. When he arrived, Mr Rahman took good care to ensure that he personally gave the Imam a conducted tour of Tower Hamlets with photographers in attendance. On the face of it, there was not the slightest harm in all this and is it light years away from the offence of spiritual influence. On the other hand, it did Mr Rahman no harm electorally when he ran as an independent for Mayor and it was a sign of things to come.
In the 2014 campaign, Mr Rahman realised that it would be all very well him and his supporters claiming that true Muslims should vote for him or even that it was their religious duty to do so, but, because he and his associates were politicians, not clerics, such a campaign would be seen as a political campaign and not as a religious movement. The only way to give real credibility to the campaign would be to obtain the open support of the Borough's Muslim clergy.
The Petitioners' case is that Mr Rahman solicited and obtained the support of the clerics, largely through a close relationship between himself and Mr Hoque, the Chairman of the Council of Mosques. Though perhaps not in the same league as the Imam of Mecca, the Chairman is someone of considerable power and influence amongst the Muslim clerics of the Borough and to have him as an ally would be a trump card in Mr Rahman's re-election bid.
The Petitioners rely on two incidents involving Mr Rahman and Mr Hoque. The first of these occurred at a meeting held by a Bangladeshi organisation known as 'Tower Hamlets Jagroto' at the Water Lily, a venue in Mile End Road, on 4 May 2014. The guest of honour was Mr Rahman and the event was avowedly a political rally in his support. Mr Rahman shared the platform with a number of Muslim clerics, with Mr Hoque prominent in the front row.
The official version, as related by Mr Rahman and Mr Hoque (to whom we shall return) was that this was no more than a political rally with no religious content. The meeting was, however, attended by an enthusiastic young supporter of Mr Rahman called Syed Naem Ahmad who posted a long report of the meeting on social media. Mr Ahmad gave evidence and the court is satisfied that the account posted by him is substantially accurate. It was common ground that all, or virtually all, to those attending were from the Bangladeshi community.
The report seems originally to have been intended for the Bangla Mirror newspaper but was given general currency by Mr Ahmad's post. Under the heading 'Jagroto Tower Hamlets organises meeting in support of Lutfur Rahman', the relevant parts of the report read:
Reject hatred and discrimination, says (sic) Islamic scholars and community leaders…
Prominent Islamic scholars and community leaders in Tower Hamlets have urged the general public to vote for Mayor Lutfur Rahman to retain equal rights and the development of the borough. Islamic Scholars, Mosque Imams, Islamic Teachers, Community Leaders and elderly people from different wards of Tower Hamlets made this appeal to general people in a meeting held in Water Lily in East London on 4 May. The meeting was organised by Jagroto Tower Hamlets.
The leaders said that once highly deprived Tower Hamlets was now placed in higher grid of national evaluation list in education, development and housing. After a long struggle against racism and discrimination, Tower Hamlets is now the first choice for people of all races and religious background. One group of people, who never appreciate development and cohesion are now practicing dirty tricks to stop this progress. They want to achieve their goal by dividing the community. Ulamae[55] Keram and Community leaders said that we have been treated as second class citizens because of our faith and race. We become targets in election time which is causing panic and tension in the community.
We have noticed that Islamic Scholars, mosques and Imam of Kaba[56] have been targets of political misrepresentation. We condemn these actions and call upon [text missing here]
Council of Mosques' Chairman Maolana Shamsul Haque[57] Presided over the meeting and Jagroto Tower Hamlets leader Maolana Syed Naseem Ahmed conducted it. The Executive Mayor of Tower Hamlets addressed the audience as Chief Guest.
[There then followed a list of some 24 people who with 'others' are said to have made speeches. The list contains politicians, journalists and Muslim religious leaders.]
In his speech Mayor Lutfur Rahman expressed his gratitude towards Islamic scholars for supporting and encouraging him and asked for their blessing so that he can be on the path of truth, honesty and have faith in Allah always. He said that, I grew up in Tower Hamlets and witnessed how my ancestors worked and suffered hard just for their survival. I was to present a safe and developed borough to our next generation. I want to work for everyone irrespective their race, religious belief and cultural background. He also said that my religious belief and Bangladeshi heritage is my pride. I will never forget the love and affection that the people of this borough have shown to me and I will always keep it up. I want to serve you as a child of yours.
Maolana Shamsul Haque said that the society of Islamic scholars want good relations and cohesion in the society. However, when some people target us on purpose, it is our moral duty to protect us. I want to express without any hesitation that religion never creates division in society but unites everyone. He urged everyone to vote for Mayor Lutfur Rahman to retain truth, righteousness and practice religious belief.
The second of these episodes occurred at a wedding reception held on 11 May 2014, again at the Water Lily. This, too, was attended by Mr Rahman as guest of honour and the senior Muslim cleric present was again Mr Hoque. The wedding was apparently well-attended and was used by Mr Rahman as a political platform. He made a lengthy speech[58] beginning:
Here present Chairman of Council of Mosques [Mr Hoque], Scholars of Islam, my respected brother Sirqjul Haque and the respected audiences, Salam. … I was very shy and worried to hear all the praises and appreciations by the Islamic Scholar[59] (Presenter). I am very grateful to you all for the generous comments you made. I will say few words; first of all I am grateful to Allah. I am grateful that God gave me opportunity to serve you & to look after you…
Later in the speech Mr Rahman said:
The only BME place is in Tower Hamlets, there are 15 directly elected Mayors exist (in the UK), only in Tower Hamlets the BME, Bangladeshis and Muslims. There are no places like this leadership. In order to move from this some people provided misinformation from Panorama to Dispatch and by walking door to door, they also provided untrue statements. What is the reason behind this, the reason is that at any cost they don't want this leadership. Insha'Allah, my belief is that if the people of Tower Hamlets and you want this leadership no one can be able to move us from Muslims Bengali leadership, Insha'Allah.
He ended:
I am very grateful to those Islamic clerks and scholars, who are here today. I know your time is valuable. I will only ask you all to pray for me and my team, salam.
He was followed immediately by Mr Hoque. There are two slightly different translations of what he said but none of the differences are of any significance. I shall adopt that of Mr A. K. Asad, the interpreter engaged by the Petitioners. Mr Hoque said:
Today we, our relatives, neighbours and the residents of Tower Hamlets living in this community, we are fortunate that we are able to give a gift from our community to the people of Britain we have decided to nominate our Mayor again, the Mayor is also present here, Insha'Allah; we will pray now and would like to thank the two families who have invited us.
At this moment the responsibility we have as we are celebrating the wedding event, we will elect the Mayor again and celebrate his victory. I urge all of you to keep in mind that the forthcoming election will be held on 22nd. We have to forget 'win or lose'; this election is to sustain our own existence and asking you to prayer. I think the Mayor would like to say you all 'Thank you'.
Before turning to the main feature of the case on spiritual influence, the court must deal with how the protagonists presented these two events. Mr Hoque was called to give evidence. He was one of the witnesses who insisted on an interpreter while making it quite clear that he understood English perfectly well. Indeed it would have been surprising if someone occupying his position could carry out his functions without at least a working knowledge of English.
Be that as it may, his account of both events differed markedly from that given above. Like Mr Rahman he denied that his intervention at these events had carried a marked religious slant or that he had urged faithful Muslims to vote for Mr Rahman. Had matters remained there, the court might have found it difficult to disentangle the truth. In respect of the first event, however, the court had the near-contemporaneous account of Mr Ahmad which was clearly truthful and, given that Mr Ahmad was a supporter of Mr Rahman, one that was most unlikely to be fabricated.
In relation to the wedding event, the account given by Mr Rahman and Mr Hoque was sabotaged by the fact that this was a wedding and, at weddings, people take videos. A video turned up showing the speeches, including that of Mr Hoque, and a translation was provided. This showed a very different series of events from that depicted by Mr Rahman and Mr Hoque.
Obviously a court will be very wary of disbelieving evidence given on oath by a cleric, especially a senior cleric, of any faith. The external evidence, however, strongly indicated that Mr Hoque had not told the truth about these events. The evidence he gave about the next element was also very unsatisfactory. Sadly, the court was not able to treat Mr Hoque as a reliable witness.
What did become clear was that Mr Hoque was a friend and associate of Mr Rahman who lent himself willingly to Mr Rahman's re-election campaign. It may be the case – indeed the court assumes it is the case – that Mr Hoque genuinely believed that it was in the best interests of the Muslim and, in particular, the Bangladeshi community for Mr Rahman to be re-elected. What is apparent from the history of the two events (and earlier events such as the EWG dinner) is that Mr Hoque and Mr Rahman were working hand-in-glove and that, at the very least, Mr Hoque's activities on behalf of Mr Rahman were carried on with the latter's knowledge and consent.
Although evidence was only adduced of these two incidents at which Mr Hoque publically endorsed Mr Rahman's candidature, it seems extremely unlikely that Mr Hoque's message was confined to these episodes or that he otherwise kept silent about his support, but the court will confine itself to those episodes where credible evidence exists.
On 16 May 2014 (6 days before the election) the Weekly Desh, a newspaper published in Bengali and in English with a circulation of about 20,000 (mainly in the Borough), carried a letter. The letter was solely in Bengali and no English version appeared in the paper. There is an accepted translation of the letter which the court will adopt.
The letter was signed by 101 Imams and other religious leaders and scholars. Leading the list was Mr Hoque. There was no suggestion that any of the signatures on the letter was other than genuine – the letter had indeed been signed by 101 Muslim leaders. It was said, at one stage, that the number 101 has a special significance in Islam but this was not expanded upon. Patently, however, for 101 prominent clerics and scholars to sign a letter in a single London Borough, albeit one with a large Muslim population, is a serious matter and the letter was intended to be taken seriously.
Before dealing with the letter itself, it is necessary to recall that this election campaign was widely conducted in the media (by all parties). The letter in the Weekly Desh was not just a matter between the newspaper and its readers. It was given enormous prominence in the other media, especially the Bangladeshi media, and, inevitably, on social media. The effect of the letter, therefore, went a great deal wider than the 20,000 readership of the Desh.
Bearing in mind that any grammatical infelicities are the responsibility of the translator and not the authors of the Bengali original, the text of the letter is as follows:
BE UNITED AGAINST INJUSTICE
MAKE LUTFUR RAHMAN VICTORIOUS
Creating opportunities, making provisions and providing services to the citizens on behalf of Her Excellency the Queen. In this case everyone has a freedom of right to choose a candidate who is suitable and able to provide the services. However we are observing that the media propagandas, narrow political interests etc involving the Mayoral election of Tower Hamlets Council have created a kind of a negative impression which in turn have created confusions amongst the public, divided the community and put the community in question. We are further observing that today's Tower Hamlets have made significant and enviable improvements in the areas of housing, education, community cohesion, inter-faith harmony, road safety and youth developments. In order to retain this success and make further progress it is essential that someone is elected as Mayor of the Tower Hamlets Borough on 22nd May who is able to lead these improvements and who will not discriminate on the basis of language, colour and religious identities.
We observe that some people are targeting the languages, colours and religions and attempting to divide the community by ignoring the cohesion and harmony of the citizens. This is, in fact, hitting the national, cultural and religious 'multi' ideas of the country and spreading jealousy and hatred in the community. We consider these acts as abominable and at the same time condemnable.
With utmost concern we observe that by shunning the needs and opportunities of the Tower Hamlets Council and its citizens, Islamophobia, which is the result of the current political stance and which has derived from false imagination, has been made an agenda for voting and voters. The mosques and religious organisations have been targeted. It is being publicised that any relationship [involvement] with the religious scholars and clerics are condemnable and is an offence. Religious beliefs and religious practice are being criticised. One of the local former councillors of the Labour Party has stated in the BBC's Panorama programme that 'Religions divide people'. Even in the same programme the honourable Imam of the Holy Kaba Sharif was presented in negative and defaming ways and thus all the religious people, particularly the Muslims, have been insulted and thrown in to a state of anxiety. We cannot support these ill attempts under any circumstances. We believe that it is not an offence to be a Muslim voter, an imam or Khatib[60]of a mosque and have involvement with all these. Under no circumstances it is acceptable to give a voter less value or to criticise them on the basis of their identity. As voters, like in any other elections we also have a right to vote in the forthcoming Tower Hamlets Mayoral Election and we should have the opportunity to cast our votes without fear. As a cognisant group of the community and responsible voters and for the sake of truth, justice, dignity and development we express our unlimited support for Mayor Lutfur Rahman and strongly call upon you, the residents of Tower Hamlets, to shun all the propagandas and slanders and unite against the falsehood and injustice.
Although this document speaks of 'the community' throughout in a neutral fashion, it must be recalled that the letter was published solely in the Bengali language in a newspaper whose readership (at least in its Bengali editions) was restricted to Bengali speakers. It had not appeared in the English section of the newspaper. In the context 'the community' means, and is intended to be taken as 'the Bangladeshi community'.
What is this document? Although written in a foreign language by clerics of a different faith, Dr Nulty would have had no difficulty in recognizing this document. It is a pastoral letter, remarkably similar to his letter to the faithful of County Meath and published in the Drogheda Independent on 2 July 1892. In other words it is a letter from an influential cleric – in this case 101 influential clerics – informing the faithful as to their religious duty. As with the Bishop, the Imams' message is clear; our religion is under attack, our enemies despise us and wish to humiliate us; it is your duty as faithful sons and daughters of the [Church][Mosque] to vote for candidate X: only he will defend our religion and our community. As the Imams' letter puts it '[our opponents are] spreading jealousy and hatred in the community. We consider these acts as abominable and at the same time condemnable'. The Bishop could not – indeed did not – express it more succinctly.
There is another echo of the Bishops' letter. The 101 signatories (which must represent a high proportion of the Imams and teachers of the Borough) may be compared with Dr Nulty's invocation of the entire Roman Catholic hierarchy of Ireland (the 29 prelates) as supportive of his views. The numbers themselves are irrelevant. What the Imams are saying, as the Bishop was saying, is: 'this is not the view of one man: this is the considered consensus of your religious leaders'.
It is not unknown for clergymen to write to the press. Earlier in 2015, a number of Anglican bishops wrote a fifty-page 'open letter' to the media, mildly criticising politicians of all parties and calling for a new politics. This was fairly harmless and did little beyond earning the hapless clerics the label of having produced a party political pamphlet for the Labour Party in the coming General Election.
There is a world of difference, however, between what might, if unkindly, be termed a general ecclesiastical bleat about how politics has gone to the dogs, and a specially targeted letter aimed at one particular body of the faithful, telling them their religious duty is to vote for candidate A and not for candidate B.
What was the effect of the letter? First, as has been pointed out, it was widely reported in the other press and broadcast media and on social media. Its influence stretched well beyond the readers of the Weekly Desh.
Secondly there is a substantial body of credible evidence that the Imams' message that it was the duty of faithful Muslims to vote for Mr Rahman entered the general campaign, with religious duty being mentioned in canvassing before the poll and to voters attending polling stations on election day (see below under 'intimidation').
How the letter came to be written is shrouded in mystery. In addition to Mr Hoque, evidence was called from one of the other 100 Imams but he shed little light on the logistics of the letter's production. Mr Hoque maintained that someone else must have drafted it and that it was presented for his signature (he signed first) when it was in its final form. Who actually drafted it was never made clear. Experience would indicate that to compile a letter and to get 101 different people to agree with it and to sign it is a major undertaking.
Then there is the timing – carefully arranged to appear on the last Friday before the election, doubtless in order to be much discussed at Friday prayers.
Although the official line was that this document was compiled entirely by the clerics involved, it is noticeable that much of the language does bear a striking resemblance to that of the political messages put out by Mr Rahman's campaign. Although Mr Rahman claims to have been taken by surprise by the appearance of the letter, it beggars belief that neither he nor his close associates knew that it was coming out. Given the close relationship between Mr Rahman and Mr Hoque it would be astonishing if, during the arduous process of obtaining the agreement and signature of all the Imams, no word of it slipped out to Mr Rahman.
The only inference one can draw from the evidence is that, at a relatively early stage, Mr Rahman decided to run his campaign on the basis that it was the religious duty of faithful Muslims to vote for him and to enlist the support of Mr Hoque to deliver what might be termed the imprimatur[61] of the senior Muslim clergy.
This brings one back to the target audience. As has been set out above, everybody in the case agreed that a high proportion of the Bangladeshi population of Tower Hamlets were traditionalist, conservative and strongly religious. The letter was deliberately pitched at Bengali speakers (to the exclusion of English speaking Bangladeshis) and lined up a very large number of very senior clerics to sign it. There can be no doubt that the target audience would take advice about their religious duties from so many senior clerics and scholars very seriously indeed. A sophisticated metropolitan readership might smile patronisingly on the earnest strictures of the Bishops of the Church of England but many traditionalist and pious Muslim voters of Tower Hamlets are going to accept the word of their religious leaders as authoritative.
Though it is true to say that the world has moved on considerably since 1892, there is little real difference between the attitudes of the faithful Roman Catholics of County Meath at that time and the attitudes of the faithful Muslims of Tower Hamlets. To some extent the proof of the pudding is in the eating. If Dr Nulty had not known his target audience well, he would not have couched his pastoral letter in the terms he did. If those responsible for the Imams' letter had not thought that it would have a significant influence on the votes of the Bengali-speaking devout Muslim voters of Tower Hamlets, they would not have gone to the considerable trouble of organising the letter and obtaining 101 signatures to it. One cannot put a document of that kind into the public domain and then say 'I didn't think it would have any effect.' If that were the case, why do it?
If this part of s 115 of the 1983 is still good law – and in the judgment of the court, it is – and if the interpretation placed on the statute by the courts (albeit in the 19th century) is still valid – and in the judgment of the court, it is – then it must be said that no meaningful distinction can be drawn between the conduct of Mr Hoque and the others responsible for organising the Imams' letter and that of the Bishop of Meath.
Controversial though it may be, and likely to cause offence, it is none the less the clear duty of this court to hold that the participation of the Muslim clerics in Mr Rahman's campaign to persuade Muslim voters that it was their religious duty to vote for him and, in particular, the Imams' letter, did, however unwittingly for most of the signatories, cross the line identified by Andrews J between what is permissible and what is impermissible.
Sadly, therefore, the court feels it has no option but to find that there was undue spiritual influence contrary to s 115(2) of the 1983 Act.
But that is not the end of the story. If, as is clearly the case, the influence was likely to affect the result of the election, such a finding would avoid the election but, by itself does so only under the general corruption provisions of s 164. The next question is thus whether the candidate or his agents have been guilty of undue influence.
In view of the findings of the court as to the close relationship between Mr Rahman and Mr Hoque and what may, I hope not too facetiously, be described as their 'double-act' at various functions, it is right to class Mr Hoque as being within the category of 'agents' in the wider sense required by electoral law.
Is Mr Rahman, however, assisted by s 158? If the candidate himself commits a corrupt practice, then he is personally guilty. If he does not commit it himself but it is committed with his knowledge and consent he is personally guilty unless the corrupt practice is treating or (as here) undue influence. Thus knowledge and consent of undue influence do not, by themselves, make the candidate personally guilty. Where undue influence is committed by an agent of the candidate, the candidate is guilty by his agents of the corrupt practice unless he can prove the four elements of s 158(3).
In the light of the findings above, it seems inescapable that Mr Rahman was himself a party to the undue spiritual influence of the clerics, in which case s 158(3) does not arise. If, however, the court is wrong about that, subs (3) must be considered. Mr Rahman does not fare well with this subsection.
Can Mr Rahman prove that '(a) … the offences mentioned in the report were committed contrary to the orders and without the sanction or connivance of the candidate or his election'? Clearly not: they were carried on with his sanction and connivance and he gave no contrary orders. Indeed he seems both to have invited and to have approved of the exhortations delivered by Mr Hoque in his presence.
Can he assert '(b) that the candidate and his election agent took all reasonable means for preventing the commission of corrupt and illegal practices at the election'? The evidence is all to the contrary.
Under (c), can one say 'that the offences mentioned in the report were of a trivial, unimportant and limited character'? Again, no.
Finally can it be shown '(d) that in all other respects the election was free from any corrupt or illegal practice on the part of the candidate and of his agents'? Given the findings of personation, other voting offences, making false statements, paying canvassers and bribery, this cannot be shown.
Though it may thus be academic whether Mr Rahman is regarded as personally guilty of undue influence or guilty through his agents, as set out above the court finds Mr Rahman personally guilty.
UNDUE INFLUENCE: INTIMIDATION AT POLLING STATIONS
A great deal of evidence was devoted to this issue on both sides – indeed on all sides as the Returning Officer filed several lever-arch files of statements from polling station staff and police officers (very helpfully arranged by polling station for ease of reference).
As the court commented perhaps somewhat wryly, listening to the evidence would convince anyone other than a hardened judge that the witnesses had been describing two entirely different elections or, perhaps, the same election but in parallel universes.
The Petitioners' witnesses painted a picture of rowdy mobs of THF supporters at polling stations, in red T-shirts or with THF rosettes and sustained by food and drink handed out from the boots of campaign cars, haranguing voters, obstructing entry to polling stations and generally putting as much pressure as they could on voters who were Bangladeshi (or otherwise appeared to be Muslim) to do their duty to their community and their faith by voting for Mr Rahman and THF.
The witnesses called for Mr Rahman, on the other hand, painted a picture of a jolly family atmosphere at the polling stations with everyone in high spirits, excited to be voting, friendly and welcoming.
With a few exceptions, the witness statements for the returning officer covering events outside the polling stations (mainly police officers) and inside (mainly polling staff) described an atmosphere of hushed, almost cloistral, calm. In the light of the two other groups of statements, an unkind person might remark that the policemen and polling staff had appeared to take as their rôle models the legendary Three Wise Monkeys.
In the real world, this was always going to be a problematic election. Tower Hamlets, together with some 16 other electoral areas, had been singled out by the Electoral Commission in consultation with local election officials such as Mr Williams for more rigorous management of the election that would normally be the case. The consultation process, which ultimately involved the police and the political parties, resulted in a lengthy Protocol being drawn up to regulate every aspect of the election. It was not confined to polling day itself but covered the registration of postal voters, the handling of postal votes and several other issues where it was felt difficulties might arise.
The Protocol was, and could only be, a voluntary document. The political parties were invited to sign up to it as a voluntary code of conduct. Except for the Conservative Party (and the court never really got to the bottom of why they had not signed) all the political parties and independent candidates signed the Protocol. Though various aspects of the Protocol were touched on in evidence, the only one that proved important was the provision concerning the number of representatives that should be allowed to attend polling stations.
What the Protocol said was that only two representatives per candidate should attend any given polling station. It turned out that what should have been said was that only two representatives per political party should attend at each polling station and that, indeed, was the rule put in place for the postponed Blackwall and Cubitt Town election in July. Two representatives per candidate was, if strictly applied, a recipe for chaos. In the larger wards there would be the candidates for the Mayor, three ward candidates and (potentially) no fewer than eight candidates in the European election. There were ten candidates for the Mayoralty and most of the political parties (including one or two independents) contested each of the ward seats. As THF was only fielding candidates in the two local elections, it did mean that it was, even under the Protocol, entitled to eight representatives in the larger wards.
In the event, the Protocol did not inhibit THF and there was a great deal of credible evidence to show that far more than the two representatives per candidate turned up at some polling stations.
Both Mr Hoar and Mr Penny have produced detailed schedules setting out their respective cases in relation to individual polling stations. It is no disrespect to their industry that this judgement (already lengthy) does not follow them round the polling stations. When assessing whether there has been undue influence contrary to s 115 of the 1983 Act, the court ought to stand back and look at the bigger picture.
However the evidence is viewed, there is no doubt that THF sent a very large number of its supporters to polling stations and that, in many cases, their numbers at given polling stations were well in excess of those prescribed by the Protocol.
There is equally no doubt that many of the THF supporters were, at best, enthusiastic, at worst, highly over-excited, and that their enthusiasm caused their behaviour to exceed what many voters attending polling stations considered to be the acceptable limits of political canvassing.
The evidence showed quite clearly that there was a considerable degree of organisation in place. Supporters were supplied with T-shirts and rosettes, together with leaflets and other political material. Clearly there is nothing wrong in that: all political parties do it. Arrangements were made for the supporters to be supplied with food and drink. Again, nothing wrong with that. If, however, you are running a political party (even one as chaotic as THF) and you let loose a mob of excitable, politically committed, young men on to the streets, then you are responsible in electoral law for their behaviour. To the extent, therefore, that breaches of s 115 were committed by THF supporters at polling stations, those supporters were in law 'agents' for whose conduct the candidate is liable. That said, the court has no doubt that those running the campaign, especially Mr Choudhury, knew exactly what their supporters were up to and took no steps to calm them down.
Thus, while Mr Rahman made great show of having agreed to and signed the Protocol and of urging his followers to respect it, neither he nor Mr Choudhury were going to let the Protocol get in the way of putting pressure on Bangladeshi voters at the polling stations.
Looking at the evidence in the round, the court is satisfied that supporters of THF at polling stations behaved as follows – not all the time and not at all polling stations but sufficiently to have alarmed voters (of all ethnicities).
Groups of supporters would approach voters, particularly Bangladeshi voters and harangue them in a manner that appeared to some onlookers to be rather aggressive. Several witnesses from different polling stations used the phrase 'running the gauntlet' to describe their passage into the polling station. Others spoke of feeling 'harassed'.
Both English and Bengali speaking witnesses attest to THF supporters shouting, amongst other things, that
a) it was the duty of Bangladeshi voters to support Mr Rahman: this was normally expressed as support for Mr Rahman rather than for THF as a party;
b) similarly it was the religious duty[62] of all faithful Muslims to support Mr Rahman;
c) Mr Biggs was a 'racist';
d) the Labour Party was 'racist' and 'Zionist'[63];
e) anyone voting Labour had been brainwashed against Islam.
Though Mr Penny did his best to counter the allegations by calling many witnesses who claimed to have attended polling stations without observing anything amiss, the body of evidence to the contrary was overwhelming and convincing. By contrast, the witnesses for Mr Rahman were not always very impressive. Quite obviously Mr Rahman and his team had rounded up a large number of sympathetic voters and had handed them pro forma witness statements with only the name of the witness and of the polling station to be filled in. Witnesses whose command of English turned out in the witness box to be rudimentary nonetheless produced polished English prose in their witness statements containing words that appeared to baffle them in cross-examination. The occasional witness claimed to have typed out his witness statement himself, oblivious to the fact that its appearance was absolutely identical to that of other (allegedly unconnected) witnesses. The nadir came when one witness gave a graphic account of how he had attended a polling station to cast his vote and found it a haven of tranquillity, only to be confronted by Mr Hoar with absolutely incontrovertible evidence that the witness had, in fact, voted by post well before polling day and could not have voted in person on the day.
The court was obliged to treat many of the witnesses called by Mr Rahman with a considerable degree of caution.
Though it is right to say that a high proportion of the witnesses called for the Petitioners were involved with other political parties – some were candidates for other parties – there was a core of evidence from witnesses who had no apparent axe to grind. Furthermore, even those witnesses who did have allegiance to parties other than THF frequently gave evidence that was corroborated from other sources.
A few examples will suffice.
Ms Janet Digby-Baker OBE, who had worked in the Borough for over fifty years and had been honoured for services to children and families, told the court of overt harassment outside the polling station at Cyril Jackson Primary School mentioned above (as well as misconduct in polling booths)[64]. She felt sufficiently outraged to write an article about it for the East London and Docklands Advertiser, only to be subjected to a torrent of abuse from partisans of Mr Rahman on that newspaper's website. The court had no hesitation in accepting her evidence and, to be fair, Mr Penny made no submission to the contrary.
Ms Beverley Charters also attended Cyril Jackson. She met Bangladeshi voters who said they were too nervous to vote because there was, at the time she spoke to them, no police presence and they felt intimated by the mob of THF supporters. They went away but later returned and Ms Charters helped them to find a policeman who escorted them through. She was told by police officers that they had had to do this with voters on several occasions throughout the day. Ms Charters herself was jeered at and 'catcalled' by THF supporters. It was obviously a very unpleasant experience. Ms Charters herself was a patently truthful witness and the court accepted her evidence.
Ms Elsie Gilding MBE, another well-respected local citizen, said she found the whole experience 'intimidating'.
Ms Chrissy Townsend was a polling station agent for the Labour Party in Lansbury Ward and spent the day visiting the five polling stations in her ward. She was obviously an apprehensive witness and her witness statement said 'I have not come forward until now because I have been frightened of intimidation and threats.' She said:
I went to Aberfeldy Culloden School[65]. I went there with my husband in the car with a colleague who was also a polling agent. When we approached the area of the polling station in Aberfeldy Street we were besieged with canvassers for Tower Hamlets First, so much so that I felt intimidated. People were banging on windows with the THF leaflets. The situation was so bad that I thought there was going to be some sort of accident. I could not even open a door and we had to go down another road, Dee Street, where the polling station is situated where there were more people there. I noticed that Ohid Ahmed, the then Deputy Mayor, was present. I got out of the car and got into conversation with an elderly lady who told me that she was frightened to go in and vote and said that she had decided not to vote as a result of the intimidation. I offered to help her get to the polling station but she said she was going home.
Ms Townsend saw a Labour candidate from the Bangladeshi community, Shiria Katun:
She was surrounded by people, dozens of men, some taking photographs. She seemed much stressed and there was a lot of pushing and shouting.
At St Saviour's Primary School[66] Ms Townsend found more THF supporters taking photographs of voters and discovered a distressed young Bangladeshi woman who said that the supporters had spat at her and called her names. The woman was very frightened and Ms Townsend called one of the attendant police officers to assist.
Ms Townsend was another patently honest and reliable witness.
At the Tiller Leisure Centre[67] the Petitioner Ms Moffat actually saw a young Bangladeshi man in tears after being told that he would not be a good Muslim unless he voted for Lutfur Rahman.
Several witnesses[68] at Old Palace Primary School polling station[69] speak of voters 'running the gauntlet' of THF supporters and having to pass through a 'corridor' of those supporters to get into the polling station.
Redcoat Youth Centre[70] was the subject of much evidence. The two Labour candidates, Ms Victoria Obaze and Ms Sabina Akhtar, gave evidence. There was credible evidence of the polling station being beset by what were estimated to be 20-30 THF activists and that they shouted that Ms Obaze was not a Muslim and Ms Akhtar did not really live in the Borough, that all non-THF candidates were 'not good Muslims' and that anyone who did not vote for Mr Rahman was 'not a good Muslim'.
There was a great deal more evidence of a similar nature concerning a score or more of polling stations but the above examples should suffice.
It cannot be denied that the conduct of Mr Rahman's supporters at polling stations on election day caused considerable disquiet at the time. Witnesses, including Councillor Peter Golds, a man of very considerable political experience, told the court that they had never before seen anything approaching this level of misbehaviour.
The fault did not lie with the Protocol. Although the Protocol could be – and has been – criticised for not having thought things through, it was only a voluntary code and Mr Rahman's supporters had no hesitation is disregarding it.
Similarly, the fault did not lie with the polling station officers who seemed to have coped remarkably well with often rowdy behaviour both outside and inside polling stations. Though this judgment has proceeded on the basis of not examining complaints of misbehaviour in polling booths, there is evidence to show several incidents of people insisting on accompanying voters into the booths and polling staff having to prevent them.
Nor is this judgment inclined to blame the Metropolitan Police. Policing Tower Hamlets under its current political régime is not an easy task. Many in the Police feel that the imputation of 'institutional racism' made by the Macpherson Enquiry, albeit 16 years ago, still dogs the Force and they are conscious that, in Mr Rahman, whose personal control of the Borough is tight, they are dealing with a man whose hair-trigger reaction is to accuse anyone who disagrees with him of racism and/or Islamophobia. In the circumstances it would be unreasonable to expect of the police anything other than an approach of considerable caution.
In policing the polling stations, their primary concern was not the provisions of the 1983 Act: their primary concern was the possible commission of public order offences. Though officers did intervene from time to time to cool things down and to attempt to disperse over-large crowds of supporters, they cannot be criticised for failing to react if such conduct fell short, as usually it did, of a public order offence.
The responsibility for the conduct of THF supporters at polling stations rests solely on the supporters themselves and on those who sent them out to the polling stations to ensure that the Bangladeshi community 'did its duty' by Mr Rahman.
The Petitioners and many of their witnesses were appalled by the behaviour of THF activists at polling stations, both at the time and when giving evidence to the court. The Tower Hamlets poll was seen by many in the wider media as one which had been marred by this behaviour.
The question the court has to answer, however, is whether this conduct crossed the line into the commission of an electoral offence under s 115 of the 1983 Act.
This is not an easy question to answer. Before the provision that is now s 164(2) the answer would have been straightforward. The conduct that the court has found took place at polling stations on 22 May 2014 would undeniably have amounted to the common law offence of intimidation. Intimidation is what it was and what it was intended to be by those organising it. Those who experienced it described it as 'intimidation' and said that they had been 'intimidated'.
The effect of s 164(2) – 'An election shall not be liable to be avoided otherwise than under this section by reason of general corruption, bribery, treating or intimidation' – is that a court may not make a finding of intimidation pure and simple. The conduct described as 'intimidation' must be shown to come within one or other of the sections defining corrupt and illegal practices. (Illegal payments, employments and hirings, though mentioned by s 164(1) can be ignored in this context). In practice this means that the intimidatory conduct must be shown to be within the terms of s 151(2)(a) or (b).
To come within s 115(2)(a), the conduct described must have involved the use of (or the threat of) 'force, violence or restraint' or the infliction of 'temporal … injury, damage, harm or loss… to induce or compel that person to vote…' For paragraph (b) the conduct must amount to 'duress' which 'impedes or prevents or intends to impede or prevent the free exercise of the franchise … or so compels, induces or prevails upon or intends so to compel, induce or prevail upon an elector …to vote…'
Though there was no evidence that any voter had actually been induced to change his vote from one of the other candidates to Mr Rahman or to THF, there can be little doubt that the intention of the THF activists was to 'induce or prevail upon an elector to vote that way'. Thus the purpose and intention of the conduct is clear. Was there, however, the use or threat of sufficient 'force, violence or restraint' to comply with paragraph (a) or sufficient 'duress' to comply with (b)?
As has been said when discussing the law, rightly or wrongly, s 115 demands quite a serious level of violence before it will permit an election to be avoided. Even though a great deal of the Petitioners' evidence has been accepted and even though those present felt that they had been subject to unacceptable intimidation, the court cannot be satisfied that the violence or duress reached the level required by the section. It is appreciated that there may well be two views about this and it is quite possible that a differently constituted court might feel that this approach is unduly cautious.
Bearing in mind the level of proof required for a court properly to be satisfied to the criminal standard, this element of the case falls short – only just, but it does fall short – of reaching that level.
With considerable misgiving, therefore, the court must reject that part of the Petitioner's case based on undue influence at polling stations.
If the court is correct in this approach, then this is unquestionably an unfortunate result. It is obviously undesirable that voters attending polling stations should be subjected to the level of intimidation that was inflicted on 22 May 2014. Equally obviously the conduct of the THF supporters, orchestrated, as I have no doubt it was, by Mr Choudhury, was deplorable, even indefensible.
The court is aware that electoral law is the subject of a current investigation by the Law Commission[71] and that part of its remit is the re-defining and reclassification of electoral offences. In the view of this court, s 115(2) sets the bar much too high for dealing with intimidatory behaviour during the conduct of the poll.
The court appreciates that many in Tower Hamlets will be disappointed, even horrified, that the 1983 Act does not penalise thuggish conduct at polling stations of the sort that occurred in 2014 but the court feels that it would not be right to stretch s 115, even if to do so might mete out rough justice to Mr Rahman's foot-soldiers.
GENERAL CORRUPTION
The court need not spend long on general corruption, largely because those corrupt and illegal practices that it has found proved are found to have been committed by Mr Rahman or by his agents for whom he is responsible.
As has been said, when examining the issue of general corruption the court should have regard to all the corrupt and illegal practices proved to have been committed in the electoral area in question and to decide whether they have 'extensively prevailed' and whether they may be 'reasonably supposed to have affected the result'.
Viewed in isolation, given the fact that they were spread over several wards and must necessarily have involved different THF activists in those wards, it is not difficult to conclude that personation and other voting offences 'extensively prevailed' in Tower Hamlets. The scale of those offences capable of being proved to the satisfaction of this court, however, is well below the level necessary to have affected the result. At most, only a few hundred dubious vote (possibly fewer) can be shown against Mr Rahman's winning margin of over 3,000. Viewed in isolation, therefore, the facts do not establish general corruption in respect of personation or other voting offences.
The unlawful payment of canvassers was not proved to a level that would be sufficient to trigger either requirement of s 164.
In respect of the other corrupt and illegal practices, the circumstances of this election are such that they necessarily operated Borough-wide. The objective was to ensure that the Borough's electorate as a whole returned Mr Rahman as Mayor. In relation to the making of false statements about Mr Biggs (which were repeated and embellished across the Borough and beyond), the bribery of the Bangladeshi electorate by the distribution of grants and the use of undue spiritual influence can all be said to meet the test of having 'extensively prevailed'.
Did these three offences, whether viewed individually or globally, meet the test of being 'reasonably supposed to have affected the result'? It is always difficult for a respondent whose election has been achieved following 'extensively prevailing' corrupt and illegal practices to say 'Yes, of course there was extensive corruption and illegality but it didn't make any difference: I would have won anyway.' That invites the retort: 'If it was useless, why do it?'
Looking at the matter realistically, it is impossible to say that the three electoral offences listed above were not likely to have affected the result. If a fair campaign had been mounted against Mr Biggs or if the Mayor had not sprayed public money round his core constituency or if he had not enlisted the help of the Muslim clergy to put unlawful pressure on Muslim voters, the result would have been very different.
In view of its findings as to the personal responsibility of Mr Rahman and his agents, the question of whether there was also general corruption under s 164 of the 1983 Act may seem academic but, for the sake of completeness, it is confirmed that the court is satisfied that general corruption did take place and met the criteria of that section.
WIDER CONSEQUENCES OF THE FINDINGS OF CORRUPT AND ELECTORAL PRACTICES
One of the tasks of an election judge is contained in s 145(3) of the 1983 Act:
Where a charge is made in the petition of any corrupt or illegal practice having been committed at the election the court shall, in addition to giving a certificate, and at the same time, make a report in writing to the High Court as required by sections 158 and 160 below and also stating whether any corrupt practices have, or whether there is reason to believe that any corrupt practices have, extensively prevailed at the election in the area of the authority for which the election was held or in any electoral area of that authority's area.
The result of the decisions reached in this judgment will be that Mr Rahman's election will be avoided and he will be disqualified from standing in the new election. The findings will necessarily lead to adverse consequences for Mr Rahman. The position of Mr Choudhury will be considered below.
From those decisions, particularly the decisions above on the issue of general corruption under s 164, it follows that the court will have to report that 'corrupt practices have extensively prevailed at the election in the area of the authority for which the election was held.' Given the nature of THF as a 'party' and the reality of its control by Mr Rahman, this means that the election of all THF Councillors must be taken to have been achieved with the benefit of the corrupt and illegal practices found by this judgment to have been committed.
This court has not been charged with deciding the validity of the election of any of those Councillors. It is far too late for anyone to petition to avoid their individual elections. So far as electoral law is concerned, therefore, each of those Councillors is fully entitled to retain his or her seat until the next election in 2018.
This is obviously unsatisfactory but the solution to the problem lies well outside the remit of this Election Court.
With a sense of relief, therefore, that particular problem can be avoided by the Court, though it will probably be sitting on the desk of the new Secretary of State for Communities and Local Government when he or she takes office after 7 May 2015.
MR ALIBOR CHOUDHURY
At the outset of the trial, Mr Hoar indicated that he would seek to have Mr Choudhury formally named under s 145 of the 1983 Act. Mr Choudhury was therefore informed that this might take place. On more than one occasion throughout the trial, and certainly before he gave evidence, it was reiterated that this was a potential course of action. At the conclusion of the evidence the court stated that Mr Choudhury should have the opportunity to make written submissions either in person or by a legal representative at the same time as the written submissions for the parties. The court also indicated that he was at liberty to appear before the court on the day fixed for oral submissions and to present his case for not being named, whether in person or by a legal representative.
Mr Choudhury did not avail himself of these opportunities. The court considers that it has the power to name Mr Choudhury under s 145 and has no hesitation in formally naming Mr Choudhury as personally guilty of corrupt and illegal practices. This means that he must vacate his office as Councillor forthwith and will suffer the statutory period of disqualification under s 160 of the 1983 Act.
THE PETITIONERS
Little has been said so far about the four Petitioners, Mr Erlam, Ms Simone, Mr Hussein and Ms Moffat. All of them gave evidence, though, in the event none of it proved pivotal. Mr Hussein, who is, incidentally, himself a member of the Bangladeshi community, was savagely cross-examined, presumably on instructions, though to no ascertainable forensic purpose.
Although they all had political connections and, indeed, Mr Erlam had unsuccessfully stood for election as a Councillor, representing a political party of his own devising. The four Petitioners came into this Petition as members of the public, electors of the Borough who are given the right to bring election petitions by the 1983 Act.
To bring an election petition as a private citizen requires enormous courage. If things go wrong and the petition is dismissed, the Petitioners face a potentially devastating bill of costs which, unless they are very fortunate, may well bankrupt them. There is no access to public funding: Parliament has left the policing of fair and democratic elections to the chance that concerned citizens will become involved at their own expense. Whether that is an appropriate and sufficient way to protect democracy is open to question.
If the bringing of an election requires courage in ordinary circumstances, bringing a petition to try to unseat Mr Rahman required courage of a very much higher order. The Petitioners knew that Mr Rahman would deploy all his resources to defeat them and could rely on the Bangladeshi media to back him all the way. The Petitioners would be portrayed as racists and Islamophobes, attempting to set aside the election (by a large majority) of a Mayor whose government of the Borough had been inspirational, for no better reason than the fact that he was a Bangladeshi. And so it proved. The Petitioners have been duly vilified - but they have hung in there.
As will be seen when we turn to counsel, the Petitioners could not afford to engage solicitors. They have had to carry out much of the leg-work of preparing this case under Mr Hoar's direction and they have worked tirelessly.
The Petitioners have been greatly aided by Councillor Golds. The court considered Mr Golds to be an impressive man and a reliable witness, and much of his evidence in this case has been accepted. But Councillor Golds is himself merely a private citizen in this matter and any help given to the Petitioners has been given from his own resources.
The court expresses surprise that this Petition was not brought by the Labour Party. The Mayoral campaign had been directed throughout towards destroying the reputation of Mr Biggs, its official candidate, and many of the votes obtained by THF candidates in the wards would otherwise have gone to Labour. Labour was (and is) the most likely beneficiary of any decision avoiding the election and disqualifying Mr Rahman from standing in the new election.
It may be that the Labour Party simply thought the game not worth the candle and was not prepared to risk its money. On the other hand it may be, like so many others who have come up against Mr Rahman, the Party was not prepared to risk the accusations of racism and Islamophobia that would have been bound to follow any petition.
The four Petitioners, then, have shown exemplary courage in bringing and persevering with this Petition. They have endured a difficult, exhausting and anxious eleven months.
And they have been vindicated.
THE RETURNING OFFICER
Following the agreement reached between the Petitioners and the Returning Officer before the beginning of the hearing, Mr Williams played little part in the trial. His counsel only appeared on the opening day, on the day when Mr Williams himself gave evidence and on the day of final oral submissions.
Nevertheless it is appropriate to include a short passage in this judgment about Mr Williams. The criticisms made of him in the Petition were very largely criticisms of alleged failures by his staff, whether at polling stations or at the count, and there was very little criticism of Mr Williams personally. Those criticisms have been unreservedly withdrawn – and rightly so.
Mr Williams faced a formidable task. He was conducting three simultaneous elections, two of which, as this court has found, were marred by serious and widespread electoral malpractice on the part of the Mayor and his inner circle. There is no doubt that far too many people attended the count and the behaviour of many who attended was regrettable.
Mr Williams was much criticised in the media for the length of time that the count took but the circumstances were such that this was inevitable and he seems to have made the correct decisions, even if they disappointed some in the press.
All in all, Mr Williams did a completely professional job in very difficult and trying circumstances. He is a man of considerable experience in elections – indeed may be considered an expert in the subject – though that expertise was sorely tested in 2014.
As the court has found so often with professional returning officers, Mr Williams was a man who kept his head when all around were losing theirs.
I cannot leave Mr Williams without paying tribute to his solicitors, Messrs Sharpe Pritchard LLP and, in particular to Mr Emyr Thomas, a partner in that firm. Mr Thomas has provided invaluable logistic support to the court and it is fair to say that, without his help and that of his partner Mr Badcock, the management of this case would have been well-nigh impossible.
COUNSEL
The court has been much assisted by counsel for the parties.
Mr Straker's interventions, albeit, in the event, necessarily limited, were, as ever magisterial.
Mr Penny, though not (before this hearing) a particular specialist in electoral law conducted Mr Rahman's case as well as it could possibly be conducted. There were times when he obviously found Mr Hoar to be 'unplayable', and he was not alone. None the less, he never deviated from a complete professionalism in his approach. The court was greatly assisted by Mr Penny's detailed and acute analysis of the issues and of the evidence and it is not his fault that the court has frequently not been persuaded that he is right.
For Mr Hoar, this has been a complete tour de force. He accepted the case on the basis of direct access. That is to say that his four clients, members of the public, could not afford to instruct and therefore did not instruct solicitors. Mr Hoar, with such assistance as his lay clients could give him, has thus single-handedly conducted the entirety of the case: pleadings, witness statements, disclosure, directions, the Scrutiny, preparation of the trial and conduct of the trial. Though he occasionally allowed his enthusiasm to get the better of his judgment, he has carried the entire case on his back and has brought it to a successful conclusion. By any standards this was a considerable feat and worthy of the admiration of the court.
THE LAW COMMISSION
As has been pointed out above, the whole question of electoral law is currently being investigated by the Law Commission. This is a very welcome development. The Commission has a long and distinguished history of applying rigorous analysis to legal problems and difficulties, and coming up with sensible and workable solutions that command public support.
This Petition has thrown up a number of issues which, while already on the Commission's agenda, can only benefit from examination of how those issues arise in a real-life situation such as the present.
First and foremost, this case highlights to an even greater extent than previous election cases I have tried, the unsatisfactory nature of the election petition as a way of protecting democracy. Police forces can and do act when evidence is presented to them of electoral wrongdoing but they do not have the resources to be pro-active and they remain heavily dependent on information supplied by the political rivals of the alleged wrongdoers.
The Petition system is obsolete and unfit for purpose. It is wholly unreasonable to leave it to defeated candidates or concerned electors, like the present Petitioners, to undertake the arduous and extremely expensive task of bringing proceedings and pursuing them to a conclusion entirely at their own expense and with the risk of bankruptcy if they fail to surmount the Grand National sized fences placed in the path of Petitioners. We do not leave it to the victim of burglary or fraud (a fortiori the victim of rape) to bring civil proceedings against the perpetrator as the only way of achieving justice. Why do we leave it to the victims of electoral fraud to go it alone?
Furthermore, if they do win and are awarded their costs against the respondent, the latter, who is turned out of office and frequently then prosecuted to conviction, is unlikely to be able to pay those costs. A petitioner's victory is often Pyrrhic.
Secondly, the whole scheme of corrupt and illegal practices and the arbitrary distinctions between the two should be reconsidered, and a rational table of electoral offences with their ingredients and their penalties clearly set out.
Thirdly, the offences themselves need urgent re-visiting. It may be that the court has taken an over-strict view of the requirements to be proved to establish an offence under s 115 of the 1983 Act in the case of intimidation and the court was extremely reluctant to reach the conclusion that the unacceptable behaviour of THF supporters at polling stations fell just below the threshold. The Commission has already indicated that it intends to examine the whole question of intimidation and the court hopes that this judgment may assist.
Again, undue spiritual influence (which is always going to be controversial) needs reconsideration. If it is to be retained (and the court is neutral on that topic), it should be more clearly articulated and, if thought appropriate, re-stated for a 21st century environment.
The formulation of bribery is not without difficulty, as this judgment shows, and would benefit from greater clarity. Serious consideration should also be given to amalgamating treating – surely an obsolescent if not obsolete concept in the modern world[72] - with the overall offence of bribery.
Finally, although it has been proved against Mr Rahman in this case, this court respectfully wonders whether, in the light of the elaborate and expensive apparatus of the modern political party, it is still necessary to make payment of canvassers a criminal and electoral offence.
FORMAL CONCLUSIONS
The court is satisfied and certifies that in the election for the Mayor of the London Borough of Tower Hamlets held on 22 May 2014:
a) the First Respondent Mr Rahman was guilty by his agents of corrupt practices contrary to:
i) s 60 of the 1983 Act;
ii) s 62A of the 1983 Act;
b) the First Respondent Mr Rahman was guilty by his agents of illegal practices contrary to:
i) s 13D(1) of the 1983 Act;
ii) s 61(1)(a) of the 1983 Act;
c) the First Respondent Mr Rahman was personally guilty and guilty by his agents of an illegal practice contrary to s 106 of the 1983 Act;
d) the First Respondent Mr Rahman was guilty by his agents of an illegal practice contrary to s 111 of the 1983 Act;
e) the First Respondent Mr Rahman was personally guilty and guilty by his agents of a corrupt practice contrary to s 113 of the 1983 Act;
f) the First Respondent Mr Rahman was personally guilty and guilty by his agents of a corrupt practice contrary to s 115 of the 1983 Act.
The court is also satisfied to the relevant standard of proof and certifies that in the election for the Mayor of the London Borough of Tower Hamlets held on 22 May 2014:
a) there were corrupt and illegal practices for the purpose of promoting or procuring the election of the Respondent Mr Rahman at that election and
b) those corrupt or illegal practices so extensively prevailed that they may reasonably be supposed to have affected the result of such election.
The court therefore declares the election of Mr Rahman as Mayor of the London Borough of Tower Hamlets to have been avoided by such corrupt or illegal practices pursuant to s 159(1) of the 1983 Act and also to have been avoided on the ground of general corruption pursuant to s 164(1)(a) of the 1983 Act.
It is declared that Mr Rahman shall be incapable of being elected to fill the vacancy for the office of Mayor of the London Borough of Tower Hamlets under s 164(1)(b) of the 1983 Act.
Mr Rahman is a solicitor of the Senior Courts and the court is obliged by s 162 of the 1983 Act to bring this judgment to the attention of his professional body, the Solicitors' Regulation Authority. It is ordered that a copy of the judgment be sent to the SRA.
The court will also report and certify that Mr Alibor Choudhury was guilty of a corrupt practice contrary to s 113 of the 1983 Act and illegal practices contrary to ss 106 and 111 of the 1983 Act.
As the court is required to consider the matter under s 145(3) of the 1983 Act, the court finds that corrupt practices extensively prevailed at the election both of the Mayor and of the Councillors for the twenty wards of Tower Hamlets held on 22 May 2014.
These conclusions will be embodied in the certificate of the court and will be the subject of the court's report to the High Court under sections 145, 158 and 160 of the 1983 Act.
Their effect is firstly that Mr Rahman's election as Mayor on 22 May 2014 was void, that is to say, it is as if it had never taken place. He has not lawfully been Mayor since that date. Secondly, as has been said, Mr Choudhury must immediately vacate the office of Councillor. Thirdly it will be Mr Williams's task to arrange for a new Mayoral election and for a by-election in the Ward of Stepney.
AFTERWORD
The evidence laid before this court, limited though it necessarily was to the issues raised in the Petition, has disclosed an alarming state of affairs in Tower Hamlets. This is not the consequence of the racial and religious mix of the population, nor is it linked to any ascertainable pattern of social or other deprivation. It is the result of the ruthless ambition of one man.
The real losers in this case are the citizens of Tower Hamlets and, in particular, the Bangladeshi community. Their natural and laudable sense of solidarity has been cynically perverted into a sense of isolation and victimhood, and their devotion to their religion has been manipulated – all for the aggrandisement of Mr Rahman. The result has been to alienate them from the other communities in the Borough and to create resentment in those other communities. Mr Rahman and Mr Choudhury, as has been seen, spent a great deal of time accusing their opponents, especially Mr Biggs, of 'dividing the community' but, if anyone was 'dividing the community', it was they.
The Bangladeshi community might have thought itself fortunate to have been the recipient of the Mayor's lavish spending but in the end the benefits were small and temporary and the ill effects long-lasting. It was fool's gold.
Central government has already had to intervene once, and, on 4 November 2014, the Secretary of State, Mr Eric Pickles, announced the appointment of commissioners to take over a number of functions of the Mayor and Council, particularly in relation to grants. It is obviously not for this court to suggest, still less recommend, any further course of action but it seems likely that the governance of this Borough will have to be examined in the not too distant future.
On past form, it appears inevitable that Mr Rahman will denounce this judgment as yet another example of the racism and Islamophobia that have hounded him throughout his political life. It is nothing of the sort. Mr Rahman has made a successful career by ignoring or flouting the law (as this Petition demonstrates) and has relied on silencing his critics by accusations of racism and Islamophobia. But his critics have not been silenced and neither has this court.
Events of recent months in contexts very different from electoral malpractice have starkly demonstrated what happens when those in authority are afraid to confront wrongdoing for fear of allegations of racism and Islamophobia. Even in the multicultural society which is 21st century Britain, the law must be applied fairly and equally to everyone. Otherwise we are lost.
Note 1 Supperstone and Spencer JJ [Back]
Note 2 [2010] EWHC 2702 (QB) (Election court); reported as R (on the application of Woolas) v Election Court [2010] EWHC 3169; [2012] QB 1; (Divisional Court) [Back]
Note 3 [2010] EWHC 3169 at paras 22 ff. [Back]
Note 4 Punch 29 February 1868 ‘A Legal Difficulty’ [Back]
Note 5 To the civil standard. [Back]
Note 6 Not necessarily the successful candidate but there would be obvious difficulties in establishing that the corruption had affected the result of the election if it had only been directed towards securing the election of one of the losers. [Back]
Note 7 Petition M/307/04 (Aston), M/309/04 (Bordesley Green): judgment reported at [2005] All ER (D) 15. Judgment affirmed by Divisional Court [2005] EWHC 2365 [Back]
Note 8 [1992] 1 WLR 1059. Interestingly, another case from Tower Hamlets. [Back]
Note 9 (1874) 2 O'M&H 100. [Back]
Note 10 See for example Westbury Case (1869) 20 LT 16 and Tewkesbury Case, Collings v Price (1880) 44 LT 192. [Back]
Note 11 See for example Stalybridge Case, Ogden Woolley and Buckley v Sidebottom (1869) 20 LT 75. [Back]
Note 12 See for example Great Yarmouth Borough Case, White v Fell (1906) 5 O'M & H 176. [Back]
Note 13 Although the two judges disagreed on whether the alleged ‘agent had been one in fact. [Back]
Note 14 See the 1983 Act s 168(1)(a)(i). [Back]
Note 15 See the 1983 Act s 168(1)(a)(i). [Back]
Note 16 Simmons v Khan M/326/07 Judgment delivered 18 March 2008. [Back]
Note 17 Though I am widely credited with the invention of this term, any credit must actually go to Mr Gavin Millar QC who introduced me to the term in the Slough case. [Back]
Note 18 SI 2001/341, as amended [Back]
Note 19 Again to the civil standard. [Back]
Note 20 Inserted by the Political Parties, Elections and Referendums Act 2000 s 135. [Back]
Note 21 Part II, which contains s 106. [Back]
Note 22 R (on the application of Woolas) v Election Court [2010] EWHC 3169 para 121. [Back]
Note 23 In a publication calledLabour Rose. [Back]
Note 24 The local newspaper in the constituency. [Back]
Note 25 Woolas para 122 [Back]
Note 26 Woolas para 124 [Back]
Note 27 Woolas para 106. [Back]
Note 28 Woolas para 103 [Back]
Note 29 Wallingford Election Petition (1869) 19 LT 766; Norfolk, Northern Division Case (1869) 21 LT 264 [Back]
Note 30 Windsor Case, Herbert v Gardiner (1874) 31 LT 133. [Back]
Note 31 (1870) 2 O’M & H 6. [Back]
Note 32 Leading to Mr Gladstone’s last ministry, as head of a minority government dependent on Irish Nationalist support. [Back]
Note 33 (1892) 4 O’M & H 185. [Back]
Note 34 (1892) 4 O’M & H 130. [Back]
Note 35 Meaning the 29 Catholic bishops and archbishops of Ireland. [Back]
Note 36 Cited by Andrews J in Meath North (1892) 4 O’M & H 185 at p 192. [Back]
Note 37 See, for example, the Nottingham Town Case (1866) 15 LT 57. [Back]
Note 38 Sylhet, together with its neighbouring region of Assam, produces the fragrant tea named after the latter. [Back]
Note 39 The other is Mr Ted Jeory of whom there will be more later. [Back]
Note 40 Mr Helal Abbas became Leader. [Back]
Note 41 Mr Skinner is recorded as having left the meeting before the decisions were taken. [Back]
Note 42 Best Value Inspection of the London Borough of Tower Hamlets Report 16 October 2014 [Back]
Note 43 In the London Borough of Redbridge. [Back]
Note 44 Ms Rushanara Ali (the UK’s first Bangladeshi MP) and Mr Jim Fitzpatrick. [Back]
Note 45 Stepney Green Ward district 3. [Back]
Note 46 Not, apparently, any relation of Mr Lutfur Rahman. [Back]
Note 47 PwC report paras 4.125 & 4.126. [Back]
Note 48 Para 4.128. [Back]
Note 49 The Boishakhi Mela, a Bangladeshi religious festival to mark the Bengali New Year. [Back]
Note 50 Which was actually marked at the time by Ms Cohen ‘dictated to me by Cll’s AA [Asad] and AC [Choudhury]’. [Back]
Note 51 PwC report para 4.101. [Back]
Note 52 Mr Robert McCulloch-Grahame. Ms Cohen’s line manager. [Back]
Note 53 It is not entirely clear what else, if anything, Mr Jubair did to earn his money. [Back]
Note 54 Various spellings of the name are to be found in the documents. This version is that of Mr Hoque himself in his witness statements. [Back]
Note 55 Ulama (as it is generally anglicized) signifies an important religious scholar. [Back]
Note 56 The Imam of Mecca referred to above. The Kabaa or Ka’aba (normal western spellings) is situated within the Al-Masjid al-Haram Mosque in Mecca and is the holiest place in Islam, towards which all Muslims turn to pray. [Back]
Note 57 Mr Hoque mentioned above. [Back]
Note 58 All citations from this event are from an English translation as the event seems to have been conducted throughout in Bengali. [Back]
Note 59 Who had introduced Mr Rahman’s speech and urged the audience to vote for him. [Back]
Note 60 The Khatib delivers the narration or sermon at Friday prayers in the mosque [Back]
Note 61 Catholic metaphors seem inevitable. [Back]
Note 62 Bengali expressions were used which the Court accepted as conveying the concept of a religious duty placed on faithful Muslims. [Back]
Note 63 At Cyril Jackson Primary School – Lansbury Ward district 2 – a particular ‘hot-spot’ of THF misbehaviour, a THF activist was actually given a warning by PC Grimes, one of the police officers in attendance. There were also shouts that Mr Ed Miliband was a ‘Zionist’. [Back]
Note 64 Given that, back in 1963, Ms Digby-Baker had taken six months out to assist the Civil Rights campaign in the USA and had worked for Martin Luther King, she may be taken to know something about being on the receiving end of electoral malpractice and to be someone who is not easily alarmed. [Back]
Note 65 Lansbury Ward district 4. [Back]
Note 66 Lansbury Ward district 1. [Back]
Note 67 Canary Wharf Ward district 3. [Back]
Note 68 Including Randall Smith, Cllr Khales Uddin Ahmed, Ms Sheenagh McKinlay and polling station officers Mr Danny Warren and Mr Peter Hubbard. [Back]
Note 69 Bromley North Ward district 3. [Back]
Note 70 Stepney Green Ward district 3. [Back]
Note 71 Not to be confused with the Electoral Commission. [Back]
Note 72 As witness the affair of the UKIP sausage-rolls. [Back] |
Mr Justice Nicol:
This is a rolled-up hearing of an application by the Defendant for permission to appeal with the appeal to follow if permission is granted from a decision of HHJ Harington given on 25th July 2014 in Gloucester County Court.
The Defendant is the tenant of the Respondent Housing Association. In the underlying proceedings, the Respondent has sought possession of the flat which they have rented to him and also an injunction against him to restrain what is said to be his anti-social behaviour and harassment of one of their other tenants. The Claim Form was issued on 4th November 2013. The injunction was granted ex parte the same day. On 2nd January 2014, by consent the Court granted a final injunction. The Defendant also agreed to a possession order being made but suspended on certain terms. He was alleged to have breached the injunction and the terms of the suspension. He admitted some of the breaches and DJ Singleton found one (but not another) proved. Sentence for breach of the injunction was adjourned. A warrant for possession was issued but the Defendant applied for this to be suspended.
Throughout these proceedings, the Defendant was represented by solicitors and counsel. At some point in March, they raised the issue as to whether the Defendant had mental capacity to litigate on his own behalf or whether he was to be regarded as a 'protected party' for the purposes of the Mental Capacity Act 2005 ('the 2005 Act') and Part 21 of the Civil Procedure Rules ('CPR'). Dr Bickerton, is a consultant psychiatrist. He provided a report dated 28th March 2014. He described how the Defendant had been involved in a serious road traffic accident in 1999 at the age of 18 in which he had suffered injuries to his brain. A few days later he was injured in another road accident which required further hospitalisation. In Dr Bickerton's opinion the Defendant continued to suffer significant cognitive deficits as a result of his brain injuries. These would affect his ability to adhere to the injunction and impact adversely on his ability to take part in court proceedings. He understood the allegations made against him and had the ability to decide whether to plead guilty to them, but he 'may/will be unable to defend the proceedings, give evidence and cope with cross examination… his fitness is impaired and he is not fit to plead'. In a form, which appears to have originated from the Official Solicitor, Dr Bickerton certified that the Defendant was 'unable to understand relevant information', and 'was unable to retain that information' and/or was 'unable to use or weigh certain information as part of the process of making the decisions in the conduct of the proceedings'. As I shall explain, each of these is a reference to the alternatives set out in the 2005 Act, at least one of which must be established before a person is considered to lack capacity.
In his certificate Dr Bickerton also certified that the Defendant's condition was unlikely to improve so that he would regain capacity. It was part of the long term consequences of the injuries which he had received in 1999.
On 8th May 2014 the Official Solicitor wrote to the Defendant's solicitor, gave his opinion that the medical evidence clearly established the Defendant's lack of litigation capacity and agreed to act as the Defendant's litigation friend.
A hearing took place before HHJ Harington on 19th May 2014. There does not appear to have been a formal application notice, but the preamble to the order recorded that the purpose of the hearing was to consider 'whether the Defendant is or has been at any material time a protected party within the meaning of Part 21 of the CPR.' The preamble continues, 'And upon determining that the Defendant has and, at all material times, has had capacity to conduct these proceedings'. It is rather curious that such a determination should be included in the preamble, rather than as a substantive order, but neither party suggested that anything of significance turned on the form of the Court's order. Its meaning was clear. Further procedural directions were then given.
For some considerable time the Defendant had been treated by a consultant clinical psychologist, Dr[1] Andrew Champion, specialising in neuropsychology. On 27th June he too completed a certificate which was also on the form prepared by the Official Solicitor. He, too, signified that, in his opinion the Defendant was unable to understand relevant information, was unable to retain that information and was unable to use or weigh certain information as part of the process of making decisions in the conduct of the proceedings. In addition, Dr Champion also thought that the Defendant was unable to communicate his decisions. The Official Solicitor repeated his willingness to act as the Defendant's litigation friend and said that it was his view that Dr Champion's certificate confirmed that the Defendant was a protected party. On 4th July 2014 the Defendant's solicitors issued an application for an order that the Official Solicitor be appointed as the Defendant's litigation friend, a variation of the order of 19th May 2014 to reflect the fact that the Defendant lacks capacity, or, alternatively a variation of the Judge's order on that date to remove the words 'and at all material times has had.'
I have a transcript of the Judge's decision on 25th July 2014. In summary, he ruled:
i) The order which he had made on 19th May 2014 was a final order. It could not be varied under CPR r.3.1(7), but in any case there had been no material change of circumstances since that date (this was not a case where the Defendant's condition had deteriorated between the time that he was seen by Dr Bickerton and Dr Champion's certificate), nor had the facts been misstated on 19th May. All that had happened was that a further expert had produced a report which was only slightly different. He dismissed the application on these grounds alone.
ii) But in any case he was not persuaded, even if Dr Champion's certificate had been available at the May hearing, that the outcome would have been different. In brief he concluded that, while Dr Champion was saying that the Defendant would have certain difficulties, they were not such as, in the Judge's view, any of the alternative forms of incapacity was established.
On the Defendant's behalf, Mr Shepherd argues as follows:
i) The Judge was wrong to conclude that he had no power to re-examine his previous decision of 19th May as to the Defendant's capacity to litigate. His decision on that occasion had not been a 'final order', and there was the further evidence from Dr Champion which required that decision to be re-considered.
ii) The Judge had erred by allowing the Claimant to contest the issue of Defendant's capacity in the way that the Claimant had done. An adversarial approach was inappropriate on such a matter.
iii) If the Judge had any doubts about the sufficiency of the evidence which was led by the Defendant, he should have adjourned the hearing in order to allow Dr Champion (and/or Dr Bickerton) to be called to give oral evidence.
iv) The Judge was wrong to conclude that the Defendant had capacity to litigate.
Mental Capacity Act 2005
By CPR 21.2(1) a 'protected party' must have a litigation friend to conduct proceedings on his behalf and by r.21.10(1) no settlement or compromise by or against a protected party shall be valid unless it has been approved by the court. The term a 'protected party' includes a person who lacks capacity to conduct the proceedings – r.21(2)(d) and the expression 'lacks capacity' has the same meaning as in the 2005 Act - ibid r.21(2)(c).
Section 2 of the 2005 Act defines people who lack capacity. It says:
'(1) For the purposes of this Act, a person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or disturbance in the functioning of, the mind or brain.
(2) It does not matter whether the impairment or disturbance is permanent or temporary.
…
(4) In proceedings under this Act or any other enactment, any question whether a person lacks capacity within the meaning of this Act must be decided on the balance of probabilities…'
Section 3 elaborates on what is meant by the inability of a person to make decisions for himself. It says:
'(1) For the purposes of section 2 a person is unable to make a decision for himself if he is unable –
(a) to understand the information relevant to the decision,
(b) to retain the information,
(c) to use or weigh that information as part of the process of making the decision, or
(d) to communicate his decision (whether by talking, using sign language or any other means).
(2) A person is not to be regarded as unable to understand the information relevant to a decision if he is able to understand an explanation of it given to him in a way that is appropriate to his circumstances (using simple sign language, visual aids or any other means).
(3) The fact that a person is able to retain the information relevant to a decision for a short period only does not prevent him from being regarded as able to make the decision.
(4) The information relevant to a decision includes information about the reasonably foreseeable consequences of –
(a) deciding one way or another, or
(b) failing to make the decision.'
Section 1 of the 2005 Act sets out certain principles which are to apply for the purposes of the Act. They include the following:
'(2) A person must be assumed to have capacity unless it is established that he lacks capacity.
(3) A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success.
(4) A person is not to be treated as unable to make a decision merely because he makes an unwise decision.'
Did the Judge have power to re-consider his decision of 19th May that the Defendant was not a protected party?
Rule 3.1(7) of the CPR provides that:
'A power of the court under these Rules to make an order includes a power to vary or revoke the order'.
Mr Shepherd argues that this gave the Judge sufficient power to vary or revoke his earlier ruling.
Mr Underwood on the Claimant's behalf submits, first, that the Judge was right to treat his decision of 19th May as a final order since it finally determined as between the Claimant and Defendant whether the Defendant was and had always been a person with sufficient capacity to conduct this litigation. As such, the Judge was right that he ought not to revisit it. Mr Underwood refers me to Roult v North West Strategic Health Authority [2010] 1 WLR 487 (CA) at [15] and Kojima v HSBC Bank plc [2011] 3 All ER 359 (Ch) at [33] – [34] for the proposition that, if there is jurisdiction under r.3.1(7) to vary or revoke a final order, it should only be exercised in exceptional circumstances. Mr Underwood argued that if the Defendant was dissatisfied with the Judge's decision of 19th May he should have appealed that decision (and on that appeal, if he wished, sought permission to rely on the additional evidence of Dr Champion), but that was not what the Defendant had done. He was trying to appeal only the decision of 25th July.
The White Book (2014 edition) at paragraph 3.1.9.1 says, 'Final orders determine between the parties the issues which are the subject matter of the litigation and which give rise to a cause of action estoppel between those parties.' Hamblen J adopted this definition in Islamic Investment Company of the Gulf (Bahamas) Ltd v Symphony Gems NV [2014] EWHC 3777 (Comm) at [108]. In the present case, the issues between the parties are (in summary) whether the Defendant breached the terms of his tenancy agreement, whether he behaved in such a way as to justify the grant of an injunction to prevent harassment and whether he has breached the injunction and terms of the suspended possession order.
It may be said that the issue as to Mr Werrett's capacity to litigate does not directly concern any of these issues. Cases such as Dunhill v Burgin (Nos. 1 and 2) [2014] 1 WLR 933 (SC) show that the subsequent realisation that a litigant lacks capacity may lead to the overturning of a previous settlement of a claim. In that case, Mrs Dunhill brought a personal injuries claim in 1999 which she settled in 2003 for £12,500 in full and final settlement. In 2009 she sought a declaration that she had lacked capacity and the settlement should be set aside because it had not been approved by the court as r.21.10 required. Her argument was upheld by the Supreme Court. Here (similarly to the 2003 settlement in Dunhill) the Defendant consented to the suspended possession order. Importantly, though, in the proceedings which Judge Harington decided on 19th May, he was asked to rule whether the Defendant had and at all material times had had capacity to conduct the litigation. If the Defendant had been successful in that application it would have impeached the suspended possession order since that would have been ineffective because (like the 2003 settlement in Dunhill) it had been made without the court's approval on behalf of the Defendant as a protected party. On 25th July the Defendant was trying to re-litigate the Judge's final ruling as to whether those earlier stages of the proceedings could be re-opened.
Mr Shepherd argued that the Court had elided what should have been a two stage process into one: that it should first have considered whether the Defendant was a protected party and, if that was resolved in the Defendant's favour, gone on to consider whether earlier decisions, such as the suspended possession order, should be effective notwithstanding the absence of a litigation friend to act on his behalf when those earlier stages in the litigation took place. He referred me to r.21.3(3) which says, 'Any step taken before a …protected party has a litigation friend has no effect unless the court orders otherwise.' [my emphasis]
In my judgment, though, there are three reasons why Judge Harington was right to take the course that he did. First, he had been asked by the Defendant to rule that the Defendant was, or had been at any material time, a protected party. The application thus concerned the past as well as the future. Secondly, that made practical sense. By the time this application was made, the litigation was at a very advanced stage. A suspended possession order had been made. By both the Defendant's admission and the District Judge's holding, its terms had been breached. A final injunction had been granted. It too had been broken (as established by the same combination of judicial holding and admission). The practical purpose of the application by the Defendant was to unwind what had so far happened in the litigation. Thirdly, in terms of the Defendant's incapacity, it only made sense to consider the position retrospectively as well as prospectively. No one was suggesting that his condition had deteriorated since the commencement of proceedings. It was and had remained much the same since the time of his accidents in 1999. It would be unreal to treat him as lacking capacity in May 2014, but able to litigate on his own behalf in January, February, March and April 2014.
Mr Shepherd argued that a decision as to a party's capacity to litigate could not be a final decision because that would preclude the possibility of the issue being revisited if the party's condition should deteriorate. However, that submission does not assist him in the context of the present proceedings. First, it needs to be re-emphasised, that it is not the Defendant's case that his condition deteriorated between 19th May and 25th July. There is no evidence to that effect. Secondly, in the hypothetical situation which Mr Shepherd postulates, the court would not be asked to re-open its decision as to the past capacity of that party to litigate but, exclusively, whether for the future he should be treated as requiring a litigation friend.
If, as I find, the Judge's decision on 19th May was a final order, he would only have had power pursuant to r.3.1(7) to vary or revoke it in exceptional circumstances. The Judge considered whether there had been a material change of circumstance or whether any facts had been misstated at the time of the 19th May decision. He was applying the guidance in Tibbles v SIG plc (trading as Asphaltic Roofing Supplies) [2012] 1 WLR 2591 (CA). But that was generous to the Defendant. Tibbles concerned a case management or interlocutory decision. It distinguished Roult and Kojima precisely because they had concerned final decisions - see Tibbles at [38].
There is very little help in the authorities on when r.3.1(7) may be invoked to vary or revoke a final decision, but if he cannot succeed on the Tibbles criteria he surely cannot succeed when a more exacting test has to be applied. I consider that the Judge was right to conclude that the Defendant could not satisfy either of the Tibbles tests. There was no evidence of a change in his condition between May and July (In this respect the present case is different from In Re F (A Child) (Return Order: Power to Revoke) [2014] 1 WLR 4375 (Fam Div) where there had been a sea change in the mother's mental state since the order which she sought to vary – see [3]-[4]. The case also concerned a child, although I recognise that Mostyn J did not consider that to be a necessary feature see [22]). Nor, in the present case had anything been misstated in the May hearing. The Judge was right to say that all that had happened was that a further expert report had been produced. But if the Defendant wished to submit this made all the difference, the proper course was to appeal the May decision and try to establish that the well known criteria for the admission of fresh evidence on appeal were satisfied.
Accordingly, I conclude that Judge Harington was right to say that he did not have power under r.3.1(7) to vary or revoke his order of 19th May.
Was the Judge right to conclude that the Defendant's application in any case did not succeed on its merits?
I shall deal first with the two preliminary matters raised by Mr Shepherd.
He argued first that the Judge was wrong to allow the Claimant actively to oppose his application. In Folks v Faizey [2006] EWCA Civ 381 a judge had given case management directions for the trial of a preliminary issue as to whether the claimant required the services of a litigation friend. Expert evidence on behalf of the Claimant suggested he was not capable of managing his own affairs (the test under the Mental Health Act 1983 which was then the governing statute). The Defendant's expert evidence suggested that he did. The Court of Appeal set aside the order for the trial of a preliminary issue. It noted that the Claimant consented to the appointment of the litigation friend and there was evidence to support the appointment. The application was made bona fide and the defendant would suffer no prejudice by the order sought. Consequently, the preliminary issue was unnecessary satellite litigation.
Mr Shepherd also observed that it would have been open to the Official Solicitor to become the Defendant's litigation friend without a court order by following the procedure in r.21.5.
Once again, though, it seems to me to be important to focus on what this application was really about. The application notice sought to remove from Judge Harington's order of 19th May the words 'and at all material times has had [capacity to litigate]'. While this was only part of the relief which was requested, given the advanced stage of the litigation, it was the part which really mattered. If this part of the relief was granted then it would (at least potentially) lead to a reopening of the earlier stages in the litigation including the making of the suspended possession order and the admissions and findings of breaches of that order and the injunction. Plainly the Claimant had a legitimate interest in arguing why this part of the relief should not be granted. Because there was no evidence that the Defendant's mental state had changed since the litigation began, the Claimant likewise had a legitimate reason to oppose the other forms of relief which the Defendant was also seeking.
Mr Shepherd's reliance on r.21.5 does not assist him. If that procedure had been adopted, without more, the previous steps in the litigation would have been unaffected.
All of this is quite different from Folks v Faizey where the absence of prejudice to the Defendant from the appointment of a litigation friend was critical to the Court's decision - see Pill LJ at [19], Keene LJ at [25] and Wilson LJ at [29].
Mr Shepherd's second preliminary point was that the Judge should have adjourned the hearing of the application when it became clear that the Claimant took issue with Dr Champion's certificate. The certificate (devised by the Official Solicitor) invited the person completing it to go through each of the alternatives in s.3(1) of the 2005 Act, to state whether the litigant lacked that particular ability and then, in the accompanying box, to give their reasons. Dr Champion had signified that, in his opinion, the Defendant lacked each of the four abilities in s.3(1)(a)-(d). The Claimant's argument was that the reasons that he gave in each case did not substantiate his conclusions. Mr Shepherd argued that this was to call into question Dr Champion's evidence that those conclusions were justified and, in fairness, the challenge should have been put to Dr Champion in cross examination. However, at a case management hearing before DJ Singleton on 2nd July 2014 it was recorded that the Claimant did not require Dr Champion to attend the hearing of the Defendant's application.
The problem with this argument is that the Defendant, who was represented at the hearing before Judge Harington on 25th July, did not ask for the hearing to be adjourned so that Dr Champion could be called for cross examination. Mr Shepherd's case has to be that the Judge erred because he did not take the initiative and, of his own motion, adjourn the hearing. I reject that argument. In an adversarial process where both parties are represented the Judge is entitled to rely on the parties to request an adjournment if they consider that is necessary for the fair disposal of the matter.
In finding that the Defendant did have capacity the Judge said this,
'20. First I find that the evidence is that, albeit it is not as easy for [the Defendant] as it is for others, he is able to understand the information. The view of Dr Champion is that it is more difficult for him, but there is no suggestion that he cannot understand it. Secondly, that as to whether he is unable to retain the information, whilst he may not be able to retain it for very long, I find also that that has not been established. Thirdly, to use or weigh the information as part of the process of making the decision. In fact the decisions have already been made in this case, but again whilst it is established that he has more difficulty than others to weigh the information as part of the process of making a decision, I find that it has not been established that he has been unable to do that. So far as communicating his decision is concerned, I do not think that that arises in this case, although I accept Mr King's [counsel who then represented the Defendant] point that it is not very easy to get instructions from him. Then subsection 2 continues, "A person is not to be regarded as unable to understand the information relevant to a decision if he is able to understand an explanation of it given to him in a way that is appropriate to his circumstances (using simple language, visual aids or any other means)."
21. Section 3(3) provides that "The fact that a person is able to retain the information relevant to a decision for a short period only does not prevent him from being regarded as able to make the decision." That, it seems to me, rather undermines Mr King's arguments about the Defendant being unable to put a time or a date or a period during which a particular incident took place. Section 3(4) says that information relevant to a decision "includes information about the reasonably foreseeable consequences of deciding one way or another or failing to make the decision."
22. It seems to me, therefore, that Dr Champion does not establish that the Defendant lacks capacity. As Mr Underwood says in his skeleton argument, section 3 provides that a person is unable to make a decision for himself only in the circumstances to which I have referred and it does not seem to me that Dr. Champion goes as far as saying that. As to the arguments put forward by Mr King in relation to his attention difficulties, reduced processing speed, reduced sustained attention, his getting tired very easily and reduced information processing and post-brain injury fatigue. It is, as I have said, something that makes it very difficult for the Defendant, I accept that. And in giving this ruling it does not mean that I do not have sympathy for him so far as that is concerned. But on what I have heard and read I conclude that Dr Champion, as with Dr Bickerton, does not establish in his certificate that the Defendant lacks capacity. So on that ground as well the application, dated 4th July, is dismissed.'
Mr Shepherd argued that the Judge had not sufficiently appreciated that Dr Champion had stated in terms (by ticking each of the boxes on the Official Solicitor's form) that the Defendant lacked capacity in each of the four alternative ways set out in s.3(1) of the 2005 Act. Dr Champion had set out his reasons in each case. Furthermore, to satisfy any one of the alternatives, it was not necessary to show complete incapacity. That had been the case under the Mental Health Act 1983 – see Masterman-Lister v Brutton and Co [2003] 1 WLR 1511 (CA) at [18] – and remained the case under the 2005 Act. Dr Champion was a qualified psychologist and, as such, was in a good position to give an expert opinion on whether the Defendant lacked the abilities referred to in the 2005 Act – see G v E [2011] 3 WLR 652 (CA) at [60] – [61]. Dr Bickerton, the psychiatrist, had also certified that the Defendant lacked the first three abilities in s.3(1). Furthermore, the Court had the correspondence from the Official Solicitor who on two occasions had supported the applications that he be appointed as the Defendant's litigation friend. Against all this evidence, the Claimant had adduced no expert evidence to show the Defendant did have capacity.
The Defendant can only succeed if I consider that the Judge was wrong to reach the conclusion that he did – CPR r.52.11(3)(a). There was no oral evidence before Judge Harington. When he said in [22] of his judgment that he based his decision on what he had heard, he was referring to oral submissions from the parties. This is not a case, therefore, where the first instance judge had a particular advantage over me in making his assessment.
The Judge said at [20] that 'The view of Dr Champion is that it is more difficult for him [to understand information], but there is no suggestion that he cannot understand it.' It could be argued that this was to overlook the box which Dr Champion ticked and which said 'he or she is unable to understand the following relevant information…' However, in my view, the Judge was entitled to treat this bald statement together with the elaboration in the box which immediately followed it. From this, it was apparent, as the Judge said, that the Defendant 'struggled' to take in information and could not concentrate for any lengthy period of time. However, as the Judge also noted, the statute directs that a person is not to be treated as lacking capacity unless all practicable steps have been taken to enable him to make a decision without success. The Judge was also able to take into account the certificate of Dr Bickerton who had said,
'[The Defendant] has very limited simple understanding of the issues and is likely to become emotionally overwhelmed and volatile due to his brain injury.'
A little earlier in his certificate, Dr Bickerton had said,
'Mr Werrett understands the allegations made against him and has the ability to decide whether to plead guilty or not but he may/will be unable to defend the proceedings, give evidence and cope with cross-examination; partly because of his intellectual difficulties, but also partly due to his great difficulty in managing his own emotions when under cross examination. He is likely to have the ability to instruct his solicitor in simple terms. I do, however, believe he would have difficulty in following the court proceedings without getting emotionally overwhelmed as he did in the recent court case. Likewise giving evidence in his own defence could be problematic for him and he is likely to be emotionally overwhelmed, which I think would be unhelpful to the court. I therefore conclude that his fitness is impaired and he does not have the mental capacity to plead.'
Taken overall, I do not think therefore that the Judge either misstated or misunderstood the evidence. Certainly, I do not think that his characterisation of Dr Champion's evidence made his decision that the Defendant did have capacity wrong.
Nor do I think that the Judge fell into the error of considering that the statute required total incapacity. In addition to the certificates of Dr Bickerton and Dr Champion, the Judge was able to see what the Defendant had been able to do (no doubt with the assistance of his lawyers). He had, for instance, provided two witness statements responding to the allegations made against him (I exclude from consideration the third statement which the Defendant made on 14th August 2014 since that was after the decision of Judge Harington which the Defendant is seeking to appeal).
The Judge was well aware of the Official Solicitor's views and his wish to be appointed as a litigation friend for the Defendant. He could not fail to be aware as well of the absence of expert evidence on the part of the Claimant. However, entirely properly, the Judge regarded it as his task to assess the evidence and decide whether it displaced the presumption in s.1(2) of the 2005 Act that the Defendant had capacity. On the material which was before him, I am not persuaded that he was wrong to conclude that it did not.
Like the Judge, I have sympathy for the Defendant's condition and the difficulties it creates for him. If there comes a time when the Defendant needs to give evidence, proper allowance will need to be made for that. When the adjourned hearing takes place to determine the appropriate penalty for his contempt of court, the Judge will have to weigh to what extent his condition affects his culpability and how, if at all, that should be reflected in any sanction which is imposed. However, these are all measures which can be adopted consistent with the conclusion of Judge Harington that it has not been shown that the Defendant is a protected party.
Conclusion
For all of these reasons I do not consider that an appeal would have real prospect of success or that there is some other compelling reason why permission to appeal should be granted. Accordingly, the application for permission to appeal is refused.
Note 1 This is Dr Champion’s title, but Mr Shepherd was not able to help me as to whether it is a medical qualification or in consequence of being awarded a Ph.D or similar degree. [Back] |
Mr Justice Cranston:
Introduction
This is yet another appeal concerning the proper application of CPR 3.9 as to relief from sanctions. In this case His Honour Judge Lochrane refused to admit witness statements filed late. Having done this he then struck out the appellant's case by reference largely to the pleadings. The appellant contends that the judge was wrong in refusing relief from sanctions. Secondly, he submits that the judge was also in error in finding in favour of the first defendant, the Mayor and Burgesses of the London Borough of Southwark ("Southwark") on its counterclaim.
Background
The litigation concerns the seizure and removal of the appellant's vehicle on 13 February 2011, pursuant to a warrant for unpaid council tax liability orders dating back some seven years. The council tax was payable to Southwark, the vehicle being seized by Newlyn Plc ("Newlyn"), acting under contract to Southwark. The appellant did not deny his liability to pay Southwark tax but his case was that the vehicle was exempt from seizure because it was a taxi used for his business: see Council Tax (Administration and Enforcement) Regulations 1992, r. 45 (1A).
Following the seizure of the vehicle, it is common ground that the appellant contacted Southwark on 8 March 2011 through Community Legal Advice contending that the vehicle was a taxi and therefore could be classed as a tool of trade. With the appellant's subsequent witness statement, and before the judge, was a letter from Southwark to the appellant stating that if he wished his vehicle to be returned he had to provide evidence that it was in fact used as a taxi. Also exhibited to his witness statement was an email and a further letter from Southwark both sent after the appellant did indeed produce evidence that the vehicle was a licensed taxi. The email dated 18 April stated that Southwark was prepared to return the vehicle to the appellant but on condition that he provided consent to entry to his property. This is a reference to Newlyn's intention to obtain a Walking Possession Agreement so that should the appellant not pay the unpaid council tax, it could execute against the appellant's possessions. The undated letter refers to the difficulties associated with resolving the matter.
The story is taken up in the debtor history, kept by Newlyn, recording contact between it and the appellant regarding the vehicle. This debtor history was disclosed by Newlyn during the discovery process and I return to it later in the judgment. Suffice to say that the debtor history confirms that agreement was not reached between the parties, and the vehicle not returned to the appellant, until June 2011.
The particulars of claim dated 24 July 2012 set out, in short form, the appellant's case that the vehicle had been unlawfully seized and detained. The amount claimed in damages was over £90,000. This was calculated in terms of income lost of £160 per day and the cost of road tax and insurance. The loss of income stretched beyond June 2011 because the vehicle had been seized a second time in June 2011 because it did not have a current tax disc. The loss of income was dated from June 2011 until the month the particulars of claim were lodged, and was coupled with an additional sum for the value of the vehicle which was apparently never returned.
Southwark's defence stated that as soon as the appellant had provided documentary evidence of his use of the vehicle for private hire it had given instructions for its release. The appellant lodged a reply which stated that Southwark and Newlyn mutually agreed in principle to the return of the vehicle but could not agree with terms and conditions of the re-delivery with the appellant, so this did not occur until June 2011.
There were a number of case management decisions in relation to the litigation, including one of 30 September 2013 which ordered the appellant to file and serve a list of documents by 14 September 2013 or the claim would be struck-out without further order. Moreover, the order also stated that all witness statements should be filed with the court by 16 December 2013. The case would be fixed with a 2-3 day time estimate.
It seems that there was an informal agreement between the parties that that date for filing witness statements should be somewhat extended until 2 January 2014. In any event Southwark served its witness statement on the appellant and on Newlyn on 20 December 2013. The appellant served his witness statement on Southwark on 13 January 2014 and on Newlyn on 6 February 2014. Newlyn had not intended to file a witness statement. Because the appellant's solicitor, Mr Lindner, had failed to include Newlyn's documents in the bundle for trial, including the debtor history, referred to earlier, it served a witness statement on 28 March 2014 in an attempt to have Newlyn's documents considered at the hearing.
The hearing and judgment below
When the matter came on Central London County Court, the first day was occupied by discussions between the parties as to preparation of a suitable bundle for the hearing. I return to this later in the judgment.
The matter came before the judge, the following day, 1 April 2014. The judge himself raised the point that the witness evidence had been served out of time and that this was in breach of CPR 32.10. He allowed an adjournment for the parties to consider their position. Mr Lindner drafted a witness statement from the appellant and made an oral application for relief from sanctions. Subsequently, there does not seem to have ever been a formal application for such relief. That witness statement, signed by the appellant, asserted that he had been unwell for approximately one month and was unable to give instructions. There was a hospital letter showing that he had an appointment that day in relation to his diabetes. Both Southwark and Newlyn were content that their witness statements would not be admitted. However, they objected to the admission of the appellant's witness statement.
The judge rejected the appellant's application for relief from sanctions. He said that there had been no explanation as to why an application to extend time had not been made before the expiry of the time provided for the exchange of witness statements. The medical evidence about the appellant's health was at the least equivocal and it was not clear to him that the appellant's condition in December necessarily prevented the preparation of a witness statement. The appellant's solicitors had to be taken to be fully aware of their obligations in relation to the filing of evidence under the rules. While circumstances did arise where relief from sanctions would be granted in this type of case, it was important that the evidence was provided upon which the court could make a decision. That evidence was not before him, and therefore it was
"not appropriate for me to grant the relief from sanctions which the claimant would have to satisfy me would be appropriate on the evidence which he produces… That has left us with the evidential position before the court being based entirely upon the pleadings…"
The judge added that the appellant's pleadings were unimpressive, condescending to very few particulars in relation to the basic allegations surrounding the apparent illegality of the vehicle's seizure. The quantification of the appellant's apparent loss was rudimentary to say the least, and the particulars did not deal with any attempts at mitigation or allowances to be made in respect of loss of income such as running expenses and taxation.
"It is very basic rather rudimentary and, frankly, rather unsatisfactory pleading."
As a matter of law, said the judge, the burden rested on the appellant to satisfy the court that the vehicle was exempt from seizure. The defences of Southwark and Newlyn suggested that they had taken relatively swift action to return the vehicle to the appellant but that the appellant failed to engage. As to the lawfulness of the vehicle's seizure, the judge said
"30… It is apparent from the submissions made that it is accepted on behalf of the claimant by Mr Lindner that, in reality, the only information upon which the defendants, or either of them, could base any decision as to the status of this vehicle as a vehicle which should not be seized prior to the end of March or the early part of April, was the existence of this [licensed taxi] sticker. It is apparent from the evidence, even indeed from the claimant's witness statement which is not admitted, that it is not suggested, either in the pleadings or in the witness statement, that Mr Fouda did in fact tell the bailiffs at any stage that it was a private hire vehicle which should not be seized prior to the submission of the documentation later in March or in the early part of April.
31… In those circumstances, it seems to me, on the evidence before the court, the suggestion on behalf of the claimant that he can prove that the seizure of the vehicle and its subsequent removal was unlawful because the defendants knew or ought to have known, on the information available to them at the time, that the vehicle was subject to the exemption in 45(1)(a), is quite unsustainable. There is nothing on the evidence to support that conclusion and indeed, to be fair, Mr Lindner in his submissions, had to accept I think that in reality the simple existence of the sticker in the window is nowhere near sufficient to satisfy the requirement for the claimant to prove that the vehicle was necessary for his personal use in the course of his business."
As to the subsequent detention of the vehicle, after it had been returned, which occurred because it was untaxed on the road, the judge said that the evidence in the pleadings was in dispute. However, the appellant had failed to discharge the burden that the continued detention of the vehicle was wrongful. Given that there was no realistic prospect of the appellant satisfying the burden in respect of the first seizure and removal of the vehicle, the second fell by the wayside. Even if the defendants were liable, it was highly doubtful that they would be held responsible for the second detention and removal based, as it was, upon the failure to renew the vehicle excise licence. It was the appellant's vehicle excise licence and his vehicle, and he must have been aware of the expiry date. It was a matter for him to renew his licence and it could not be suggested on any sensible basis that the defendants could be liable for the appellant's failure to renew.
The judge then turned to Southwark's counterclaim. In respect of the costs of seizure and storage the figure given as at 26 November 2012 was approximately £20,000 and that had more or less subsequently doubled. The judge noted that the defence to the counterclaim did not address in any sense directly the question of the costs of seizure and retention. In the absence of the witness statements there was no evidence beyond the pleadings to substantiate the counterclaim, but there was no effective denial in respect at least of important elements of the cost of seizure and retention after the second seizure. They were not itemised or a daily rate pleaded. Allowing for the fact that the appellant did not plead to the counterclaim, in breach of the spirit if not the letter of the CPR,
"it seems to me that the best that can be done is for the claim, as I have already indicated to be struck-out and, in light of the pleadings, for judgment to be entered for the first defendant in the sum of £20,825 as pleaded in the counterclaim…"
Following the judge's order, a week later, on the 8 April 2014, there was an application lodged in the county court to strike-out Southwark's defence and counterclaim. It was asserted that Southwark and Newlyn were entitled to court fees only since they had failed to file cost budgets. There was also an application to extend the deadline for filing an appeal against the judgment.
On 11 June 2014 the judge heard Newlyn's wasted cost application. At that hearing Mr Lindner withdrew the 8 April 2014 application after the judge indicated that Mr Lindner's firm, MartynsRose, had no locus to issue the application in its own name, which is what had happened.
The judge decided that MartynsRose should pay £2000 to Newlyn by way of wasted costs. In his judgment the judge reiterated the concerns he had at the hearing about the competency of the appellant's solicitors. The case had been "extraordinarily badly prepared" and the appellant had been "peculiarly ill-served by his solicitors who had… appeared, on the face of it, to be advising him in completely unrealistic terms". The application of 8 April, issued in the name of MartynsRose, not the appellant, was "inexplicable and bizarre" and confirmed his judgement about the solicitors' behaviour. Given the woeful way the case was presented it was difficult to say whether some kind of claim was properly sustainable. The judge added that the particulars of claim were wholly inadequate although they may have been prepared directly on the appellant's instructions. The quantification of the appellant's case was wholly unrealistic, but again that was asserted to be on the appellant's explicit instructions.
The judge then turned to disclosure and the preparation of the bundle for trial. The documentation disclosed a particularly confused attitude to the obligation of disclosure by the appellant's solicitors. If it was the appellant's case that he had no documentation and specifically intended to rely on his own witness evidence, that could have been made plain at an earlier stage. A different approach would then have been taken by the other side in pursuing documentation. Moreover, the bundle was prepared late and without consultation with Southwark or Newlyn. The judge said that the result was the loss of the first day of trial and part of the second.
"23 As a result, when the parties attended on the first day of the trial, admittedly in the unassigned list, when they were asked whether or not they were ready to be assigned they had to accept that the bundles were not ready and accordingly they will almost certainly have missed the opportunity of a slot in front of a judge on the first day of the trial. As it turns out, during the course of that first day a significant period of time was spent attempting – with only partial success – to resolve the significant difficulties in the content of the bundle created by the solicitors instructed by [the appellant].
24 The trial accordingly was not in a position to start even until the beginning of the second day when it came in front of me, another matter which had been in front of me having settled the day before. As I have said, on that occasion I took the view that the state of the pleadings and the failure of the parties, the [appellant] in particular, to comply with the orders and Rules was so significant that effectively the claim was ultimately struck out."
So it does seem to me that there is significant default on the part of the solicitors in relation to the discovery issues and the bundle, and a significant amount of time and energy, and indeed the first day of the trial, was lost as a result of that. That is not Mr Fouda's fault; clearly that is evidently the responsibility of the solicitors. Accordingly, the judge made a wasted costs order in relation to what he found was the significant fault on the part of the solicitors' disclosure obligation and the failure to prepare the bundle for trial. (During the hearing Mr Lindner said, for example, that the appellant had instructed that he had not filed a tax return for the year after he started his business in 2010.)
There were appeals launched against both the judge's decision at the substantive hearing and on the wasted costs order. On the 4 August 2014 Patterson J had to grant an extension of time so an application for permission to appeal and for a stay of execution on the substantive issue could be considered. There were subsequent orders on the 26 September and 27 October 2014 by Jay and Hickinbottom JJ extending time for the appellant to file the appeal bundle. On 14 January 2014 Green J granted permission to appeal on the basis that, without any consideration of prejudice, the judge had refused to permit witness evidence. Although the judge was of the view that the pleadings were defective, he proceeded to reject the appellant's claim and granted summary judgment on the defendant's counterclaim for a very large, wholly unspecified amount. Green J said that the judgment conveyed the strong impression that the judge adopted a particularly technical approach. I note in passing that the current appeal was never served on Newlyn.
The application to appeal on the wasted costs order, having been initially rejected by Carr J on the papers, was further refused by Blair J on 20 January 2015 at an oral renewal hearing.
The law
CPR 32.10 provides that if a witness statement or a witness summary for use at trial is not served within the time the court has specified, the witness may not be called to give oral evidence unless permission is given. The White Book 2015 notes at paragraph 32.10.2 that, since its amendment, the courts have been less willing than previously to grant relief from procedural sanctions under CPR 3.9, including the sanction taking effect by operation of CPR 32.10. The leading authority on relief from sanctions is the majority judgment (Lord Dyson MR and Vos J) in Denton v T H White Ltd [2014] EWCA Civ 906; [2014] 1WLR 3926. At the time of the judge's decision the Court of Appeal had not decided Denton v T H White and the leading authority on relief from sanctions was Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 WLR 795.
In Denton v T H White the Court of Appeal held that an application for relief from sanctions should be dealt with in three stages. The first stage is to assess the seriousness or significance of non-compliance with the relevant rule, practice direction or court order: [25]. A useful measure in assessing this is whether the breach imperils future hearing dates or otherwise disrupts the conduct of litigation, including other litigation as well as the instant case. At least initially that will not involve a consideration of other unrelated failures occurring in the past: [26]. If a judge concludes that a breach is not serious or significant, relief from sanctions will usually be granted and it will usually be unnecessary to spend much time on the second or third stages: [28].
The second stage is to consider why the default occurred, particularly where the default is serious or significant: [29]. The third stage is to evaluate all the circumstances of the case, so as to enable the court to deal justly with the application, including the factors in CPR 3.9 (a) and (b), in other words the need (a) for litigation to be conducted efficiently and at proportionate cost, and (b) to enforce compliance with rules, practice directions and orders: [31]-[32]. Factor (a) made it clear that the court must consider the effect of the breach in every case. Factor (b) emphasized the importance of compliance with rules, practice directions and orders, because the old lax culture of non-compliance is no longer tolerated: [34].
"35 Thus, the court must, in considering all the circumstances of the case so as to enable it to deal with the application justly, give particular weight to these two important factors. In doing so, it will take account of the seriousness and significance of the breach (which has been assessed at the first stage) and any explanation (which has been considered at the second stage). The more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it. Where there is a good reason for a serious or significant breach, relief is likely to be granted. Where the breach is not serious or significant, relief is also likely to be granted.
36 But it is always necessary to have regard to all the circumstances of the case. The factors that are relevant will vary from case to case. As has been pointed out in some of the authorities that have followed the Mitchell case [2014] 1 WLR 795, the promptness of the application will be a relevant circumstance to be weighed in the balance along with all the circumstances. Likewise, other past or current breaches of the rules, practice directions and court orders by the parties may also be taken into account as a relevant circumstance."
The appeal
In advancing the appeal before me, Mr Salis abandoned many of the grounds of appeal as drafted to concentrate on two issues, the failure of the judge to provide relief from sanctions because of the late service of the witness statements, with the result that no witness evidence was admitted, and the decision to give judgment to Southwark on the counterclaim for storage charges for the vehicle, having struck-out the appellant's case and having disallowed all the witness evidence.
(a) Relief from sanctions
As to the first point, Mr Salis submitted that albeit that Denton v T H White Ltd [2014] EWCA Civ 906; [2014] 1 WLR 3926 had not been decided at the time of his decision, the judge in refusing relief from sanctions had not assessed factors it identified – the seriousness of the breach, the reasons for it or the general circumstances of the case in accordance with its precepts. In Mr Salis's submission in terms of the first stage of enquiry laid down in Denton v T H White this was not a significant or serious breach of the rules. The appellant's witness statements had been filed late but, when they were, there were still several months before the trial itself. Mr Salis contended that late service had no effect on this case or on litigation generally. It had not imperilled future hearing dates nor disrupted the conduct of the litigation. The parties themselves had assumed that there would be a trial in the ordinary way with witnesses and it was the judge himself who had raised the issue.
At the second stage, Mr Salis conceded that the reason for non-compliance – failure to appreciate the effect of CPR 32.10 and relief from sanctions under CPR 3.9 – was not a good reason when advanced by a solicitor. As to the third stage Mr Salis had also to accept that the conduct of the case by the appellant's solicitors was hardly commendable. But they had been penalised as a result of the wasted costs jurisdiction and the solicitors' failures should not be held against the appellant himself. At the third stage, said Mr Salis, the effect of the breach had to be considered and the judge did not do that. Had the appellant been able to give evidence he would have explained that well after he had given information about the use of vehicle as a taxi, Southwark and Newlyn continued to retain it.
For Newlyn, Ms Power submitted that the judge had considered the impact of non-compliance, albeit implicitly, and that there was no prejudice to the appellant raised when it applied for the relief of sanctions before the judge. None of the parties were able to adduce witness statements so they were all in the same position. Considering all the circumstances of the case there was no prejudice to the appellant. Denton v T H White Ltd had not at that point been decided but the judge in effect considered what is now the three stage test. Had the appellant been able to adduce his witness statement and give evidence, it would not have advanced his cause since he was the author of his own misfortune. The evidence was that Southwark and Newlyn made strenuous efforts to return the vehicle. The appellant had not disputed Newlyn's attempts to return it and could have recovered it much earlier if he had given a Walking Possession Agreement.
(b) Counterclaim
Mr Salis conceded that he was recasting the very appeal as compared with the way the matter was advanced in the grounds of appeal. Essentially his submission was that the judge was wrong to decide the matter on the pleadings, given that they were incomplete on the point (as the judge acknowledged) and not evidence. There was no explanation in the pleadings as to how any figures for storage were calculated. The appellant may not have contested the figures but he certainly did not admit them. The appellant's case was that the vehicle had been wrongly seized and so he was stating, in effect, that Southwark was not entitled to claim any storage charges.
Southwark was not represented at the appeal. Apparently it takes the view that enough public money has already been spent on the litigation and it cannot justify more. In its skeleton argument prepared at an earlier stage it said this in relation to the counterclaim:
"The learned judge's conclusion was that there was no effective defence but merely a bare denial of the counterclaim and that the storage of the vehicle had effectively been admitted. On this basis the Respondent was entitled to judgment on the pleadings.
The learned judge's conclusion was both reasonable and rational."
(c) Discussion
First instance judges must contend with the changing fashions of appellate courts. Under our common law system the current fashion applies retrospectively; we have not adopted a system of prospective overruling to mitigate the extreme cases. In the present litigation the judge was applying, in effect, the approach of Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 WLR 795. Because Denton v T H White [2014] EWCA 906; [2014] 1 WLR 3926 had not been decided he obviously did not follow the three stage approach of the majority there.
In my judgment, however, if the judge had worked through the majority approach in Denton v T H White he would have reached the same conclusion he did. Certainly non-compliance with the rules – CPR 32.10 in this case – was not significant or serious in this case. But the reason for non-compliance – the second stage in Denton v T H White – was, as Mr Salis conceded, against the appellant. Most importantly, the non-compliance with CPR 32.10 was within a context where the appellant's solicitors had been serial offenders. There was their dismissive attitude to their disclosure obligations and the unsatisfactory way the case was pleaded. Significantly, the solicitors' failure to contact Southwark and Newlyn to prepare a bundle for the hearing culminated in the loss of the first day of the hearing. (I note in passing that the solicitors' errant behaviour continued with the bizarre application of 8 April 2014. There was also the need for them to seek leave in this court to file the application to appeal out of time.) Addressing all the circumstances of the case, including past and current breaches of the rules, which is required at stage three of the Denton v T H White approach, the judge would have been perfectly entitled to refuse relief from sanctions.
As I have said Southwark did not appear at the appeal to defend the judge's decision on its counterclaim. For the reasons Mr Salis has advanced, it seems to me that the appellant succeeds on this point.
Conclusion
For the reasons I have given I dismiss the appeal as regards relief from sanctions but allow it in relation to Southwark's counterclaim. |
His Honour Judge Robinson:
By this application the Claimant, who is of full age and capacity, seeks a further interim payment on account of damages. She has been represented by Mr Matthew Phillips. Mr David Heaton QC has appeared for the Defendant.
The Claimant was born on 23 April 1990. She suffered extremely serious injuries on 24 April 2012 when she was thrown from the motorcycle she was riding as a pillion passenger. Liability was not in dispute and judgment with damages to be assessed was entered on 31 July 2013.
Unless the case settles, damages will be assessed at a trial due to start in January 2016 with a time estimate of 7 days. The most serious injury sustained by the Claimant was a spinal cord injury resulting in paraplegia classified by the American Spinal Injury Association as T6 A complete. The Claimant's cognitive functions are certainly largely intact, although very recently epilepsy has been diagnosed. It is too early to say if this is accident-related. The Claimant is able to mobilise with a wheelchair and has some upper limb mobility. On any view this is a very substantial claim. At trial the judge will certainly wish to consider if at least some heads of future loss should be dealt with by way of an order for periodical payments. The Claimant wishes at least some heads of future loss to be dealt with in this way.
There have been previous interim payments. The total amount paid to the Claimant, including a sum of £75,000 due to be paid imminently, is £970,000. In addition, the Defendant has re-paid to the CRU benefits paid to the Claimant totalling £32,367.99. By the time of trial, the amount due to the CRU will have risen to £41,763.09. Thus the total amount, for which credit will have to be given at trial, is £1,011,763.09.
By Application Notice dated 6 February 2015 (sealed on 12 February 2015) the Claimant seeks a further payment of £700,000 to fund the purchase of a suitable property and perform works of adaptation. Mr Phillips opened this application by saying he sought a total of £500,000 which included the £75,000 due to be paid imminently. Thus the net amount sought is £425,000.
Applications such as this one fall to be determined in accordance with CPR Part 25.6 and 25.7 and also in accordance with the guidance provided by the Court of Appeal in Cobham Hire Services Limited v Benjamin Eeles [2009] EWCA 204.
The starting point is CPR Part 25.7(4): "the court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment".
The Eeles case is widely regarded as comprising two stages. Under the first stage, dealt with by Smith LJ in paragraph 43 of her judgment, the judge must assess the likely amount of the final judgment leaving out of account the heads of future loss which the trial judge might wish to deal with by way of PPO. The allowable heads of loss may comprise:
General damages for pain suffering and loss of amenity;
Special damages to date;
Interest on those heads;
Capitalised accommodation costs, including future running costs.
The assessment should be carried out on a conservative basis. Provided that is done, a reasonable proportion may be a high proportion. Proportions as high as 90% have been awarded in the past.
Where, however, the interim payment requested exceeds a reasonable proportion of the likely award thus assessed, recourse may be had to the second stage of Eeles. Under this stage, the judge may include in the assessment of the likely amount of a final judgment the capitalised amounts of future losses. However, he can only do this if he "can confidently predict that the trial judge will wish to award a larger capital sum that that covered by" the items falling within the first stage of Eeles – see paragraph 45 of the judgment of Smith LJ.
Furthermore, the judge must be satisfied by evidence that there is a real need for the interim payment requested. As Smith LJ pointed out (see para 45):
"For example, where the request is for money to buy a house, he must be satisfied that there is a real need for accommodation now as opposed to after the trial and that the amount of money requested is reasonable. He does not need to decide whether the particular house proposed is suitable, that is a matter for the Court of Protection, but the judge must not make an interim payment order without first deciding whether the expenditure of approximately the amount of money he proposes to award is reasonably necessary. If the judge is satisfied of that to a high degree of confidence then he will be justified in predicting that the trial judge would take that course and he will be justified in assessing the likely amount of the final award at such a level as will permit the making of the necessary interim award" (emphasis added).
In this application it is common ground that an interim payment of £425,000 cannot be made without recourse to the second stage of Eeles.
The current accommodation position can be shortly stated. Before the accident, the Claimant was living with her fiancé in private rented accommodation. Regrettably that relationship has since broken down. Following treatment and rehabilitation she returned to her parent's house at [ an address] in July 2012. That house was not suitable for her needs. She began by living in what Mr Maxwell (solicitor for the Claimant) describes in his witness statement in support of this application as "a makeshift bedroom converted from the family dining room". A scheme of adaptation was devised. Works were performed between January and March 2013, during which time the Claimant and her parents lived in rented accommodation.
The anticipated costs of the scheme of adaptation, as first devised, was around £113,000. In the event a more extensive scheme of works was devised. The final overall cost, including fees, was £279,735.
Thus the present position is that the Claimant is living with her parents in their house which has been adapted for her current needs.
This application arises because the Claimant has seen a property in the nearby village of Thurnscoe. The full address is [an address]. It is described by Mr Maxwell as "a part constructed dormer bungalow, having external walls, internal flooring, a second story and roof. It has not been fully fitted out and the Claimant and her advisors will have a 'blank canvas' when considering appropriate alterations for the property".
The Claimant learned of this property in January 2014 and visited it on 3 March 2014.
On 19 May 2014 the Claimant's father put in an offer to buy the property for £252,000, which offer was accepted, on 21 May 2014. I assume that both offer and acceptance are on the usual "subject to contract" basis. On 29 July 2014 Mr Maxwell says he wrote to the Defendant's solicitor asking for an interim payment of £710,000. Mr Maxwell also refers to alternative requests for a sum of £300,000 to allow the property in its current state to be purchased. The Claimant is fearful that unless she moves promptly, the vendors will take steps to market the property elsewhere. Whether they are in reality likely to do so is something which Mr Heaton doubts, for reasons he advanced in argument, but it is not something I am really in a position to assess. What is clear from the Claimant's most recent witness statement dated 5 March 2015 is that the Claimant has become extremely emotionally attached to the notion of buying [an address]t – see paragraphs 256 to 273 of her statement.
I propose at this stage to consider the figures. I have been very much assisted by an extremely helpful schedule titled "Valuation Table" prepared by Mr Phillips. In it he sets out the various heads of loss relevant for the purposes of Eeles stage one. He gives the rival figures taken from the Claimant's schedule of loss and the Defendant's counter schedule. Then, in a column headed "Conservative Valuation" he gives his proposed figure to be used for the purposes of assessing the likely value of the sum to be awarded by way of lump sum at trial. In the final column headed "Comment" he explains how he has arrived at his conservative valuation figure. He submits that I can safely work on the assumption that the figures he proposes will not be more than the trial judge will award. In the main, he has arrived at his conservative valuation figures by splitting the difference between those proposed by the parties on the basis of 2:1 in favour of the Defendant.
With the exception of the proposed conservative valuation for damages for pain suffering and loss of amenity which, for present purposes only, Mr Heaton concedes in the sum of £200,000, Mr Heaton takes issue with the approach proposed. He submits that it is unsafe in an application such as this for the interim payment judge to work on anything other than the figures in the counter schedule. Mr Phillips responds that interim payment judges frequently form their own assessment of the relevant figures.
In an application for an interim payment where the only figures available are those provided by the Claimant, the interim payment judge will indeed have to form an assessment of conservative valuation based upon whatever material there is available. In this case there is a fully reasoned counter schedule prepared by Leading Counsel with vast experience of this type of work. There is simply not the opportunity for the interim judge to make a reasoned assessment of the strength or otherwise of the rival contentions. Nor, in my judgment is it, in general, appropriate to do so. That is the task of the trial judge who will hear the evidence.
That said, it is right to observe that, just as it is the rare case indeed that the Claimant in a case such as this succeeds in recovering every penny claimed, so is it the rare case that, absent gross exaggeration or deceit, every argument deployed by the Defendant succeeds. I should make it clear that there is no suggestion of such adverse factors in this case.
I think there is force in the submission of Mr Heaton, but I think I can sensibly round up the figures provided by the Defendant to the nearest £500. Thus, following the format of the table prepared by Mr Phillips, I will work on the basis of the following figures.
Head of Loss
Claim Counter Schedule Cons
Value Judge
PSLA 250,000 190,000 200,000 200,000
Past Earnings 39,909 36,434 37,581 36,500
Past Care etc 463,629 366,121 391,906 366,500
Past Aids etc 31,882 30,936 31,248 31,000
Past Household costs 36,828 6,379 9,306 6,500
Past Medical costs 109,295 100,835 103,627 101,000
Past Accommodation 707,819 47,570 113,000 48,000
Future Accommodation 439,643 448,445 475,507 448,500
Past Travel & Transport 50,015 18,231 25,000 18,500
Past Holidays 21,817 4,231 5,000 4,500
Interest on PSLA damages 11,400 11,400
Total 1,272,400
In relation to past accommodation costs, there is a clear argument concerning the nature and extent of the works proposed by the Claimant's accommodation expert. Given that the works, even as originally devised, were intended only to be a short term solution to the accommodation problem, there is certainly a prospect that the trial judge will be attracted to the argument of the Defendant's accommodation expert that works involving extending the conservatory and adding what in effect was an annex to the garage were not reasonable. Thus I have used the figure proposed by the Defendant, rounded up to the nearest £500.
In relation to future accommodation costs I have again used the Defendant's figures, rounded up, acknowledging that the Defendant's expert appears to have altered a view he has held in the past. That is classically a matter to be explored in cross examination at trial.
Given the concession (for these purposes only) on damages for pain suffering and loss of amenity, it follows that the figure for interest is also agreed in the sum shown.
If one were to take 90% of £1,272,400, one gets £1,145,160. From that must be deducted the sum of £1,011,764 to leave £133,396 available to be awarded under Eeles stage one. This is not enough to permit purchase of [an address] even in its present state of construction. Thus I move to consider the second stage of Eeles.
The function of the judge hearing an application for interim payments such as this, is not to usurp the function, nor to fetter the discretion, of the trial judge, save in the limited circumstances identified in Eeles. To adopt the language of Smith LJ from paragraph 45 of her judgment, the interim payment judge must not make an order which will mean that future heads of loss will have to be capitalised "without first deciding whether the expenditure of approximately the amount of money which he proposes to award is reasonably necessary". Only if the judge is satisfied of that matter to a "high degree of confidence" can the interim payment judge be justified in "predicting" that the trial judge will also take that course.
The compelling problem for the Claimant in this application is that it is manifestly obvious that there is, as is submitted by Mr Heaton, no immediate "reasonable necessity" for the Claimant to purchase another property before the trial in January 2016. Of course the Claimant wishes to commence living independently of her parents and in her own property. It is plainly in her best interests to set about that as soon as possible. Even if completion of the property and adaptations were not completed by the time of trial, the Claimant would still be able to move into the house 9 months earlier than if she has to wait for the trial judge to determine the amount of damages to be awarded. It is also worth repeating the fact that the Claimant has become extremely emotionally attached to the notion of buying and adapting this particular property. I take account of the submission that suitable properties are in scarce supply in the area where the Claimant wishes to live.
However, the fact is that at present she is adequately accommodated in a house that has been adapted to cater for her needs at a cost of over £279,000 as recently as March 2013, just 13 months ago. The trial is now just 9 months away. There is clearly an emotional pull in favour of [an address] which any judge reading paragraphs 256 to 273 of the Claimant's most recent statement must feel. This grievously injured Claimant deserves to be allowed to get on with her much altered life as soon as possible. However, I am driven to conclude that there is no reasonable necessity for the Claimant to spend any money at all in respect of alternative accommodation before the conclusion of the trial of this matter.
In any event, this is not a case where I feel I can "confidently predict" that the trial judge will necessarily wish to capitalise heads of future loss other than care and case management. The Claimant is a young woman with a normal or near normal life expectancy. She was in work at the time of the accident. Capitalising loss of future earnings and other recurring future losses may be the decision that the trial judge ultimately reaches, but I am by no means confident of that, and I am certainly not satisfied to a high degree of confidence.
Thus it seems to me that I can properly direct payment of an interim payment of £133,000 under the Eeles stage one principle. This is in addition to the £75,000 shortly to be received in any event. However, Mr Heaton submits that I should not even do that if to do so may enable the Claimant to buy the property at [an address]. It is clear that, from the perspective of the Defendant, whether it is appropriate that this property be bought and adapted for the Claimant's use is highly controversial. In such a case Mr Heaton submits that if the Claimant did manage to buy [an address], the Defendant would not be playing on a level playing field at trial. It is common ground that the Claimant requires a capital sum sufficient to buy and adapt a property. The amount of money required to achieve that result is the subject of substantial dispute. Mr Heaton submits that the reality is that the trial judge would be faced with a de facto situation which the trial judge would feel obliged to sanction and thus factor in to the conclusion concerning what sum was reasonably required to provide for the Claimant's reasonable needs. Mr Heaton says that the trial judge should feel free to approach this issue unfettered by having to deal with what has actually occurred.
The general rule is that in respect of an interim payment assessed by reference only to stage one of Eeles the court is not concerned with what the Claimant does with the money. However, I am prepared to accept that even within the confines of stage one of Eeles the interim payment judge can take into account the level playing field argument. It is more typically brought into play where the Claimant proposes to use the interim payment to effect a fundamental change in the existing care or accommodation regime.
Thus, for example, in Campbell v Mylchreest [1999] PIQR Q17 the Court of Appeal upheld a decision of Blofeld J directing payment of £100,000 to the Plaintiff out of monies in court. The Plaintiff was then currently being cared for in a long term NHS unit for severely disabled people. It was proposed to use the money to enable the Plaintiff to move out of that unit and live with his parents. The appropriate accommodation and care regime was a hotly contested issue. The Court of Appeal held that what was described as the level playing field factor was to be taken into account when deciding whether to make an interim payment, but in that case held that the payment was justified and that the trial judge would still be able to determine the issue of appropriate care regime dispassionately.
There is no doubt that the Claimant will, if she can, buy the property in advance of the trial. If that will result in the creation of an unlevel playing field, I am prepared to accept that the Court has discretion not to direct an Eeles stage one payment.
I accept that it is just possible that the Claimant might be able to buy [an address]. If I direct payment of £133,000 and she shortly receives £75,000, she will have £208,000. Although that is £54,000 short of the purchase price, it is possible she can arrange finance or negotiate a deferment of the payment of the balance of the purchase price until January 2016. Of course, this leaves out of account any associated costs of purchase and leaves open the question how the Claimant will fund her care regime until trial if she utilises some or all of the soon to be received £75,000. However, it is possible she might buy the property. If she did, would that result in an unlevel playing field? In this instance I am confident that the answer is "no". If the Claimant bought the property, she knows she is doing so in the teeth of fierce opposition by the Defendant on the issue whether this is an appropriate property. There will be no scope to argue that she bought the property in ignorance of any dispute on that issue. However, the reality is that, if the Claimant does buy the property, she will not be in a position to do anything to it before trial. There will be no money. Thus if the trial judge concludes that the property is unsuitable, the Claimant will simply have to sell it in exactly the same state as when she bought it. There may well be wasted expenditure in the form of costs of purchase and sale which the Claimant will have to bear herself, but in the context of the value of the claim as whole, they will surely be considered insignificant.
Thus I conclude that I should direct the payment of a further interim payment in the sum of £133,000.
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Mr. Justice Edis :
This litigation arises out of a tragic incident which occurred at around 11:00pm on 2nd November 2010. The claimant, who was then 23 years old, sustained a very severe brain injury when he fell from a moving taxi and hit the road surface. His injuries are such that he was unable to give evidence at the trial before me about the circumstances which led to him falling on to the surface of the road, and has never been able to speak about it to anyone. I am trying the issue of liability.
The Facts
The Claimant brings this claim in negligence and also alleges the tort of false imprisonment. A brief review of the agreed facts will show how that comes about. The Claimant hired the Defendant's taxi at the Abbey taxi rank in the centre of Bath shortly before 11.00pm. He was with his then girlfriend Abigail Noad. They asked the Defendant to drive them to his home address at 100 Queens Drive and the Defendant did so. At that time, the Claimant lived there with his father and other members of the family and Ms. Noad lived there most of the time as well. On the way, they stopped twice. First, very soon after they hired the cab, they got out and went into a pizza takeaway shop. They came out without a pizza, but it appears that they had ordered one which was to be delivered to their home. Then they asked the driver to stop so that Ms. Noad could get out of the car and buy cigarettes. This was about half way through the journey. When they reached the home address, Ms. Noad got out first. As the Claimant was moving to stand up to alight from the taxi the Defendant drove off, with the taxi door open, back towards the taxi rank which was the original starting point of the journey. Despite the Claimant's protestations the Defendant continued to drive on. In his Skeleton Opening for the Trial Mr. Killalea QC, who appears for the Claimant, said that "the Claimant decided to get out of the taxi before it had arrived at the Defendant's intended destination and in doing so sustained serious brain injuries". Mr. Lynagh QC, who appears for the Defendant, put it more plainly. He alleged that the Claimant "jumped" from the taxi. The point at which the Claimant did this was about ¾ of a mile from the home address and the taxi was travelling over 20mph at the time. The Abbey rank, to which he was being returned, was a couple of miles away. It is also agreed that the Claimant was not drunk, although he may have been affected by alcohol. The Landlord of the Rifleman's Arms was called on his behalf to say that this was so. The Defendant does not say that the Claimant was drunk, although in interview he did say that he was unsteady on his feet. His counsel makes the submission that the relatively sober state of the Claimant is a point favouring the Defendant. It might be negligent to drive off with a captive drunk in the back of the taxi because he might be expected to do something dangerous. A sober man would be far less likely to try to get out of the taxi in a dangerous way, and this may affect the issue of negligence. For whatever reason, it is common ground now that the Claimant was not heavily under the influence of alcohol.
The reason why it is agreed that the Claimant deliberately left the taxi despite the fact that the Claimant himself cannot explain his conduct, is that it is quite clear on the evidence that this is what happened. The scene of the accident was examined by PC Hignett, of the Avon & Somerset Police Collision Investigation Unit. His report is admissible as agreed opinion evidence further to an order of Master Eastman dated 27 June 2014. He described the position of coins and blood marks left on the carriageway as a result of the Claimant's exit from the vehicle. These show that the Claimant landed on the opposite side of the carriageway to the side upon which the taxi was driving, about 1.4 metres out from the offside of the taxi. In PC Hignett's opinion, this distance "would be typical of a person making a conscious effort to leave a vehicle as opposed to simply falling out". PC Hignett's opinion is that the taxi was travelling at a speed less than 30 mph when the Claimant left the vehicle, and that the Claimant was probably travelling at 20-24 mph as he struck the road surface.
This, therefore confirms the evidence of the Defendant who says that after he drove off with the Claimant in the back of his taxi, he had sat down again on the seat. He says also that the movement of the taxi in starting off had caused the door to close. This was because he was parked on a speed bump and there was a jolt as the car began to move which caused the door to close. It was not, however, locked. Although the taxi has a locking system which prevents passengers leaving the taxi, the Defendant had not tried to apply it. This was because he had got out of the habit of using it because it only worked intermittently. It was not his taxi and he did not think it was his job to spend money on repairing it. Therefore, the Claimant was safely in the back of the taxi until he deliberately chose to leave it.
The reason why the Defendant behaved as he did was that he had formed the view that the Claimant and Ms. Noad were not going to pay the fare but were planning to "do a runner". It was not seriously disputed that this is what he thought, but the Claimant's case is that he was wrong to come to that conclusion. It is important for a variety of reasons that I should review the evidence on this issue and reach a conclusion. There are only two sources of direct evidence about this: the Defendant and Abigail Noad. Ms. Noad has ended her relationship with the Claimant and is now thought to be living in Bath with a new partner and a baby. I am told that she has refused to co-operate with the Claimant's lawyers and she did not give evidence. She did make witness statements to the police and these are in the Trial Bundle and a Hearsay Notice has been served. The first of these is dated 3rd November 2010, and the second the 7th December 2010. In her first statement she says that after the stop for cigarettes she remembered Kris saying to the driver "It's OK mate. It's not like we're not going to pay you or nothing, and we're not going to do a runner." The Defendant agrees that something about doing a runner was said by one or other of his passengers. He says it is quite a common joke. This is one of the things that made him think that this was what was going to happen when the Claimant stood up to leave after Ms. Noad had left first. This element of common ground is some encouragement to lend some weight to her written evidence, even though it has not been given on oath and there has been no cross-examination about it. Another aspect of her first statement is less reassuring. In it she says this
"I got out of the taxi. I had a £20 note in my pocket and it was my intention to use that to pay the driver. I hadn't told the driver that I was going to pay the fare, but he looked at me out of his window and could see that I was now holding the £20 note aloft and in his direction."
She then went on to describe how she saw the Defendant shut the rear door and drive off.
If that passage were true, it is very hard to see why the Defendant did not simply take his fare from the £20 note. She altered this account in her second statement when she said that she had in fact taken out the £20 inside the taxi. She said that the door was then closed and that she waved the £20 note up to the window after that, which is when the driver looked straight at her.
The Defendant denies that he ever saw Ms. Noad with any money. He says that she got out and disappeared from his sight, which made him very suspicious because he thought that this was consistent with the passengers planning to do a runner. On this issue I prefer the evidence of the Defendant. This is not only because it was given from the witness box, and subject to cross-examination, but also because it is inherently far more probable. This means that there was no overt offer of payment, and this added to his concern that he was not going to be paid. In fact, she did not do a runner. Mr. Gunthorpe, the Claimant's father, gave evidence that after the taxi had driven off with the Claimant on board she banged on the door and he looked out of the window and saw her. He came down and opened the door to let her in. Mr. Gunthorpe said that by the time he saw her she had a pizza in her hand. This means that she must at some stage have encountered the pizza delivery vehicle. It is likely that this is why she left the taxi and was nowhere to be seen at the point when the Defendant decided that he was not going to be paid and took his retributive action.
There is no basis for concluding that the Claimant and Ms. Noad were actually planning to make off without payment. The Defendant's grounds for forming this belief were not strong and, although he did not know it at the time, it is now clear that the Claimant and Ms. Noad had given him their true address. The fact that both young people were intending to leave the taxi before any money changed hands was an important reason why he thought they were not going to pay him. The Defendant did accept that some people do get out of the vehicle before paying, although he thought that this was unusual in a purpose built taxi where the passenger can stand up to reach into his pockets inside the car. As I have said, they had asked to be dropped off outside their home and if the Defendant had stayed in the street watching what they did after leaving his taxi he would have seen them going in with their pizza. If they had not paid him by that time, he could have called the police or at least knocked on the door and asked for his money. This, in my judgment, makes it extremely unlikely that they were actually planning to avoid paying the fare, although I accept that the Defendant genuinely thought that this was the position, which is why he acted as he did.
The Defendant was, in his way, quite an impressive witness. I take into account the fact that the investigation into these events by the police revealed that he was in the habit of carrying an illegal weapon, namely a CS Gas canister. This is not to his credit, but he explained to me why he did it and I have read the Pre-Sentence Report compiled about him at the time. This piece of evidence does not cause me to doubt the Defendant's honesty. The concessions which he made in cross-examination were, I thought, based on a real desire to tell the truth and also to be fair to the Claimant who had been so grievously hurt as a result of his conduct. He accepted that he may have made a mistake in his belief that they were in the process of running away without paying. He also accepted without demur that his intention in driving the Claimant back to the rank was to teach him a lesson by causing him as much inconvenience as he could. He did not think it was going to secure payment, and this was in no sense a lawful arrest. He did not suggest that he ever thought that he was entitled to drive the Claimant away from his home and back to the taxi rank. He said that he was not angry, in the sense of furious, but that he was "peed off". He told me that quite a few drivers in Bath do this. Probably most of them lock the doors to ensure that the passengers cannot escape. It was a strange thing to do without functioning locks, because the car had to deal with junctions and traffic lights before it got to the rank. It had in fact already passed two junctions where it must have slowed to a walking speed even if it did not stop. The chances of getting the Claimant back to the rank were not high, even if he did not decide to jump out at over 20mph. However, that is what the Defendant chose to do.
I therefore accept his account of the conversation with the Claimant after he decided to drive off. Just after the door locked as the car picked up speed, the Defendant says that the Claimant asked him where he was going and that he replied that they were going back to the taxi rank. The Claimant said that all taxi drivers were paranoid. The Defendant had told the police that he had added "you can do what you want", although he did not remember saying that now. I find that he did say this, otherwise he would not have told the police that he had. He said that the Claimant seemed resigned to what was happening. He said there was no shouting in the back of the taxi and nothing to warn him that the Claimant was going to jump out. He told me, and I accept, that if he had thought that was going to happen he would have stopped. The fact that this conversation occurred does not, of course, mean that the Claimant was reassured by it. As far as he was concerned he had done nothing wrong, and found himself being driven off by a stranger into the night. Whether that made him fearful or angry I do not know. What is clear, however, is that he decided that he should try to escape.
The end result is that the Claimant decided to jump out of the taxi at a dangerous speed. I do not know why he did this. It may have been that he misjudged the speed and thought it was safe to do so, but the true motive will never be known. I have found that he had not intended to avoid paying the fare, but it is possible that he became worried after he had been abducted because he only had £4.00 or so on him and the fare was £8.90. Since Ms. Noad was evidently the one who was intending to pay the fare, that did not prevent the Defendant from being paid in Queens Drive, but now that they had left the Claimant's home, he had no way of paying him. He may have become concerned that when the Defendant and other drivers at the rank realised this there would be consequences for him. Given the obviously militant approach of the Defendant to non-payers, he may have had some ground for thinking this. He may not have believed that he was going to be returned to the rank and allowed to go. He was a young man of 23 of good character.
It is unnecessary for the purposes of this judgment to recite any further evidence or to resolve any other disputes. Essentially, I have set out the relevant facts as I find them to be and they are largely undisputed.
The Applicable Law and the Submissions
Negligence
Mr. Lynagh QC submitted that liability in negligence attaches only in respect of losses which are reasonably likely to happen. He submits that the act of the Claimant in jumping out of his taxi was not a foreseeable consequence of the Defendant's driving. He says, alternatively, that the decision of the Claimant to jump out of the taxi was a novus actus interveniens which broke the chain of causation between any breach of duty by the Defendant and the damage sustained by the Claimant. I shall refer below to some of the authorities which were cited, but it is immediately apparent that these two ways in which the case may be formulated are very closely associated.
In respect of the claim in trespass by false imprisonment Mr. Lynagh again makes a submission on causation, arguing that the imprisonment did not directly cause the loss. In his written submissions he put it this way:-
"In the present case, the Defendant submits that until he jumped from the taxi the Claimant had impliedly consented to being taken back to the taxi rank and so was not unlawfully imprisoned.
"Even if it cannot be said that the Claimant consented, the period of unlawful imprisonment was perhaps only a couple of minutes which is de minimis. The Claimant's injuries were not caused by any commission by the Defendant of the tort of false imprisonment. They were caused by the Claimant's own reckless decision to jump out of the taxi."
He also contends that damages under this head should be capable of reduction for contributory negligence, but deals with that submission by reserving the right to raise it on appeal. This is because of the decision of the Court of Appeal in Co-operative Group (CWS) Limited v. Pritchard [2012] QB 320, a decision which I have recently followed in Flint v. Tittensor [2015] EWHC 466 (QB) at paragraph 45. The issue was not argued in that case and I recited an agreed position in the judgment.
In respect of both causes of action Mr. Lynagh raises the public policy defence of illegality, relying on a decision of Kenneth Parker J in Beaumont & O'Neill v. Ferrer [2014] EWHC 2398 (QB), [2015] PIQR P2. I accept that if these injuries occurred because the Claimant was committing the criminal offence of making off without payment when he sustained them, then the public policy defence of illegality would bar his right to damages. However, I have found that he was not doing that. The Claimant was not engaged in any criminal conduct which would require the court to bar his otherwise valid claims as a matter of public policy. I shall therefore not address this defence further, because it has failed on the facts and does not arise.
The Defendant submits that the test of foreseeability remains that adopted by the House of Lords in Bolton v Stone [1951] AC 850:
"Nor is the remote possibility of injury occurring enough; there must be sufficient probability to lead a reasonable man to anticipate it." (Lord Porter at page 858).
In other words, the Defendant was obliged to take precautions against risks which were reasonably likely to happen.
In Whippey v Jones [2009] EWCA Civ 452 Aikens LJ at [16] put it this way:
"Before holding that a person's standard of care has fallen below the objective standard expected and so finding that he acted negligently, the court must be satisfied that a reasonable person in the position of the defendant (i.e. the person who caused the incident) would contemplate that injury is likely to follow from his acts or omissions. Nor is the remote possibility of injury enough: there must be sufficient probability of injury to lead a reasonable person (in the position of the defendant) to anticipate it."
Mr. Lynagh submits that the proper approach to causation is one of fairness as set out by Sedley LJ in the case of Spencer v Wincanton Holdings Ltd [2009] EWCA Civ 1404:
"Fairness, baldly stated, might be thought to take things little further than reasonableness. But what it does is to acknowledge that a succession of consequences which in fact and in logic is infinite will be halted by the law when it becomes unfair to continue. In relation to tortious liability for personal injury, this point is reached when (though not only when) the claimant suffers a further injury which, while it would not have happened without the initial injury, has been in substance brought about by the claimant and not the tortfeasor."
This approach to causation was followed by Kenneth Parker J in Beaumont. He cited the above passage from Spencer and held that the Claimants who jumped from a moving taxi to avoid paying the fare had no case because of the illegality defence, which I have dealt with above. However, before that he had also held that their claim in negligence failed, even if the taxi driver was in some way at fault. This was because of his approach to causation. He said, at paragraph 26:-
"Even if David Ferrer [the driver] should have followed that course and in not doing so was at fault, the failure followed from the criminal intentions and actions of the youths in the taxi, and any degree of fault was simply overwhelmed by those intentions and actions."
Ms. Chalmers, who appeared in that case and appears in this, told me that permission to appeal has been granted and made available the reasons for that. Jackson LJ, granting leave, said
"This case raises difficult questions of causation and the impact of illegality. No authority seems to be directly in point. The claimants have suffered devastating injuries. These are "compelling reasons" within CPR 52.3(6)(b) why the claimants should not be shut out from pursuing and appeal even though their prospects of success are not unduly high."
In Vellino v. Chief Constable of Greater Manchester Police [2001] EWCA Civ 1249; [2002] 1 WLR 218 the Claimant was injured when he jumped out of a window escaping from the lawful custody of police officers who had arrested him. This is a common law crime. The Trial Judge (Elias J) found the police guilty of negligence in allowing him to jump, and made a substantial reduction for contributory fault. He then went on to find that the claim was barred in its entirety by the public policy defence of illegality. The Court of Appeal upheld the finding on illegality and in Gray v. Thames Trains Limited [2009] UKHL 33; [2009] 1 AC 1339, Lord Hoffmann said that the decision was based on sound common sense. Sedley LJ, dissenting in Vellino, would have preferred to reflect illegality by make a reduction in the damages rather than defeating the claim altogether. None of the Judges who considered this case suggested that the negligence of the police in failing to hold on to Mr. Vellino when they knew of his propensity to jump was not, in law, a cause of his injuries because he had behaved much worse than they had. Spencer was decided after Vellino and so was not considered. Spencer is a case which concerns the usual novus actus situation involving one of the exclusionary rules which
"…assist judges in deciding the circumstances in which a defendant, whose liability to a claimant for a particular occurrence has been established, will not be responsible for certain consequences of an act of negligence and the damages that are claimed to flow from those consequences", see Aikens LJ at paragraph 29.
Where negligence is established but the subsequent conduct of the claimant has contributed to a part of the loss there is a rule of remoteness which involves a value judgment to determine whether that conduct amounts to contributory negligence or goes further and amounts to a novus actus interveniens. The rule of law under examination was that which is described as the "second enquiry" in paragraph 70 of the speech of Lord Nicholls in Kuwait Airways Corp v. Iraqi Airways Co (No 6) [2002] 2 AC 883. The policy of the law was there described in this way
"..the inquiry is whether the plaintiff's harm or loss should be within the scope of the cause of action in question. The law has to set a limit to the causally connected losses for which a defendant is to be held responsible."
The issue before me is rather different. The injuries were not sustained in two stages, the first being the fault of the defendant and the second being a consequence both of that original fault and of an unwise act by the claimant. The injuries were sustained in one incident when the claimant jumped out of the defendant's taxi. The act of jumping did not break the chain of causation between the actions of the defendant and the injury: it was the cause of the injury. The issue is whether it was a foreseeable consequence of the fault of the defendant and not whether a limit on those causally linked consequences should be imposed in the interests of fairness.
It is clear from the passage cited above that the claimants in Beaumont lost before Kenneth Parker J on the negligence issue because they were engaged in a criminal act. This claimant, on my finding, was not. That claim was also decided in a different legal context because there was no claim for damages based on the intentional tort of trespass, whereas there is here. I am not persuaded by the submission made on behalf of the defendant in this case that the decision of counsel for the claimants in Beaumont not to base his case on trespass means that the claim in trespass must be bad in law. Therefore, I derive limited assistance from that decision without in any way questioning its result, with which I respectfully agree. To my mind such claims are barred by the illegality defence, whatever the outcome may be in negligence.
Mr. Killalea QC accepts that the Claimant was guilty of an error of judgment in deciding to try to leave the taxi at 20mph. He suggests that travelling at such a speed in a car feels much slower than it actually is, and that this is why the Claimant may have felt it safe to jump. He submits that he is entitled to succeed on primary liability because it was negligent to drive the taxi with a passenger in the back who was effectively being abducted because it was foreseeable that he might try and escape and that if he did so would run the risk of some physical injury in the process.
In negligence, therefore, the Defendant submits that the claim should fail entirely, while the Claimant submits it should succeed but allows for a reduction for contributory negligence. In order to recover in full, despite the serious misjudgement of the Claimant which was the immediate cause of his injuries, Mr. Killalea turns to the intentional tort of trespass to the person by unlawful imprisonment.
Trespass/False Imprisonment
Mr. Killalea QC submits that false imprisonment is a species of trespass to the person and therefore is actionable per se. As such, the Claimant is entitled to damages for imprisonment without proof of loss. As well as damages for imprisonment, the Claimant claims to be entitled to claim for any physical or mental injury, which results from the false imprisonment. Liability, he submits, extends to all the consequences which result from the tortious conduct, provided those consequences are properly attributable as a matter of causation to the Defendant's conduct and not to some novus actus interveniens. This is because the test of remoteness in false imprisonment is directness of the consequence, not foreseeability of the damage. Clerk & Lindsell explains the position at paragraph 2-139:-
"The test of remoteness in trespass to the person is directness of the consequence, not foreseeability of the damage. This stems from the historical development of the writ of trespass, the two most prominent features of which were that trespass was actionable per se, i.e. without proof of damage, and that the interference with the claimant had to be a direct result of the defendant's act. Indirect or consequential harm was the subject of an action for "trespass on the case" later referred to as an action on the case, or simply "case". The traditional example of the distinction between direct and indirect harm is that of a log thrown onto the highway. If the log strikes someone the injury is direct and trespass would lie, but if it simply lies in the road and obstructs the highway and someone trips over it, the injury is indirect and the claimant would have to sue in case, and prove damage. In the modern cases, remoteness of damage is virtually never an issue in trespass to the person, probably because trespass is now seen as a tort of intention (although the defendant's intention relates to an intention to do the act which amounts to trespass; there is no requirement that the defendant intended to harm the claimant)."
McGregor on Damages 19th Edition at 40/012-40/020 explains the way in which damages are awarded in false imprisonment cases. These are almost always claims against the police or other state body which has detained the claimant in purported exercise of some power. The general damages are for loss of dignity and distress and ill-health caused by the detention.
"Further, any pecuniary loss which is not too remote is recoverable; there appear to be no modern reported cases. Pecuniary losses fall into two categories in the cases. In the first place, that any loss of general business or employment is recoverable would seem to follow from Childs v Lewis, where the claimant, a company director, had been wrongfully given into custody by the defendant, and his co-directors had demanded his resignation on learning of his arrest. Lush J. directed the jury that they were entitled to hold that the claimant's loss of his director's fees by his acceding to this demand flowed from the false imprisonment. He pointed out that "clearly if the plaintiff had not resigned the other directors would have taken steps to remove him", and that his co-directors would be bound to hear of the claimant's arrest "before the prosecution started, or certainly before the magistrates dealt with it". In the second place, a few 19th century cases show that the claimant's costs incurred in procuring his discharge from the imprisonment may be recoverable as damages. Such costs were recovered in this way in Pritchet v Boevey. There had been no adjudication as to these costs by the judge who ordered the claimant's release; he would have given the claimant his costs if he had undertaken not to bring an action, and on the claimant's refusal no order had been made as to costs. Similarly, in Foxall v Barnett where the claimant, committed to prison for manslaughter by a coroner's warrant, had been admitted to bail and had subsequently got the inquisition under which he had been committed quashed, it was held that in an action against the coroner for false imprisonment he might recover the costs of quashing the inquisition. However, where the claimant has been refused costs in the prior action, as opposed to there being no order as to costs, he has failed to recover them as damages: this was the result in Loton v Devereux which was distinguished in Pritchet v Boevey on this ground. So, too, there will be no recovery in respect of costs unreasonably incurred. Thus Lord Campbell in Foxall v Barnet made it clear that the action must have been one which was necessary to gain release, and it is submitted that the jury's refusal in Bradlaugh v Edwards to award the claimant damages in respect of his expenses in procuring bail before the magistrates and in getting together evidence in defence of the charge is properly explained on the ground that the costs were not considered to have been reasonably incurred."
Decision
I have found that the Defendant drove away from the Claimant's home with the Claimant in the back when he had no right to do so. This caused the Claimant to try to escape and he did so making a serious error of judgment about the level of risk to himself in jumping out of a taxi at 20mph. The Claimant says he is entitled to recover in full despite his folly, and the Defendant says he should have to pay nothing despite his deliberate wrong doing. This is a stark and unattractive choice.
The claim in negligence is not straightforward. There is no doubt that at all times the Defendant owed a duty to drive his vehicle with reasonable care for the safety of the Claimant. I have little difficulty in finding that driving away while the Claimant was standing up in the rear of the taxi with the sliding side door open was a breach of that duty. However, this action caused the Claimant to sit down and engage in a brief conversation with the Defendant. It did not cause him any injury. The injury occurred a minute or so later and ¾ mile away. At that time there is no evidence that the Defendant was driving in an unsafe manner. He was certainly driving within the speed limit. The case in negligence must therefore be put on the basis that it was negligent to drive the vehicle at all with a person detained in it who may attempt to escape because the driver knows that he wants to get out. The possibility of escape would be particularly clear because the doors were not capable of being locked. It was foreseeable that he would attempt to escape and any such attempt would involve some level of risk of injury to the Claimant. The Particulars of Claim do not refer to the absence of working locks, but there is no dispute about that fact, indeed it is based on the evidence given by the Defendant. That apart, they do contain allegations which enable the case to be advanced on the basis which I have just described.
In my judgment once the duty and breach are explained in that way it becomes clear that the Defendant was in breach of his duty to drive his car with reasonable care for the safety of the Claimant. The taxi was simply not suitable for conveying prisoners safely. It would be unsafe whether the detention of the passenger was lawful or not. The presence or absence of working locks is not decisive of the issue, but should have operated as a particular warning on the facts of this case to the Defendant of the risk that his prisoner may try to escape. The reason for the detention is not relevant to the negligence claim, at least on primary liability. The police often detain people who have committed very serious offences, but it cannot be suggested that the police do not owe a duty of care to their prisoners because their own misconduct caused their incarceration. Because it is an offence to escape from lawful custody any claim for injuries caused by the claimant to himself in the course of escape will be defeated by illegality.
The answer to the submission based on Bolton v. Stone that it was not foreseeable that the Claimant would jump out at over 20mph is that this is irrelevant. In Spencer the defendant made a similar argument which was rejected by Aikens LJ at paragraph 33. It was certainly foreseeable that the Claimant would try to leave the taxi and that it may be moving when he did so. If the Defendant had asked himself whether the Claimant would probably jump out when the vehicle slowed in traffic, at traffic lights or at a junction he would probably have answered in the affirmative. If he had asked himself whether there was some risk of some injury if the Claimant did jump out of the taxi while it was moving quite slowly, again he would have said Yes. A stumble and a bruised knee, broken wrist or turned ankle would have been very much on the cards. The fact that he might misjudge the risk and jump out at a very dangerous speed causing catastrophic injury was less foreseeable, but it is foresight of the kind of damage which occurred, namely personal injury, which is required and not of the precise mechanism by which it occurred. This is clear in Lord Rodger's account of remoteness in Simmons v. British Steel Plc [2004] UKHL 20; [2004] PIQR P33, at paragraph 67:-
"67. These authorities suggest that, once liability is established, any question of the remoteness of damage is to be approached along the following lines which may, of course, be open to refinement and development. (1) The starting point is that a defender is not liable for a consequence of a kind which is not reasonably foreseeable: M'Kew v Holland & Hannen & Cubitts (Scotland) Ltd 1970 SC (HL) 20 , 25 per Lord Reid; Bourhill v Young 1942 SC (HL) 78 , 85 per Lord Russell of Killowen; Allan v Barclay (1864) 2 M. 873 , 874 per Lord Kinloch. (2) While a defender is not liable for damage that was not reasonably foreseeable, it does not follow that he is liable for all damage that was reasonably foreseeable: depending on the circumstances, the defender may not be liable for damage caused by a novus actus interveniens or unreasonable conduct on the part of the pursuer, even if it was reasonably foreseeable: McKew v Holland & Hannen & Cubitts (Scotland) Ltd 1970 SC (HL) 20 , 25 per Lord Reid; Lamb v Camden LBC [1981] QB 625 ; but see Ward v Cannock Chase DC [1986] Ch. 546 . (3) Subject to the qualification in (2), if the pursuer's injury is of a kind that was foreseeable, the defender is liable, even if the damage is greater in extent than was foreseeable or it was caused in a way that could not have been foreseen: Hughes v Lord Advocate 1963 SC (HL) 31 , 38, 40 per Lord Reid. (4) The defender must take his victim as he finds him: Bourhill v Young 1942 S.C. (H.L.) at 92 , per Lord Wright; McKillen v Barclay Curle & Co Ltd 1967 S.L.T. 41 , 42, per Lord President Clyde. (5) Subject again to the qualification in (2), where personal injury to the pursuer was reasonably foreseeable, the defender is liable for any personal injury, whether physical or psychiatric, which the pursuer suffers as a result of his wrongdoing: Page v Smith [1996] 1 AC 155 , 197F–H, per Lord Lloyd of Berwick."
In general the police or prison service could not succeed in defeating or reducing a claim for damages resulting from injury during detention by relying on the conduct of the claimant which resulted in that detention. That is because the criminal conduct which led to detention would not usually be a cause of the loss. It would usually merely provide the occasion for the loss to occur. Where, however, the conduct which resulted in arrest and detention was part of the same series of events as the incident which caused the loss then the defence of contributory negligence would arise. In my judgment, this is such a case. It is trite law that the assessment of contributory fault requires an assessment of the extent to which the claimant's conduct was blameworthy and its causative potency. The value judgment of which Aikens LJ spoke in Spencer requires "unreasonable" conduct of the Claimant which was, in law, a cause of the loss to be classified either as contributory fault or novus actus interveniens. The word "unreasonable" was described in his judgment in the same case as a "protean adjective" by Sedley LJ. Aikens LJ identified an "unwillingness to be prescriptive" in the authorities at paragraph 37 which means, I think, much the same thing. Aikens LJ said that this unwillingness was deliberate. In other words the law does not seek to define by any rigid rule what type of conduct by the claimant will defeat his claim as opposed to merely reducing it. The terms used to convey the nature of the judicial exercise involved are all fluid and each case depends on its facts: "fairness" is at the heart of the exercise and that is a scarcely less protean adjective than "unreasonable". The passage from the judgment of Sedley LJ at paragraph 19 above explains what it adds. The aim of the exercise is to achieve a just outcome.
In my judgment, the intention of the Claimant in doing the "unreasonable act" will matter to the outcome. That is because criminal or reckless conduct is morally more blameworthy than conduct which is merely careless. As explained in Spencer, recklessness and deliberate misconduct are not necessary elements of misconduct which must be found before it can amount to a novus actus interveniens, see Sedley LJ at paragraphs 19 and 20, and Aikens LJ at paragraph 43. That is not to say that where they are found they are irrelevant. Thus, the act of jumping from a taxi in Beaumont was done in furtherance of a criminal conspiracy to avoid paying the fare. The same act, in the present case, was not. That is a sufficient distinction to make a difference in the outcome. I do not know, as I have said, why the Claimant decided to jump. It is obvious that he misjudged the speed at which the taxi was travelling because there must have been junctions coming up which would have required it to slow down and had he been thinking clearly he would have appreciated this. He also misjudged the level of risk involved in jumping from a vehicle moving at over 20mph. Whether he took this risk because he simply wanted to avoid having to walk a couple of miles home from the rank, or whether he was frightened I do not know. It is for the Defendant to prove that consequences of his tort should not result in an award of damages because of the novus actus interveniens or reduced because of contributory fault. All that I can safely say about the Claimant's conduct is that it was not a criminal act done in an attempt to avoid paying the fare. It was certainly careless in that it involved a serious misjudgement of the level of risk. It was also done because he had been unlawfully abducted and wished to be at liberty, as he was entitled to be. In these circumstances I find that it was not a novus actus interveniens but was sufficiently careless to justify a significant reduction in the damages payable for negligence. If I had found that he jumped through fear, and misjudged the risk in the agony of the moment the reduction, if any, would have been small. I cannot make that finding in the absence of any evidence. Whatever the reason, it was a grave misjudgement and more serious than, for example, the "unreasonable conduct" found against the claimant in Spencer. It was certainly a causative factor of great potency. In these circumstances I reduce the damages payable in the tort of negligence by 50%.
I now turn to the claim in trespass. The text books cited above do not contain any real assistance on the proper approach to remoteness of damage in false imprisonment cases where the loss includes injuries sustained accidentally in the course of escape. This is because such a claim has not been decided before, at least as far as the cases cited by the authors reveal. It is necessary therefore to address the matter in principle. In principle this is an intentional tort and a sub-division of trespass to the person. In another type of trespass, namely assault, injuries sustained while running away in fear of assault would be recoverable because steps taken to avoid injury caused by the assault are a direct result of the assault itself. The question is whether the same approach to this tort means that the damage sustained by an escaper from unlawful imprisonment can be said to be directly caused by it.
It is probably an accident of history that no defence of contributory fault under the Law Reform (Contributory Negligence) Act 1945 exists in claims in trespass. As the facts in this case reveal it is unfortunate. I have attempted to arrive at a just result in this case using the flexible approach premised on fairness which the law has developed in negligence claims. If I am right in that result, it follows that it is not fair for the defendant to be required to fund the whole of the claimant's loss. The law of tort generally seeks to avoid results which are unfair. I have therefore considered the decision of the Court of Appeal in Pritchard v. Co-Operative Group Ltd [2012] QB 320 with some care to see if it can be distinguished. I can see no basis on which to do that, and therefore am bound by the result to find that the defence of contributory negligence is not available. I mean no criticism of the reasoning in that decision, which is powerful, when I say that this is regrettable for the same reasons which are explained by Sedley LJ in his dissenting judgment in Vellino v. Chief Constable of Greater Manchester Police cited above.
There is no doubt that the claimant was unlawfully imprisoned by the defendant. I reject Mr. Lynagh's submission that he consented to be carried back to the rank in the taxi. He did not. He could not have made his lack of consent any plainer than he did when he jumped out of the taxi. I also reject the submission that the false imprisonment was de minimis. It was not. It was an abduction. The defendant must therefore pay damages for the direct consequences of that deliberate act. Those consequences include reasonable steps taken by the claimant to bring the detention to an end, in just the same way as the consequences of an assault would include reasonable attempts to escape from the attacker. This is why the costs of proceedings to secure release were recoverable in the 19th century cases cited in McGregor on Damages above, but only if they were reasonably incurred. At paragraph 20-022 in McGregor the author explains the decision in Bradlaugh v. Edwards 11 C.B. (N.S.) 377 as one involving an application of the third proviso relating to the recovery of legal costs whereby a person procures his discharge from false imprisonment.
"In false imprisonment the prior proceedings in which the now claimant incurs costs are those whereby he procures his discharge. What law there is upon the recovery of such costs is very old, being contained in a few mid-19th century cases. These together sketch out the rule that recovery is allowed subject to three provisos: that the action brought to gain release was necessary, that the costs had not been refused by the court in that action, and that the costs incurred were reasonable ones. Pritchet v Boevey is the case which established that costs incurred in procuring discharge from a false imprisonment are recoverable; it would seem that all three provisos were satisfied. As to the second proviso, there had been no adjudication as to these costs by the judge who ordered the claimant's release; he would have given the claimant his costs if he had undertaken not to bring an action, and on the claimant's refusal no order had been made as to costs. Similarly, in Foxall v Barnett where the claimant, committed to prison for manslaughter by a coroner's warrant, had been admitted to bail and had subsequently got the inquisition under which he had been committed quashed, it was held that in an action against the coroner for false imprisonment he might recover the cost of quashing the inquisition, Lord Campbell insisting that the first proviso had to be shown to be satisfied. By contrast, with the second proviso not satisfied in Loton v Devereux, where the claimant had been refused costs in the prior action as opposed to there being no order as to costs, the claimant failed to recover them as damages. And it is submitted that a failure to satisfy the third proviso gives the proper explanation of Bradlaugh v Edwards. The jury not having awarded the claimant damages in respect of his expenses in procuring bail before the magistrates and in getting together evidence for the defence of the charge, Erle C.J. indicated that these costs may have been unreasonably incurred."
The footnote extracts a passage from the judgment of Erle CJ as follows:-
"ibid. at 384: "Where a party has been illegally imprisoned, and has been put to expense in procuring his discharge, he may very well urge that fact before the jury as an aggravation: but he has not right to demand to be reimbursed ex debito justitiae. It is in the discretion of the jury to give him such damages as they may consider a sufficient compensation for the wrong the party has sustained, irrespective of any expense he may, perhaps needlessly, have incurred in his defence."
The provisos relating to the recovery of legal costs do not exist separately from the general law of remoteness in intentional torts. They arise from the co-existence of the jurisdiction to award the costs of other proceedings in those proceedings themselves. The loss therefore is predicated upon the exercise, or non-exercise of a judicial power in other proceedings. Another reading of the decision in Bradlaugh suggests that the explanation appears to be based on the discretion of the jury to award general damages without regard to any expense incurred if they consider some lesser sum to be a sufficient compensation for the wrong incurred. Erle CJ approached the case on the basis that the jury may have had in mind the fact that the unlawful imprisonment had denied the plaintiff the opportunity to "do that which he might afterwards have deeply regretted, and therefore that the injury…was in the result a substantial benefit to the plaintiff…..". Earlier, he had said:-
"It is in the discretion of the jury to give him such damages as they may consider a sufficient compensation for the wrong the party has sustained, irrespective of any expense he may, perhaps needlessly, have incurred in his defence."
It may, therefore, be that there is little assistance on this issue to be derived from that decision which has a theological aspect to its ratio which is not of relevance to the present case. What it does suggest is that the steps taken to bring unlawful imprisonment to an end will not invariably result in an award of damages.
Because the potential relevance of the different rule of remoteness in trespass was not fully explored before me in submissions, I circulated an early draft of this judgment and asked for submissions in writing on the issue. The Defendant did not make any such submissions and therefore neither supported nor repudiated the provisional conclusion which I had reached in his favour. In helpful written submissions received in answer to my request on behalf of the Claimant that the cases cited in McGregor do not support the proposition that a claimant can only recover as damages for unlawful imprisonment compensation for injuries caused by his own action where that action was reasonable and necessary. It is submitted that their true explanation is found in the special rule which limits the recoverability of legal costs as damages, relying on the passage in McGregor on Damages I have set out in the previous paragraph. I do not agree. The award of costs by way of damages in subsequent proceedings where they might have been awarded in the original action but were not is a special situation. However, it is a situation which requires additional limits on recoverability to be built on to the limits which apply in all cases, not limits which are wholly different in kind. The fundamental problem is that the legal costs in the one case, or the injuries resulting from an escape attempt in the other, both flow directly from a decision by the Claimant. They are not directly caused by the unlawful imprisonment but by the claimant's desire to bring it to an end. The legal costs will be recoverable if, but only if, they were necessary and therefore reasonably incurred. This is "proviso 1" in McGregor's analysis. This is a rule of general application. Provisos 2 and 3 are specific to legal costs. Proviso 1 is because otherwise they will not be caused by the imprisonment, but by the foolish decision of the Claimant. To put it another way, they will not be the result of the claimant reasonably mitigating his loss. In such cases the court will have to look additionally at provisos 2 and 3 to see whether full compensation resulted from a costs award made by the court which dealt with the action for relief, and, if not, why not. This is the approach which Carnwath J, as he then was, considered in British Racing Drivers' Club v. Hextall Erskine & Co [1996] 3 All ER 667, at 691F, when he addressed the third proviso by ordering a taxation of the costs. I therefore find that the adverse consequences of an escape attempt, in this case personal injury, are only recoverable if they are direct result of the tort of unlawful imprisonment. To satisfy that test they must be the consequence of a reasonable and necessary act intended to bring the unlawful imprisonment to an end.
I have found that the claimant did not act reasonably. He was substantially to blame for his own misfortune. I have in mind the passage from the judgment of Morris LJ in Sayers v. Harlow Urban District Council [1958] 1 WLR 623 at 630 cited by Mr. Killalea:-
"It seems to me that the most natural and reasonable action on the part of someone who finds herself undesignedly confined is to seek the means of escape. Those who are responsible for the unjustifiable detention can hardly, either with good grace or sound reason, be entitled to be astute in offering criticism of the actions of the unfortunate victim"
That decision concerns a claim in negligence in which the Claimant suffered a reduction of 25% for contributory negligence. Having been accidentally locked in the cubicle of a public lavatory she tried to escape by climbing over the partition. She decided that was not possible and descended, falling and hurting herself as she did so. The observations of Morris LJ are to be understood in that context. The criticisms advanced by the Defendant of the Plaintiff's conduct were in fact justified. They did not, as the County Court Judge had held, defeat the claim in its entirety but they did defeat it in part. I have followed as similar approach to this decision in my conclusion in the negligence claim. I do not think it has anything to contribute to my consideration of the extent to which the result on the issue of the causation of the injuries might be different in trespass from that in negligence.
It appears to be common ground, and supported by the textbook extracts set out above, that the rule on causation in negligence cases is not the same as it is in cases in trespass and it is necessary to consider whether the approach to novus actus is the same in both torts. In my judgment it is clearly not. In trespass there is no sliding scale in assessing the consequences of unreasonable conduct by the claimant, with its imprecise dividing line between contributory fault and novus actus interveniens, because there is no contributory fault defence available. The claim either succeeds or fails in its entirety. The "value judgment" described by Aikens LJ, which is an essential tool in deciding what conduct on behalf of the claimant breaks the chain of causation and what does not, cannot be made in trespass cases. This means that the court must approach the concept of novus actus interveniens differently. Loss which flows from an unreasonable attempt to escape from unlawful detention could be described as flowing from a novus actus interveniens but it may also be described as not being directly caused by the unlawful imprisonment but by the Claimant himself. A third way of expressing it is to say that it flows from an unreasonable attempt to mitigate loss. There is a limit imposed by the law on the recoverability of losses in trespass which may be caused factually by the wrongful conduct of the defendant, but it is not the same as that in negligence. It is not based on foreseeability, and does not involve the concept of fairness which underpins these decisions in the tort of negligence, as I have sought to demonstrate above. It allows compensation for the direct consequences of the tort, which includes the Claimant's reasonable attempts to bring the effects of the tort to an end by his own conduct. He is entitled to recover the cost of reasonably mitigating his loss by bringing the false imprisonment to an end. It does not allow recovery for the consequences of the Claimant's unreasonable conduct. This would explain why the common law did not develop a defence of contributory negligence to actions in trespass, which is the reason why it is not available under the 1945 Act. I therefore hold that the injuries sustained by the Claimant were too remote as a matter of law from his unlawful imprisonment by the Defendant to found a claim for damages for this form of trespass.
For these reasons there will be judgment for the Claimant for 50% of his damages for the consequences of his injuries which are to be assessed at a later hearing.
The Claimant is entitled in addition to a modest sum of damages for unlawful imprisonment which does not take the injuries into account. The assessment of such a sum is an arbitrary and unsatisfactory exercise. He was driven away from his home for about ¾ mile unlawfully. Taken on its own, this would be an irritating and unsettling incident, but not one with any serious consequences. Had he left the vehicle when it was stationary at lights, the impact of the abduction would have been transitory. I have broadly accepted the evidence of the Defendant and therefore find that his intention was not to do anything other than to return him to the rank where he would be released. This is the kind of conduct which creates a significant risk to life and limb as this case, and Beaumont v. Ferrer, both demonstrate. Where, as here, it occurred because of a misunderstanding about the intentions of the Claimant and not because he was intending to evade payment of the fare a modest increase in the award to include aggravated damages is appropriate. A sum of £250 is, in my judgment, sufficient to mark the wrongful conduct of the Defendant leaving the injuries aside.
For the reasons given in a Form N460 I have acceded to the applications for permission to appeal submitted by both parties. I am therefore required to state that this is a final judgment and that appeal lies to the Court of Appeal Civil Division. An important factor in the grant of permission is the fact that the appeal in Beaumont v. Ferrer for which Jackson LJ has granted permission as I have noted above is now listed for July 2015. I therefore direct that Notices of Appeal must be lodged within 14 days and that the case should be placed before the Lord Justice managing that appeal to consider whether the cases should be heard by the same constitution and, if so, how that may be achieved. When lodging their Notices of Appeal the parties should also lodge brief written submissions on that issue. |
Mr Justice Dingemans:
This is a libel claim brought by the Claimant His Highness Prince Moulay Hicham Ben Abdallah Al Alaoui of Morocco ("Moulay Hicham") against the Defendant Elaph Publishing Limited ("Elaph") in respect of an article published in Arabic on its news website on 8th and 9th October 2014. Elaph is a company incorporated in England and Wales. The article was removed following a complaint by Moulay Hicham's solicitors on 9th October 2014.
Proceedings were issued on 10th October 2014 and Particulars of Claim were served on 8th December 2014. A certified translation of the article was annexed to the Particulars of Claim, and the application is made on the basis of that translation.
Elaph brings an application seeking a determination that the words pleaded in paragraph 3 of the Particulars of Claim are not capable of bearing: (a) the defamatory meanings pleaded in paragraphs 6.1 to 6.3 of the Particulars of Claim; (b) any other meaning defamatory of Moulay Hicham; and (c) that the claim be struck out and reverse summary judgment be entered for Elaph.
There was, in the alternative, an application for a preliminary issue about the actual meaning of the words. However this was not pursued at the hearing before me. This was because a preliminary issue to determine the actual meaning and whether that meaning was defamatory (as opposed to whether the words were capable of bearing any defamatory meaning) will raise issues about whether the statement "has caused or is likely to cause serious harm" to the reputation of the Claimant within the meaning of section 1 of the Defamation Act 2013. The publication was on the internet and it was common ground that there was relevant evidence about the extent of the internet publication which might be adduced.
I should note therefore that this is an application about whether the words are capable of bearing a defamatory meaning. My task is therefore to "pre-empt perversity", see Rufus v Elliot [2015] EWCA Civ 121 at paragraph 8.
After argument and before delivery of the judgment I was notified that the parties might be able to resolve matters and I was asked to delay delivery of my judgment. I was then informed that the parties had not been able to settle matters and I therefore hand down judgment.
The article
The relevant part of the article, together with paragraph numbers to assist in the reference, is set out below:
"Using former boxer Zakaria Moumni in a premeditated plot:
Moulay Hicham schemes to entrap Mounir Al-Majidi
[1] Moulay Hicham does not pass up any chance to sabotage the image of Moroccan King Mohammed VI, and the latest ploy utilised former boxer Zakaria Momeni to bring down Mounir Majidi, assistant and adviser to the King.
[2] Beirut: Everything that harms Morocco always involves Moulay Hicham. This argument has become increasingly prevalent in the corridors of the royal family palace in light of the machinations that the cousin of King Mohammed VI never ceases to weave, the most recent of which, recently involved a take-down of Mounir Majidi, an aid very close to the Moroccan monarch's heart.
Premeditated plots
[3] Reports emerged stating that Moulay Hicham met with former Moroccan boxer Zakaria Moumni on 26th June this year in the Fouquet Hotel in Paris in order to urge him to raise a case against Majidi in French courts on charges of making death threats. Hicham requested that Moumni keep the case a secret, so that Majidi could be forcibly held when he came to France.
[4] Hicham launched a similar strike last February on Abdellatif Hamouchi, head of Morocco's anti-espionage agency, who was called by the French judiciary for investigation while staying at the home of the Moroccan ambassador in Paris. This issue had a negative impact on French-Moroccan relations.
[5] Moumni insists that the alleged meeting happened only by coincidence—but this was the response that Hicham whispered into his ears. The latter is working very hard not to answer the fundamental question: what is the difference between a chance meeting that he claims took place and the meeting that lasted half an hour? Moumni admits, however, and without equivocation, that he met Moulay Hicham and his wife in the Fouquet hotel because he, himself, frequents the hotel and happened to see the Alaouite Prince, himself, visit that day.
Coincidence or conspiracy!
[6] Few believe the story of the accidental meeting, especially since Hicham visited the George V Four Seasons Hotel, owned by a relative of Saudi Prince Alwaleed bin Talal, when he was in Paris. The Fouquet Hotel, where the meeting took place, is situated on the same street.
[7] News reports list some of the finer details of this meeting, claiming that the Moroccan Prince spoke frequently while Moumni spent half an hour listening attentively. Hicham incited the former boxer to say, at every occasion and wherever he went, that Mounir Majidi, Secretary to the Moroccan King, threatened to kill him in France. He also urged him to submit a judicial complaint against Majidi, informing him of people that would help him do so and asking him to contact them.
[8] Moumni himself is the world champion of a type of Thai boxing called "light contact." He currently benefits from a decree issued by late Moroccan King Hassan II which appointed him Sports Advisor of Morocco, despite the fact that the sport that he practices is not included on the list of sports recognised by the Olympics. In 2006 Moumni received authorisation to operate two large fare-operated vehicles and take all the revenues. One would be placed under his name and the other under his father's name. Thus, the man set fire to the Kingdom's highest-ranking centres whose revenues he benefits from, just like a man who drinks from a well and then throws a stone inside it…"
Pleaded meanings and relevant contentions
It was pleaded on behalf of Moulay Hicham that the natural and ordinary meaning of the words was:
"(1) that the Claimant had orchestrated a plot to sabotage the image of King Mohammed VI of Morocco whereby, in the course of a pre-arranged meeting at the Fouquet Hotel in Paris on 26 June 2014, he had induced Zakaria Moumni: (a) to make false allegations against the King's close aide Mounir Majidi that he, Majidi, had threatened to kill Moumni, and (b) to bring a criminal complaint against Majidi on the basis of such false allegations so that Majidi would be arrested in France;
(2) that the Claimant had instructed Moumni to lie to cover up the plot by claiming, falsely, that his meeting with the Claimant at the Fouquet Hotel had been coincidental;
(3) that the Claimant had orchestrated a similar plot against Abdellatif Hamouchi, the head of Morocco's anti-espionage agency, in the February before this, which had resulted in Hamouchi's being called in for questioning by the French judicial authorities, and the Claimant was therefore responsible for the resultant negative impact on French-Moroccan relations."
Mr Rushbrooke QC on behalf of Moulay Hicham placed particular emphasis on the words in the article which it was said would affect the whole approach of the reader including: "using"; "premeditated"; "plot"; "schemes"; "entrap"; "sabotage"; "ploy"; "take-down"; and "conspiracy". It was submitted that the implication for any reasonable reader was that Moulay Hicham was getting Moumni to give false evidence against aides to the King, or had encouraged Moumni to give evidence where Moulay Hicham had shown no interest in whether it was true. It was said that the article suggested that Moulay Hicham, as a prince, was working against the interests of the King by encouraging persons to report matters against the aides and that was defamatory.
Mr Glen on behalf of Elaph contended that the article is incapable of bearing the meaning that Moulay Hicham encouraged Mr Moumni to make "false" allegations, and that the allegation of falsity was fundamental to all of the meanings complained of on behalf of Moulay Hicham. It was said that it may have been that Moulay Hicham did not in fact encourage Mr Moumni to make the allegations and was not working against the King but that would simply show that the article was wrong, but it cannot be defamatory to say that a person opposes the ruling monarch, because that depends on what view is taken of the monarch and monarchy.
Mr Rushbrooke submitted that the meanings were defamatory even if the allegations were not known by Moulay Hicham to be false, because it would be defamatory to say that he encouraged the making of allegations not caring whether they were false. Reference was made to the pre-action correspondence and the suggestion that the sting of the article was that Moulay Hicham was working against the interests of the King of Morocco. There was a discussion in submissions about whether it would be defamatory to say that a prince was working against the interests of the monarch.
Applicable legal principles
The principles to be applied on applications of this nature are well-established. They were summarised by Sir Anthony Clarke MR in Jeynes v News Magazines Limited [2008] EWCA Civ 130 at [14]:
"The legal principles relevant to meaning … may be summarised in this way: (1) The governing principle is reasonableness. (2) The hypothetical reasonable reader is not naïve but he is not unduly suspicious. He can read between the lines. He can read in an implication more readily than a lawyer and may indulge in a certain amount of loose thinking but he must be treated as being a man who is not avid for scandal and someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available. (3) Over-elaborate analysis is best avoided. (4) The intention of the publisher is irrelevant. (5) The article must be read as a whole, and any 'bane and antidote' taken together. (6) The hypothetical reader is taken to be representative of those who would read the publication in question. (7) In delimiting the range of permissible defamatory meanings, the court should rule out any meaning which, 'can only emerge as the produce of some strained, or forced, or utterly unreasonable interpretation …' …. (8) It follows that 'it is not enough to say that by some person or another the words might be understood in a defamatory sense.'"
There are a number of well-known definitions of the legal meaning of the word "defamatory". Sir Thomas Bingham MR in Skuse v Granada Television Limited [1996] EMLR 278 at 286 said:
"A statement should be taken to be defamatory if it would tend to lower the plaintiff in the estimation of right-thinking members of society generally or would be likely to affect a person adversely in the estimation of reasonable people generally."
It follows that it is not enough that the words should damage the Claimant in the eyes of a section of the public only, see Modi v Clarke [2011] EWCA Civ 937. It does not defame someone to say that he wishes to destroy the structure of world cricket, because that depends on the views of that section of the public interested in the sport on the current structure, see paragraph 30. This mirrors Strasbourg jurisprudence which emphasises the latitude given to statements about public figures and political matters where reasonable persons may have very different views about actions and systems of government, see Lingens v Austria (1986) 8 EHRR 407 at paragraph 41 and the analysis in Curran v Scottish Daily Record and Sunday Mail Ltd [2011] CSIH 86 at paragraphs 51 and 53.
It is also relevant to note that the claim was brought in relation to the "natural and ordinary meaning" of the words, and not an innuendo meaning. A natural and ordinary meaning does not require the support of extrinsic facts passing beyond "general knowledge", or "matters of universal notoriety" or "matters which any intelligent viewer or reader may know".
Evidence
There were a number of witness statements in the bundle before me. These included witness statements on behalf of the Defendant from Dominic Crossley and Andrew Willan, and witness statements on behalf of the Claimant from Moulay Hicham and Nicole Doucette.
Some of this evidence related to matters which were not before me, such as serious harm, and some related to matters which it was alleged any "intelligent reader" of Elaph's website would know. Mr Glen submitted that such a reader would know that there was political opposition to the Moroccan regime related to the Arab Spring, and that questions had been raised about Morocco's human rights record. Mr Rushbrooke submitted that the article itself gave the relevant context and that nothing more was required.
In my judgment the materials set out in the witness statements of Mr Crossley and Mr Willan go far beyond what would be known to the ordinary reader of the Elaph website, including extracts of books and previous articles. Those materials are not relevant for the purposes of determining the issue which is before me. The same is true of the materials set out in the witness statement from Moulay Hicham, which also set out particulars of why Moulay Hicham said that the article was wrong and inaccurate. In my judgment any hypothetical intelligent reader of Elaph would know, as a matter of general knowledge, that there is a monarchical regime in Morocco and that the King is the ruler of Morocco. It might be noted that this part appears from the article in any event.
Nicole Doucette had carried out the original translation of the article. She gave evidence giving alternative words for the translated words, and gave her interpretation of the meaning. However her evidence was also not relevant to the issue before me. This is because there was a translation with the Particulars of Claim and the claim is made on the basis of that translation which has been accepted, and because Ms Doucette's opinion of what the article means is not admissible evidence.
In the end I have determined this application on the basis of the article and its original translation. The other materials in the witness statements might be relevant to other applications, but they have not assisted me in determining this "capability" application.
My determination
All of the words highlighted by Mr Rushbrooke and set out in paragraph 8 above are relevant to the meaning that the hypothetical reasonable reader will give to the article. However in my judgment a reasonable reader would not read the article as saying that Moulay Hicham had induced Zakaria Moumni or any other person to make "false" allegations against Majidi so that he might be arrested. This is because the article does not deal with whether the allegations were "false" or whether Moulay Hicham had not cared whether the allegations were true, and the article deals with Moulay Hicham's role in encouraging the making of the complaints. Indeed to the extent that the matter is dealt with the article states that Moulay Hicham "does not pass off any chance" to sabotage the image of the King, which suggests that Moulay Hicham had taken advantage of facts which had become known to him. The use of the words "premeditated plot" or "ploy" shows only that it was planned and not that it was fabricated. The fact that matters are kept secret does not suggest that they are false.
The article does say that Moulay Hicham urged Zakaria Moumni to raise a case against an aide close to the Moroccan King on charges of making a death threat, and had launched a similar strike against Addellatif Hamouchi, head of the anti-espionage agency. The article does suggest that this was part of a campaign to harm the image of the King, and the article appears to take the line that any such approach is wrong. However that depends on the views of that section of the public interested in the politics of Morocco. It is not, in my judgment, capable of being defamatory of someone to say that they are working against the interests of a ruler for the reasons given in Modi v Clarke. I should record that I understand the concerns of Moulay Hicham about the article, who denies that the article was accurate or that he was working against the interests of the King, however an inaccurate article is not necessarily defamatory. For all these reasons in my judgment the words are not capable of bearing the defamatory meanings pleaded in paragraphs 6.1 and 6.3 of the Particulars of Claim (and set out in paragraph 8 above).
In my judgment the position is different in relation to paragraph 6.2 of the Particulars of Claim. A reasonable reader might conclude that the article said that Moulay Hicham had instructed Mr Moumni to lie about the meeting happening by coincidence. This is because of the words "but this was the response that Hicham whispered into his ears", the heading "coincidence or conspiracy?" and the phrase "few believe the story of the accidental meeting, especially since …". This meaning is capable of being defamatory of Moulay Hicham because it suggested he had lied. In my judgment this meaning is not dependent on the allegation of falsity in relation to meanings in paragraph 6.1 and 6.3 because it relates to the report of the meeting about making the allegations, and does not deal with whether the allegations were false. It is capable of crossing the threshold of seriousness, but whether it has done in the circumstances of this case can be addressed at the determination of the other applications.
There was some argument about whether the article would be capable of bearing other meanings defamatory of Moulay Hicham, but in the event no other meanings were proposed. It was common ground that the parties should be given time to consider this judgment and any possible amendments to the Particulars of Claim before the outstanding applications were determined.
In these circumstances the issue of reverse summary judgment does not arise, and it is right to record, as Mr Rushbrooke noted, that there had been no compliance with the formalities of such an application.
Conclusion
For the detailed reasons given above in my judgment the article was not capable of bearing the defamatory meanings pleaded in paragraphs 6.1 and 6.3 of the Particulars of Claim. The articles were capable of bearing defamatory meanings set out in paragraph 6.2 of the Particulars of Claim.
The parties are to have time to consider this judgment and any possible amendments to the Particulars of Claim. |
Mr Justice Newey :
For many years, the claimant, John Raymond Transport Limited ("JRT"), provided Rockwool Limited ("Rockwool"), which manufactures insulation products, with haulage and warehousing services.
In July 2014, however, Rockwool gave notice to terminate certain contracts with JRT. In response, solicitors acting for JRT, McTaggart, disputed the validity of the termination. They also put forward the claim that forms the subject matter of the present proceedings, which were issued on 19 November 2014. That claim has two components. In the first place, it is alleged that Rockwool was contractually obliged to allocate a minimum number of haulage loads each year to JRT but failed to do so. In all, Rockwool is said to have provided some 15,000 too few loads in the six years falling within the limitation period and thus to be liable to JRT for £4,433,266.17 (plus interest). I shall refer to this element of JRT's claim as "the Minimum Loads Claim". Secondly, JRT asserts that its haulage charges fell to be adjusted annually pursuant to its contractual arrangements with Rockwool but the appropriate adjustments were not made. A schedule to the particulars of claim puts the resulting loss at £3,697,401.37. I shall refer to this part of JRT's claim as "the Clause 7 Claim". The total sought by JRT is stated in the particulars of claim to be £8,208,937.38 (although that is not precisely the aggregate of £4,433,266.17 and £3,697,401.37).
Rockwool now seeks to have the proceedings struck out under CPR 3.4(2)(a) and/or for summary judgment to be entered in its favour under CPR 24.2(a)(i) and (b). However, it was common ground before me that, in the circumstances of this case, CPR 3.4 adds nothing important to CPR 24. I can therefore concentrate on whether summary judgment should be granted.
Contractual documentation
The earliest contractual document in evidence is an agreement made in 2000. The agreement ("the 2000 Agreement") was stated to run for three years from 1 June 2000, with the possibility of extension until May 2005, and provided for JRT to provide a variety of services. In particular, it undertook "to supply and manage all of the UK mainland transport requirements on behalf of [Rockwool]".
In 2002, JRT told Rockwool that the 2000 Agreement was becoming increasingly uneconomic. New contractual arrangements were agreed as an interim measure. A written agreement ("the 2002 Agreement") was entered into in respect of the period between 1 June and 31 December of 2002. This included, as clause 9(c), the following provision:
"Except as set out elsewhere in this Agreement, [Rockwool] shall provide a minimum of 30 loads per day (Monday to Friday) excepting the weeks that include Bank Holidays and Rockwool planned shutdowns notified to [JRT]. Any failure on Rockwool's part to provide such loads will result in [JRT] being entitled to be paid £225 for each load less than 30".
The agreement also stated (in clause 2):
"After 31st December 2002, [JRT] confirms that it will discuss the possibility of a further Agreement with Rockwool which may include any warehousing requirement; any Rockwool on site shunting services and the provision of vehicles for the completion of a reduced number of loads per day, currently anticipated to be in the order of 10-15 loads per day".
Rockwool proceeded to put its hire and haulage services out to tender. JRT tendered, and was ultimately chosen as a service provider. Paragraph 24 of the particulars of claim states that the invitation to tender documents "estimated" the total number of loads to be about 60 loads per day.
Several agreements were entered into between the parties. The key document for present purposes is the logistics contract for "Full and Multi Drop Loads" ("the 2003 Agreement"). Rockwool's obligations were stated to include these:
"3.2 Rockwool will utilise [JRT] for the delivery of Products within the Territory subject to the following:-
i) Deliveries to Wickes Limited and deliveries of small orders (groupage) are excluded from the Agreement.
ii) Full trailer loads to a single Consignee and multi drop loads (Maximum of three per trip) will be shared equally by post-code destination on a daily basis between [JRT] and a second haulier who will be directly employed by Rockwool subject to clause 3.2iii) below.
iii) Rockwool reserves the right to utilise a third haulier primarily for deliveries to post code destinations within Scotland and the North East of England. The maximum number of full and multi drop loads offered to a third haulier will be ten per working day up to a maximum of 20% of the full and multi drop loads measured on a daily basis. e.g. If Rockwool has 50 loads or more for delivery on a given day the third haulier will be offered a maximum of 10 loads. If the maximum number of loads available is 30 on a given day then the third haulier will be offered a maximum of 6 loads. Rockwool agrees that the third haulier will be required to deliver to the furthest destinations within Scotland and the North East of England as part of its allocation….
3.6 In the event of an industrial dispute or other event that causes the closure of the production process, Rockwool will guarantee a minimum of 10 loads per day at £275 per load until the end of the Agreement or one month whichever is the sooner."
Clause 6.1 of the 2003 Agreement provided for the charges payable to JRT to be as "set out in Schedule 3", and schedule 3 contained a "Full Load Price Matrix" listing prices for numerous different "districts". For example, the rate for various destinations in Wales was as little as £95, while the cost of a Scottish trip could be as high as £819.06. Rockwool was to "advise [JRT] on a daily basis the Charges they are due for the single drop deliveries in accordance with Schedule 3" (clause 6.2), and JRT was to "invoice Rockwool the additional Charges for multi drop loads or other Charges properly due under this Agreement within five days of the end of the month during which the Charges were incurred" (clause 6.3).
Clause 7 of the 2003 Agreement was headed "Review of Charges". It provided as follows:
"7.1 Charges may be increased or decreased on the anniversary of the Contract Year to reflect cost movements resulting from the effects of inflation or deflation or other cost movements beyond the control of [JRT] and
i) the revised Charges will come into effect at the commencement of the new Contract Year and
ii) in the event that the Charges are not agreed in writing until after the commencement of a new Contract year any changes to any Charges, which are subsequently agreed by the Parties, will be treated as having taken effect as at the commencement of such Contract Year.
7.2 [JRT] shall have the right to amend the Rentals at any time as a result of cost increases arising from changes in legislation or regulation and shall use its reasonable endeavours to provide 30 days notice to Rockwool.
7.3 The Charges relating to transportation have been calculated on the basis of a fuel cost of 61.64 pence per litre of diesel. Rockwool recognizes that movements in diesel fuel prices, whether resulting from market conditions or from Government intervention or legislation are outside the control of [JRT]. Accordingly, the Charges shall be adjusted to reflect changes in fuel cost as follows:
7.3.1 The Charges shall be adjusted to reflect the actual price of diesel paid by [JRT] at the Commencement Date.
7.3.2 Thereafter, in the event that diesel fuel prices increase or decrease by more than 2.0 percent when compared to the last price of diesel used to compute the Charges, the Charges shall be adjusted to reflect such increase or decrease and a revised price matrix issued. This will be on the basis that fuel represents 26% of [JRT's] costs."
Clauses 12 and 23 of the 2003 Agreement dealt respectively with "Claims" and "Waiver". Clause 12 provided for "[a]ny claims of whatever nature arising out of the performance of the Services" to be "notified by the relevant party to the other in writing within a reasonable time of having learned of such a claim". Clause 23 stated that "[n]o failure to exercise and no delay in exercising any right power or privilege hereunder" was to "operate as a waiver thereof".
The 2003 Agreement was varied a number of times. The first variation was effected in 2004 by a document the front sheet of which recorded that the document had been prepared by Mr Paul Johns, JRT's managing director, for Ms Janet Tupman, who was a manager with Rockwool, and which also stated:
"All other terms not included in this document as per previous contract 2002 to 2004".
The section of the document concerned with "full loads" was in these terms:
"Charges as of 1st April 2004
* As per 2004 Rate Schedule supplied.
Terms and Conditions
* Prices assume a contract until 28th February 2007.
* Prices assume work allocation as per current allocation, i.e. current [JRT] and Edwards Logistics load allocation, i.e. 60% plus of total full outward loads produced at Rockwool Pencoed.
* Prices assume [JRT] have exclusive use of 218 Rockwool contract trailers.
* Annual reviews on proven costs ~ increases and decreases.
* Rockwool will require an operational review at the end of 2005.
If there are any significant Rockwool operational/production changes, [JRT] will be asked to review their charges to reflect these changes, and if these charges are agreed, the contract will run until 28th February 2007. If agreement is not reached, 3 months notice to terminate the contract can be given by either parties."
The 2003 Agreement was varied again, in a similar way, in 2007 ("the 2007 Agreement"). This time, the front sheet stated, "All other terms not included in this document as per previous contract signed in 2002," but it seems clear that the "2002" was a mistake and that the document should in fact have referred to the 2003 Agreement. The section dealing with "full loads" read:
"Charges as of 8th March 2007
* 7% increase on all rates excluding Scotland.
Terms and Conditions
* To be effective from Wednesday 8th March 2007.
* Based on a fuel price of 78.15 pence per litre.
* Work allocation 225 – 260 full loads per week plus all Eurobond deliveries.
* Rates inclusive of current Severn Bridge rate @ £ 15.30
* Based on a contract until 30th June 2008.
* Rates to remain effective until 30th June 2008 excluding fuel increases and any increases due to government legislation.
* Fuel increases to be based on fuel being 32.5% of overall cost.
* Manitou deliveries plus £ 75 per delivery. [JRT] to provide 1 Manitou fork truck and 3 suitable trailers to provide this service."
A third variation was agreed in 2008 ("the 2008 Agreement"). On this occasion, the front sheet stated, "All other terms not included on this document as per previous contract signed in 2002, all figures quoted ex VAT"; once again, the "2002" must be a mistake. Under the heading "Charges as of 1st August 2008", rates were stated to be "as per existing" subject to some specified exceptions (so that, for example, the rate for Birmingham was given as £305). A page headed "Full load terms & conditions" provided as follows:
"Rates to be effective from 1st September 2008. To remain fixed until 31st August 2010 excluding increases / decreases in fuel / changes in government legislation or operational changes by Rockwool.
Rates based on a fuel price of 103.50 pence per litre. Assuming fuel as 34% of overall cost.
Rates based on a weekly work allocation of :-
Year 1 ~ 225 to 300 full loads per week plus all Eurobond deliveries. Year 2 ~ 275 to 350 full loads per week plus all Eurobond deliveries.
We are confident we have the infrastructure and expansion plan in place within our business to grow in tandem with your business aspirations as the 3rd line becomes fully operational.
Rates inclusive of current Severn Bridge rate @ £ 15.90. Increases / decreases will be added / deducted as and when they occur.
Night Deliveries ~ plus £85 (6pm to 6am) as of 1st October 2008
(Charge not applicable to existing deliveries)
Saturday Deliveries ~ plus £85
Sunday / Bank Holiday Deliveries ~ plus £125
Performance Targets
Full Loads ~ Target 100% minimum requirement 95% on time
Site Deliveries (Full Loads) ~ Target 100% minimum requirement 99% on time"
The final document to which I should refer dates from 2011. JRT contends that this, too, served to vary the 2003 Agreement. Rockwool does not accept that the parties actually agreed the document, at least in all respects. For convenience, however, I shall refer to it as the "2011 Agreement".
The format of the 2011 Agreement was comparable to that of the 2008 Agreement. The section dealing with "full load terms and conditions" began as follows:
"Rates to be effective from 1st August 2011. To remain fixed until 31st July 2012 excluding increases / decreases in fuel / changes in government legislation or operational changes by Rockwool.
Rates based on a fuel price of 115.00 pence per litre. Assuming fuel as 36% of overall cost.
Rates based on a weekly work allocation of :-
Year 1 ~ 150 to 375 full loads per week plus all Eurobond deliveries."
Legal principles
Summary judgment
A summary of the principles that apply to applications for summary judgment is to be found in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch). Lewison J there said (in paragraph 15):
"The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success: Swain v Hillman [2001] 2 All ER 91;
ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]
iii) In reaching its conclusion the court must not conduct a 'mini-trial': Swain v Hillman
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725."
Contractual interpretation
As Lord Clarke noted in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900 (at paragraph 14), echoing Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 and Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] AC 1101, the "ultimate aim of interpreting a provision in a contract, especially a commercial contract, is to determine what the parties meant by the language used, which involves ascertaining what a reasonable person would have understood the parties to have meant". As Lord Clarke also said (at paragraph 14), "the relevant reasonable person is one who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract". "The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent" (Lord Hoffmann in the Investors Compensation Scheme case, at 913), but "it is always admissible to look at a prior contract as part of the matrix or surrounding circumstances of a later contract" (Rix LJ in HIH Casualty and General Insurance Ltd v New Hampshire Insurance Co [2001] EWCA Civ 735, [2001] 2 Lloyd's Rep 161, at paragraph 83), though "a cautious and sceptical approach to finding any assistance in the earlier contract" is "a sound principle".
The Minimum Loads Claim
The Minimum Loads Claim is advanced by JRT on the basis (as is explained in paragraph 43 of the particulars of claim) that Rockwool "agreed to allocate a minimum of 225 full or multi drop loads from 8 March 2007, varied to a minimum of 275 full or multi drop loads from 1 September 2009, varied to a minimum of 150 loads from 1 August 2011". According to paragraph 39 of the particulars of claim, the 2008 Agreement:
"evidenced an oral or partly oral agreement and/or set out an agreement between the parties that there would be a minimum allocation of full and multi load drop deliveries by [Rockwool] to [JRT] of 225 per week from 1 September 2008 to 31 August 2009, and 275 from 1 September 2009 to 31 August 2010, plus all Eurobond deliveries in addition".
Similarly, the 2011 Agreement is said (in paragraph 42 of the particulars of claim) to evidence "an oral or partly oral agreement" and/or to set out "an agreement that the minimum load allocation by [Rockwool] to [JRT] was further varied so as to be reduced to 150 full or multi drop loads, excluding Eurobond deliveries".
Mr Ian Mill QC, who appeared for Rockwool with Mr Ben Lynch, argued that the Minimum Loads Claim is bound to fail. According to Mr Mill, neither the 2008 Agreement nor the 2011 Agreement obliged Rockwool to provide JRT with any minimum number of loads. Moreover, there is, Mr Mill argued, no real prospect of JRT establishing that any such obligation arose orally.
In contrast, Mr Hugh Sims QC, who appeared for JRT with Mr Oliver Mitchell, maintained that minimum loads obligations were imposed by both the 2008 and 2011 Agreements and, before them, by the 2007 Agreement. That, he said, flowed from the references in the 2008 and 2011 Agreements to rates being based on specified work allocations or, more baldly, from the 2007 Agreement's:
"Work allocation 225 – 260 full loads per week plus all Eurobond deliveries."
In any event, Mr Sims submitted, the factual matrix requires exploration before the claim is determined. In particular, so Mr Sims suggested, there needs to be enquiry into whether there were, as JRT contends, oral agreements (or components of the agreements).
On balance, however, I agree with Mr Mill that I can conclude at this stage that Rockwool did not undertake any relevant obligation to provide JRT with a minimum number of loads and, hence, that the Minimum Loads Claim must fail. My reasons include these:
i) As JRT's claim relates to the period since November 2008, it depends on the 2008 and 2011 Agreements. Neither document said in terms that Rockwool had to provide JRT with a minimum number of loads each week. Each agreement stated merely that the rates given were "based on" the "weekly work allocation" specified. The wording is thus consistent with the work allocations having been (as Ms Tupman has said in a witness statement) "merely figures used to calculate the rates payable" and giving JRT "the ability to return to Rockwool to seek to renegotiate the rates should the expectations not be met";
ii) Had the parties intended to impose a minimum loads obligation on Rockwool, they could have been expected to make specific provision for weeks containing Bank Holidays and planned shutdowns. It is, I think, inherently improbable that Rockwool would have been prepared to bind itself to supply JRT with, for example, 225 loads in the week beginning 22 December 2008 (which included Christmas Eve, Christmas Day and Boxing Day);
iii) The parties would also, as it seems to me, have been likely to say something about the consequences of a breach if Rockwool had been undertaking a contractual obligation to give JRT a minimum number of loads. The parties can fairly, in my view, be taken to have realised that it could otherwise be very hard to assess what, if any, loss JRT had suffered in consequence, the more so given the widely varying rates payable for different loads (see paragraph 8 above);
iv) Clause 9(c) of the 2002 Agreement had imposed a minimum loads requirement in plain terms and included provision both as to Bank Holidays and shutdowns and the consequences if Rockwool failed to provide the requisite number of loads. That fact makes it the more striking that the 2007, 2008 and 2011 Agreements lacked all these features;
v) Clause 3.6 of the 2003 Agreement, dealing with industrial disputes, was also expressed clearly, using the word "guarantee" and specifying the value of the relevant loads;
vi) It is apparent, in my view, that the contents of the 2008 and 2011 Agreements were not all intended to take effect as contractual terms. Thus, I should not have thought that the passage in the 2008 Agreement beginning "We are confident" can have imposed a contractual obligation. Nor can I see how the "100%" performance target to be found in both the 2008 Agreement and that of 2011 can have operated as a contractual term;
vii) Evidence as to the negotiation of the 2007, 2008 and 2011 Agreements, or what Mr Johns subjectively intended by those documents, is not admissible when considering their construction;
viii) As JRT's managing director and the draftsman of the 2004, 2007, 2008 and 2011 Agreements, Mr Johns would surely be in a position to spell out how and when any relevant oral agreement was concluded. No real detail is, however, to be found in the witness statement he has made. In his statement, Mr Johns took issue with the proposition that "there was no discussion or assurance of any minimum level of work" when the 2003 Agreement was entered into and said that it was his understanding that "the 2003 Agreement was negotiated by reference to, and predicated upon an acknowledgment and understanding [JRT] would receive minimum levels of work", but it appears to be common ground that, between 2003 and 2007 Rockwool was under no obligation to provide JRT with specific numbers of loads. Such loads as there were had merely to be shared in accordance with clause 3.2(ii) of the 2003 Agreement; and
ix) The correspondence that Mr Johns and Ms Tupman have exhibited also lends no support to the supposed oral agreements. It includes, for instance, emails of 21 June 2007, 28 April 2008, 25 September 2008 and 14 April 2010 in which Mr Johns complained about the levels of loads that JRT was receiving but without anywhere alleging that Rockwool was in breach of any minimum loads obligation.
The Clause 7 Claim
The Clause 7 Claim is based on clause 7.1 of the 2003 Agreement. As already mentioned, that stated that charges "may be increased or decreased on the anniversary of the Contract Year to reflect cost movements resulting from the effects of inflation or deflation or other cost movements beyond the control of [JRT]". According to the particulars of claim, "the charges have not been adjusted as required by the 2003 Agreement".
The schedule to the particulars of claim assumes a cost per load of £225 in 2002 and applies successive increases (or, in one year, a decrease) by reference to the retail prices index. On this basis, the cost per load is put at £274.67 between May and December of 2008, £273.30 during 2009, £285.87 in 2010, £300.74 in 2011, £310.36 in 2012, £319.98 in 2013 and £325.74 between January and May of 2014.
In my view, the Clause 7 Claim cannot possibly succeed as regards the periods with which the variation agreements dealt. For example, the parties agreed in the 2008 Agreement on rates "effective from 1st September 2008" and that those rates were to "remain fixed until 31st August 2010 excluding increases / decreases in fuel / changes in government legislation or operational changes by Rockwool". In the circumstances, it cannot be open to JRT to contend that the rates as at 1 September 2008 were other than those agreed in the 2008 Agreement or that those rates were other than fixed until 31 August 2010, subject only to any adjustments under clause 7.2 of the 2003 Agreement (cost increases arising from changes in legislation or regulation), under clause 7.3 of that agreement (to reflect changes in fuel cost) or in respect of "operational changes by Rockwool". Likewise, since the 2011 Agreement similarly stated that rates were to be "effective from 1st August 2011" and to "remain fixed until 31st July 2012 excluding increases / decreases in fuel / changes in government legislation or operational changes by Rockwool", JRT cannot be entitled to dispute that the rates in question were those applicable as at 1 August 2011 and fixed until 31 July 2012 (subject to the possibility of adjustments on the same grounds as those agreed in 2008). It follows, I think, that there can be no question of JRT having a claim under clause 7.1 of the 2003 Agreement except in relation to (a) the period between 1 September 2010 and 31 July 2011 and (b) the period from 1 August 2012.
Mr Mill argued that a claim with regard to even these periods must necessarily fail. He submitted that the use of the word "may" in clause 7.1 is reflective of the fact that there was no obligation on the parties to agree any increase or decrease and said that the provision would anyway amount to no more than an (unenforceable) agreement to agree. Mr Sims, however, maintained that the "may" is explicable by the simple fact that a relevant cost movement might or might not occur; that there would have been no need for contractual provision to permit the parties to discuss and, if able to do so, agree adjustments; and that the fact that JRT did not mount a claim under clause 7.1 at the time does not matter (compare e.g. Amherst v James Walker Goldsmith & Silversmith Ltd [1983] Ch 305 and Idealview Ltd v Bello [2009] EWHC 2808 (QB), [2010] 1 EGLR 39). In the end, I have concluded that, while Mr Mill's contentions are not without substance, they are not in this respect so compelling as to justify summary judgment in his favour.
There are, however, other objections to the present version of the Clause 7 Claim so far as it relates to the periods between 1 September 2010 and 31 July 2011 and from 1 August 2012. In the first place, any claim under clause 7.1 of the 2003 Agreement must take as its starting point the rates actually in operation at the relevant time. If, for instance, a claim is to be mounted for an increase in rates between September 2010 and August 2011, it must be on the basis that all (or conceivably some) of the various rates fixed by the 2008 Agreement fell to be increased "to reflect cost movements resulting from the effects of inflation or deflation or other cost movements beyond the control of [JRT]" (to quote clause 7.1). Neither of the costs per load specified in the particulars of claim for 2010 or 2011 (viz. £285.87 and £300.74) is likely to be of any relevance. A second point is that it is probably necessary to look beyond the retail prices index. Clause 7.1 may well demand an analysis of the implications for JRT's costs of inflation or deflation, and specific account may need to be taken of the fact that changes in fuel prices and costs increases arising from legislation or regulation are specifically catered for elsewhere in clause 7.
In the circumstances, I do not think any of the Clause 7 Claim can stand in its present form. On balance, however, I consider that JRT should be given a chance to reformulate its claim in respect of the periods between 1 September 2010 and 31 July 2011 and from 1 August 2012. In a re-worked form, such a claim could have a real prospect of success and, accordingly, not be susceptible to being dismissed under CPR Part 24.
Conclusion
I can summarise my conclusions as follows:
i) The Minimum Loads Claim should be dismissed;
ii) The Clause 7 Claim should also be dismissed in so far as it relates to periods other than those between 1 September 2010 and 31 July 2011 and from 1 August 2012; and
iii) JRT should be given an opportunity to re-formulate its Clause 7 Claim as regards the periods between 1 September 2010 and 31 July 2011 and from 1 August 2012. |
MRS JUSTICE NICOLA DAVIES:
Before the court are applications in three libel actions brought by the claimant against the publishers of three newspapers; the Independent (HQ14D05024) print and online; the London Evening Standard (HQ14D05025) print and online; the Huffington Post UK (AOL(UK) Limited ("AOL") (HQ15D00253) online only. The claims arise from articles published by the defendants which make substantially the same allegations of the claimant. In summary they are that the claimant became violent towards his ex-wife within months of marrying her causing her to leave and disappear with their infant son. The claimant contends that these allegations are defamatory of him both at common law and pursuant to section 1 Defamation Act 2013 ("the 2013 Act").
The Defendants have issued application notices pursuant to CPR 3.1 seeking a trial of the following preliminary issues:
i. An application issued by the defendant in the AOL action seeking an order that there be a trial of the following preliminary issues:
a) whether the publication of the words complained of has caused or is likely to cause serious harm to the reputation of the claimant within the meaning of section 1 of the 2013 Act;
b) whether pursuant to the principles established in Jameel (Yousef v. Dow Jones & Co. Inc [2005] QB 946 the pursuit of the claimant's claim constitutes an abuse of the court's process;
c) that the claimant's application for the trial of a preliminary issue as to whether the words complained of bear the meaning attributed to them at paragraph 6 of the Particulars of Claim be combined with a trial of the two preliminary issues at (a) and (b) above.
ii. The defendants in the Independent and Evening Standard actions seek orders that the following issues be tried as preliminary issues namely:
a) whether the publication referred to in paragraphs 5 and 6 of the Particulars of Claim in the meanings pleaded in paragraph 7 has caused or is likely to cause serious harm to the reputation of the claimant within the meaning of section 1 of the 2013 Act;
b) whether the publication was understood to refer to the claimant.
Defences have been entered in the Independent and Evening Standard actions. No Defence has been entered in the AOL action. In the event that the court orders a hearing of the preliminary issue it is not intending to serve a Defence until the determination. On 11 March 2015 Sir David Eady sitting as a Judge of the High Court handed down judgment as to the issue of meaning in the actions against the Independent and Evening Standard ([2015] EWHC 620 (QB)).
The Particulars of Claim in all three actions plead identical introductory paragraphs. Paragraph 1- 3.2 states:
"1. The Claimant is a French national. He is an aerospace engineer, and a teacher and instructor in the aviation and aerospace sector. He currently works as a teacher at an air military college in Abu Dhabi UAE and resides in Dubai, UAE.
2. On 26 February 2010 the claimant married Afsana Begum (also known as Aman, Yahiya and Shukur) ("Afsana"), a British National in London. Since then Afsana has gone by the name of Afsana Lachaux. On 4 April 2010 Afsana gave birth to a son, Louis, of whom the claimant is the father. On 12 August 2012 the Claimant and Afsana were divorced.
3. Further, and if and insofar as it may be relevant, the claimant has and at all material times has had substantial, well-established, connections to this jurisdiction, and an established reputation here. In support of these contentions but without prejudice to the evidence that will be adduced in this connection, the claimant will rely on the following facts and matters:
3.1 At all material times the claimant has had a significant number of friends and acquaintances, personal and professional, and some direct relatives (members of the Vazeille family) who are resident within the jurisdiction. In particular:
3.1.1. The UK, England in particular, is a major aerospace hub, and many of the Claimant's colleagues in previous jobs in the industry have been British nationals and/or resident and working in this jurisdiction. He also has professional connections with individuals who are resident in this jurisdiction, in particular persons working for companies which operate in the aviation and aerospace sector.
3.1.2 Among the Claimant's current colleagues, several are British nationals, including his Program Chair. Some of these are ordinarily resident in this jurisdiction, and are working only temporarily in Abu Dhabi.
3.1.3 At all material times the claimant has used and/or has been registered with specialist aviation and aerospace-sector recruitment agencies based and operating within this jurisdiction, for example, Resource Consulting Limited based in Worcester, and VHR, based in London.
3.1.4 Further, as pleaded above, the claimant was married to his ex-wife Afsana in England. She is a British national and has a wide circle of relatives, friends, and acquaintances, personal and professional, resident within the jurisdiction. The claimant became known to many of them as a result of their marriage.
3.2 Further, as regards the claimant's son Louis, although Louis is resident in Dubai with his father and will continue to reside with him there, it is reasonably to be anticipated that at some time in the future he will start to spend time with his mother and her family in this jurisdiction, and that as a result the claimant himself is likely to spend an increasing amount of time here."
AOL Action
The substance of the claimant's case as to meaning and serious harm is set out in paragraphs 5 to 7.7 of the Particulars of Claim as follows:
"5. Between about 20 January 2014 and about 17 September 2014, in an article headed "British Victim of Domestic Abuse Faces Prison in the UAE" by Rori Donaghy, the Defendant published on the Huffington Post UK website (www.huffingtonpost.co.uk/rori-donaghty/domestic-abuse-uae b 4631202.html) and caused to be published on the www.huffingtonpost.com and m.huffpost.com websites, both within this jurisdiction and in Dubai, the following words defamatory of the Claimant:
"British Victim of Domestic Abuse Faces Prison in the UAE
When Afsana Lachaux left her job as a senior civil servant four years ago in London as a newly wed to start afresh in Dubai, but she could never have imagined how that dream would swiftly turn into a nightmare. A victim of domestic abuse, Afsana took her baby and bravely left her partner three years ago, but has been trapped in Dubai ever since as her ex-husband has exacted a prolonged campaign of intimidation and harassment against her
Now on 21 January, she will appear in court accused of kidnapping her own child, as she suffers the consequences of the Emirati legal system that affords little protection for victims of domestic violence. British officials have proved to be ineffective, with politicians repeatedly saying they must respect the UAE's legal system and recommending lawyers that turn out to be corrupt.
Afsana Lachaux, a 46 year old British citizen of Bangladeshi origin, had her passport taken from her in June 2011 after her abusive ex-husband used his influence with Emirati authorities to obtain an indefinite travel ban on her and her three –year-old son. Since then she has been forced to live in abject poverty, reliant on support from her two adult sons working in London and seen her health deteriorate swiftly.
The ex-husband a wealthy foreign exchange dealer, told her that he would 'destroy her' at a divorce hearing and has successfully used the Emirati legal system to do just that. At a trial held in her absence, he was granted sole custody of their child after a judge ruled she was an unfit mother due to neglect on the basis that her child has eczema. In October 2013, after more than a year of living in hiding. Afsana's ex-husband snatched their child after finding out where they were living.
Emirati authorities have been complicit in this tale of abuse as well. In June 2011 Afsana and her young child were thrown in Bur Dubai prison for several hours during which time they were denied access to food and water. Whilst detained Afsana says a police officer physically assaulted her. For the next year she repeatedly complained to the public prosecutor about the abuse, threats and intimidation she had experienced but her complaints were ignored and the public prosecutor is alleged to have said 'it is not his concern if she and the child lived or died.'
British authorities have been little better, as they have consistently batted off the family by saying they must respect the Emirati legal system. Worse than inaction has been the terrible legal advice provided by the British Embassy, who have recommended 3 lawyers to Afsana's family, all of whom took large sums of money from them and then refused to attend court to represent her.
Sadly, Afsana's experience of authorities failing to investigate allegation of abuse against her, whilst accepting cases submitted by her alleged abuser echoes the experience of many who suffer domestic abuse in the UAE. There are no official statistics for domestic abuse, but legislation that permits the 'chastisement' of wives and children demonstrates a legal system that does not afford sufficient protection for the most vulnerable groups in society.
Although the Dubai Foundation for Women and Children (DWFC) reported a 36% rise in domestic violence cases during 2012, there remains concern that underreporting may be an issue. As when Afsana went to the government run DWFC, staff were legally obliged to inform her husband of her whereabouts as stipulated by Emirati law.
If a woman cannot have their fundamental rights to security protected by refuges, and when legislation effectively legalises acts of domestic violence, it is highly likely that cases of abuse will go unreported by women who possess no recourse to justice.
The courts of the UAE have been manipulated to allow for an alleged perpetrator of domestic abuse to criminalise his victim, when a legal system should provide protection for women in these circumstances. For a country that seeks to project itself as progressive and liberal, as seen when Dubai recently won the right to host the World Fair in 2020, it is a complete contradiction in terms for this kind of incident to take place.
Emirati authorities and British officials must do more. If authorities in the UAE want to live up to an image of being a place where the world lives together cohesively, they must reform a legal system that allows for victims of domestic violence to become the criminal. British officials need to step up to the mark and provide proper assistance to Afsana Lachaux, by pressuring authorities into dropping all charges and returning her passport so that she can come home as soon as possible.
Sadly, the way things stand, Afsana will appear in court to face unjust charges of kidnapping her own child when it is her ex-husband who should be in court to answer why he has abused this woman and his son in such deplorable ways."
6. In their natural and ordinary and/or inferential meaning the words meant and were understood to mean that:
6.1.while he was still married to and living with his ex wife Afsana, the claimant subjected her to physical abuse which she bravely left him to escape, taking their baby son with her;
6. 2 the Claimant falsely accused Afsana of kidnapping their son, a false charge which had unjustly left her facing jail in the UAE, when the truth was (as he knew) that she had justifiably taken him away with her to escape his abuse;
6.3 the claimant improperly threatened Afsana at a divorce hearing telling her that he would 'destroy' her; and
6.4 having tracked down Afsana after more than a year of living in hiding, the claimant snatched their son back from her without justification and with callous disregard for his welfare.
7. Further, for the purposes of section 1(1) of the Defamation Act 2013, the publication of the said words or statement has caused and/or is likely to cause serious harm to the reputation of the claimant. In support of this contention the claimant will rely on the following facts and matters:
7.1 The said words conveyed the imputations of an concerning the claimant set out in paragraph 6 above.
7.2 These imputations were, in the common law sense, very seriously defamatory of the claimant.
7.3 As pleaded at paragraph 3 above, the claimant has substantial connections with this jurisdiction and a reputation to protect here, both now and in the future. As regards the future, it is by no means an unlikely prospect that at some point in the future the claimant will wish to live here, as he is entitled to do, not least having regard to the fact that:
7.3.1 he works in the aerospace and aviation sector; and/or
7.3.2 his son Louis has a British mother, who may choose in the future to exercise his right to take British citizenship and to study and/or live here.
7.4 The claimant was readily identifiable from the words complained of. His surname is a relatively distinctive one, both in this jurisdiction and in Dubai.
7.5 The words complained of were published on the Huffington Post UK website and on two other Huffington Post Internet platforms which, as set out in paragraph 4 above, have a very substantial readership in this jurisdiction and in Dubai.
7.6 The said words were published on those websites continuously for almost eight months.
7.7 In the premises, it is reasonably to be inferred that the words complained of have been read and/or drawn attention to by a very large number of readers. Without limiting the generality of this contention, reliance is placed on the fact that by mid-August 2014 the article as published on the Huffington Post UK website was recording that it had received 468 Facebook Likes and 131 Facebook Shares, and that it had been Tweeted 579 times."
The Independent
The substance of the claimant's case as to the defamatory words and serious harm is set out in paragraphs 5 to 8.7 of the Particulars of Claim as follows:
"In an article by Alaistair Sloan headed "British mother faces jail in Dubai after husband claims she kidnapped their son" published on pages 16 and 17 of the print issue of The Independent for 25 January 2014, the Defendant published or caused to be published, both within this jurisdiction and in Dubai, the following words defamatory of the claimant.
"British mother faces jail in Dubai after husband claims she kidnapped their son".
Family of Afsana Lachaux claim UK is unwilling to help for fear of risking jet deal.
[insert to photograph] Afsana Lachaux from Poplar, east London, moved with her husband to Dubai where she gave birth to her son, Louis.
The family of a British woman trapped in the United Arab Emirates and facing charges of kidnapping her young son have accused the UK authorities of abandoning her.
Afsana Lachaux, 46, from Poplar, east London, was a British civil servant when she met a wealthy French currency dealer who she married in 2010. The couple moved to Dubai where she gave birth to their son, Louis.
Four months later, the family claim, her husband became violent. They also claim he hid Louis's French passport, and refused to allow him to be registered as a British citizen. Fearing for her own safety, they say Ms Lachaux escaped, taking Louis with her.
She tried to return to the UK, but her husband secured a travel ban from a Dubai court and requested that her passport be confiscated. He also initiated divorce proceedings and won custody of Louis.
Mrs Lachaux turned to the UK consulate for help. At first, says her son Rabbhi Yahiya, 26, officials referred her to a refuge for victims of domestic violence. But, he added, they didn't realise the refuge was legally bound to notify her husband once she checked in.
Mrs Lachaux was forced on the run again. She again contracted the consulate and was advised to go to the police station to face charges of libel her ex-husband had brought.
There she was physically assaulted by a police officer, her son claims and, Louis was denied food and water.
Then in October, when his mother was meeting a friend, her ex-husband snatched Louis from her arms. She has not seen him since.
Ms Lachaux's ex-husband filed a further case against her for kidnapping, and if found guilty, she could face several years in prison.
Mr Yahiya says he has written several letters to the Foreign Office to no avail. 'As a family, we are disgusted with the way they have handled my mother's case.' he said.
In the past year, Prime Minister David Cameron and Foreign Secretary William Hague have made official trips to Dubai in a bid to secure a lucrative sale of Eurofighter Typhoon military jets.
'Most of our calls were never returned. They don't want to jeopardise the sale,' claimed Mr Yahiya.
Rori Donaghy, director of Emirates Centre for Human Rights, added: 'The British government have failed to support Afsana, because they were seduced by the deal'. Meanwhile Nick McGeehan, Middle East Director for Human Rights Watch, said the 'UAE's laws discriminate against women', meaning 'Mrs Lachaux cannot be guaranteed a fair trial.'
Mrs Lachaux's MP, Labour's Jim Fitzpatrick told The Independent:
'The way Afsana Lachaux has been treated is appalling. As a woman in a Muslim county the authorities there have taken the word of the man as true.'
A foreign Office spokesperson said: 'We cannot interfere in the judicial process of another country. We will continue to provide consular assistance to the family.'"
6. The said article, comprising substantially the same words, was also published on the Website on about 24 January 2014 (http://independent.co.uk/news/uk/crime/british-mother-afsana-lachaux-faces-jail-in-dubai-after-husband-claims-she-kidnapped-their-son-9084171.html). The article has been published there continuously since that date and remains on the Website to this day. The only difference between the original online and print versions of the article are as follows:
6.1 The headline of the online version is "British mother Afsana Lachaux faces jail in Dubai after husband claims she kidnapped their son"; the words "Afsana Lachaux" after the word "Family".
6.2 The standfirst (the words immediately under the headline) in the online version is "Family claim UK is unwilling to help for fear of risking jet deal", whereas the print version includes the words "of Afsana Lachaux"after the word "Family".
6.3 The inset wording underneath the photograph in the online version is "Family claim UK is unwilling to help for fear of risking jet deal", while in the print version it is "Afsana Lachaux from Poplar, east London, moved with her husband to Dubai where she gave birth to her son Louis".
7. In their natural and ordinary and/or inferential meaning the words complained of (both in their print and online manifestations) meant and were understood to mean that the claimant:
7.1 became violent towards his ex-wife Afsana soon after the birth of their son, which caused her, fearing for her safety, to escape and go on the run with the child;
7.2 having tracked Afsana down, callously and without justification snatched their son back from his mother's arms; and
7.3 Falsely accused Afsana of kidnapping their son, a false charge which if upheld could result in her, quite unfairly and wrongly, spending several years in a Dubai jail.
8. Further, for the purposes of section 1(1) of the Defamation Act 2013, the publication of the said words or statement has caused and/or is likely to cause serious harm to the reputation of the claimant In support of this contention the claimant will rely on the following fats and matters:
8.1 The said words conveyed the imputations of and concerning the claimant set out in paragraph 7 above.
8.2 These imputations were, in the common law sense, very seriously defamatory of the claimant.
8.3 As pleaded at paragraph 3 above, the claimant has substantial connections with this jurisdiction and a reputation to protect here, both now and in the future. As regards to the future, it is by no means an unlikely prospect that at some point in the future the claimant will wish to live here, as he is entitled to do, not least having regard to the fact that:
8.3.1 he works in the aerospace and aviation sector; and/or
8.3.2 his son Louis has a British mother, who may choose in the future to exercise his right to take British citizenship and to study and/or live here.
8.4 The Claimant was readily identifiable from the words complained of. His surname is a relatively distinctive one, both in this jurisdiction and in Dubai. Furthermore, the words complained of have been published at all times in juxtaposition with a prominently displayed and clear photograph of Afsana, making it all the more likely that readers, especially those who came into contact with Afsana and the claimant when they were sill married, would identify the claimant with the offending imputations.
8.5 The words complained of were published in the print version of The Independent, a national newspaper which, as set out in paragraph 4 above, has a very substantial readership within this jurisdiction and a substantial readership in Dubai.
8.6 The said words have also been published continuously on the Website for around ten months. They continue to be published on the Website to this day. As set out in paragraph 4 above, the Website has a very substantial readership both within this jurisdiction and, it is reasonably to be inferred, in Dubai.
8.7 In the premises, it is reasonably to be inferred that the words complained of have been read by a very large number of readers of The Independent within this jurisdiction and in Dubai.
The Evening Standard
The substance of the claimant's case relating to the defamatory words and serious harm is set out at paragraphs 5 to 7.7 of the Particulars of Claim as follows:
"In an article by Susannah Butter headed "Dubai's a small place – he took Louis in an instant" published in the print issue of London Evening Standard for 11 February 2014 and on the Website from about 10 February 2014 onwards and on a continuing basis (http://www.standard.co.uk/lifestyle/london-life/dubais-a-small-place--he-took-louis-in-an-instant-9119014.html), the Defendant published or caused to be published, both within this jurisdiction and in Dubai, the following words defamatory of the Claimant:
"'Dubai's a small place – he took Louis in an instant'
Today a London mother goes to court accused of abducting her own three-year-old. Her older son tells Susannah Butter how escaping a troubled marriage left Afsana Lachaux facing jail abroad after her ex-husband 'snatched' their child
Today, in a Dubai courtroom, more than 4,000 miles away from home, a jury will decide if Afsana Lachaux is guilty of kidnapping her three-year-old son Louis from her ex-husband.
The 46-year-old former civil servant from Popular may never see her child again. Her older son from a previous marriage, Rabbhi Yahiya, 26, says: 'Unless the British Government intervenes, my mum risks going to jail for something she didn't do, after which she will be deported and lose her son. All she did was leave an abuser.'
Despite being accused of kidnapping, Lachaux hasn't seen her three-year-old since October last year, when her ex-husband allegedly took him out of his pushchair in the street. The case has cost the family a 'debilitating' £70,000 in legal fees and left an 'overriding feeling of helplessness'.
The exact charges relate to Lachaux not bringing her son to a custody visit with her ex-husband, who cannot be named for legal reasons, in March 2012. But Yahiya, who works for the British Council, gives his mother's version of events. 'She didn't turn up because on previous visits she was assaulted by him in public. She told the police but they did not want to hear it.' The allegations of domestic violence have not yet been tested in any court, and her ex-husband has denied them.
Lachaux is originally Bangladeshi but grew up in east London, where she married and brought up Rabbhi, 26, and his 23-year-old brother. 'She rose up the civil service from local government and worked in regeneration. She was a successful, sociable, headstrong woman. I am proud of her. We liked going to Greenwich as a family.' She and Yahiya's father are divorced.
In 2009 Lachaux told her children she was seeing a French man, a comfortably off avionics engineer based in Dubai. Yahiya says: 'I never asked where they met. We were glad my mum had found someone and was happy.'
They married in summer 2009 in London and moved to Dubai in February 2010. 'It was a big adventure – the first time my mom had lived abroad. They were in love and planning to have a child so she was excited. Now I remember that he seemed reserved and only his brother and parents came to the wedding but at the time I didn't question it. It was a happy time.'
Louis was born two months premature, in April 2010, and shortly afterwards Yahiya stopped hearing from his mother as frequently. 'We thought it was odd that she hadn't brought Louis to see us. In November we Skyped.'
He recounts what he heard that day. 'She told me he had beaten her and showed me the bruises. She was crying, which I'd never seen her do before. She told me that since Louis was born her husband had become controlling. He refused to let her register Louis as a British citizen, got him a French passport and hid it with his birth certificate outside the house. The impression I got was that he didn't want her to take Louis anywhere without him. A woman can't work in the United Arab Emirates without her husband's permission so she was confined to the house. Eventually she told the police but they just said, "Go home to your husband". It's seen as the man's right to chastise his spouse there.'
A year later, Yahiya persuaded her to escape. 'I went to Dubai in April 2011. We fled but couldn't leave the country because we didn't have Louis's passport.' They stayed in hotels and rented apartments but, according to Yahiya, things got worse. 'In June 2011 she was taken to Bur Dubai police station for "absconding". She and Louis were put in the same cell where a British man had allegedly been beaten to death by guards a month earlier.'
Yahiya says she was locked up for four hours in 40-degree heat and denied food and water. 'While she was holding her one-year-old and asking why she was there, a prison guard pushed her in the face.' Although Lachaux had never been charged with any offences, her passport was confiscated by Dubai police.
Her husband obtained visiting rights to see Louis, so every week Lachaux would meet him in the park. According to what his mother told Yahiya: 'Once he tried to snatch Louis and it badly bruised his head,' Yahiya alleges. 'She went to the police but they said they didn't care if she lived or died.'
She went to the Dubai Foundation for Women and Children in February 2012. 'It's the only refuge in Dubai and they had a legal obligation to tell her husband where she was. She and Louis shared bunks with illegally trafficked sex workers.'
In March 2012 she went into hiding and stopped the visits – it is for this that she is being prosecuted. 'I told her not to go any more. I was concerned for her.' Yahiya and his brother received an email from her husband, warning that if they went to Dubai he would report them for aiding a kidnap. She lived on the sofas of friends and 'in squalid accommodations, living off noodles' with Louis who, his brother says, is 'sharp and funny'.
And then, on October 29 last year, her husband tracked her down. 'Dubai's a small place. She told me he took Louis – it happened in an instant.' Lachaux hasn't seen her son since.
When she called the British embassy to report the incident they told her that in August 2012 her husband had obtained a divorce in a Sharia court and been given custody. 'My mum didn't even know. Men can do that in Dubai. She was denied custody on claims that Louis had eczema, making her an" unfit mother".' She claimed to Yahiya that she did not know the four witnesses who testified against her.
Since this began, Lachaux's family have been trying to help but the Dubai justice system has proved impenetrable. 'For three years I have been in touch with the Dubai Embassy, the British Embassy there, William Hague and the Middle East ministers. I've told them about every incident but they say they can't intervene in the judicial process of another country. Our MP Jim Fitzpatrick has been supportive, and asked David Cameron to raise my mum's case when he's been there. I've read about an Austrian woman and a Norwegian woman being raped there, and both their governments intervened. Why can't ours do anything to help my mum? Do you understand the frustration?'
The Standard contacted the Dubai police for a response and was referred to the British Consulate in the UAE. The FCO spokesman said: 'Consular staff has been providing assistance to Mrs Lachaux since 2011 including attending court hearings with her. Consular officials have approached the UAE authorities about this case and we will continue to work closely with them. However we cannot interfere in the judicial process of another country. We must respect their systems just as we expect them to respect the UK's legal processes.'
Meanwhile, Yahiya awaits the court case. 'Every time I speak with my mum I try to keep her spirits up. She's still strong but her face has changed. She's so skinny and on tenterhooks the whole time. My family and I would like the British authorities to ask the Dubai government to drop her case, overturn the current custody order and return her passport so that she and her son can come home to London.'"
6. In their natural and ordinary and/or inferential meaning the words meant and were understood to mean that the Claimant:
6.1 became violent and abusive towards his ex-wife Afsana within months of marrying her, beating her and leaving her with bruises on at least one occasion;
6.2 assaulted Afsana in public on custody visits relating to their young son;
6.3 attempted to snatch their son on one custody visit, leaving him with a badly bruised head;
6.4 callously and without justification snatched their son from out of his pushchair in the street; and
6.5 subjected Afsana to the grotesque injustice of facing jail in Dubai for 'abducting' her own child, when in truth she had only fled with him to escape the Claimant's violent abuse.
7. Further, for the purposes of section 1(1) of the Defamation Act 2013, the publication of the said words or statement has caused and/or is likely to cause serious harm to the reputation of the Claimant. In support of this contention the Claimant will rely on the following facts and matters:
7.1 The said words conveyed the imputations of and concerning the Claimant set out in paragraph 6 above.
7.2 These imputations were, in the common law sense, very seriously defamatory of the Claimant.
7.3 As pleaded at paragraph 3 above, the Claimant has substantial connections with this jurisdiction and a reputation to protect here, both now and in the future. As regards the future, it is by no means an unlikely prospect that at some point in the future the Claimant will wish to live here, as he is entitled to do, not least having regard to the fact that:
7.3.1 he works in the aerospace and aviation sector; and/or
7.3.2 his son Louis has a British mother, who may choose in the future to exercise his right to take British citizenship and/or live here.
7.4 The Claimant was readily identifiable from the words complained of. His surname is a relatively distinctive one, both in this jurisdiction and in Dubai. Furthermore, the words complained of have been published at all times in juxtaposition with a prominently displayed and clear photograph of Afsana, making it all the more likely that readers, especially those who came into contact with Afsana and the Claimant when they were still married, would identify the Claimant with the offending imputations.
7.5 The words complained of were published in the print version of the London Evening Standard, a newspaper which, as set out in paragraph 4 above, has a very substantial readership within this jurisdiction.
7.6 The said words have also been published continuously on the Website for over nine months. They continue to be published on the Website to this day. As set out in paragraph 4 above, the Website has a very substantial readership both within this jurisdiction and, it is reasonably to be inferred, in Dubai.
7.7 In the premises, it is reasonably to be inferred that the words complained of have been read by a very large number of readers of the London Evening Standard within this jurisdiction and in Dubai."
Background
The relevant articles were published respectively on 20 January 2014, 24 January 2014 and 10 February 2014. On 27 February 2014 the claimant's solicitors were instructed. The solicitor's letters of claim on behalf of the claimant were not sent until 28 August 2014 (AOL), 22 September 2014 (The Independent) and 23 September 2014 (The Evening Standard). The claimant's solicitors stated that they had spent "a considerable amount of time not only putting together the funding arrangements… but also establishing the facts, collating evidence, and ensuring that our client's case is sound". The defendants, unsurprisingly, took exception to the considerable delay which had occurred between instruction and the letters not least because the complaint was directed to serious harm to the claimant's reputation for as long as any one of the articles remained available upon a defendant's website.
AOL
In a thirteen page letter of response dated 17 September 2014 Lewis Silkin, in clear and trenchant terms, set out the defendant's case point by point. It dealt with the matters raised by the claimant including reference, the issue of whether in fact the claimant is a "foreign exchange dealer" as alleged in the article, what, if any connections the claimant has to the UK, serious harm and delay. It identified the fact that there had been four articles published by the Daily Mail concerning the custody dispute between the client and his ex-wife the first of which was published on 23 January 2014 both online and, it was believed, in hard copy. The articles reported a number of allegations made by Afsana Lachaux against the claimant, which reflect the allegations made in the articles complained of in these proceedings. The articles published subsequently in the Daily Mail online were on 2 February, 13 February and 16 February 2014. The point was made on behalf of the defendant that the claimant does not appear to have raised complaint, still less taken any legal action, in respect of the Daily Mail articles.
No response was received to the letter and on 3 October 2014 the defendant's solicitors again wrote. An apology was offered which included the following:
"The HuffPostUK has received a complaint about this post from Afsana's ex-husband and we accept that the post might fairly be criticised for creating a one sided impression of the couple's dispute; it could have been made clearer that Afsana's allegations of domestic abuse were denied by her ex-husband.
We are happy to put that right and apologise to him for any embarrassment caused."
The article was also taken down from the website.
By a letter of reply dated 6 October 2014 the claimant's solicitors identified their client as an aerospace engineer by training and profession who is currently working as a teacher in the aviation and aerospace sector. Such activity as a foreign exchange trader was by way of a hobby, the claimant's solicitors describing him as "one of those 'amateurs' who like many others, dabbles in forex trading using his own money in his spare time." The letter dealt with many of the points raised in the defendant's letter. Correspondence ensued between the parties which was detailed and dealt at length with the issues raised in the claimant's original letter, the defendant's first letter of response and any subsequent issues. No one reading the correspondence could have been in any doubt as to the stance being taken by the defendant upon the points raised in correspondence.
On 19 January 2015, one day before the expiry of the one year limitation period, a claim form was served accompanied by the Particulars of Claim. On the same day the claimant issued an Application Notice seeking a determination of meaning as a preliminary issue. It is clear from the correspondence that both parties contemplated a preliminary challenge upon the issue of serious harm.
On 27 January 2015 Warby J handed down the Judgment in Ames & anr v. The Spamhaus Project Limited [2015] EWHC 127 (QB) in which he provided guidance as to the appropriate procedural mechanism to adopt for the purpose of determining the issue of serious harm.
The Independent and Evening Standard.
Following the first letter by the claimant's solicitors the defendants responded using in-house lawyers. David Price Solicitors & Advocates were subsequently instructed on behalf of both defendants and raised in correspondence the same matters as had been raised on behalf of AOL. Defences in both actions dated 23 January 2015 plead in detail the respective cases of the defendants. Issue is taken with any connection which the claimant allegedly has with the UK and whether he is identifiable. It is denied that the publication of the words would have caused serious harm to the claimant's reputation or is likely to do so in the near future. Defences of public interest and truth are pleaded.
The Law
The relevant provisions of section 1 of the 2013 Act are as follows:
"1.- Serious harm
(1) A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant………."
In Cooke & anr. v. MGN Limited [2014] EWHC 2831(QB) Bean J (as he then was) determined the question of serious harm (Section 1 of the 2013 Act) as a preliminary issue. He found that the harm had to be serious and not merely substantial, that harm to the claimant's reputation had been or was likely to be caused and for that purpose it was not sufficient to demonstrate serious distress or injury to feelings. The nature and effect of any subsequent apology was a factor to be considered in assessing whether such serious harm was likely to be caused and that while evidence was not required in every case witness statements had been admitted by the court for the purpose of the determination. Of note is the fact that time for the service of the Defence had been extended until after determination of the preliminary issue.
Subsequent to Cooke guidance was given by Warby J in Ames above as to the appropriate procedural mechanism to adopt for the purpose of determining the issue of serious harm. In his judgment at [48-50] Warby J considered the test set out in Section 1 of the 2013 Act and the connection between "serious harm" and the Jameel test which requires a tort to be "substantial" as follows:
"Section 1 of the Defamation Act 2013
48. The major part of the publication complained of by Mr Ames and Mr McGee took place on and after 1 January 2014 and is therefore subject to the requirements of s1(1) of the Defamation Act 2013 which provides that;
1) A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant."
49. This wording does not abolish the principles discussed above. It introduces an additional requirement. The use of the word "serious" obviously distinguishes the statutory test from the common law as stated in Thornton. The threshold identified in Thornton was that the statement should "substantially" affect attitudes in an adverse way, or have a tendency to do so. The Jameel test also requires a tort to be "substantial". As Bean J noted in Cooke v MGN Ltd[2014] EWHC 2831 (QB), [2014] EMLR 31[37], examination of the Parliamentary history of the section shows that the word "serious" was chosen deliberately in place of the work "substantial". It follows that the seriousness provision raises the bar over which a claimant must jump, as compared with the positions established in the two cases mentioned. These Points are spelled out in the Explanatory Notes to the section:-
"The section builds on the consideration given by the courts in a series of cases to the question of what is sufficient to establish that a statement is defamatory. A recent example is Thornton v Telegraph Media Group Ltd in which a decision of the House of Lords in Sim v Stretch was identified as authority for the existence of a "threshold of seriousness" in what is defamatory. There is also currently potential for trivial cases to be struck out on the basis that they are an abuse of process because so little is at stake. In Jameel v. Dow Jones & Co it was established that there needs to be a real and substantial tort. The section raises the bar for bringing a claim so that only cases involving serious harm to the claimant's reputation can be brought".
Put another way it is no longer enough to establish a tendency to have a substantial impact and amount to a real and substantial tort; there is now no tort unless and until "serious harm to reputation" has either been caused or "is likely to" be caused by the publication.
50. In these circumstances it seems to me that an assessment of whether a defamation claim in respect of publication on or after 1 January 2014 should be dismissed on the grounds that the actual or likely harm to reputation is too slight to justify the claim, or grounds that include this proposition, should normally start with consideration of the "serious harm" requirements in s1. The court should ask itself whether one of those requirements is satisfied or, as appropriate, is arguably, or has a real prospect of being, satisfied. If the answer is no, then there is no tort at all and the claim will inevitably be dismissed. If the answer is yes, it may be hard to establish that the tort alleged fails the "real and substantial tort" test."
At [101] Warby J stated:
"In my judgment it is likely in today's legal context to be preferable to address issues of serious harm or Jameel abuse by means of preliminary issues, with any disputes as to meaning being resolved at the same time. …"
As to the issue of Jameel abuse Warby J considered the authority at [27] and following and noted that the question of whether "a real and substantial tort" had been committed within the jurisdiction had been identified as a "threshold criterion" in an application to strike out a claim as an abuse.
The defendants contend that these applications come within the guidance of Warby J in Ames and should be tried as preliminary issues together with the issue of meaning in the AOL case. In response the claimant contends that the applications are premature. Reliance is placed upon the fact that in the AOL action no Defence has been served and thus the ambit of the issues between the claimant and the defendant is yet to be defined. Further, in correspondence Lewis Silkin has indicated that its client intends to rely on a defence of truth and until issue has been joined by the pleading of a Defence and Reply accompanied by Statements of Truth it will not be possible to properly evaluate and make informed decisions as to what are described as the 'pros and cons' of the various alternative trial options. It is submitted that the effect of these applications is to hinder the court in its ability to fulfill its costs management duty pursuant to CPR rule 3.12 (2) since costs budgets have not been exchanged. It is said that it is difficult to envisage how it might be possible for the court properly to manage both the steps to be taken and the costs to be incurred by the parties so as to further the overriding objective. These applications should await a case management hearing when the court will be in a position to properly evaluate the relevant issues.
Conclusion.
The claimant instructed solicitors on 27 February 2014. Six months later, on 28 August 2014, the first letter of claim in these three actions was sent on behalf of the claimant. The claimant and those who act on his behalf had ample opportunity to evaluate and set out in detail the case that was to be met. The letters of claim set out in detail not only the issues but the facts upon which reliance is placed, such detail being replicated in the pleaded Particulars of Claim. The clarity and detail of the initial and subsequent response by solicitors acting on behalf of AOL dealt comprehensively with the issue of serious harm and relevant matters relating to whether or not a substantial tort has been committed.
It is clear from the Explanatory Note to the 2013 Act that the effect of section 1 and the requirement of 'serious harm' is to create a higher hurdle for the claimant and one that is at the threshold of any defamation action. I agree with the approach taken and guidance given by the court in Cooke and Ames above namely that it is appropriate to determine 'serious harm' as a preliminary issue. I regard the issue of 'serious harm' as a threshold condition in any action brought pursuant to the provisions of the 2013 Act. It is moreover, an issue which can be evaluated, in appropriate circumstances without recourse to any pleaded Defence. The claimant brings the action, it is for him to set out his case on this threshold condition. In this case he has had ample time and opportunity to do so. Witness statements can be before the court to assist in the determination of this issue. I am satisfied that there is before this court sufficient fact and detail in all three actions so as to permit it to determine the question of serious harm as a preliminary issue.
The three issues of reference (identification), serious harm and real and substantial tort are all interlinked. If the claimant cannot be identified then he cannot be caused harm. Until serious harm is made out there can be no real or substantial tort. Factually, matters which are relevant to the question of serious harm, for example the connection which the claimant has with the United Kingdom, whether he is identified in the Particulars of Claim which describe him as a French national, make no reference to his occupation as a foreign trader, do not plead his full name - only that he is the ex-husband of Afansa Lachaux - are all interlinked with reference and an abuse argument as to whether there is a real and substantial tort. In my view, common sense together with observance of the overriding objective, requires early determination of serious harm, reference and Jameel abuse so as to enable a determination to be made as to whether these claims should continue. Such a hearing would be at one with the ethos of the 2013 Act namely early identification of issues, where appropriate determination of the same, with consequent saving of time and money. A contention by the claimant that in this case such a course does not take account of the concept of cost budgeting and that such a hearing should await service of further pleadings and a case management hearing, flies in the face of common sense and the aims of the overriding objective.
For the reasons given I am of the view that these applications fall within the guidance issued by Warby J in Ames namely that it is preferable to address issues of serious harm or Jameel abuse by means of preliminary issues with any disputes as to meaning being resolved at the same time. Accordingly the defendants applications are granted. |
MR JUSTICE GILBART :
Introduction
This is a trial of a preliminary issue:
"Whether the scope of (the Defendant's) liability to the Claimant is to be determined in accordance with the law of England or the law of Greece."
The order for a trial of that issue was made by consent by Master Yoxall on 10th November 2014.
On 17th May 2011 the Claimant, who was then aged 25, and who lives in England and Wales, was on holiday on the island of Zakynthos in Greece. She was on the verge of a road on that island when a car left the road and struck her. She suffered grievous injury to her legs. She has since received extensive surgical and other medical and therapeutic treatment. Her right leg has been amputated through the tibia, and her left leg required extensive surgery to repair the knee ligaments. She has had repeated surgery to her legs. She must wear a prosthesis, and also has to use a wheelchair. She continues to suffer from pain and disability. She has also endured a psychological reaction, and an exacerbation of pre-existing depression. She has suffered losses of earnings, and it is claimed that she will be at a disadvantage on the open labour market.
The car in question was registered in Greece. The Claimant's solicitors wrote to the Defendant Motor Insurers' Bureau ("MIB") to obtain insurer details for the vehicle. Upon enquiry, its Greek equivalent considered that the vehicle was uninsured, and that the driver (who was of Albanian extraction and perhaps nationality) was responsible for the accident.
The Claimant has made a claim against the MIB under Regulation 13(2) of the Motor Vehicles (Compulsory Insurance)(Information Centre and Compensation Body Regulations) 2003 (SI 2003/37) ("The 2003 Regulations").
In the Defence, it is admitted that the driver was liable under the law of Greece for the accident. It is admitted that, under the law of Greece, the Greek Guarantee Fund for the purposes of the relevant EU Motor Insurance Directives (of which more below) would be liable to compensate the Claimant. Liability is therefore admitted under Regulation 13, but it is contended that the measure of compensation payable should be assessed in accordance with the law of Greece. This is a case where the level of damages available to a claimant for personal injuries would be higher if assessed according to the laws applying in England and Wales than in Greece. (Although as will become apparent it cannot be assumed that the level of provision is more generous in England and Wales than in all other EU jurisdictions.)
Judgment has been entered for the Claimant by consent on 9th July 2014, and an interim payment made under CPR 25. That was without prejudice to the Defendant's arguments on the applicable law.
The Court of Appeal in Jacobs v MIB [2010] EWCA Civ 1208 [2011] 1 WLR 2609 has held that in a Regulation 13 claim (i.e. the case of a person from England and Wales suffering injury in another EU state at the hands of a culpable but uninsured or unidentified driver, but claiming in England and Wales), the law by which the assessment of compensation is to be made is that of England and Wales. It held that the right to compensation arose under the Regulations. In the judgment of Moore-Bick LJ, he addressed the effect of the coming into force of Regulation (EC) No 864/2007 of the European Parliament and Council on the law applicable to non-contractual obligations ("Rome II") on this issue. Moore-Bick LJ there said that the law applying to the existence of tortious liability has, since Rome II, been the law of the country where the injury was caused, but that the law by which the court makes the assessment of compensation under the 2003 Regulations remains the law of England and Wales. That approach was endorsed in Bloy and Ireson v MIB [2013] EWCA 1543 [2014] PIQR P9. While the comments in the judgment of the Chancellor (Etherton LJ) in that case are obiter on the effect of Rome II, its ratio adopted the interpretation of Regulation 13(2) given in Jacobs.
European Union Directives are not shy of using the traditional Latin names for the concepts involved. Those tags also have the advantage of being succinct and precise, and I shall use one or two. By lex fori is meant the law of the state in which the court dealing with the claim is situated, whereas lex loci delicti is the law of the state where the injury occurred, and in this case refers to Greece. (There are questions that can arise about the location of the relevant damage, but they are addressed in Rome II, and need not detain us here). Rome II applies the lex loci delicti to the issues of both liability and quantum, save in exceptional cases. The Court of Appeal has thus held in Jacobs that the lex fori applies to the assessment of compensation in claims under Regulation 13. However the Court of Appeal has since applied Rome II to actions in tort against the tortfeasor's insurer, including the rule that the assessment of compensation is made according to the lex loci delicti (see Wall v Mutuelle de Poitiers Assurances [2014] EWCA Civ 138 per Longmore, Jackson and Christopher Clarke LJJ)). The Court of Appeal there applied the lex loci delicti to the two issues of liability and the assessment of damages, while matters of procedure - such as the way in which expert evidence would be adduced – was held to be a matter for the lex fori.
The MIB contended in Jacobs and before me that since Rome II, Regulation 13 of the 2003 Regulations cannot be applied so as to provide for a level of compensation different from that obtainable in the country where the accident occurred – i.e. the application of lex loci delicti. The MIB obtained permission to appeal from the Supreme Court in Jacobs v MIB but before the appeal could be made and heard, the Court of Justice of the European Union (CJEU) gave judgment in Homawoo v GF Assurances C-412/10 [2011] ECR 1-11603. That held that Rome II was not in force at the relevant date in Jacobs, so that the appeal would have served no purpose and was not proceeded with. Bloy, which was decided after Jacobs, related to an accident which occurred before Rome II came into effect.
In this case, the MIB argues that this is a case where there can be an appeal straight from the High Court to the United Kingdom Supreme Court. It does so without demur from the Claimant, whose consent to an appeal direct to the Supreme Court under section 12 of the Administration of Justice Act 1969 is recorded in the order of Master Yoxall already referred to. As I indicated to the parties at the hearing, I shall consider whether to make such an order having received submissions in the light of my judgment.
The issue before the Court is twofold:
(a) Does Regulation 13, on its true construction, state that the assessment of claims made under it must be assessed according to the law applying in England and Wales ?
(b) Given that Rome II is an EU regulation and is part of the law of the United Kingdom without the need for any domestic legislative steps to bring it into effect, is the effect of Rome II such that in a case falling within the Motor Insurance Directives, and therefore the 2003 Regulations, the court must now assess compensation in accordance with the law where the accident happened (lex loci delicti) and not that of England and Wales (lex fori)?
Given the existence of what is agreed to be authority binding on me (Jacobs) I can only find for the Claimant on the merits of these arguments. But given the fact that this matter may well be the subject of subsequent appeal, it is right that I should set out the respective arguments of the parties.
To do so, I shall approach the matter under the following heads:
A Levels of damages for personal injury in England and Wales compared to other EU states;
B The law of England and Wales on choice of law until Rome II;
C The relevant Motor Insurance Directives, and the roles of the national compensation bodies such as the MIB;
D Agreement Between Compensation Bodies and Guarantee Funds of 29th April 2002;
E The 2003 Regulations;
F Rome II: Regulation 864/2007 of the European Parliament and of the Council on the law applicable to non-contractual obligations;
G The approaches in Jacobs and Bloy;
H Submissions for the Defendant MIB;
I Submissions for the Claimant;
J Discussion and conclusions.
A Levels of damages for personal injury in England and Wales compared to other EU states
It was common ground before me that there may be situations where the level of damages awarded by a court under the applicable laws of states other than the United Kingdom may be higher. I was presented with a report prepared for the European Commission in 2009 which considered levels of compensation. It shows that in most respects the UK is one of the more generous systems, but not the most generous. Unfortunately, the example chosen for comparison in the report was a case where there is a claim after a death in a road accident. That raises potential problems, as the existence of a claim for wrongful death is undoubtedly a matter for the lex loci delicti - see Cox v Ergo Versicherung AG [2014] UKSC 22 [2014] AC 1379.
I was also provided with some details of the level of general damages for pain, suffering, and loss of amenity set out in the Book of Quantum used in the Republic of Ireland, first introduced in 2004 as part of the move to abolish jury trial in personal injury actions. Comparison with the Judicial College equivalent reveals that some suggested figures are higher, and some lower, than their English and Welsh equivalents. It of course relates only to one aspect of damages. As Mr Beard QC pointed out, claims, and especially those for the more serious injuries, may well involve claims for past loss of earnings, continuing and future losses of earnings, the costs of care and so on. There may also be arguments about the deductibility of benefits paid to an injured person in the form of pensions, disability benefits etc etc.
No firm conclusions can be drawn from the material placed before me. The safest course, and one accepted by both parties, is that one is unable to say whether English/Welsh assessments are more or less generous, either generally or in a particular type of case. Both parties agree that in this case the level of compensation assessed according to Greek law would be lower than that assessed according to the law of England and Wales. But in my judgment one cannot approach matters of interpretation of legislation (whether of European Regulations or Directives, or a domestic statutory instrument) on the basis of the facts of one case, or of a comparison between levels of compensation between two particular countries, or of comparisons in one class of case (say compensation for loss of earnings, or compensation for pain suffering and loss of amenity).
I have referred to this topic because one of the criticisms made by Mr Mercer QC of Bloy is that the Court of Appeal relied on an assumption that the levels of compensation awarded in the United Kingdom would be more generous than those awarded in other EU states. The same matter was addressed in Jacobs albeit rather more diffidently.
B The law of England and Wales on choice of law until Rome II
In Harding v Wealands [2006] UKHL 32 [2007] 2 AC 1 the House of Lords considered the rule in the context of a claim brought in England against an Australian national in respect of injuries sustained in a motor accident in Australia. It affirmed the traditional approach that the assessment of damages was for the lex fori- see Lord Hoffman at [51]-[53].
The United Kingdom is not a signatory to the Hague Convention on the Law Applicable to Road Traffic Accidents 1971, which set some choice of law rules to which I shall refer in due course.
It is to be noted also that the approach in England and Wales was by no means shared by other EU states. Many applied the lex loci delicti to both the issue of liability for the injury, and to the assessment of compensation. When Rome II was undergoing consideration and preparation, the difference between the approaches in various states was noted, but the final version of Rome II reflected the position of the states who apply the lex loci delicti, as I shall refer to in due course.
C The relevant Motor Insurance Directives, and the roles of the national compensation bodies such as the MIB
Between 1972 and 2005 five Motor Insurance Directives were adopted. In October 2009 the Sixth Directive codified those that had preceded it. As Directives (by virtue of Article 288 of the Treaty establishing the European Community as amended by the Lisbon Treaty) they are
" ……. binding as to the result to be achieved, upon each member State to which it is addressed, but shall leave to the national authorities the choice of form and methods"
The First Directive (1972/166/EC) dealt with the provision of motor insurance which covered drivers for accidents anywhere within what was then the EEC. It also provided for a national body (such as the MIB) to guarantee settlement of claims arising in its own state arising from the use of a car normally based in another state.
The Second Directive (84/5/EC) of 30th December 1983 required each member state to set up or authorise a body to provide compensation to those injured by uninsured or unidentified drivers. The MIB is the guarantee body for the purposes of the UK. Given the terms of the 2003 Regulations, it is necessary to set out parts of Article 1[1]
"Article 1
1. The insurance referred to in Article 3 (1) of Directive 72/166/EEC shall cover compulsorily both damage to property and personal injuries.
2. Without prejudice to any higher guarantees which Member States may lay down, each Member State shall require that the amounts for which such insurance is compulsory are at least:
……………………………………………………………………… …
3. …………………………………………………………………………
4. Each Member State shall set up or authorize a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied.
The first sub-paragraph shall be without prejudice to the right of the Member States to regard compensation by that body as subsidiary or non-subsidiary and the right to make provision for the settlement of claims between that body and the person or persons responsible for the accident and other insurers or social security bodies required to compensate the victim in respect of the same accident. ………………………………..
5. The victim may in any case apply directly to the body which, on the basis of information provided at its request by the victim, shall be obliged to give him a reasoned reply regarding the payment of any compensation.
………………………………………………………………………..
6. ………………………………………………………………………..
7. Furthermore, each Member State shall apply its laws, regulations and administrative provisions to the payment of compensation by this body, without prejudice to any other practice which is more favourable to the victim."
Up to now, the Directives did not enable someone injured by an uninsured or unidentified driver to seek compensation anywhere other than the state where the accident had happened. However the Fourth Directive (Directive 2000/26/EC) of 16th May 2000 made substantial changes. One of its main purposes was to enable an EU resident to be able to obtain compensation in respect of injury sustained in a motor accident in another EU state.
Articles 1 and 3 set the scene for the Directive:
"Article 1
Scope
1. The objective of this Directive is to lay down special provisions applicable to injured parties entitled to compensation in respect of any loss or injury resulting from accidents occurring in a Member State other than the Member State of residence of the injured party which are caused by the use of vehicles insured and normally based in a Member State.
……………………………………………………………………………..
2. Articles 4 and 6 shall apply only in the case of accidents caused by the use of a vehicle
(a) insured through an establishment in a Member State other than the State of residence of the injured party, and
(b) normally based in a Member State other than the State of residence of the injured party.
3. ……………………………………………………………….
Article 3
Direct right of action
Each Member State shall ensure that injured parties referred to in Article 1 in accidents within the meaning of that provision enjoy a direct right of action against the insurance undertaking covering the responsible person against civil liability."
By Article 4, each insurer is to identify claims representatives in each member state. Article 5 deals with the establishment of Information Centres. By Articles 6 and 7:
"Article 6
Compensation bodies
1. Each Member State shall establish or approve a compensation body responsible for providing compensation to injured parties in the cases referred to in Article 1.
Such injured parties may present a claim to the compensation body in their Member State of residence:
(a) if, within three months of the date when the injured party presented his claim for compensation to the insurance undertaking of the vehicle the use of which caused the accident or to its claims representative, the insurance undertaking or its claims representative has not provided a reasoned reply to the points made in the claim; or
(b) if the insurance undertaking has failed to appoint a claims representative in the State of residence of the injured party in accordance with Article 4(1). In this case, injured parties may not present a claim to the compensation body if they have presented a claim for compensation directly to the insurance undertaking of the vehicle the use of which caused the accident and if they have received a reasoned reply within three months of presenting the claim.
Injured parties may not however present a claim to the compensation body if they have taken legal action directly against the insurance undertaking.
The compensation body shall take action within two months of the date when the injured party presents a claim for compensation to it but shall terminate its action if the insurance undertaking, or its claims representative, subsequently makes a reasoned reply to the claim.
The compensation body shall immediately inform:
(a) the insurance undertaking of the vehicle the use of which caused the accident or the claims representative;
(b) the compensation body in the Member State of the insurance undertaking's establishment which issued the policy;
(c) if known, the person who caused the accident,
that it has received a claim from the injured party and that it will respond to that claim within two months of the presentation of that claim.
This provision shall be without prejudice to the right of the Member States to regard compensation by that body as subsidiary or non-subsidiary and the right to make provision for the settlement of claims between that body and the person or persons who caused the accident and other insurance undertakings or social security bodies required to compensate the injured party in respect of the same accident. However, Member States may not allow the body to make the payment of compensation subject to any conditions other than those laid down in this Directive, in particular the injured party's establishing in any way that the person liable is unable or refuses to pay.
2. The compensation body which has compensated the injured party in his Member State of residence shall be entitled to claim reimbursement of the sum paid by way of compensation from the compensation body in the Member State of the insurance undertaking's establishment which issued the policy.
The latter body shall then be subrogated to the injured party in his rights against the person who caused the accident or his insurance undertaking in so far as the compensation body in the Member State of residence of the injured party has provided compensation for the loss or injury suffered. Each Member State is obliged to acknowledge this subrogation as provided for by any other Member State.
3. This Article shall take effect:
(a) after an agreement has been concluded between the compensation bodies established or approved by the Member States relating to their functions and obligations and the procedures for reimbursement;
(b) from the date fixed by the Commission upon its having ascertained in close cooperation with the Member States that such an agreement has been concluded.
The Commission shall report to the European Parliament and the Council on the implementation of this Article and on its effectiveness before 20 July 2005 and shall submit proposals if necessary.
Article 7
If it is impossible to identify the vehicle or if, within two months following the accident, it is impossible to identify the insurance undertaking, the injured party may apply for compensation from the compensation body in the Member State where he resides. The compensation shall be provided in accordance with the provisions of Article 1 of Directive 84/5/EEC. The compensation body shall then have a claim, on the conditions laid down in Article 6(2) of this Directive:
(a) where the insurance undertaking cannot be identified: against the guarantee fund provided for in Article 1(4) of Directive 84/5/EEC in the Member State where the vehicle is normally based;
(b) in the case of an unidentified vehicle: against the guarantee fund in the Member State in which the accident took place;
(c) in the case of third-country vehicles: against the guarantee fund of the Member State in which the accident took place."
Thus, for an injured person in the Claimant's position (resident in England and Wales but who had suffered injury in another country at the hands of an uninsured driver) the Directive provided a straightforward and timely route to obtaining compensation within her own country. The 2003 Regulations were passed to implement the Fourth Directive in the United Kingdom. I shall return to their terms in due course.
The travaux préparatoires for the Fourth Directive ( see the proposal dated 10th October 1997 by the European Commission for the Fourth Directive) state that:
(Re Article 1 (Scope)) "In line with the principle of subsidiarity, the victim's position may be improved by providing an intermediary. This can be done without changing the rules on liability and jurisdiction that currently apply in the Member States" (page 3 para 3)
(Re Article 2 Direct right of action) "The Directive does not establish new rules of law or amend conventions in the field of international law conferring private jurisdiction on courts. Both the definition of the applicable law and the establishment of the jurisdiction of the courts are determined by reference to the rules of private international law applicable in most of the member states……." (page 6)
(Re Article 3 (Claims Representatives)) "The paragraph does not contain any provisions on the law applicable to accidents suffered by visitors. In most cases the rules of private international law applicable in the various Member States make this the law of the State where the accident occurs. As in the case of the direct right of action, the law applicable is always determined by reference to the generally applicable rules of private international law. This Directive does not provide any criteria for the choice of the applicable law (for example, lex loci or the law of the State of Residence of the victim, etc.)" (page 7) (My italics)
As written, the words from the proposal in relation to Article 2 can be read as saying that the choice of law is determined by the rules of private international law applicable in most member states. However the words I have italicised in the proposal relating to Article 3, having started by echoing that approach, are then quite specific that it sets no criteria for determining choice of law. As I shall describe when I come to deal with the travaux préparatoires for Rome II, there was no desire to retain those differences.
A codifying Directive (the Sixth) (2009/103/EC) was made on 16th September 2009. Amongst its recitals are the following:
"(20) Motor vehicle accident victims should be guaranteed comparable treatment irrespective of where in the Community accidents occur.
(30) The right to invoke the insurance contract and to claim against the insurance undertaking directly is of great importance for the protection of victims of motor vehicle accidents. In order to facilitate an efficient and speedy settlement of claims and to avoid as far as possible costly legal proceedings, a right of direct action against the insurance undertaking covering the person responsible against civil liability should be provided for victims of any motor vehicle accident.
(34) Parties injured as a result of a motor vehicle accident falling within the scope of this Directive and occurring in a State other than that of their residence should be entitled to claim in their Member State of residence against a claims representative appointed there by the insurance undertaking of the responsible party. This solution would enable damage suffered by injured parties outside their Member State of residence to be dealt with under procedures which are familiar to them.
(35) This system of having claims representatives in the injured party's Member State of residence affects neither the substantive law to be applied in each individual case nor the matter of jurisdiction.
(36) The existence of a direct right of action for the injured party against the insurance undertaking is a logical supplement to the appointment of such representatives and moreover improves the legal position of parties injured as a result of motor vehicle accidents occurring outside their Member State of residence.
(48) The role played by the compensation body is that of settling the claim in respect of any loss or injury suffered by the injured party only in cases which are capable of objective determination and therefore the compensation body should limit its activity to verifying that an offer of compensation has been made in accordance with the time limits and procedures laid down, without any assessment of the merits.
(50) The compensation body should have a right of subrogation in so far as it has compensated the injured party. In order to facilitate enforcement of the compensation body's claim against the insurance undertaking where the latter has failed to appoint a claims representative or is manifestly dilatory in settling a claim, the body providing compensation in the injured party's State should also enjoy an automatic right of reimbursement with subrogation to the rights of the injured party on the part of the corresponding body in the State where the insurance undertaking is established. This body is the best placed to institute proceedings for recourse against the Insurance undertaking.
(51) Even though Member States may provide that the claim against the compensation body is to be subsidiary, the injured person should not be obliged to present his claim to the person responsible for the accident before presenting it to the compensation body. In such a case the injured party should be in at least the same position as in the case of a claim against the guarantee fund.
(52) This system can be made to function by means of an agreement between the compensation bodies established or approved by the Member States, defining their functions and obligations and the procedures for reimbursement.
(53) Where it is impossible to identify the insurer of a vehicle, it should be provided that the ultimate debtor in respect of the damages to be paid to the injured party is the guarantee fund provided for this purpose situated in the Member State where the uninsured vehicle, the use of which has caused the accident, is normally based. Where it is impossible to identify the vehicle, it should be provided that the ultimate debtor is the guarantee fund provided for this purpose situated in the Member State in which the accident occurred."
The Articles of the codifying Sixth Directive contain the following:
Article 3
Compulsory insurance of vehicles
Each Member State shall, subject to Article 5, take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance.
The extent of the liability covered and the terms and conditions of the cover shall be determined on the basis of the measures referred to in the first paragraph.
Each Member State shall take all appropriate measures to ensure that the contract of insurance also covers:
(a) according to the law in force in other Member States, any loss or injury which is caused in the territory of those States;
(b) ……………………………………………………….
The insurance referred to in the first paragraph shall cover compulsorily both damage to property and personal injuries."
Article 6 deals with national insurers' bureaux. Articles 10 and 11 deal with the payment of compensation in cases where the accident was caused by an uninsured or unidentified vehicle. They read, insofar as is relevant
"Article 10
"1. Each Member State shall set up or authorise a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in Article 3 has not been satisfied.
The first subparagraph shall be without prejudice to the right of the Member States to regard compensation by the body as subsidiary or non-subsidiary and the right to make provision for the settlement of claims between the body and the person or persons responsible for the accident and other insurers or social security bodies required to compensate the victim in respect of the same accident. However, Member States may not allow the body to make the payment of compensation conditional on the victim establishing in any way that the person liable is unable or refuses to pay.
2. The victim may in any event apply directly to the body which, on the basis of information provided at its request by the victim, shall be obliged to give him a reasoned reply regarding the payment of any compensation.
……………………………………………………………………….
3. ………………………………………………………………………
4. Each Member State shall apply its laws, regulations and administrative provisions to the payment of compensation by the body, without prejudice to any other practice which is more favourable to the victim.
Article 11
Disputes
In the event of a dispute between the body referred to in Article 10(1) and the civil liability insurer as to which must compensate the victim, the Member States shall take the appropriate measures so that one of those parties is designated to be responsible in the first instance for paying compensation to the victim without delay.
If it is ultimately decided that the other party should have paid all or part of the compensation, that other party shall reimburse accordingly the party which has paid."
Article 18 gives an injured person a direct right of action against the insurer of the vehicle which caused the accident. Articles 19 ff (Chapter 7) deal with the "settlement of claims" in respect of vehicles which are covered by insurance. Article 22 sets out a procedure whereby insurers are to deal with claims within 3 months of receipt of a claim. Article 24 enables claims to be brought against the compensation body in the state of residence of a claimant in cases where the insurer has not responded under Article 22. It must respond within 2 months. However if the insurer does respond, then the compensation body will terminate its action. By Article 24(2):
"The compensation body which has compensated the injured party in his Member State of residence shall be entitled to claim reimbursement of the sum paid by way of compensation from the compensation body in the Member State in which the insurance undertaking which issued the policy is established.
The latter body shall be subrogated to the injured party in his rights against the person who caused the accident or his insurance undertaking in so far as the compensation body in the Member State of residence of the injured party has provided compensation for the loss or injury suffered."
Article 25 deals with the case where the vehicle or its insurer cannot be identified within 2 months of the date of the accident:
Article 25
"Compensation
1. If it is impossible to identify the vehicle or if, within two months of the date of the accident, it is impossible to identify the insurance undertaking, the injured party may apply for compensation from the compensation body in the Member State where he resides. The compensation shall be provided in accordance with the provisions of Articles 9 and 10. The compensation body shall then have a claim, on the conditions laid down in Article 24(2):
(a) where the insurance undertaking cannot be identified: against the guarantee fund in the Member State where the vehicle is normally based;
(b) in the case of an unidentified vehicle: against the guarantee fund in the Member State in which the accident took place;
(c) ………………………………………………………………
2. ……………………………………………………………….."
D Agreement Between Compensation Bodies and Guarantee Funds of 29th April 2002
On 29th April 2002, and in pursuit of Article 10 of the Fourth Motor Insurance Directive, the Compensation Bodies of the various states (the MIB and its equivalents) entered into an agreement. In the case of claims under Article 7 of the Fourth Directive (i.e. where a compensation body of the victim's member state pays compensation when the vehicle cannot be identified, or no insurer can be identified within 2 months of the accident) the Compensation Body must inform the relevant Guarantee Fund (Clause 7.1). It then continues:
" 7.2 When it makes a compensation payment to an injured party, the Compensation Body shall………apply, in evaluating liability and assessing compensation, the law of the country in which the accident occurred………"
By Clause 8, reimbursement is due to the Compensation Body from the relevant Guarantee Fund as follows:
"8.1 to the exclusion of everything else, the following:
8.1.1 the amount paid in compensation to the injured party or his/her beneficiaries; specifying the amounts paid as material damage and as bodily injury;
8.1.2 "[Fees such as those of lawyers and experts]"
8.1.3 ……………………………………
8.2 the amount to be reimbursed may only be disputed by the final paying Guarantee Fund if the Compensation Body has ignored objective material information given to it or has not observed the rules of applicable law."
E The 2003 Regulations
The Explanatory Note to the Regulations, while of course not definitive, gives a concise and useful guide:
"These Regulations give effect to Articles 5, 6 and 7 of the Fourth Motor Insurance Directive.
In order to assist persons to seek compensation in respect of motor vehicle accidents occurring in an EEA State other than their State of residence, regulation 3 establishes the MIIC as the information centre. That body shall establish a means of access to specified information, so as to allow its dissemination to injured parties in certain circumstances. Further provisions provide that in appropriate cases the information centre is obliged to seek similar information from organisations with like functions established in other EEA States.
Regulation 4 describes the specified information. This includes, in the case of motor vehicles normally based in the United Kingdom, the name and address of the insurer and the number of the insurance policy in respect of any identified vehicle.
Regulation 5 …………………………………………………………..
Regulation 7 …………………………………………………………..
Regulation 9 empowers an injured party resident in an EEA State to require the information centre to supply him with insurance details in respect of vehicles normally based in a Member State or EEA State where:
(i) the accident occurs in the United Kingdom; or
(ii) where the vehicle is usually based in the United Kingdom and the accident occurs in the EEA or a state subscribing to the Green Card Scheme; or
(iii) where the injured party resides in the United Kingdom and the accident occurs in an EEA State or a state subscribing to the Green Card Scheme.
The right of a person resident in the United Kingdom to obtain this information in respect of an accident occurring within the United Kingdom is therefore provided for, although it is not required pursuant to the Fourth Motor Insurance Directive.
Regulation 10 approves the Motor Insurers' Bureau as the compensation body for the United Kingdom.
Regulation 11 provides that in certain circumstances a person resident in the United Kingdom may claim compensation from the compensation body. The right to claim arises in respect of loss or injury resulting from an accident caused by the use of a motor vehicle in a public place. The accident must have occurred in an EEA State other than the United Kingdom, or in a country subscribing to the Green Card Scheme. The vehicle the use of which caused the damage must normally be based and insured, in an EEA State other than the United Kingdom. The claimant must have sought compensation from the liable insurer or his claims representative. That insurer must have failed to make a reasoned reply within three months. Further rules apply if no claims representative has been appointed. The claimant must not have commenced legal proceedings against the insurer.
Regulation 12 provides that in the circumstances described in regulation 11, and subject to certain provisos, if the injured party proves to the compensation body that the insured person is liable to him, then to the extent that he can prove loss and damage the compensation body must compensate him.
Regulation 13 provides that in certain circumstances a person who resides in the United Kingdom may be able to claim compensation from the compensation body where either the vehicle the use of which caused the damage, or the requisite insurer, cannot be identified. The accident must have occurred in an EEA State other than the United Kingdom, or in a country subscribing to the Green Card Scheme. The vehicle must normally be based in, and insured in, an EEA State other than the United Kingdom.
Regulations 14 and 15 set out circumstances in which the compensation body or the Motor Insurers' Bureau must indemnify a foreign compensation body."
Turning to the Regulations themselves, it is only necessary for the purposes of this judgement to set out Regulations 10 - 13 and 16:
"Compensation body for the United Kingdom
10. MIB is approved as the compensation body for the United Kingdom for the purposes of the fourth motor insurance directive.
Entitlement to compensation where the insurer is identified
11. (1) This regulation and regulation 12 apply in a case where—
(a) an injured party is resident in the United Kingdom,
(b) that person claims to be entitled to compensation in respect of an accident occurring in an EEA State other than the United Kingdom or in a subscribing state, and
(c) the loss or injury to which the claim relates has been caused by or arises out of the use of a vehicle which is—
(i) normally based in an EEA State other than the United Kingdom, and
(ii) insured though an establishment in an EEA State other than the United Kingdom.
(2) Where this regulation applies, the injured party may make a claim for compensation from the compensation body if—
(a) he has not commenced legal proceedings against the insurer of the vehicle the use of which caused the accident, and
(b) either of the conditions set out in paragraph (3) is fulfilled.
(3) The conditions are—
(a) that the injured party has claimed compensation from the insurer of the vehicle or the insurer's claims representative and neither the insurer nor the claims representative has provided a reasoned reply to the claim within the period of three months after the date it was made;
(b) that the insurer has failed to appoint a claims representative in the United Kingdom, and the injured party has not claimed compensation directly from that insurer.
Response from the compensation body
12. (1) Upon receipt of a claim for compensation under regulation 11, the compensation body shall immediately notify—
(a) the insurer of the vehicle the use of which is alleged to have caused the accident, or that insurer's claims representative;
(b) the foreign compensation body in the EEA State in which that insurer's establishment is situated; and
(c) if known, the person who is alleged to have caused the accident, that it has received a claim from the injured party and that it will respond to that claim within two months from the date on which the claim was received.
(2) The compensation body shall respond to a claim for compensation within two months of receiving the claim.
(3) If the injured party satisfies the compensation body as to the matters specified in paragraph (4), the compensation body shall indemnify the injured party in respect of the loss and damage described in paragraph (4)(b).
(4) The matters referred to in paragraph (3) are—
(a) that a person whose liability for the use of the vehicle is insured by the insurer referred to in regulation 11(1)(c) is liable to the injured party in respect of the accident which is the subject of the claim, and
(b) the amount of loss and damage (including interest) that is properly recoverable in consequence of that accident by the injured party from that person under the laws applying in that part of the United Kingdom in which the injured party resided at the date of the accident.
(5) The compensation body shall cease forthwith to act in respect of a claim as soon as it becomes aware that—
(a) the insurer referred to in regulation 11(1)(c), or the claims representative of that insurer, has made a reasoned response to the claim, or
(b) the injured party has commenced legal proceedings against the insurer.
Entitlement to compensation where vehicle or insurer is not identified
13. (1) This regulation applies where—
(a) an accident, caused by or arising out of the use of a vehicle which is normally based in an EEA State, occurs on the territory of—
(i) an EEA State other than the United Kingdom, or
(ii) a subscribing State,
and an injured party resides in the United Kingdom,
(b) that injured party has made a request for information under regulation 9(2) , and
(c) it has proved impossible—
(i) to identify the vehicle the use of which is alleged to have been responsible for the accident, or
(ii) within a period of two months after the date of the request, to identify an insurance undertaking which insures the use of the vehicle.
(2) Where this regulation applies—
(a) the injured party may make a claim for compensation from the compensation body, and
(b) the compensation body shall compensate the injured party in accordance with the provisions of Article 1 of the second motor insurance directive as if it were the body authorised under paragraph 4 of that Article and the accident had occurred in Great Britain.
Civil Liability
16. Any sum due and owing pursuant to these Regulations shall be recoverable as a civil debt."
While it was held in Jacobs that Regulation 13(2)(b) is not a choice of law provision, it will be observed that the effect of it is to overcome any arguments about which law applies to the claim. I shall deal with the application and interpretation of the Regulations more generally at a later stage. I shall also in due course consider the effect of Rome II (if any) on the application and interpretation of the Regulations.
F Rome II: Regulation 864/2007 of the European Parliament and of the Council on the law applicable to non-contractual obligations
This was enacted as a Regulation within the meaning of the Article 288 of the Treaty establishing the European Community as amended by the Lisbon Treaty. It follows that it is
"…..binding in its entirety and directly applicable in all Member States."
As a result of its status as a Regulation, Member States, unless otherwise expressly provided, are precluded from taking steps for the purposes of applying the regulation , which are intended to alter its scope or supplement its provisions: see C-40/69 Hauptzollamt Hamburg-Oberelbe v Bolmann [1970] ECR 69 at [4].
I shall start by citing the relevant Articles. I shall then refer to the Recitals, and then to the travaux préparatoires, which cast some light on the intended application and interpretation.
"CHAPTER I
SCOPE
Article 1
Scope
1. This Regulation shall apply, in situations involving a conflict of laws, to non-contractual obligations in civil and commercial matters. It shall not apply, in particular, to revenue, customs or administrative matters or to the liability of the State for acts and omissions in the exercise of State authority (acta iure imperii).
2. The following shall be excluded from the scope of this Regulation:
(a)-(g) …………………….
3. This Regulation shall not apply to evidence and procedure, without prejudice to Articles 21 and 22.
4. ………………………………….
Article 2
Non-contractual obligations
1. For the purposes of this Regulation, damage shall cover any consequence arising out of tort/delict, unjust enrichment, negotiorum gestio or culpa in contrahendo.
2. This Regulation shall apply also to non-contractual obligations that are likely to arise.
3. Any reference in this Regulation to:
(a) an event giving rise to damage shall include events giving rise to damage that are likely to occur; and
(b) damage shall include damage that is likely to occur.
Article 3
Universal application
Any law specified by this Regulation shall be applied whether or not it is the law of a Member State.
CHAPTER II
TORTS/DELICTS
Article 4
General rule
1. Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.
2. However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.
3. Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.
CHAPTER V
COMMON RULES
Article 15
Scope of the law applicable
The law applicable to non-contractual obligations under this Regulation shall govern in particular:
(a) the basis and extent of liability, including the determination of persons who may be held liable for acts performed by them;
(b) ………………………………………………………………..
(c) the existence, the nature and the assessment of damage or the remedy claimed;
(d) within the limits of powers conferred on the court by its procedural law, the measures which a court may take to prevent or terminate injury or damage or to ensure the provision of compensation;
(e) ……………………………………………………………………
(f) persons entitled to compensation for damage sustained personally;
(g) …………………………………………………………………..
(h) the manner in which an obligation may be extinguished and rules of prescription and limitation, including rules relating to the commencement, interruption and suspension of a period of prescription or limitation.
Article 16
Overriding mandatory provisions
Nothing in this Regulation shall restrict the application of the provisions of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the non-contractual obligation.
Article 17
Rules of safety and conduct
In assessing the conduct of the person claimed to be liable, account shall be taken, as a matter of fact and in so far as is appropriate, of the rules of safety and conduct which were in force at the place and time of the event giving rise to the liability.
Article 18
Direct action against the insurer of the person liable
The person having suffered damage may bring his or her claim directly against the insurer of the person liable to provide compensation if the law applicable to the non-contractual obligation or the law applicable to the insurance contract so provides."
There can be no doubt that Article 4 prescribes that in claims in tort for personal injury, the lex loci delicti (or strictly, the lex loci damni, being the laws of the state where the damage has been inflicted) applies to issues of both liability and damages, unless one of the exceptions in Articles 4.2 or 4.3 apply. That was common ground before me, and accords with the decision in the Court of Appeal in Wall v Mutuelle de Poitiers Assurances [2014] EWCA Civ 138. A distinction must be drawn between the choice of law which informs the assessment of damages (now Article 4) and the rules on evidence and procedure which will apply at the trial- see Longmore LJ at [16-20], Jackson LJ at [34-46 ], Christopher Clarke LJ at [47-53].
It is instructive to refer also to the Recitals (as Jackson LJ did in Wall - see [37]):
"(1) The Community has set itself the objective of maintaining and developing an area of freedom, security and justice. For the progressive establishment of such an area, the Community is to adopt measures relating to judicial cooperation in civil matters with a cross-border impact to the extent necessary for the proper functioning of the internal market.
(2) According to Article 65(b) of the Treaty, these measures are to include those promoting the compatibility of the rules applicable in the Member States concerning the conflict of laws and of jurisdiction.
(3) The European Council meeting in Tampere on 15 and 16 October 1999 endorsed the principle of mutual recognition of judgments and other decisions of judicial authorities as the cornerstone of judicial cooperation in civil matters and invited the Council and the Commission to adopt a programme of measures to implement the principle of mutual recognition.
(4) On 30 November 2000, the Council adopted a joint Commission and Council programme of measures for implementation of the principle of mutual recognition of decisions in civil and commercial matters (3).The programme identifies measures relating to the harmonisation of conflict-of-law rules as those facilitating the mutual recognition of judgments.
(5) ………………………………………………………………………..
(6) The proper functioning of the internal market creates a need, in order to improve the predictability of the outcome of litigation, certainty as to the law applicable and the free movement of judgments, for the conflict-of-law rules in the Member States to designate the same national law irrespective of the country of the court in which an action is brought.
(7) ………………………………………………………………………
(8) This Regulation should apply irrespective of the nature of the court or tribunal seised.
(9) ………………………………………………………………………
(10) ……………………………………………………………….
(11) The concept of a non-contractual obligation varies from one Member State to another. Therefore for the purposes of this Regulation non-contractual obligation should be understood as an autonomous concept. The conflict-of-law rules set out in this Regulation should also cover non-contractual obligations arising out of strict liability.
(12) The law applicable should also govern the question of the capacity to incur liability in tort/delict.
(13) Uniform rules applied irrespective of the law they designate may avert the risk of distortions of competition between Community litigants.
(14) The requirement of legal certainty and the need to do justice in individual cases are essential elements of an area of justice. This Regulation provides for the connecting factors which are the most appropriate to achieve these objectives. Therefore, this Regulation provides for a general rule but also for specific rules and, in certain provisions, for an 'escape clause' which allows a departure from these rules where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with another country. This set of rules thus creates a flexible framework of conflict-of-law rules. Equally, it enables the court seised to treat individual cases in an appropriate manner.
(15) The principle of the lex loci delicti commissi is the basic solution for non-contractual obligations in virtually all the Member States, but the practical application of the principle where the component factors of the case are spread over several countries varies. This situation engenders uncertainty as to the law applicable.
(16) Uniform rules should enhance the foreseeability of court decisions and ensure a reasonable balance between the interests of the person claimed to be liable and the person who has sustained damage. A connection with the country where the direct damage occurred (lex loci damni) strikes a fair balance between the interests of the person claimed to be liable and the person sustaining the damage, and also reflects the modern approach to civil liability and the development of systems of strict liability.
(17) The law applicable should be determined on the basis of where the damage occurs, regardless of the country or countries in which the indirect consequences could occur. Accordingly, in cases of personal injury or damage to property, the country in which the damage occurs should be the country where the injury was sustained or the property was damaged respectively.
(18) The general rule in this Regulation should be the lex loci damni provided for in Article 4(1). Article 4(2) should be seen as an exception to this general principle, creating a special connection where the parties have their habitual residence in the same country. Article 4(3) should be understood as an 'escape clause' from Article 4(1) and (2), where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with another country.
(19)-(32) …………………………………………………………………
(33) According to the current national rules on compensation awarded to victims of road traffic accidents, when quantifying damages for personal injury in cases in which the accident takes place in a State other than that of the habitual residence of the victim, the court seised should take into account all the relevant actual circumstances of the specific victim, including in particular the actual losses and costs of after-care and medical attention.
(34)-(40) ……………………………………………………………."
Lest there be any doubt about the intention to harmonise the rules applying in the various states, and to do away with the rule hitherto applying in the different UK jurisdictions, one observes the terms of Recitals 15-17. But it is instructive to note also what happened during the gestation of that Regulation. In the proposal of the Commission of 22nd July 2003, it was concerned by the differences which existed between the Member States on rules relating to conflicts of laws, which it considered had adverse effects economically. Its aim was to replace the existing 15 sets of Rules with "a single set of uniform rules" which would "represent considerable progress for economic operators and the general public in terms of certainty as to the law"- paragraph 1.2. It called for the harmonisation of the rules on conflict of laws – see paragraph 2.2.
It elected to use the Regulation method because:
"it lays down uniform rules for the applicable law. These rules are detailed, precise and unconditional and require no measures by the member States for their transposal" (sic) "into national law………The nature of these rules is the objective set for them, which is to enhance certainty in the law and the foreseeability of the solutions adopted as regards the law applicable to a given legal relationship. If the Member States had room for manoeuvre in transposing these rules, uncertainty would be reintroduced into the law, and that is precisely what harmonisation is supposed to abolish. The Regulation is therefore the instrument that must be chosen to guarantee uniform application in the Member States." (My italics)
In the paragraphs relating to what became Article 4, the Commission set out its very firm view that there should be one location, and one only, taken for the point at which the direct damage arose or was likely to arise, being the place where the harmful event occurred. That would thus equate the lex loci damni with the lex loci delicti in a motor accident case. It also contended that the solution in Article 4.1 "meets the concern for certainty in the law," and argued that the rules reflected a reasonable balance between the various interests at stake. It did not favour the principle of favouring the victim as a basic rule, which would give the victim the option of choosing the law most favourable to him. That was considered to reintroduce uncertainty in the law. It regarded the exception in what is Article 4.3 as one which should be treated as truly exceptional, and emphasised that Articles 4.1 and 4.2 were drafted in the form of rules and not presumptions.
The European Parliament considered the proposal in a report (A-0211/2005) of 27th June 2005). It proposed at a plenary session on 6th July 2005 that what is now Article 4 (then Article 3) should be amended in various ways, including
(a) In the absence of agreement or as otherwise provided for in the Regulation, the law applicable in the case of a tort or delict should be that of the law of the place in which the damage occurs or is likely to occur, irrespective of the country in which the event giving rise to the damage occurred, and irrespective of the country or countries where the indirect consequences of the event would arise (proposed amendment to what is now Art 4.1)
(b) In the case of personal injuries arising out of traffic accidents, and with a view to the motor insurance directive, the court seised and the liable driver's insurer should, for the purposes of determining the type of claim for damages and calculating the quantum of the claim, apply the rules of the individual victim's place of habitual residence unless it would be inequitable to the victim to do so, but that with regard to liability, the applicable law should be the law of the place where the accident occurred. There were then further amendments proposed to the then proposed wording of what are now Articles 4.2 and 4.3.
In its justification for the proposed amendment, it was argued that the effect of the Fourth and Fifth Motor Insurance Directives enabled a victim to bring an action in his/her own country against the other party's insurer, and that it would be more equitable to apply the law of the victim's state of habitual residence. It referred also to the fact that it was important to have regard not only to differences in levels of compensation, but also to the heads of damage recoverable, such as the entitlements to damages for pain and suffering, nursing and attendance allowances and certain pensions.
The Commission rejected the proposed amendments, save for that relating to the location of the damage. It objected to having different rules for traffic accidents, and stated that it would cause a sharp divergence from the law in force in the Member States. The Council endorsed that approach on 25th September 2006.
G The approaches in Jacobs v MIB [2010] EWCA Civ 1208 [2011] 1 All ER 844, and Bloy and Ireson v MIB [2013] EWCA Civ 1543.
In Jacobs a UK resident was in Spain when he was struck by a car driven by a German in December 2007. No insurer was identified. The claimant issued proceedings under Regulation 13 of the 2003 Regulations. A preliminary issue was ordered as to whether the assessment of compensation should follow Spanish or UK law. The case was conducted in the belief that Rome II was in force at the relevant date (as noted above at paragraph 9 above, the CJEU subsequently held that it was not then in force). At first instance, the Claimant argued that Rome II did not apply, because this was not a situation where there was a conflict of laws. It was argued that once the pre-conditions in Regulation 13 of the 2003 Regulations were met, there was a free standing obligation to pay compensation, as if the accident had happened in Great Britain. It was also argued that the damage had occurred in Great Britain. It was held by Owen J ([2010] EWHC 231 [2011] 1 All ER (Comm) 128) that:
(a) Regulation 13(2)(b) could not be interpreted and applied in a manner consistent with Rome II, and Rome II must prevail [28-29];
(b) Article 4 of Rome II applied because the obligations, whether of the driver B or of the Defendant as compensating body, both arose from a tort or delict, namely the culpable want of care of B. The liability of the MIB arose from his tort or delict, and was secondary to that of B as the tortfeasors [30];
(c) Recital 17 (set out above) showed that the relevant location was that where the injury was sustained. That was also consistent with the Fourth Directive's provisions on reimbursement and subrogation [35];
(d) If the Spanish Guarantee Fund brought the subrogated claim against B in the Spanish Courts, the compensation issues would be determined under Spanish law. It would be wholly inconsistent with Rome II to have the application of different laws depending on which country's courts were seised of the matter [37];
(e) If a UK citizen and a Spanish citizen had been standing together when struck by B's car, the Claimant's argument required one to conclude that the two claimants would have their claims for damages assessed under two different sets of laws, which would be inconsistent with the objective of Rome II [38];
(f) The Claimant's approach would enable the injured party's state of residence to determine the law to be applied to the computation of the claim, contrary to the objective of Rome II [39]
(g) The relevant law to be applied to the assessment of damages was that of Spain.
There was an appeal to the Court of Appeal (Laws, Moore-Bick and Rimer LJJ). Moore-Bick LJ gave the first judgment, with which the other Lords Justices agreed. After setting out the nature of the Directives he referred to the parties' arguments. Both parties are said [38] to have agreed that Regulation 13 did not involve a choice of law, although Mr Mercer QC submitted to me that the MIB had not in fact made such a concession. The Defendant argued that before the Claimant could be compensated, it had to be established that the claimant was entitled to receive any compensation at all, and that since the accident had occurred in Spain, Article 4 applied, and that in the absence of either 4.2 or 4.3 applying, Article 4 required that the issue had to be decided in accordance with the law of Spain, where the accident had occurred.
It is necessary to set out some parts of the judgment in detail. Moore-Bick LJ addressed the scheme of the Fourth Directive at [21- 23], where he concluded that the right to compensation arose from the Regulations themselves:
"The scheme of the Directive
21 The scheme of the compensation arrangements established by the Fourth Directive appears clearly from Articles 6 and 7, to which I have already referred. In essence, the compensation bodies are intended to provide a safety net which will be called upon only in rare cases where the tortfeasor is unidentified or uninsured or where for some reason the insurer fails to respond to a claim within the prescribed time. Even then, however, the compensation bodies do not ultimately bear the burden of the claim, because the body that has paid compensation to an injured party has the right to obtain reimbursement from the corresponding body in the state where the insurer is established (that body in turn being subrogated to the driver's rights against the insurer) or has a claim against one of the guarantee funds: see Articles 6(2) and 7. The scheme appears to proceed on the assumption that the existence of the driver's liability and the determination of the amount of compensation payable to the injured party will be governed by the same principles at all stages of the process, but the Directive does not go so far as to provide that such questions are to be determined by reference to the law of the country in which the accident occurred.
22 When the Directive was published in May 2000 Rome II had not been introduced and complete harmony between the conflicts of laws rules applied in the Member States was lacking. It appears that under the law of some states all questions relating to liability and damages were determined in accordance with the law of the country in which the accident occurred, whereas in others different principles applied. In England, for example, issues of liability and heads of recoverable damage were normally determined by reference to the law of the place where the accident occurred, but the assessment of damages was determined by English law as the lex fori, as subsequently confirmed by the decision of the House of Lords in Harding v Wealands [2006] UKHL 32, [2007] 2 AC 1. The position was the same in Scotland. The Directive did not address that difficulty, which may explain why the parties to the Agreement considered it necessary to do so in express terms: see clauses 3.4 and 7.2. However, the fact remains that at the time the Regulations were made there was no universal rule of law governing the question and the Regulations themselves are silent on the point.
23 Mr. Layton submitted that the right of an injured person to make a claim against the compensation body derives from the 2003 Regulations themselves. That, in my view, is correct. The Fourth Directive obliges Member States to put in place legislation to achieve the effects for which it provides. In the absence of the 2003 Regulations there would be no compensation body and no right for an injured person to recover compensation from it. It is for Member States to decide how to achieve that end and they are entitled, if they wish, to put in place legislation that goes beyond the minimum requirements, provided its effect does not conflict with the object of the Directive. When interpreting the Regulations, however, it must be borne in mind that the scheme established by the Fourth Directive provides that liabilities imposed on the compensation body in the state where the injured person resides will be passed back, usually to the driver's insurer by way of the compensation body in the state where the insurer is established, but in the case of an uninsured or unidentified vehicle to the relevant guarantee fund. The guarantee fund might have a right of recourse against the driver himself (in the case of an uninsured driver) under local law. The central concept behind the scheme, therefore, is to provide the claimant with easy access to a defendant in his own country while ensuring that the liability ultimately comes to rest with the person or body with whom it ought to reside. Moreover, the scheme does not detract from the claimant's rights against the driver himself or against the driver's insurer. An interpretation of the Regulations which allowed a claimant to recover from the compensation body in his own country more than he could have recovered from the driver's insurer or the driver himself might therefore be regarded as anomalous."
He then addressed Regulations 11 and 12, which deal with the case of the identified driver with an identified insurer. He said this at [24-25]:
"Regulation 12 – the assessment of compensation
24 Since the paradigm case with which the Regulations deal is that in which the driver of the vehicle involved in the accident is capable of being identified and is insured, it is helpful to begin by considering regulations 11 and 12. Regulations 11 and 12 oblige the MIB to indemnify an injured person who lives in England if he can satisfy it that the insured driver is liable to him in respect of the accident: regulation 12(4)(a). If he can do that, the MIB must indemnify him in respect of "the amount of loss and damage (including interest) that is properly recoverable . . . by the injured party from that person under the laws applying in [England]": regulation 12(4)(b). Since the accident must have taken place abroad, the need to demonstrate liability on the part of the driver clearly requires the court to consider what law governs that issue. In most cases Article 4(1) of Rome II will apply and the issue will be determined by reference to the law of the country in which the accident occurred.
25 It is less easy, however, to identify the law which governs the assessment of damages because of the reference in regulation 12(4)(b) to the laws applying in England. If that had not been included, so that the paragraph referred simply to the amount of loss and damage properly recoverable by the injured party from the person liable, the position would have been straightforward. Whatever the position in 2003, Article 4 of Rome II would now apply and the issue would normally have to be determined by reference to the law of the country where the accident occurred. On the face of it, however, the inclusion of the reference to the laws applying in England and Wales obliges the MIB to pay compensation assessed in accordance with English law."
It will be noted that Moore-Bick LJ has therefore recognised the effect of Article 4 of Rome II, but has relied on the terms of the 2003 Regulations to say that the obligation on the MIB to compensate in accordance with English law remains. At [27] he rejected the argument that the reference to the laws applying in England was a reference to English rules on conflict of laws. He went on to say:
"27 ………..At the time when the Regulations were made English conflicts of laws rules would not have referred the issue of the assessment of damages to the law of the country where the accident occurred; on the contrary, they would normally have been assessed by reference to the lex fori. If the draftsman had wished to provide that recoverable loss and damage was to be assessed in accordance with the law of the country where the accident occurred, he could easily have said so. In fact, however, he used words which broadly reflect what was then generally understood to be the position in English law. The reference to "the laws applying in that part of the United Kingdom in which the injured party resided at the date of the accident" clearly recognises that different principles may apply to determine the amount of loss and damage properly recoverable by the injured party, depending on whether he resided in England and Wales, Scotland or Northern Ireland."
He then addressed the argument of the Defendant MIB that the logic of the Fourth Directive scheme called for loss and damage to be calculated under Regulation 12 by reference to the lex loci delicti. He said at [29-30]:
29 …………I find myself driven to the conclusion that in the case of the insured driver the MIB is obliged to pay compensation assessed in accordance with English, Scots or Northern Irish law, as the case may be. That may reflect the fact that prior to Rome II conflicts of laws rules relating to non-contractual obligations differed as between Member States or it may, as Mr. Layton submitted, reflect a policy decision to ensure that compensation paid to a resident of the United Kingdom by the domestic compensation body is no less generous than would be payable under domestic law. (The position is mirrored in regulation 14 under which the MIB is obliged to indemnify a foreign compensation body against compensation paid to a foreign resident without regard to the law by reference to which it was assessed.) For present purposes it matters not. In fact, however, under the Agreement the compensation bodies agreed among themselves to apply the law of the country in which the accident occurred when assessing compensation, thus providing a measure of protection against more generous provision under the injured person's domestic legislation. The practical effect in a case such as the present is that an English victim of a road traffic accident can recover compensation from the MIB assessed by reference to English law and that the payment will be funded by the MIB itself insofar as it exceeds the amount recoverable in accordance with the law of the country in which the accident occurred. Conversely, where the law of the country in which the accident occurred provides more generous compensation, the injured person resident in the United Kingdom can recover from the MIB no more than the amount he would have been able to recover under English law. That reflects a broad measure of common sense and although it may at first sight appear to be inconsistent with the scheme of the Fourth Directive, the Directive itself does in fact contemplate the existence of such arrangements, since Article 10(4) provides as follows:
"Member States may, in accordance with the Treaty, maintain or bring into force provisions which are more favourable to the injured party than the provisions necessary to comply with this Directive."
30 Perhaps the strongest argument against interpreting the regulation in that way is that the injured person may be able to recover more (or less) from the MIB in its capacity as compensation body than he could have recovered from the insurer, or, for that matter, the driver responsible for the accident. However, since a right to obtain compensation from the MIB arises only if the insurer fails to respond, it may have been thought that domestic arrangements for providing compensation should not be affected by the scope of the recovery that could have been made from the foreign insurer or driver. At all events, I do not think that this anomaly, such as it is, provides sufficient grounds for giving regulation 12 a meaning it does not naturally bear."
He then turned to Regulation 13:
"Regulation 13 – the assessment of compensation
31 Regulation 13(1) defines the circumstances in which a right to compensation arises, but it says nothing about how compensation is to be assessed. Regulation 12 provides an important part of the context in which Regulation 13 is to be construed, however, since one would expect the amount of compensation that can be recovered by the victim of an unidentified or uninsured driver to be neither more nor less generous that that available to the victim of an insured driver. Indeed, in Evans v Secretary of State for the Environment, Transport and the Regions & Motor Insurers' Bureau (Case C- 63/01) [2003] ECR I-14447 the European Court held that the legislature's intention was to entitle victims of damage or injury caused by unidentified or insufficiently insured vehicles to protection equivalent to, and as effective as, that available to persons injured by identified and insured vehicles. One of the curious features of regulation 13 is that, unlike regulation 12, it does not expressly require the injured person to satisfy the compensation body that the driver is liable to him in respect of his injury. It would be surprising, however, if that were not necessary, not only because the basis of compensation would be fundamentally different in nature, but also because, by introducing a form of no-fault compensation, it would represent a radical departure from the scheme of the Directive which provides for the liability to be borne by one of the guarantee funds. Accordingly, although for reasons given earlier I think Mr. Layton was right in saying that the claim against the MIB arises under the Regulations and to that extent may be said to be free-standing, it does not follow that the right to recover compensation is wholly independent of the existence of liability on the part of the driver said to have caused the accident. That depends on the correct interpretation of regulation 13. Nor, however, does it necessarily follow that if the right to claim compensation depends on the existence of liability on the part of the driver responsible for the accident the measure of compensation must equate to what could be recovered from him. Again, that depends on the correct interpretation of regulation 13.
32 In my view the answer to this particular question lies in the words "shall compensate the injured party in accordance with the provisions of Article 1 of the [Second Directive]". Article 1(4) of that Directive obliges each Member State to set up a body to provide compensation for damage to property or personal injuries caused by unidentified or uninsured vehicles. I think it is reasonably clear from the recitals to the Directive that its purpose was to assimilate the position of the victim of an unidentified or uninsured driver or vehicle to that of the victim of an identified and insured driver or vehicle; it is not its purpose to require the establishment of a system of no-fault compensation. It is, therefore, implicit in the scheme of the Directive that the victim must be able to establish that the driver is liable to him in respect of his injuries, but whether that requires proof of fault will depend on the law of the country in which the accident occurred. The reference in regulation 13(1)(c)(ii) to an insurance undertaking which insures the use of the vehicle assumes the existence of a liability on the part of the driver which ought to be, but is not, covered by insurance. It follows, in my view, that the obligation imposed on the MIB by regulation 13(2)(b) to compensate the injured party in accordance with the provisions of Article 1 of the Second Directive carries with it the implicit proviso that the injured party must be able to show that the driver is liable to him. As in the case of a claim under regulation 12, that is a question to be determined by reference to the applicable law identified in accordance with the appropriate conflicts of laws rules. At the time the Regulations were made the applicable rules were those of the Private International Law (Miscellaneous Provisions) Act 1995, but since the introduction of Rome II, the rules set out in that Regulation will apply and will normally lead to the application of the law of the country in which the accident occurred.
33 The judge approached the matter on the basis that the claim against the MIB, being based on a non-contractual obligation arising out of a tort, must be governed in all respects by a single system of law. However, it is well established that different systems of law may govern different questions raised by the same claim (see, for example, Macmillan Ltd v Bishopsgate Investment Trust Plc (No. 3) [1996] 1 WLR 387, 418A-B per Aldous L.J.) and under English conflicts of laws rules the assessment of damages gives rise to a separate issue. The difficulty in the present case lies in the words "as if it were the body authorised under paragraph 4 of that Article and the accident had occurred in Great Britain". Mr. Layton submitted that those words oblige the MIB to pay compensation assessed on the basis that the accident had occurred in Great Britain, that is, assessed in accordance with English law, and he also relied on Article1(7) of the Second Directive which provides for each Member State to apply its own laws, regulations and administrative provisions to the payment of compensation by the guarantee fund for which it provides. Mr. O'Brien, on the other hand, submitted that the whole of the expression "as if it were the body authorised under paragraph 4 of that Article and the accident had occurred in Great Britain" simply reflects the fact that the MIB, which acts as the guarantee fund for Great Britain pursuant to Article 1(4) of the Second Directive under the terms of the Untraced Drivers Agreement and the Uninsured Drivers Agreement, has also been designated by the United Kingdom as the compensation body required by the Fourth Directive. Those words were, he said, necessary to impose on the MIB in its capacity as compensation body an obligation of the kind that it already bore as guarantee fund, including a liability in respect of accidents occurring abroad.
34 Sections 143-145 of the Road Traffic Act 1988 apply to the use of a vehicle in Great Britain and the EEA and the Uninsured Drivers Agreement is of corresponding scope. The Untraced Drivers Agreement, however, is limited in its scope to accidents occurring in Great Britain. (Separate arrangements exist for Northern Ireland.) However, not only do the Regulations designate the MIB as the compensation body for the whole of the United Kingdom, they impose on it an obligation relating to accidents occurring abroad. Accordingly, if the Untraced Drivers Agreement were to be retained for this purpose, it was necessary for the Regulations to bring a wider range of cases within its scope. In my view, therefore, Mr O'Brien was right in saying that the somewhat complicated language of regulation 13(2)(b) was designed to achieve that result. It does not necessarily follow, however, that it does not have the effect for which Mr. Layton contended. A legal fiction may have consequences beyond its immediate purpose.
35 The mechanism by which the MIB's obligation to compensate persons injured in accidents occurring abroad involving uninsured or unidentified drivers is established is to treat the accident as having occurred in Great Britain, but in the absence of any provision limiting its scope it is difficult to see why it should not also affect the principles governing the assessment of damages, particularly in the absence at the time of complete harmonisation throughout the EEA of the conflicts of laws rules governing that issue. Nonetheless, the matter is not free from difficulty. As I have already observed, at the time the Regulations were made damages recoverable as a result of an accident occurring in Great Britain would normally have been assessed by reference to the lex fori, yet regulation 13(2)(b) does not make any provision for the application of English or Scots law as such, presumably leaving it to the court seised of any claim to apply its own law.
36 At this point it is necessary to return to the recitals to the Fourth Directive in order to see whether they point to a conclusion different from that which the language of the Regulations suggests. It is apparent from the recitals that although the European Parliament and the Council of Ministers were concerned with equality of treatment between persons injured in road accidents across the EEA, their concern was primarily directed to the ability of injured parties to obtain compensation, not to the amount of that compensation. That concern led to the introduction of a right to make a claim directly against the wrongdoer's insurer (regarded as a logical development of the victim's right to make a claim against a representative of the insurer located in his home state), the establishment of information centres and compensation bodies. The emphasis is very much on access to information, the provision of a convenient claims procedure and the ability to obtain compensation rather than on the amount of that compensation, to which the recitals make no reference beyond recognising that it must not fall below the prescribed minimum in respect of which insurance is required. In my view nothing in the recitals lends any additional support to either party's case.
37 Having regard to the language of regulation 13(2)(b), I am persuaded that Mr. Layton is right and that compensation is to be assessed on the basis that the accident occurred in Great Britain. That has the incidental merit of ensuring that the measure of compensation recoverable under regulation 13 is likely to be broadly the same as that recoverable under regulation 12.
38 The judge considered that regulation 13(2)(b) contained a choice of proper law that was inconsistent with the provisions of Rome II. That led him to consider the doctrine of supremacy as developed in decisions such as Amministrazione delle Finanz dello Stato v Simmenthal S.p.A. (Case 106/77) [1978] ECR 629 and thence to the conclusion that the rules of Rome II must prevail. However, as I have said, the parties agreed that regulation 13(2)(b) is not a choice of law clause, rightly, in my view, because it is concerned with defining the existence and extent of the MIB's obligation as the body appointed to provide compensation for injury suffered in road traffic accidents rather than with determining the liability of the wrongdoer. That being so, Rome II has no application to the assessment of the compensation payable by the MIB under regulation 13 and it is therefore unnecessary to consider the issues relating to the construction of Article 4 that would arise if it did so.
39 For these reasons I would allow the appeal and answer the questions posed by the preliminary issues compendiously by stating that the MIB is obliged to pay compensation to the claimant assessed in accordance with the law of England."
As recorded above, the Supreme Court had granted the Defendant leave to appeal, but it was not pursued because of a subsequent CJEU decision on the date when Rome II came into force. As I shall set out in due course, Mr Mercer QC, while accepting some parts of Jacobs, makes trenchant criticisms of others.
I turn now to Bloy & Ireson v Motor Insurers' Bureau [2013] EWCA Civ 1543. In that case the two claimants (a mother and her baby son) were injured in Lithuania in September 2007. The infant claimant suffered catastrophic injuries, including brain damage, which will require lifelong care. Rome II was not in force then. The driver was subsequently convicted of driving under the influence of alcohol and careless driving, as well as driving without insurance. In Lithuania there was a limit of € 500,000 in respect of all claims arising out of any one accident. The MIB contended that the compensation payable under the 2003 Regulations should be limited to the maximum payable under Lithuanian law. The Defendants appealed on four grounds. The appeal was heard by the Chancellor (Etherton LJ), Hallett and Sharp LJJ. The Chancellor gave the judgement with which Hallett and Sharp LJJ agreed.
The first ground was that the trial judge (HH Judge Platts in Manchester) had been wrong to apply Jacobs when the issue of a cap of the kind in that case had not been addressed there. The Chancellor said [43] that the trial judge had been right to apply and follow Jacobs and then went on at [44]:
" It is true that the arguments in the two cases have been presented differently and the MIB accepts that Rome II, which featured prominently in Jacobs, has no application to the present case. The arguments in Jacobs and in the present case, however, are all deployed in respect of the same critical question, that is whether the law applicable to the assessment of compensation under Regulation 13(2)(b) is to be assessed by reference to the law of the part of Great Britain where the injured party resides or the law of the place where the accident took place. The decision in Jacobs was that, subject to establishing the tortious liability of the culpable driver under the applicable law for the tort (in the present case, Lithuanian law, and admitted), Regulation 13(2)(b) is a deeming provision with all the consequences that follow, including that the assessment of compensation is governed entirely by the law of the relevant part of Great Britain: see Jacobs at [35] and the analogous provisions of Regulation 12(4)(b). That precisely answers the preliminary issue in the present case. Moreover, Moore-Bick LJ considered the issue against the background of all the relevant EU legislation and the 2002 Agreement, taking due note of the consequence that the MIB will only be able to obtain limited reimbursement from those Member States guaranteeing a lower level of compensation pursuant to the Motor Insurance Directives."
Ground 2 concerned an argument on whether the cap on compensation was a rule categorised as lex causae (i.e. lex loci delicti) or lex fori. Given the fact that Rome II now applies to such issues, it is unnecessary to rehearse it. Ground 3 was concerned with what was said by the MIB to be the departure from the principle of comparative treatment. One can pick up the judgment at paragraph 58:
"58 The second European strand relied upon by the MIB is that both the 2002 Agreement and the 2003 Regulations were made pursuant to the provisions of the Fourth Motor Insurance Directive. It is not disputed that the 2002 Agreement was the agreement contemplated in what is now Article 24.3 of the Consolidated Directive (formerly Article 6.3 of the Fourth Motor Insurance Directive). Clause 5 of the 2002 Agreement expressly ties its aims to the obligations imposed by Article 7 of the Fourth Motor Insurance Directive. Mr Randolph also emphasised that clause 11 of the 2002 Agreement provided that the date of entry into force of the 2002 Agreement was to be fixed by the European Commission. The 2003 Regulations were brought into force pursuant to the obligation of the United Kingdom in the Fourth Motor Insurance Directive. Accordingly, it is argued by the MIB, the Motor Insurance Directives, the 2002 Agreement and the Regulations must be read together so as to produce a coherent scheme compliant with European law.
59 I agree with the Judge that MIB's approach is flawed. Mr Randolph is correct to say that the 2002 Agreement was entered into pursuant to the Fourth Motor Insurance Directive and, in particular, was the agreement contemplated by Article 6.3 of that Directive. The parties to it, however, are purely private bodies. They are insurance industry bodies in the different Member States. As I have already said, the MIB itself is a company limited by guarantee, whose membership is made up of insurance companies. The Comité Européen Des Assurances, whose name appears at the head of the 2002 Agreement, is a representative industry body. The 2002 Agreement is, therefore, neither legislation nor an agreement between Member States. It is a purely private agreement between insurance industry bodies. The Motor Insurance Directives have not empowered such bodies or such an agreement to impose on the governments of Member States limitations on the liability of insurers, and hence Member States, where such governments wish to provide for greater compensation for victims of traffic accidents than the minimum amounts specified in the Motor Insurance Directives. Nor did the Fourth Motor Insurance Directive confer on the European Commission any power to dictate the terms of the 2002 Agreement. Furthermore, as Mr Alexander Layton QC, for the claimants, cogently observed, the 2002 Agreement post-dated the Fourth Motor Insurance Directive and cannot determine its meaning.
60 Mr Randolph submitted that the Member States do not have a completely free hand in the light of, for example, the European legal principle of effectiveness. I do not see, however, how that principle can have any relevance to the facts of the present case or Jacobs.
61 Furthermore, if the MIB is correct in its submission that Regulation 13(2)(b) imports English conflict of laws principles, it must follow, if the limitation on the amount of compensation recoverable under Lithuanian law is properly characterised as procedural, that the 2002 Agreement cannot have had the effect for which the MIB contends.
62 In contrast to the 2002 Agreement, the 2003 Regulations represent the will and intention of Parliament. For the reasons I have given, Regulation 13(2) (b) has the meaning determined in Jacobs. Even if Jacobs is, contrary to my view, not binding in the present case, I would come to the same conclusion as the Court of Appeal in that case. Giving the words in Regulation 13(2) (b) their natural meaning, it clearly provides for compensation to be assessed in accordance with English law (or the law of Scotland or Northern Ireland as the case may be). That is consistent with Regulation 12. Regulation 12 provides the clearest possible indication that Parliament did not intend to limit compensation in the way stipulated in the 2002 Agreement. The wording of Regulation 13(2)(b) is different from Regulation 12(4)(b) but, as Moore-Bick LJ observed in Jacobs (at [34]), that is because its purpose was to bring a wider range of cases within the scope of the Untraced Drivers Agreement, which is limited to accidents in Great Britain.
63 Mr Randolph accepted that there was nothing in the Motor Insurance Directives preceding the 2003 Regulations which required Member States, in a case such as the present or in Jacobs, to limit the compensation payable to the injured party to the amount which could have been recovered by a victim from the guarantee fund in the Member State in which the accident took place and the uninsured vehicle was normally kept. In his oral submissions, however, Mr Randolph sought to recast the issue as being whether what are now Articles 24.2 and 25.1 of the Consolidated Directive require the reimbursement of a compensation fund in the position of the MIB in the present case to be a complete reimbursement rather than a partial one. On the other hand, he also acknowledged that the Motor Insurance Directives do not expressly address the present issue. I understood his contention to be, at least at one point in his submissions, that it was left to the agreement contemplated in Article 24.3 of the Consolidated Directive to determine the reimbursement arrangements.
64 What is perfectly clear is that the Motor Insurance Directives expressly stipulate that Member States can provide for their residents payment of more compensation than the specified minimum amounts. Regulation 13(2)(b) of the 2003 Regulations represents, therefore, a perfectly coherent policy of Parliament to provide residents in the United Kingdom, whose losses will accordingly be suffered here, with a more generous level of compensation than would have been recoverable in the foreign Member State where the accident took place and so putting them on a par with the victim of an accident taking place in the United Kingdom itself.
65 Finally, on this aspect, it seems to me that there is at the least, a strong argument that the Fourth Motor Insurance Directive actually did provide for precisely the policy to be found in Regulation 13(2)(b) of the 2003 Regulations. What is now Article 25 of the 2009 Consolidated Directive provides that, where it is impossible to identify the insurance undertaking within two months of the date of the accident, the injured party may apply for compensation from the compensation body in the Member State where he resides and the compensation shall be provided in accordance with the provisions of Articles 9 and 10. What is now Article 10.4 provides that each Member State shall apply its laws, regulations and administrative provisions to the payment of compensation by the compensation body without prejudice to any other practice which is more favourable to the victim. Mr Randolph submitted that Article 10.4 is not relevant to the present case and that it does not address how to deal with a "cap on liability" (as he put it). I am inclined to think, however, that Article 10.4 is, on the contrary, directly in point. This issue was raised by the claimant in Jacobs but Moore-Bick LJ did not address it because he did not need to. Similarly it is not strictly necessary for us to decide it in the present case because of all the other reasons that I have given supporting the claimants' and the Judge's interpretation of Regulation 13(2)(b) on the facts of the present case."
It is not necessary to deal with the fourth ground, which relates to the refusal of the trial judge to refer the matter to the CJEU.
H Submissions for the Defendant MIB
By agreement between the parties, Mr Mercer QC addressed me first, followed by Mr Beard QC in response.
Mr Mercer's submissions were wide ranging. Few if any stones within the legislative edifices were left unturned, but that provided the court with a full picture. I hope I do his substantial submissions no injustice by condensing them. His case had two strands:
i. The effect of the Directives, and the proper interpretation and application of Regulation 13 of the 2003 Regulations;
ii. The effect of Rome II.
He argued the following
(a) The purpose of the Motor Insurance Directives is to enable the victim of an unidentified or uninsured driver to obtain compensation from the MIB on behalf the guarantee body in the state where the accident occurred. That explains the reference in the Regulations to the Second Directive. The words of Regulation 13 follow the Fourth Directive, with the addition of the words "as if it were the body authorised under paragraph 4 of that Article and the accident had occurred in Great Britain" so as to impose an additional liability on MIB to compensate in respect of accidents abroad, as Moore-Bick LJ said in Jacobs at [33-34]. It was required to do that, as MIB otherwise had no power to compensate UK victims for torts committed against them abroad. Where he departs from Jacobs is that he says that the Regulation, properly interpreted in the light of the Directives, does not create a mechanism to have the compensation assessed under UK law, and certainly not since Rome II;
(b) Since Cox v Ergo Versicherung AG [2014] UKSC 22 [2014] AC 1379 one cannot separate the issues of liability for an accident from the scope of liability;
(c) It is speculative to assume, as was assumed in Jacobs at the foot of [29] that there was a policy decision to be more generous to UK claimants than the Directives required. Reference was made to the French, Irish and Italian heads and measure of damages;
(d) The interpretation and application of Regulation 13 puts a victim who has sustained injury at the hands of a culpable driver who is unidentified or uninsured, in a different position from one who sustained injury at the hands of an identified insured driver. If the UK victim has found the insurer, who has responded timeously, and sued the insurer direct (under Article 3 of the Fourth Directive) in the state where the accident occurred, that victim will get damages assessed according to its law. Since Rome II, it would make no difference if the victim sued the insurer by action in the UK courts - see Wall v Mutuelle de Poitiers Assurances [2014] EWCA Civ 138. Such an action is possible under EU law- see Odenbreit v FBTO [2007] ECR 1-11321 [30].
(e) The principle of equivalence is fundamental: see the CJEU judgment in C-63/01 Evans v MIB and Secretary of State for Transport [2003] ECR 1-14447 [24-28}, and especially [27]. Reference was also made to the Advocate General's Opinion in that case at [30-39] and especially [36] which emphasises that it is
"……in principle a civil-law claim to compensation that underlies compulsory insurance cover in respect of motor vehicles. The statutorily prescribed duty to have insurance cover is linked to this civil-law claim and serves as the economic safeguard for a well-founded claim to compensation."
(f) Both the judgment and the Opinion were relied on in Byrne v MIB [2008] EWCA 574 [2009] QB 66 at [99] per Carnwath LJ, where paragraph [27} of Evans on equivalence was applied [21].
(g) The anomaly created by the Jacobs and Bloy approach is well illustrated by considering Regulations 11 and 12 of the 2003 regulations. If the interpretation is correct, the claim under Regulation 12(3) will reflect UK law on the assessment of compensation, but if the hitherto unresponsive insurer responds, then the claim will revert under Regulation 12 (5)(a) to being assessed according to the law of the state where the accident occurred.
(h) Whatever the position before Rome II, there can be no doubt that in the event of a claim, exceptions in Arts 4.2 and 4.3 apart, the lex loci delicti applies to issues of both liability and damages. That means that when a victim has suffered injury in an EU country as the result of another's tort or delict, there is one claim, to be determined according to the law of the state where the event occurred. The maintenance of Regulations 12 and 13 as interpreted and applied in Jacobs cannot be sustained. While there was variation before Rome II on the choice of law for the assessment of compensation, and the jurisdictions in the UK were among those that treated those two aspects of a claim differently, that is no longer the case. The distinction has been removed across the EU in the interests of uniformity, and can no longer be justified.
(i) As Rome II is a Regulation, it is to be applied directly. States are directly forbidden from altering or supplementing its scope: see Art 288 of the Lisbon Treaty and the Bolmann case (see section F above). The travaux préparatoires show that the idea of maintaining the different rules on choice of law was firmly rejected, both generally, and specifically in the case of motor accident cases.
(j) If there is an inconsistency between a directly applicable EU law and a provision of UK legislation, the latter must be read and take effect as though the statute had enacted that it was to be without prejudice to the directly enforceable EU rights: see Lord Nicholls of Birkenhead in Autologic plc v IRC [2005] UKHL 54 [2006] 1 AC 118, 126 at [16].
(k) There are four significant legal errors in Jacobs:
i. At [25] it is accepted that Rome II applies "normally", but then the UK regulation is preferred to the EU Regulation so far as one aspect of the claim is concerned. That involves a fundamental departure from the provisions of Art 288 of the Lisbon Treaty requiring that an EU Regulation has direct binding effect, and that no alteration to its extent or scope is permitted.
ii. At paragraph [32] it is said that it is implicit in the scheme that the victim must show that the driver was responsible for his injuries. Moore-Bick LJ said that that issue was to be determined under Rome II, and would normally lead to the application of the lex loci delicti. It is not possible, says Mr Mercer, to hold that part of Art 4 of Rome II applies, but not the other part. The Lord Justice's reference [33] to Macmillan v Bishopsgate Investment Trust Plc [1996] 1 WLR 387,418 and its holding that different systems of law may govern different questions raised in the same claim overlooks the fact that binding law in the form of Rome II is quite explicit that there should not be different systems dealing with the issues of liability and damages in any case to which it applies.
iii. At paragraph [29] it is suggested that there can be differences between what a victim would get , depending on whether the law of England and Wales is more generous than the other state's law.
iv. The reference in paragraph [35] that Regulation 13 of the 2003 Regulations (treating the accident as if it had occurred in Great Britain) should apply in the absence of any provision limiting its scope was to adopt the wrong approach. What the Court of Appeal should have done was to interpret the words of the Regulation in line with the scheme in the Directives.
(l) So far as Bloy is concerned, Mr Mercer says that the Court made the error at [64] of assuming that the effect of the 2003 Regulations was to provide more generous compensation to UK citizens injured abroad than was required under the Directives.
(m) For completeness, Mr Mercer says that the concession recorded by Moore-Bick LJ at paragraph [38] was not made.
I Submissions for the Claimant
Mr Beard QC made the following submissions:
(a) Claims against unidentified or uninsured drivers are the exception and not the rule.
(b) The 2003 Regulations implemented the Fourth Directive. The system is one where a victim and his/her advisers can go to the local compensation body and be dealt with locally, and where everyone involved knows and understands the law.
(c) The arguments of the MIB stem from the fact that it signed up to an agreement which will leave it with losses when it cannot get full reimbursement because the level of compensation (as in this case) would be higher in the UK than in the country where the accident occurred.
(d) The obligation to compensate the Claimant in this case is statutory, being derived from the Regulations 13 and 16. There is nothing in the Directives to say that the approach in the Regulations is wrong. Indeed the Directives nowhere state that compensation must be assessed in any particular way by compensation bodies.
(e) Equivalence is to be found in the fact that victims are to be dealt with through the system of information being available locally. The principle of equivalence is not designed to achieve equivalence in compensation, but in procedure, as set out by Moore-Bick LJ in Jacobs.
(f) The claim against a guarantee fund in one's home state, and a claim from a compensation body in the state of residence are not, nor intended to be, directly comparable.
(g) Evans v MIB is of limited relevance. It addresses the Second Directive. It did not consider the overall intention of the legislature.
(h) It is wrong to look at the case on the basis that the MIB is standing in the shoes of another insurer. It has a specific role under Regulations 12 and 13.
(i) The scheme in Regulation 12 and 13 is an easy scheme for a victim to use to gain recourse. For that reason it is misleading to consider whether there are anomalies between claims against an insured driver, and claims against an uninsured driver.
(j) Article 28 of the consolidating (Sixth) directive permits member states to make provisions which are more generous to injured parties. It is noted also that the Hague Convention of 1971 on the Law Applicable to Road Traffic Accidents still applies and is unaffected by Rome II- see Rome II Art 28. The UK is not a signatory but some EU states are signatories. It applies a code based on where a vehicle is registered to determine the relevant law.
(k) Jacobs addressed both the Directives and Rome II. It should be followed. As to Mr Mercer's four points:
i. The use of the word "normally" in paragraph [25] is appropriate. That is what Article 4 of Rome II says.
ii. This was simply the Lord Justice dealing with an argument that had been raised.
iii. This is a question of statutory interpretation. It was dealt with at paragraph [36].
iv. In truth, the Court of Appeal was not applying Rome II, but the 2003 Regulations, which are a separate scheme.
(l) Rome II is not a "steamroller" crushing all in its path. There is a margin of appreciation, as shown for example in Evans at [70] , on the choice of how the effluxion of time is to be compensated for.
J Discussion and Conclusions
In my judgment the starting point is to consider the effect of Regulation 13 of the 2003 Regulations before Rome II came into effect, and then to consider whether Rome II has made any difference.
As noted earlier, and recognised in the travaux préparatoires for the Fourth Motor Insurance Directive, there were different rules on the choice of law for determining the level of compensation. It follows that at the time of the Second and Fourth Directives, a tortfeasor being sued would be required to pay compensation in accordance with the law applied in the court in question. In some Member States that would be the law of the lex loci delicti, and in others the lex fori. Until the Fourth Directive, there was no right in EU law to sue the insurer of a tortfeasor direct, and such an action was not recognised in the law of England and Wales. A foreign tortfeasor from another EU state would in most circumstances not be sued in an English/Welsh court. So the reality was that most, or at the very least significant numbers, of such claims against insured tortfeasors would not involve any dispute on the choice of law for the assessment of compensation. In most cases - i.e. where the accident occurred within the domicile of the tortfeasor - the law would be that applied by the court where the accident occurred.
The Fourth Directive, as is shown by the extracts from its travaux préparatoires cited above, did not seek to achieve uniformity in the application of rules on the choice of law. That being so, it must be taken that the Fourth Directive, in its provisions for passing on claims and for reimbursement, must be assumed to permit claims to be made, and the compensation to be assessed, in one country and then passed to another even though the claimant's national compensation body would have applied the lex fori and the guarantee body of the lex loci delicti would not have done so. The same approach appears from Article 1 paragraph 7 of the Second Directive.
I therefore consider that there is considerable force in the Defendant's argument that the words in Regulation 13 "as if it were the body authorised under paragraph 4 of that Article and the accident had occurred in Great Britain" were intended to enable the MIB to fulfil the objective of the Fourth Directive and accept claims which related to accidents in other states, but related to UK citizens.
Further, the terms of Regulation 13 did no more than state what was the accepted UK position as at 2003 - i.e. that compensation would be assessed in a UK court according to the relevant UK law. The fact that the Regulation included the words it did may be seen as a strong supporting argument for the MIB case. After all if any dispute between the claimant and the MIB on a claim under Regulation 13 related to the measure of compensation, one did not need the critical words in Regulation 13 to apply the lex fori. That would have applied anyway as it was a matter (the claim under Regulation 13) which could only be litigated in the UK. If the words were intended to have the effect of applying the lex fori to the assessment of compensation, the words would thus have been surplusage. In my judgment they must have been included to serve some other purpose. However, as was observed in both Jacobs and Bloy it was a consequence of what the Chancellor described as a deeming clause that it had the effect of determining which rule applied on the assessment of compensation.
It is true of course that the MIB had entered into an agreement with a provision which limited reimbursement to that available in the country where the accident occurred, but that private agreement cannot be used to interpret the Directives or the Regulations. It was an agreement which the MIB must be taken to have gone into with its eyes open, knowing what the then approach of the English and Welsh courts was to the assessment of compensation.
As a matter of interpretation, and bound as I am to follow Jacobs and Bloy on the interpretation of the Regulations, I conclude that the effect of Regulations 13 and 16 was to create a cause of action enforceable as a civil debt, in which compensation would be assessed on the basis of the law of England and Wales.
One now comes to Rome II. Whether wrongly described as a steamroller, it has undoubtedly altered the landscape. In the simplest terms, no claimant making a claim against a tortfeasor, or the insurer of a tortfeasor, can now expect that any law will apply other than the law of the state where the damage occurred as determined by Article 4, irrespective of any consequential losses. As recognised in Jacobs in motor accident cases, that will inevitably mean the law of the state where the accident occurred which caused the injuries, unless one of the exceptions in Art 4.2 or 4.3 apply.
It must also be observed that its effect will apply not just to national laws, but also to Directives. When the Second Directive referred to Member States applying their own laws to the payment of compensation, it meant the laws which have force. In the United Kingdom (and elsewhere) that law is now that contained in Article 4 of Rome II. The saving for different approaches to this issue is no longer germane (although of course the saving for other matters may well still be so - see for example the discussion in Wall v Mutuelle de Poitiers SA [2014] EWCA Civ 138 (supra) about case management and the admission of expert evidence).
So, unless one of the exceptions in Articles 4.2 or 4.3 apply, if a UK claimant is injured in a motor accident in Greece by an insured driver, and sues the driver in Greece, or sues the driver's insurer in the UK direct under the Fourth Directive, the law by which compensation will be calculated will be the law of Greece, as the decision in Wall v Mutuelle de Poitiers SA demonstrates. That is confirmed also by the clear intention of Rome II to achieve uniformity.
Given the effect of the 2003 Regulations, it means that if the Claimant is correct, the only circumstances in which an injured claimant in such a case (absent an exception being made under Article 4.2 or 4.3) is able to ask that compensation be assessed according to UK law is if the driver is uninsured, or if the insurer has been dilatory (and not responded) under Regulation 12.
I have referred to the arguments raised before me about equivalence. On any view, while the principle remains intact, the application of it must have been affected by the enactment of Rome II. Its objective was, and its effect is, that those UK residents injured in another EU state by insured and identified drivers will now always have their damages assessed according to the laws of the country where the accident occurred (save for a case within one of the exceptions in Articles 4.2 and 4.3), whereas if Jacobs is correctly decided those injured by uninsured and unidentified drivers will not.
Mr Beard's point that there is an important equivalence to be found in the provision of local procedures, conducted by people familiar with the local rules on compensation, is a point of substance. But perhaps some of its force is lost when one considers that since Rome II, a person injured by an insured driver abroad can deal locally with the claim, and indeed issue it here, but must adduce evidence on the relevant law of the country where the accident occurs.
Moore-Bick LJ said that there was nothing in the Motor Insurance Directives requiring equivalence of compensation. But now, if the approach in Jacobs is correct that Rome II does not affect the interpretation and application of Regulation 13, there will also be no equivalence relating to the rules that apply to the making of a claim. There will be equivalence between claimants injured by insured drivers, but not as between all claimants, once one includes those injured by uninsured or unidentified drivers. It means that if the Claimant's arguments are correct, the victim of the uninsured driver is treated in a different way from the victim of the insured driver, and one which, if the level of compensation thereby obtained is greater is to his or her advantage. Conversely, if it is lower, it will be to his or her disadvantage. The question of whether that advantage or disadvantage is one which is determinative must essentially be a matter of policy. The Recitals and the travaux préparatoires for Rome II can leave one in little doubt that the policy of Rome II was to achieve more uniformity, and to avoid the anomalies generated by the different sets of rules on choice of law, including in particular those arising in motor accident claims. It was a policy objective of the relevant political body with the power to legislate to enact Regulations so as to achieve that end. I do not consider that a court can seek to apply a different policy objective.
The Defendant says, with some force, that given the fundamental change in the landscape, what is required is the interpretation of the 2003 Regulations so that Rome II is given effect. If that argument were accepted, the words in Regulation 13 would not provide a provision in effective conflict with Rome II. The Defendant also has force in its argument that in Jacobs the Court of Appeal has accepted that Rome II Art 4 dictates the choice of law on the issue of liability, but then has not applied it to the issue of compensation.
As I indicated at the outset of this judgment, I am bound by the two Court of Appeal authorities of Jacobs and Bloy. I would not consider that there is force in the Defendant's case that the Regulations were misinterpreted as they stood. However I am of the view that the effect of Rome II on the correct interpretation required to bring Regulation 13 into conformity with Article 4 gives the Defendant's arguments that Jacobs was wrongly decided, and that the approach of Owen J at first instance in Jacobs should be endorsed, very considerable force. Whether they are of sufficient force to achieve a different result will be for others to determine.
Given that the only issue remaining between the parties is the assessment of the compensation payable, I am therefore bound to answer the issue question thus: it is to be assessed in accordance with the law of England and Wales.
I could not leave this judgment without paying tribute to the immense amount of assistance I received from all counsel in this matter.
This judgment has been sent out in draft in the usual way. I have adopted some, but not all, of the amendments suggested to me by Counsel in their prompt and helpful submissions.
Note 1 The Defendant has suggested that I have not used the correct wording (or spelling). I have taken the text from http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:31984L0005&rid=2
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MR JUSTICE GILBART :
On 17th April 2015, I handed down judgment ([2015] EWHC 1002 (QB)) on the preliminary issue in this action:
"Whether the scope of (the Defendant's) liability to the Claimant is to be determined in accordance with the law of England or the law of Greece."
I decided that issue in favour of the Claimant, who had argued that it was to be determined in accordance with the law of England. I was informed during the hearing that an application would be made for a certificate under s 12 of the Administration of Justice Act 1969 if, as was always likely to happen, I regarded myself as bound by the decision in Jacobs v MIB [2010] EWCA Civ 1208 [2011] 1 All ER 844 on the effect of Rome II on the interpretation and application of Regulation 13(2) of the Motor Vehicles (Compulsory Insurance)(Information Centre and Compensation Body Regulations) 2003 (SI 2003/37). I invited submissions on the point to be made in writing in the light of my judgment.
The Defendant MIB has now sought permission under section 12 of the Administration of Justice Act 1969. That Act has been amended by section 63 of the Criminal Justice and Courts Act 2015, which came into force on 13th April 2015. It now reads, insofar as is relevant to this application
"12 Grant of certificate by trial judge.
(1) Where on the application of any of the parties to any proceedings to which this section applies the judge is satisfied—
(a) that the relevant conditions are fulfilled in relation to his decision in those proceedings, or that the conditions in subsection (3A) ("the alternative conditions") are satisfied in relation to those proceedings " and
(b) that a sufficient case for an appeal to the House of Lords under this Part of this Act has been made out to justify an application for leave to bring such an appeal
the judge, subject to the following provisions of this Part of this Act, may grant a certificate to that effect.
(2) This section applies to any civil proceedings in the High Court which are either—
(a) proceedings before a single judge of the High Court …………………………..
(3) Subject to any Order in Council made under the following provisions of this section, for the purposes of this section the relevant conditions, in relation to a decision of the judge in any proceedings, are that a point of law of general public importance is involved in that decision and that that point of law either—
(a) relates wholly or mainly to the construction of an enactment or of a statutory instrument, and has been fully argued in the proceedings and fully considered in the judgment of the judge in the proceedings, or
(b )is one in respect of which the judge is bound by a decision of the Court of Appeal or of the House of Lords in previous proceedings, and was fully considered in the judgments given by the Court of Appeal or the House of Lords (as the case may be) in those previous proceedings.
(3A)The alternative conditions, in relation to a decision of the judge in any proceedings, are that a point of law of general public importance is involved in the decision and that—
(a) the proceedings entail a decision relating to a matter of national importance or consideration of such a matter,
(b) the result of the proceedings is so significant (whether considered on its own or together with other proceedings or likely proceedings) that, in the opinion of the judge, a hearing by the Supreme Court is justified, or
(c) the judge is satisfied that the benefits of earlier consideration by the Supreme Court outweigh the benefits of consideration by the Court of Appeal.
(4) Any application for a certificate under this section shall be made to the judge immediately after he gives judgment in the proceedings:
Provided that the judge may in any particular case entertain any such application made at any later time before the end of the period of fourteen days beginning with the date on which that judgment is given or such other period as may be prescribed by rules of court.
(5)-(8) ………………………………"
4 Section 15 of the Act reads, insofar as is relevant
"15 Cases excluded from s. 12.
(1)-(2)………………………………………………………………..
(3) Where by virtue of any enactment, apart from the provisions of this Part of this Act, no appeal would lie to the Court of Appeal from the decision of the judge except with the leave of the judge or of the Court of Appeal, no certificate shall be granted under section 12 of this Act in respect of that decision unless it appears to the judge that apart from the provisions of this Part of this Act it would be a proper case for granting such leave."
Submissions for the Defendant
The Defendant contends that the matter at issue is one of public importance. It argues that the issue of which law applies to determine the scope of MIB's liability under Regulation 13 of the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 ("the 2003 Regulations") is of general public importance. If the Court of Appeal's decision in Jacobs v MIB is wrong, it is important that it is put right for at least the following reasons, which were developed at the trial of the issue:
(a) the Court of Appeal's interpretation is inconsistent with Rome II and, as such, it puts the courts of England and Wales in breach of their obligations under EU law;
(b) the Court of Appeal's interpretation is also, at least arguably, inconsistent with the EU motor insurance directives and puts the UK in breach of its obligations to implement the Directives in full;
(c) the Court of Appeal's decision results in a number of significant anomalies, including the fact that, if correct, an English resident Claimant injured abroad will obtain a different level of compensation depending upon whether the claim is against an insurer or against the Compensation Body;
(d) a significant (and increasing) number of claims are affected by the Court of Appeal's decision. It has produced evidence that 484 claims have been made under the 2003 Regulations against the MIB;
(e) as the cost of claims met by MIB is funded by UK motor insurers, the burden of any additional costs borne by MIB will be passed on to UK premium-paying motorists;
(f) the fact that the Supreme Court granted permission to appeal in Jacobs v MIB demonstrates that the Supreme Court considered it was a point of general public importance. As is apparent from the number of claims affected, the importance of the point has not reduced since permission was granted in that case;
(g) although it is a matter for the Court to determine, it should be noted that the Claimant in this case agrees that the point is one of general public importance;
(h) the issues raised in the case are novel and free-standing. There is no Supreme Court authority. Had Jacobs been within the temporal scope of Rome II, the issues would have been resolved by now. It is appropriate that the issues are elucidated by the Supreme Court now to ensure that cases arising under Regulation 13 are dealt with consistently and correctly;
(i) in addition, it is important to note that the fact that questions of EU law arise in this case will be relevant to the Defendant's application for permission. There is no CJEU authority on the questions and it could not be suggested that the application of EU law is so obvious as to leave no scope for any reasonable doubt that the questions should be resolved in favour of the Claimant. In such circumstances, as there is no remedy under national law against a decision by the Supreme Court (including at the permission stage), Article 267 of the Treaty on the Functioning of the EU would require the Supreme Court to refer questions to the CJEU before refusing an application for permission to appeal.
The MIB contends that the conditions in subsections 12 (3)(a),(b) and (3A) (c) of the Act are satisfied. As to the latter, it argues that that the benefits of earlier consideration by the Supreme Court outweigh the benefits of consideration by the Court of Appeal.
It argues also that section 15 of the Act does not exclude an appeal in this case. It is a case where under CPR 52.3(6) permission would certainly be given by myself as trial judge to Appeal to the Court of Appeal. The second limb of the test in CPR 52.3(6) is satisfied. The case raises an important point of law which needs to be clarified. In this context, the fact that MIB has agreed to pay the Claimant's costs of the resolution of the preliminary issue and made an interim payment of £200,000 are relevant.
Finally the MIB drew my attention to recent authority where a certificate was granted: Al-Waheed v Ministry of Defence [2014] EWHC 2714 (QB) per Leggatt J.
Submissions for the Claimant
The Claimant does not oppose the application, and indeed supports it. She submits that
(a) the Claimant recognises the Court's conclusion in its Judgment that it is at least arguable that the decisions in Jacobs and Bloy in the Court of Appeal failed properly to apply Rome II. In the circumstances the Claimant supports the Defendant's application that any appeal in this case should be considered by the Supreme Court without the need for further consideration of the issues raised by this case in the Court of Appeal;
(b) the Claimant agrees that the issues arising in this case may be of wider public importance. She notes that there are several cases currently proceeding before the Courts whose outcome is likely to be significantly affected by the outcome of the present proceedings;
(c) having regard to the rulings in Jacobs and Bloy and the terms of the rule in Young v Bristol Aeroplane [1944] KB 718 the Claimant does not see an advantage in further consideration of these matters by the Court of Appeal, in particular given the terms of the Judgment and the exploration of the issues before me;
(d) on the other hand, an appeal to the Court of Appeal would result in additional cost and delay, which would be contrary to the overriding objective and would prejudice the Claimant and other claimants in the other currently proceeding cases;
(e) whilst the Claimant has the benefit of a modest interim payment (in comparison to the overall value of the claim), it is not possible to assess the value of the claim until the applicable law is determined. She is therefore, kept out of the majority of her damages until this issue is resolved;
(f) by extension, claimants in other claims which await the outcome in this claim will be similarly disadvantaged by delay which would be caused by appeal to the Court of Appeal;
(g) having regard to the requirements of section 12 of the Administration of Justice Act 1969 (as amended) and, in particular, section 12(1)(a) together with sections 12(3)(a) and/or (b), and/or section 12(3A)(c) the Claimant, therefore, supports the Defendant's application for a 'leapfrog' certificate pursuant to section 12 and the terms of paragraph 2 of the draft order;
(h) for the avoidance of doubt, nothing in this submission should be taken to suggest that the Defendant is correct in its contentions as to the substance of the matter which are set out in its submissions of 21 April 2015.
Conclusions
I made it plain during the hearing of the submissions on the preliminary issue that I would only consider the grant of a certificate once I had been able to reflect on the submissions made to me about the preliminary issue, and I had handed down judgment. Having done so, and having received the parties' submissions I am entirely satisfied that this is a proper case for the grant of a certificate. The position of the Court of Appeal is known from the Jacobs v MIB decision. As I set out in paragraph 9 of the judgment it would have been considered by the Supreme Court (which had granted permission to appeal) had it not been for the decision of the Court of Justice of the European Union (CJEU) gave judgment in Homawoo v GF Assurances C-412/10 [2011] ECR 1-11603. That held that Rome II was not in force at the relevant date in Jacobs, so that the appeal would have served no purpose and was not proceeded with.
I am satisfied that the conditions in section 12(3)(a), (b) and, in the light of the submissions of both parties, 3A(c) of the 1969 Act (as amended) are all met in this case. I consider that the arguments of both parties show that there is an important issue to be determined which will affect a substantial number of claims, and that if the appeal were made instead to the Court of Appeal, with what is likely to be a further appeal to the Supreme Court, delay would be caused to the resolution of those claims.
I have therefore granted a certificate.
I have also made an agreed order relating to costs, which does not call for description in this judgment. |
Judge Behrens :
1 Abbreviations
In this judgment I shall adopt the following abbreviations:
Bregal Capital LLP Bregal
The Danwood Group Ltd Danwood
Danwood Group Limited Employee Benefit Trust Danwood EBT
Earnings before Interest Taxes Depreciation and Amortisation EBITDA
Earnings Before Tax EBT
Danwood Group Holdings Ltd Holdings
Long Term Incentive Plan LTIP
Steve Francis Mr Francis
Brian Ogden Mr Ogden
Jonathan Parish Mr Parish
Phoenix Office Supplies Limited Phoenix
PricewaterhouseCoopers LLP PWC
Regent Associates Regent
Articles of Association of Danwood Group Holdings Ltd the Articles
Share Purchase Agreement the SPA
2 Introduction
This is an action by Mr Parish and Mr Ogden for deceit and/or misrepresentation. It arises from the sale of their shares in Phoenix to Danwood on 30 January 2009. They were paid partly in cash and partly in C shares in Danwood's holding company, Holdings, which is now known as Hykeham Group Limited.
In essence, the Claimants allege that they agreed to sell the entire share capital in Phoenix on the basis of representations that the C shares were worth £34.48 or alternatively £30 each. The C shares were to be allotted to Mr Parish under the terms of an LTIP scheme.
There are two groups of representations. The first group are partly oral and partly in writing. It is said that in October 2008 Mr Coles the Commercial Director of Danwood made an oral representation as to the value of the C shares. Following the meeting on 31st October 2008 Mr Coles sent a letter to Mr Parish. It is alleged that the final paragraph of the letter contains a representation that the C shares to be held under the LTIP would be equivalent to approximately £2 million.
The second alleged misrepresentation occurred in August 2009. Under the terms of the SPA Danwood still owed a sum in respect of the net assets of Phoenix. That sum was payable in cash. After some negotiation it was agreed that the payment would be made as to £1,500,000 in cash and the balance (£225,000) by way of 7,500 C shares. It is said that Danwood thereby represented that the C shares were worth £225,000 or £30 each.
It is said that the representations were untrue, were made recklessly or dishonestly. Alternatively reliance is placed on the Misrepresentation Act 1967.
A number of defences are made to the claim. It is not accepted that the alleged representations were made or are to be interpreted in the manner suggested by the Claimants. The representations were representations of opinion and not of existing fact. It is denied that the representations on their true construction were untrue. In so far as they were untrue they were believed to be true at the time they were made. There was no dishonesty or recklessness. Equally there was no negligence. It is said that liability for misrepresentation was excluded under the terms of the SPA and/or the LTIP. There is a dispute as to whether Mr Ogden has a valid cause of action. There is a challenge to the method of assessing damages claimed by the Claimants.
3 The facts
3.1 Mr Parish, Mr Ogden, Phoenix
Mr Parish was born on 23 August 1965. Fairly soon after leaving school he was employed by Montgomery Office Supplies. He started in logistics and then moved into a role as a sales representative. After gaining a good understanding of the local market and the necessary processes involved in running a business, he decided to set up his own company.
Mr Ogden was born on 27 March 1955. After university he qualified as a Management Accountant and eventually became the Finance Manager of Laporte Fluorides.
In 1989 Mr Parish approached Mr Ogden and asked for advice about setting up a business. After various discussions they wrote a business plan to determine if his venture was viable and if it would be possible to get support from the bank. At that time it was not envisaged that Mr Ogden would be involved in the business.
Phoenix was incorporated in September 1989. Mr Parish was the Managing Director. At that time the business was predominantly focused on delivering general office supplies and office furniture to local companies in the Sheffield area.
In paragraphs 8 to 24 of his witness statement Mr Parish set out in some detail the expansion of Phoenix from 1989 to 2006. Mr Parish's account was uncontroversial and not really relevant to the issues I have to decide. I shall not lengthen this judgment by setting it out.
From a relatively early stage Mr Ogden came over to the office every Thursday evening to review the accounts and, at month ends, on a Saturday morning to close down the month accounts. In 1995 Mr Ogden was appointed as full time Finance Director of Phoenix.
Mr Ogden worked on all finance and operational matters and assisted Mr Parish with tender submissions for the company's key educational markets. He also liaised with manufacturers and distributors to ensure a robust supply chain to support the business growth. Mr Parish and Mr Ogden worked hand in glove on a daily basis which often meant working together out of hours to achieve the company's objectives.
By 2006 Phoenix's EBT were approximately £600,000. By that time Mr Parish and Mr Ogden were the sole shareholders - Mr Parish held approximately 51% of the shares; Mr Ogden held the remaining 49%.
3.2 Mr Coles, Mr Daniels and Danwood.
Mr Daniels left University in 1968, where he studied Business Management, and joined Gestetner Duplicators Ltd as a management trainee. He left Gestetner 3 years later to run his own business in partnership with a colleague. They changed the name to Danwood when they expanded out of Lincolnshire. Mr Daniels was Chairman and Managing Director of Danwood from 1972 until mid-October 2012.
In the 40 years that Mr Daniels ran the business he built it up from nothing to an international business turning over circa £250,000,000 and employing 1900 people in 7 countries.
In October 2012 Mr Daniels was replaced as Managing Director by Mr Francis although he remained as Chairman of Danwood. In evidence he said that he was also sales director. He was suspended on 18th December 2012 and dismissed in January 2013. In evidence he stated that neither he nor his lawyers were given the reason for his suspension.
There was litigation between Danwood/Holdings and Mr Daniels relating to both Mr Daniels' running of Danwood and to the value of Mr Daniels' shares. That litigation was settled on confidential terms in November 2014. Those terms have not been disclosed. In the course of evidence Mr Daniels stated that during the negotiations he agreed that he would give evidence on behalf of Danwood in this litigation.
It is not in dispute that Danwood had an aggressive policy of acquisitions. Between 2004 and 2007 it acquired 32 companies in the UK and Ireland. It acquired 14 more companies between 2007 and 2012. In evidence Mr Daniels made the point that this was its business model. He accepted that Danwood had acquired companies at the rate of about 7½ per year since incorporation.
Mr Coles qualified as a chartered accountant in 1970. He had a chequered early career because in the early 1980's he was convicted of an offence arising out of the failure of the company of which he was the Finance Director and was sentenced to 18 months imprisonment.
In 1998 or 1999 he was employed by Danwood and became the Finance Director. In 2005 his role changed to that of Commercial Director as a result of heart problems. In 2008 he was the Director in charge of the acquisitions team.
On 18 December 2012 Mr Coles was suspended by Danwood pending investigations. He was never told the nature of the investigations although he had a number of meetings with Danwood. He tendered his resignation at the end of January 2013 as a result of which he was placed on gardening leave. His contract terminated in July 2013.
3.3 Initial offer from Danwood
In 2006 Mr Parish and Mr Ogden discussed the options of exiting the business. After some research on the internet they decided to instruct Regent to act on their behalf.
Mr Parish and Mr Ogden had a number of meetings with Mr Asher of Regent. Although there was no professional valuation of Phoenix they were given a range of values between £5 and £7 million. According to Mr Parish they sent out 10 Information Memorandums . They had 5 responses one of which was from Danwood.
On 1st October 2007 a meeting took place between Mr Parish and Mr Ogden on behalf of Phoenix, Mr Daniels, Mr Coles and Mr England on behalf of Danwood and Mr Asher on behalf of Regent. The object was to enable each side to get to know the other, to understand Danwood's interest in Phoenix and for Danwood to get an understanding of Phoenix's activities.
On 29th November 2007 following a further meeting on 28th November 2007 Mr Daniels made a written subject to contract offer to purchase Phoenix with a proposed completion date of 28th February 2008. The essential terms of the offer were:
1. a goodwill figure of £2.4 million (based on 6 times EBT)
2. a figure for the net assets of Phoenix estimated to be £1.5 million
3. an earn out based on the additional EBT over £400k for the next two years. If an EBT in excess of £750k was achieved, an extra £2.1 million (i.e. 6 x £350k) would be paid.
In an acquisitions summary prepared at the end of November 2007 Mr England noted that Mr Parish informed Danwood that he had received 2 offers (£4.6 and £6.4 million) and was awaiting another and that Mr Parish was expecting to get over £6 million. In evidence Mr Daniels accepted that he was aware that Mr Parish was looking for a sum in excess of £6 million.
3.4 Project Gresty
In April 2008, Danwood completed an agreement with Bregal (an independent private equity firm based in London then known as Englefield) whereby Bregal made a substantial investment of £40 million into Danwood in return for equity. The deal was known as 'Project Gresty'.
It is common ground that the acquisition of Phoenix was on hold whilst Project Gresty was being negotiated. The acquisition team at Danwood were fully occupied with Project Gresty.
As a result of Project Gresty the entire issued capital of Danwood was owned by a holding company, Holdings. Previously the shares in Danwood had been owned by the Directors (as to 58%), an employee benefit trust and other individuals.
The shares in Holdings were split into three categories – 'A', 'B' and 'C'. The 'A' shares – constituting 30% of the company – were held by Bregal; the 'B' shares were held by the existing shareholders of Danwood; and a new category of 'C' shares was created as part of an incentive plan for senior employees (the LTIP).
As part of the Bregal deal, existing Danwood shareholders were given the sum of £2.42 and 0.4585 'B' Shares in Holdings for each Danwood share they held.
The Articles provide that 'C' Shares are – bar some minor exceptions – non-transferable. The only mechanism by which value in 'C' Shares can be enjoyed by a 'C' Shareholder is on what is defined in the Articles as a "Liquidity Event" i.e. a "Disposal", "Sale", "Liquidation" or "Listing". In essence, these amount to a situation in which Danwood is dissolved, bought out or has an initial public offering on some recognised exchange.
Clause 4 of the Articles sets out the mechanism by which the proceeds of any "Liquidity Event" will be shared between the 'A', 'B' and 'C' Shareholders. The effect of Clause 4 can be summarised as follows:
1. The net equity proceeds of the Liquidity Event are first divided 30% / 70% between the 'A' Shares (on the one hand) and the 'B' / 'C' Shares (on the other).
2. The 70% allocated to the 'B' / 'C' Shareholders will be applied first to the 'B' Shares up to a value of £47 million (plus 10% per annum from the date of the Articles).
3. Any remaining value will be applied to the 'B' and 'C' Shares proportionately to their nominal value.
4. Any amount allocated to the 'A' Shareholders which exceeds a defined "Threshold Return" shall be divided 15% / 85% to the 'A' Shareholders (on the one hand) and the 'B' / 'C' Shareholders (on the other).
Thus, as between the 'B' and 'C' Shareholders, up to a valuation of £47 million of Danwood (increasing at 10% pa), the 'B' Shareholders enjoy a disproportionate benefit of the value of the company. Beyond that valuation, however, the 'B' and 'C' Shareholders enjoy any increasing value in due proportion. Further, if the valuation reaches the 'Threshold Return' then the 'B' and 'C' Shareholders together enjoy the value disproportionately to the 'A' Shareholders.
As at the date of completion of Project Gresty no 'C' shares were issued. 800,000 'C' Shares were issued on 6 March 2009 and a further 366,667 were issued on 28 September 2009. There are thus a total of 1,166,667 'C' Shares now issued.
3.5 The June Heads of Terms
At the end of May 2008 a further set of Heads of Terms were sent to Mr Parish and Mr Ogden. The terms were in substantially the same form as the November Heads of Terms. Thus, they referred to the agreement for sale being subject to contract (although other terms were to have legal effect). The offer price was identical to that in the November Heads of Terms – that is to say the goodwill was valued at £2.4 million, the Net Assets were to be valued and the earn out remained in place on the same terms as before. The target date for completion was 31st August 2008. Both Mr Parish and Mr Ogden countersigned the Heads of Terms on 5th June 2008.
When he gave evidence Mr Parish pointed out that at that time he had been working with Danwood for 6 months. He said that he had been speaking to Mr Daniels on a regular basis and had even (at Mr Daniels' request) been down to Portsmouth to write a report on Printware Ltd.
3.6 The September report from Mr Coles
On 26th September 2008 Mr Coles (with the assistance of other members of the acquisition team) prepared a briefing paper on the acquisition of Phoenix for the board meeting of Holdings that was to take place on 1st October 2008. The report is a lengthy document to which it is not necessary to refer in detail. It contains a section on Phoenix's accounting model which includes:
"The accounting model adopted by Phoenix is ultra-conservative and if the company were to develop the number of customer sites that they believe they could, then the model is unsustainable given the impact of working capital on the business without further support. The model used by Phoenix is simply a traditional rental model where the rental is spread evenly over the life of the contract and costs are driven through depreciation, interest and normal operating costs"
It then sets out an analysis of the profitability of one contract using this accounting method and compares it with the profitability using Danwood's accounting and cost structure. The analysis suggested an overall increase in profitability of £304,921 over 4 years.
According to Mr Coles Danwood's treatment of contracts such as this was approved by its then auditors – Ernst & Young. In 2012 Danwood changed its auditors. Its new auditors (PWC) took a different view and considered that Danwood's accounting model was not in accordance with accounting practice.
In any event Mr Coles's report drew attention to this model and made the point that it completely changed the financial dynamics of Phoenix. The report concluded by setting out the terms of the proposed deal including the provisions relating to earn out.
3.7 The Board Meetings on 1st and 8th October 2008
The acquisition of Phoenix was discussed at a Board Meeting of Holdings on 1st October 2008. Mr Daniels made the point that Danwood had a long list of acquisitions that were being worked on. He queried whether they should continue in the current climate. Mr Lazarus suggested that they should continue with the acquisition policy but should be robust in pricing negotiations.
There was further discussion at the Board Meeting of Danwood on 8th October 2008. Mr Daniels described the business of Phoenix and the purchase price including an earn out.
There was a discussion on the acquisition during the course of which Mr Daniels said his priority was Admiral, Phoenix, Copyplan and then others. It was agreed that Phoenix's financials needed to be well understood as part of the due diligence.
3.8 The change from the earn out to the LTIP
Some time in early October 2008 Mr Daniels decided that the offer for Phoenix would no longer include an earn-out. Instead there would be an offer of an LTIP. This change is not reflected in any Board Minutes but Mr Daniels said that he discussed it with his co-directors.
As the subsequent discussions are central to the dispute it is convenient at this stage to summarise the LTIP.
The LTIP
The details of the LTIP are contained in an 18 page document signed by Mr Parish on completion. The first 8 pages of the document are a summary of the general terms of the scheme initially written by Mr Coles (with assistance) sometime in 2006 but amended later. The remaining 10 pages are the terms of the scheme itself.
The LTIP was a vehicle designed to provide share benefits to Divisional Board Members and their families. It consisted of the award of C shares in Holdings based on performance criteria and (in Mr Parish's case) Mr Parish's continued employment with Danwood.
Provided Mr Parish met the performance criteria and was still in employment after 4 years the C shares would then vest.
The shares to be vested are held in an Employee Benefit Trust based in Guernsey. The shares to be vested were to be held in the trust and notionally allocated for Mr Parish's benefit. If the conditions attaching to the award were met the trustees were to segregate the shares into a separate fund for Mr Parish and his family.
The shares to be issued were free shares and not options. As such Mr Parish was not buying at a certain price with the hope that the price would increase and then only receiving the difference in value on sale.
On the other hand the shares that were the subject of the LTIP were C shares. The rights attached to such C shares were those contained in Holdings' Articles. These included the fact that (in general) the shares were only realisable on a Liquidity Event. Furthermore in assessing their value the complicated procedure set out in clause 4 of the Articles had to be undertaken.
The conversation between Mr Daniels and Mr Parish
It is by no means clear when the initial conversation between Mr Parish and Mr Daniels about the LTIP took place. Neither Mr Parish nor Danwood have a contemporaneous note of it. Furthermore there is a dispute as to whether it was a face to face meeting or a telephone conversation.
Both Mr Parish and Mr Ogden say that the LTIP was first discussed over the phone. Mr Ogden was not party to the telephone call but he says that Mr Parish reported the phone call to him shortly after he received it.
Mr Daniels says it was discussed at a meeting in Lincoln. In cross-examination he expressed himself as "virtually certain" about this
"because I would never, as part of my professional business life, hold a conversation like that, negotiating terms of anything that was important, with anyone, be it a customer, supplier, over the telephone. It is just not what I do."
There is some support for Mr Daniels' recollection in an email dated 17th October 2008 sent by Mr Ogden on behalf of Mr Parish to Mr Daniels. In that email Mr Parish thanked Mr Daniels for the meeting "today" and looked forward to working with him. The second paragraph of the email reads:
I just wanted to confirm that the initial payment is based on 6 times last years earnings before tax and the value of the balance sheet. As agreed today the earn out will be based on shares against Group performance and that I can distribute these to incentivise key personnel related to the commercial objectives if I so wish. [My italics]
When asked about this Mr Parish accepted that there must have been a meeting but said he had forgotten about it and had not referred to it in his witness statement. He accepted the LTIP must have been discussed at the meeting but he thought that the meeting in Lincoln was to do with contracts, Managed Print and all sorts of other things. Mr Parish thought the phone conversation took place about a week before the email.
Mr Parish deals with the phone call in paragraphs 81 to 84 of his witness statement. In view of the importance attached to this conversation by Mr Latimer I shall set them out in full.
I received a telephone call from Colin Daniels who informed me that he had been having a few problems regarding cash funding for acquisitions that he had in the pipeline now that the venture capitalist was on-board. He advised me that he needed to replace the earn-out element of the acquisition with shares in an LTIP scheme but that it would equate to the same value. He stated that there were very few people with shares and that shares were only issued to limited numbers of executives and thus it was in his words "an exclusive club".
Colin went on to say that the Board members were getting older, and as such, he needed a succession strategy and part of issuing shares to people like me helped to facilitate that strategy but that it would result in a four year earn-out. Colin Daniels said that I was a key part of the acquisition but that he would not expect Brian to work past one year so I would need to sort things out in the background with Brian as the earn-out would cover a period that ran on after Brian had left the business.
I asked him to clarify that what he was saying was that the scheme had the same value as the earn-out but involved shares instead of cash payments and was over a longer period, but nothing else had changed. Colin Daniels said that my understanding was correct but that I would still have to achieve the yearly targets to be awarded the shares just like the position would be with the earn-out.
I told him that I would obviously speak to Brian about this and Colin Daniels said he would ask Richard Coles to call me to organise a meeting with me to go through the details. I said I would discuss this with Brian and I would await Richard's call.
In cross-examination Mr Parish agreed that he needed more detail and that he was waiting for a further discussion with Mr Coles before he made any decision in the matter because he needed more detail. He appreciated that Mr Daniels did not have a full understanding of the scheme and that Mr Coles was its architect.
Mr Parish's evidence was that Mr Daniels said that
he needed to replace the cash-earn out for shares, but it would be of the same value
He commented that he would not give up £2 million for nothing. Later in his evidence he described the LTIP as a direct replacement for the earn-out. He repeated that he had made it clear that he was looking for a minimum of £6 million as the price for Phoenix.
Mr Daniels discusses the meeting in paragraphs 21 to 23 of his witness statement. Much of it is devoted to the email of 17th October 2008. He does, however, say (in paragraph 22) that he believes that he told Mr Parish that:
if and when he was awarded shares under the LTIP, and those shares were ultimately turned into cash, he could do whatever he wished with the money.
In cross-examination he acknowledged that he could not remember everything about the meeting:
Q. "You cannot actually remember that conversation with Mr Parish, can you ?
A I can remember very little about it, so I am telling you what I believe I can remember.
Q. Just to be clear, when you say that you believe you can remember, it is very important if you just tell us what you actually have a recollection of and what you are trying to piece together to assist the court; just so the judge knows. Of course, they are not quite the same thing.
A. I have certain knowledge that the Board had rejected purchasing Phoenix on the basis that there was going to be an earn–out. That was off the table. I had to speak to Jonathan and I had to tell him that I had to give him information about the LTIP and what that could be worth to him if he bought into the LTIP and joined the company on that basis. That I can remember. I can remember not much else about the conversation. I can remember Jonathan talking about wanting to incentivise other members of staff and I believe (and this is only a belief) that I would have said something like, "Jonathan, if you earn the money, it is your money. So you can do what you want with it." I cannot remember that, but I think that it is something I would have said."
He did, however, give a number of relevant answers:
Q. You told Jonathan Parish that Danwood needed to replace the earn-out element of the acquisition with an LTIP of equivalent value, did you not?
A. I told Jonathan Parish that for reasons that I either would have explained to him or not, because I cannot remember everything about that meeting, that the earn-out was off the table, that the company would not go ahead with an earn-out, but we wanted to discuss with him an alternative that we thought he would find acceptable.
Q. Jonathan asked you to clarify what you were saying and to confirm that the scheme had the same value as the earn-out, except it was shares rather than cash. That is right, is it not?
A. No, I told Jonathan there was an opportunity over four years to earn what he wanted to achieve in terms of a £2 million pay-out, an opportunity to earn over a period of four years. That is why the 58,000 shares were offered to him, which was the same equivalent as all the other Managing Directors had, which were the equivalent of what we hoped were going to be worth £2 million.
Q. In fact, you confirmed to Mr. Parish, when he said, "Can you clarify that it was going to be the same value in the LTIP as in the earn-out?", that that understanding was correct and you simply went on to talk about the targets or hurdles that he would have to hit in order to get the earn-out, did you not?
A. I confirmed to him that if he had achieved his hurdles to achieve his 14,500 shares each year by making his targets, we hoped that after four years his shares would be worth £2 million and hopefully, as the years went by, more.
The meeting between Mr Parish and Mr Coles
It is common ground that there was a meeting between Mr Parish and Mr Coles following the conversation with Mr Daniels. It was not a long meeting and it covered a number of topics. Both Mr Parish and Mr Coles agreed that the discussion about the LTIP only lasted about 10 minutes.
According to Mr Parish's witness statement (paragraphs 89 – 92) Mr Coles explained:
1. that the LTIP was a Long Term Incentive Plan for a select number of directors and was very tax efficient.
2. that each year Mr Parish had to achieve targets to secure the shares
3. that even though Mr Ogden was not expected to be with Danwood in 4 years time, as the LTIP replaced the earn-out Mr Ogden had an interest in the LTIP.
4. that Mr Parish would be at the higher end of the share allocation based on the number of shares required to replace the cash earn out of £2.1 million. He made it clear that the shares would have the same total value.
In cross examination Mr Parish expressed the view that at that point there was some uncertainty about some elements of the scheme and how it was drafted. He agreed with Mr Sinclair that at the end of the meeting he still required further information which Mr Coles was to provide in writing. He was however clear that the decision to go ahead with the LTIP was based on the oral representations by Mr Daniels and Mr Coles. When asked about the representations by Mr Coles he said
I reiterated it was at the same value as the original earn-out and he said "Yes", and he is going to need to allocate a large number of shares to get to that point in the scheme.
He also said that Mr Coles specifically said that the value of the shares under the LTIP would be of equivalent value to the amount of the earn-out.
Mr Coles dealt with the meeting in paragraphs 26 and 27 of his witness statement. He made the point that the LTIP was not intended to be a direct replacement of equivalent value to the earn-out. He made the point that he explained the basic mechanism of the LTIP to Mr Parish. There was no suggestion that Mr Parish was acting for Mr Ogden.
In cross-examination Mr Coles accepted that only a select number of directors were involved in the LTIP. He did not say that the LTIP was tax efficient. In his view it was not. Rather the way in which the shares were held could be tax efficient. He had the LTIP with him and went through it with Mr Parish. He did not compare the LTIP with the earn-out. His purpose was to explain how the LTIP worked not to make comparisons. He did explain that Mr Parish would have to meet a yearly hurdle. He did not discuss the position of Mr Ogden. He did not discuss the earn-out. The discussion related purely and simply to the mechanism by which the LTIP worked.
Later he explained that his personal motivation was to explain the workings of the LTIP. He rejected suggestions that he misrepresented the LTIP in order to secure the deal which was a high priority for Danwood or that his motive was to sell the LTIP to Mr Parish.
The letter sent by Mr Coles to Mr Parish
Following the meeting between Mr Parish and Mr Coles on 31st October 2008 Mr Coles wrote to Mr Parish to provide more details of the LTIP. As can be seen from the first paragraph he enclosed a draft of the LTIP with the letter. As the letter is central to the allegations made by the Claimants I shall set it out in full.
SUBJECT TO CONTRACT: LTIP
Dear Jonathan
Following our meeting last week, I am enclosing a draft of the Long Term Incentive programme (LTIP) that we discussed. I have set out a few points below to help you put the scheme in context.
The Group Board has a strategic objective to increase turnover to a minimum of £400 million by 2013. This will be achieved through a blend of organic growth and acquired turnover and we hope should produce an EBITDA of circa £50 million. It is, of course difficult to value this in today's market, but we would not expect to float in good market conditions at less than a multiple of 10, which would not be unreasonable for a business of the scale and market position of Danwood by 2013
As part of the re-organisation in April 2008 when we brought Englefield into the Company a new holding company was formed called Danwood Group Holdings Ltd which effectively owns 100% of the operating company, the Danwood Group Ltd. The total issued share capital is 11,166,667 shares broken into 3 classes.
A class represents 30% of the Company and is owned by Englefield. B class represents 60% of the Company and is owned by the previous key managers and directors. C class represents 10% of the Company and is owned by the Company's Employee Benefit Trust.
The A and B shares are closed to new participants so the LTIP will receive C shares. Sufficient shares have been ring fenced in the LTIP sub trust of the EBT to meet the demands as the LTIP share vestments.
The purpose of the LTIP scheme is to encourage divisional directors to grow their business units in line with the Company's growth and profit objectives. The cost of the shares to you is simply as a result of your own endeavours in achieving the budgets you will in any event set in the first place. There is therefore no cash outlay for you, so you are effectively backing your own commercial judgement.
The number of shares available to each LTIP participant is strictly limited to a maximum of 58,000 C shares and we have included you at the top of this scale. This figure was selected to give an indicative value of circa £2 million on final investment, which of course should continue to rise as the business continues to grow over the years ahead. This therefore should be seen as a starting point and certainly not the end game.
If you have any issues you want to explore in more detail please ring me.
Best wishes
Yours sincerely
Richard Coles
It is the Claimants' case that the letter constitutes a representation that 58,000 C shares had a value in October 2008 of approximately £2 million. Danwood does not accept this analysis. It is Danwood's case that the figure of £2 million was the forecast value of 58,000 C shares when they vested in 4 years time.
As will appear later in this judgment the meaning of the letter has to be interpreted objectively. I have to consider what a reasonable person with the relevant background knowledge would have understood from the words used in the context in which they were used.
In those circumstances the subjective views of the parties as to what the words meant are by no means decisive. In those circumstances it is not necessary to summarise the whole of the cross-examination on the letter. Mr Parish's views can be seen from the following passages from his cross-examination:
Q. We will talk about net assets later, but looking at this, where it says, "the value of circa £2 million on final investment", you knew -- it is obvious -- that means in four years' time, does it not?
A. It may be a higher figure.
Q Yes, it may be higher.
A. It may be a higher figure. It says it is a starting point a well, which is the other area that you seem to be – the position in this letter reflected my understanding of the conversations. It is that it was circa £2 million for the shares at a starting point and I think that somewhere in here it states that it should be seen as a starting point and certainly not an end game, not four years down the line and I get the same value that I had got in June Heads of Terms, or Brian and myself had got in the June Heads of Terms.
Then slightly later:
MR. SINCLAIR: It is, "This figure was selected to give an indicative value of circa £2 million in four years' time."
A. That is right, yes. It is saying that, but obviously the £2 million comes back to the original earn-out figure, so it is somewhat ironic that the maximum number of shares you can actually have comes back to our earn-out figure as well.
Q. What this sentence is not saying is, "This figure is selected to give an indicative value of £2 million today."
A. No, the previous paragraph, which you seem to want to ignore, is saying it is a starting point.
JUDGE BEHRENS: No, it is actually the next sentence.
A. Sorry, it is the next sentence.
JUDGE BEHRENS: It is there. It is the final sentence.
A. I apologise.
JUDGE BEHRENS: It is there, but ----
A. It is saying it is a starting point and not an end game. That clearly says to me that the growth will be in the future. The future is tomorrow. That is saying that the company now has investors. It is pushing growth. Its vision is to get to £400 million and the risk that me and Brian were taking was effectively, now we have investors in, would the shares go down or could they go up? With an investment capital company
the size of Bregal behind it, it was very unlikely if financial information was reported correctly in regard to that so our risk was very minimal. The only decision we had was, are we prepared to take shares instead of cash?
When Mr Coles gave evidence he was referred to paragraph 30 of his witness statement:
I did not intend that the wording of the letter dated 31 October 2008 should be construed as making any form of guarantee as to what the future (or indeed current, as seemingly alleged) value of the 'C' shares might be – hence the cautious wording I chose to use: "an indicative value of circa £2m, which of course should continue to rise". It was not the case, as alleged at Paragraph 23 of the Reply, that the £2m figure was "presented as being both the minimum value of 58,000 shares and a fair substitute for the earn-out provision". The letter does not present any "minimum value" and nor does it make any reference to the earn-out that had previously been considered, which was never a "substitute" for the LTIP. It is a matter of basic valuation accounting that the 'C' Shares could not possibly be worth anything unless and until there was a Liquidity Event as defined in the Articles. I do not consider that I misled Jonathan as to how the LTIP would operate, or what the 'C' Shares might be worth in the future if our projections proved to be accurate.
In cross-examination he adhered to that position. His object in writing the letter was simply to reflect the position of the LTIP. He said the letter was to indicate the sort of hope value Danwood had in the business moving forward. He denied that the letter was written dishonestly or intended to convey the meaning that the C shares were worth £2 million at that time.
The figures put forward by Mr Coles are supported by a spreadsheet which he had prepared at the time. That spreadsheet has been criticised by Mr Clements (the Claimants' expert) but it does show a forecast 2013 value for the C shares of £32.13 per share which would value 58,000 C shares at about £1.9 million. It is not suggested that he showed Mr Parish this spreadsheet at the time.
3.9 The conference in mid November 2008
In November 2008 Mr Parish was invited to and attended a conference where presentations were given by a number of senior executives including Mr Daniels. In his presentation Mr Daniels referred to Danwood's ambition to achieve a £400 million turnover by 2013. Thus the figure of £400 million referred to in the October 31st letter was shared by Mr Daniels, the managing Director.
3.10 Events leading to completion
The Email of 3rd November 2008
On 3rd November 2008 Mr Parish sent Mr Coles an email in which he stated that he had read the LTIP document and raised two queries. One related to tax, the other to the LTIP targets. In his query Mr Parish referred to "the aim of £400 million revenue". Mr Coles answered both the queries the same day.
The November 2008 Heads of Terms
On 13th November 2008 Danwood sent to Mr Parish and Mr Ogden new Heads of Terms. This document made no mention of the earn out (which had, of course been replaced) or the LTIP. Otherwise it was similar to the earlier Heads of Terms. The target date for completion was 1st December 2008.
The Heads of Terms were signed by Mr Parish and Mr Ogden on 17th November 2008
Events leading to completion
It is not necessary to set out the events in any detail. However a number of points need to be made:
1. Both sides had legal advice. Mr Parish and Mr Ogden instructed Trevor Ironmonger of Ironmonger Curtis. Danwood had the benefit of 2 in house solicitors (Ross Eaglestone and Scythia Cross) in its acquisition team.
2. On 18th November 2008 Mr Ironmonger sent a long email to Mr Eaglestone. One of the matters he referred to was the LTIP. After making the point that it was not referred to in either the draft SPA or the Heads of Terms he referred to the draft LTIP document that had been sent to Mr Parish. The email continued:
Whilst a useful illustration of the scheme, to properly consider this we do all need to see the full proposed documents as specific to Jonathan. Indeed, I am told that you are designing the LTIP around Phoenix. Please provide details of the rights that attach to the C ordinary shares together with a copy of the articles
As this scheme is effectively now offered in place of the previously proposed earn out, it is of course an important part of the deal and should also be in place upon Completion. Can you please let us have the necessary LTIP and employment documents as soon as possible
3. On 27th November 2008 Mrs Cross sent to Mr Ironmonger a draft service agreement for Mr Parish. In the email she made the point that she had not referred to the LTIP:
"as I am told that from a tax perspective it's preferable to keep it in an entirely separate document. [Mr Eaglestone] will supply a copy of the LTIP document as soon as it has received final approval from our tax advisers."
4. On 11th December 2008 Mr Eaglestone sent to Ironmonger Curtis a copy of Holdings' Articles, and the LTIP.
5. At a Board meeting of Holdings on 22nd January 2009 Mr Daniels reported that the Phoenix acquisition would be completed on 30th January 2009. The Board also authorised the issue of C shares. The relevant minute reads:
The proposal of issuing 800,000 C shares at a price of 5p per share was discussed. It was agreed that the price fairly reflected the current market value of the C shares. It was agreed that the 800,000 shares can be issued.
6. Pursuant to this resolution the 800,000 C shares were in fact formally issued on 6th March 2009.
3.11 Completion
Completion duly took place at Danwood's offices on 30th January 2009. At the completion meeting a suite of documents were signed and exchanged. These included the SPA, Mr Parish's LTIP, and employment contracts for both Mr Ogden and Mr Parish.
Mr Ogden was in fact offered an LTIP but when he pointed out that this was a mistake it was withdrawn.
Under the terms of the SPA the sum of £2.4 million was payable on completion. The sum payable in respect of the Net Assets was payable within 7 days of agreement and determination of the completion accounts in accordance with a procedure set out in Schedule 6.
Under clause 4.2.1 and Schedule 1 the sum of £2.4 million was payable as to 49.25373% to Mr Ogden and 50.746262% to Mr Parish. However under clause 4.6 it was open to the Sellers to agree between themselves a different proportion.
On 29th January 2009 Mr Ironmonger invoked the power under clause 4.6 by sending Mrs Cross an email which included:
Please note that for the purpose of the agreement Schedule 1 [Mr Ogden] and [Mr Parish] want the initial cash consideration to be paid as follows:
Mr Parish £1,350,000 55.59%
Mr Ogden £1,050,000 44.41%
Total £2,400,000 100%
This document is relied on in support of the allegation that Mr Parish was acting as Mr Ogden's agent in the negotiations for the LTIP. It is Mr Parish's case that when Mr Daniels first mentioned the LTIP in October 2008 Mr Daniels told him that he would have to sort Mr Ogden out as it was not intended that Mr Ogden would work for 4 years so as to qualify for shares under the LTIP. As a result of that discussion Mr Ogden and Mr Parish agreed that the LTIP shares would be held by Mr Parish for himself and Mr Ogden in the proportions set out above.
Mr Parish, however, accepted that he did not inform anyone at Danwood of the terms of his agreement with Mr Ogden. Furthermore as can be seen from the wording of the email the payment instruction only refers to the "initial cash consideration" and is, of course different from the proportions in Schedule 1.
3.12 Payment for Net Assets
On 3rd April 2009 Mr Ogden sent Phoenix's draft completion accounts to all relevant parties at Danwood. Those completion accounts valued the net assets at £1,831,675. Included within that figure was long leasehold property valued at £1,287,020.
It is common ground that there was a dispute between Nigel Ward (the Director of Danwood who was dealing with the matter) and Mr Parish over the value of the properties. It is not necessary to set out the details of the dispute save to note that Mr Ward considered that the properties were overvalued.
Schedule 6 contained a mechanism for the resolution of the dispute which both parties were keen to avoid. Accordingly in an effort to avoid the process, on 10th July 2009 Mr Parish sent an email to Mr Daniels proposing a compromise. It is not necessary to set out the compromise in detail as it contained a number of elements. One of the elements related to bad debts. Another proposal was to reduce the £1,287,020 value of the properties by £104,249 to £1,182,771 and to divert that sum to Mr Parish's LTIP.
There were further negotiations which resulted in a proposal by Mr Ward at the beginning of August 2009. Regrettably the email of that proposal cannot now be found.
On 9th August 2009 Mr Parish sent Mr Ward an email which is central to the second part of their claim. It reads:
Hi Nigel,
After reviewing your proposal regarding the asset value I wish to table the following which is very much in line with your correspondence and our discussion with the objective of moving forward before the board next week.
1. Your proposal effectively restructured the figures to 1,445k cash and 280 LTIP
2. To bring to a close. 1,500 cash and 225 LTIP (at a share value of 30.00 per share making a total number of shares 7500)
3. Colin also stated that he intended to [align] my salary with the other MDs to 150k to create parity.
I appreciate you are going away today but if it would be possible to confirm the position by close of business I would be grateful.
Thanks
Jonathan
There were further negotiations at least in part over the bad debts. In an internal email from Mr Ward to other members of Danwood dated 1st September 2009 Mr Ward said:
[Mr Parish] and I have agreed a payment of £1.5m less the Bradford debt (presumably still £110k …) This values the properties at £955k which I think is OK
On 3rd September 2009 Mr Ward sent Mr Parish an email stating that he thought the matter was agreed and that subject to updating the accounts Danwood would remit £1,399,647.
The email continued:
Myself or Colin will outline on a separate note that this year's performance … satisfies your first LTIP hurdle; that there are a further 7500 C shares allocated to you and to outline your bonus percentage for the forthcoming financial year.
On 15th September 2009 Lizzie Taylor (an Acquisition Accountant employed by Danwood) emailed Mr Ogden confirming receipt of the accounts showing net assets of £1,499,489 and asking for confirmation that that sum was to be split in accordance with the percentages in Schedule 1. Mr Ogden emailed back the same day that the moneys were to be split as to 56% for Mr Parish and 44% for himself.
It is the Claimants' case that there was a representation by Mr Ward that the C shares were at that time worth £30 a share.
Both Mr Parish and Mr Ogden were cross-examined as to whether Mr Ward actually represented any value for the shares at all. In the light of the allegations now made the answers are important.
Mr Parish's answers to questions about the 9th August 2009 email included:
MR. SINCLAIR: The proposal put to you was 1.445 cash, but then he actually proposed 8,000 shares, did he not? He did not propose a figure of money. He proposed 1.445 cash and 8,000 shares in the LTIP?
A. And 8,000 shares came back ----
JUDGE BEHRENS: Just answer the question. Do not analyse it. If you cannot remember, just say "I cannot remember".
A. I cannot remember.
JUDGE BEHRENS: I do not want you to work out what 8,000 shares comes to, because I can do that if I have to.
MR. SINCLAIR: Do you remember that when Mr. Ward made this offer to you, it was a certain amount of cash, which I think we can see is 1.445 cash, and he also offered a number of shares, which was 8,000?
A. Correct.
Q. What you have done in this e-mail is, you have rewritten his offer in a slightly different way. You have said: "Your proposal effectively restructured the figures to 1.445 cash and 280 LTIP", by which you mean £280,000 in the LTIP?
A. Correct, as everyone has been talking about putting the balance, the payment -- I think there are words like "payment" and "balance" in these e-mail chains -- into the LTIP. It is not -- it is an asset figure. Are we saying now we are going to give another £300,000 discount as well?
Q. What Mr. Ward was not doing was offering you a specific amount of money going into the LTIP. He was offering a specific number of shares, and what you have done is rewritten that in your own way to identify an amount of money going into the LTIP. That is why you used the words "effectively restructured", because you were rewriting what he offered you in your own way?
A. That is not correct. We went to a meeting after this, and that is where the figure changed to 1.5 and 250,000, where Nigel said the figure in regard to the shares and where Brian and him negotiated to get down to £30 a share, to cover off the interest, because we were not being paid cash.
Mr Ogden's evidence included the following exchange:
MR. SINCLAIR: Please can we look at paragraph 128 of your statement. This refers to a meeting that you had with Nigel Ward in August 2009, where you say: "Nigel had suggested that there the £1,445k was paid in cash and the remaining amount of £280k would be transferred into Jonathan's LTIP. Nigel Ward suggested that there should be a transfer of 8,000 C Shares".
Can you now recall that, or is that ----
A. I can recall that, because that was a conversation that we had, that there was a balance of 280,000 and Mr. Ward suggested 8,000 C Shares.
Q. Can you remember that Mr. Ward suggested the number of 8,000 for the C Shares?
A. Yes.
Q. You can remember that?
A. I can.
JUDGE BEHRENS: This would be after the e-mail, would it?
A. Yes, because we were expecting 1.725 in cash. Then an e-mail came, and it obviously had on it 1.445 million, which was a long way short of 1.725 million, and so we said, "Can we come and see you and discuss it", with the aim of getting the 1.445 million up as high as we could.
MR. SINCLAIR: Do you think that Mr. Ward said in terms, "Well, the remaining amount of 280,000 that we are in dispute about, that is equivalent to 8,000 C Shares, and so we will give you that"?
A. I believe it was suggested 8,000 C Shares for the balance of the net assets, and the balance for the net assets was £280,000.
Q. Yes. But is that what Mr. Ward was saying, both those things?
he say, "There is £280,000. So, instead of giving you that in cash, we will give you the equivalent in shares, which is 8,000 shares"?
A. No. I think he said, "I propose 8,000 shares." I do not think he used the word "equivalent", but he knew he was talking about a balance of £280,000.
Q. He never made an actual representation to you, did he, that the shares were worth £35 per share? That is something that you worked out ----
A. Yes, by dividing ----
Q. --- by looking at his offer?
A. Yes, that is correct.
Q. In the end, the proposal that was arrived at was slightly different: it was £1.5 million in cash and 7,500 shares; is that right?
A. That is correct, yes. We tried to negotiate the cash higher, but I think Nigel just said that we have cash flow problems, for whatever reason. It was evident that we were not going to push the cash figure up much higher without falling out.
3.13 Events following completion
2009
On 28th September 2009 a further 366,667 C shares in Holdings were issued. As a result there were a total of 1,166,667 C shares issued.
In October 2009 Mr Daniels emailed Mr Ogden (with copies to Mr Parish and Mr Coles) confirming that Phoenix's performance qualified for the first year of the LTIP scheme.
2010
Sometime in 2010 Mr Parish discovered that no C shares had been allocated to him. On 31st August 2010 Mr Daniels sent an internal email to Mr Wilson (who was responsible for the day to day administration of the LTIP) stating that the 7,500 C shares resulting from the agreed negotiation should have been deposited into his sub-trust but that the shares earned in years 1 and 2 would not be deposited until the end of the 4 year period. Mr Parish was said to agree with this.
In September 2010 Mr Parish attended a presentation prepared by Mr Ward to discuss the 2009/2010 results. Amongst the items discussed was a share valuation. In summary that valuation valued the C shares at £4.14 as at 30th September 2010 with a projected valuation of £8.11 for the next year.
In his witness statement Mr Parish described himself as "spooked" by these valuations as they were less than the sums previously represented to him. In cross-examination he described himself as "shocked", and "horrified".
2011
Mr Parish did not raise the question of the LTIP until February 2011. On 24th February 2011 he sent an email listing a number of items he wished to discuss with Mr Daniels. Amongst the items was a 15 minute discussion in the presence of Mr Ogden about the LTIP.
The meeting took place on 7th March 2011. Minutes were prepared by Mr Parish (and were sent to Mr Daniels' personal assistant on 14 March 2011) and read:
JP outlined a challenge with respect to the value attributed to the C shares with regard to the work-out structure agreed prior to completion. CD assured JP it would be resolved but suggested JP organise a meeting with [Mr Coles] to resolve the number of C or B shares required to bring the plan back in line with the agreed value.
Following that email Mr Parish sent an email to Mr Coles on 7th April 2011 which includes
"Good afternoon, Richard.
Colin asked me to drop you a line after a positive and constructive meeting we had recently regarding a number of divisional topics.
The item he asked me to liaise directly with yourself was with respect to my LTIP with the objective of repositioning in line with the expectations communicated as part of the acquisition
… The LTIP was structured in such a way as to provide a value of circa £2 million after four years (the original figure of the "Earn-out" on acquisition was to be £2.1 million) and to achieve this 58,000 C shares were to be allocated via the LTIP. The price per share would therefore be £34.48.
The C share valuation at 30 September 2014 was £4.14 … The forecast valuation at 30 September 2011 for C shares is £8.11 …. As can be clearly seen there is a large difference in share value between that "allocated" against that forecast. …
Danwood rely on that email as being inconsistent with the suggestion that there was any representation as to the 2008 value of the C shares. It refers to the use of the words "expectations" and "forecast".
Mr Coles did not reply until 22 June 2011. In his reply he said:
I fully appreciate the need to address these issues but they are complex and go hand in glove with a project I am currently working on which has an impact on the equity structure of the Company. I have to complete this within the next week so I will then promise to move straight on to your issues.
When he gave evidence about this email Mr Coles said:
The discussions about share value and the share structure of the company were not isolated to Jonathan Parish at all. It was the entire younger management team of the company coming through, who were working with the business to grow the business. They were the ones that were growing it. There were a lot of the senior management who had reached either maturity or near maturity, as in near pension age, and they were having a disproportionate amount of the value of the business in terms of the way the business was structured at that stage. Our view was that the business was structured incorrectly to be able to deal with the business moving forward. …
As I said already, we were negotiating with Bregal to try to establish a new share structure for the business that would fairly benefit the younger members of the company.
Q. But the reason you were doing it was not merely a concern for fairness; it was that if promises had been made to Jonathan Parish and Brian Ogden, if you could restructure with Bregal, the C Shares might start to be worth something?
A. No, the principle was to get rid of the whole C share structure and completely redistribute the way the C Shares operated.
Mr Parish and Mr Ogden had a meeting with Mr Coles in August 2011 when the share value was discussed. Mr Parish alleges that Mr Coles said that he understood that Mr Parish had been "spooked" by Mr Ward's presentation, that he knew what had been agreed and that Danwood was not going to rip him off. Mr Coles said he needed more time to sort it out and would get back to Mr Parish.
Mr Coles remembered that Mr Parish and Mr Ogden came to see him. He had no recollection of using the words attributed to him by Mr Parish. He repeated the explanation that he was negotiating with Bregal to try to establish a new share structure for the business that would fairly benefit younger members of the Company. He explained that he was trying to get rid of the whole C share structure and redistribute the way the C shares operated.
On 25th October 2011 PWC replaced Ernst & Young as the auditors of Danwood and Holdings. In the course of the 2011 audit PWC were made aware of what they describe as accounting irregularities.
2012
On 7th and 8th February 2012 there was an email exchange between Mr Parish and Mr Coles in which Mr Coles confirmed that Mr Parish had achieved the LTIP qualification for the third year. Mr Coles' email continued:
I know it seems to have gone on for ages but I am now aware of all the facts that will enable us to revisit the LTIP scheme and other methods of equity incentivisation within the Company. Hopefully I will shortly be able to provide something more concrete to support Colin's statements about the broader all employee share scheme.
By May 2012 it had become apparent that Danwood had had 3 years of no growth in EBITDA despite £40 million in acquisitions. On 2nd May 2012 Mr Daniels sent an email to senior executives (including Mr Parish) pointing this out and that it should not be allowed to continue.
In July 2012 Mr Parish was offered the job of Group Director rather than his job of Managing director of the Northern Division. There are a number of emails about this. It is not necessary to refer to them in detail. Mr Parish raised a query relating to the question of whether he had qualified for the fourth year of the LTIP. Mr Parish described the LTIP as being "of major importance" and being "a major part of the acquisition process". He did not complain of the misrepresentation at that time.
On 5th October 2012 Mr Parish sent an email to Mr Coles which included:
"Obviously I'm due to shares based on the performance related earn out and in this year, like the previous years, I have had formal confirmation I have achieved the gate, so would this not be classed as receivable or is this only applicable when the shares vest in December 2012 at the forecasted rate of £34.00 to get back to the £2 million agreed based on the maximum amount of shares being 58,000, which was put aside to accommodate the expectation of circa £2.1 million earn out at the point of acquisition."
When it was suggested to him that that showed that the £2 million was a forecast of the value at December 2012 Mr Parish did not accept this. He gave the following explanation:
No. I am saying that is exactly what we were expecting as part of the earn-out. This was a replacement for the earn-out. So, the starting point and the beginning is the £2 million. They will grow, hopefully, over the next few years, especially with the venture capitalist behind the business. We did not give away £2 million.
On 16th October 2012 Mr Francis was appointed as CEO in place of Mr Daniels.
On 6th November 2012 Mr Francis gave a presentation entitled "Strengthening for the Future" in which he acknowledged that for each of the last 3 years there had been on average £3.5 million overbooked revenues and that EBITDA had been overstated by an average of £4 million annually.
On 23rd November 2012 Mr Wilson sent Mr Parish an email confirming that 7,500 shares were transferred to his EBT subtrust in 2010 and that he had earned a total of 14,500 shares in each of the 2009, 2010 and 2011 years.
On 18th December 2012 Mr Daniels and Mr Coles were suspended.
On 20th December 2012 Mr Wilson sent Mr Parish an email in which he stated that the current market value of the C shares was nil and there were 7,500 C shares held in Mr Parish's subtrust.
2013
Mr Parish replied to Mr Wilson on 3rd January 2013. He expressed concern that the shares appear to be valueless as he had always understood they had "substantial value". He queried why only 7,500 shares were in his name.
A further reply was received from Mr Francis on 8th January 2013. He accepted that the scheme, when launched, was perhaps not communicated as transparently as one might expect. He pointed out that with Mr Coles and Mr Daniels on suspension it was difficult to gather the necessary information to be more definitive.
On 22nd January 2013 Mr Daniels resigned as a director of Danwood and Holdings. He ceased to be employed from that date. On 31st January 2013 Mr Coles resigned as a director and gave 6 months notice to end his employment. He was placed on gardening leave throughout that period.
On 30th January 2013 Mr Collis (a Director of Danwood) sent an email to Mr Parish to confirm the share values allegedly discussed with Mr Daniels. It includes:
The share value was set at £35 per share to cover the business transfer and £30 per share to cover the shortfall in the asset value of the buildings.
Mr Parish was asked about this email in cross-examination and the fact that Mr Collis was not called to give evidence. His answers included:
Q. And Mr. Collis was never there in any discussion about the LTIP prior to the acquisition of Phoenix, was he?
A. No, but he was aware, because he worked in the office and he was the Director of Phoenix and he was part of the transition, which is stated, I think, in Mr. Daniels' statement, I think.
Q. He was never there when you had these discussions with Mr. Ward about the net asset value?
A. He was not at the net asset meeting, no.
Q. He is a friend of yours who was planning to give evidence in these proceedings on your behalf, was he not?
A. Roger was a colleague of mine, and he was a colleague of Colin's, and a friend for 15 to 20 years, which is why I recorded this conversation, because I suspected what would happen.
Q. And he has not proved himself to be a very reliable person, has he, in fact? You were planning to call him, and the decision was taken not to call him, because he was not a witness of truth?
A. I believe that is what counsel has put forward, yes.
On 23rd April 2013 Mr Parish secretly recorded a telephone conversation he had with Mr Daniels. At that time Mr Daniels was heavily involved in litigation with Danwood. That litigation was compromised in November 2014 on confidential terms.
3.14 Mr Berg
Mr Berg was appointed as Group Finance Director of Danwood on 15th September 2008. His contract was terminated on 12th December 2008. It is not necessary to go into the grounds of the termination.
When he was interviewed by Mr Daniels before his appointment Mr Berg was told that Danwood wanted to bring someone onto the Board who had experience of listed companies because the idea was for Danwood to be ready for flotation in 3 years.
He was told his package would include a substantial sum by way of shares in Danwood to be held on his behalf in a LTIP. He was told that the shares would be worth £1 million.
Mr Berg was not given any details and assumed (perhaps wrongly) that he would be granted share options rather than actual shares. In any event he did not initially appreciate that there were different classes of shares. Equally he does not seem to have known the structure of what he was being offered.
Mr Berg had a meeting with Mr Coles shortly after he joined but was told that his share entitlement had not been sorted out and would be dealt with soon.
Mr Berg became concerned about the value of the shares following a presentation given by Mr Wilson at the end of October 2008. On 3rd December 2008 he had a meeting with Mr Daniels when he raised the question of the shares. On 12th December his contract was terminated.
There was a dispute as to how much he was owed by Danwood. The dispute was compromised in the summer of 2009.
4 The Law
Fraud
Mr Sinclair drew to my attention three relevant principles in fraud cases:
1. The burden of proof lies on the Claimants to establish their case. They must persuade the Court that it is more probable than not that Danwood made fraudulent misrepresentations. Although the standard of proof is the same in every civil case, where fraud is alleged cogent evidence is needed to prove it, because the evidence must overcome the inherent improbability that people act dishonestly rather than carelessly or innocently. [See In Re B [2009] 1 AC 11]
2. The claim in fraud must be decided on the basis of the pleaded representations. As Lord Millett explained in Three Rivers District Council v The Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 (at [184-6]):
"184 It is well established that fraud or dishonesty ... must be distinctly alleged and as distinctly proved; that it must be sufficiently particularised; and that it is not sufficiently particularised if the facts pleaded are consistent with innocence ... This means that a plaintiff who alleges dishonesty must plead the facts, matters and circumstances relied on to show that the defendant was dishonest and not merely negligent, and that facts, matters and circumstances which are consistent with negligence do not do so.
185 It is important to appreciate that there are two principles in play. The first is a matter of pleading. The function of pleadings is to give the party opposite sufficient notice of the case which is being made against him. ...
186 The second principle, which is quite distinct, is that an allegation of fraud or dishonesty must be sufficiently particularised, and that particulars of facts which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved."
3. In assessing whether a statement was made fraudulently the test is based on the defendant's subjective understanding of the utterance. Thus in Akerhielm v de Mare [1959] AC 789 Lord Jenkins said:
"The question is not whether the defendant in any given case honestly believed the representation to be true in the sense assigned to it by the court on an objective consideration of its truth or falsity, but whether he honestly believed the representation to be true in the sense in which he understood it albeit erroneously when it was made."
Misrepresentation
A useful recent summary of the relevant law is contained in the judgment of Popplewell J in Moto Mabanga v Ophir Energy [2012] EWHC 1589 (QB) at [24]-[30]:
The relevant principles applicable to claims based on misrepresentation, which are relevant both to the tort of deceit and to claims under Section 2(1) of the Misrepresentation Act 1967, include the following.
Whether any, and if so what, representation was made has to be judged objectively according to the impact that whatever is said may be expected to have had on a reasonable representee in the position, and with the known characteristics, of the actual representee. See MCI WorldCom International Inc v Primus Telecommunications Plc [2004] EWCA Civ 957 per Mance LJ at paragraph 30; Raiffeisen ZentralBank Osterreich AG v Royal Bank of Scotland Plc [2010] EWHC 1392 (Comm); [2011] 1 Lloyd's Reports 123, per Christopher Clarke J at paragraph 81. The reference to the characteristics of the representee is important. …
In the case of an express statement, the court has to consider what a reasonable person would have understood from the words used in the context in which they were used: IFE Fund SA v Goldman Sachs International [2007] 1 Lloyd's Rep 264 per Toulson J at paragraph 50 (upheld by the Court of Appeal at [2007] 2 Lloyds Rep 449 ). The answer to that question will depend on the nature and the content of the statement, in the context in which it was made, the characteristics of the maker and of the person to whom it was made and the relationship between them: Raiffeisen ZentralBank v RBS per Christopher Clarke J at paragraph 82.
In the case of an express statement which is made in a document, the context will include the other terms of the document and the terms of surrounding documents passing between the parties. When considering a written representation, the task is to determine how the words would have been understood by the parties, not in a vacuum, but having regard to all the surrounding circumstances known to the parties. It is important in this context, just as when seeking to determine the true construction of a contract, to consider the full terms of the relevant document, not merely the extract which is said to contain the express statement amounting to a misrepresentation. This is not some arbitrary rule of construction. It accords with the commercial expectations of businessmen. One sentence in a letter is not written or read in isolation. It is written or read in the context of the whole letter and would be intended and understood as such.
…
Statements of opinion are not normally actionable if they consist of no more than contentions or arguments as to the effect of a document whose terms are equally known to both parties…
Statements of opinion will generally carry with them an implied representation that the opinion is honestly held. In such cases there is no misrepresentation if the opinion was expressed in good faith: Economides v Commercial Union Assurance [1998] QB 587. A statement of opinion may also carry with it an implied statement of fact that the maker knows facts which justify his opinion or has reasonable grounds for expressing the opinion. Such an implication may more readily be drawn where the representor is in a stronger position than the representee to know of, or to ascertain, the relevant facts: see Smith v Land and House Property Corporation ...1884) 28 ChD 7; Brown v Raphael [1958] Ch 636. Whether such implication in fact arises depends in each case on the express terms of the representation and the circumstances in which it was made, including the characteristics of the representor and representee, the relationship between them, and the relative state of their knowledge.
5 The pleaded allegations of misrepresentation/fraud
The Amended Particulars of Claim
In paragraph 13 of the Amended Particulars of Claim it is alleged:
1. That (at the meeting in October 2008) Mr Daniels said he wished to replace the earn out provision with the equivalent value of shares under a share scheme called an LTIP and suggested that Mr Parish should meet with Mr Coles.
2. That at the meeting with Mr Coles, Mr Coles represented that Danwood proposed replacing the earn out provision worth a maximum of £2.1m with the equivalent value of shares under the LTIP.
In paragraph 18 of the Amended Particulars of Claim it is alleged that in the letter of 31st October 2008 Mr Coles represented to the First Claimant that the C shares provided under the LTIP would be equivalent to approximately £2m worth of shares.
In paragraphs 30 and 31 of the Amended Particulars of Claim it is alleged that during the negotiations in the summer of 2009 Mr Ward represented by conduct that 8,000 C shares in Holdings were worth £280,000 (giving a value of £35 per share) and that 7,500 C shares in Holdings were worth £225,000 (giving a value of £30 per share).
In paragraphs 40 and 41 of the Amended Particulars of Claim the Claimants alleged that the representations were untrue at the time they were made and thereafter. The Particulars to paragraph 41 make it clear that the allegations are that 58,000 C shares were not worth £2 million as at October 2008 and that 7,500 C shares were not worth £225,000 in August/September 2009.
In paragraph 42 of the Amended Particulars of Claim the Claimants allege that the representations were made dishonestly or recklessly. The Particulars indicate that the Claimants' case is that Mr Daniels and/or Mr Coles and/or Mr Ward knew that 58,000 C shares in Holdings were not worth £2 million in October 2008 and that 7,500 or 8,000 C shares were not worth £225,000 or £280,000 in the summer of 2009. Alternatively they were reckless as to whether the C shares could have had those values at the relevant times.
The Defence
In paragraph 10 of the Amended Defence issue is taken as to whether Mr Daniels represented that the LTIP was a direct substitution of equivalent value and whether Mr Coles made any representation about the value of the C shares at the meeting with Mr Parish.
In paragraph 13 of the Amended Defence issue is taken as to whether the letter of 31st October 2008 on its true construction contained a representation that the C shares awarded under the LTIP would be equivalent to approximately £2 million worth of shares.
In paragraph 23 and 24 of the Amended Defence issue is taken as to whether Mr Ward expressly or impliedly represented that 8,000 C shares in Holdings were worth £280,000 (giving a value of £35 per share) and that 7,500 C shares in Holdings were worth £225,000 (giving a value of £30 per share).
In paragraph 32 of the Amended Defence it is denied that any representations that were made were untrue; it is asserted that they were statements of opinion honestly and reasonably held by their makers and which were based on the assumptions stated in the letter of 30th October 2008.
In paragraph 34 and 35 of the Amended Defence issue is taken as to the reliance of the Claimants on the representations. It is expressly denied that any representations were made dishonestly, recklessly or negligently.
The Reply
With limited exceptions the Amended Reply does not in substance add to the issues set out above though it does go into considerable detail in relation to the arguments the Claimants seek to put forward.
In paragraphs 92 and 93 of the Amended Reply it is alleged that even if the statements were statements of opinion they are actionable because they were not reasonably and honestly held.
Comments
In his closing submissions Mr Sinclair distinguished between 3 types of representations about share value. Type A is a representation that the existing value of a share is £x. Mr Sinclair acknowledged that such a representation was actionable. In principle I agree though it is possible that such a representation may be a representation of opinion. Whether such a representation has been made depends on the matters set out in paragraphs 25 – 27 of Popplewell J's judgment. Type B is a representation that the future value of the share will be £x in (say) 4 years time. He submits that this is not actionable though there may be an implied representation that the representation was honestly held. I agree. This is covered in paragraph 29 and the first two sentences of paragraph 30 of Popplewell J's judgment. Type C covers the situation in the remainder of paragraph 30 of Popplewell J's judgment.
Mr Sinclair submits that the Claimants' case is that all of the representations are Type A representations i.e. representations as to the existing value of the shares. That is the effect of the pleadings, and the way the case has been prosecuted. He referred me in particular to Mr Latimer's opening where he referred to the C shares being worth £34.48 at the date of the letter[1], to the cross-examination of Mr Coles where it was put to Mr Coles that the purpose of the letter was to convey to Mr Parish and Mr Ogden that the C shares were worth £2 million on the date of the letter[2] and to an exchange on Day 4 when Mr Sinclair expressed concern as to the cross examination of Mr Coles on his spreadsheet. Mr Latimer described as "a straw man" the suggestion that the valuation in the spreadsheet gave rise to a cause of action. It was not and had never been in issue.
Mr Sinclair points out that there is no alternative claim pleaded based on the honesty or reasonableness of Danwood's belief as to the value of the C shares when they finally vested after 4 years. Nor was such a case put in cross-examination.
I agree with those submissions. Accordingly the central question for me to decide is whether Danwood (either by Mr Coles or Mr Daniels) represented that the value of 58,000 C shares was approximately £2 million in October 2008 or (by Mr Ward) that the value of 8,000 C shares was £280,000 and/or that the value of 7,500 C shares was £225,000 in the summer of 2009.
6 Assessment of witnesses
As both Counsel appreciate there is a great deal of common ground between the parties. So much so that Mr Latimer was able to list a considerable body of facts as undisputed.
However there are crucial factual differences as to what was said by Mr Coles and Mr Daniels at their meetings with Mr Parish in October 2008 and of course there are disputed allegations that Mr Coles, Mr Daniels and Mr Ward were dishonest/reckless.
In those circumstances it is necessary to form an assessment of the main witnesses. Perhaps, unsurprisingly, Counsel invited me to accept the evidence of the witnesses called on behalf of their respective clients.
Mr Latimer's submissions
Mr Latimer relied on what he describes as Mr Daniels' approach to the evidence based on the taped conversation where he agreed to back Mr Parish and Mr Ogden up, to the fact that Mr Daniels did not disclose the letter of claim that Danwood had made against him and that Mr Daniels had only agreed to give evidence for Danwood as part of the settlement of his dispute with Danwood. Mr Latimer made the point that Mr Daniels was in touch with Mr Collis (the author of 30th January 2013 email but who was not called to give evidence).
He pointed to the fact that Mr Coles had to correct his witness statement in relation to other litigation involving Danwood, and that Mr Coles had known Mr Daniels as a friend for a long time. Mr Coles agreed that some of the comments in his witness statement had been prepared by lawyers.
He relied on the independent evidence of Mr Berg. He suggested that the effect of Mr Berg's evidence was that Mr Daniels represented that the share options had a value of £1 million in September 2008.
He pointed out 3 factors that he suggested gave Mr Daniels and/or Mr Coles the incentive to lie. These were Danwood's aggressive acquisitions policy, the financial pressures facing Danwood and the priority afforded by Danwood to the acquisition of Phoenix.
He reminded me that Mr Coles had a criminal conviction and that he was not now a chartered accountant.
Mr Sinclair's submissions
Mr Sinclair was critical of Mr Parish and Mr Ogden's evidence. He submitted that (i) the evidence was incoherent or lacked credibility on key points; (ii) the evidence was inconsistent with the contemporaneous documentation; (iii) the evidence was, in some respects, suspiciously detailed considering the material events occurred years ago; (iv) they clung to evidence in their witness statements – even on relatively unimportant matters – rather than concede their recollection may be faulty.
Examples given by Mr Sinclair included the insistence that the meeting with Mr Daniels was over the telephone. Mr Sinclair also submitted that Mr Parish and Mr Ogden "had embarked on a fairly impressive course of manufacturing evidence to try to support their claim". He cited a number of examples including the clandestine taping of conversations with Mr Daniels and Mr Collis, and the email from Mr Collis.
He placed a different interpretation on Mr Berg's evidence from that suggested by Mr Latimer. Insofar as his evidence was alleged to amount to similar fact evidence of attempts to mislead parties about the value of 'C' Shares it lacked any probative value. His evidence amounted to a statement that Mr Daniels had told him that he "would" receive £1 million of 'C' Shares (which he took to mean share options[3]) and that he was dissatisfied when he later attempted to get this deal "sorted out". Mr Berg realised that the value of the share options depended on the performance of Danwood. It was not alleged that Mr Daniels made any representation about the then value of the C shares.
Mr Sinclair submitted that Mr Coles was a transparently honest and careful witness, doing his best to recall the events in question about which he was asked. By contrast to Mr Parish and Mr Ogden he did not adopt a blanket oppositional approach to cross-examination but considered questions as they came, accepted criticism on occasion and stated where he could not remember events[4].
Mr Sinclair submitted that Mr Daniels was an honest witness and that he was candid about where he could remember matters and where he could not. Mr Daniels' rejection of the material allegations made against him in cross-examination was observably genuine.
It is plain from the secretly-recorded transcript of Mr Parish's conversation with Mr Daniels that (rightly or wrongly) he felt let down by Danwood. His evidence was that his provision of a witness statement was not a term of the settlement of his dispute[5]:
A. They asked me, as part of the settlement, if I would be prepared to stand up and give an honest testimony at this trial. I had always said, even before the settlement was agreed and signed, that I would stand up and be counted because I thought that what was happening here was totally wrong and I was very happy to come and challenge it.
Discussion
I derive little assistance from the evidence of Mr Berg. When read as a whole I do not think it supports Mr Latimer's submission that Mr Daniels represented to Mr Berg that the then value of the C shares was £1 million. The facts are not sufficiently similar to be of any probative value. Nor do I accept the submission that Mr Daniels misled Mr Berg.
Nor do I accept the submission that Mr Daniels gave evidence as part of the settlement of his dispute with Danwood. I have set out the answer he gave above. I regard the failure by Mr Daniels to produce the letter of claim by Danwood as immaterial. It is simply not relevant to anything I have to decide. The terms of the settlement were confidential and I saw no reason to require the disclosure.
Equally I derive little assistance from Mr Sinclair's submission that Mr Parish and Mr Ogden have attempted to manufacture evidence. The emails they sent were quite open. Whilst it is true that Mr Parish tape recorded conversations the tape recordings are admissible as evidence.
I do not accept that Mr Coles and Mr Daniels had the incentive to lie suggested by Mr Latimer. There was no dispute that Danwood had cash flow problems. These were disclosed to Mr Parish. That was the reason that the earn out came off the table. Equally Danwood's acquisition policy was not a secret and did not provide an incentive to lie. I do not accept that Danwood was desperate to acquire Phoenix at any cost. It is quite clear from the Board minute of 8th October 2008 that Danwood was looking at a number of other companies including Phoenix. Admiral was much larger than the others. Even though Phoenix may have been second in priority there is nothing in the note or any of the other minutes to suggest that Danwood or Mr Daniels was so desperate that it needed to lie to obtain Phoenix.
Both Mr Coles and Mr Daniels struck me as honest witnesses. Both were prepared to make concessions as to what they remembered and what they did not. It has though to be remembered that the relevant events took place in 2008 and 2009 and in such a case their evidence has to be tested against the contemporaneous documentation.
I think there is force in the other criticisms Mr Sinclair made about the evidence of Mr Parish and Mr Ogden. I agree in particular that their evidence was inconsistent with key contemporaneous documents. The three most important such documents are the emails of 17th October 2008 (which expressly refers to a meeting on that date), and the emails of 7th April 2011 and 5th October 2012 both of which expressly use the word "forecast" and which indicate that the value was to be £2 million after 4 years. I found Mr Parish's explanations for these emails unconvincing. I also agree that neither Mr Parish nor Mr Ogden were willing to make any concessions and stuck to their evidence. A good example of this was the question of whether the discussion between Mr Parish and Mr Daniels in October 2008 was by phone or at a face to face meeting. In the light of the email Mr Parish was forced to concede that there must have been some meeting on 17th October when the LTIP was discussed and that he had forgotten about it. He was still adamant and had a detailed recollection of the phone conversation about a week before. [Incidentally this evidence would mean that the phone call took place on about 10th October 2008 rather than "towards the end of October 2008" as pleaded in paragraph 13 of the Amended Particulars of Claim and repeated in paragraph 13 of the Amended Reply].
In all the circumstances I think I have to treat Mr Parish and Mr Ogden's evidence with caution.
As Mr Collis was not called to give evidence and was not present when any of the discussions took place between the parties which are said to contain the representations relied on by the Claimants, I attach no weight to the email he sent on 30th January 2013.
7 The representations
There are four relevant occasions where representations are said to have been made –
7.1 The conversation between Mr Daniels and Mr Parish
I have set out the rival versions of the conversation in section 3.8. I shall not repeat them. A number of points can be made:
1. I think it more likely than not there was only one conversation which took place at the face to face meeting on 17th October 2008. In so far as there was a phone call it was to set up the meeting. Thus Mr Parish's recollection that the discussion took place on 2 occasions – once on the phone and at the meeting – is wrong.
2. There is considerable common ground over what was said at the meeting. Much of what is contained in paragraphs 81 to 84 of Mr Parish's statement is common ground. The dispute between the parties relates to whether anything was said about the value of the shares
3. There are different versions of what Mr Daniels is alleged to have said about the value of the shares in the LTIP.
In paragraph 81 of his witness statement Mr Parish alleges that the words used were "it would equate to the same value"
In paragraph 13 of the Amended Particulars of Claim the words used were alleged to be "he wished to replace the earn out provision with the equivalent value of shares under a share scheme called an LTIP"
Mr Parish's evidence was that Mr Daniels said that "he needed to replace the cash-earn out for shares, but it would be of the same value".
In paragraph 49 of Mr Ogden's statement he says that Mr Parish told him that Mr Daniels had said that "he wanted to replace the earn-out element of the acquisition with shares and that it would equate to the same value although it would be over a four year period instead of around 3 years."
4. As set out above Mr Daniels acknowledged that he did say that he hoped the shares would have a value of £2 million after 4 years.
5. It is, of course unsurprising that the versions are slightly different in view of the lapse of time. Indeed in re-examination Mr Parish accepted he could not remember the precise words used. It is, however, to be noted that in none of the versions is Mr Daniels alleged to have made any representation that the value of the C shares as at October 2008 was £2 million.
6. The use of the word "would" in all of the versions points to a future rather than present time. Furthermore as the earn-out would not in any event be earned for at least 2 years it is difficult to see how the word "equivalent" can refer to a present time.
I have already indicated that I am approaching Mr Parish's evidence and that of Mr Ogden with caution. In the light of the answers given by Mr Daniels I find that the value of the shares was discussed at the meeting. However I am satisfied and find as a fact that the representation made by Mr Daniels was as to his opinion of the future value of the shares after 4 years. Not only is that in accordance with Mr Daniels' evidence, it is also how a reasonable person would have understood the word "would" in the versions given in evidence by Mr Parish and Mr Ogden in the context of the LTIP which did not vest for 4 years.
I am satisfied that Mr Daniels' opinion of the future value of the shares was one that was honestly held by him at the time. It was, after all, based on figures which were repeated at the conference in November 2008.
It follows in my view that there was no misrepresentation at the meeting.
7.2 The meeting between Mr Coles and Mr Parish
I have set out the rival versions in section 3.8 and will not repeat them. It is common ground that there was a meeting and that a small part of the meeting (about 10 minutes) was devoted to an explanation of the workings of the LTIP. It is also common ground that Mr Parish asked for further information to be provided in writing.
It is to be noted that in his witness statement and in one of his answers in cross examination Mr Parish said that Mr Coles used the word "would" when he described the future value of the shares.
Mr Coles denied that there was any conversation at all about the value of the shares. His sole purpose was to explain how the LTIP worked not to make comparisons.
I prefer the evidence of Mr Coles. It follows that no representation at all was made at this meeting.
7.3 The letter of 31st October 2008.
I have set out the terms of the letter and shall not repeat them. I have to assess what a reasonable person with the characteristics of Mr Parish would have understood from the words of the letter in the context in which they were used. The context includes the whole of the letter and the terms of surrounding documents passing between them including the draft LTIP document which was sent with the letter.
I accept that the context will include:
1. the previous offers made by Danwood which included the £2.1 million earn out if the relevant EBT was achieved over the following two years.
2. the fact that the LTIP was offered in substitution for the earn-out.
3. the fact that (as was known to Danwood) Mr Parish and Mr Ogden had been looking for a minimum of £6 million for their shares.
4. the fact that (as was known to Mr Parish) Danwood had cash flow problems.
5. the fact the basic terms of the LTIP were very different from the terms of the earn out. It is not necessary to list all the differences but they would include:
1. The earn out was by way of a cash payment; the LTIP was by way of non-transferable shares in a private company.
2. The earn out involved a maximum figure in pounds; the LTIP involved a maximum number of shares.
3. The earn out was paid after a 26 month period; the LTIP involved receipt of shares after a four year period ending on 1st December 2013.
The second paragraph of the letter sets out Danwood's aspirations. These include a turnover to a minimum of £400 million by 2013, an EBITDA of circa £50 million, and to float with a multiple of at least 10.
The next 3 paragraphs of the letter describe the share structure of Holdings after the investment by Bregal. It is not in dispute that it contains a mistake where it states that:
The total issued share capital is 11,166,667 shares broken into 3 classes.
Whilst the 1,166,667 'C' shares were authorised in Holdings' articles, they were not issued in October 2008. They were issued in March and September 2009.
It is not necessary to refer to the next paragraph. The penultimate paragraph is central to the allegation of misrepresentation. After setting out that Mr Parish would be entitled to a maximum of 58,000 shares the crucial two sentences read:
This figure was selected to give an indicative value of circa £2 million on final investment, which of course should continue to rise as the business continues to grow over the years ahead. This therefore should be seen as a starting point and certainly not the end game
Mr Sinclair points to the use of the words "indicative value" and "final investment". He points to the fact that final investment means in 2013 (i.e. after 4 years). Thus on its true construction this sentence would mean that an indicative value of the shares when they vest finally would be circa £2 million. Thus he submits that the reference in the following sentence to "starting point" is a reference to the period after the period before final (in)vestment.
Mr Latimer, on the other hand points to the use of the words "starting point" and "continue to rise" in the penultimate paragraph of the letter. He submits that on their true construction the words must refer to the present (i.e. October 2008). Thus the representation is that the value of 58,000 C shares in October 2008 is circa £2 million.
I prefer the submissions of Mr Sinclair. In my view a reasonable person with the background knowledge of Mr Parish would understand that paragraph to be a forecast of the indicative value of the C shares on final vesting. I agree with Mr Sinclair that reference to final investment is a clear pointer to 1st December 2013 which is the date in the LTIP when they finally vest.
Despite Mr Parish's evidence to the contrary I find that he understood the letter to be a forecast of the future rather than the current value of the C shares. To my mind the emails that Mr Parish sent on 7th April 2011 and 5th October 2012 show that at that time he considered that the letter comprised a forecast of future rather than present value. Each of the emails uses the word forecast. A fair reading of them clearly shows that that is what Mr Parish understood the position to be. I cannot, with respect, accept Mr Parish's (and Mr Ogden's) explanation to the contrary.
It follows in my view that the representations that were made in the letter of 31st October 2008 were expressions of Mr Coles' opinion of the future value of the C shares on 1st December 2013
The opinions were honestly held by Mr Coles. This is shown by the spreadsheet he relied. It may be that the spreadsheet is flawed but that does not mean that Mr Coles' opinion was not honestly held.
It follows that there was no misrepresentation in the letter.
7.4 August/ September 2009
The context of these negotiations is that Danwood were required to pay Mr Parish and Mr Ogden for the net assets of Phoenix. There was a dispute between the parties as to the value of the buildings and the parties were seeking a compromise without going through the disputes procedure in the SPA.
When they gave evidence neither Mr Parish nor Mr Ogden alleged that Mr Ward made an express representation about the value of the C shares. That appears from the passages of the evidence set out above and also a short passage cited in Mr Sinclair's closing submissions where Mr Parish acknowledged he could not remember whether Mr Ward offered a number of shares or a value of the shares to go into the LTIP.
Furthermore I agree with Mr Sinclair that the use of the word "effectively" in the emails of 9th August 2009 and 4th September 2009 strongly supports the view that the figures for the LTIP were as a result of a calculation by Mr Parish.
In those circumstances I am not satisfied on the balance of probabilities that Mr Ward made any express representations about the value of the C shares. In so far as values are referred to they are as a result of calculations by Mr Parish or Mr Ogden.
Equally I am not satisfied that there was any implied representation. As noted above there was a dispute as to the amount payable. In those circumstances it is impossible to say that the shares were being offered at any particular value.
It follows in my view that that there was no misrepresentation in the summer of 2009.
8 Conclusion
In the light of my conclusion that there were no misrepresentations this action fails and must be dismissed.
9 Other issues
A number of other matters were canvassed during the trial and in the closing submissions. In the circumstances it is not strictly necessary to deal with them. Furthermore any observations I make would necessarily be obiter.
However in deference to the full argument that I have received I shall express my views on some of them briefly.
9.1 Mr Ogden
Mr Ogden has been a party to the proceedings from the start. However he has never been a beneficiary of any shares in the LTIP. It was never envisaged that he would work for the 4 years necessary to qualify for the shares to vest.
He was however a minority shareholder in Phoenix and would have been entitled to a share of any earn-out in the SPA. However once the earn-out was removed from the SPA he had no such entitlement.
It is not in dispute that there were discussions between Mr Ogden and Mr Parish about this. Mr Parish said that this came about because Mr Daniels told him that he would have to sort Mr Ogden out. In any event Mr Daniels and Mr Parish came to an arrangement that the proceeds of the LTIP shares would be split between them on a 56/44 basis. No one at Danwood was informed of this arrangement.
The original Defence took the point that the claim as pleaded disclosed no cause of action on behalf of Mr Ogden. As a result the claim was amended. In summary the allegation was that the representations by Mr Daniels, Mr Coles and Mr Ward were made to Mr Parish in a dual capacity – partly to him in a personal capacity and partly to him as agent for Mr Ogden.
As Mr Sinclair points out Mr Ogden did not participate in the October discussions, Mr Ogden did not participate in the LTIP, and the letter of 31st October 2008 was not addressed to him.
In those circumstances I agree with Mr Sinclair that it is difficult to see how, looked at objectively it can be said that the representations can be said to have been made to Mr Parish as agent for Mr Ogden. The fact that Mr Parish and Mr Ogden had entered into a private arrangement as to how to share the proceeds of sale of the LTIP shares does not, to my mind, make Mr Parish Mr Ogden's agent for the purpose of receiving the representations.
9.2 Exclusion Clauses
There is considerable debate in the pleadings, skeleton arguments and closing submissions as to whether the terms of the SPA and the LTIP excluded liability for non fraudulent misrepresentations, constituted an entire contract, and/or prevented the Claimants from asserting that they had relied on any misrepresentations. There is further debate as to whether the terms (if they have the effect suggested by Mr Sinclair) are reasonable within section 3 of the Misrepresentation Act 1967.
I have deliberately not set out the relevant clauses because any discussion would substantially add to the length of this already long judgment.
I express no views as to any of the issues set out above save to comment that the parties were agreed that in the event of a finding of fraud or deceit the exclusion clauses would be of no effect.
9.3 Value of the shares
On 4th June 2014 Judge Kaye QC made an order relating to expert evidence which included:
The experts' reports shall be restricted to determining the value of the C shares as at 31st October 2008, 9th August 2009, and the date of the report.
In the light of the nature of the Claimants' allegations it is not difficult to see why the order was couched in these terms.
The Claimants' report dated 19 December 2014 was provided by Mr Clements a partner in Grant Thornton. He valued the C shares on the 3 days at £nil, £0.05 and £0.01. The basis of his valuation is at paragraphs 4.1 to 4.10. In summary as the C shares had not been issued at 31st October 2008 they were of no value; he noted that the C shares had been issued at £0.05 in March 2008 and thought it right to take that value as the value on 9th August 2009. The value at the date of the report was taken to be their nominal value.
The Defendant's report dated 7 January 2015 was provided by Mr Plaha, a partner in BDO. He was instructed to estimate the prospective value of the C shares based on the information available to the Directors on 31st October 2008 and 9th August 2009. It is not necessary to analyse his report in detail. It is to be noted that he had to make a number of assumptions (some of which he set out in paragraphs 1.12 and 6.1). One of the assumptions was that the exit date was 30th September 2013.
In paragraph 7.1 of his report Mr Plaha concluded that the value of the C shares at the exit date depended on the assumptions he had made with regard to turnover, EBITDA, multiple, debt and interpretation of the Articles. He then produced a table with 28 different valuations varying from £0.75 to £36.38 per share.
On the first day of the trial Mr Latimer objected to this report both because it was late and second because it was not in accordance with Judge Kaye's order.
Mr Sinclair's advocacy persuaded me that a prospective valuation might be relevant. I accordingly permitted the Defendant to rely on the report. This led to a further detailed report from Mr Clements.
When the experts gave evidence there was no cross-examination on Mr Clements' first report. The cross-examination focussed on the assumptions made by Mr Plaha with particular reference to the spreadsheet relied on by Mr Coles when he wrote his letter.
Mr Latimer was critical of Mr Coles' spreadsheet because it omitted the cost of acquisitions and is hard to reconcile with other spreadsheets relied on by Mr Coles. He suggested that Mr Coles' spreadsheet used the wrong figure for EBITDA. He also drew attention to the extreme difficulty (which Mr Plaha acknowledged) of forecasting a share value 4 years ahead. In paragraph 89 of his closing submissions Mr Latimer submitted that the attempt by Mr Plaha to produce a prospective valuation failed because
1. Danwood was trying to do the impossible and project figures 4 years into the future when 12 months would be regarded as fairly long range;
2. Danwood was not generating the cash to make the projected acquisitions;
3. Danwood's own expert witness quite properly admitted the limitations of the exercise he had been asked to undertake.
In his closing submissions Mr Sinclair accepted that the market value of the shares were those suggested by Mr Clements. He submitted that the only relevance of the "hope" or "projected" value of the shares was in support of the contention that the prediction of the future value was honestly made. He submitted that it was not part of the Claimants' case that if the representations were predictions as to the future they were not honestly made.
In paragraph 76 of his closing submissions Mr Sinclair sought to answer the criticisms of Mr Coles spreadsheet. It is not necessary for me to deal with the points in detail. He pointed out that there is no pleaded case that the estimate was made negligently.
I agree with Mr Sinclair that there is nothing in the expert evidence to undermine the conclusion I have already expressed that the representations made by Mr Daniels and Mr Coles were made honestly.
In the circumstances I accept the evidence of Mr Clements as to the value of the C shares on the first two dates in his report. I am not able to form any realistic view as to the prospective value of the shares on either of the dates.
I have dealt with this issue in more detail than I would otherwise have done because there is an issue over the costs of Danwood's expert Mr Plaha. I have been asked to approve a significant increase in the sums mentioned in the original costs budget. I have no hesitation in refusing this application. Having now understood the pleaded issues (see section 5 above) and the nature of Judge Kaye's order I am quite satisfied that the instructions to Mr Plaha went beyond what Judge Kaye had authorised. Furthermore the end result was of limited assistance. My provisional view is that none of the costs of Mr Plaha should be allowed and that the Claimants should be entitled to set off against the costs they will inevitably be ordered to pay the costs of Mr Clements' second report and of his attendance at the trial.
9.4 Quantum
The question of quantum does not arise in the light of the findings I have made. Furthermore there are differences between Mr Sinclair and Mr Latimer as to the correct principles to be applied. I do not intend to lengthen this judgment by an analysis of the relevant law. I would however comment that Mr Sinclair's analysis is predicated on the assumption that if the representation had not been made Mr Parish and Mr Ogden would have gone ahead in any event. If the position is that that the deal would not have gone ahead and if they had been able to sell their shares in Phoenix to an alternative buyer for the £6 million that they were looking for then it would not follow that their loss was zero as submitted by Mr Sinclair.
There are, of course, two big "ifs" in the scenario I have suggested above. However as these are events which come after the representations the proper course may have been to treat this as a "loss of a chance" case and to direct an enquiry to assess the relevant chances. This is what happened in one of the cases that was cited to me.
However in the circumstances I do not need to consider the matter further.
10 Costs budgeting
I propose to deal with the costs budgeting issues quite shortly. Danwood seek to increase their cost budget in respect of 3 matters
Disclosure
Danwood seeks to increase its budget in relation to disclosure by £8,938. The approved budget is £43,976.30. The increase is said to be due very largely to 62.3 hours of paralegal time (£6,230) and 7.3 hours of fee earner time (£1,898) above what had been anticipated due to the fact that the Claimants gave a very substantial volume of disclosure and due to the need to deal with the Claimants' requests for additional disclosure.
Shortly before the trial the Claimants made a wide ranging request for significant additional disclosure. This was followed by a heavily contested application for specific disclosure which was refused by HH Judge Bird. Judge Bird reserved the question of costs until trial. I can see no reason why the costs of that application should not follow the event. Thus Danwood will be entitled to the costs of that application. Those costs will include dealing with the application which will have to be assessed in due course by the costs judge if they are not agreed. In those circumstances it is not appropriate for me to increase the costs budget in respect of the application.
Mr Latimer submitted that the Claimants' disclosure was limited (running to about 300 documents) and was in accordance with their Disclosure Report.
In those circumstances I am not satisfied it is appropriate to increase the budget in relation to Disclosure.
Witness Statements
The approved witness statement budget was £47,071. This was based on an assumed four witness statements. In fact, five witness statements were exchanged. Danwood therefore seeks and additional £10,000 in respect of costs incurred by two fee earners on the case.
In answer to this Mr Latimer pointed out that the witness statements were not long and that there had not been any significant development in the litigation compared with the position as it existed in June 2014.
I agree with Mr Latimer's submissions. I see no reason to increase the costs budget in relation to the witness statements.
Experts
The approved expert report budget for Danwood was £20,000. This budget was set before the expert had been identified. According to the expert, the fees are now going to be a total of £69,864 and therefore an increase of £49,864 is sought by Danwood.
I have dealt with the expert's costs in section 9.3 above. The increased costs were in my view incurred because the instructions to the expert went beyond what was permitted by Judge Kaye's order. The application is refused.
11 Conclusion
For the reasons set out above the claim fails and will be dismissed.
I cannot leave this case without thanking the legal representatives on both sides for the assistance they have given me in the presentation of the case, the clear and helpful skeleton arguments and closing submissions and by completing the case, or at least the evidence, within the allotted time.
Note 1 Day 1, p 9 line 24 [Back]
Note 2 Day 4, p 547, 3 - 13 [Back]
Note 3 Day 3, page 359, line 12 [Back]
Note 4 e.g. Day 3 page 444-5 on the unpleaded question of whether the documents could have stated more clearly the ‘C’ Shares had not yet been issued [Back]
Note 5 Day 4, page 622 lines 18 - 23 [Back] |
Mr Justice Foskett:
Introduction
The Claimant, James Robshaw, was born on 9 December 2002. He is currently very nearly 12 years and 4 months of age. It is not disputed that his birth was negligently mishandled at Lincoln County Hospital, Lincolnshire, with the result that he sustained significant brain damage leading to serious disabilities.
Liability for negligence has been admitted and judgment for damages to be assessed was entered on 31 January 2013.
The hearing of the assessment of damages took place before me over 11 days. At the commencement of the trial, whilst there had been agreement on certain issues, there was a very significant gap between the claim advanced on James' behalf and the valuation put upon it by the Defendant. During the trial the gap narrowed, but not to the extent that the whole claim was settled. As it is, I have had to consider important issues such as life expectancy, accommodation (including whether the property already acquired should be demolished and something put in its place or whether it should be extended) and some aspects of the care regime as well as some, frankly, trivial issues such as whether there should be a cord operated curtain track in James' new home.
Agreement had been reached before the trial, subject to the approval of the court, on the appropriate award of damages for pain, suffering and loss of amenity in the sum of £290,000. That indicates the severity of the brain damage. There is no doubt that James' disabilities are severe and that he has complex needs. The means by which those needs are to be met lie at the heart of the differences between the parties. There is, unfortunately, a material dispute as to his life expectancy, the Defendant's case being that James will live to age 53, the case advanced on his behalf being that he will live to age 70-71.
Recorded in the Appendix to this judgment are those areas where agreement had either been reached before the trial or where agreement was reached during the trial.
I should say that the predictions of the parties about the length of the trial were somewhat pessimistic although those predictions were made before the gap between the parties narrowed and certain events occurred that shortened the trial. James' advisers thought the trial might last 20 days and the Defendant's advisers thought it might be nearer 15 days. In fact, as I have indicated, the trial lasted 11 days, of which 10 were devoted to the evidence, lay and expert, and one day to final submissions. The initial pessimism may have been borne of the knowledge that there were 91 files of documents copied for the hearing and so many potential areas of disagreement at the outset of the trial to which apparently James' team were put to proof. I merely observe that it is unfortunate that such substantial time estimates had to be given for a "damages only" hearing because, inevitably, accommodating such a lengthy hearing in the list is less easy than one of more manageable proportions. Accommodating the availability of all witnesses is also problematic in such circumstances.
As it is, the fact that so little has been agreed has led to a very lengthy judgment.
As it was, the Defendant sought an adjournment of the trial at its outset because the expert paediatric neurologist who reported for James, Dr Colin Ferrie, was unfit to attend the trial and the Defendant submitted that it was unfair that it should be deprived of the opportunity to cross-examine Dr Ferrie. The James' advisers contested the need for the adjournment. I rejected that application and the trial started on the following day. If Dr Ferrie had been present, the trial might have been extended by one day or thereabouts. His absence has not rendered resolution of the life expectancy issue (see paragraphs 33 - 137 below) impossible (though it has made it more difficult) nor has it caused the trial to be unfair from the Defendant's perspective. At the end of the day, the issue of life expectancy is to be determined by the court, not by the experts, on the basis of all the evidence received.
The form of the award
It is accepted by both parties that the award of damages should be paid partly by way of a lump sum and partly as periodical payments. In particular, the award for future care and case management should, it is agreed, be paid by way of annual periodical payments and that any periodical payments should start on 15 December 2015 (which is the usual date for payments by the NHSLA). It is further agreed that there will need to be a pro rata payment in respect of any heads of loss awarded by way of a periodical payments to cover the period from the date of trial (to which date past losses have been calculated) and 14 December 2015.
The extent to which other heads of loss might appropriately be dealt with by way of periodical payments will have to await the outcome of my assessment of the multiplicands for the other continuing losses in the light of James' needs. James will require sufficient free capital to meet his accommodation needs, to pay for items of equipment that will need to be changed periodically (e.g. wheelchairs, adapted vehicles and eye-gaze equipment) and to provide an adequate contingency fund. The parties have invited me to hand down a judgment determining the level of James' needs and the appropriate multiplicands after which submissions can made on the appropriate form of award in the light of independent financial advice which will then be commissioned. I have been content to approach the case on this basis. The other factor that the parties will need to know before being able to advance this aspect of the case is my conclusion on the life expectancy issue because the appropriate multiplier (or multipliers) will depend upon that conclusion. This judgment is, therefore, the judgment that contains all my conclusions on the disputed items. The final judgment giving effect to these conclusions will be handed down in due course.
This is a case where substantial interim payments have been made totalling £1,718,487.60 (inclusive of repayment to the CRU of £18,487.60). This has enabled, within the limits of the present rented family accommodation (which is agreed to be inadequate for James' needs), the implementation of an interim care and other support regime over the 3 or 4 years or so prior to the trial. I will say more about that in due course.
I can say that where agreement has been reached by the parties on any issue I am able to give my approval to the agreement.
James' disabilities
Before turning to his family situation I should set out briefly the nature of James' disabilities. In view of the dispute there is about his capacity to improve his function in the future, I will for present purposes merely record the general nature of his disability.
He sustained a hypoxic ischaemic encephalopathy during his unnecessarily prolonged birth and was subsequently diagnosed with motor developmental delay, cerebral palsy and learning difficulties. His cerebral palsy affects all four limbs (and he is thus described as quadriplegic or tetraplegic) and is dyskinetic in type, with prominent dystonia and athetosis, characterised by frequent involuntary writhing movements. James attended the first day of the trial and I was able to observe for myself that which is also shown on the videos prepared for the trial and described by the witnesses, namely, frequent jerky arm and hand movements, in particular. It should, perhaps, be observed that this attendance at court would have been either an exciting or anxious time for James and it is possible that I saw rather more movements of this nature than in a calmer setting. However, for reasons that will emerge, this is an ongoing feature of his presentation that does add complexity to the picture.
He does possess a high level of retained intellect and insight, but equally has significant communication problems. At present he communicates using an eye-gaze augmentative and alternative communication (AAC) system which I will describe in greater detail later (see paragraph 204). It is not difficult to appreciate and sympathise with the frustrations to which this particular combination of disabilities must give rise.
Fortunately, James is continent and ordinarily he can and does indicate when he wants to go to the toilet. The process is not without its complications however.
James wins the highest praise from everyone he meets. Mrs Julia Ho (see paragraph 225 below) described him as "a very active, quite exceptional, young man." That seems to be borne out from all other sources.
The family setting and the Claimant's mother
James' mother (who has been referred to throughout as 'Mrs Adams') was born in 1966 and is now aged 48. She was first married in 1988 to Paul Adams who was in the RAF. They separated in January 1996 and divorced later that year. Subsequently she met James' father, Graham Robshaw, in 2001. They had not lived together permanently prior to James' birth because he worked away during the week and she stayed with her parents during the week. They shared weekends together at his property. Her pregnancy was unexpected, but nonetheless something about which they were both pleased at the time and which, at that stage, heralded a permanent relationship together. However, without going into details, Mr Robshaw found James' disabilities difficult to cope with and he and Mrs Adams separated in April 2005. I have not had the advantage of seeing and hearing from Mr Robshaw, but I understand that he and James see each other twice a week and that this is something that James enjoys. Mr Robshaw plays no direct role in James' daily care.
I will say a little about Mrs Adams and her close family and their involvement in her life and that of James. Her family are based in and around Lincoln.
There can be absolutely no doubt about the strength of the support that her family has given to Mrs Adams personally over the period since James was born and of the love and affection they show to James. It is not easy to find the words adequately to re-create on paper the obvious bonds that exist between them all and I will not try. The general flavour will, I trust, emerge from what follows. All I will say is that having seen Mrs Adams, her brother, her father and James in court together briefly on the first day of the trial, the empathy between them all was palpable. I will return to Mrs Adams herself later, but her father and brother were immensely impressive, good-humoured and caring men who were plainly proud of their family's achievements and who wanted the best for James and Mrs Adams. I am sure Mrs Adams' late mother was of a similar disposition. Mr Neil Block QC, Leading Counsel for the Defendant, paid tribute to them all handsomely by describing them as "a fantastic family". He was right to do so.
Superimposed upon some physical problems that Mrs Adams possesses (and to which I will return below), she has suffered very considerable anxiety and stress leading to some psychological difficulties over the last few years. Unfortunately, it will be necessary to say a little about those matters because they have an impact on certain aspects of the claim, both for past losses and for future expenses. However, there can, in my view, be no doubt at all that she has faced more than her fair share of misfortunes. It is to be hoped that the future will be somewhat brighter for her once this case is over and she and James have moved to the property that will accommodate his needs and the care regime that is recognised to be necessary. For reasons that will become apparent, I will have to make some assessment as to whether, and if so to what extent, it is likely that her difficulties will continue in the future.
From childhood Mrs Adams had problems with her left knee which were eventually diagnosed as having been caused by a congenital problem with her hips which put stress on the joints, causing her pain. In October 1990 she underwent bi-lateral femoral rotational osteotomies with a view to straightening the top part of her legs. She was in hospital for six weeks and there was a substantial rehabilitation period. Although this improved matters considerably, by May 2004 (and thus when James was eighteen months old) she was advised to undergo further surgery. It had been intended that she should be in hospital for 7-10 days, but following her development of MRSA she had to remain in hospital for six weeks and there was a significant period of recovery thereafter during which her parents took substantial responsibility for looking after James. There was some assistance once a week provided by Social Services, but little more than that. It was not until December 2004 that she was able to start helping look after James again and, as already indicated above, in April 2005 she and Mr Robshaw separated.
As will be appreciated, during that period and in the years that followed, James continued to grow and become stronger with the result that handling him in the context of his vigorous athetoid movements became more and more difficult. As a result of that, in September 2008 Mrs Adams injured her left shoulder when lifting him and putting him into his car seat. The problems associated with her shoulder have been ongoing since then.
During the three year period after Mrs Adams' discharge from hospital in 2004, she and James remained with her parents in their property. The bedroom and bathroom they used was upstairs and carrying James up and downstairs, given his athetoid movements and increasing weight, was a major problem. The property was not wheelchair accessible either. She needed to find a bungalow. Her father bought out the half share of Mr Adams in the former shared home and that property was then sold to realise money for Mrs Adams. Her brother, Mr Darren Chafer, re-mortgaged his property and lent her £40,000. With that generous assistance, and with her father paying all the conveyancing and removal costs, she acquired a bungalow in Lincoln (1 Graveley Close) in May 2007 for £136,000. After that was acquired she repaid her brother at the rate of £300 per month which was increased to £440 per month when the property was rented out in December 2011 (to which I will refer further below). Although the property was a bungalow it was not really suitable for James but it was all she could afford at the time. Mr David Reynolds, the Defendant's accommodation expert, described it as "a rather small two-bedroomed bungalow". Dr Lewis Rosenbloom, the Consultant Paediatric Neurologist instructed by the Defendant, described it as "somewhat cramped". Mrs Adams' witness statement sets out the problems that I need not rehearse in detail. She said, and I have no doubt as to its accuracy, that it was "incredibly hard coping with the situation" and that she "constantly felt tired and drained and everything felt hopeless." She said she often had little sleep.
Although the proceedings were not issued in this case until 20 August 2012, litigation had plainly been in contemplation for a much longer period (Dr Rosenbloom having examined James for the first time in October 2007). Following the payment of an interim payment, a case manager (Amanda Beesley) was appointed and her first task was to see if more appropriate accommodation could be found. Another property in Lincoln was found into which Mrs Adams and James moved in July 2011. It was a larger bungalow than the one from which they moved and it had a level access and doors wide enough for a wheelchair, but there were a number of difficulties with it. However, the most serious difficulty that she ran into was one with the neighbours who complained about the large number of people (mostly support workers, therapists, family members and others) who were visiting the property. Mrs Adams said, and again I do not doubt it, that she was caused very considerable stress and worry during the eighteen month period they were there. They were given notice by the landlord and had to leave.
Amanda Beesley found another property (a chalet bungalow) into which they moved in December 2012. Mrs Adams remains there with James and says that, though it is not ideal, it is better than the previous properties. Her bedroom and bathroom is upstairs and downstairs is a bedroom for James and another bedroom for the carers. It is, however, accepted by all parties to be unsuitable in the long term.
I have recounted this history to demonstrate the pressures to which Mrs Adams has been exposed over at least ten years or so, superimposed upon which has doubtless been the constant flow of experts reporting on the case for litigation purposes. It would doubtless have taxed someone of a less anxious disposition than hers.
If all this was not enough, her mother died in late 2013. The video clips I have seen include passages showing the inter-reaction between James' grandmother and James and his grandmother's fondness for him is clear. Needless to say, not merely did Mrs Adams have to support herself through the shock of losing her mother, but she will have had to guide James through it also, together with offering her father, Mr Terry Chafer, support also.
Finally, of course, a few days before the long-awaited trial for the assessment of damages, in which so many items are contested, she learned of Dr Ferrie's situation.
As I have said, these are pressures that would have tested the resilience of anyone. When Mrs Adams gave evidence, I could see the tension she felt as she grasped her hands together in the witness box (something Mrs Hazel Tuckfield also noted when she visited Mrs Adams and James in September 2014: see paragraph 172 below) and she was on the verge of tears on one or two occasions. However, she answered all the questions, sensibly, coherently and intelligently and with evident and entirely understandable concern for James. Mrs Beesley, who probably knows her better than most at the moment, described her as "an intelligent lady with many skills". She described her also as "brave". Her solicitor, Mrs Denise Stephens, who also acts as James' Deputy, described her as a "very kind, loving and intelligent woman". I agree entirely with each aspect of those assessments. I sense that James already knows how lucky he is to have a mother such as Mrs Adams. I think that his appreciation of that will grow as time moves on.
It is now some while since she worked, but prior to the birth of James she had worked as a medical secretary, an administrative assistant, as an administrative officer with the CAB and as a legal secretary. Her hope is that she will be able to get back to some form of employment when this case is finished and she and James are settled in proper accommodation with a full care package for James.
Because it may impact on the future case management and/or Deputyship costs, I will have to make some assessment of the role Mrs Adams will play in James' life in the future and her ability to be a little more decisive than has been the case over the last few years - which has had an effect on the level of those costs hitherto. I will return to that aspect later (see paragraphs 443-446).
Life expectancy
I should turn immediately to the vexed issue of life expectancy. It is most unfortunate that the dispute should exist and having to determine it is always an invidious task for a court. Whilst the welcome introduction of the ability of the court to make periodical payments orders in cases of this nature has lowered the profile of the issue in a number of cases, as the editors of McGregor on Damages, 19th ed., 2014, remark somewhat ruefully at paragraph 38-103, "the issue is still with us". Dr Rosenbloom made much the same point in his article in 'Clinical Risk' entitled 'Estimating life expectancy in children with neurological disabilities' in 2004 (see paragraph 62 below). In this particular case it is, of course, doubly unfortunate that I have not been able to witness what would, in effect, have been an informed debate on the issue between two acknowledged experts in the field who have arrived at different views.
Dr Rosenbloom expressed his regret that Dr Ferrie was unable to be present and it was obvious that each had mutual respect for each other's opinion. I do not recall seeing previously a passage such as that which follows in a memorandum recording the areas of agreement and disagreement between experts (and indeed Dr Rosenbloom confirmed that he had never introduced such a passage into a joint statement previously), but Drs Ferrie and Rosenbloom said this at the conclusion of their memorandum dated 6 July 2014:
"Against the background that both Dr Ferrie and Dr Rosenbloom are experienced experts who prepare reports for both Claimant's and Defendant's advisers they would wish to bring to the attention of those instructing them and to the Court that the differences between them, especially so far as their life expectation estimates are concerned, are much greater than is usually the case.
Dr Ferrie's estimate is to age 66 years. Dr Rosenbloom's estimate is to age 53 years.
The reasons for our differences are detailed in this minute and following extensive, constructive and mutually respectful discussion we are not able to reconcile them further.
In spite of the extent of the difference between us we each accept that the other's estimate is reasonable whilst preferring our own.
We agree therefore that there is a wide range of possible projected life expectancy for James and that this is between 53 and 66 years in total."
As already recorded (see paragraph 4 above), the case in fact advanced on James' behalf on the basis of the evidence given at the trial (which is said to have demonstrated material improvements in his abilities since Dr Ferrie and Dr Rosenbloom discussed matters in July 2014) is that I should conclude that the predicted life expectancy should be to age 70-71.
By way of background, it should be noted that Dr Ferrie's first report dated 8 September 2012, based upon his assessment at the time, contained the opinion that James was likely to survive "to around 70 years of age", but that assessment expressly did not take into account "any adjustment the Court might consider appropriate to take into account the likely benefits which are likely given his success in the litigation." That latter comment was directed to the suggestion that the Court might make a further "modest upward adjustment" to his own estimate to reflect the advantageous position that James would enjoy in comparison with others who would not have access to substantial damages and the benefit of very high standard 24/7 care. Dr Ferrie's approach at that time was that James had the ability to roll/sit and get around by scooting, but would not be able "to fully feed himself", but would "gain sufficient self-feeding abilities such that for the purposes of [the 2008 Strauss paper: see paragraph 41 below] he could be considered as self-feeding."
In a further report dated November 2013 Dr Ferrie maintained that opinion for the reasons that will appear in paragraph 51 below. He modified his view downwards slightly (in other words, survival to age 66) in the light of his discussion with Dr Rosenbloom for the reasons mentioned in paragraph 52 below. That was his last recorded view on the position and I have, of course, received no direct evidence that he had changed his view back to survival to age 70 or thereabouts in the light of developments since July 2014 or indeed in the light of the new statistical material to which I will refer below (see paragraph 42). However, I have effectively been invited to conclude that this would have been his view had he heard all the evidence I heard and that such a view would have been correct. I will return to that contention in due course, but for the present will make the following observation on the differences between the two expert views as recorded in the memorandum.
The task of trying to reconcile or choose between opposing views that are recognised by respected experts in the field to be "reasonable" is even more difficult than choosing between two views that each opposing proponent regards as unreasonable or unsustainable. I do not know whether that passage in the memorandum was a subtle, coded message to the parties or the court simply to "split the difference" bearing in mind the long-established view that whatever assessment of life expectancy is made it will be proved to have been wrong. However, whatever the temptation, I do not think that a court can perform its role conscientiously by approaching the issue in that way: unlikely though I suspect it may be in this particular case, it could result in a significant over-payment of compensation with public money, on the one hand, or a significant degree of under-compensation for a very seriously disabled young man with, on whichever view is adopted, many years ahead of him, on the other. Nonetheless, it offers some comfort if it should be the case that I conclude that neither view is wholly consistent with the evidence I have received. It is accepted on all sides that ultimately I must make an assessment based upon all the evidence that I consider goes to the issue.
It has been established for a long time that there is interplay between the conclusions to be drawn from certain statistical data available to the experts and the actual presentation of the individual concerned. The statistics are those derived from the data collected and published in the USA by Professor David Strauss and others (which is generally referred to as "the Strauss data"). I will say a little more about those statistics and how they are to be applied shortly, but the following interchange during Ms Susan Rodway QC's cross-examination of Dr Rosenbloom on behalf of James illustrates the proposition in the first sentence of this paragraph:
Q. Are you prepared to accept that common sense, clinical judgment and empirical experience are relevant in seeking to predict the individual life expectancy of someone like James?
A. To the best of one's ability, yes, I do.
MR JUSTICE FOSKETT: That has always been the position, hasn't it?
A. It has indeed, my Lord.
MR JUSTICE FOSKETT: But one looks, obviously, at the statistics because they are very important, but at the end of the day the individual characteristics are matters that have to be factored in.
A. And this is something that we have always written about and always taught.
MR JUSTICE FOSKETT: That's what I had always understood to be the position ….
MS RODWAY: Within that clinical experience, clinical judgment can be brought to bear and is very important.
A. I think that's parts (sic) of it.
Q. Even if one can't find a paper in the literature that specifically reflects someone with James's range of disabilities, one … overlays the statistics with the clinical assessment?
A. With caution, my Lord, and to the best of one's ability. I would not be looking for (sic) someone such as James [and] saying the described clinical characteristics are such that he shouldn't be in that group altogether, because I don't think that's an appropriate way to look at the data and to look at clinical experience.
Q. But … we have discussed not just the aspiration, and we differ on that, where you consider that even absent aspiration now, there is still a risk in the future. But on the other side, I think we did agree that on the mobility aspect, the greater the mobility, it's an empirical judgment that that decreases the risk of lung infections because you have a lesser chance of getting respiratory load?
A. Yes.
Q. One doesn't need for that purpose to see dozens of papers written by learned authorities; you are able to say that because you see it in practice?
A. But it is also supported by the literature.
Q. Yes. A lot of it, though, Dr Rosenbloom, when one moves on to these various areas, a lot of it is common sense, isn't it? If you can cough more, if you can clear your lungs more, you are going have be a better chance than someone who is unable to do so?
A. I hope it is common sense, my Lord. It would be worrying if that which we have attempted to describe is so against common sense and then you would be looking for flaws in the argument … [so] I agree with counsel.
It is this kind of approach that will have led Swift J in Whiten v St. George's [2011] EWHC 2066 (QB) to consider whether to make any adjustment to the figure generated by an analysis of where the claimant in that case fell within the Strauss data "to reflect individual features in [his] case": [85]. In fact she did not do so in that case, but there are examples in other cases where the life expectancy derived from the statistical data has been altered by reference to the individual characteristics of the particular claimant and his or her clinical presentation. It should be noted that Swift J considered this question after the necessary adjustment for use in the UK of the actual life expectancy rates utilised in the US: see [22]. I will return later to the way in which this factor is sought to be deployed in the present case and the issue about when any such adjustment should be made (see paragraphs 91 - 100 below). However, it is important to recall that an adjustment to UK figures is required and the manner in which it is achieved is set out in the 2008 paper at page 491. It is common ground in this case that such an adjustment is necessary and the essential manner in which it is achieved is not in dispute.
In an endeavour not to extend unduly what is necessarily a lengthy judgment, I would respectfully adopt and rely upon the full and detailed description of the background to the Strauss data and its development set out in Whiten at [19]-[38]. It has not been questioned in this case and, in my view, it sets out clearly the history up to and including what is generally referred to as "the 2008 paper" (i.e. Strauss DJ, Brooks J, Rosenbloom L, Shavelle RM. 'Life expectancy in cerebral palsy: an update': Developmental Medicine and Child Neurology 2008; 50: 487-493). Dr Ferrie and Dr Rosenbloom took the 2008 paper as the relevant starting point to apply to this case at their meeting in July 2014.
The judgment in Whiten was given in August 2011. There has been a further contribution to the learning on this topic by the same authors with the addition of Linh Tran and Yvonne Wu in the form of articles published in 2014 in Developmental Medicine and Child Neurology entitled 'Recent trends in cerebral palsy survival'. Part 1 related to "period and cohort effects" and Part 2 to "individual survival prognosis". The articles were accepted for publication on 15 April 2014 and were apparently published online subsequently although Dr Rosenbloom was unable to remember precisely when that was. I mention this only because it is very unfortunate that reference to the new study and its potential relevance to this case did not feature at the meeting between Dr Ferrie and Dr Rosenbloom on 6 July 2014 although publication must have been imminent if it had not taken place already. As I have already said (see paragraph 41), they agreed that the 2008 paper was the correct starting point. It is troubling that the existence of this new learning was, it would seem, unknown more generally (or certainly in the context of this case) until Dr Rosenbloom drew it to the attention of the Defendant's solicitors in a letter dated 31 December 2014, about 14 days before the trial. This was too late for Dr Ferrie's indisposition not to have intervened before he could express a view based upon the new study. As I will indicate below (paragraphs 52 - 55), his articulated view is, therefore, based upon the 2008 paper being the starting-point and upon his appreciation of James' presentation in July 2014.
Although the message of the 2014 articles is, as I read them, essentially positive in relation to those cerebral palsy patients who are fed to some extent by a gastrostomy (see paragraphs 44 - 48 below), in fact the new research did not alter Dr Rosenbloom's previously expressed view of James' life expectancy following the joint meeting: he adhered to survival until age 53 and it is possible to see how, simply applying the new relevant table produced in the 2014 articles, he did so. I will indicate below (paragraphs 56 - 57) how he reached that conclusion.
According to Part I of the 2014 paper, the "study population included persons age 4 years and older with [cerebral palsy] who were clients of the California Department of Developmental Services between January 1983 and December 2010." The total number involved in the survey was 51,923, split roughly 55% male and 45% female. The study drew attention to the fact that "[tube] feeding, most often by gastrostomy, was more common in children than in adults … [but that in all age groups] the use of feeding tubes has become more prevalent in recent years." In the light of the questions raised in this case about the significance of the gastrostomy that James now has (it having been inserted on 2 April 2013), it is worth noting what the authors say about the significance of tube fed cerebral palsy patients:
"Tube feeding has become much more widespread in children with CP. We found that 6% of children born in the 1980s had a gastrostomy at their first evaluation and an additional 9% had a tube inserted during the study period. Supplementary analyses revealed that, as expected, the 6% had more severe functional disabilities than the 9% who had the tubes placed later in the study period. On the other hand, the 9% who had tubes placed after the initial evaluation had disabilities that were still worse than those of the remaining 85% who fed orally throughout the study period. This demonstrates that while tube feeding is still a marker for more severe disabilities, there has been some shift toward placement of tubes into children with less severe disabilities. Further, an increasing number of clinicians have embraced mixed tube and oral feeding, such that gastrostomy is no longer an 'all-or-nothing' intervention. In the present study, we were unable to make distinctions between children who were completely tube fed and those with feeding tubes who took a significant proportion of their nutrition orally."
The authors also say this:
"Because tube feeding remains one of the most powerful predictors of long-term survival, it should always be considered in the survival prognosis for an individual child."
The concluding paragraph of Part 1 was in these terms:
"There have been substantial improvements in mortality rates for children with CP in California. Childhood mortality rates in CP declined by 2.5% per year from 1983 to 2010, which is very similar to improvements found for children in the general population. Mortality rates in tube fed adolescents and adults have declined by 0.9% per year. The mortality ratio for orally fed adolescents and adults and adults over age 60, as compared with the United States general population, has actually increased. These trends should be taken into account for individual survival prognosis."
The concluding paragraph of Part 2 was as follows:
"Survival prognosis for persons with CP should take into account age and severity of disability. The survival figures reported here are based on the most recent California population data from the Department of Developmental Services, and supersede those given for the same comparison groups in prior publications. These new figures include adjustments to reflect the observed declines in mortality rates in California. We hope that this article serves as a practical guide to prognosis to be used in planning of future care for children, adolescents, and adults with CP."
It was in Part 2 that the up-to-date table of life expectancies appeared as Table III. That table replaces Table 1 of the 2008 paper referred to at [29] of Swift J's judgment in Whiten and reproduced for convenience in paragraph 49 below. The new table is reproduced here:
Table 1 of the 2008 paper was as follows:
It was that latter table that both Dr Ferrie and Dr Rosenbloom took as the framework for the assessments of life expectancy up until and including the discussion in July 2014.
In his report dated November 2013 Dr Ferrie had given the following as his reason for adhering to the view that James would probably survive to around 70 years of age:
"In my previous Report I estimated that James will probably survive to around 70 years of age. This estimate was based upon the likelihood that at 15 years of age he would continue to be able to roll and scoot and to be substantially self-feeding. Since I gave this estimate a gastrostomy feeding tube has been inserted. However, I do not think it would be appropriate to consider James within the Strauss cohort of those fed by gastrostomy since it is clear that the majority of his calories continue to be given orally. On the basis of the information available to me when I re-evaluated James, I no longer felt it likely that at 15 years of age he would be able to self-feed to any significant extent and that he should be considered within the cohort of subjects who roll/sit but cannot walk and are fed by others. This would equate with a significant reduction in my previous estimate of his life expectancy. However, more recent evidence indicates that James is now obtaining a significant proportion of his calories orally and that he has rapidly learnt to use the Neater Eater. His self-feeding skills are likely to further improve and on this basis I feel that his life expectancy should be calculated (as before) on the basis that he best fits in the Strauss cohort of those who can who roll/sit and self-feed (recognising that he will not fully self-feed). Taking this and additional positive and negative factors into consideration I estimated that he would probably survive until around 70 years of age. I remain of the opinion that this is an appropriate estimation of his life expectancy."
The reasons that thereafter led him to reduce this estimate to 66 years was set out in the memorandum referred to above as follows:
"Dr Ferrie now considers that James is likely to survive until 65.75 years (66 years if rounded to the nearest year). This is less than the estimates in his reports due to him now considering it appropriate to now make a bigger reduction than he originally did to reflect James's limited self-feeding skills, the presence of the gastrostomy and his acceptance that his cognitive and intellectual level and his general health are neutral rather than positive factors."
Dr Ferrie arrived at the foregoing figure by the route revealed in the following two paragraphs in the memorandum:
"The approach of Dr Ferrie is that the relevant cohort for James is rolls/sits, cannot walk and self feeds. A 15 year old male with these abilities has a life expectancy according to Strauss of 45 additional years (survival to 60 years) compared to 60.6 additional years (survival to 75.6 years) in the general population. In other words the subject's life expectancy is 79% of the relevant population. The projected life expectancy of a 15 year old who, like James will attain the age of 15 years in 2017 is 74.8 additional years with survival to 89.8 Therefore if James was currently 15 years of age he might be expected to survive to 71 years of age. A correction must be made for the fact that James is not yet 15 years of age (0.25 years) and for any additional positive and negative factors to survival identified."
"Dr Ferrie considers the most important negative factor is that he is not fully self-fed. The presence of the gastrostomy is a weak negative factor. He considers his type of cerebral palsy to be a positive factor. He considers James's success in litigation also to be a positive factor. Following further consideration and discussion, he no longer considers his intellectual abilities and general health to be positive factors. He now considers these to be neutral factors. He no longer considers that the positive and negative factors to cancel each other out. He thinks a reduction of 8 years to reflect his limited self-feeding and the presence of the gastrostomy is appropriate. He considers that the combined 'positive uplift' should be 3 years."
The starting point thus taken by Dr Ferrie (from Table 1 in the 2008 paper) was that a 15-year old male with the abilities/disabilities he identified would live until age 60. Via the route set out in the first paragraph quoted in paragraph 53 above he concluded that such a person would have 79% of the normal projected life expectancy of someone of the same age, but without the disabilities. Since that projected life expectancy (in the UK) for someone who would be 15 in 2017 would be to survive to age 89.8, the projected life expectancy for James would be 71 (i.e. 79% of 89.8). From that starting point of 71, there is a reduction of 0.25 years to reflect the fact that James is not yet 15 and the risk of him dying prior to achieving that age and a further reduction of 8 years "to reflect his limited self-feeding and the presence of the gastrostomy", but an addition of 3 years by way of a "positive uplift", yielding 65.75 (rounded up to 66). The positive uplift is derived in part from Dr Ferrie's intuitive opinion that the very high standard of care that James will have throughout the remainder of his life is "likely to improve survival". Those further adjustments to the starting point of 71 were made after the relevant conversion to the UK projected figures (see paragraph 40 above).
That, therefore, is the way that Dr Ferrie reached the view that survival until the age of 66 was the appropriate conclusion. In relation to feeding he treated James as "not fully self-fed" and the "presence of the gastrostomy [as] a weak negative factor".
Dr Rosenbloom's approach in his report of January 2014 was to say that he classified James as "fed by others" because his view at the time was that "it is probable that most of his nutrition will continue to be given orally", notwithstanding the gastrostomy insertion. His approach at that stage was, using Table 1 (see paragraph 49 above), that if James were aged 15 years and was fully able to roll or sit but was "wholly fed by others" his predicted life expectancy within the US data would be for a further 32 years. He considered that reductions were required from that figure (i) because of the small risk that James would not survive to 15 years, (ii) because he had only "limited rolling and sitting abilities" and (iii) because "he will continue to be partially fed by gastrostomy". For that combination of features he considered it appropriate to reduce the life expectation estimate by 7 years – in other words from age 47 to age 40 years. This translated to living for a further 29 years from January 2014. That required adjustment to the UK figures in the manner set out in the 2008 paper. Adopting that approach, Dr Rosenbloom noted that the projected life expectation in the UK for an uninjured 11-year old male was "close to 88 years" with the result that there was "some 13 years more" than the actual life expectation data in the 2008 paper. The proportion of that 13-year difference to apply in James' case was the fraction derived from dividing 29 (his estimated further years of actual life expectation) divided by 49.6 (the actual life expectation of an uninjured male of his age). That came to 6 years and, accordingly, Dr Rosenbloom's then estimate of projected life expectancy was that he would live to the age of 46 years.
As a result of his meeting with Dr Ferrie, Dr Rosenbloom modified his view somewhat, but there remained the significant difference between their two views as reflected above. Dr Rosenbloom's approach at that time can be seen from the following two paragraphs in the memorandum:
"94. In his report Dr Rosenbloom has made a total downward adjustment of seven years to take into account James' age, his limited motor abilities, and the particular characteristics of his feeding. Following this expert discussion and in the light of updating information he has reduced this downward adjustment to 2 years in total as is further detailed below.
For the purpose of answering this question [i.e. what discount needs to be applied to reflect James' age at the trial in January 2015] he estimates that there should be a reduction of one year because of James' age and two years because of his clinical need for gastrostomy insertion. He then now increases his estimate by one year because of James' limited self-feeding abilities. He now does not make any reduction for James' motor abilities as he regards him as average for the relevant category of sits/rolls.
…
96. [In relation to the question of how the agreed upward adjustment to reflect the UK projected mortality data is achieved] Dr Rosenbloom adopts the approach detailed in the Strauss et al (2008) paper. Using this approach he has first made the deduction detailed in his answer to Question 94 above i.e. to take into account James' age and relevant clinical factors. He now considers that these deductions amount to 2 years as has been detailed in his answer to 94 above. Then, as has been detailed in his report, he has noted that projected life expectations in the UK for uninjured 12 year old males are some 13 years more than the actual life expectation data used by Strauss et al and summarised in Table I of their 2008 paper. The appropriate proportion of this to apply in James' case is 33 (James' estimated further years of actual life expectation from January 2015) divided by 53.6 (the actual life expectation of an injured 12 year old male) multiplied by 13. This comes to 8 years.
As I have indicated, the 2014 papers (to which, of course, like the 2008 paper, he was a contributor) have not altered his eventual opinion, but he arrives at the age of 53 years, as set out in his letter of 31 December 2014 (see paragraph 42 above), as follows: he remained of the view that James should be regarded as "fed by others", but in the light of the new Strauss data he should increase his estimate of James' actual life expectation by 1 year (given that there was a small increase in survival for those "fed by others", namely, from 32 further years to 33 further years). Based on the USA data he considered James' actual life expectation to be to age 46, i.e. a further 34 years. Making the appropriate adjustment for UK figures (derived on this occasion by dividing 34 by 64.4 – the actual further years of life expectation of an uninjured 12-year old male – and multiplying that fraction by 13), in round figures this came to 7 years. This resulted in the projected life expectation to age 53 years. In the same letter Dr Rosenbloom suggested that Dr Ferrie's new estimate in the light of the new paper would be (in round figures) to age 64. I have not, of course, had any input from Dr Ferrie on that issue.
The focus of the debate at the trial has been upon whether Dr Rosenbloom is correct to classify James as "fed by others" and to make adjustments from the starting-point thus generated within the Strauss data or whether Dr Ferrie was right to treat him as "self-fed" for starting-point purposes, but to make in the first instance an essentially downward adjustment to reflect the proposition that James was not "fully self-fed" (my emphasis). As will be apparent from the foregoing, Dr Rosenbloom has taken his starting-point as 33 further years of life (in the light of the 2014 papers) and Dr Ferrie took a further 45 years in the light of the 2008 paper. I agree with Dr Rosenbloom that Dr Ferrie would almost certainly have taken a further 45 years as a starting-point if he had seen the 2014 papers because the life expectancy for the self-fed cohort is the same in that paper as in the earlier paper.
As it seems to me, the first issue to consider is the way in which the three categories of feeding set out in the Strauss tables are defined. In the 2008 paper the categories were "tube fed" (in other words, by gastrostomy), "fed by others, without feeding tube" and "self-feeds". In the 2014 papers the categories are "tube fed", "self-feeds orally" and "fed orally by others". Given that, on at least a superficial view of the evidence (and which I will examine more closely below), James is (i) fed partly orally by others, (ii) has some (arguably limited) self-feeding capability, but (iii) is also supplied some nutrition by gastrostomy, it is immediately apparent that classifying him within one or other of the cohorts in either of the tables as defined is not straightforward.
Ms Rodway and Mr Latimer-Sayer have invited my attention to what has been said about these classifications by the authors of the various papers over the years. The eating skills of a cerebral palsy patient (in addition to his or her motor skills) have been seen from the outset as a significant marker for the severity of the brain damage and thus upon life expectancy. In the 1998 paper, in its introductory paragraph, it was asserted that "[the] most powerful prognostic factors for survival were … mobility and feeding skills." In the list of characteristics given on the second page of that article the numbers of those in the overall cohort who were either "tube fed", "fed by others, no feed tube" or some "self-feeding skills" were enumerated. The group that possessed "some self-feeding skills" were said in the body of the article to include those who could only use fingers.
Looking at matters chronologically, it is right to observe that Dr Rosenbloom, in his 2004 article (see paragraph 33 above), said this about gastrostomy feeding:
"There has also been some controversy and confusion with regard to the relevance of the need for gastrostomy feeding to the life expectation in disabled children with cerebral palsy. Here the issues are far more complex than whether or not a gastrostomy is in place and life expectation appears to be primarily related to the child's nutritional status. Specifically it is reasonable to anticipate that a child who has a gastrostomy but is adequately nourished and free from the risk of aspiration is likely to have a longer life expectancy than one who is orally fed but is failing to thrive and has recurrent respiratory infections."
I will return to that issue shortly, but so far as the definitions of the classifications in the Strauss data are concerned, the 2008 paper illuminates further what should be regarded as "self-feeding" in the following passage:
"(6) The highest functioning group considered in the study, namely "rolls and/or sits and self feeds" sometimes appears to have been misinterpreted. Because it was the highest functioning category it included individuals with a wide range of disabilities. At the lower end of the group were individuals who could roll over and finger feed but, for example, could not stand unaided and had no useful form of mobility. At the higher end were those who could self-feed with utensils and walk without support. Evidently the life expectancies in these two groups are quite different and the estimates in Table III were a composite that were too high for the first group and too low for the second.
(7) In the database we worked with there is a six-level feeding scale, ranging from fed by others (level 1) to finger feeding (levels 2 and 3) up to 'uses fork and spoon without spillage' (level 6). We used the phrase 'at least some self-feeding (SF)' in the earlier article simply to contrast levels 2 to 6 with level 1. To qualify for this the person must take a significant proportion of his nutrition by SF. We perhaps did not make it sufficiently clear that children who take only 10%, say, of their nutrition by SF would not be considered to have 'at least some SF' for our purposes."
It follows (and Dr Rosenbloom confirmed this in cross-examination) that children who take more than 10% of their nutrition by self-feeding are to be placed in the self-feeding category for the purposes of the Strauss tables. I will return to this later.
I have already alluded to the proposition that, on a superficial analysis, James does not fit neatly into any of the classifications set out in the various Strauss papers. It is, of course, to be recalled that it is acknowledged in the 2014 papers that the authors were unable to make distinctions between children who were completely tube fed and those with gastrostomies who took a significant proportion of their nutrition orally. Bearing in mind that Dr Ferrie and Dr Rosenbloom each make adjustments from the starting point that each takes, the question arises of whether there is a true starting point for someone such as James within the Strauss tables. It may well be that as the Californian data base increases, further refinements along these lines will emerge, but at present I am tempted to say that he is somewhere between the two extremes and it is somewhat artificial to be forced to place him in one category or the other and then to make adjustments upwards or downwards.
I will return to this when I have considered the evidence of what James can now do and whether there is a basis for concluding that his ability to self-feed will improve in the future and/or whether the gastrostomy is to be seen as a positive or negative factor in the longer term. As to the future, it is of course, the case that both Dr Ferrie and Dr Rosenbloom are paediatric consultant neurologists who have been involved in the treatment of children. To that extent their knowledge of what occurs in relation to cerebral palsy patients in adulthood is less extensive than others who do follow matters through into the post-18 age group. Dr Rosenbloom accepted that, whilst he did follow up many of his patients to age 25 or thereabouts, he had no clinical hands-on role with adult cerebral palsy patients. In those circumstances, it does seem to me that I must look elsewhere for evidence about what the future may hold in terms of the feeding pattern for James. Indeed that may also be the case in relation to other matters.
The most direct and persuasive evidence (which, in the event, was largely agreed) was the evidence of the two speech and language therapists who gave evidence, Ms Kay Coombes for James and Mrs Michelle Whitton for the Defendant. Although an important role in a case such as this for experts of their discipline is to address the communication difficulties of the cerebral palsy patient, their remit covers also issues relating to eating, drinking and swallowing – both areas being features of oromotor function.
Ms Coombes saw James in February 2011 and again in August 2013. She has seen the videos that have been prepared. Mrs Whitton saw James in June 2013 and, whilst she had not seen the videos at the time of the joint discussion with Ms Coombes, she had seen them prior to giving evidence. To the extent that it matters, I thought both were impressive witnesses, each with a good deal of relevant experience, Ms Coombes being particularly articulate and persuasive. I felt I could rely upon their combined assessment where it was given and that where Mrs Whitton felt that she should defer to others, I felt that I could rely upon Ms Coombes as an objective and reliable appraiser of the issue in question. I will come to that assessment shortly, but I need to describe one aid to eating that James has which is useful from time to time and would, if used more frequently, enable it to be said that he self-feeds to a greater extent than at present. The aid is a "Neater Eater".
Before describing it I should record one clear area of agreement between Ms Coombes and Mrs Whitton: it is that James has good skills in being able to take food into his mouth, move it around and control it in his mouth, chew it and swallow it without aspiration, regurgitation or gastrointestinal reflux. His problems are more associated with getting the food to the mouth than with processing it properly when it is in the mouth. It is getting the food to the mouth that the Neater Eater is designed to help.
The manufacturers describe it as an eating aid designed to enable people to use their own movements to feed themselves. It can come in a variety of forms, with varying levels of sophistication, but at its most rudimentary it constitutes a mechanical arm at the end of which is a spoon. The user grasps the arm and uses it to bring food in the spoon to the mouth. Ms Coombes described it as "quite bulky" and that it sits on a plate fixed to the table. She said that people who use such a device say that "they feel more in control and know when the food is arriving because it is very predictable" compared with being fed by somebody who is not properly trained. She was unable to say how much they continue to be used by cerebral palsy patients because very little data exists, but she was aware of people who used them over an extended period of time. Mrs Whitton had a similar view although she was aware of people who do use Neater Eaters either for one meal a day or perhaps partially during a meal. She saw it as a matter of choice for the individual depending on their capacity to use it.
It is common ground that such a system (or at least the system that James currently has) does take up a fair degree of space on the dining table and the process of feeding in this way can be quite laborious. In their joint statement Ms Coombes and Mrs Whitton expressed the view that "the time it takes for James to eat using a Neater Eater … and the limited space available in his current accommodation are likely to discourage frequent use of the Neater Eater."
On any view, in the future James will be in much more spacious accommodation so it follows that one disincentive to the use of the Neater Eater will be removed or at least reduced. Ms Coombes was asked whether she saw James going on to develop self-feeding skills and, if so, how much of his calorific intake might be received by that route. Her answer is worth recording:
"The issues that I would be taking into account would be his choice. He clearly has chosen to persevere with the Neater Eater, for example. He clearly is interested in self-feeding, including taking foods directly in his hands or in a tube that stops his grasp squashing whatever he is trying to hold. So he is certainly interested in it, but it's also clear that he doesn't always choose to have oral eating. For example, at school, if there is something that he is going to miss, he wants to go out and play … he will opt for a gastrostomy feed. The question was about how I see the future. I think that it must be part of the future that he should be enabled to exercise choice, to select priorities … what he wants to do, but he must also be given the opportunity to feed himself as much as possible. And given the way in which his eating, drinking, swallowing regime is continuing at the moment, and bearing in mind that he is able to take drinks through a straw and so on, I don't see why he shouldn't be able to have a combination of gastrostomy feeding at his choice, really, and to ensure that he has sufficient nutrition, but also … when there is time and space and he wants to, then he should be able to feed himself using a Neater Eater or feed himself with assistance from another person perhaps. I was asked how much he might do that …. It is a difficult one … but given his developing abilities and his clear interest in being independent in terms of meal times and in other things as well, I do not see why it wouldn't be realistic to think he could have perhaps a third of his nutrition self-fed. But it's maintaining that ability for him to choose, I think, and have the flexibility. But in terms of the safety and ability to do it, there aren't vast obstacles. It's his busy life, really."
I should say that Ms Coombes and Mrs Whitton agreed that at present James received about 25% of his calorific intake via his gastrostomy. It follows that the other 75% was received either through feeding by others or as a result of such self-feeding as he undertook. There is an issue about whether using the Neater Eater would constitute self-feeding (to which I will return), but finger-feeding would also be included within that definition.
Mrs Whitton accepted that James had already made progress with the use of the Neater Eater and that if he is in the future supported by trained carers, has the space and is encouraged to feed himself more, he is likely to do so more in future. She said that the "chances are higher" that his hand-to-mouth co-ordination will improve and the more food will arrive at his mouth via his own use of the Neater Eater in the new regime after it has been set up.
I am, of course, focusing on this issue because of the debate about how to classify James' present feeding pattern. Before trying to reach a conclusion on that issue, I should return to the question of the gastrostomy. As a matter of fact, of course, the gastrostomy is in place. However, the reasons for its insertion are, on the case advanced on James' behalf, important. Dr Rosenbloom, I believe, accepted that the reason for its insertion is of some relevance although his general stance was that a "child who has required, and still requires, a gastrostomy … is more severely neurologically impaired in a general sense than one who does not have a gastrostomy." He appeared at one stage to think that it was inserted because of the risks of aspiration. However, the evidence is clear that that was not the case. A video fluoroscopy was carried out in October 2012 and Mrs Beesley, who was present, said (and it was not challenged) that what had been thought to be evidence of aspiration was an artefact. On that basis, it is clear (and Dr Rosenbloom accepted) that the gastrostomy was not inserted for that reason. The reason does appear from the letter of Head of Speech and Language Therapy at Sheffield Children's Hospital dated 2 October 2012. The relevant part was in the following terms:
"During the solid and liquid textures we felt that we saw some trace aspiration in James' trachea. However, this did not move and we are not clear that this was the case so will be reviewing the disc as soon as it is available to us. Following the study, I was able to discuss with James' family, his case manager and speech and language therapist that although James is reported to love his food and reported to eat a lot of food, I felt that the effort required in eating for a prolonged period – a meal time can take up to one hour – could be using up many calories in itself. I advised James' family that I felt that if James had a gastrostomy through which he could have most of his nutrition, he would then be able to have shorter mealtimes, focussed on food that he really enjoyed, of textures that he could cope with easily so that he would be getting nutrition and still be able to get pleasure out of food. We discussed that we had only seen a ten minute mealtime with James where the amount of effort he expended was considerable. We have no information about James' swallow at the end of an hour and this may increase his vulnerability.
James' mum informed me that he had a friend with a gastrostomy and had been quite keen on having his food this way as well as the opportunity to enjoy small amounts of food at family mealtimes."
Although this letter suggested that the gastrostomy would constitute the route by which "most of his nutrition" would be received, that is obviously not the case in practice (see paragraph 73 above), but nonetheless it remains a useful, and not insignificant, means by which his nutrition is kept at the right levels. The suggestion is that it constitutes a "top up" process which Dr Rosenbloom was prepared to accept as an appropriate description.
It will, I think, be apparent that reaching anything like a definitive conclusion on the issue of where James stands in the Strauss tables is extremely difficult. Dr Rosenbloom and Dr Ferrie found it difficult. I cannot help but observe that an important decision that may affect whether James receives adequate compensation or whether more public money than is necessary is spent on such compensation really ought not to turn on such questions. However, I must do the best I can on the material I have.
Dr Rosenbloom appeared to accept that if the use of the Neater Eater was included as part of self feeding, James would probably be regarded as taking more than 10% of his nutrition by self feeding. I derived that from his answer to Mr Block in examination in chief when he said that "[if] we ignore the Neater Eater, it's my opinion that [James] doesn't take 10% of his nutrition by self feeding." It seems to follow from that that he was conceding that if the Neater Eater was not ignored, the conclusion would be that James should be in the cohort of self feeding cerebral palsy patient. However, he asserted that the reference in the 2008 paper to the 10% criterion (set out in paragraph 63 above and referred to in paragraph 64 above) "clearly doesn't include machines such as the Neater Eater." That seems to me to be more definitive than his answer to the precise question addressed at the meeting with Dr Ferrie. The question was whether in terms of self-feeding it was agreed that it included using an aid such as a Neater Eater. It was made clear that this was not an agreed issue. Dr Rosenbloom's answer was as follows:
"It is Dr Rosenbloom's experience that the use of appliances such as a Neater Eater by individuals with cerebral palsy tends to be transient and time limited. In addition it is not usual for a significant amount of an individual's nutrition to be obtained using an appliance such as this. Dr Rosenbloom does not regard the use of a Neater Eater … as indicating that an individual self-feeds."
In answer to the same question Dr Ferrie had said this:
"Dr Ferrie notes that no guidance is given by Strauss on how the use of aids to feeding should be approached. In his experience the use of aids such as special cutlery and, non-slip mats is 'accepted' as being compatible with self-feeding."
Obviously, I have not heard from Dr Ferrie and plainly I must be cautious about preferring a view expressed by him when I have not heard him challenged upon it, but I have to say that it makes more sense to me in, if I may so describe the process and its effect, "mechanical terms" than Dr Rosenbloom's view. I cannot see what material difference there is in the mechanics of eating if someone uses his or her hand naturally to bring the food to the mouth and someone who does so "artificially" in the sense of being assisted by some mechanical process that has the effect of dampening hand or arm movements that would otherwise make bringing food to the mouth difficult. Neater Eaters and other devices of this nature have, on the evidence, been in existence for a good many years – and doubtless have become more sophisticated with the passage of time. I am inclined to feel that if the Strauss team had for some reason wanted its readership to exclude the use of such an aid from consideration in this context, it would have said so. I am, of course, acutely aware that Dr Rosenbloom is a distinguished member of that team, but notwithstanding that I do have to be satisfied that what is advanced stands up to appropriate scrutiny and on this issue I cannot be so satisfied. I quite accept that Dr Rosenbloom's essential answer to all this would be that not being able to self-feed properly and the need for the gastrostomy are all markers for the severity of the brain damage, but for present I am merely addressing the relevance of the Neater Eater in relation to self-feeding.
To that extent, I conclude that James' use of the Neater Eater would qualify for self-feeding within the Strauss tables. I cannot, of course, speak for the conclusion that might be reached in other cases on different evidence, but that seems to me to be the correct conclusion on the evidence I have heard.
However, tempting though it is to say that that conclusion settles the issue under consideration, I do not think that it does. The evidence about how much nutrition James takes from using the Neater Eater is, to my mind, unclear. I have no doubt that on some days when it is used he will receive more than 10% of his nutritional intake by that process. That seems to me to be commonsense and in line with what Dr Rosenbloom said as recorded in paragraph 76 above. However, there must be other days when he does not use it at all or very little and if follows that the same conclusion could not be reached. I have little difficulty concluding that James can indeed manage to use the Neater Eater, as Mrs Adams said, "pretty much by himself". That was supported by Mrs Sarah Hilton-Bailey, James' current treating physiotherapist. However, Mrs Beesley said clearly that, in the present circumstances, it is not possible for James to access the dining room table on a routine basis to use the Neater Eater. It is partly a function of the relatively cramped accommodation in the present property and partly of the difficulties that Mrs Adams, in her present psychological state, causes. She has a lot of documentary material on the table and gets very stressed if it is moved. The carers do not feel that they can interfere with this. As I have said, I accept the evidence that James can use the Neater Eater (and indeed the short video clip supports that conclusion), but there is no convincing evidence that he uses it sufficiently regularly for it to be said that he has a consistent intake of food via this route. There were some difficulties, according to the evidence, of being able to set it up at his former school. I am not sure that I was told specifically about the arrangements at his present school, but one can imagine that similar issues would arise in a mainstream school. For my part, it seems to me more in keeping with commonsense that a person would need consistently more than 10% of his daily nutritional intake for him to be regarded, on that basis of the Strauss definition, as being within the self-feeding category and I do not think the evidence supports that conclusion as things stand.
For reasons that I will give shortly, I do not think that the conclusion referred to in the preceding paragraph necessarily determines that James, with his present abilities, should be seen as in the category of "fed by others" if that means he is exclusively fed by others. But it does mean that I cannot accept that, as things stand, he can properly be regarded as in the self-feeding category. Although it is correct to say that the evidence has moved on since Dr Ferrie expressed his view in July last year, I do not think that the evidence supports the conclusion that, had he been available at the trial, Dr Ferrie would have modified his view again. At all events, the issue is one for me and that is my conclusion on that issue. As I have said, however, I do not think that this necessarily means that the starting-point must be where Dr Rosenbloom says it is.
Before coming to that and other issues, the other question that arises is whether, in assessing where James should be classified within the Strauss data, I could or should take into account the fact that he has the ability to use a Neater Eater and that the likelihood (as is contended) that that he will use it much more when he is settled into new accommodation with a better and more intensive care regime than is presently available to him. The issue was addressed by Dr Rosenbloom and Dr Ferrie in their joint discussion and I think I should record their respective conclusions.
The question was whether, when assessing life expectancy, it is important that James has the ability to self-feed or that he is actually self-feeding for the majority of the time. The answer was recorded as follows:
"We are largely agreed on this point. Dr Rosenbloom considers that the latter is more important i.e. that the individual should be actually self-feeding for the majority of his intake. It is his opinion that when considering life expectation it is actual-functioning, rather than a hypothetical potential to function, that is the relevant criterion. In Dr Ferrie's opinion the most important factor to consider in most cases is how the individual receives the bulk of their calories. In other words he considers the latter to be most important. However, there may be individual circumstances which negate this. For example, an individual may be capable of self-feeding and may do so for one meal a day and at weekends but time pressures cause most of his meals to be given to him. In this case the ability to self-feed is more important."
I am not sure I can quite accept the submission made by Mr Block and Miss Greaney that this represented agreement between the experts that actual functioning, rather than hypothetical potential to function, is a more important factor when considering life expectancy if what is being suggested is that the possibility that an existing ability to self-feed, albeit not utilised regularly for whatever reason, is to be disregarded wholly for life expectancy purposes, particularly if there is good reason to believe that the ability will be more regularly utilised in the future. Dr Ferrie appears to be saying that, whilst "in most cases" the life expectancy issue will be informed by the amount of calorific intake by self-feeding, there are those cases where an unfulfilled or unrealised ability to self-feed fully on a regular basis is more important. The reconciliation between that view and the view of Dr Rosenbloom seems to me to be that, whilst the current level of actual self-feeding is more relevant to the initial placement of a person within the Strauss data, the existing ability and its potential for greater utilisation may be something calling for an adjustment to the effect of that initial classification. That is how I intend to approach this factor.
I understand Dr Rosenbloom to accept that the starting point itself can be adjusted in an individual case. He accepted, by reference to the 2014 tables, that for a 15-year old boy there is a 12-year "life expectancy gap" between someone at the bottom of the feeding range (i.e. "fed by others", 33 years) and someone at the top of that range (i.e. self-feeding, 45 years) and that there was a "clear linear progression". He agreed that it would be for the court to decide where in that spectrum James was to be placed. If that is to be determined (as I have concluded) largely by reference to existing feeding patterns, it does seem to me logical (and indeed in accordance with what the 2008 Strauss paper said) that a starting point somewhere within that spectrum should be taken rather than trying artificially to force the individual case into one end or the other of that spectrum. Whether that is merely another means of "adjustment" of the life expectancy is, perhaps, a moot point, but since there is an issue about the stage at which any adjustment for individual factors is made (see paragraphs 91 - 100 below), it seems to me more logical to alight upon a sensible starting-point and then to adjust the predicted life expectancy to reflect individual factors thereafter, particularly if some of the factors reflect the effect upon life expectancy of future changes of the individual circumstances. At all events, that is the exercise I propose to undertake.
I have covered a great deal of the relevant ground already and I will not repeat it. I do not think that James can be regarded now as fully self-feeding. Dr Ferrie was of that view in July (as indeed was Dr Rosenbloom) and I accept that assessment as at that time. Whatever improvement there has been since July 2014 (and I accept that there has been some improvement) I do not consider that it puts James into that category. In my view, he has the ability to self-feed (albeit not to the extent that he would, certainly at present, take in his full daily calorific needs), but that ability is currently constrained by his general living conditions. He receives about 25% of his daily calorific intake via his gastrostomy and the balance largely by being fed by others, though he will receive some food by self-feeding, either using his Neater Eater or by finger feeding.
Dr Rosenbloom does not suggest that the starting-point should be influenced by the presence of the gastrostomy (since this is not a case where all feeding is undertaken via a gastrostomy) and, accordingly, I ignore it for present purposes. So the question is where in the spectrum between 33 and 45 years should the starting-point be taken? In the light of my findings, it has to be nearer at the lower end of that range than the top end, but not so low as to place James in the cohort of those who are fully fed by others. My assessment is that, within the Strauss table, the starting point should be a further 37 years from the age of 15. In other words, provided James survives until the age of 15, then by reference to the US data he would survive a further 37 years subject to any further adjustments, upwards or downwards, that are required and/or justified by his individual characteristics.
Counsel agreed to make the necessary calculations, but my belief was that this would mean that, provided James survived to 15, he would have a predicted life expectancy by reference to UK figures of an additional 8 years or thereabouts beyond his life expectancy if in the US (in other words, a further 45 years) subject to any of the other adjustments to which I have referred. Indeed my belief has been confirmed by the agreement referred to in paragraph 134 below.
Before addressing any adjustments, I need to consider the disputed issue of when those adjustments are to be made – is it before or after the conversion of the US figures to the UK figures? The Defendant contends for the former, supported by Dr Rosenbloom, Mr Block and Miss Greaney arguing that it "wholly distorts the calculation" if the adjustment is not made at this stage. The latter is contended for on behalf of James. Dr Ferrie has approached matters in this way. Each side claims that logic is on their side. Dr Rosenbloom does not think it would make much practical difference because the clinical factors that would be taken into account would be similar, but adheres to his view.
I have noted previously (see paragraph 40) that Swift J considered whether to make any adjustment in Whiten after the conversion of the US figures to the UK figures). It is right to say that no argument appears to have been put forward about the matter and equally right to say that Swift J was not particularly impressed with the approach of either of the experts in that case. She did not have the advantage of Dr Rosenbloom's view. Whilst ordinarily I would attach great weight to the approach of a very experienced judge in this field who had the benefit of help from equally experienced counsel, I do not think I can attach quite so much weight to the approach than I might otherwise have done for those reasons. However, notwithstanding that observation, it is of particular note that the Defendant's team in that case (doubtless instructed on behalf of the National Health Service Litigation Authority as is the Defendant's team in the present case) took no point about this and that is something I should bear in mind.
The first point to note is that there is nothing in any of the Strauss papers that expressly deals with this question. In his response to the issue raised at his meeting with Dr Ferrie, Dr Rosenbloom said this:
"Dr Rosenbloom considers that adjustments for age and clinical factors should be undertaken before making any upward adjustment for projected life expectation. This is consistent with the recommendation made in the Strauss et al paper."
However, he agreed when giving his evidence that there is nothing that gives express guidance on the issue in the Strauss papers. He said, however, that his own opinion was shared by his Californian colleagues. He put the matter in this way:
" … it is also the view of Professor Strauss and the California colleagues … I have assumed that because the material we are working with in coming to a view is the actual US life expectation then adjusted for clinical criteria. And to me, it made sense to get as accurate a figure as we could for actual life expectation before we made the adjustment. That seemed to me, and seemed to my California colleagues, to be the logical way to go about it."
He also appeared to say that the majority of his paediatric neurological colleagues supported his view and that only Dr Ferrie was an advocate of the contrary view.
When challenged about it by Ms Rodway, Dr Rosenbloom's approach can be seen as follows:
Q. If you do that [i.e. make the adjustments before conversion to the UK figures], because it is already recognised that there is an increased life projection in the UK, it's unfair on the individual who is living within the UK cohort, isn't it?
A. I think in all honesty, my Lord, it depends on whether the adjustment you make before altering from US to UK projected is whether the adjustment is upward or downward, because the proportionate amount would be increased if one is making an upward adjustment and would be decreased if you made a downward adjustment. So I don't see it as being fair or unfair. It's a suggested way that seems to work in practice.
I am not wholly clear how such an approach can be said to have been shown "to work in practice" other than by concluding that its fruits seem to accord with the perceptions of "the right result" of some of those with expertise in the field. This seems to be something of a self-fulfilling prophecy. I do feel that there ought to be a logical answer to this issue.
With great respect to Dr Rosenbloom, I have not found it easy fully to understand the position he takes on the basis of the answers given. Unfortunately, there was no recorded discussion about the issue when he met Dr Ferrie and there is nothing in Dr Rosenbloom's letter of 31 December 2014 that clarified the approach. I do not, of course, doubt his evidence that he has discussed this with his Californian colleagues, but that is no substitute for a written analysis that has been considered by appropriately qualified experts and subjected to an effective "peer review". It is very difficult for a court to make a decision on a matter like this without some clearly articulated material that it can scrutinise and evaluate. All expert opinions need to withstand logical scrutiny: Bolitho v City and Hackney Health Authority [1998] AC 232, 241.
Since the approach of the parties and of the court in Whiten was as I have indicated, it seems to me that (perhaps by default) the practice of making adjustments after the conversion may have developed. In those circumstances, if the Defendant in any case considers that this approach is wrong, it does seem to me that the onus of persuading another court that the approach in Whiten is wrong must lie on those instructed by the Defendant in a subsequent case. Dr Rosenbloom is, of course, a well-known and highly-respected expert, but, as I have indicated, merely to express an opinion without any very cogent backup is not really sufficient. If this argument is to be pursued in future it needs to be put before a court in a satisfactory fashion so that an informed decision can be made.
I propose, therefore, to take a cautious approach (arguably marginally favourable to James) and to assume for present purposes that the approach in Whiten was correct and to say, as is the case, that I have not been persuaded that it was wrong. At a very simplistic level (which I acknowledge may, on proper analysis, be wrong), there seems to me some logic in the proposition that in a case such as this the Strauss figures should be converted to the projected life expectancy in the UK to the result of which any adjustments in the light of UK experience and/or conditions should then be made because it will be that experience that will inform the assessment of the individual living in the UK and those conditions in which the individual claimant will live and be cared for. If, for example, it is the case that the standard of future care is a relevant factor in the ultimate assessment of life expectancy, it seems to me to be distinctly arguable that the standards of care with which the domestic courts are familiar should inform whatever adjustments are made and that transposing any such adjustment into the US figures before conversion is inappropriate and illogical. At all events, I propose to hold, on the basis of the evidence and arguments I have heard in this case, that that approach is the correct one.
What adjustments, if any, should be made in this case to the converted life expectancy of 45 years from the age of 15? It will, of course, be necessary to consider making a modest adjustment to reflect the risk that James will not survive to the age of 15. Given that it was acknowledged by Dr Rosenbloom to be a small risk, my preference would be for a modest "rounding down" of the figure finally thrown up by the calculations to which I will refer below. I have to say that working in terms of a figure after the decimal point in what is acknowledged to be the world of an inexact science seems inappropriate: none of the Strauss tables are presented in that way. However, I will return to this at paragraphs 135-137 below.
It will be appreciated that no further downward adjustment is required by reason of the fact that James is still "fed by others" to a material degree: that factor was taken into account in deciding where in the "33 – 45 year spectrum" (see paragraph 89) James was to be placed by way of a starting-point. The logic, as it seems to me, is that if there were grounds for thinking that the amount of feeding by others was likely materially to increase in the future (thus giving rise to whatever increased risk is associated with that process), there might be scope for some reduction in the projected life expectancy. However, the evidence is very much the other way: as I have already said (see paragraph 88), James already has the ability to use a Neater Eater and, given his very positive approach to life and his plain wish to act and behave as much as possible as do those without disability, I have no doubt that he will increase its use once he is in his new accommodation and has the full care regime in place. For my part, that seems to me to be a factor that would require some degree of upward adjustment. I will return to the "quantum" of that adjustment later. I cannot see that there is any fundamental objection to this course because Dr Rosenbloom himself made an adjustment upwards to reflect James' existing self-feeding skills when he revised his initial life expectancy assessment (see paragraph 57 above), although I perceive his general position to be that future improvements are irrelevant. I will deal with that particular aspect shortly.
In relation to the gastrostomy, Dr Rosenbloom maintained his view, notwithstanding a searching cross-examination by Ms Rodway on the issue, that this remained a negative factor and required a downward adjustment of two years. It will be recalled that Dr Ferrie in July 2014 (but without access to the new Strauss papers) regarded this as "a weak negative factor". Some part of the 8 years by which he reduced his starting point of 71 years was attributable to this, but it can safely be assumed that it was a fairly modest part of the overall reduction.
James is not, of course, tube-fed in the sense that all his nutrition comes via such a route. If so, he would have been in a very different cohort of cerebral palsy patients. The extent to which he currently relies upon it is set out above (see paragraph 73). It was put in place, not because of the risks of aspiration, but for convenience purposes given the length of time eating in a more conventional way required: he is a young man and does not wish to spend too long eating in that way if there is a quicker method. It has, by all accounts, paid dividends and he has put on weight since its insertion.
As previously observed (see paragraph 44), the most recent Strauss paper describes the more liberal use of gastrostomies for children with less severe disabilities and the philosophy on the part of some clinicians that a "mixed tube and oral feeding pattern" was acceptable or desirable. In this kind of situation, there seems to be something of a trend away from regarding a gastrostomy as a significant constraint on life expectancy. Indeed Dr Rosenbloom's article (see paragraph 62 above) appears to me to foreshadow the viewpoint that a gastrostomy can have a positive impact on life expectancy in some circumstances. James is certainly a child who "is adequately nourished and free from the risk of aspiration". On that basis, according to Dr Rosenbloom's article, he is "likely to have a longer life expectancy than one who is orally fed but is failing to thrive and has recurrent respiratory infections." I did not fully understand why Dr Rosenbloom thought that this consideration did not apply in James' case.
Ms Rodway and Mr Latimer-Sayer invite me to say that the gastrostomy should be seen as a positive factor in James' case: it acts as a useful top up for James' calorific intake which is positive. However, it is, to use laymen's language, a piece of inserted medical equipment which presumably carries its own negative impact. However, it does seem to me that the 2014 papers, when seen in the light of Dr Rosenbloom's earlier view, do put the existence of a gastrostomy in someone like James marginally on the positive side of the equation than the negative side even allowing for the artificial nature of the intervention to which it gives rise. I will return to this later.
The next matter for consideration is whether some positive adjustment upwards is justified by reference to the quality of care that James' will receive for the rest of his life. The care package is secure for the rest of his life and, whatever the precise outcome of the case, it is likely that there will be sufficient free capital (or further periodical payments) to ensure that the essential quality of the care package will be maintained and that essential equipment will be updated. Ms Rodway and Mr Latimer-Sayer submit that common sense suggests that James will have a significant advantage over other people in his cohort because of his ability to pay for good quality care, accommodation, equipment, therapies and so on. This positive feature justifies an upward adjustment of the predicted life expectancy.
In his 2004 article (see paragraph 62), Dr Rosenbloom said this:
"…when clinicians are asked to give an opinion on the prognosis for survival in medical negligence or personal injury litigation … figures that are statistically derived from the epidemiological studies can and should be weighted for clinical factors. What is less certain it is whether it is appropriate to weigh statistically derived figures in relation to assumed future quality of care. Whilst it is intuitive to attempt to do this there is hitherto no supportive published evidence."
That was what he said in 2004 and he maintains the same position now some ten years later. Dr Ferrie took a different view and I will turn to his opinion later. So far as Dr Rosenbloom is concerned his position can be seen from the following interchange during the course of his evidence in chief:
DR ROSENBLOOM: My view, my Lord, is that poor care is very likely to produce a reduced life expectation, if the individual is neglected, not attended to, not properly nourished, skin isn't attended to and so on. In the UK and in my own practice generally that is so exceptional that I believe it can be discarded. I have never found evidence that the converse of exceptional care prolongs life expectation, and I think that the reason for this is that the reasons people die once you get an appropriate average standard of care relate to illnesses that would cause them to die anyway, rather than the more that they are cared for, the longer that, in statistical terms, they will live. That's my best guess.
MR BLOCK: Can I see if I have understood that. You are saying that the [Strauss paper] deals with average care?
A. Yes.
Q. And if someone has very significantly below average care, then that would be detrimental and could well result in a lower life expectation?
A. I believe that's probable, yes.
Q. But increases from the average upwards, there is no evidence that that has a positive effect on life expectancy?
A. Correct.
MR JUSTICE FOSKETT: It's somewhat counter-intuitive that, though, isn't it?
A. I have said that myself, and in the 2004 paper that is included in this I have actually used the phrase "counter-intuitive", so I wholly agree with you, my Lord. But we can't find the evidence. It's interesting that, looking at other papers on care from the United States, it does seem that people living in residential institutions where there may well be an average standard of care live longer on average than those living at home. So there is quite a lot that's counter-intuitive about this, and I think that the issue that we have to look at is quality of life, rather than longevity. And here, I have no doubt that a very high quality of care, the sort of activities that have been talked about for James, will enhance his quality of life but, let me give a crude example, they are not going to stop him dying from a heart attack or a stroke.
MR JUSTICE FOSKETT: No, I understand that.
In cross-examination he accepted almost all the points put to him by Ms Rodway about the life-style that James will have and the care regime to which he will be subject: points such as the 24/7 availability of trained carers who could deal with any physical problems arising from the gastrostomy and reducing the risk of any aspiration or choking whilst eating; the availability of good quality accommodation with good quality hygiene and cleanliness; access to all the equipment required to remain mobile; access to physiotherapy, speech and language therapy and any other necessary therapies; access to private medical treatment and access to private occupational therapy ensuring seating reviews; and the ability to be transported appropriately and to take holidays. He accepted that the quality of the care received would be likely to improve the quality of James' life, but he maintained his position that there was no evidence that these factors increased longevity. He said there was no data to support it.
The issue was re-visited again during his cross-examination and I think it right to record the interchanges:
MS RODWAY: … one of the features … we differ on, is your dismissal of the improved features: good care, good socio-economic factors on expectation of life. That's something you set your face against.
A. I thought we had said earlier in cross-examination that I cannot find evidence to support that, but I agreed with his Lordship that to an extent this is counter-intuitive.
Q. Yes.
MR JUSTICE FOSKETT: I was just reflecting on this over the weekend. How would you find evidence of this? I mean, this is the age-old problem. You can't run a survey with one cohort of 12-year olds and you give them the best care in the world, and another cohort that you don't give them any care at all.
A. No, you can't, my Lord. One of my constant theses that I have looked for research funding for is to follow up individuals who have been successful litigants.
MR JUSTICE FOSKETT: Yes.
A. Funding for that has never been made available to me.
MR JUSTICE FOSKETT: No. But you indicated -- I was looking back at the transcript and I hope I quote you correctly -- that there was some evidence, I think, in the States that those who were looked after in institutions fared better than those who were looked after at home?
A. Yes.
MR JUSTICE FOSKETT: But I think you put that on the basis that those who were in institutions would have an average level of care, I think was the way you put it?
A. I believe so, my Lord.
MR JUSTICE FOSKETT: But it may be said, well, actually, those who are in institutions will be more constantly monitored than those who happen to be at home. If they happen to be at home with a first class care regime, that may be one thing, but if they are simply at home being looked after by a family with no resources, then of course, it's rather difficult to draw such a conclusion.
A. I agree completely, and I hope that I was honest about that because, of course, the other thing that would, that could be argued was if you were in some sort of care regime you would not have regular and consistent caretakers and that could be disadvantageous. It could be argued either way, and I agree with you it could be very difficult to demonstrate what is intuitive, that the sort of care that James receives will in his case prolong his life. I understand what has been put to me. I can't support it because I don't know.
It is, perhaps, that last comment of Dr Rosenbloom that really emphasises his position. He does not know whether socio-economic factors (including the quality of care) make a difference because, from his perspective, there is no reliable clinical or other scientific evidence upon which he can say positively that they do make a difference. From a purist perspective that does seem to me to be a perfectly reasonable and respectable position to take. However, my concern, which was foreshadowed in one of my questions to Dr Rosenbloom, is that it is difficult to see how any statistically reliable evidence to support or refute the proposition that good care extends the life expectancy of a cerebral palsy patient will ever emerge because no ethically acceptable experiment can be set up to test it. (On reflection I think my suggested need to compare a cohort of patients who receive "the best care in the world" and those who receive "no care" is a little stark, but the point is that a statistically valid exercise in which one cohort of patients is given first-class care and another has deliberately reduced care in some areas in order to compare survival rates would not be ethical.) Whilst I do not, of course, criticise this purist perspective as such, I do not consider that it binds the court to adopting the same approach. The court is never bound by scientific certainty in these matters and Dr Rosenbloom is the first to acknowledge that the whole issue is not an exact science in any event.
I do not see why the court cannot, in an individual case, seek to identify the risks that exist in an individual's life if he or she is a cerebral palsy patient and then consider the life that such a patient is likely to lead in the future and to determine how large those risks in truth are likely to be in that individual's life. In some cases, of course, the best care in the world may not obviate or materially reduce those risks. But there may be other cases in which it is quite plain that the risks to life are reduced by the quality of care to be received and if that can be demonstrated as the likely scenario I cannot see any reason in logic for the court not giving effect to that conclusion in the individual case by adjusting the life expectancy thrown up in the generality of cases based upon the available statistics.
I will for the present leave to one side the fact that Dr Ferrie is plainly of the view that this is a legitimate approach and I will consider whether there is other thinking (or indeed authority) that supports this general approach. It is clear that there is. On the basis of a number of cases where the claimant has sustained serious spinal injuries in an accident, it has been the agreed position of the experts that the likely quality of future care affects the life expectancy prediction. The courts have accepted this approach and, as I will indicate, in at least one case the court has adopted this approach in relation to a cerebral palsy patient. However, as it seems to me, there is no material difference between the type of disability under consideration: in each case the disability will give rise to particular risks as to mortality beyond the ordinary risks of mortality and the court has adopted the position that where those additional risks are reduced by reason of the quality of care to be received in the future, that is a legitimate basis for making an adjustment to the life expectancy prediction thrown up by reference to such statistics as are available.
In Owen v Brown [2002] EWHC 1135 (QB); [2002] All ER (D) 534 (May), the claimant, then aged 20, sustained very serious injuries in a road traffic accident, including head injuries, and was rendered triplegic. The court had to assess aspects of his damages claim (which was being met by the defendant on a 90% basis). As Silber J said, a critical factor in assessing most of the items of future loss in the case was the claimant's life expectancy. It was necessary to consider it in detail. The opinion of the very experienced Consultant Spinal Surgeon, Mr. Brian Gardner, who reported for the claimant, was that the claimant would live until the age of 70. Dr. John Evans, the Consultant Neurologist, called as the defendant's expert on life expectancy was of the view that the claimant would live until the age of 60 although "in recognition of the difficulties of estimating the life expectancy of the claimant, he was prepared to accept that the life expectancy of the claimant could be 62.5 years."
In the event, Silber J preferred the thrust of Mr Gardner's evidence to that of Dr Evans, but indicated that he would have to scrutinise it carefully. I will indicate one or two matters of potential relevance in the judgment, but it is, perhaps, worth recording that Dr Evans shared the view of Mr Gardner that when assessing the life expectancy of an individual "the quality of care supplied to the individual concerned [is] significant:" [78]. One of the positive factors taken into account by Mr Gardner that would increase the claimant's life expectancy was "the financial ability of the claimant to have access to good medical care and to take advantage of medical advances." Silber J said that he regarded this as a "valid and significant point".
Silber J reviewed extensively the worldwide statistical material available concerning the survival of spinal injury patients to which Mr Gardner had referred and which he took into account in advancing his opinion on the life expectancy of the claimant. One passage in the judgment of note in this context is where Silber J recorded Mr Gardner's reasons for saying, as was the case, that there were better survival rates in Australia than the UK. The passage is as follows [74]:
"Mr. Gardner does not think that there in anything intrinsically different between the Australia and United Kingdom populations. He concludes that the probable reason for the better life expectancies in Australia is the better care facilities available for those with spinal injuries in Australia. Mr. Gardner points out that the United Kingdom spinal cord injury service is seriously under-resourced. For example, 42% of United Kingdom patients with complications to their spinal cord injuries cannot gain access to specialist facilities. The claimant with the benefit of his damages award would not be constrained by these limitations and fortunately he will be able to purchase and will continue to have the benefit of very good care."
The judge also recorded the following view of Mr Gardner [76]:
"Mr. Gardner stressed that in his opinion that there was a trend to increasing life expectancy for those with spinal cord injuries and that it will continue to increase for those, like the claimant who are financially able to have access to good treatment and to further improvements that will arise in the treatment of spinal injuries."
Having scrutinised Mr Gardner's evidence with care and having taken into account the guidance given by the Court of Appeal in The Royal Victoria Infirmary and Associated Hospitals NHS Trust v. B (A Child) [2002] EWCA Civ 348, an important case in this context, Silber J said this [88]:
"My conclusion is that Mr. Gardner's assessment of the claimant's life expectancy is correct. I strongly agree with Mr. Gardner that a significant positive factor that he correctly took into account was and is the very high standard of care that the claimant receives and will receive. The effect of the award in this case is that the claimant will be the beneficiary of very high quality care in all the areas in which he requires it."
A similar approach was adopted by Lloyd Jones J, as he then was, in Sarwar v Ali and the MIB [2007] EWHC 274 (QB) in a case involving a claimant who became a C5 tetraplegic following a road traffic accident. It does not appear to have been disputed between the two experts called on each side that socio-economic factors could have an impact on life expectancy, though there was a difference as to the extent. By way of explanation of the following passage from the judgment, the judge's attention had been drawn to a paper by Krause and others [23]:
"Nevertheless, I consider that there is force in the submission that such socio-economic factors are likely to have a favourable impact on the life expectancy of the Claimant. I did not understand Mr. Tromans to deny them any effect. While I am unable to accept that their impact is likely to be as dramatic as the Krause paper contends, I nevertheless consider that these favourable factors should be given weight in assessing life expectancy in the present case. In this regard I attach particular importance to my finding that the Claimant will use his award to purchase high quality care and medical services."
Burton v Kingsbury [2007] EWHC 2091 (QB) was another case in which a young man was rendered a C4 quadriplegic in a road traffic accident. The experts on life expectancy in that case were Mr Gardner and Mr Tromans, the former taking the view that the claimant's life expectancy of 69 years whereas Mr Tromans said it was around 62-63 years. Flaux J recorded [24] that "Mr Gardner's evidence in his report is that probably the most important determinant of life expectancy for a spinal cord injured person was the quality of care" and that he (Mr Gardner) had relied upon, inter alia, the Krause paper, to which reference was made in Sarwar's case, in this connection. Mr Tromans had drawn attention to two critiques of the Krause paper both of which emanated, at least in part, from Professor Strauss (the contention in essence being that the inclusion in the cohort under consideration of workers' compensation cases skewed the results in favour of suggesting greater longevity). The precise criticisms are probably not relevant for present purposes because it would seem that Mr Tromans adhered to his view that socio-economic factors could have a bearing on life expectancy, but Flaux J's conclusion, having referred to the Krause paper, is to be noted. He said this [28]:
"I accept that the different social conditions and health care arrangements in the United States (particularly the complete absence of a state run health service corresponding to the NHS) should make one cautious of placing too much reliance on the Krause study. Furthermore, there seems to me to be some force in the argument that workers compensation cases should be discounted because in an American context they represent a generally healthier segment of the population. Having said that, in my judgment, the overall point made by Mr Gardner, which he adhered to, irrespective of the workers compensation argument, that favourable economics improve life expectancy in persons with [spinal cord injury] is a valid point, which I accept."
He continued thus [29]:
"In the Joint Statement prepared by Mr Gardner and Mr Tromans, Mr Gardner expressed the opinion that, notwithstanding the doubts expressed about the workers compensation element of the Krause study, there is robust evidence apart from the Krause study that economics impact on longevity. I agree and consider that any suggestion to the contrary in the Strauss materials is flawed."
There is, therefore, a clear line of thinking, accepted in those three cases, that the future quality of care can affect the life expectancy of the spinal injury patient. There is, it would seem, some reasonably extensive statistical evidence to support the validity of this factor in spinal injury patients and, of course, people like Mr Gardner and his colleagues will see patients for many years of all ages. However, as I have said, I cannot see any logical difference between patients with that disability and those who possess disabilities associated with cerebral palsy when it comes to considering such a factor. If there was compelling statistical evidence to the contrary, a different view may have to be formed, but until then I do not see why the common sense proposition that good and conscientious care will reduce mortality risks should not be adopted and reflected appropriately.
It was adopted by His Honour Judge MacDuff QC, as he then was, in the unreported case of reasonable needs v Shrewsbury NHS Trust, 14 June 2007. Ms Rodway and Mr Latimer-Sayer have drawn my attention to the following passages in his judgment in relation to the issue of life expectancy:
"144. For reasons which are given above, I get no assistance at-all from Professor Barnes. But, in spite of Dr Thomas's evidence that he saw no reason to adjust the statistical result ("it is the best evidence we have") I propose to adjust the life expectancy figure by three years in the Claimant's favour. I hold that her expected life span is to age 40. There is just one reason for this. [She] will have the benefit of a first class care package. This undoubtedly helps to guard against the risks associated with the main risk factors. Round the clock nursing care, which [she] will have, will, for example, guard against the risks associated with skin pressure ulcers. With good care, skin ulcers should not be a problem. But if they were to occur, ameliorative nursing measures would be brought to bear, at the first sign. The risk of aspiration may also be used as an example. Good feeding, carefully supervised, should guard against aspiration. And there would be a good early warning system, with prompt and appropriate medical treatment. An epileptic seizure would be detected immediately with the proper treatment. And so on.
145. Dr Thomas accepted this. He accepted that good care will make a difference. Of course, we do not know about the care enjoyed by the average member of the California database. Some will have excellent care; some, I guess, as good as that which [she] will enjoy. Many will not. Whatever is the position, [her] care package is likely to be well above the average. Unfortunately nobody asked Professor Strauss for his observations upon this and whether he could help with hard evidence about the care given to the members of his group across the range. Nor was he asked about the effects of excellent nursing care upon the results of his analysis. I should perhaps also take account of the fact that [she] will be living in a stimulating environment with loving parents, an opportunity for "swimming" in a spa pool of her own … and regular holidays. This might also have an impact upon her prospects.
146. In the final analysis, it is impossible to judge how far to go. Why should I assume an extra three years rather than an extra two years or some other figure? It is not something upon which I have expert evidence, and, in the end, it comes down to a judgment based upon a general feeling for the case. I cannot justify a three year uplift as opposed to any other figure. It is a decision made with the help of the judicial fingertips. I find that [her] expectation is to age 40".
I infer from that extract that Dr Thomas (almost certainly Dr Neil Thomas, an experienced Consultant Paediatric Neurologist, who gave evidence in Whiten for the defendant) had given evidence on behalf of the defendant and had "accepted that good care will make a difference" to life expectancy. That, of course, suggests that it is not universally accepted that the issue is irrelevant. That case was in 2007 and, as Judge MacDuff said, no-one had asked Professor Strauss about the issue. (Professor Strauss had given evidence in that case by video-link.) Had they done so, one assumes the answer would have been along the lines of the following passage in the 2008 paper which was accepted for publication in December 2007:
"The effect of quality of care on life expectancy is frequently discussed, and it is sometimes asserted, without any supporting evidence, that quality of care is a critically important factor. This issue is more complex and less clear than is often assumed and the following brief discussion summarizes some of the reasons for this. Some of these points have been made at greater length in a recent review article on life expectancy after traumatic brain injury by Shavelle et al. Quality of care is a rather vague term that may refer to any or all of the following:
(1) The expertize of the caregivers, ranging from highly qualified professionals to relatively unskilled (and low paid) staff. A complicating factor is that caregivers are often family members, who generally do not have formal qualifications but in some cases become highly skilled carers.
(2) The accessibility of physicians and emergency services.
(3) The quantity of care and equipment provided, which is often a reflection of the funds available.
Next, the effect of quality of care on life expectancy surely depends on what is being compared. If, for example, it is good care versus grossly inferior care, the difference in life expectancy will doubtless be large. That comparison, however, is generally not of interest. The most relevant comparison is between (1) the reasonable and necessary standard care available in most developed societies, and (2) the care expected given that the patient has a carefully prepared and well-funded life care plan.
It might be argued that the care embodied in (2) represents the best case in practice, as one cannot forecast exactly what care the patient will receive, or will choose to receive, in the coming decades.
It is sometimes asserted that quality of care is the most important determinant of life expectancy. If the comparison is between (1) and (2) above, this assertion is clearly wrong: the most important determinant is undoubtedly the severity of the disabilities. For example, literature from many countries documents that young patients in the permanent vegetative state have mortality rates up to 500 times larger than in the general population. If quality of care is as important a determinant of mortality risk, then death rates under 'standard' care would have to be 500 times higher than they would be under (2). This is surely inconceivable.
Further, some states or countries provide services to individuals with disabilities as an entitlement. For example, California provides annual person-centered individual program plans plus provision of all indicated care. In such cases it is not clear what is the difference, if any, between (1) and (2) above …."
Mr Block and Miss Greaney have drawn attention to that passage and have submitted that it means that "the distinction between reasonable and necessary care and a well-funded care plan is probably not relevant." I note that they do not use the expression "plainly not relevant".
I confess to finding the passage in the 2008 paper rather difficult to follow and would have valued meaningful elucidation. On a straightforward reading it does not say specifically that the quality of care is irrelevant; it suggests that the issue is "complex and less clear than is often assumed." The passage undoubtedly challenges the view that it is a "critically important factor" in assessing life expectancy. However, the way that the issue has been advanced in the cases to which I have referred (and indeed the way it has been advanced in this case) is in a less extravagant manner than is conveyed by that expression: it is to the effect that where there is good reason to believe that the quality of future care will reduce some identifiable risks to life, then it is appropriate to reflect that in the overall assessment of life expectancy.
Dr Rosenbloom's position is, as I have said, that there is no evidence to support this approach and I have already indicated my view about that (see paragraph 112 above). He also asserted many times that it is the severity of the brain damage that operates as the true constraint on survival and that all the individual features of James' presentation are simply markers of the acknowledged severity of his brain injury. As I understood him, this viewpoint was emphasised in the context of the debate about where to place James in the Strauss data. Dr Rosenbloom would not accept, for example, that merely because James has shown no tendency towards aspiration at present his lifetime risk of aspirating is in some way diminished. However, it needs to be understood, in the context of the issue about whether an adjustment can be made to the life expectancy prediction because of anticipated good quality future care, that the relevance of the care relates to the reduction in the likelihood of the risk materialising in a way that is unheeded and thus not acted upon before death occurs. The two issues are, in my view, different.
Having concluded that it is legitimate to increase the life expectancy prediction in the light of the future care that will be available to James, by how much should the prediction referred to in paragraph 89 above be increased? The nature of the overall care package available to James in the future will be apparent from the balance of this judgment (and indeed is reflected in paragraph 110 above), but in summary he will have 24/7 care from 2 trained carers with the availability of many aids and items of equipment that will enhance his mobility and ability to communicate. In addition he will have available other therapies and access to the opportunities of appropriate exercise and recreation that might be denied to others who do not have the means to access such a regime.
Because he does not subscribe to adjusting the prediction for this reason, Dr Rosenbloom did not put forward a figure for the adjustment on this account. Dr Ferrie had suggested a 3-year increase (against the background of an 8-year decrease because James was not to be regarded as fully self-feeding and the presence of the gastrosomy as a "weak negative factor": see paragraph 53 above), though some part of the increase was on account of the particular type of cerebral palsy that James has. I understand that Dr Ferrie's position in relation to that matter is that the high level of dystonic movements means that James is constantly "exercising" and, accordingly, the lack of mobility (with its associated risks) that afflicts some cerebral palsy patients does not apply to him. Dr Rosenbloom clearly disagreed with this view and, without further explanation from Dr Ferrie or some clear support in the literature, I do not think I can act upon it. Because it appears to be a somewhat novel suggestion I propose to assume that it accounted for a modest proportion of the 3-year period he advocated.
In Lewis, Judge MacDuff had no expert evidence to guide him on the amount of any adjustment to be made on account of the good future care that could be anticipated in that case (other than support for the proposition that he was entitled to make such an adjustment) and, as he said, it was a matter of judgment based upon a general feel for the case assisted by "the judicial fingertips". I might observe that in that case the claimant was to receive 90% of the full value of her damages claim, not 100% as James will.
In this case I do have Dr Ferrie's view, albeit not one tested in cross-examination. Nonetheless, his approach was to look for a modest addition on this account and it would be difficult to see his 3-year period of itself to be excessive given the lengthy life expectancy otherwise predicted for James. I have also had the advantage of a detailed analysis of the factors that do or do not constitute constraints upon survival for someone like James. Although those matters go largely to where in the statistical cohort he should be placed, they have a bearing on the impact that future care may have. Overall, I consider that adding an additional 2 years for the quality of the future care and the lifestyle to which it will give rise in this case will not operate as an injustice to either party. If anything, it may be on the conservative side.
Furthermore, it seems to me to be appropriate to regard the continued presence of the gastrostomy and the likely increase in use of a Neater Eater once James' new regime is in place in his new accommodation to be factors that combine to warrant a modest uplift in the way that, had she felt there were such factors in Whiten, Swift J would have considered appropriate in that case "to reflect individual features in the claimant's case." I do not think it unreasonable to assume that Dr Ferrie included a 1-year reduction within his overall 8-year reduction for the "weak negative factor" of the gastrostomy given that Dr Rosenbloom had suggested 2 years because of the "clinical need" he then perceived for the gastrostomy. Equally, therefore, it seems to me reasonable to add 1 year to reflect the modest positive factor to which, in my judgment, the gastrostomy gives rise combined with the positive feature of greater self-feeding in the longer term by using the Neater Eater, albeit that both aspects of James' daily feeding pattern will be watched carefully by his trained carers.
My overall conclusion, therefore, is that a total of 3 years should be added to the predicted life expectancy before any reduction is considered for the risk that James will not survive until 15. It is agreed by Counsel that this means that the life expectancy, subject to any such reduction, is to age 63.2[1].
I have mentioned the small risk that James will not survive until 15 in paragraphs 56 and 101 above. I expressed the hope that I could make a modest "rounding down" to achieve a whole-figure life expectancy because a life expectancy with figures beyond the decimal point seems to me to be inappropriate in this context. It does appear that this can be achieved.
Dr Rosenbloom had suggested a reduction of 1 year and Dr Ferrie had suggested a 0.25 year reduction at the time of the joint statement. Dr Rosenbloom accepted in cross-examination that it was less than a year since the trial was 6 months on from the joint meeting and James had remained well. He said "precisely what" reduction should be made was uncertain and said that "the risks are that in spite of the excellent care he receives, … he could have an overwhelming infection from which he would die [or] that he may have an episode of status epilepticus." Those were identified as the risks, but they are, he said, "small and the downward adjustment is small because of that".
Against that background, I would have proposed taking Dr Ferrie's assessment, now very nearly 9 months since the joint meeting. This would indeed have reduced the life expectancy to as near to age 63 as would make no difference. If I had acceded to Mr Block's suggestion in his closing submissions that it is reasonable to adopt 0.5 years, the rounding up of the figure of 62.7 would also achieve the same result. Whichever route is adopted, the relevant age is age 63.
Epilepsy/provisional damages
It is accepted that James is at an increased risk of developing epilepsy. The lifelong risk of developing recurrent seizures is about 10%. The impact of developing epilepsy may be serious if the seizures are not well-controlled by medication.
The parties are agreed that, subject to a suitable form of wording, provisional damages and variable periodical payments should be awarded to deal with increased needs in such an event
"Lost years" claim
It is accepted on James' behalf that I am bound by the decision in Croke v Wiseman [1982] 1 WLR 71 to disallow the claims made for the loss of earnings and pension he would have enjoyed between the age of 63 and his normal life expectancy in a non-disabled state. Ms Rodway and Mr Latimer-Sayer have reserved his position in that respect should this case go further and have drawn my attention to the observations of Laing J in Totham (see paragraph 189 below). There is nothing further I can add to the position in this regard.
James' likely work pattern but for his disabilities
It is agreed in this context that I must make findings that will enable an assessment to be made of James' net annual loss of earnings at various stages of his working life had he been able to enjoy such a life, to include the issue of whether any deduction should be made for the costs of travelling to and from work and of work clothing. I will deal with the longer term first.
(a) earnings from age 22
Issues such as this are always difficult. James is only 12 and making realistic assessments for the future that might have been is yet another uncertain process. However, it is a familiar exercise where agreement between the parties cannot be reached.
In terms of the expert evidence on the issue, the assessments of the psychologists are relevant. In this case David Johnson, a clinical psychologist, and Albert Reid, an educational psychologist, were instructed on behalf of James. The Defendant instructed Anthony Baldwin, a consultant psychologist. Mr Baldwin discussed issues with Mr Johnson and Mr Reid separately and separate joint statements were produced. In the event, Mr Baldwin was not called by the Defendant to give evidence.
Mr Johnson ('DAJ') and Mr Baldwin agreed as follows:
"But for his injuries, what would James' level of cognitive ability probably have been? We agree that James would probably have been of at least Average ability and capable of achieving success in at least further education level. DAJ considers that, given James has been able to perform within the Average range on some tests now … in the context of permanent brain damage and multiple impairments, it is likely that he would have been more able in the absence of injury. DAJ considers it reasonable to suggest the potential for High Average level ability, given an undamaged brain.
But for his injuries, what kind of employment would you have expected James to have been capable of? We agree that James would have probably continued his education to at least further education level. We agree his area of study/employment would probably have been vocational, rather than professional. We agree James could have worked in a skilled occupation, with the potential to progress to managerial levels."
Mr Reid and Mr Baldwin agreed as follows:
"We agree but for his injuries James could have been a young man whose general level of cognitive function would have most probably fallen within the normal average range.
In Mr Baldwin's view he would have been capable of independent living and been capable of continuing his education at a college of further education, most probably undertaking vocational qualifications. In drawing this conclusion Mr Baldwin has reviewed the family background including the social and economic resources available to them. On balance he would have obtained vocational qualifications up to NVQ level.
In Mr Reid's view it is likely that James would have achieved at least 5 GCSE subjects at grades A* - C including Maths and English; he could then have undertaken tertiary qualifications including a Degree leading to a vocational qualification."
As I have said, Mr Baldwin was not called to give evidence which means that, subject to any concessions made by Mr Johnson and Mr Reid, their evidence was not controverted by any other evidence.
Mr Block and Miss Greaney accept that the consensus of the expert evidence is that James would probably have qualified for and obtained vocational employment and they also accept that there is a strong family history on Mrs Adams' side of the family of the men working for a local engineering company originally called Ruston's but which eventually became Siemens, having at one stage been Alsthom. Indeed that was the very clear evidence given by James' grandfather, in particular, to whom I have previously referred (see paragraph 20 above), of that connection. He said that seven of the family had worked for Ruston's, including his grandparents on each side, his father, his father's brother, himself, his brother and his son who had all worked there, several as engineers. When he retired in December 1998 he was Design Group Manager for Alsthom Development Department (having been promoted over the years) and was responsible for the design and manufacture of multi-million pound projects. His brother rose through the ranks and became the chief engineer of Hawker Siddeley Power Engineering.
Darren Chafer, Mrs Adams' brother, is now 46 and studied mechanical engineering at college. He has been a senior planning engineer with Siemans in their project management team since November 2012 having been promoted over the years. His current pay including bonuses is just under £40,000 per annum gross. If he was to be promoted into the next salary band he could anticipate an annual salary increase of between £6,000 and £9,000. He gave evidence that a starting salary for an apprentice was £24,000 and for a graduate it would be £27,000.
There is undoubtedly a very strong tradition on Mrs Adams' side of the family to work in the engineering world and, if I may say so, of an obvious commitment to hard work that brings its rewards in terms of promotion. Although the evidence I have summarised in the last few paragraphs was necessarily focused on the male cohort within the family, Mrs Adams' own approach to work (as summarised in paragraph 31 above) mirrors that ethic. As I have said, I have not seen nor heard from Mr Robshaw. It is, of course, impossible to say, but for reasons upon which I need not dwell, it is possible that, but for James' disabilities, that the relationship between Mrs Adams and Mr Robshaw would have survived. If that was so, James would have been subject to the regular influences of his natural father as well as any that might have come from Mrs Adams and her family. So far as Mr Robshaw is concerned, it is to be noted that, whilst he started life as a lorry driver, he decided to train as a plumber and apparently has been running a successful business since then.
I rather think, from everything that has been said about James at his present age, that he would have been very much his own man, but it would be surprising if he had not shown the kind of determination to succeed in whatever career he chose that he is presently showing to overcome his disabilities. Had he done so, he would, I am quite confident, have had the backing of all sides of his family. Equally, of course, it is a common experience that, whilst some children will be happily content to fall into the pattern of the working life of their parents, many will want to forge their own future and feel that they have moved on. Putting together all the pieces, I sense that James would have been in that latter category.
Mr Johnson said that a career in engineering would have fitted perfectly well with James' cognitive abilities and I see no reason not to accept that assessment. Whether James would actually have gone into an engineering occupation is, of course, impossible to say, but my assessment is that he would not have gone into anything less than that and that, accordingly, the broad level of earnings achievable in that sphere will represent a good measure of what he would have been likely to earn over his adult working life. It is, of course, impossible to say whether James would have remained in the area of Lincoln or would have moved away. I am sure that the strong family from which he came would have operated as a magnet to draw him to remain near to what has always been his home. On the other hand, if it was necessary to move some distance away in order to better himself, I am sure he would have taken that course, particularly given all the modern means of maintaining regular contact with loved ones. If he had moved away it is possible that his earnings would have been higher than if he stayed in the relatively restricted area near to Lincoln simply because the choice of potential employers would be greater.
I think the suggestion of the Defendant (which has moved up from the wholly unrealistic assertion in the counter-schedule that he would have earned no more than £18,000 per annum over his lifetime) that he should be seen as earning in the medium range of the male skilled trade occupations (approximately £25,000 per annum gross) or "all male employees" (approximately £28,700 per annum gross) reflects too pessimistic an assessment of his future but for his disabilities, but the figures help inform the general picture.
I have been told that the 2014 ASHE average annual gross earnings for science, research, engineering and technological professionals is £44,406 (SOC 21), for mechanical engineers the average was £44,436 (SOC 2122), for electrical engineers the figure was a little higher at £47,934 and for electronics engineers the average was £44,075. The average for engineering professionals generally (SOC 2112) was £42,718 gross. In order to put these figures into context, the national average for all employees is £37,028, for plumbers and heating and ventilation engineers (SOC 5314) it is £28,317 and for large goods vehicle drivers (SOC 8211) it is £26,619.
Looking across that range in the light of my assessment of the likely future for James but for his disabilities, I consider that a realistic figure for his average annual gross earnings over his working life from the age of 22 would be £42,000. Counsel will doubtless agree the net effect of that. I will probably follow the example of Swift J in Whiten (see [124]) and make a modest deduction (measured in a few hundred pounds) to reflect the likelihood that he would have incurred some expenses in connection with his employment. However, I do not see the suggested deduction advanced by the Defendant of £3,000 per annum as "modest" in the context of this case. If James had stayed in the Lincoln area, the costs associated with his employment would undoubtedly have been small. If he had left that area they could have been larger, but in my view that would have been counter-balanced by higher earnings generally.
(b) pension benefits
There is a dispute about the percentage to be applied to the gross earnings to determine the amount of the claim for loss of pension benefits to which, in principle, it is agreed James is entitled. I will revisit that dispute if agreement cannot be reached in the light of my conclusions as to his future earnings prospects.
(c) earnings from 16 to 22
A claim is advanced on James' behalf for the part-time earnings at weekends and holidays that it is said he would have earned. Such a claim is not disputed in principle, but there is a difference between what is claimed, namely, just over £15,000 (based upon £3,250 per annum) and the round-figure suggestion of the Defendant of £5,000 (which I am told works out at just over £1,000 per annum).
This claim would not have arisen, in the normal course of events, for another 4 years or so. It is common knowledge that finding reasonably well-paid part-time employment for young people is not very easy in current conditions. I have not received any evidence of what the position is in and around Lincoln. That position may, of course, have changed in 4 years' time, but I consider some caution needs to be shown here.
A round-figure sum of £7,500 is, in my view, reasonable under this head of loss.
Retirement age if not disabled
It is said on James' behalf that, but for his disabilities, he would not have retired until the age of 70. The Defendant submits that the age should be 67.
One is looking now (in 2015) at what would be the likely position some 50 years hence. Given the current climate, in which many people work longer than hitherto, it is difficult to believe that at least the same climate will not exist then. On my assessment of James' likely future but for his disabilities, he would not have been working in heavy, manual work or work with very considerable stresses beyond the normal stresses of everyday working life. To that extent it is, in my judgment, much more likely that he would have worked until 70 rather than 67.
The approach in law to the valuation of aspects of the claim
Before turning to the disputed areas of the claim, I should refer briefly to the extensive written submissions that each side has advanced concerning what is said to be the "correct" approach to determining whether any particular feature of the claim is sustainable. The submissions would seem to mirror contentions advanced in other cases over the last few years.
The starting-point is not in issue: a claimant is entitled to damages to meet his or her "reasonable requirements" or "reasonable needs" arising from his negligently caused disability (see, e.g., Sowden v Lodge [2004] EWCA Civ 1370) and should receive full compensation. The issue that may arise, it is said, is when there is a range of "reasonable" options to meet those needs. In that situation is the court permitted or obliged to choose the cheapest option or that which the claimant advances? Reference has been made to Heil v Rankin [2001] 2 QB 272, Rialis v Mitchell, 6 July 1984, Massey v Tameside & Glossop Acute Services NHS Trust [2007] EWHC 317 (QB), Taylor v (1) Chesworth (2) MIB [2007] EWHC 1001 (QB) and A (by her Litigation Friend H) v Powys Health Board [2007] EWHC 2996 (QB), on the one hand, and Iqbal v Whipps Cross NHS Trust [2006] EWHC 3111 and Whiten (see above), on the other. Totham (see paragraph 189 below) was also referred to.
In Whiten Swift J said that the approach she adopted was as follows [5]:
"The claimant is entitled to damages to meet his reasonable needs arising from his injuries. In considering what is "reasonable", I have had regard to all the relevant circumstances, including the requirement for proportionality as between the cost to the defendant of any individual item and the extent of the benefit which would be derived by the claimant from that item."
My attention was drawn after the conclusion of the hearing to a decision of Warby J in Ellison v University Hospitals of Morecambe Bay NHS Foundation Trust [2015] EWHC 366 (QB) where it appears that the Defendant sought to widen the scope of what Swift J had said. In rejecting that argument Warby J said this:
"18. Ms Vaughan Jones also relied on a proposition in the same paragraph of Swift J's judgment, that the relevant circumstances include "the requirement for proportionality as between the cost to the defendant of any individual item and the extent of the benefit which would be derived by the claimant from that item". I accept, and I did not understand it to be disputed, that proportionality is a relevant factor to this extent: in determining whether a claimant's reasonable needs require that a given item of expenditure should be incurred, the court must consider whether the same or a substantially similar result could be achieved by other, less expensive, means. That, I strongly suspect, is what Swift J had in mind in the passage relied upon.
19. The defendant's submissions went beyond this, however. They included the more general proposition that a claimant should not recover compensation for the cost of a particular item which would achieve a result that other methods could not, if the cost of that item was disproportionately large by comparison with the benefit achieved. I do not regard Whiten as support for any such general principle, and Ms Vaughan Jones did not suggest that Swift J had applied any such principle to the facts of that case. She did suggest that her submission found some support in paragraph [27] of Heil v Rankin, where Lord Woolf MR observed that the level of compensation "must also not result in injustice to the defendant, and it must not be out of accord with what society would perceive as being reasonable."
20. Those observations do not in my judgment embody a proportionality principle of the kind for which the defendant contends, and were in any event made with reference to levels of general damages for non-pecuniary loss. Ms Vaughan Jones cited no other authority in support of the proportionality principle relied on. I agree with the submission of Mr Machell QC for the claimant, that the application to the quantification of damages for future costs of a general requirement of proportionality of the kind advocated by Ms Vaughan Jones would be at odds with the basic rules as to compensation for tort identified above."
I am disinclined to express any concluded view of my own on any issue of principle that may be said to arise in this general context largely because it is difficult to find any head of claim in the present case that could be affected by the resolution of any such issue of principle. I would, however, tentatively express my agreement with Warby J's analysis of Swift J's formulation of the correct test.
To my mind, in assessing how to provide full compensation for a claimant's reasonable needs, the guiding principle is to consider how the identified needs can reasonably be met by damages – that flows from giving true meaning and effect to the expression "reasonable needs". That process involves, in some instances, the need to look at the overall proportionality of the cost involved, particularly where the evidence indicates a range of potential costs. But it all comes down eventually to the court's evaluation of what is reasonable in all the circumstances: it is usually possible to resolve most issues in this context by concluding that solution A is reasonable and, in the particular circumstances, solution B is not. Where this is not possible, an evaluative judgment is called for based upon an overall appreciation of all the issues in the case including (but only as one factor) the extent to which the court is of the view that the compensation sought at the top end of any bracket of reasonable cost will, in the event, be spent fully on the relevant head of claim. If, for example, the claimant seeks £5,000 for a particular head of claim, which is accepted to be a reasonable level of compensation, but it is established that £3,000 could achieve the same beneficial result, I do not see that the court is bound to choose one end of the range or the other: neither is wrong, but neither is forced upon the court as the "right" answer unless there is some binding principle that dictates the choice. It would be open to the court to choose one or other (for good reason) or to choose some intermediate point on the basis that the claimant would be unlikely to spend the whole of the £5,000 for the purpose for which it would be awarded and would adopt a cheaper option or for some other reason.
I apprehend that parties have been settling cases and the courts have been deciding cases on this broad approach for many years without doing violence to the full compensation principle. Inevitably, broad-brush judgments are called for from time to time and, as I have been invited by both parties to do on occasions in this case (where so many individual items remain in dispute), the court must simply "take a view". I will be adopting that broad approach, where appropriate, when considering certain disputed heads of claim in this case.
Future care costs
There is now a good measure of agreement on the future care arrangements and the disputed items upon which my decision is required are relatively few in number. They are helpfully itemised in the table prepared by Mr Latimer-Sayer and reproduced in paragraph 178 below. Before I turn to this, I do need to highlight what I consider to be an unfortunate history to what became a major concession at the trial by the Defendant.
It was never in dispute, of course, that James would require significant 24/7 care of some nature. Following the visit in May 2013 to see James of Mrs Hazel Tuckfield, the occupational therapist instructed by the Defendant who reported on care issues as well as other matters, she prepared a report dated 2 January 2014. By then she had seen the report of Mrs Maggie Sargent dated 4 September 2013. That report had concluded that when she saw James in June 2011 (when James would have been 8½) "one carer could cope, but that he would need to have two carers to help his mobilising in the future." She noted that he needed "very high levels of support." She saw him again just over two years later in July 2013 by which time, of course, Mrs Beesley had been appointed as case manager and a care regime had been put in place for just over a year so far as possible in the circumstances of the accommodation available to James and his mother. James had two carers on duty throughout the day and one sleep-in carer overnight. Mrs Sargent's view of the future care requirements was that James required two full time carers during the day and, based on the care records, also one night time carer. She costed the night time carer on the basis that a sleep-in carer should be paid for six months a year and a waking carer for six months a year. (A sleep-in carer works 10 hours, but is paid for 6 hours. If they are woken more than two times per night they are paid more. A waking night carer works for 10 hours, is paid for 10 hours and is expected to remain awake for the whole shift.)
In her report of July 2014, Mrs Tuckfield agreed that James required two carers during the day although she felt some of that care was being given (and would continue to be given) by Mrs Adams and the package should be costed accordingly, certainly up until the age of 19. She agreed that he required a night sleeper. After the age of 19, she agreed that two full time carers would be required each day and that night time care was also required, though not on the same basis as suggested by Mrs Sargent.
At their joint discussion on 26 June 2014, whilst they differed on how the night time care was to be provided, Mrs Tuckfield and Mrs Sargent agreed that from the aged of 19 James would require two carers at all times throughout the day. As I understand their joint statement, they only disagreed about the position prior to the age of 19 on the basis that Mrs Tuckfield maintained her view that Mrs Adams would be providing part of the care regime.
Mrs Tuckfield visited James again on 24 September 2014. In the light of her assessment on that occasion, and having (as she said) read the carers' notes and the case management records, she revised her opinion and said that James no longer required two carers at all times throughout the day. She suggested that two carers would be required only for certain key times during the day on a school day, with additional hours being used flexibly during the weekends and school holidays. She costed the provision of a second carer on the basis that such a carer would, on school days, be employed for two hours per day during the morning and evening routines and for one further hour per day to be used flexibly and when required. On non-school days, she suggested that the second carer should be employed for two hours per day during the morning and evening routines and then four hours per day to be used flexibly and when required.
Leaving aside whether this was a legitimate assessment of the situation that presented itself at the time, the net effect was to reduce the annual cost of the care package for James after the age of 19 by something like £40,000 per annum. Apart from knowing that a round table meeting did take place prior to the hearing before me (in December 2014 having originally been scheduled for September 2014, I have been told), I do not, of course, know how the negotiations proceeded. However, this kind of changed position cannot assist. I do not, of course, suggest that an expert should not change his or her opinion if it is truly justified, but having agreed to what was in effect a full care package a few months previously, some very good reason for changing to a less "populated" package for someone presenting with James' disabilities is a surprising step to take.
It was during the afternoon session of the third day of the trial that Mr Block told me that Mrs Tuckfield, having heard the evidence thus far, had now accepted that full double-up care, both day and overnight, would be required in any future care regime. At Mr Block's request she produced a supplemental report indicating her calculations which she did. It was dated 16 January 2015. Effectively, it reinstated the position that had obtained prior to her changed position following her visit to James in September 2014. She said the reason for changing her view was that she had "now had the opportunity to read through the Manual Handling Assessment prepared by Pamela Simpson and had clarification of the number of manual handling events throughout James' day."
Pamela Simpson is a Chartered Physiotherapist and Moving and Handling Consultant. Mrs Beesley requested a manual handling assessment from her on 28 October 2014 and it was carried out shortly afterwards. Her report was dated 6 November 2014. In summary it recorded James' height and weight and the significant involuntary movements which made him difficult to manage at times and interfered with attempts to move him. It noted that the carers and Mrs Adams did carry out standing transfers, but expressed the view that these were not safe and should not be undertaken in the future. In a waking typical day James is recorded as being transferred 22 times and when at school he is allocated 2 support workers to assist with transfers. The recommendation was that transfers henceforth should be undertaken by two people using a hoist (preferably a ceiling track hoist), with two people being required to provide assistance with James' head/body position whilst hoisting and then with the positioning of his feet when lowering him into a chair or onto a bed. It was recorded that it took two people to re-position James in his wheelchair and to re-position or turn him at night using an "in bed" sliding system. She concluded that two people would need to be available 24 hours per day to carry out any movement, transfer or change of position that James needed or wanted. She said that the bigger James became, the worse the problem would become. She emphasised that two sleep-in carers should be available all night for the long term future.
Apparently that assessment was disclosed to the Defendant on or about 12 November and Mrs Tuckfield accepted that she had read it in November. If that is so, and it made the impact upon her that, according to her report dated 12 January 2015, it did, it is surprising that it took until after the trial started for that to be revealed. In fact when she was asked about it by Mr Block in chief, she said that it was Mrs Beesley's evidence that James' stood to use a bottle to empty his bladder (which required two carers to assist him) and the evidence that it required two people to re-position him at night if he became untucked that led her to agree that he required double-up care, both day and night. She made no reference to the Manual Handling Assessment prepared by Pamela Simpson. When she was asked about this by Mr Latimer-Sayer she said she could not see where the 22 transfers came from and, for that reason, felt her opinion was correct at that time.
I regret to say that this was not a very impressive piece of evidence and it shook my confidence that Mrs Tuckfield had really focused upon James' real requirements since her visit to him again in September 2014. Whilst views might differ about her position concerning Mrs Adams' involvement in the care regime, until September 2014 Mrs Tuckfield had shared Mrs Sargent's view that James did need double-up care during the day. Not unnaturally, her shifting position has made me cautious about accepting her assessment in other respects in this particular case and one or two other suggestions that she had made that have since been abandoned (for example, that James could use a sheath to overcome the difficulties of finding an accessible toilet) have given me the sense that she does not fully understand his needs.
I will return to the remaining issues and to the table I mentioned in paragraph 168 above. In that table 'MS' is Mrs Sargent and 'HT' is Mrs Tuckfield:
TO AGE 19 FROM AGE 19
(i) The appropriate annual allowance for waking night care – whether this should be 8 weeks (MS) or 3 weeks (HT) per annum. (i) The appropriate annual allowance for waking night care – whether this should be 8 weeks (MS) or 3 weeks (HT) per annum.
(ii) Team leader hours – whether should be 30 hours (MS) or 20 hours (HT) per week. (ii) Team leader hours – whether should be 30 hours (MS) or 20 hours (HT) per week.
(iii) Team leader enhanced rate – whether £8 per hour (MS) or £4 per hour (HT). (iii) Team leader enhanced rate – whether £5 per hour (MS) or £4 per hour (HT).
(iv) Food & other expenses – whether £3,640 (MS) or £2,600 pa (HT). (iv) Recruitment & advertising – whether should be £2,000 pa (MS) or £1,500 pa (HT).
(v) Recruitment & advertising – whether should be £1,500 pa (MS) or £1,000 pa (HT). (v) Payroll – whether should be £1,200 (MS) or £750 pa (HT).
(vi) Training – whether should be £1,800 pa (MS) or £1,500 pa (HT). (vi) Additional childcare - £67,379 (MS) or nil (HT).
(i) waking night care
The issue here is what annual allowance should be made to reflect the possibility that James' will need attention more than twice a night because of an unsettled night and for periods of illness and holidays. Should it be 8 weeks, as Mrs Sargent says, or 3 weeks, as Mrs Tuckfield says, or some intermediate position?
There are, of course, times when James is unwell, although fortunately not too frequent. However, most of the occasions when he is disturbed at night are when he gets into an uncomfortable position or because his bedding needs adjustment. Analysis of the records (which I take to be undisputed) demonstrates that in the year from September 2013 to August 2014 there were 136 waking nights (based upon 3 or more disturbances) and, by way of example, in September 2013 there were 18 waking nights, three of which involved 5 disturbances and one night involved 6 separate disturbances.
The point is made by Mr Block and Miss Greaney that when James has settled into suitable accommodation with suitable equipment, including the bed and bedding, his sleep will be less disturbed and they rely also upon the combined view of Dr Ferrie and Dr Rosenbloom that most children with cerebral palsy do achieve a more settled sleep pattern as they grow up. The joint statement suggests that "with suitable training he may learn to move to a more comfortable position himself". On that basis Dr Rosenbloom thought that "a sleep-in night carer will suffice". However, Dr Ferrie was not wholly confident that "awake night care" would not be necessary in the future. Improvement is a possibility, but I consider it unrealistic to think that there will be any prolonged period when there are wholly undisturbed nights and when there are disturbed nights there will be those when the carers are disturbed sufficiently for higher payments to be required. The agreed position of Mrs Sargent and Mrs Tuckfield is that Dr Rosenbloom's solution will not necessarily suffice and that some provision must be made. Dr Rosenbloom deferred to them.
It does seem to me that Ms Rodway and Mr Latimer-Sayer make a strong point when they say that Mrs Sargent's allowance of 8 weeks equates to 4 weeks waking night for two carers and that since assistance at night for repositioning and toileting will require two people, this is not an over-estimate. That has persuaded me that I should adopt 8 weeks for this head of claim.
(ii) team leader hours
The current team leader is employed for 30 hours per week and I do not see the need for that level of time diminishing in the near future. Obviously, there is a potential overlap between this time and the time given to case management, but until the new regime after the move to better accommodation has truly bedded down and Mrs Adams has come to terms with it (as to which see paragraphs 443 – 446 below), I think it would be unrealistic to suppose that the need for team leader time is going to diminish. I would propose allowing 30 hours per week until James is 19 and then I will simply choose a half-way house between the position taken by Mrs Sargent and Mrs Tuckfield and say that 25 hours per week would be appropriate thereafter.
(iii) team leader enhanced rate
Mr Block and Miss Greaney make the fair point that the enhancement has recently been increased from £2 to £4 per hour, that there is no evidence of any difficulty in recruiting suitable people on this basis and that there is complete satisfaction with the current team leaders. I agree that those considerations (coming as they do from what is currently happening "on the ground") are sufficient to displace the suggestion that there is a need effectively to double the enhanced rate for the future until 19. I do not doubt that the need to deal with Mrs Adams' issues will continue to present its difficulties, but I do not see, on the present evidence, that more than £4 per hour is required as an enhancement.
However, that enhancement rate cannot remain static and I agree with Mrs Sargent that it will need to be increased in order to keep good quality staff and that a £5 differential is appropriate for the longer term. That figure should become effective when James is 19.
(iv) "on costs"
The "on costs" of the carers constituted by food and expenses, recruitment and advertising, training and payroll are all agreed in principle, but there are differing figures advanced by Mrs Sargent and Mrs Tuckfield.
In relation to food and expenses the range is between £2,600 and £3,640. I will take £3,250 as an appropriate figure. For recruitment and advertising, I thought Mrs Sargent had a strong point when she said that advertising and recruitment in the Lincoln area can be more difficult and expensive than in other parts of the country and, accordingly, I would accept her figures of £1,500 per annum until James is 19 and £2000 per annum thereafter.
Payroll at £1,000 seems to be the figure that Mrs Sargent mentioned in her evidence, though I note the figure of £1,200 in Mr Latimer-Sayer's table. £1,000 is a mid-point in the range of £750 to £1,200 and I will take the figure as that for this purpose. In relation to training, again I will take the mid-point of the bracket and say that the figure should be £1,650.
(v) future childcare
This is a claim for the additional costs of bringing up children in the event that, in due course, James has a family. Mrs Sargent has calculated the sum by reference to 20 additional hours of care each week over a 10-year period between the ages of 25 and 35 when such children as he may have would be with him on his own or he would accompany them on their activities. An annual figure is arrived at and then discounted by one-third for "contingencies" (which are not specified) and an appropriate multiplier applied to the multiplicand thus generated. The resulting figure is just over £67,000. No real issue is taken by the Defendant with the arithmetical approach and calculation (although Mrs Tuckfield feels that there would be no need for additional childcare expenditure because of the availability of the two full-time carers for James in any event), but it is said that the claim is too speculative. I am invited to take the same view of James' prospects to becoming a parent as Laing J did in the case of Totham v Kings College Hospital NHS Foundation Trust [2015] EWHC 97 (QB) and say that the prospects are fanciful.
It is not, I think, helpful to look at decisions in other cases on an issue such as this: it all depends upon the particular facts. In this case it is not really disputed that James would be capable of becoming the father of a child though the process would not be without its complications. In this case, he would probably have sufficient cognitive ability to understand the choice he had made by committing himself to fatherhood. Furthermore, it is common ground that the opportunities for someone like James to meet a potential partner have become very much greater over the last 10 – 15 years and will doubtless continue to grow over the next 10 – 15 years or so. There is already evidence that James is attracted to (and indeed is attractive to) the opposite sex. Equally, the overall attitude of society to disability has changed markedly over the years and that which would have been regarded at one time as quite out of the question is no longer so regarded.
I acknowledge all these positive factors and it seems to me important that a court should not too readily say "it will never happen". In this case, I do not think I would say that the prospect of James becoming a father is merely speculative or fanciful but, on the other hand, I would have to conclude on the evidence as it stands (which includes the evidence of Mrs Sargent that only one of the many male cerebral palsy patients with whom she has had dealings over the last 30 years has become a father) that the prospects are small and indeed sufficiently small to require a very significant further discount to be made to any calculation as to the potential additional costs. It seems to me that such a discount would reduce the figure to something that would bear no real relationship to that actual cost if the event itself materialised. An award of such a sum would, in my view, be wholly artificial. There is, perhaps, an argument that some part of the damages for the lost amenities of life should include an element for the reduced prospect of ordinary family life, but this is a difficult area and that kind of approach would also require some thought and I doubt that any sum included within the award (if not contained within it already) would match the additional costs required in a case such as this.
Whilst, naturally, I hope that things turn out positively for James if a family is what he wishes to achieve in the future, I do not consider that I can award him any sum by way of damages in respect of the head of claim sought.
Physiotherapy
A fair amount of this claim has been agreed, but there are a few remaining issues.
The first disputed area concerns the period up to age 19. The issues are whether, as is contended on James' behalf, between the ages of 12 and 19 (i) he requires 36 individual hour-long sessions of "maintenance physiotherapy" annually, (ii) 10 sessions of initial training for the care team are required in one year (in other words, a "one off" piece of expenditure) and (iii) 6 sessions per year thereafter of ongoing training for the care team are required.
In relation to (i) Mrs Susan Filson, the physiotherapist called as an expert on behalf of James, broke down the 36 sessions she suggested were required annually for "maintenance physiotherapy" up to the age of 19 in this way:
"I think that on a one-to-one at school, the physiotherapist could probably see him now every two weeks, which would come to about 26 sessions, rather than the weekly that she is doing just through school time. Because he is growing, to keep it regular, say, 26 sessions for the one-to-one sessions. And then I would say that every term the physiotherapist needs a session with the school teacher and the TAs and perhaps the PE teacher to advise and see if there have been any changes and just to see positioning and things at school. That's another three sessions. Then each time he has his orthotics checks, which may be once or twice a year, the physiotherapist needs to be there with the orthotist, so that's another session. Then the seating, because he is growing, every six months they will be looking at his seating and that tends to take a double session. I worked a session out at an hour and to do a proper seating, it can be up to two hours, so I have allowed two sessions per seating, so it comes to four, but it's actually not four sessions, it's a double session. Then maybe one session, maybe to go to the sailing club to advise on posture for that or maybe, if he gets into the football or the riding, so one one year, one another, which actually adds up to about 36."
Mrs Wendy Murphy, the expert physiotherapist called by the Defendant, suggested that 24 sessions per annum (which would include carer training) for this period is a reasonable provision, the carer training sessions being arranged at convenient times to enable day and night-time staff to be trained. The case manager would have to organise the rota so that over a period of time, all members of the care team will have been present during James' physiotherapy sessions. In other words, she was suggesting a total of 24 sessions per year.
Mrs Filson said that that arrangement was impractical given that a total of 14 carers would form part of the team. I agree. It seems to me that, to the extent that training is required, separate training sessions for the carers is necessary whatever the level of maintenance therapy is provided for James. Mrs Filson explained the practical difficulties of training the carers at the same time as providing proper physiotherapy for James and that a double session is often the best way forward. Given that keeping the carer team up to scratch and up to speed with the techniques and any new equipment obtained, allowing for 6 sessions a year for continuing training is not unreasonable. Equally, I cannot see anything unreasonable about the "one off" set of 10 sessions, particularly in the year when the new accommodation and the new facilities become available.
As to the annual provision for James, I accept that physiotherapy is going to be important to him over the next few years in order to maintain the improvements already made about which Mrs Sarah Hilton-Bailey told me and which I accept. However, at the age of 19 it is agreed that the sessions required annually until the age of 21 would be 16 (including carer training) and from 21 until 45 20 sessions (including carer training). It would be odd if immediately upon his 19th birthday James immediately received about half the physiotherapy that he had been receiving annually for the preceding 6 or 7 years. I rather suspect, particularly in the last year or so of that period, that the physiotherapy may reduce gradually. If that is so, it seems to me that adequate financial provision for physiotherapy over the period up until the age of 19 will be made if the number of "maintenance physiotherapy" sessions is assumed to be at a flat rate of 30 per annum over the whole period.
The next area of dispute is in the post-45 period. On James' behalf it is said that he is likely to develop musculoskeletal problems from about 45 onwards and, accordingly, it is appropriate to allow some additional physiotherapy thereafter. Mrs Filson considered that with his abnormal posturing as he gets older James will get more pain and problems and she allowed an additional 6 sessions per annum from age 45. She explained that these were six sessions would occur within a short space of time to deal with some problem that arose; it was not a long-term addition to the normal physiotherapy routine, but provision made for the need for additional physiotherapy if and when the need arose. Ms Rodway and Mr Latimer-Sayer contend that this is not unreasonable.
Mrs Murphy agreed the James would get more aches and pains as he ages but thought it unlikely that James would incur musculoskeletal injuries as such. She felt that the 20 sessions of physiotherapy and could not see what the 6 additional sessions were for.
I consider that there is a justifiable "half-way house" between these views. It seems to me reasonable to provide for the eventuality that James' abnormal posturing will give rise from time to time for some additional therapy, but I would have thought an annual provision of 6 sessions is unnecessary. That should be spread over 2 years and, accordingly, I would allow for 3 additional sessions per year from the age of 45.
I will return to the multi-disciplinary team (MDT) meetings as a discrete issue later (see paragraphs 474 - 480).
Augmentative and alternative communication (AAC)
Much of this claim has been agreed, but there are some remaining issues. The claim arises principally in relation to the use of the eye gaze equipment that is essential for James to be able to communicate orally and in writing. Whilst there are some issues relating to the future provision of that equipment (see paragraphs 370 - 409 below), the present (fairly narrow) issues arise out of the need to provide the support of an appropriately qualified speech and language therapist to help James maintain and improve his communication skills using this equipment and to train staff at school when James is at school and his carers and support staff when at home in the use of the relevant equipment. There is no dispute about the need, merely about the cost and time involved in its provision.
The AAC speech and language therapist experts were Mrs Gillian Hazel on behalf of James and Ms Gillian Rumble on behalf of the Defendant. Both were well-qualified and well-informed and I found their assistance helpful. Mrs Hazel, with Ms Rumble present, demonstrated how the eye-gaze system works. It was described by one of the experts as acting like the mouse on a traditional computer, but the eyes of the operator govern the position of the cursor on the screen. As I understand it, there is an inbuilt camera in the PC that can "observe" where the eyes of the operator are looking so that the cursor can be moved around on the screen. The PC can be "trained" to recognise the way in which the individual operator wishes it to respond and, for example, a pattern of blinking can enable the operator to "click" in the way with which all PC operators are familiar. It is obvious that this is a sophisticated process which, like all computer technology, will doubtless improve (probably beyond current recognition) with the passage of time. However, it does, for example, require regular up-dating with vocabulary as James' own vocabulary increases. (In order to use this technology to its best effect for learning purposes it is necessary to "differentiate" the school curriculum, in other words, as I understand it, to filter out parts of the school syllabus to make them more easily accessible. This has been carried out successfully so far under the supervision of Ms Marion Stanton and her charges for the past have been agreed and there is no dispute about her future involvement other, perhaps, than in respect of the MDT meetings. This is dealt with later.)
Hourly rate
Mrs Hazel and Ms Rumble were agreed that it is difficult to find suitably qualified and experienced AAC speech and language therapists, particularly in the Lincolnshire area. Mrs Hazel suggested the hourly rate (which reflects therapy time as well as travel time and travel expenses) should be £187.50 per session and Mrs Rumble suggested £165 per session on the same basis. A reasonable compromise would be £175 and that is the figure I allow.
Allowance between 13-16
The next issue between them is whether, as Mrs Hazel says, there should be an allowance for 125 sessions per year between the ages of 13 and 16 or 80 sessions, as Ms Rumble says. Mrs Hazel's contention is that since James is now at a mainstream school where his form tutor and teachers will change on an annual basis he will need a continuing high level of AAC input and that it would be wrong to reduce this by one-third from what is agreed he currently needs, given that his vocabulary and level of activities will be expanding at a fast rate during this period and bearing in mind the onset of important examinations.
Ms Rumble's view is that whilst intensive input is required in the first year of mainstream school (and the provision of 125 hours for the first year was agreed on that basis), there is no reasonable need for more than 80 hours of input per annum after the first year. His carers and support staff will, it is argued, be able to adopt a greater role in terms of programming his eye gaze system when vocabulary changes need and there will, accordingly, be a reduction in the support needed after the first year of intensive support. Furthermore, the current speech and language therapist provided by the NHS (Philippa Blackburn who has AAC experience) will be providing additional support such that 80 hours is all that is reasonably required.
Both arguments have a degree of force. I am inclined to prefer Mrs Hazel's essential approach because the next few years will be immensely important in James' education and it has to be borne in mind that the next 2 years or so are likely to be quite disruptive because of changes in accommodation and the introduction of new carers into his support team. It seems to me important that nothing slips by the wayside so far as AAC is concerned. I would have thought that 120 hours per year would be sufficient.
Allowance from 16-19
This is agreed at 72 hours per year if James remains in mainstream education rather than going to a Further Education college. Mr Block and Miss Greaney submit that the chance that James will return to a special school environment (which does exist) should result in providing that one year in this period at 46 hours per annum be allowed given the existence of AAC specialists within such an institution.
I reject that approach. The chance of James returning to that environment, on the basis of how his mainstream placement is currently progressing, is so remote that it can be ignored.
Rolling programme of training
Given the size of the care team for James (from and to which members will constantly be leaving and joining) once it is fully in place, Mrs Hazel says that an additional day's training of AAC input should be allowed per year (to be utilised on an ad hoc basis) to enable staff training.
The argument to the contrary is that the annual allowance for training is sufficient to cover the training needs of new staff members and that new carers will be working alongside other carers who will be very familiar with the eye gaze system who will know how to programme it with new vocabulary and the new carers will also learn from being present during the AAC therapy sessions provided by AAC speech and language therapist.
I consider that some provision ought to be made, but I think that the one day's training provision should be spread over 2 years.
Assessments at communication aids centre
Mrs Hazel and Ms Rumble agree that every 3 years there will be a need to review the AAC devices and related equipment available to James. Mrs Hazel recommends that this is carried out at a multidisciplinary centre (such as one of the ACE Centres – 'ACE' standing for Aiding Communication in Education). She says that the staff at such centres are highly skilled and specialists within AAC.
Ms Rumble says that James will have highly skilled input from his private AAC speech and language therapist as well as on-going input from those with assistive technology expertise and in the light of that there is no reasonable need for him to attend the ACE Centre. She allows for 12 hours of AAC speech and language therapist input (£165 x 12 = £1,980) every 3 years to address the assessment of new AAC devices and related equipment and that is a reasonable provision.
The cost of doing this Mrs Hazel's way is £2,500.
It will probably turn out, in the fullness of time, to be a mixture of the two approaches. No injustice will be done if I take the figure to £2,250 every 3 years.
I will deal with the remaining differences between the parties in relation to the actual AAC requirements later (see paragraphs 370 - 409).
Speech and Language therapy (SLT)
The amount of the provision of SLT has been agreed, but there is a minor issue about the travelling costs of the therapist. The hourly rate has been agreed at £90 and both experts agree that provision needs to be made for travelling costs.
As with a number of aspects of the specialist expertise required for James, suitably experienced SL therapists are few on the ground in the area where he lives. The travelling had originally been assumed to be £30 per visit which was then increased in the written opening to £55 per visit. It then transpired that the new SL therapist recently instructed to help James charges £110 per visit for her travelling time and expense. The claim is, therefore, advanced on the basis of £90 per hour for the SLT itself (as agreed) and £110 per visit.
The Defendant says that the claim in the opening for £55 of travel time/expense per visit was reasonable and was accepted as such on the basis that it treats one visit as consisting of two therapy sessions. In the circumstances, it is said that a reasonable hourly rate (including travel time and expense) is £145 per hour.
I have some sympathy with the Defendant's position here, but I do have to be mindful of the geographic constraints. Again, painting with a fairly broad brush, I will allow £160 per hour inclusive of travel time and expense.
There are claims for a periodic swallowing assessment every 3 years, provision for periodic review/attention by a dental hygienist and for orthodontic treatment. Whilst I can understand the first of these matters in principle, I can see no basis in the evidence for either of the other two: many people in any event see a dental hygienist from time to time and there is nothing about James to suggest that, because of his cerebral palsy, he will require orthodontic treatment. As to the first, I do not think that a formal review in the sense suggested is likely to be necessary: there will be a sufficiently observant care regime in place such that any issues with swallowing will be identified at an early stage. Any case manager will have this kind of issue in mind. I do not propose to make any allowance for these matters.
A number of other issues concerning future provision for James may arguably depend upon the way in which his accommodation is to be provided in the future and I will return to those (plus any remaining issues) after dealing with the accommodation claim. I can, however, deal with one small matter (chiropody) now.
Chiropody
There is a claim for chiropody costs at £216 per annum. Mrs Tuckfield agreed this in her first report and agreed it in her joint statement with Mrs Julia Ho, the expert occupational therapist instructed on James' behalf. The position now taken by the Defendant, supported by Mrs Tuckfield, is that his carers could cut James' toe-nails, the changed viewpoint being based upon a reference in the support worker records to the effect that his carers cut his nails at present. It is thus contended that there is no reasonable need for on-going chiropody services.
As I have said before (see paragraph 173), there is nothing wrong with an expert changing his or her view in the light of new evidence, but I find it surprising that, having agreed the provision on two occasions previously, a reference to the existing (arguably unsatisfactory) arrangement should cause a volte face.
Mrs Adams says that ordinarily she (not the carers) does this now (including finger nails) and Mrs Beesley says that she would be unhappy about the carers doing it and she is seeking a chiropodist in the local area. Without going into details, it is obvious that James' involuntary movements make cutting his nails a hazardous affair without some expertise and I can see nothing wrong with this aspect of the claim. It is important to James' welfare.
Accommodation
As I have indicated previously, there is agreement between the parties that the present accommodation that James and Mrs Adams (with the limited care regime to which I have referred) occupy is unsuitable (as indeed were the previous properties) and that it was reasonable to purchase the property which will form the basis of his long-term (indeed life-time) accommodation. That property (a bungalow) is known as 'Yorke Hurst' and is situated in the village of Skellingthorpe about three miles to the west of the centre of Lincoln. It was purchased for £295,000 with the assistance of an interim payment. The bungalow is situated in a reasonably large area of land, is adjacent to trees and woodland and is not far from where Mr Chafer senior and Mr Chafer junior live. As will appear, the land is such that it could accommodate a "new build" bungalow suitable for James' needs or is sufficient to accommodate the necessary enlargement of the present bungalow to meet his needs.
Rebuild or adaptation?
The first issue to address is whether the additional cost of demolishing the existing bungalow and building a new property is reasonably to be laid at the Defendant's door or whether the damages should merely reflect the costs of adapting the existing building. I was told by Mr Block that the "ball-park" additional cost of demolition followed by a new build is about £50,000. I am asked on behalf of James to find that the reasonable way forward is to demolish the existing buildings and start again because it will enable the construction of a purpose built, energy and cost effective property, with, it is argued, the further advantages of being able to plan the timing and cost of the building more accurately and for James to benefit from considerable savings in VAT that would arise on a new build compared with an adaptation of an existing building.
The Defendant argues that the additional expenditure should not be something for which it is responsible. It is not suggested that the demolition and new build option is an unreasonable way forward (indeed Mr Reynolds candidly acknowledged that, if he was doing this for himself, he "probably would want to knock it down and start again"), merely that the additional cost should, in effect, be paid for out of some other feature of James' damages rather than being part of the compensation awarded by the court because his reasonable requirements can be met in a cheaper way.
The existing bungalow is a 1920s, twice extended, property. It was described in the surveyor's report based on an inspection carried out in August 2013 as "originally a very small bungalow and whilst the extensions have allowed it to increase in size to a three bedroomed bungalow, the accommodation that it now provides is somewhat disjointed." A good deal of damp was found in the original building and a number of matters were said to require early attention including the installation of a chemical damp proof course to all external and internal walls forming the original building and the re-roofing of the entire property. Some asbestos was found to exist in the outbuildings and was the subject of a separate report some while later. Most of that is characterised as being "low risk", but obviously if demolition was contemplated of the outbuildings there would need to be specialist help in ensuring that no danger from the asbestos was created.
Leaving aside for present purposes the asbestos issue, one only has to state the conclusions of the survey to see why anyone with any sensible eye to producing something that is tailor-made for someone with James' disabilities (and looking to the long term) would unhesitatingly conclude that demolition and building from scratch would be the obvious course. Indeed, by utilising all the modern methods of construction the long term costs of maintaining and heating such a property would almost certainly be reduced and/or maintained at a proportionate level. Anyone with the means to do this would, without doubt, approach things in this way even if they were only acquiring the property for, say, a few years with a view to selling it on. It would be a good investment to build in this way. Whatever the true nature of the life expectancy prediction in James' case, he is likely to be living in this property for a very long time. A £50,000 increase in spending now could achieve a very considerable saving in annual costs in the years to come and, of course, would provide him with an "ideal" home in the sense that it could be designed from scratch specifically with his needs in mind. For my part, I would say that this is a proposition that makes the claim for the additional immediate cost of demolition and building from scratch entirely reasonable and a legitimate sum to claim from the Defendant. Adopting the immediately cheaper option of simply extending the existing property can hardly be said to constitute reasonable mitigation of the loss that is sought to be recompensed by the provision of appropriate accommodation for James.
If that reasoning were not sufficient, then, in the circumstances of this case, I would conclude that demolition and a new build are justified for another reason. Mr Reynolds very fairly conceded that it would be impossible to extend the existing bungalow appropriately if there was a perceived need to give James proper access to three bedrooms within the property (by which is meant being able to propel his powered wheelchair into such rooms and turn around within those rooms in order to exit). In his (Mr Reynolds') suggested scheme for the extension of the present property this could not be achieved and it was acknowledged that no scheme utilising the existing rooms could be produced which would enable this manoeuvrability. Those bedrooms would almost certainly be rooms that would ordinarily be used by carers and, whilst she remained in the property, Mrs Adams, to which James would not usually require access. However, an inability to access those rooms and the adjoining family bathroom would deny him the opportunity to go freely and safely throughout the whole of the property. Whilst he could access his mother's bedroom to see her if she was confined to bed because she was ill, he would have to reverse out of the room. In my judgment, those enforced features of the living regime would be wrong in this case for the reasons to which I will refer in the next paragraph.
I would not want this case to be treated as a precedent for saying that in every case a disabled claimant should necessarily be entitled as of right to accommodation that permits access to and manoeuvrability within every part of the property. It is, of course, possible to envisage some disabled claimants for whom this would not be a factor of any significance, if at all. However, James has full awareness of his surroundings and of his own limitations, has the ability to manoeuvre his powered wheelchair correctly, knows his own mind and, subject to the constraints of having a Deputy making important decisions for him in the future with his input, will be the owner of the accommodation in which he lives. An inability to be able to go everywhere in his own home safely would be to undermine the principle that damages are designed to place a claimant, so far as is possible, in the position he would have been in if uninjured.
As I have already indicated, Mr Reynolds did produce a suggested plan of how the existing property might be extended to meet James' reasonable needs. It first appeared as part of his report dated February 2014 when he thought that James was confined to a manual wheelchair (see paragraph 240 below). Nevertheless, he has continued to suggest that it would (with some modification) be suitable for James' requirements. However, when his suggested modifications to the existing bungalow are examined in detail, there are some considerable disadvantages with the layout that would have to be adopted such that it would, in my view, make adaptation an inappropriate option.
The present hallway leading from the present front door (which would be retained in this scenario) is narrow – some 985 mm in width, in other words, less than 1 metre – and the further hallway leading off that hallway in the direction of the current lounge (both of which would be retained in this scenario) is 1110 mm in width – so just over 1 metre. Mr Stephen Cumbers, the accommodation expert called on behalf of James, and Mr Reynolds are agreed that the minimum turning circle required is 1.7-1.8 metres. This would be needed in any hallway to enable James to turn within it rather than having to go solely in one direction, either forwards or in reverse. Because the wing where James' bedroom and therapy room would be located under Mr Reynolds' scheme is on the opposite side of the property from the side where the living room/conservatory would be located, James would have to go along these narrow hallways each time he wanted to get to and from the main living room and conservatory. That he would inevitably be required to go in one direction or the other does not seem at all satisfactory or safe.
The other specific area of difficulty with Mr Reynolds' suggested layout was the proposed dining room and kitchen layout. In its final manifestation (having been modified from its first representation) the kitchen and the dining room are on opposite sides of the present lobby area (which itself is quite narrow) and each is effectively an open plan room leading on to that lobby area. Mr Cumbers expressed his views about this in a way I thought was persuasive and I set out the gist of his answer to a question from Ms Rodway about his attitude to the proposed layout:
"I'm not comfortable with that layout at all … because you have got a dining room and this is a lifetime home again for him … where James can only get to one end of the table. He has his back (if he is positioned in his wheelchair up to that table) to whatever is happening in the kitchen. He can't get to the other end of the dining room, he can't get around and circumnavigate that dining room at all. He is just stuck at that end … with his back to the kitchen. He is also having to manoeuvre in a place, where … the kitchen/dining room is in fact a through-room, everybody has to go through it. So … where James is wanting to sit … everybody is milling around going from one end of the bungalow to the other. And the kitchen area itself, if I were to place within that a turning circle of … 1,700 millimetres/1,800 millimetres … you can probably see with the scale of that room that it would pretty well occupy the space between the worktops and he would certainly be obstructing anybody else in that kitchen area …. So he needs to have somewhere where he can be positioned and I have suggested in my report that there ought to be a cul-de-sac arrangement of kitchen but the kitchen space needs to be adequately large so that there could be a separating breakfast bar beyond which the dining room and the dining space [takes] place, where James can be brought up to a breakfast bar and positioned in his wheelchair and therefore be part of the kitchen activities without necessarily obstructing and becoming an obstruction within the business end of the kitchen."
He accepted in cross-examination that the people who might be "trafficking through" the "through-room" would generally be James' mother or the carers and, of course, that is something to be borne in mind. However, as I see it, this is James' lifetime property and one needs to take a longer term view. Even now he might have friends round to join him for a meal, but as time goes on that is even more likely – and, of course, desirable. It is quite plain that, like other members of his close family, he is an engaging and sociable person. Obviously, everything has to be kept within proportionate bounds, but it would be mean-spirited to provide him with accommodation that would undermine the opportunity to engage in this kind of activity. I do not think that the arrangement reflected in Mr Reynolds' scheme, if it can reasonably be avoided, should be set in place now in a way that could impede the normal and desirable way in which uninjured people organise their lives.
As I have said, I found Mr Cumbers' view on the proposed scheme persuasive. Mr Block criticises Mr Cumbers for criticising Mr Reynolds attempts to depict a suitable extension for Yorke House without himself having tried to draw up his own plan for an extension for the existing property. He says that Mr Cumbers accepted that it ought to be possible to provide something that met all reasonable requirements by extending the existing property of 98 square metres into something of 300 square metres plus (if that was what was required) within the land available. Putting that concession into context, what Mr Cumbers said was that it would involve putting the extension out in "two or three directions", utilising what he described as the "irregular rectangular shape" of the external walls of the existing property that would be preserved. It is plain that he thought that such a course was not sensible, but nonetheless agreed that it was feasible.
Ms Rodway criticised Mr Reynolds for, as she put it, a lack of thoroughness and objectivity and not approaching matters as "objectively as a responsible expert should" pointing to the fact that he had not read the survey on Yorke Hurst until the day he gave evidence and that his original opinion was based upon the erroneous assumption that James was confined to a manual wheelchair and could not control and manoeuvre a powered chair.
I did not find this process of accusation and counter-accusation very helpful. Both Mr Cumbers and Mr Reynolds have a great deal of experience in this area that can be brought to the court for its assistance. Doubtless each could be criticised for some aspects of their approach and indeed each has been criticised by the opposing legal team. I have borne in mind the criticisms. However, for my part in this particular context, I see the putting forward by Mr Reynolds of his suggested scheme as his best attempt at demonstrating to the court how the existing property could be made part of the new accommodation for James. He has many years experience of assisting the court (whether instructed by the claimant's side, the defendant's side or jointly) in these matters and I am assuming that he has complied with the obligations of an expert witness. That means that what I see in his proposed scheme is either the best option, or at least one of the best options, available if the approach of retaining the bare bones of the existing property is adopted. It is, therefore, a scheme which it is legitimate to scrutinise to see how, in reality, it would work. For the reasons I have given, it has some major drawbacks, which, in my judgment, demonstrate yet further that demolition and a new build is the only sensible option in this particular case. That, as I have said, actually accords with Mr Reynolds' personal view had he been going about this for himself. He also acknowledged that his scheme "works but it's not ideal" and that, given a blank sheet of paper, he would not design the accommodation in this way.
One final point is that the dining room/kitchen arrangement under his proposed scheme would not accommodate satisfactorily the more regular use by James of the Neater Eater that I consider is likely to occur once he has moved provided, of course, the accommodation permits it.
Against the totality of this background, I am firmly of the view that demolition and a new build is the only sensible option in this case and that the immediate additional cost of doing so is reasonable and proportionate.
The actual requirements of the new property
The overall floor area required on Mr Reynolds' view of James' reasonable requirements is just over 237 m² given the need to provide accommodation for a second night carer. Mr Cumbers' view is that a minimum of 327 m² is required on the same basis. They are broadly agreed on a number of areas and the simplest approach is for me to focus first on where Mr Block and Miss Greaney aver that Mr Cumbers' specific suggestions go beyond what is reasonably required and what is proportionate because those suggestions largely (though not exclusively) give rise to the additional 90 m² proposed by Mr Cumbers.
Separate family dining room
Mr Cumbers proposes that there should be a separate family dining room of 15 m². It is contended on behalf of the Defendant that there is no reasonable need for a separate dining room because Mr Reynolds' proposed scheme makes adequate provision for the kitchen/diner. For reasons I have given (see paragraphs 237-238 above) I do not consider that Mr Reynolds' proposed scheme is adequate. That does not necessarily mean that Mr Cumbers' suggestion is itself reasonable, but I do not have any other reasonable option by which to judge it save to note that in the joint statement Mr Reynolds' comment on this proposal was that it was "included in the kitchen/diner". It does not seem to me that there is any specific objection raised to the amount of space (which, of course, is designed to accommodate the manoeuvrability of the powered wheelchair), merely to the need for such provision.
It does seem to me that, given everything that will be happening within his home, particularly if he has people in to see him from time to time, the provision of a separate family dining room would be entirely reasonable. I would accept that this is reasonably required. (This is a convenient point to deal with one other minor issue concerning the dining facilities. Although not an occupational therapist, Ms Coombes had suggested that a variable height dining table should be provided for James and I do not think that in principle it is contested: indeed it is consistent with my conclusion in paragraph 385. However, there is a choice between a table suitable for a single person (at £900 + VAT), an electronically operated table (at £3000 + VAT + delivery at £100) and a manual group table (at £1300 + VAT + delivery at £100). I do not see the justification for the electronically operated table with all the carers around to adjust the height, but I do think there is merit in the group table so that James can dine with other. I will allow £1660 every 10 years for this.)
Additional guest bedroom
Mr Cumbers provides for an additional guest bedroom for James of 16 m². It is predicated on the basis that most of James' friends/companions are likely to be wheelchair-bound or with disabilities – perhaps people he has met at school or elsewhere – who, in the ordinary course of events would visit him and sleep over. Provision, he argues, should be made for such eventualities.
The Defendant contends that there is no reasonable need for this facility on the basis that James will have a large exercise/physiotherapy room that could be used as a bedroom on the occasions that he has a guest to stay who needs wheelchair accessible accommodation. Any non-wheelchair guests can, it is said, use one of the other bedrooms.
Whilst I can see the attraction of such provision if money was no object, I am not persuaded that it would constitute a reasonable or proportionate expense. Whilst, of course, it is possible that James will have disabled friends/acquaintances, I do not think that a specifically designated bedroom is really called for to meet those occasional times when such a person might stay, particularly as I believe that through the use of other rooms (including the exercise/physiotherapy room) such a guest could be accommodated satisfactorily for the odd night or two.
Independent living space for James
Mr Cumbers provides for some independent living space for James of 25 m². In his report he justified this by saying that James should be provided with a separate living area where he can be with his carers on a one-to-one basis and also have space to entertain friends and companions – for example, to enjoy music and activity without impinging upon the family's ordinary living areas or having to revert to his own bedroom. He suggested that it should comprise a sitting area and a modest kitchen area with breakfast bar or small dining table. He said that ordinarily this would need to comprise approximately 40 m² of space but that he was anticipating that the therapy room for which provision would be made would, in effect, become James' longer term dayroom and, accordingly, he deducted 15 m² to leave 25 m² to be found.
The Defendant contends that there is no reasonable need for this since James will have a large bedroom, a large exercise/physiotherapy room and the use of the family sitting room and conservatory.
Whilst the need for an area such as this would, it seems to me, diminish if Mrs Adams was not living permanently in the property, even in that situation I can see the justification for having some area like this in James' own part of the property so that he can leave what would otherwise essentially be his bedroom to get on with other things. However, I am not persuaded of the need for the modest kitchen area with breakfast bar referred to nor am I persuaded that this room should, taken in isolation, be as large as 25 m². Since I see a potential inter-relation between space reserved for this use and the study/hobbies/communication room to which I will be referring below, I will reserve my decision until I have considered that issue.
Study/hobbies/communication room
Mr Cumbers provides for a study/hobbies/communication room of 8 m² which he suggests should be set up with James' computer equipment and other peripherals where he could be accompanied by a family member.
The Defendant's argument is that Mr Reynolds has allowed a larger exercise/physiotherapy room (23 m²) compared with the 18 m² provided for by Mr Cumbers who then provides for a separate hobbies/communication room and that the provision of one larger room will meet James' reasonable needs and will provide greater flexibility of use.
I am persuaded by Mr Cumbers' contention that the exercise/physiotherapy room should be reserved solely for those purposes. He said that the room would contain all the necessary equipment for home-based therapy and exercise, much of which is large and bulky. It needs to be a room where James can be hoisted to and from it and has wheelchair manoeuvrability space around it and that is why he advocates its retention for those uses and no other. As I have said, I agree.
However, the need for some space within the property for hobbies/communication does not appear to be in dispute (but if it is, I accept the need in principle) and, as indicated above, in principle I see the reasonable need for some independent living space for James over and above what is to be found elsewhere in the property.
Mr Cumbers has suggested that a total of 33 m² is necessary for this. I do not think the case for such a large area has been made out, but if, as I consider is feasible, these two areas of need can be met in one room, the only question is what area I should conclude to be reasonable. It plainly has to be large enough to house the computer equipment and so on and also a television and any other music equipment. If I double the 8 m² provided for by Mr Cumbers for the study/hobbies/communication room, giving 16 m² in all (a little over the size of the family dining room), then I believe reasonable provision will have been made.
Separate WC
Mr Cumbers provides for a separate WC of 3 m² (which would need to be near the front entrance lobby) so that James' carers and therapists can access a toilet other than in his specially adapted bathroom area or the family bathroom. Although he suggests that it should be large enough for James to use, it would be a multi-purpose WC available to all who are at the property and would be like a cloakroom in many houses.
The Defendant argues that there is no reasonable need for such provision.
This provision seems to me to be entirely reasonable. I would add to the list of those who might use the facility any disabled guest to the property. Without such a facility, the only WC available for a disabled person would be the facilities that James has in his part of the property. That would not be satisfactory.
Conclusion on these specific matters
The net effect of these conclusions is that I reduce by 25 m² the provision suggested by Mr Cumbers leaving 302 m² of provision.
More general conclusion on accommodation issues
The final question is whether there is any further deduction to be made from that figure because his floor area allocation is too great to be reasonable in any respect. Ms Rodway and Mr Latimer-Sayer invite me to recall that Mr Cumbers emphasised that he has provided minimum sizes for the rooms he has recommended. Mr Block and Miss Greaney invite me to say that 230 m² overall is sufficient.
I do not see this as an exercise in painting with a broad brush. It would be wrong simply to reduce what is claimed because it "seems too high". It needs to be emphasised that circulation space for manoeuvrability purposes is essential given the nature of James' disabilities and bearing in mind his ability to control a powered wheelchair. There will be furniture in the property that will inevitably reduce circulation area.
Having looked at Mr Reynolds' views of the alleged over-provision of space (beyond the specific matters dealt with above), the main differences appear to be the conservatory (where Mr Cumbers says 16 m² and he says 6 m² if a conservatory is to be provided at all) and the two bedrooms other than James' bedroom (where Mr Cumbers says 16 and 14 m² respectively and he says 9 and 8 m² respectively). Their overall circulation space is expressed to be an additional 15% on top of the overall floor area.
If James is to have proper access (in terms of manoeuvrability) to the two bedrooms referred to (and, in my view, he should be entitled to that) and proper access to the conservatory (which I regard as reasonably required in principle) such that he can share it with his mother/carers/guests, all those rooms need to be of the size suggested by Mr Cumbers.
I am assuming that within the 302 m² thus provided that there is sufficient space for the separate shower room facilities that are accepted to be required if, as is likely, James has carers of both sexes. Consequently, each carer's bedroom should have a separate shower room (rather than a shared facility).
I trust that those conclusions will enable the necessary calculations to be made.
Additional issues arising out of the accommodation claim
There, as I understand it, are the following incidental issues arising out of the accommodation claim:
i) Whether there is a reasonable need for Torso height kitchen, utility units and wardrobes and cupboards.
ii) Whether there is a reasonable need for carer's kitchen units.
iii) Whether there is a reasonable need for a cord operated curtain track.
iv) Whether there is a reasonable need for an intruder alarm.
v) What is the appropriate level of contingency provision?
(i) Torso height kitchen, utility units and wardrobes and cupboards – Mr Cumbers recommended that all kitchen units should be arranged at torso level so that James could view and participate in what was taking place in the kitchen with equivalent provision in other areas throughout the property (in other words, no high-level compartments and no low-level drawer compartments). Mr Reynolds agreed that a worktop area that was lower which James could access for assisting with "pastry making or whatever" may be useful but could be accommodated in a standard kitchen. That concession in respect of the kitchen area suggests that an area should be provided so that James can take part in such cooking and/or preparation activities as he can. I agree that it is reasonable to provide such an area, but given that much of the food preparation will, in practice, be carried out by his carers, I do not think that all units should be at such a level if so to provide would make it difficult for the carers to carry out these tasks comfortably. On the evidence I heard I am not able to judge to what extent that may be so if all kitchen units are arranged at torso level. If Mr Cumbers and Mr Reynolds can agree a cost for making provision of the kind I have identified, then the figure should be included as an element of the accommodation claim. If they cannot do so, I will endeavour to reach a conclusion on the basis of further written submissions.
The concession in principle was, in my view, rightly made because the logic of the proposition is to place James in the same position, as nearly as possible, as if he was not disabled. As I have indicated elsewhere, however, it is only reasonable to go so far in achieving this objective. It seems to me unreasonable to specify absolutely that there should be "no high-level compartments and no low-level drawer compartments" anywhere in the property. Some should be designed so that they are within James' reach, but some storage space may have to be provided to which James would not ordinarily have access. Again, I will invite Mr Cumbers and Mr Reynolds to consider this issue further in the light of this broad conclusion and endeavour to agree some figure to be included in the accommodation claim. If this proves impossible, again I will try to reach a conclusion on further written submissions.
(ii) carer's kitchen units – this is agreed.
(iii) cord operated curtain track – this has not been actively opposed by the Defendant and, accordingly, will be allowed.
(iv) intruder alarm – It is not disputed by the Defendant that this is reasonable, but the argument is that it is an ordinary item that would have been required in any event.
I agree that it might have been a feature of James' home irrespective of his disabilities, but not necessarily so: insurers may stipulate that one is provided, but it depends on the neighbourhood.
In the absence of evidence that it would have been required by insurers in the neighbourhood where James will live, it seems to me appropriate to conclude that the alarm is required in consequence of James' disabilities.
I will deal with the contingency sum below (see paragraphs 300-301).
Credit for rent received by Mrs Adams and for properties James would have purchased in any event?
The Defendant argues that Mrs Adams, who has received £440 per month by way of rental income on 1 Graveley Close since January 2012 (see paragraph 24 above), should give credit for 50% of that sum on the basis that it reflects housing costs that James would have incurred in any event until the age of 25 years. This amounts to £2,640 per annum.
This is a very unattractive proposition, but the approach must be applied if that is what the law requires. The argument is hotly disputed on James' behalf. The contention of Ms Rodway and Mr Latimer-Sayer is that the family would have stayed in their original home but for James' disabilities and it is reasonable for Mrs. Adams to keep 1 Graveley Close because it is clear that James will be able to live independently, albeit with a considerable support package, at some stage in the future at which point she may return to live there. As things stand, she does not benefit from the rental income because it is passed directly to her brother as a way of paying him back for his own generosity (see paragraph 24 above). Ms Rodway and Mr Latimer-Sayer argue that whatever care package is put in place, Mrs. Adams will undoubtedly continue to play an important role in James' life (beyond that of "just" being his mother) for which she will not be remunerated and any perceived benefit to her of living rent free in James' property should be seen as an incidental benefit for which credit should not be required to be given. This was the approach adopted by Swift J in Whiten at [459] – [470] having analysed the previous authorities including M (a child) v Leeds Health Authority [2002] PIQR Q46 and Iqbal v Whipps Cross University NHS Trust [2007] LS Medical 97. I respectfully agree with that approach and adopt it in this case.
In my judgment, no credit needs to be given in the manner contended for by the Defendant.
There is an issue regarding the value of the property James would have purchased in any event. The need to give credit for 50% equity in a property is accepted on James' behalf, but it is said that this should be for a property costing £68,450 to age 35 and thereafter for a property costing £142,470. The Defendant's case is that James would have purchased a property with a partner from age 25 year in the sum of around £125,000. Credit should be given for 50% of that sum – in other words, in the sum of £63,000.
It is difficult to do other than to paint with a broad brush here. Given the area where it is likely that James would have lived in his non-disabled state, I think a fair compromise of the figures would lead to the conclusion that from 25 to 35 he would have owned a property worth £75,000 and that from 35 onwards a property worth £150,000. The relevant credit will be for 50% of those sums.
Adaptations to father's and grandfather's homes
There is a claim for adaptations to the houses of James' grandfather and father to allow better access for him. This is advanced on the basis of £5,500 per property making a total of £11,000. The Defendant suggests that portable ramps of £500 could be installed making £1,000 in total.
The Defendant's suggestion seems reasonable and I am unable to see the justification for the more expensive approach.
Swimming pool at home?
The issue of whether it would be reasonable to allow for a swimming pool in principle in James' new accommodation became more narrowly focused during the trial. In the earlier stages of the preparations for this case the emphasis of the reports on James' behalf was upon hydrotherapy because of the perceived benefits of warm water exercise. However, with the passage of time it became clear that James was more physically able than a person who routinely requires hydrotherapy and it became common ground that there is no reasonable need for hydrotherapy. Notwithstanding the acceptance of that position, a consensus emerged amongst the experts on both sides that swimming provides James (who obtains a great deal of enjoyment from it) with physical and psychological benefits which are different from other activities that can be carried on other than in water and that he should be able to undertake swimming if he wishes. Mrs Beesley told me that "the care team are very keen to take James swimming because it's something he really enjoys" and described it as an activity that he loves. Dr Rosenbloom told me that James indicated to him "with his actions, rather than words, how much he enjoys swimming."
The psychological benefits were identified by Mr Johnson in this way:
"From a psychological point of view, one of the benefits of swimming is that it allows James to move freely. He is spending a lot of time strapped in, as it were, and isn't able to exercise as well as if he was in a free state."
He also said this:
"I support James swimming. The provision of the facility is not really within my expertise. It has got to be somewhere that he can access easily and readily without problems of fatigue, without problems of long travelling time and, of course, with adequate access."
Although Dr Rosenbloom chose his words very carefully, the sense I obtained from what he said was that, as an activity for James, it was one he supported. Dr Ferrie had expressed his support for it in their joint statement. Mrs Filson supported it too and gave reasons for that support.
Dr Rosenbloom and Dr Ferrie agreed that for James to undertake water-based activity he required an accessible pool with a suitable hoist or graded wheelchair access, suitable changing facilities and warm water.
The question at the trial became whether the one public swimming pool within tolerably easy reach of where James would be living, namely, Horncastle swimming pool, would provide a suitable swimming facility for James. If it did, there would be no need for a purpose-built pool at his home. The Horncastle pool is about 40 minutes' drive away from James' home which, Mr Block and Miss Greaney submit, would be a reasonable distance to travel for a swim at weekends or potentially after school. Whilst that is quite a distance for regular access to the pool, I am inclined to think that it would not have led to the conclusion that it was an unreasonable proposal that he should make use of it, certainly in the longer term after he had left school.
What emerged, however, is that the pool is kept at a standard 29°C which it is common ground is too cold for James who needs 32°C. At a late stage in the evidence Mrs Murphy suggested that this problem could be resolved by James wearing a wet suit (called a 'trisuit'), made of flexible material, that could be custom-made for him. It would, it was suggested, be much easier to put on James than a lycra bodysuit that he had tried previously and which he did not like. It did, however, emerge that Mrs Murphy had no experience of someone such as James using such a suit and had merely spoken to the salesman from the company that made it. Even assuming such a suit could be made, it is very difficult to see how James could readily be put in such a suit in the changing rooms at the pool (or indeed anywhere) given his strong involuntary arm movements.
The next issue was the provision of an appropriate seat to attach to the pool hoist, it being acknowledged that the chair currently in place would not be suitable or safe for James. Mrs Murphy suggested that a suitable seat could be purchased for James (either by him or by the pool itself) to attach to the pool's hoist. Mrs Filson said that those responsible for public pools are usually very reluctant to allow people to bring in their own equipment since they would have no control over the situation and there would be public liability and insurance issues. She said that in her experience local authorities are not generally receptive to such proposals.
Mr Block and Miss Greaney were left to express the hope that Mrs Murphy's view that a way through the problem could be found would prove correct.
The problem in this case may largely be a function of the geographic location of where James will live, but the evidence does demonstrate clearly that the only way in which the need (not just the desirability) for him to go swimming regularly can only met by some home-based provision. Mr Block and Miss Greaney contend that the evidence in support of a home pool provision in this case "falls short of the situations where the Courts have previously been persuaded that a home pool is reasonably required." I was reminded of the following cases: (i) Cassel v Riverside Health Authority [1992] PIQR Q168 (where a claim for a hydrotherapy pool by a claimant with cerebral palsy was refused on the basis that it was not "an expense made necessary by the increased cost of caring for the plaintiff" and the evidence of the claimant's mother was held insufficient to persuade the court of the need for a hydrotherapy pool); (ii) Lewis v Royal Shrewsbury Hospital NHS Trust (see paragraph 124 above) where HHJ Macduff QC asked whether there were "real and tangible therapeutic benefits" for a claimant with quadriplegic athetoid cerebral palsy of having a pool at home and concluded on the basis of the medical and physiotherapy evidence that there were real physical benefits that went beyond "providing activity, interest and pleasure"; and (iii) Whiten (above) where Swift J refused the claim for "aquatic physiotherapy" sessions with a physiotherapist in a specialist hydrotherapy pool. Her conclusion can be seen from the following paragraphs of her judgment:
"262. … I have no doubt that the claimant enjoys his aquatic physiotherapy sessions, just as he enjoys his visits to the swimming pool with his family and/or carers. I readily accept that exercising in water is generally beneficial for him. However, I am not satisfied that the claimant has established a clinical need which cannot adequately be met by physiotherapy exercises carried out in an ordinary swimming pool with suitably trained carers and, occasionally, his treating physiotherapist. Consequently, I make no award for the costs of future aquatic physiotherapy.
263. Whilst it might be convenient for the claimant to have a pool at his new home, there is no evidence of a real need for that facility. The claimant will have trained carers and a suitably adapted vehicle to take him for sessions in a swimming pool at a local private leisure club whenever he wishes to go. The availability of suitable pool facilities will be one factor to be considered when the family come to decide where their new home should be sited."
I do not, with respect, see those cases as providing any rigid test about what needs to be demonstrated in this context in any particular case. The guiding principle is whether a claim advanced reflects a claimant's "reasonable requirements" or "reasonable needs" arising from his or her negligently caused disability (see paragraph 162 above). I respectfully agree with Judge Macduff that just providing pleasure would not ordinarily be sufficient and some real and tangible benefits would need to be demonstrated. Mr Block and Miss Greaney draw attention to the focus of the argument in Whiten which they suggest was whether any "clinical need" for the hydrotherapy pool was demonstrated. However, what Swift J said was that "a clinical need which cannot adequately be met by physiotherapy exercises carried out in an ordinary swimming pool with suitably trained carers and, occasionally, his treating physiotherapist" had not been established. The claimant in that case could go with his "trained carers [in] a suitably adapted vehicle to [to] a swimming pool at a local private leisure club whenever he wishes to go." For the reasons I have given that option will not be available to James.
It does not seem to me that other cases provide the answer to the question in this case. Every case is dependent on its own facts and I would repeat what I said in connection with the issue of access to and manoeuvrability to all parts of James' new home (see paragraph 234 above), namely, that the decision in this case should not be seen as a green light for claiming a home-based pool in every other case. James does have complex needs that do require to be met in ways that may not arise in other cases and merely because an example cannot be found in a previous case does not mean that the provision made in this case is wrong. Very many cases are, of course, resolved without the court being required to adjudicate and it is, therefore, unknown precisely how frequently the issue of a home-based pool is raised and either conceded or recognised to some extent in the overall settlement.
In my judgment, the case for a home-based pool is made out here on the basis of the real and tangible psychological and physical benefits that swimming will give to James, but which cannot be obtained in a convenient local public facility. It can only be provided by a home-based pool. The next question is how should it reasonably be met?
It is accepted that once I have determined the size of the pool reasonably required, Mr Cumbers and Mr Reynolds should be able to reach agreement on the likely costs of building such a pool.
Ms Rodway and Mr Latimer-Sayer submit that ideally the pool should be large enough for James in which to swim and to be in the pool with others. A pool measuring 7 x 4 m was recommended by Mr Cumbers to achieve this. Mr Reynolds drew attention to the idea of a pool within an extension therapy room partly enclosed by a conservatory called the 17fx Aquasport (at a capital cost of £95,000). It is 5.33 m length and 2.33 m width, but there is a seating area at one end which narrows the effective swimming area. Mr Reynolds is of the view that it could accommodate three people for activities. As I understand it, it can be made to offer a slow-moving jet stream of water against which someone can swim, although it is questionable as to whether James could cope with that.
Whilst I can understand that "ideally" a pool of the size mentioned by Mr Cumbers would be desirable, I do not think I can approach this issue on that basis – I need to alight upon some dimensions for a pool that are reasonable and which can be provided at a proportionate cost bearing in mind, as I do, that whilst there may be occasions when there is more than one person in the pool engaged in activities, more often than not it will be James on his own (doubtless attended by his carers) who will be using it (a) to give him enjoyment and (b) to enable him to receive the above-mentioned beneficial features of the exercise that regular swimming would provide. Overall, I think that a pool of roughly the dimensions of 5 x 3 m would be sufficient and the costings should be calculated on that basis.
Contingency sum
It is obviously sensible to provide a contingency sum to cater for unexpected expenditure in the substantial building project that will be involved in the provision of the new accommodation for James. 10% is contended for on his behalf; 5% on behalf of the Defendant.
It is, in my view, better to err on the side of caution. To that extent I propose to follow the example of Sir Rodger Bell in Iqbal v Whipps Cross University Hospital NHS Trust (see paragraph 162 above) who allowed a contingency sum of 10%.
Occupational therapy equipment
A number of items were in dispute between Mrs Ho and Mrs Tuckfield. I itemise them has follows:
(i) Replacement of wheelchair seating – The dispute is as to the frequency with which James' wheelchair seating is replaced, Mrs Ho suggesting every 2 years (because James is a heavy wheelchair user and regular replacement is essential), Mrs Tuckfield suggesting every 2 to 3 years between the ages 12 and 18 years thereafter as frequently as the wheelchair is replaced, namely, every 5 years (which is agreed).
I consider that it is reasonable to replace the seating every 2 years until James is 18 and that he should have the seating replaced once during the 5-year period between every 5-year replacement of the wheelchair itself, namely, every 2½ years.
(ii) Spare wheelchair seating – It is said on James' behalf that because he cannot use his wheelchair without appropriate seating, which has to be moulded especially for him and that it takes a while for his bespoke seating to be made, a spare seating system is reasonably required so that he always has appropriate seating either when his manual or power wheelchair seating fails or becomes wet. The Defendant's case is that there is no reasonable need for such seating. He will have a spare power chair and, it is argued, the cover can be replaced and there is a wheelchair cape to wear in wet weather.
I think, on balance, that this is not necessary and make no allowance for it. A little ingenuity and foresight and the problem said to give rise to the need should not arise.
(iii) Wheelchair pump – It is said on James' behalf that it is reasonable for him to have a suitable wheelchair tyre pump so he can pump up his tyres when necessary. Mrs Tuckfield's says that the tyres could be pumped in a garage and that there is no reasonable need for a pump.
A pump apparently costs £50. It is said that it will need to be replaced every 5 years. Plainly, in my view, it is sensible and reasonable to have a pump available at all times. The alternative, if Mrs Tuckfield is right, is to get his wheelchair to the local garage. That makes no sense to me. Will it need replacing every 5 years? I doubt it. I will allow a replacement every 10 years.
(iv) Waterproof capes – It is said on James' behalf that these (which cost £116 per year) are an additional item because they go over the top of an outdoor coat or jacket and protect the wheelchair. The Defendant's case is that this is not an additional cost by reason of disability because James would have needed waterproof outer clothing in any event.
I cannot accept that these capes (the need for which I can understand) need to be replaced every year. I will allow the figure of £100 (reduced to take account of the need for waterproof outer clothing in any event) every 5 years.
(v) Replacement of wheelchair trays – I am invited to "take a view". Every 4 years is the answer.
(vi) Replacement of Spectra XTR – Mrs Ho says 4 years; Mrs Tuckfield says 5. There is no science about this: 4½ years is my decision.
(vii) Maintenance of Spectra XTR wheelchair – It is argued that it is reasonable for James to continue to have his wheelchairs serviced and maintained by Contour at the annual cost of £1,665. Mrs Tuckfield obtained an alternative costing from Sunrise Medical for £150 per annum (although the true basis of what would be done for this figure was unclear), but she accepted that it was reasonable for James to have one point of contact and to have his wheelchairs maintained by the same company which supplied them. That was a sensible concession and it seems to me obviously desirable that the wheelchairs are maintained to the highest possible standard. I will allow the annual cost claimed.
(viii) Slings – It is contended that it is reasonable for James to have slings for his overhead track hoist and his portable hoist so they are always there to be used as and when necessary. It would, it is said, be inconvenient and time consuming for the slings to be transferred over. Mrs Tuckfield was of the view that the slings are interchangeable with the ceiling hoist slings, that they should accompany James wherever he goes and that it was reasonable to use the slings on the ceiling and mobile hoist. His carers can, it is said, move the slings and there is no reasonable need for a second set of identical slings.
I consider that James ought to have separate slings. I do not understand why they would need to be replaced every year. Replacement every 3 years seems reasonable.
(xi) Shower chair – It is contended that James would benefit from having a shower chair so he can have a shower, the cost of a suitable chair being £4,315. It is said that most boys of James' age will prefer a shower to a bath and that using a handheld shower in his adapted bath (Mrs Tuckfield's option) will not the same thing.
I do not think that the preference for a shower (which I accept is likely) will necessarily simply remain whilst James is young and, accordingly, look on this as a legitimate long-term provision. I have little evidence, but replacement of the chair every 5 years seems excessive. I will allow replacement every 7 years.
(x) Electric tooth brush – This is claimed, but I cannot see that there is any justification, based upon James' disability, for claiming something that for many people is the standard means of cleaning their teeth.
(xi) Washing machine/tumble drier – It is contended that with two sleep-in carers constantly living in his home it is reasonable to make an additional allowance based upon a more frequent replacement of his washing machine than otherwise.
I do not see the real foundation for this. Washing machines require replacing from time to time. Purchasing a good one at the outset will probably mean that it will last longer, though that is not always the case. However, I cannot see the reason, based upon the consequences of James' disability, for more frequent replacement.
(xii) Portable table – It is suggested that this is a reasonable item. Mrs Tuckfield maintains that there is no reasonable need for such an item.
I do not think the case has been made out for something which, in any event, is a very modest cost.
(xiii) Advance seating system (and replacements) – Mrs Ho described this as "a chair on wheels" (an office type of chair with full support) which James would use when using his computer, or when he is at the table using his Neater Eater. She called a "doing chair", not a sitting chair, and commented that James uses such a chair now (which was purchased privately) and is transferred into it and finds it comfortable. It is seen as an alternative to being in his wheelchair all the time. Mrs Tuckfield accepted that it was important for James to move position, but said that in her experience "certainly by teenage years … children choose not to go into these functional seating systems … [they] would rather stay in their wheelchairs."
Since this provision is sought only until the age of 18, I think that it is reasonable for its replacement to be provided for, mostly because James is currently using it to his advantage and there is no indication that he is likely to cease to use it for the time being.
(xiv) Theraposture bed – The only issue is the cost, Mrs Ho says £4,095 and Mrs Tuckfield says £3,963.
A reasonable figure is £4,000.
(xv) Mattress protectors – The issue of whether provision for two such protectors annually in the sum of £50 each should be made depends on the nature of the bed purchased. Some beds come with the protector attached. Others do not.
This is a small item and I am not persuaded that it is necessary to make separate provision for it.
(xvi) Pressure relieving mattress – Mrs Ho suggested a portable mattress for when James is a holidaying or otherwise away from home because beds in alternative accommodation cannot be guaranteed. She recommends a "roly-poly" mattress that can be put in the luggage compartment on a plane. She said that it was "a small issue, but … a very important issue." If the mattress is wrong on holiday, then essentially the holiday is ruined.
I think there is force in that and, accordingly, regard this as a reasonable item.
(xvii) SP Point Swing and large trampoline – These items cost £8,480 and £5,532 respectively. They would be "one off" purchases for use during James' remaining teenage years. The opportunity for James to engage in the kind of activities undertaken on a swing and a trampoline is not contested in principle though Mrs Tuckfield felt that they could be provided at far less expense. The Defendant contends that the provision of a swing at a cost of £8,480 which is designed for multiple users in a playground environment is disproportionate as is a trampoline costing over of £5,500.
Some balance does have to be applied here. I would regard a sum of £5,000 as an appropriate provision by way of direct compensation for the need to provide facilities of this nature. If those helping James feel that the sums claimed should be spent, the balance would have to be found from his general damages.
(xviii) Sip and Puff Boat and a Wayfarer dingy – I will deal with these together. The sip and puff model boat costs £600 and would enable James to learn how to use sip and puff controls with a view to him controlling his own adapted dinghy in due course. Currently he goes to Rutland Water but the availability of an adapted dinghy is not guaranteed or there may be insufficient instructors available to accompany him. The contention is that by having his own adapted dinghy (which would cost £6,495) he would be able to use it more frequently and thus to spend more time on the water. It could be kept closer than Rutland Water (which is about an hour away by road) and he would be able to use it with trained carers.
The Defendant contends that there is no reasonable need for a sip and puff model boat and that the boats available for use at Rutland Water (which is a reasonable place for him to travel) are not operated by sip and puff controls.
Whilst I understand that James would like to undertake this pastime and that it would be more convenient to have his own dinghy, it is difficult to characterise the provision of such a dinghy as constituting a reasonable need that should be met by way of compensation. The ability to go sailing can be met in a different way and I agree with the argument that when he has a full team of carers in place, it should be easier to arrange sessions at Rutland Water. Accordingly, I cannot award anything under this head of claim.
(xix) Replacement of spare power chair – Mrs Ho says every 6 years, Mrs Tuckfield says every 7 years.
I will simply compromise this dispute at 6½ years.
(xx) Maintenance contract for spare power chair – This does not appear to be in dispute, but if it is it seems to me that the current cost is the best indictor of the reasonable costs, which I understand to be in the sum of £1,665 per annum.
(xxi) Seating for spare power chair – There is some evidence that the cost of this seating may be somewhat more than the £2,710 agreed between Mrs Ho and Mrs Tuckfield when they discussed matters.
I will, accordingly, allow a little more than the agreed sum, namely, £3,000.
(xxii) All-terrain power wheelchair – This kind of wheelchair, as its name suggests, is capable of coping with terrains that are rougher and more difficult than ordinary terrains. It would enable James, for example, to access the woods near to his new home, go off the trails and enable him to go onto a beach. If he acquired a dog, it would enable him to take the dog for a walk. Mrs Tuckfield said that if this was the sort of activity that James would wish to be involved in she "could not argue" against it, her suggestion, however, being that this would be a solitary activity though she recognised that his carers would be likely to go with him. It is an expensive item - £16,500 to purchase and about £1875 per annum to maintain.
Mrs Ho suggested that this was "essential for James." He is, she said, very good with his day-to-day powered wheelchair, but he wants to be doing more. The all-terrain wheelchair would enable him to do so. An all-terrain wheelchair that is set up for his seating need and his head control, would, she said, enable him to do what many of her clients are doing all the time.
Given the part of the country where James lives, and given the proximity of his forthcoming home to woods and countryside, I see this not only as a desirable acquisition, but as an entirely reasonable way of giving to James the opportunity to do what many uninjured in his locality, and elsewhere in the country, also do without having to think about preparing themselves to do so.
I agree with the proposition that such a wheelchair may be more frequently used in the earlier years of James' life, though the pleasures of being able to "take a walk" in the woods or to take a "stroll along a beach" will still be there to be obtained in later years. In my view, this is a lifetime facility to which James is entitled.
Against that background, I think it reasonable to provide for the renewal of the all-terrain wheelchair every 6 years until James is 50 and then every 7 years thereafter.
(xxiii) Additional occupational therapy for the new home - Given that Yorke Hurst will be demolished and a new property built from scratch, it is submitted on James' behalf that 20 hours of additional occupational therapy input should be provided on a "one-off" basis. There are, it is said, many items of equipment to position and consider which would involve working with the architects and the surveyors and engaging in site visits. Mrs Ho recommends 20 sessions and Mrs Tuckfield recommends 10 sessions for this purpose.
I cannot choose between these views and will simply "split the difference" on this issue and allow 15 hours which will presumably be spread between the year when the house is being built and the initial stages after the works are complete or nearing completion. At all events, it is a "one-off" provision.
Future travel and transport
There is no issue about the need to purchase a VW Caravelle at a cost of £42,000. There are ancillary issues concerning the periodic replacement, running costs and other matters arising from that vehicle. There is an issue about whether the purchase of an adapted motorhome is reasonable.
There is also a preliminary issue concerning the appropriate approach to the calculation of future travel and transport. This was not developed in the oral argument or indeed in the oral evidence and I feel less equipped to deal with it than I might otherwise have been had the issue been argued in this way. Whilst it is a while since I have had to consider the matter, my perception is that the way the Defendant contends that the issue should be approached is the established and conventional approach and that the approach advanced on James' behalf is somewhat novel. My preference, therefore, is to adhere to the established approach.
That involves periodic replacement of the VW Caravelle, with appropriate credit to be given for vehicles that would have been owned in any event, and provision to be made for increased associated costs (in other words, increased depreciation and increased standing costs associated with driving a larger, more expensive vehicle). I believe that all I need to do is to indicate my conclusions about the frequency of the periodic replacement of the VW Caravelle and the likely cost of a vehicle for James had he not been disabled (and when that would have been acquired) and the parties should thereafter be able to do the necessary calculations.
(i) replacement of VW Caravelle and associated issues
The Defendant's contention is that since this vehicle will have a warranty, be properly serviced and maintained and probably not travel more than 10,000 miles per annum, 8-yearly replacement is reasonable. It is said that the Motability Scheme has a standard 5 years for wheelchair accessible vehicles which can be extended to 7 years.
Mrs Ho suggests a replacement period of 4 years and emphasis is placed on the importance for James of having a reliable vehicle because he would be unable to rely upon public transport in the event of a breakdown. It is suggested that it is noteworthy that the Motability Scheme provides for replacement new standard vehicles every 3 years and every 5 years for wheelchair accessible vehicles.
To some extent the appropriate replacement period will depend upon the likely annual mileage to which James' vehicle is exposed as the Defendant's contention suggests. That is rather difficult to assess. I suspect that there may be less mileage with advancing years but rather more in the period until, say, he is in his mid-40s to 50. However, I think it more appropriate to alight upon a lifetime replacement period and, so far as possible, a lifetime additional mileage per year arising from his disabilities.
Mrs Ho accepted that a 5-year replacement period was reasonable even though she would have preferred 4 years. A 5-year period is consistent with the decisions in Lewis v Shrewsbury NHS Trust LTL (see above) for a VW Caravelle, in A v Powys Local Health Board [2007] EWHC 2996 (QB) and in Noble v Owens [2008] EWHC 359 for a Chrysler Voyager, and in Morgan v Phillips LTL 29/9/08 for a Fiat Multipa. It is close to the 4½-year replacement period agreed for a VW Caravelle in the case of Totham v St. George's NHS Trust (see above). Accordingly, I choose a 5-year replacement period.
Should credit be given for the costs of a car that James would have acquired in any event? In accordance with the approach in Whiten (see above) at [476-477], I think that some credit should be given. In Whiten the claimant was also male, but appears to have been a Londoner, and Swift J felt that he would not have acquired a vehicle until he was 25 because it would be expensive to run in the city environment. It is suggested on James' behalf that he should give credit for a car costing up to £13,000 new as from the age of 18. I am, of course, reluctant to take a different course from that which, arguably, is generous to the Defendant when it has been offered on behalf of a claimant, but I do not think that, whatever prosperous future might have awaited James without his disabilities in the longer term, he would have been able to afford a new car at £13,000 at the age of 18. He is more likely to have acquired something of a more modest type if he had acquired a vehicle at all at that age. I think the best way of reconciling the competing interests here is for the calculations to be carried out on the basis that he would have acquired a new vehicle at £13,000 at the age of 23. So far as the longer term is concerned, it is suggested on his behalf that credit should be given for a car costing £13,000 to £18,000 new from the age of 35 onwards. That does accord more clearly with my view of his future but for his disabilities. I will say that credit for a new car in the sum of £18,000 should be given after the age of 35.
It is argued that James is likely to incur additional mileage for various reasons including attending medical and therapy appointments, orthotic appointments, picking up prescriptions, trialling and picking up equipment and so on. It is suggested that an additional 5,000 miles per annum is reasonable. The Defendant accepts that it would be reasonable to allow an additional 5,000 miles per annum to age 18 years but suggests that it is unlikely that there will be significantly increased mileage as an adult.
Knowing what I do about James' enthusiasm for doing as much as he can, I consider it likely that he will be demanding of his carers to take him out of his home as much as possible in the future and not just in his teenage years. Against that background, I think it would be appropriate still to provide for extra mileage after the age of 18 arising from his disability. Given that he will be living in a somewhat more rural setting than the claimant in Whiten, I propose to take 3,000 miles per annum after the age of 18 as the additional mileage figure.
There will be a need for additional insurance cover for carers to drive his adapted vehicle. Mrs Ho's estimate is £2,000 per annum. Mrs Tuckfield suggested a range of between £500 and £2,000 and took a mid-point of £1,250. Mrs Ho said her experience was that the costing was nearer £2,000 and in some cases up to £3,000.
I think this evidence is persuasive and I will allow £2,000.
A claim of £84 pa is advanced for new carers to have lessons to prepare them for driving a larger vehicle than they are used to. I consider this unnecessary. Other, more informal arrangements can be made.
A claim is for washing and valeting James' car is made. I suspect that if he was a busy person (which my view as to his likely future would suggest), he might well have incurred that expenditure in any event. I make no allowance for this.
Given my finding that James is unlikely to have children in the future, I have been asked to determine whether but for his disabilities he probably would have shared his transport expenses with a wife or partner with the result, as I understand the argument, that he should be credited for mileage that he would have travelled in any event on a shared basis (or shared costs basis) with his wife or partner.
I am inclined to think that Miss Greaney's argument is correct, namely, that I am being invited to speculate on how many journeys would have been shared between James and his wife or partner when I do not have the evidence reliably to calculate any deduction on this basis. A whole variety of unknown factors (such as where his wife or partner worked and whether she would have had her own vehicle) contribute to a scenario of uncertainty in this regard. I do not think I can make any allowance for this.
(ii) Adapted Motorhome
A one-off expenditure of just over £96,000 is claimed (with annual refurbishment costs of £1,000) to purchase a Kon Tiki motorhome to enable James to go on caravanning and camping holidays, a particular feature of his mother's family tradition. It is accepted that it is not possible to rent such a vehicle and it would need to be customised for James. It is said to be the only way for James to be able to attend certain events such as a music festival or to visit or stay with friends or family who do not have adapted facilities or space for him in their homes. There is also the issue of long journeys when finding suitable toilet facilities is difficult. Mrs Beesley gave evidence of many places that advertise the existence of disabled facilities which would be unsuitable or incapable of accommodating James' wheelchair. Equally, whilst the evidence suggested that the number of accessible toilets generally is increasing she gave evidence that they were still "few and far between" in Lincolnshire. It is acknowledged that a motorhome could be used for holidays in Europe although there would be costly ferry tickets, toll charges, fuel expenses, breakdown recovery insurance and hotel stop-over costs on any such venture.
The Defendant accepts that Mrs Adams' parents have always enjoyed caravanning and camping holidays, but it observes that, sadly, her mother has passed away recently and it is suggested that it is unlikely that James will continue to go on holiday with his grandfather for much longer. He may or may not go on holiday with his mother as an adult, it is said. It is argued that it is reasonable to make provision for long and short haul holidays and for Calvert Trust visits to the age of 18 years. Thereafter, it is said that "provision can be made for weekend breaks in suitably equipped accommodation." Attention is drawn to the purchase cost and it is argued that it would be disproportionate to make such costly provision for something that is not proven to provide a benefit that will enhance James' quality of life in a manner that cannot be achieved in other ways.
This claim is made as a separate item from the increased holiday costs to which I will refer below. Since the two issues are, at least in part, related I will deal with that claim before coming to a view of the two claims together.
Increased holiday costs
The increased holiday costs have helpfully been agreed at £11,000 per holiday for European holidays and £14,000 per holiday for long-haul holidays. The main issue is how frequently James is likely to go on long-haul trips in the future although, as I have indicated, there may be an impact on the provision made for the frequency of the European holidays at the additional figure indicated if I allowed the claim for the motorhome because some of those holidays are likely to be enjoyed by using the motorhome.
It is said on James' behalf that provision for long-haul holidays ought to be made on a bi-annual basis – every 2 years – and that the same should apply to European holidays, the two types of holiday alternating. The Defendant's argument is that the likely pattern of long-haul holidays but for James' disabilities would have been once every 5 years on the basis that he would have had an income commensurate with vocational qualifications and that, accordingly, his decision to undertake such trips would have been reduced accordingly.
I do not necessarily share the premise of the Defendant's argument, but experience shows that families, in particular, will generally undertake long-haul holidays less frequently than short-haul holidays, largely on the grounds of expense and being able to fit such a holiday into the schedules of everyone within the family. I think it is not unreasonable to conclude that throughout his life but for his disability James would have taken a long-haul holiday on average every 3 years, either with his family when he was still living with them or on his own (perhaps with any family he may have had). In the meantime he would have taken an annual holiday either in Europe or the UK. Will he do the same given his disabilities? Whether he will travel long-haul as much is open to question, but Mrs Sargent's evidence concerning the way in which those travellers with serious disabilities such as those possessed by James are accommodated nowadays is sufficiently compelling for me to conclude that this pattern will probably be replicated in his case. There has already been one successful long-haul trip to Florida. To that extent, I do not think it is unreasonable to calculate at least part of the future additional cost of holidays upon this basis.
If James has the advantage of the motorhome, then I consider that he will not necessarily take a European holiday every year because he will have the ability to go anywhere in the UK in reasonable comfort with all the facilities at hand that he needs. If he does not have the motorhome, I believe he would look for the relative "luxury" of going somewhere every year where some sunshine could be guaranteed.
There are strong arguments in favour of the motorhome in James' case, not arising solely from the caravanning tradition within the family. It will give him some independence that would only arise otherwise if there were disabled facilities around the country that would cater adequately for his needs. The evidence suggests otherwise. The clear downside is the capital cost involved. However, as I have said, I think there will be less of an incentive to take regular foreign holidays in Europe if he has the motorhome and, to that extent, some of the immediate expenditure will be "saved" over his lifetime. Equally, some of the near European holidays might well be taken utilising the motorhome with, I would imagine, some saving of cost.
I will, therefore, allow as a head of claim the acquisition of the motorhome (with the annual refurbishment costs claimed), but on condition that future additional holiday costs are calculated on the basis that over any 3-year period there will be one long-haul holiday, one European holiday (on a full additional cost basis) and one UK holiday utilising the motorhome. I will invite the parties to endeavour to agree the additional cost that is attributable to such a holiday, in default of which I will decide the matter on the basis of written submissions.
The annual cost of activity holidays at the Calvert Trust to age 18 years has been agreed at £3,000 per annum (see Appendix). The remaining issue is whether an allowance should be made for weekend/city breaks at the cost of £3,000 per annum (to allow for 2 short breaks per annum) from the age 18 years. Largely because of the significant capital cost of the motorhome, I propose to make a broad-brush deduction of what would otherwise be a reasonable claim for this kind of break to one of £1,000 per annum.
Future information technology
There remain a number of issues concerning the future provision of aspects of information and other technology. I will deal with each separately below.
(i) back-up eye-gaze system – It is agreed that James requires a principal eye-gaze system (at the initial cost of £12,699) which will need replacement every 3 years (see Appendix, paragraph 10(1)). There is an issue as to how the need for a back-up system if his principal system malfunctions should be provided. Dr Beale's recommendation is for a second integrated I-15 My Tobii system, given that it is accepted that the My Tobii I-15 is the best system for James to use – in other words, an entirely separate system should be purchased every 3 years at the same cost as the principal system. Mr Clayton has suggested a PCEye Go – a slim eye gaze unit that can attach to any laptop, computer tablet and desktop. It is argued that this is a very flexible option and would provide a reasonable temporary back-up system. It costs about £3,000.
I accept the importance of the eye-gaze system for James and I can well understand the frustration should it malfunction. However, I do not think it is reasonable or proportionate to have an entirely identical system, possibly lying idle for 3 years, just to cater for that eventuality. Many people have to put up with similar frustrations. It seems to me that what Mr Clayton suggests would be a reasonable temporary "make do" system if, contrary to his expectation, the warranty (perhaps of an extended nature) relating to the principal system does not provide for a temporary replacement whilst it is repaired.
(ii) touch screen tablet – There is no dispute that James requires one. Dr Beale says it will cost £2,000 because of the need for a system with "hot swappable batteries", whereas Mr Clayton says that this is not necessary and the requirement could be met for £1,000.
I cannot really resolve that difference and propose simply to split the difference on this. I allow £1,500.
(iii) digital camera – The difference between Mr Clayton's position and that of Dr Beale is that he has allowed the cost of the basic customisation of a digital camera for James' use whereas Dr Beale has allowed for a more specialised pan and tilt function. Dr Beale allowed £500 for the camera and £1,000 for customisation, but recognised the need to deduct £100-200 for a standard camera. It is suggested that it is reasonable for James to have control over the same functions (such as pan and tilt and zoom) that he would have been able to control had he been able to hold and operate a camera himself.
The Defendant's case is that there is no evidence that James has a particular interest in photography. It is, it is said, more likely that but for his injuries he would have owned a standard digital camera and that the basic customisation costs meet reasonable provision and are proportionate.
Dr Beale's approach costs £1,350 with a 3-year replacement period; Mr Clayton's involves an initial cost of £500 with a 5-year replacement period.
Whilst it may be true that James has not yet demonstrated a particular interest in photography, he is only 12 and may not yet have been offered the opportunity to use a camera that is designed for his use. With his general interest in things that he does and sees, and with the opportunity for travel, I am sure he will wish to record scenes and events from time to time. I am inclined to think that Dr Beale's solution is rather more expensive than reasonably necessary and a fair compromise of the competing solutions is to allow a £500 initial cost with a 4-year replacement period.
(iv) Wireless music system – I can deal with this very shortly.
Wireless computer based music systems are increasingly common and I am sure James would have had one (or something similar) irrespective of his disability.
(v) Height adjustable table – The experts present a range of cost between £750 and £1,000 plus VAT and a range of replacement periods of 7-10 years.
I will allow £1,000 (inclusive of VAT) and an 8-year replacement period.
(vi) customisation of printer, scanner and copier – Based upon Dr Beale's view it is submitted on James' behalf that it is reasonable to allow £250 (which takes into account £200 for standard costs) every 3 years for the customisation of printer, scanner and copier to be operated with the eye-gaze system. Mr Clayton said that while the grids need to be set up, the printers do not need to be customised.
I think it reasonable to make some provision for this given the importance in James' life of the eye-gaze system. I would have thought £200 every 3 years would be reasonable.
(vii) Customisation of special needs software – It is not disputed that this is reasonably necessary and that it will be necessary every 3 years. Just as customisation is crucial for successful use of eye-gaze equipment itself, the associated software also needs to be customised although Mr Clayton suggested that not much of this software would need to be customised for James. He suggested a 3-yearly figure of £3,500. Dr Beale suggested £6,500 based upon direct personal experience.
Again, I doubt that I will do either party an injustice if I take £5,000 as the 3-yearly cost.
(viii) Visits for installation, assessment and training – Again, the need for this on a 3-yearly basis is not in issue. Dr Beale says £4,500; Mr Clayton says £3,500.
I will say £4,000.
It is not disputed that James will need certain environmental controls which he can operate using the eye-gaze system (see paragraph 10 of the Appendix) and I do not apprehend that it is seriously in dispute that James has the cognitive capacity to appreciate when he wants to alter his own internal environment as all who are not so disabled may do and that he has an appreciation (which will doubtless increase) of safety considerations. However, some items remain in dispute.
(ix) External door openers - The issue here is whether all external doors should be motorised and be capable of being operated by James. Each door so motorised would cost £2,500 and there would be a need to replace each one every 10 years. So much is agreed. Whilst the final design of the new home remains to be concluded, it is likely that there will be 4-5 external doors, 5 being the more likely figure. Mr Block and Miss Greaney submit that, having regard (i) to the safety issues that this would present, (ii) to the normal use of such doors and the barrier created by such doors given the number of support staff and therapists that will visit the property and (iii) the proposition that James will be supported at all times by two carers, there is a balance to be struck between respecting James' autonomy and the practical implications of motorising all external doors. Mr Clayton had suggested that motorising 2 doors would be sufficient. Ms Rodway and Mr Latimer-Sayer submit that all such doors should be motorised.
There is some uncertainty at present about the precise layout of the house, but I do see the desirability of James having control over the main doors within the property. In my view, if funds are provided for the motorisation of 4 doors, adequate and proportionate provision will have been made. That will doubtless be born in mind in the design of the property.
(x) CCTV – The contention here is that James will have a large number of strangers coming into his house and for safety reasons CCTV is suggested as a means of "keeping an eye on his carers and checking the facts e.g. that a particular night was a waking care night." It also offers, it is argued, a measure of protection against would-be burglars in the future as he will be vulnerable. The countervailing argument so far as the carers are concerned is that James will have two carers in attendance at all times which is a distinguishing feature from the usual situation of one carer being present.
I have to say that I do not consider that this is a necessary or reasonable provision. Whilst James will, of course, be vulnerable to some extent, I would have thought carers would find CCTV intrusive and although the occasional recruitment of an unsatisfactory carer can never be avoided completely, there will be a sufficient number of professionals coming and going on a regular basis (together with the close attention that Mrs Adams and her family and the case manager/team leader will keep on what is going on) for any problems to emerge quite quickly.
(xi) Door intercom system – This is a relatively inexpensive item (£330 every 10 years) and the suggestion is that when he is older, it is reasonable for James to be able to see who is at the door and let them in. Whilst there will be two carers in attendance at all times in the property (which, in my view, negates the need for an electric gate and garage door: see below), this is such a modest item that I am prepared to allow it.
(xii) Electric gate and garage door – The combined cost of these items is £7,000 every 10 years. The argument in favour is that James will have the cognitive capacity to operate these and there is no reason why he should not be able to control these himself rather than being reliant upon his carers.
I see the argument, but there is need for proportionality here and there does seem to me to be some advantage in only the carers being able to open the gates to the property from the safety and security point of view. They will doubtless consult James in the event of any doubts.
I do not propose to allow either of these items.
(xiii) Pager system and video surveillance – This costs £1,200 replaceable every 10 years. The pager/surveillance system is recommended by Dr Beale so that James, when he is left on his own, can call for help and the carers can speak to him and see him on a video surveillance screen before responding to his call for assistance. The Defendant contends that there is no reasonable need for such a system given the comprehensive package of care that will be provided.
It does seem to me that the provision of this system is reasonable and desirable. James will find it oppressive if there is a carer in, for example, his day-room every minute of the day keeping an eye on him. He and the carers will need some space and this system will help to ensure that, if James gets into trouble whilst on his own, someone can be called quickly. It is, in the scale of things, not too expensive and therefore constitutes a proportionate response to an identifiable need.
(xiv) Installation, programming and training – It is agreed that provision must be made for this every 10 years. Dr Beale suggests £5,000, Mr Clayton suggests £4,000. The appropriate figure depends upon the amount of equipment I have determined that it is reasonable to provide.
Since I have disallowed one or two quite significant items of equipment, I think that £4,000 is the appropriate figure.
(xv) Consultancy with architect – This provision is designed to enable liaison between the architect for the new accommodation and AT supplier. It is said to arise every 10 years, though I do not quite understand why that should be so. I should have thought that this is essentially "one-off" expenditure with perhaps a need to revisit issues occasionally. Mr Clayton suggests £500 based on one day of liaison; Dr Beale suggests 3 days costing £1,500.
I will allow £1,000 on a "one-off" basis for the new accommodation and then £500 once for every 10-year period thereafter.
(xvi) Development of AT hardware – The figure claimed here is £2,500 every 10 years. The rationale is said to be the need for the environmental controls (which are usually operated by way of infrared or voice commands) to be customised for use with James' eye-gaze equipment. Mr Clayton was of the view that no such provision is required because James is an eye-gaze user. The hardware, he says, will still be set up using an infrared system. Dr Beale says that this provision is needed to adapt James's AT system so that it can control the rest of the environmental system, which is normally controlled by physical buttons or physical remote control.
The position here is not as clear as I might have wished, though I accept that the importance of the eye-gaze system to James as being the essential means by which he can control things around him. I will have to paint yet again with a fairly broad brush and will allow £1,500 for this item every 10 years.
Other miscellaneous expenses
Two specific items have been agreed (section 12 of the Appendix), but there are some remaining issues:
(i) Additional clothing costs – The issue is whether the annual allowance should be £500 or £200 or some intermediate level. On behalf of James it is contended that he will require more frequent changes of clothing because of drooling, occasional accidents and messy eating although Mrs Ho largely estimated the £500 allowance on the basis that he will get hot in the wheelchair and his clothes will require more frequent washing resulting in more frequent replacement. In addition, it is said that James scuffs his shoes and these need to be replaced more frequently. Mrs Tuckfield's estimate is based on the fact that James would have required frequent replacement of clothing as a child in any event.
There are undoubtedly features of James' presentation that will lead to greater wear and tear on clothing and a continuing need for their replacement beyond the norm. I would have thought that £400 per annum would suffice for this purpose.
(ii) Additional bed linen and towels for James – It is said that James requires a lot of extra towels for bathing. Mrs Adams spoke of this and estimated the additional expenditure on towels at £148 pa. Also continues to have occasional accidents, requiring his bedding to be changed leading to more frequent replacement of his bedding. It is suggested that £200 per annum should be set aside for this. The Defendant submits that James is now ordinarily continent and the occasional accident at night should not give rise to a claim for additional bed linen and towels.
For my part, I consider that the modest additional expenditure on these items each year will be covered adequately by the £400 per annum I allowed under (i) above.
(iii) Bed linen and towels for carers – The argument is that since it is now agreed that James requires two sleep-in carers at night their bedding and towels will need changing and washing every few days leading to more frequent replacement. Mrs Tuckfield suggested that the carers' bedding and towels which is used frequently can be replaced every 6 years. This is disputed on James' behalf, the suggestion being that there will be a need for 4 sets of bedding and towels which are cleaned on a regular basis if two sleep-in carers are required.
I consider that any claim is modest here and will allow £150 per annum.
(iv) Sundries – This claim relates to items like kitchen rolls, toilet paper for carers, disinfectant, wipes, antibacterial sprays and so on which are required in greater quantities because of James' disabilities. It is not disputed in principle – Mrs Ho suggests £20 per week (£1,040 per annum) and Mrs Tuckfield suggests £10 per week.
I will allow £750 per annum.
(v) Increased toys/games/equipment - Mrs Ho suggests an increased allowance for toys/games/equipment because James damages games, toys and books as a result of his athetoid movements. Furthermore, disabled toys and games are generally more expensive because they need to be adapted. The Defendant argues that there is provision in the claim for garden play equipment, computer software, physiotherapy balls and other equipment. It is unlikely in these circumstances that additional costs will be incurred. There is, it is argued, no reasonable need for an additional allowance. Mrs Ho accepted that the claim should only run "until such time as he has all the computer equipment".
I do not think the fact that other equipment designed for enjoyment has been included in the claim undermines this claim in principle, but the allowance really does need to be modest. I will allow £150 per annum until the age of 16 by which time all the computer equipment should be well and truly in place.
(vi) Gardening/decorating/DIY – This is agreed in principle in the sum of £1,500 per annum. There has been a suggestion by the Defendant that this was provided for in the accommodation claim. Ms Rodway and Mr Latimer-Sayer say that it is not and have given reasons in writing why that is not so. In the absence of any response on behalf of the Defendant I will take that as the position. An issue has arisen as to when it should be seen as commencing. Mrs Ho had advanced the claim from when James became 25 and she confirmed this in her evidence. The logic of starting it then was not questioned by either James' legal team or by the Defendant's team and the issue went somewhat by default.
I can see the logic of saying that it should start immediately on James taking up occupation in his completed new property and, accordingly, allow that sum per annum from, for convenience, 2 years hence – say upon James attaining the age of 14½ years.
(vii) Increased telephone costs – This is agreed in principle subject to proof of the figure claimed, namely, £120 per annum. That figure was based upon some unchallenged evidence of Mrs Adams. My understanding was that this was to be left to me to make an assessment.
I do not doubt Mrs Adams' evidence, but I am sure that as the new care regime settles down and everyday life becomes more routine, there will be less need for additional landline calls. I accept they may, however, be more frequent because of James' disabilities. £75 per annum should comfortably cover this.
(viii) Additional cleaning costs – Approximately £1,500 per annum is claimed for the additional costs of cleaning the larger property that James will live in. The Defendant argues that there is no reasonable need for this provision. It is said that (as is the case now) he will have two carers and there is evidence that the existing carers undertake some cleaning and other domestic tasks. Mrs Adams did indeed describe how they tidied up after James and sometimes did some ironing. The contention is advanced that in future "[the] requirement to undertake cleaning can be written into the carer's contracts."
Although Mrs Tuckfield seemed to think that was established practice, I am bound to say that it seems odd to me that people engaged to be carers should also be expected to be domestic cleaners. Of course, to some extent they will be responsible for general tidying up from time to time (including ironing and so on), but their primary responsibility will be to care for James with his complex care needs. I think Mrs Tuckfield accepted that they would not be responsible for any "deep clean" of the property.
I think that this head of claim is legitimate, but it is, perhaps, open to question whether as much as £30 per week will be spent on this. I will make an allowance of £1,000 per annum.
(ix) Activities – Since, unfortunately, James is unlikely to obtain paid employment, he will need to fill his time with activities. Mrs Ho has suggested an allowance of £25 per week for the additional cost of these activities. The Defendant contends that there is no reasonable need for this allowance because James would have had leisure pursuits in any event that would doubtless have cost something to pursue. It is emphasised also that provision has been made for play equipment in the garden, soft play equipment and a football wheelchair to age 30.
I think the Defendant's argument is sound and I accept it.
(x) Additional Car Parking – A little over £60 per annum is sought for the additional car parking costs said to arise out of James' disability - e.g. attending medical and therapy appointments, orthotic appointments, buying equipment and so on. Further additional car parking charges have been incurred when carers have accompanied him and his father to the cinema.
This kind of claim is difficult to quantify, but I regard it as de minimis in any event in the scale of a claim of this kind. I do not propose to make any allowance.
Future management of the award, MDT meetings and Mrs Adams' position
I have put these various matters together because there is a loose inter-relation between some of them.
Deputyship costs
A major issue has arisen in this case about the Deputyship costs. The issues I have to consider relate to the future costs (and those specific issues are identified in the schedule set out in paragraph 447 below), but the Defendant has raised concerns about the past costs which, it is said, should inform my assessment of the future costs. As it is, the past costs have been agreed, but the Defendant seeks to make a number of criticisms about the manner in which they were charged, evidenced, it is said, by the manner in which they were subsequently assessed by the court. I am not really satisfied that what has happened in the past is relevant to my assessment of these costs in the future save, perhaps, in respect of the effect that Mrs Adams' continued involvement in James' life and his care in the future may have on those costs. To that extent I do not propose to deal with this aspect of the Defendant's case in any detail. I regard it as unfortunate that the issues should have been raised in the manner they have.
As previously indicated, James' Deputy is Mrs Denise Stephens who, of course, acts also as his litigation solicitor. Mrs Stephens is a well-known and experienced solicitor in the clinical negligence and serious personal injury sphere. She is now a partner with Shoosmiths, having formerly been with another well-known firm in Hampshire, Moore Blatch. She transferred from Moore Blatch to Shoosmiths in 2011. She was handling James' case whilst at Moore Blatch and took the case with her on her move to Shoosmiths. She has been doing Court of Protection work for about 10 years and is currently a Deputy in 8 cases, with one other potential case pending. Whilst there are, of course, obvious differences in the two roles there is no objection in principle to a claimant's litigation solicitor acting also as his or her Deputy: it can result in a saving of costs and the relationship with the family will often have built up over a period which can prove a benefit. I do not understand that to be in issue. She said that she does about 90% litigation and 10% Deputyship work.
The particular focus of the criticisms made by the Defendant in relation to the past Deputyship costs was for the period from 31 May 2011 to 31 May 2013. The bill for the Deputyship costs submitted for assessment by the Supreme Court Costs Office was in the sum of £44,923 and it was reduced on the eventual assessment to £27,978, a reduction of approximately 38%. In fact it should be noted that the amount by which costs attributable to the Deputy's work were reduced by about 11%, the usual reduction, according to Mrs Christine Bunting, the expert called on behalf of James, being between 5-15%. That reduced figure has been the agreed figure for the Deputyship costs during that period – or at least has been included within the figure of £1.3 million for past costs. As for the period since 31 May 2013 I propose to assume that the parties will accept whatever costs are assessed by the Cost Officer or the Costs Master of the Court of Protection.
No suggestion is made that Shoosmiths billed for work that was not carried out. Equally, although Mr Hugh Jones, the expert called by the Defendant, had at one stage raised the spectre that some of the work charged was outside the scope of Mrs Stephens' authority, that she had wrongly charged work as the litigation solicitor to Deputy work or had duplicated case management work, none of these suggestions was pursued in cross-examination of her and he could advance nothing in support of these suggestions when he gave evidence. However, the assertion is made on the Defendant's behalf that "Mrs Stephens has to date failed to properly manage the estate within the agreed confines of cost-effectiveness and proportionality" and that she showed a "lack of understanding of her duty as a Deputy". It is suggested that billing for all work done as a Deputy and leaving it to the Costs Master to reduce the bill to an appropriate level was wrong.
The basis of that suggestion is that the bill submitted to the Costs Master was prepared by simply translating into the bill the work done by each fee-earner at the hourly rate specified in the current Guideline Hourly Rates irrespective of whether the work done by that fee-earner was work that demanded the attention of that level of fee-earner. Stripping this suggestion down to its bare essentials means that there was a fair amount of work charged out at Grade A rates when the nature of the work probably only justified Grade D rates. The Grade A fee-earners were Mrs Stephens herself and another colleague at Shoosmiths. As I have indicated, although there was a large reduction in the bill submitted (unusually large, as Mrs Stephens herself acknowledged on the basis of her personal experience), the percentage reduction attributable to the Deputyship time spent being within the average bracket.
The origin of the suggestion I have identified in paragraph 436 above was, I think, Mr Jones who described the bill for the relevant in his report or witness statement period as "grossly excessive" although it emerged that he had not at that stage read the 21 Deputyship files that covered the relevant period. Whilst his view was, to some extent, vindicated by the ultimate view of the Costs Officer, I think it regrettable that such an opinion was advanced without having looked at the files in what, on any view, is a difficult case.
Turning briefly to the assessment of the bill, there is a procedure whereby, following a review by the Costs Officer of his or her first assessment of a bill, an oral hearing can be requested. I understand that it does not happen that frequently, but it is open to a Deputy to request such a hearing if it is felt that the reviewed assessment is still not satisfactory. Mrs Stephens said that she did not avail herself of that opportunity. Had she done so, it is, of course, possible that some of the significant reductions might have been modified if, as a result, the real difficulties in this case had been put forward to the Costs Officer or the Costs Master. (I think I should observe that the description of the background to the bill of costs submitted, which is given on the first page of the bill, will not necessarily have conveyed to the Costs Officer the difficulties experienced by Mrs Stephens with Mrs Adams during the relevant period, to which I will refer below, and some of the complexities of the situation.) At all events, whether that would have been the result of an oral hearing is unknown, but it is partly for that general reason that I reject the submission made by Mr Block and Miss Greaney that the annual costs thus assessed "are highly relevant to the future costs." They suggest that, split evenly, these are about £14,000 per annum, inclusive of disbursements and VAT, and that since there was during the relevant period at least one relocation to a rental property, the purchase of Yorke Hurst, the change from primary to secondary education, the existence of an outstanding SENDT appeal, the organisation of case manager, therapists, carers, aids and equipment, vehicle and so on, this should be seen as the appropriate figure by which to judge the cost of the reduced Deputyship activity in the following years.
What has emerged is that the reasons for the large bill were derived from a combination of factors. First, it is quite plain from Mrs Beesley's evidence that Mrs Adams has found decision-making extremely difficult. That is, I emphasise, no criticism of her: the difficulties that she has had to confront over the 12 years since James was born have been set out above (see paragraphs 21 - 32). It is simply a fact. I do not propose to recite all the matters mentioned by Mrs Beesley, but it has been very difficult to get Mrs Adams to commit to a number of matters and that has extended the time spent by Mrs Beesley, as case manager, on her tasks. Inevitably, that same general problem has, to some extent, affected the time spent by Mrs Stephens in her role as Deputy. She has spoken of the need from time to time to spend two or three hours with Mrs Adams (having travelled many miles from her office to Lincoln and back). She too gave examples of issues that were time-consuming in that role: for example, Mrs Adams delayed filling in a form for Disability Living Allowance so that James could have a vehicle under the Motability scheme, something Mrs Stephens had to unravel. Getting Mrs Adams to focus on the need to challenge the Statement of Educational Needs for James was also time-consuming. These are just two examples. The second broad explanation for the large bill derive from the change of firm for Mrs Stephens and the need to set in place in her new firm a deputyship structure that was more streamlined than before and that during the relevant period there was a need to employ a Grade A solicitor for quite a lot of the work that would ordinarily have been carried out by someone of lower grade, that need arising from maternity leave.
If there was to be any criticism of the bill generally, it might be that someone within Shoosmiths should have taken the time to identify those situations where a Grade A fee-earner's time (albeit incurred in fact) ought to have been charged out at a lower grade fee-earner's rate. However, the evidence was that this practice, though obviously desirable if possible and indeed carried out in some cases, is not the current universal practice. That being so, I cannot see how Mrs Stephens or her firm can be criticised for submitting the bill in the form that it was submitted and leaving the assessment to the Costs Officer.
What is much more important is how the future costs are to be assessed and it is to that issue that I will turn after expressing my conclusions on the impact that Mrs Adams will have on the future arrangements for James.
Mrs Adams in the future
I have already indicated my view that Mrs Adams will continue to play an important role in James life. At least until he is 18, and almost certainly for several (probably many) years thereafter, she will continue to live in the new accommodation that is to be provided for him subject, of course, to any change in her personal circumstances. Even if she moves out at some stage and even if (which I very much hope for her sake that she does) she obtains some employment in order to put her obvious skills to good use, she will continue worrying about and being concerned for James as any parent does for any child even when the child is an adult, but more particularly so having regard to his disabilities and vulnerabilities. She will undoubtedly remain very close to James even if she moves out of the property.
With the passage of time, I am sure her anxieties will subside and, on the balance of probabilities, her psychological difficulties will improve once the new accommodation and care regime have bedded down. However, I am sure that any case manager and Deputy will have to consider her views in the longer term because it would be unrealistic to assume that she and James will not communicate and discuss issues concerning his life and welfare. It is recognised on all sides that James has cognitive skills and that, within the limits of the systems available to him, will be able to communicate his views and those views will have to be taken into account. My conclusion, therefore, is that built into the assessment of the future Deputyship costs must be adequate provision for including Mrs Adams in the discussions, making some allowance for the fact that she may wish to discuss matters for longer than in other cases. Equally, of course, though one hopes it will not happen, there may come a time when she and James disagree about important matters. At that stage the role of the Deputy may increase significantly, both in discussing matters with James and with Mrs Adams. It is not, of course, beyond the realms of possibility that James' natural father may become more involved in the future.
I would add this observation in relation to Mrs Adams. I do not consider it realistic to suppose that the moment this case is finally over and the precise amount of the damages is settled Mrs Adams' mental state will start improving immediately. Over the passage of time, I am sure it will do so, but the immediate aftermath of the final resolution of this case will involve decisions about the property, additional carers and how James' education and welfare are to be dealt with in the next few, potentially difficult, teenage years. That will undoubtedly give rise to anxieties that will, at least to some extent, simply replace those associated with the litigation itself. This will, I am sure, present its challenges to all concerned.
That, therefore, is my general conclusion in relation to Mrs Adams and the impact that her position will have on the future costs of the Deputyship. I must now look at the specific items that remain in dispute.
The remaining issues
The remaining issues are reflected in the following table prepared by Mr Latimer-Sayer and agreed by Miss Greaney. I should explain that Year 1 is to reflect the first year after the final conclusion of these proceedings (and the other years find their place accordingly) and 'CoP', of course, stands for Court of Protection.
ISSUE CLAIMANT (£) DEFENDANT (£)
1. Year 1 CoP and Deputyship costs 45,399 12,293
Mr Jones allows an additional £2,000
2. Year 2 CoP and Deputyship costs 31,776 9,734
3. Annual Co P and Deputyship costs from Year 3 to age 18 26,688 7,175
4. Annual CoP and Deputyship costs from age 18 31,776 7,175
Mr Jones allows an additional £1,000 - £1,500
5. Allowance for contingencies[2] 30,000.00 22,500 to 30,000[3]
6. Additional applications to CoP within C's lifetime 4,044[4] x 2 applications n/a – included in the sum for contingencies
7. Additional work due to change of accommodation 17,911 to 21,727[5] n/a – included in the sum for contingencies
8. Annual tax return 480 to 960 282
9. Advice re building contracts 600 to 900 n/a – included in the sum for contingencies
10. Work regarding a will on behalf of C Non-statutory will – 8,684 to 9,099
Statutory will – 16,275 to 21,970 Non-statutory will – 8,684 to 9,099
Statutory will – 11,354 to 14,644
11. Work regarding cohabitation Without court approval – 4,300 to 6,800
With court approval – 6,037 to 8,537 n/a – included in the sum for contingencies
12. Prenuptial agreement Without court approval – 5,500 to 8,000
With court approval – 7,309 to 9,809 n/a – included in the sum for contingencies
13. Pension auto-enrolment 3,265 to 4,537 n/a – included in the sum for contingencies
The figures that need to be explained in particular are those in sections 1-4 of the table. Each is based upon the opinion of Mrs Bunting for James and Mr Jones for the Defendant. Mrs Bunting is a Chartered Legal Executive and Director of Deputyship services at Hyphen Law in Swindon. She has many years' experience in working as a Deputy and is frequently appointed to act as a professional Deputy by the Court of Protection. Mr Jones was for many years a partner with Pannone LLP specialising in Court of Protection and Deputyship matters. He is the founder of Hugh Jones Solicitors in Manchester which is described as "a firm of independent Court of Protection solicitors". It was founded in 2013. He and Mrs Bunting have similar years of experience in the field. The figures in each column are those put forward in their reports and confirmed during their joint discussion. During the hearing Mr Jones made the additions to his figures indicated in sections 1 and 4. I need not spell out the full extent of how these figures are arrived at, but the most significant component in each is the estimated number of hours of professional time suggested and the relevant grade of fee-earner. All figures are exclusive of VAT which would have to be added. All Mr Jones' figures include the cost of one annual visit. These figures can be tabulated as follows:
MRS BUNTING MR JONES
1. Grade A - 40 hours @ £217
Grade B - 23 hours @ £192
Grade C - 50 hours @ £161
Grade D - 75 hours @ £118
TOTAL - £30,000 + VAT
Professional fees for Deputy to visit James – 2 visits of 2 hours and travelling time of 6 hours and 52 minutes - £3,848.14 + VAT
+
Other disbursements[6] 1. Grade A - 18 hours @ £217
Blended Grade C/D[7]
- 36 hours @ £139.50
TOTAL - £9,000
+
£2,000
GRAND TOTAL:
£11,000
2. Grade A - 24 hours @ £217
Grade B - 15 hours @ £192
Grade C - 45 hours @ £161
Grade D - 62 hours @ £118
TOTAL - £22,000 + VAT
Professional fees for Deputy to visit James – 1 visits of 2 hours and travelling time of 6 hours and 52 minutes - £1,924.07 + VAT
+
Other disbursements 2. Grade A - 12 hours @ £217
Blended Grade C/D
- 30 hours @ £139.50
TOTAL - £7,000
3. Grade A - 20 hours @ £217
Grade B - 14 hours @ £192
Grade C - 30 hours @ £161
Grade D - 52 hours @ £118
TOTAL - £18,000 + VAT
Professional fees for Deputy to visit James – 1 visits of 2 hours and travelling time of 6 hours and 52 minutes - £1,924.07 + VAT
+
Other disbursements
3. Grade A - 6 hours @ £217
Blended Grade C/D
- 26 hours @ £139.50
TOTAL - £5,000
4. Grade A - 24 hours @ £217
Grade B - 15 hours @ £192
Grade C - 45 hours @ £161
Grade D - 57 hours @ £118
TOTAL - £22,000 + VAT
Professional fees for Deputy to visit James – 1 visits of 2 hours and travelling time of 6 hours and 52 minutes - £1,924.07 + VAT
+
Other disbursements
4. Grade A - 6 hours @ £217
Blended Grade C/D
- 26 hours @ £139.50
TOTAL - £5,000
+
£1,000 - £1,500
GRAND TOTAL:
£6,000-6,500
I will deal with each of these sections separately though some of the observations I make in relation to Year 1 are applicable to other future years too.
Section 1 – Year 1
Both experts are agreed that this will be an intensive year, but there is a significant disparity between their assessments even allowing for the increased provision made by Mr Jones during the trial. It will be appreciated that Mrs Bunting conducted a detailed analysis of what she perceived to be the requirements during that year and indeed expressed concerns, having heard some of the evidence in the case, that she had under-valued these costs to some extent. Mr Jones' approach was, as he accepted in cross-examination, much more impressionistic.
To some extent, it will always be necessary to have an impressionistic approach to an issue of this nature because of all the imponderables about what the Deputy will or may need to do in the future. Mrs Bunting said, and I accept, that there are no typical cases – "they vary hugely", she said. In that context Mr Jones' long-standing experience in this area is, of course, potentially valuable, though no more so than that of Mrs Bunting who, as I have indicated, also has considerable experience in the area. However, whilst there is much to be said for some standardisation of approach in these matters, unless a fixed fee structure is put in place for Deputyship costs this is one area where the "one cap fits all" approach is not going to provide the solution: each case will be fact-specific. In so far as it is ever appropriate to speak of a 'typical cerebral palsy' case involving a child, those cases without major management issues will involve a child who does not have any significantly retained intellect, perhaps very limited mobility, and the Deputy is able to deal directly with the his or her parents, both of whom are themselves capable of dealing with the issues involved. Often there are two parents to share the burden of decision-making. This case is plainly very different from such a case for very many reasons.
Furthermore, the likely management costs involved cannot, certainly in this case, be determined exclusively by the kind of "factory figures" that the economies of scale that some firms can bring to the process yield, though such figures may be helpful in keeping figures advanced by others in perspective.
This is also a reason for not being over-influenced by what has been agreed or awarded in other cases. Mr Block and Miss Greaney reminded me of what had been agreed in Farrugia (a protected party by his mother and litigation friend, Lorraine Farrugia) v Burtenshaw and ors [2014] EWHC 1036 (QB) and in Whiten (see above). In respect of the latter case they say that the on-going annual cost agreed was less than one-third of the on-going annual cost sought in this case and that the sums awarded for the statutory will and replacement of a Deputy are well below the figures sought on behalf of James. There was no claim in Whiten, they say, for the "numerous additional costs sought in this case." I will, of course, have regard to this in a very broad way, but I repeat that what may have been agreed or decided in one case can have little bearing on what may be awarded in another case. I would observe that in Whiten, the claimant had extremely limited mobility and the assessment was that when he reached adulthood the maximum level of cognitive functioning he would achieve would be equivalent to a child of 4-5 years [13] and Swift J accepted evidence that "the claimant's reasoning and functioning level is likely to remain well below the level of a 4-5 year old, so that, while he may apparently be able to perform a task at that age level, he will not have the underlying skills of reasoning and understanding possessed by an undamaged child functioning at that age level." In that case both parents of the claimant were university graduates.
Just as I do not find much assistance by reference to other cases, I would not expect to see what I decide in this case to be cited in support of or against a claim for Deputyship costs in another case. At all events, on any view, James' situation is very different from that of the claimant in Whiten.
For reasons already foreshadowed I have not the slightest doubt that the first year after the final resolution of this case will be one of intense activity. The accommodation aspects will predominate, but there will be care team issues as well. That intense activity will continue into at least the second year, although not quite at the same level. It seems to me to be important not to underestimate the level of Deputyship activity during these periods. Given that Mrs Stephens has played a very significant role in the family's affairs over the last few years, I do not think it at all unreasonable that she should continue to do so at a high level of involvement, certainly in the next few years. Some continuity is important and her involvement seems to me to be important in James' best interests bearing in mind also that his best interests will be served by enabling Mrs Adams to come to terms with and accept what is happening.
I am prepared to accept that £30,000 is a reasonable estimate for the professional costs during that first year and that the overall hours attributed to the work by Mrs Bunting are a fair estimate. Given that Mrs Stephens will be involved at a high level I would have combined the hours of the Grade A and Grade B fee-earners and apply the Grade A rate to those hours (which totals £13,671) and then apply the blended rate of £139.50 for the Grade C and Grade D fee-earners to the combined hours advanced by Mrs Bunting for them. The grand total on this basis is about £31,000 which I would round down to £30,000 (to take account of the fact that some of the Grade A work ought to be charged at Grade B rates) to which VAT of £6000 must be added. I would allow for two visits during the year at £2000 per visit (inclusive of travelling expenses and VAT) and I will allow a round-figure sum for other disbursements of £3500 (also inclusive of VAT where relevant), thus yielding £43,500 in total for the first year.
Section 2 – Year 2
I am prepared to allow £22,000 for professional costs during the second year after the final resolution of this case (based upon Mrs Bunting's estimate of the hours likely to be involved), again by rounding down slightly the effect of the same kind of calculation and for the same reasons as mentioned under section 1. To that must be added VAT of £4,400. I will allow for one visit during the year at £2,000 (inclusive of travelling expenses and VAT) and a round-figure sum for other disbursements of £2,500 (inclusive of VAT where relevant), thus yielding £30,900 in total for the second year.
Section 3 – Year 3 to age 18
I would anticipate that by the end of the first two years after the conclusion of this case the new accommodation should be complete and the care regime properly in place, with a good deal of daily input from the case manager and team leader. I do not think that the role of the principal Deputy will ever cease in this case, but I believe that by this stage Mrs Stephens' regular role will have diminished from what it will have been in the first two years. I consider it entirely reasonable to continue to allow one annual visit by the Deputy to see James – it is important that James meets his Deputy in person at least once a year. With the developing means of personal communication via the Internet they may well be able, where necessary, to communicate electronically (perhaps by Skype or something similar) at times, but whatever means of communication is adopted it will, of necessity, be time-consuming: James will take some time to communicate his views and patience and understanding will be required from the Deputy. This is not a case where there are many opportunities for shortcuts. Nonetheless, in the years ahead a fair measure of the Deputyship work will be capable of being carried out by those at a lesser charge out rate than Mrs Stephens' charge out rate.
Those latter observations are, of course, applicable to the longer term as well as for the period after the first two years post-trial up until the age of 18. Focusing on this period, Mrs Bunting has suggested the hours set out in section 3. In the expectation that all issues in this case will have been resolved by the time that James is, say, 12½ years of age (in June 2015), he will be 14½ by the time he is properly installed in his new accommodation with the full care regime. There will, therefore, be 3½ years until he is 18. It does seem to me that, as ever, the Deputyship requirements will vary from year to year, but generally the level of activity will be at a more administrative level in this period than at the level of important decision-making. In my view, Mrs Bunting's suggestions need some modification for that reason. For my part, I would have said that 20 hours of Grade A fee-earner's time would be sufficient and a total of 70 hours of Grades C and D fee-earners' time (at the blended rate) would be adequate. The total, slightly rounded down, would be £14,000, to which VAT of £2,800 must be added. I would continue to provide for one annual visit by Mrs Stephens in the sum of £2,000 (inclusive of travelling expenses and VAT). I would allow for general disbursements at £2,000 (inclusive of VAT where relevant). This yields £20,800 per annum for this period.
Section 4 – from 18 for life
Mrs Bunting is suggesting something over £31,500 in total per annum for this period and the amount attributable to Deputyship time is £22,000 plus VAT (with one annual visit also provided for). The overall figure, which includes VAT and disbursements, is, she confirmed, at a level of management costs being charged for Deputyship work for clients who have a serious level of brain damage. Mr Block suggested to her that the figure is considerably out of line with figures granted in other cases, being at least double, he suggested. (If he was referring to Whiten, I have identified the differences between that case and this above: see paragraph 453). Mrs Bunting said that she could not comment on other cases, but said that, in her experience, the management costs are frequently undervalued with a consequent impact on other heads of damage.
I am, of course, dealing with a specific case, not with the general position. The work of a Deputy is very important, but these figures, on an impressionistic basis, do seem very high. I would merely observe that the use of the GHR for the charge out rates, whilst plainly established practice for many years, does represent a use for the GHR for which, at least in their origin, they were not designed. They were put in place to assist the courts in deciding on the recoverable costs in summary assessments made in the context of contested civil litigation (see Report to the Master of the Rolls of the Costs Committee of the Civil Justice Council, May 2014). I understand from Mrs Bunting that some kind of review is currently underway and that cost-budgeting is being actively considered. Doubtless this is part of the general impetus that exists to reduce costs associated with litigation and allied matters.
I consider that I should bear this in mind when looking broadly at the Deputyship costs for the future in this case. It is, however, important to recall that this will potentially be a challenging case for the Deputy because of the combination of James' disabilities, the overall family dynamics and the geography of where James lives. As it seems to me, the best structure in the circumstances is to provide for an annual figure that is relatively conservatively assessed, but to provide a somewhat more generous contingency figure than might otherwise be the case to cater for the occasional "spike" in Deputyship time that might happen from time to time. The basis upon which the £30,000 contingency figure is advanced on James' behalf is set out in footnote 1 above. Mrs Bunting identified the following as possible moments of "crisis" when additional Deputy time might be required: illness of close family members, bereavement, changes in the family dynamics such as Mrs Adams' cohabitation or remarriage and the introduction of or change in a vocational activity. The possibility of James engaging in a relationship is another. I will return to these matters having dealt with the basic annual cost.
Having considered that the appropriate figure for Deputyship time in the immediate pre-18 period was £14,000 per annum (see paragraph 459 above), it seems to me that the slight increase that both experts consider necessary in adulthood would be catered for by allowing £16,000 per annum. To this must be added VAT of £3,200 and again provision should be made for one annual visit by Mrs Stephens in the sum of £2,000 (inclusive of travelling expenses and VAT). Again I would allow for general disbursements at £2,000 (inclusive of VAT where relevant). This yields an annual figure of £23,200.
Painting with a broad brush, it seems to me that it would be appropriate to make provision for a contingency figure of £40,000, rather than the £30,000 suggested on behalf of James. That contingency figure, however, is to be held against unknown contingencies of the kind identified above.
I must now deal with certain matters which have been identified as potential known contingencies. I will deal with each by reference to each of the other sections in the table set out in paragraph 447 above.
Section 6
The assessed amount of each potential application is agreed, but Mr Jones felt that this should be included within the general contingency figure. It could, in my view, be included in such a figure, but it has not been included in my approach to that figure. Accordingly, since only two applications are sought to be provided for, I will allow the sum of £8,000 on this account.
Section 7
Since I do not see any real prospect of James moving accommodation once he has moved into the new property, I cannot see the need to make the provision sought under section 7.
Section 8
An annual tax return will be required. James would have been obliged to submit an annual tax return each year had he not been disabled, but it would not necessarily have been as complicated as that which will have to be returned in the light of the financial position obtaining because of his disability and, accordingly, in principle I can see that an allowance should be made. I would have thought that an allowance of £500 per annum would suffice for the costs of this. For the avoidance of doubt, that includes VAT.
Section 9
James will have the benefit of architects' advice in relation to the new property into which he will move. I cannot see the need for this provision.
Section 10
It seems to be accepted that, despite his cognitive capacity, James will almost certainly not have the capacity to make a will. Provision should therefore be made for the making of a statutory will. I think it reasonable to accept Mrs Bunting's view that provision for two such wills in James' lifetime. Mrs Bunting and Mr Jones agreed in the joint statement that the cost of one statutory will fell within the range of £11,354 to £14,644, the mid-point of which is £13,000. Accordingly, I allow for two such wills at that figure.
Sections 11 and 12
Consistent with my view on the issue of whether James will be likely to form a relationship such that he will cohabit or marry (see paragraph 191), I do not consider that an allowance should be made for these two items. If I am wrong in my view for the future, this would have to be seen as an unexpected contingency embraced within the £40,000 I have provided for in paragraph 464 above.
Section 13
Mrs Bunting has drawn attention to the forthcoming statutory obligation of an employer to make pension provision for employees and to the potential impact of this upon a Deputy who is employing members of a care team. The care team for James is already large in number and will be larger in due course. It is uncertain precisely how these statutory changes will impact, but Mrs Bunting suggests that it would be appropriate to make some provision for the Deputy to be able to obtain advice about it and to maintain such scheme as may be required. I agree that it would not be right to treat the whole potential cost of this as being embraced within a contingency sum, but since the true cost is uncertain I will have to take a conservative approach and adopt modest figures. If there is any shortfall, it will have to be swept up under the contingency sum.
As I understand the way the claim is advanced, it is suggested that there could be Deputyship costs of £1,500-2,000 plus VAT for the setup of the scheme and then £1,000-1,500 per annum management costs (plus associated VAT and expenses) thereafter. Given the uncertainty, I do not consider I can award the sums on that basis. However, I think it right to provide for £1,000 (inclusive of VAT) in the initial year in which the new statutory obligations arise and £750 per annum (inclusive of VAT) for each year thereafter to cater for the continuing obligations that arise. The parties will have to agree the year in which the initial obligation will arise and to calculate the award accordingly.
Multi-disciplinary team meetings (MDT)
The issues here are whether 1 or 2 hours should be allowed for the agreed need for MDT meetings, how frequently they should take place, whether these meetings should just occur until James is 18 or for life and how they should be costed.
In the first place, I would have thought it sensible to provide for meetings that last two hours in the initial stages. There are complexities involved which, of course, may resolve with the passage of time, but it is important to have time to iron out any differences of view in the early stages or to ensure that everyone is working towards an accepted common objective. I accept that the physiotherapist, who is an integral part of the whole process, should attend the whole meeting and should be entitled to charge accordingly. Mr Johnson considered that there should be monthly meetings in the first year after the final resolution of the trial. Mr Baldwin, who was not called to give evidence, thought that 4 such meetings should be sufficient.
Whilst it might be said that Mr Johnson's view is unchallenged by evidence, it is challenged on behalf of the Defendant. I can see the sense of having several meetings early on and I would allow for one every two months for the first six months of Year 1 and then twice more in that year. After that until the age of 18 I would have thought that 4 meetings per year would suffice.
Thereafter, until the age of 25, I would have thought 3 meetings per year would be sufficient and that thereafter a case for 2 such meetings a year could arguably be made, but the claim has been limited to one such meeting per year and I should, therefore, accept that approach. I do think it important that these meetings continue throughout James' life and I do not think that they should be rushed. Indeed, since they are likely to take part in his home as time goes on, it is possible that he will be consulted by the professionals present. Given his communication difficulties, this will prolong the meeting. For that reason I am of the view that 2 hours should always be set aside albeit for reasons that are different from those that dictate a 2-hour meeting in the initial years. Taking a different view would mean that James' lifetime disabilities are being given less attention than they should be.
The remaining issue is how these meetings should be costed for future purposes. As advanced on James' behalf, they would cost over £3,000 on each occasion. The claim is advanced on the basis that each of the following would charge for their time to attend: the neuropsychologist, the physiotherapist, the occupational therapist, the AAC specialist, the speech and language therapy specialist, the case manager, Ms Marion Stanton, the team leader and three support workers.
I do not see any basis for the case manager, the team leader and the three support workers to be paid outside their normal working time to attend such meetings. The meetings can presumably be arranged around their working patterns. Furthermore, the AAC specialists agreed that the attendance of the specialist AAC adviser at such meetings is incorporated within the figure allowed for that expert. I think it is important that Ms Stanton attends these meetings over the years until James has finished his full-time education (which I imagine will be at the age of 18 years or thereabouts), but I think it would be difficult to justify her paid attendance thereafter.
I trust these observations will enable an appropriate annual figure to be agreed.
Conclusion
I believe I have now dealt with all disputed matters so far as possible.
I will invite James' legal team to take financial advice on the implications and both parties to endeavour to agree a formula for the final resolution of the claim in the light of these conclusions. In default of agreement I will have to consider the issues further either on the basis of written submissions or by way of a further oral hearing.
I should like to express my appreciation to all Counsel and to their Instructing Solicitors for their assistance and to those responsible for the provision of the daily transcripts and the Livenote facility.
APPENDIX
LIST OF AGREEMENTS
GENERAL DAMAGES
Agreed at £290,000.
INTEREST ON GENERAL DAMAGES
Agreed at £12,151.
PAST EXPENSES AND LOSSES
Agreed at £1,300,000.
INTEREST ON PAST EXPENSES AND LOSSES
Agreed at £252,026.26.
FUTURE CARE AND CASE MANAGEMENT
It is common ground that future care and case management should be paid by way of an annual periodical payment and that this should be split into two care periods: (i) from 12 to age 19; and (ii) from age 19 for life. The agreements can be summarised in the following table.
FROM AGE 12 TO 19 FROM AGE 19
Hourly rates are agreed at £10 per hour weekdays and £11 per hour weekends / holidays.
Day care during term time is agreed at 7 hours per weekday x 2 carers.
Day care on the weekends during term time and throughout school holidays is agreed at 14 hours per day x 2 carers.
Night care is agreed at 10 hours per night (paid for 6), provided by 2 sleep-in carers.
It is agreed that there should be an allowance for waking night care (although the extent of the allowance is disputed).
It is agreed that there should be no deduction for "ordinary parental care" in any event.
Case management is agreed at £21,000 pa.
It is agreed that there will be 14 fulltime employed carers for the purposes of calculating credit for carer thresholds in respect of ERNIC and carers' pension contributions.
The ERNIC threshold is agreed at £7,956 per carer.
The pension threshold is agreed at £5,772 per carer.
Annual insurance is agreed at £135 per annum.
Hourly rates are agreed at £10 per hour weekdays and £11 per hour weekends / holidays.
Day care is agreed at 14 hours per day x 2 carers (full double-up).
Night care is agreed at 10 hours per night (paid for 6), provided by 2 sleep-in carers.
It is agreed that there should be an allowance for waking night care (although the extent of the allowance is disputed).
It is agreed that there should be no deduction for "ordinary parental care" in any event.
Case management is agreed at £21,000 pa.
It is agreed that there will be 14 fulltime employed carers for the purposes of calculating credit for carer thresholds in respect of ERNIC and carers' pension contributions.
The ERNIC threshold is agreed at £7,956 per carer.
The pension threshold is agreed at £5,772 per carer.
Annual insurance is agreed at £135 per annum.
Annual training costs are agreed at £2,000 per annum.
Food and other expenses are agreed at £4,420 per annum.
FUTURE EDUCATION
Agreed at £150,000.
FUTURE MEDICAL TREATMENT AND THERAPIES
(1) Orthopaedic Surgery
Agreed at £11,922.
(2) Counselling and Psychological Treatment
Agreed at £85,000.
(3) Physiotherapy
The following items are agreed:
(i) Annual maintenance physiotherapy from age 19 to 21 – 16 sessions, £1,920 per annum.
(ii) Annual maintenance physiotherapy from age 21 to 45 – 20 sessions, £2,400 per annum.
(iii) Additional physiotherapy after botox – 8 sessions, £960.
(iv) Additional physiotherapy required after orthopaedic surgery – 15 sessions, £1,800.
(v) Wide neuroplinth - £1,000, with one replacement.
(vi) Annual maintenance of the neuroplinth - £70 per annum.
(vii) Walking aid - £2,000, with two replacements.
(viii) Leckey standing frame - £2,300, with one replacement.
(ix) Duo tandem tricycle - £5,500, one-off provision.
(x) Physiotherapy balls, wedges, I-joy mechanical horse, buoyancy aids etc - £1,000, one-off provision.
(4) AAC
The following items are agreed subject to court's finding as regards the appropriate rate per session and the James' likely educational path:
(i) AAC input from age 12 to 13 – 125 sessions.
(ii) AAC input required at mainstream school from age 16 to 19 – 72 sessions per annum.
(iii) AAC input required at local college further education (Year 1) – 115 sessions per annum.
(iv) AAC input at specialist residential college – agreed at 24 sessions per annum.
(v) AAC input after end of education – 15 sessions per annum.
(vi) AAC input after age 25 – 15 sessions per annum.
(vii) Training agreed save for the rolling programme of training which remains disputed.
(5) Speech & Language Therapy
SLT is agreed at £90 per hour. The following are agreed subject to the court's finding as regards the appropriate rate per session including travel expenses:
(i) Years 1 and 2 – 120 sessions of SLT per annum.
(ii) Years 3 to 19 – 80 sessions of SLT per annum.
(iii) From 19 to 25 – 30 sessions of SLT per annum (if at non-residential college).
(iv) From age 25 – 30 sessions of SLT per annum.
(6) Occupational Therapy
The following are agreed:
(i) OT from 12 to 19 - £2,820 per annum.
(ii) OT from age 19 - £780 per annum.
(7) Seating Reviews
Agreed at £750 per annum.
FUTURE AIDS AND EQUIPMENT
(1) The Chunc manual wheelchair (and then adult manual wheelchair) - £3,000, replacement every 5 years.
(2) Annual maintenance of the manual wheelchair - £100 per annum.
(3) Replacement tyres of the manual wheelchair - £100 per annum.
(4) Wheelchair insurance for the manual wheelchair - £25 per annum.
(5) Portable ramps - £135, replacement every 10 years.
(6) Replacement batteries for the power wheelchair - £180 per annum.
(7) Insurance for the power chair - £69.50 per annum
(8) Recharging for the power wheelchair - £91.25 per annum
(9) Portable hoist - £2,337, replacement every 10 years.
(10) Annual maintenance for portable hoist - £200 per annum.
(11) Lecky bath seat - £556 one-off.
(12) Burnett body supports - £250, replacement every 3 years.
(13) Presalit changing table - £2,700, replacement every 10 years.
(14) Maintenance costs of changing table – £100 per annum.
(15) Boris toilet seat - £1,828, replacement every 5 years.
(16) Careflex chair – £1,500, replacement every 5 years.
(17) Spare covers for Careflex chair - £250, replacement every 5 years.
(18) P-Pod chair - £1,400, replacement every 5 years.
(19) Maintenance of bed - £100 per annum.
(20) Soft play equipment - £3,000, replacement every 10 years.
(21) Batteries for spare power chair - £180 per annum.
(22) Insurance for spare power chair - £69.50 per annum.
(23) Football wheelchair - £9,500, replacement every 6 years until age 30.
(24) Seating for football wheelchair - £3,400, replacement every 6 years until age 30.
(25) Insurance for football wheelchair - £69.50 per annum.
FUTURE ORTHOTICS
Agreed at £72,153.
FUTURE INFORMATION TECHNOLOGY
The following items are agreed:
(1) Main eye gaze system - £12,699, replacement every 3 years.
(2) Mounting system for desktop use - £250, replacement every 3 years
(3) Mounting system for floor standing use - £900, replacement every 3 years
(4) Mounting system for wheelchair use - £1,850, replacement every 3 years
(5) I-Pad with software, mounting and software - £750, replacement every 3 years
(6) Laptop PC for carers - £750, replacement every 3 years
(7) Additional back-up disk, switchbox, cabling etc - £500, replacement every 3 years
(8) Text capture system - £2,370, replacement every 3 years
(9) Adaptations of bed controls - £2,000, replacement every 3 years
(10) Adaptations of toys and electrical devices - £450, replacement every 3 years
(11) Mainstream software - £300, replacement every 3 years
(12) Technical support - £500 per annum
(13) Insurance of AT system - £250 per annum
(14) Internal door openers - £1,500 each x 10, replacement every 10 years
(15) Window openers - £675 each x 10, replacement every 10 years
(16) Curtain openers - £700 each x 10, replacement every 10 years
(17) Power socket controllers - £250 each x 11, replacement every 10 years
(18) Lighting controls - £120 each x 10, replacement every 10 years
(19) Annual maintenance of environmental controls - £1,250 per annum
(20) Discount for IT equipment which would have been purchased in any event - £500, every 5 years.
FUTURE ADDITIONAL HOLIDAY COSTS
It is agreed that:
(1) 4 carers will be required to accompany James on holiday now and as an adult.
(2) Additional European holidays will cost £11,000 per holiday.
(3) Additional long-haul holidays will cost £14,000 per holiday.
FUTURE MISCELLANEOUS
The following items are agreed:
(1) Gardening, decorating and DIY - £1,500 per annum (but see paragraph ?? above).
(2) Allowance for office equipment and stationery for carers - £100 per annum.
(3) Extra costs of Blue Badge breakdown recovery compared to standard breakdown recovery - £60.75 per annum.
(4) Sailing membership for £600 pa to age 25 covering the cost of 4 adult memberships to enable James' carers to take him sailing.
(5) Cost of the removal of bats prior to the demolition of Yorke Hurst demolition - £4,200.
Note 1 The starting point is 15 + 37 (see paragraph 89) – thus to age 52. Normal UK life expectancy for a 12-year old boy is a further 77.6 years – thus to age 89.6 (page 22 of Facts & Figures 2014/2015). This is 13.2 more years than the US life expectancy which is to age 76.4 (15 + 61.4 from the 2014 Strauss data: paragraph 48 above). Using Dr Rosenbloom’s methodology of adding 3 to reflect the fact that the Claimant is aged 12 as at the date of trial, the Claimant is entitled to 40 (37 + 3) / 64.4 (61.4 + 3) i.e. 62.11% of the difference of 13.2 years = 8.2. The exact life expectancy calculation is therefore 52 + 8.2 + 3 = 63.2.
[Back]
Note 2 Mrs Bunting assessed the total Deputyship cost of dealing with an unexpected crisis at £7,202 on each occasion and allowing for 5 or 6 unknown events and discounting for accelerated receipt, the sum of £30,000 is claimed. [Back]
Note 3 Mr Jones suggested £22,500 if the life expectancy was to age 50 or £30,000 if to age 70. [Back]
Note 4 This figure is agreed as a figure in respect of each application but Mr Jones is of the opinion that any such applications are already included in the sum allowed for contingencies. [Back]
Note 5 This claim has been discounted by 50% for contingencies and by a discount factor of 0.7254 (13 years) for accelerated receipt. [Back]
Note 6 These include the Office of Public Guardian supervision fee of £320, Security bond provision (of £600), the SCCO Detailed Assessment fee of £220 and the Cost Draftsman’s fees of 6% of the professional fees claimed plus VAT on the draftsman’s fees. [Back]
Note 7 A concept introduced by Master Peter Haworth. [Back] |
HHJ Collender QC :
INTRODUCTION
The Claimant, Mr Spencer claims damages for personal injuries and consequential loss arising from the alleged negligence of the staff of the Hillingdon Hospital following a surgical operation performed upon him at the hospital on 1 February 2010.
The Defendant is the National Health Service Trust responsible for the medical and surgical services at the hospital. It is agreed that the Defendant is vicariously liable for any negligent care given to Mr Spencer at the hospital.
Breach of duty and causation are disputed. Quantum of damages, subject to liability, is agreed at the sum of £17,500 subject to the court's determination of the issue of contributory negligence raised by the Defendant against Mr Spencer.
THE FACTS
I will set out the facts that are not, or on the evidence before me cannot sensibly be disputed.
Mr Spencer was born on 27 November 1960, so was aged 49 at the time of the operation and is now aged 54. He works as a property services manager.
In late 2009, Mr Spencer began to suffer symptoms of pain in his right groin. His GP suspected a right inguinal hernia and Mr Spencer was referred to the hospital where, on 19 January 2010 he was seen for a pre-operative assessment in the surgical outpatients department by Mr S Chaudhry, a locum General surgeon. Mr Chaudhry diagnosed that as well as suffering from a hernia on the right side, Mr Spencer was also suffering from a hernia on the left side. It was proposed that bilateral extraperitoneal repairs be performed upon both hernias by the use of a laparoscope so as to avoid an open wound operation. Mr Spencer was told at the hospital that in its course, the operation might have to be converted from a laparoscopic to an open procedure. Before he signed a consent form in respect of the operation, Mr Spencer sought reassurance from Mr Chaudhry that in the case of such a conversion to an open procedure, priority would be given to repairing the hernia on the right side. Following these discussions, Mr Spencer signed a form of consent for the operation which warned him of the risks of:
'Bleeding, infection, scar, recurrence of problem, conversion to open procedure, injury to bowel'.
No mention was made in the course of Mr Spencer's discussions with any staff at the hospital on 19 January 2010 that he might suffer a deep vein thrombosis or pulmonary embolism as a consequence of the proposed surgery and the immobility that it would cause. He was not given any information as to the likely signs and symptoms that he might suffer in the event of the development of such conditions.
Before the operation was performed on 1 February 2010, Mr Spencer had pneumatic boots placed on his legs. These are a device that is intended to improve a patient's blood circulation so as to reduce the risk of a patient suffering from deep vein thrombosis.
The operation was begun laparoscopically but, in its course, the procedure was converted to an open procedure because the balloon procedure carried out extra-peritoneally caused some bleeding that obscured the surgeon's view. A right inguinal repair was performed but no repair was attempted on the left side. The operation took some 53 minutes.
Mr Spencer's immediate post operation recovery took the expected course so that he was discharged from the hospital on the day of the operation. Mr Spencer was provided in the course of his treatment at the hospital with a pamphlet entitled:
'Hernia Repair – Information for Patients' which stated:
"If you have any problems following your discharge then please telephone the Hillingdon Hospital switchboard … and ask to speak to the Senior House Officer".
What Mr Spencer was not told was that he might suffer a deep vein thrombosis or pulmonary embolism as a consequence of the surgery. He was not given any information as to the likely signs and symptoms that he might suffer in the event of the development of such conditions.
On 2 February 2010, Mrs Spencer rang the hospital to report that the Claimant was 'feeling unwell'. She was told to ring the Claimant's GP or the hospital Accident and Emergency Department 'for any further problems'. There is no record that Mr Spencer complained of problems with his calves at that time and entries in Mr Spencer's GP records for 2 February and 8 February 2010 of telephone calls from Mr Spencer or his wife do not mention any problems involving Mr Spencer's calves.
On 8 and 16 February 2010, Mr Spencer saw the practice nurse at his GP's surgery for his dressings to be changed. He was seen again at the hospital on 25 March 2010 by Mr Chaudhry's surgical Senior House Officer and on 19 April 2010 by Mr Ariyarathenam, a surgeon, for further assessments in respect of his left inguinal hernia. As a result of these visits it was decided that he need not have a further repair operation performed.
There is a GP record of a telephone call made on 23 April 2010 from or on Mr Spencer's behalf that records:
"Had hernia op feb 1st – feels heart beat and sob had calf pain 2 weeks ago"
Later that day Mr Spencer was admitted to the hospital via the Accident and Emergency department suffering from severe shortness of breath. It was discovered that he was suffering from bilateral pulmonary emboli originating from the main right and left pulmonary arteries. He was treated appropriately with blood thinning medication and his condition improved so that he was able to be discharged home with medication on 27 April 2010.
I need not further describe the history in respect of the treatment of Mr Spencer as the potential damages in this case have been agreed.
THE RESPECTIVE CASES OF THE PARTIES
There are some minor evidential issues. There is some uncertainty, if not dispute as to the advice given to Mr Spencer by the nursing staff on discharge and in particular by the nurse who discharged him, Nurse Woods. He accepts that he was given advice from nursing staff in respect of pain relief, and for the use of laxatives to avoid straining. He does not recall that he was advised by Nurse Woods, as is asserted by the Defendant in the Defence, that he should see his GP or go back to the hospital Accident and Emergency Department if he had any problems post operatively. In any event, as already noted, he did receive such advice by means of the pamphlet to which reference has already been made.
It was not accepted by the Defendant in the course of the trial that Mr Spencer suffered the symptoms he described in his legs shortly after his discharge home.
There is no evidential issue but that Mr Spencer was not advised by staff of the hospital at any time before his discharge as to any risk that he ran of developing deep vein thrombosis or pulmonary embolism after the operation and as to the signs and symptoms that may attend the development of that condition.
The principal issue I have to determine in this case is as to Mr Spencer's pleaded case that before his discharge he should have been provided with verbal and written information as to:
(a) The signs and symptoms of deep vein thrombosis and pulmonary embolism including:
(i) Pain and swelling in his leg;
(ii) Hotness or discolouration of the skin on his leg, other than bruising around the operation site;
(iii) Numb or tingling feet;
(iv) The appearance of larger than normal or more noticeable veins near the surface of his legs;
(v) Shortness of breath;
(vi) Pain in his chest, back or ribs which gets worse when breathing in deeply; and/or
(vii) Coughing up blood; and
(b) The importance of seeking medical help and who to contact if deep vein thrombosis, pulmonary embolism or another adverse event was suspected.
Causation has been substantially agreed. The Defendant accepts that if Mr Spencer had gone to see his GP in February 2010, he would have been referred to hospital and received treatment that would have prevented the two acute episodes of pulmonary embolism that he suffered. Mr Spencer has been put to proof as to the nature of his post-operative symptoms and whether he would earlier have sought medical advice, if he had been advised as he asserts he should have been.
Finally, as already noted, the Defendant seeks to reduce any award of damages the court might make by reason of what they allege to have been contributory negligence on his part.
THE LAW
As a preliminary and relevant to a matter in this case namely, the absence of certain potential witnesses, I would note the authority of Wisniewski v Central Manchester Health Authority [1998] (CA) PIQR p.324. In that case Brooke LJ reviewed the case law on the circumstances in which the court may draw adverse inferences about the non-attendance of witnesses at trial and said at p.14:
'From this line of authority I derive the following principles in the context of the present case:
(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.
(2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.
(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.
(4) If the reason for the witness's absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.'
The test to be applied in respect of breach of duty in respect of clinical negligence is well known. It was set out in a jury direction by McNair J in Bolam v Friern Hospital Management Committee [1957] 1 WLR 583 as follows:
"I myself would prefer to put it this way, that [a medical practitioner] is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of medical men skilled in that particular art. ... Putting it the other way round, a man is not negligent, if he is acting in accordance with such a practice, merely because there is a body of opinion who would take a contrary view."
In his speech in Bolitho v City and Hackney Health Authority [1998] A C 232 Lord Browne-Wilkinson commented on the Bolam test as follows at 241F-242B:
"in my view, the court is not bound to hold that a defendant doctor escapes liability for negligent treatment or diagnosis just because he leads evidence from a number of medical experts who are genuinely of opinion that the defendant's treatment or diagnosis accorded with sound medical practice. In the Bolam case itself, McNair J. stated [1957] 1 W.L.R. 583, 587, that the defendant had to have acted in accordance with the practice accepted as proper by a "responsible body of medical men." Later, at p. 588, he referred to "a standard of practice recognised as proper by a competent reasonable body of opinion." Again, in the passage which I have cited from Maynard's case, Lord Scarman refers to a "respectable" body of professional opinion. The use of these adjectives -responsible, reasonable and respectable-all show that the court has to be satisfied that the exponents of the body of opinion relied upon can demonstrate that such opinion has a logical basis. In particular in cases involving, as they so often do, the weighing of risks against benefits, the judge before accepting a body of opinion as being responsible, reasonable or respectable, will need to be satisfied that, in forming their views, the experts have directed their minds to the question of comparative risks and benefits and have reached a defensible conclusion on the matter."
At page 243 A-D after reference to authorities, he said:
"These decisions demonstrate that in cases of diagnosis and treatment there are cases where, despite a body of professional opinion sanctioning the defendant's conduct, the defendant can properly be held liable for negligence (I am not here considering questions of disclosure of risk). In my judgment that is because, in some cases, it cannot be demonstrated to the judge's satisfaction that the body of opinion relied upon is reasonable or responsible. In the vast majority of cases the fact that distinguished experts in the field are of a particular opinion will demonstrate the reasonableness of that opinion. In particular, where there are questions of assessment of the relative risks and benefits of adopting a particular medical practice, a reasonable view necessarily presupposes that the relative risks and benefits have been weighed by the experts in forming their opinions. But if, in a rare case, it can be demonstrated that the professional opinion is not capable of withstanding logical analysis, the judge is entitled to hold that the body of opinion is not reasonable or responsible.
I emphasise that in my view it will very seldom be right for a judge to reach the conclusion that views genuinely held by a competent medical expert are unreasonable. The assessment of medical risks and benefits is a matter of clinical judgment which a judge would not normally be able to make without expert evidence. As the quotation from Lord Scarman makes clear, it would be wrong to allow such assessment to deteriorate into seeking to persuade the judge to prefer one of two views both of which are capable of being logically supported. It is only where a judge can be satisfied that the body of expert opinion cannot be logically supported at all that such opinion will not provide the bench mark by reference to which the defendant's conduct falls to be assessed."
An important recent decision upon the nature of the duty of care owed by members of the medical profession to patients in relation to advice and information given to patients before their consent is sought to the performance of an operation is the unanimous decision of the Supreme Court in Montgomery v Lanarkshire Health Board [2015] UKSC 11.
The judgment of the Court was given by Lords Kerr and Reed with which the five other Justices sitting on the appeal agreed. In the judgment the decision of the Court of Appeal in Pearce v United Bristol Healthcare NHS Trust [1999] PIQR P53 and the dissenting opinion of Lord Scarman in Sidaway v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital [1985] AC 871, were approved.
The Court said at para. 86:
'... because the extent to which a doctor may be inclined to discuss risks with a patient is not determined by medical learning or experience, the application of the Bolam test to this question is liable to result in the sanctioning of differences in practice which are attributable not to divergent schools of thought in medical science, but merely to divergent attitudes among doctors as to the degree of respect owed to their patients.'
The principles to be followed in determining the duty of care to be applied in considering whether or not a medical practitioner has fulfilled their duty of care when informing a patient in respect of a medical procedure or operation to be performed on that patient so that they can decide whether or not to consent to that procedure or operation were summarised at para. 87 as follows:
'An adult person of sound mind is entitled to decide which, if any, of the available forms of treatment to undergo, and her consent must be obtained before treatment interfering with her bodily integrity is undertaken. The doctor is therefore under a duty to take reasonable care to ensure that the patient is aware of any material risks involved in any recommended treatment, and of any reasonable alternative or variant treatments. The test of materiality is whether, in the circumstances of the particular case, a reasonable person in the patient's position would be likely to attach significance to the risk, or the doctor is or should reasonably be aware that the particular patient would be likely to attach significance to it.'
The Court noted the need to consider the full facts and circumstances of the individual patient in each case, stating at para. 89:
'... the assessment of whether a risk is material cannot be reduced to percentages. The significance of a given risk is likely to reflect a variety of factors besides its magnitude: for example, the nature of the risk, the effect which its occurrence would have upon the life of the patient, the importance to the patient of the benefits sought to be achieved by the treatment, the alternatives available, and the risks involved in those alternatives. The assessment is therefore fact-sensitive, and sensitive also to the characteristics of the patient.'
Montgomery is clearly a decision which demonstrates a new development in the law as it relates to the law on informed consent and strictly the ratio decidendi of the decision is confined to cases involving the adequacy or otherwise of information given to a patient upon which they are to decide whether or not to undergo a particular type of treatment. It is not of central importance to a consideration of the facts of this case. However, there is force in the contention advanced by Mr Skelton that the basic principles – and the resulting duty of care – defined in Montgomery are likely to be applied to all aspects of the provision of advice given to patients by medical and nursing staff. Insofar as the judgment in Montgomery emphasises the need for a court to take into account a patient's as well as their doctor's point of view as to the significance of information for a patient I consider it relevant to a consideration of the facts of this case.
THE EVIDENCE
I turn now to the evidence. I heard from Mr Spencer. In his written evidence he concluded that the nurse who discharged him did not tell him that he should see his GP or go back to the hospital Accident and Emergency Department if he had any problem post operatively. In his oral evidence he was rather more accepting that he may have been told that; in any event that advice was given by the leaflet that he was provided with on discharge.
His evidence was that he began to suffer aching calf muscles from the morning of 4 February 2010. He put that down to his lack of activity over the preceding days. He said that it did not cross his mind that these symptoms were to do with his recent surgery. On his return to work on 15 February 2010, he recalled that his calves were still aching and that he became short of breath on climbing stairs. Again, he put this down to loss of fitness. He did not mention these symptoms to his GP during his wound check on 16 February 2010, or when he saw Mr Chaudhry on 25 March 2010.
Mrs Spencer, whose evidence was not challenged, confirmed that her husband complained of pain in both calf muscles in the days after the operation and that his calf muscles were both rock hard. Her recollection was that he thought that the problem was his calves because he had not been able to take exercise.
Expert evidence was lead on Mr Spencer's behalf from Professor Poston who gave evidence by way of a written report dated 7 June 2014, a supplementary letter dated 20 January 2015, the joint statement of the expert witnesses, and by way of his oral evidence before me.
Professor Poston was critical in his evidence of the failure of the staff of the hospital to undertake a formal assessment of the Claimant's risk of deep vein thrombosis. However, he accepted that Mr Spencer did not fall into the category of those patients who should be prescribed blood thinning medication as prophylaxis by reason of their particular risk of developing the condition.
In his written report he noted his opinion as follows:
'... all patients undergoing surgery are at some risk and that risk must be addressed by the provision of appropriate advice.'
'Therefore, there was a basic duty of care to advise Mr Spencer of the symptoms of DVT should it arise in the postoperative period.'
'As such, the failure by the hospital to advise Mr Spencer of the signs and symptoms of deep vein thrombosis would not be supported by a responsible body of surgical opinion.'
In his letter of 20 January 2015, Professor Poston referred to a 2005 report of the House of Commons Health Committee on 'The prevention of venous thromboembolism in hospitalised patients' that noted that deep vein thrombosis in hospitalised patients causes between 25,000 and 32,000 deaths a year. That report recommended that Guidelines already produced by the National Institute for Health and Clinical Excellence (NICE) in respect of Venous Thromboembolism be extended in their scope to cover the majority of hospital patients.
Of importance to the issues in this case are the Guidelines produced in response to that recommendation that were published very shortly before Mr Spencer's operation by NICE as Clinical Guideline 92: "Venous thromboembolism: reducing the risk" subtitled "Reducing the risk of venous thromboembolism (deep vein thrombosis and pulmonary embolism) in patients admitted to hospital."(NICE 92)
These Guidelines and previous NICE Guidelines on the same subject, principally that published in 2007 as Clinical Guideline 46 (NICE 46) were considered in some detail by Professor Poston in his report and in his oral evidence to the court. His contention before me was that by reason of the contents of both NICE 46 and NICE 92 the Defendant was under a mandatory obligation to inform Mr Spencer of the signs and symptoms of deep vein thrombosis so that he could recognise the same. In the joint statement Professor Poston stated:
"The Guidance is intended to encompass those patients on the cusp of the very specific risk factors for increased risk of DVT stated in both guidelines, which in the Claimant's case was at attempted laparoscopic procedure, an anaesthetic time of just under 1 hour in a patient whose BMI was just less than 30."
I will deal with some of the detail of NICE 46 and NICE 92 at this point in my judgment.
Under NICE 46 only adults undergoing inpatient surgical procedures that carried 'a high risk of VTE' were covered by the Guidelines. 'High Risk' is a concept limited to those Guidelines. It is common ground that Mr Spencer did not fall into that classification at the time of his operation.
Under NICE 92, a wide range of patients are classified as requiring to be risk assessed for their likelihood of developing deep vein thrombosis. Under the heading, "Groups that will be covered" the Guidelines state:
a) Adults (18 years and older) admitted to hospital as inpatients or formally admitted to a hospital bed for day case procedures, including …"
There follows a list that includes:
"patients admitted to a hospital bed for day-case medical or surgical procedures."
Clearly, Mr Spencer fell within this classification at the time of his operation.
Under the heading, "Assessing the risks of VTE and bleeding" the Guidelines state:
'all patients' should be assessed on admission to hospital to ascertain whether they are at increased risk of VTE."
Under the heading "Planning for discharge" the Guidelines state:
"As part of the discharge plan, offer patients and/or their families or carers verbal and written information on:
the signs and symptoms of deep vein thrombosis and pulmonary embolism…"
It was accepted by Professor Poston that not all patients apparently within the classification of groups that will be covered under the Guidelines have to be provided with information about signs and symptoms of deep vein thrombosis and pulmonary embolism. For example, it would not be appropriate to provide such information to those undergoing colonoscopy; sigmoidoscopy and other procedures that did not involve the administration of a general anaesthetic to the patient. His view was that it was implicit in the Guideline 'Planning for discharge' that the words 'have undergone general anaesthetic' should be included after the after the word 'patient' although he accepted that there was nothing in that Guideline which stated expressly that it did apply to those who had undergone general anaesthetic.
Potential witnesses for the Defendant included Mr Chaudhry, Nurse Woods, and Senior Sister Gibson, in respect of whose evidence a witness statement was served in these proceedings and who was in charge of the day surgery unit at the time of Mr Spencer's admission. Mr Prabhudesai, Mr Chaudhry's successor, who provided a substantive response to a letter of complaint from Mr Spencer and who sought in that letter to explain the hospital's practice in day case surgery cases was another potential witness.
In the event none of these potential witnesses gave evidence before me but a letter was placed before me from the Defendant's solicitors that sought, somewhat ineffectively to demonstrate why, Mr Choudhry and Nurse Woods were not available at the time of the trial.
The evidence I heard in support of the Defendant's case was that given by an expert surgeon, Mr Thomas. He gave evidence by way of a written report dated 28 May 2014 and the joint statement of the experts.
Mr Thomas was clear that Mr Spencer was not at high risk of developing deep vein thrombosis and a pulmonary embolism and, considering the surgery performed, his underlying risk of such complications was very small. His evidence about the provision of advice about signs or symptoms of these conditions to Mr Spencer after his surgery was as follows:
"In my opinion the best advice is to say that if the patient does have any further or future problems, that they should contact the GP or A+E department. It is impossible to either ask or give advice as to every possible complication that can occur after hernia operation or anaesthetic. The list would be huge – furthermore the patient would not be able to take such a list in. Therefore patients are only warned or questioned over common complications after such surgery."
Mr Thomas suggested that if there were a requirement to provide information about non-material risks then the process of providing information pre-discharge would be transformed. He estimated that it would take 30 minutes to provide a person in the position of Mr Spencer with information as to all the problems he might develop after surgery of the kind undergone by Mr Spencer. However, he accepted that such complications, e.g. wound infection, were not analogous to deep vein thrombosis which puts patients' lives at serious risk and constitutes a medical emergency, but could be countered by a patient seeking urgent medical attention, and would be something that many patients would be unaware of unless they had been told about it.
In line with that opinion he considered that the advice given to Mr Spencer on discharge was appropriate. His contention was that a responsible body of surgeons would not have provided the Claimant with such information and that the provision of such information was not mandatory under either NICE 46 or NICE 92.
In the joint statement Mr Thomas stated:
"The Guidance is aimed at patients within the 'risk' category – and according to the guidelines, the patient did not fulfil these criteria"
Mr Thomas argued that the requirement under Guideline 92 was to assess all patients within the scope of the guidance as required. His interpretation of the Guidelines was that the NICE Guidance on information for discharge was only directed at those patients who fell into the "Increased Risk" category because it would be illogical to require information about deep vein thrombosis to be provided to those who were not at risk of developing the condition.
It is pertinent to note that the experts concluded their joint statement by stating that:
"For future clarity, it would be wise to seek guidance directly from NICE as to its intention with regard to the use of their Guidance in patients such as the Claimant undergoing the procedure which the Claimant underwent, in the particular circumstances of the Claimant's operation."
The Defendant argued that the risk of Mr Spencer developing deep vein thrombosis was in the region of 1 in 50,000 based on a research paper (Zurawska et al 2007) that suggested that the risk of developing deep vein thrombosis as a result of day surgery was in the region of 0.04%. A further research paper before the court (Anwar and Scott 2003) referred to a further paper (Dudda et al 1990 - not before the court). From those rather convoluted references Professor Poston extracted the statistics that the incidence of pulmonary embolism after inguinal hernia repair was 0.9% for pulmonary embolism and 0.7% for deep vein thrombosis. However, it appears that the two research papers were not in pari materia, the Dudda paper including surgery other than day case procedures.
In answer to a question posed at the joint meeting – namely 'Was Mr Spencer at risk from suffering from a deep vein thrombosis or a pulmonary embolism as a result of his surgery on 1st February 2010 the experts stated:
"The experts are agreed 'no' for a straightforward inguinal hernia repair."
It was, or became clear in the course of the trial, that both experts qualified that answer by the insertion of the word "material" before the word "risk" when answering that question. Professor Poston accepted that he understood a 'material risk' to mean a risk that 'a reasonable person in the Claimant's position would be likely to attach significance to'.
CONCLUSIONS
I turn to my conclusions.
I will deal firstly with the few evidential issues for determination that are separate from the expert evidence.
What if anything was Mr Spencer told by Nurse Woods on his discharge? In his exchanged written statement Mr Spencer said that he was not told to report any problems; in cross examination, he accepted that he was told to report any problems albeit he gave this oral evidence with some reluctance or uncertainty. I heard no evidence from Nurse Woods about this but Mr Spencer accepts that he was given the leaflet that is in evidence that says, essentially, what it is alleged Nurse Woods would have said to Mr Spencer.
Secondly, what, if any post-operative signs and symptoms did Mr Spencer suffer in his calves in the days following his discharge? Again, I accept Mr Spencer's account, supported as it is by the unchallenged evidence of his wife.
Finally, has Mr Spencer established that he would have sought medical advice if he had been warned of the signs and symptoms that were indicative of the development of deep vein thrombosis and pulmonary embolism? Mr Spencer came over to me as a sensible and prudent man. It is notable that he was anxious not to give his consent to the hernia operation until he had been re-assured that if the laparoscopic procedure had to be changed to an open procedure the right hernia would be repaired in preference to the left. It seemed a little strange that Mr Spencer did not associate the calf symptoms with the operation. That comment is perhaps easily made with hindsight. Mr Spencer gave a reasonable explanation as to why he did not make the association; he attributed the calf symptoms simply to being laid up as a result of the operation and not taking exercise. The fact that the symptoms were remote from the operation site is of significance.
I discount the possibility that if Mr Spencer had been expressly told something to the effect that signs and symptoms in the calves would be indicative of a rare but highly dangerous condition that could be treated effectively if caught early, he would not have responded by seeking medical advice so soon as that condition developed.
I turn to the issue to which the expert evidence was directed, namely the duty of care to be fulfilled by the hospital staff towards Mr Spencer in the circumstances of this case and whether or not that was fulfilled.
In the light of the Montgomery decision already discussed above, I would express the test that I should apply to be the Bolam test with the added gloss that I should pay regard to what the ordinary sensible patient would expect to have been told. Put in the form of a question, the test I consider to be, would the ordinary sensible patient be justifiably aggrieved not to have been given the information at the heart of this case when fully appraised of the significance of it?
I say at once that I was generally impressed by both the surgeons who gave evidence before me. They were both properly, but vigorously, cross - examined. They held to their opinions which were clearly genuinely held by both and in support of which both argued well and with considerable supporting material on both sides. They did not make my decision in this case easy; likewise, their understandable concern as to the correct interpretation of the NICE Guidelines and the need for them to be clarified.
The background to the present Guidelines is the problem of unnecessary deaths from venous thromboembolism identified by the House of Commons Health Committee. The general thrust of the Guidelines is clearly intended to raise awareness of the conditions dealt with by the Guidelines both amongst health care professionals and their patients and to improve communications between both groups so that unnecessary deaths can be avoided.
I note that the information that it is contended should have been given would have been easy and practical to give either verbally or within a discharge leaflet. It cannot sensibly be doubted that the giving of that information to patients who in fact develop signs and symptoms of deep vein thrombosis and pulmonary embolism would be very likely to improve the prospects of early and therefore more favourable treatment for those patients.
Whilst, as already noted, I accept that the NICE Guidelines are not wholly clear in identifying the group of patients to which the specific guidance noted in the Guidelines should be given on discharge, on balance, I consider that the better view is that of Professor Poston, namely, that it is intended to be directed at all patients who fall within the groups expressly covered by the Guidelines save those where no risk could possibly arise – e.g. the patient formally admitted as a day care patient for a procedure that carried no risk, however remote, of deep vein thrombosis or pulmonary embolism. I reach this conclusion based on the substantial change from Guideline 46 to Guideline 92 which demonstrates that the committee preparing the Guidelines were anxious to make changes that would produce a real reduction in the numbers of those suffering from deep vein thrombosis and pulmonary embolism following surgical procedures.
I accept that the determination as to whether a given practice is in accordance with the NICE guidelines is not by itself determinative of negligence, but it is highly relevant.
It is clear to me from the papers referred to by the expert surgeons that outside the identified risk group of patients the development of deep vein thrombosis and pulmonary embolism is properly characterised as rare. How rare has been the subject matter of lively debate between the experts on those papers. I will not attempt to rule definitively on that debate by proposing a statistic purportedly extracted from the material placed before me. What is clear to me on the evidence is that it is known to, and accepted by, the medical profession that there is a cadre of patients who, following a surgical procedure under general anaesthetic develop deep vein thrombosis/pulmonary embolism and who may be saved from suffering or death if the early well known markers of those conditions are picked up.
I cannot help but conclude that Mr Spencer fell into that category on the hospital's own tacit admission by the fact that, albeit as a blanket policy, all surgical patients appear to have been treated, when under general anaesthetic with pneumatic boots to reduce the risk of deep vein thrombosis and pulmonary embolism developing.
I ask myself the question, would the ordinary sensible patient expect to have been given the information contended for; put another way I ask myself, would such a patient feel justifiably aggrieved not to have been given on discharge the information contended if appraised of the significance of such information. I consider that, on the evidence before me, the answer to both questions should be in the affirmative.
I accept that, on the face of it, there is an apparent inconsistency in this case if there was in Mr Spencer's case no duty to warn of the risk of deep vein thrombosis or pulmonary embolism pre-operation to obtain a properly informed consent but there was a duty to inform about symptoms and signs indicative of it. However, I consider that argument unpersuasive. Different considerations are in play. The subject matter of the first is a warning of a remote risk; the second is information as to characteristic signs and symptoms indicative of a potentially fatal condition that can be successfully treated if early diagnosed.
Further, even if the NICE Guidelines are not wholly clear on this issue, based on the evidence of Professor Poston, I consider that modern, safe and responsible medical practice should be to give such advice to patients undergoing general anaesthetic. Whilst in many cases such treatment will cause a small risk of deep vein thrombosis and pulmonary embolism, and one of which many patients will be unaware; to inform such patients of the very particular signs and symptoms of those conditions is a precaution that can save lives and should be given.
I find it telling that no evidence has been called from the hospital by the Defendant. Many relevant questions that could have been put to hospital witnesses remain unanswered such as, perhaps most importantly, was an assessment made of Mr Spencer's risk of a deep vein thrombosis? It is significant that no formal assessment of Mr Spencer's categorisation in relation to the risk of deep vein thrombosis and pulmonary embolism is documented in the hospital records. I have no evidence from the Defendant, save the note that Mr Spencer was provided with a pneumatic boots during his operation, to counter the assertion fairly made that the hospital do not appear to have had a consciousness of the need for, or to have had procedures in place, to reduce the risk of post operative deep vein thrombosis and pulmonary embolism.
I am persuaded that the staff of the hospital collectively failed Mr Spencer by not advising him at any time whilst he was in their care of the life threatening significance of symptoms of the kind he suffered and the consequent need for him urgently to seek medical care if he suffered such symptoms.
For the foregoing reasons I consider that the Defendant acted in breach of their duty of care towards Mr Spencer in the way that they treated him.
I consider now the allegation of contributory negligence made against Mr Spencer. The Defendant contends that there was fault on the part of Mr Spencer for failing to follow the instructions that he had received on a number of occasions to report on 'any problems' he experienced and they contend for a reduction for contributory negligence of no less than 50%. They contend that Mr Spencer should have reported, as directed, his symptoms which were so close in time to his operation and were to a degree novel and unexplained.
Having found the Defendant liable to Mr Spencer on the facts of this case, I see difficulties for the Defendant in this argument. His calf pain arose several days after the operation, in an area of his body that had not been operating on, and after he had recovered from the procedure. I have accepted his evidence that he attributed the pain in his calf to his inactivity due to being generally unwell after the operation. I am satisfied that Mr Spencer did not – and could not reasonably have foreseen – that by not seeking medical attention for his calf pain he would suffer deep vein thrombosis and a pulmonary embolism; matters that I have found should have been in the mind of the staff of the hospital and communicated to Mr Spencer.
For the foregoing reasons, I reject the Defendant's contention that Mr Spencer was himself negligent and therefore in part contributed to his damage.
It follows from the foregoing that there must be judgment for the Claimant for the total agreed sum of £17,500. |
Introduction
On 28 January 2015 I handed down my reserved judgment on the issue of liability in this case in which the claimant alleged that the defendant's management of her birth on 25 October 1999 had been negligent with the result that she suffered a Brachial Plexus Injury as a result of shoulder dystocia.
In principle the claimant's allegations fell into two main parts.
a. That, during the labour of the claimant's mother (who is her litigation friend), the need for a Caesarean section was indicated at about 13.50 hours on 25 October and on no less than 3 occasions thereafter but, negligently, no Caesarean section was performed and instead the defendant negligently decided that the birth should be allowed to proceed to a vaginal delivery. (The First Limb)
b. That the vaginal delivery itself was negligently managed because the midwives undertaking it failed to adopt recognised procedures to deal with the shoulder dystocia that the claimant suffered in the course of the vaginal delivery. (The Second Limb)
I found for the claimant in that I concluded that the defendant's employee had indeed been negligent in deciding not to proceed to a Caesarean section at 13.50 hours but I was not satisfied that the claimant had established liability in respect of the defendant's conduct at any other stage of the labour prior to delivery nor was I satisfied that she had done so in respect of her claim under the Second Limb.
The effect of my finding is that the defendant is liable to the claimant for 100% of her damages even though the claimant was unsuccessful in many of her specific allegations.
On 1 October 2014 the claimant made a Part 36 offer to settle liability on the basis that she received 65% of the damages that would accrue on a 100% basis. That was rejected on 9 October. There are no other Part 36 offers but on 10 October the defendant repeated in writing an offer that it had made verbally at a settlement meeting on 1 October that it would settle on the basis that the claimant received 30% of the damages.
It is of course not disputed that my judgment is more advantageous to the claimant than the proposal contained in the Part 36 offer. On 28 January therefore when the judgment was handed down Mr Sheldon, counsel for the claimant, contended that the consequences of Part 36.14(3) should apply and that the claimant should have all her costs on an indemnity basis from the expiry of the relevant period plus interest thereon at the enhanced "Part 36 rate" plus the enhancement of damages specified in 36.14(3)(a) and (d).
The defendant's position was that the consequences of Part 36.14(3) should be disapplied because, by reference to Part 36.14(4), in the circumstances it would be unjust to apply them. Furthermore Mr Martin argues that even if Part 36 is not disapplied, it does not prevent the court from making an issues based or proportionate costs order to reflect the fact that the claimant failed in respect of the Second Limb bearing in mind that the Second Limb was a discrete and independent allegation. In other words, that, at best, the claimant should have her costs with the Part 36 enhancements in respect of the work referable to the First Limb claim but that she should not be awarded costs for the unsuccessful prosecution of the Second Limb of her claim at all, much less with any Part 36 enhancements.
Furthermore, Mr Martin for the defendant argued that even in respect of any costs awarded to the claimant the court has discretion to permit some but not necessarily all of the Part 36 enhancements in respect of costs and damages and can decline to do so if permitting them would lead to an injustice. Mr Martin contended that it would indeed be unjust to permit all the enhancements on those costs awarded to the claimant even though she had bettered her Part 36 offer.
For reasons that I shall come to the claimant does not accept the proposition that a proportionate costs order is even permissible where a Part 36 offer has been made and which the defendants have failed to beat or that an application of all the consequences envisaged by Part 36.14(3) would lead to injustice.
On 28 January I concluded that it was not unjust for the consequences of Part 36 to apply in principle. In the time available however it was impossible to resolve the issue as to whether a proportionate costs order was appropriate to reflect the claimant's want of success on the Second Limb and whether the existence of a Part 36 offer had a bearing on whether a proportionate costs order was permissible and/or appropriate in any event. Equally it was not possible to consider whether it was appropriate to disallow any of the enhancements otherwise due to the claimant in the circumstances.
Preliminary Comments
Before I deal with these issues I feel constrained to observe that the draft judgment on the liability trial was circulated to the parties on 27 November 2014 but it was not until 26 and 27 January 2015 that I received skeleton arguments on the issue of costs (and other issues) from counsel for the defendant and the claimant respectively. These were sent in anticipation of the handing down of judgment which it will be remembered was listed for the 28 January and for which 30 minutes had been allocated, as the parties well knew.
Mr Sheldon's skeleton argument made it clear that there were 6 issues that needed to be resolved on 28 January. The first 2 were the issues as to costs identified above. The second of those, namely the impact that a Part 36 offer has on the appropriateness of a proportionate costs order is regarded by both counsel as an important and perhaps novel proposition of law.
The remaining 4 cover amendments to costs budgets, payments on account of costs, interim payment of damages and the defendant's application for permission to appeal the substantive judgment. As I understand it, only one of these namely an interim payment of £25,000 was actually agreed. Mr Martin's skeleton argument added one further issue; that related to the issue of permission to rely on expert psychological evidence about which at that stage there was also an absence of agreement.
At my request on 27 January the Court staff emailed counsel to ask if they seriously believed that all these matters (about which I had had a 12 page skeleton from Mr Sheldon and a 9 page skeleton from Mr Martin) could be resolved in the 30 minutes allocated bearing in mind that I had a part heard trial starting at 10.30. The response was that 30 minutes was adequate and so the hearing went ahead.
It was clear almost immediately that 30 minutes was nowhere near enough. In that time I was able only to deal with the issue as to whether Part 36 should be disapplied to the claimant's costs in so far as she was awarded costs. As a result I was obliged to reserve the question of what proportion of the costs should be recoverable by the claimant and whether any Part 36 enhancements should be disallowed. My order of that date provided for further written submissions and factored in the possibility of a further hearing, albeit by telephone if possible.
I am grateful to both counsel for their courtesy in recognising that their view that these issues could be resolved in 30 minutes was "over-optimistic" as they put it but the fact is that costs and time have been wasted. I make this point first because it may have to be reflected in the order as to costs in respect of the preparation of the further written submissions and any hearing, telephone or otherwise, that may be required to determine all outstanding issues and secondly because it is important to emphasise how important it is that parties give critical and constructive consideration to time estimates and not work on the basis that a hearing will take no longer than the parties merely hope it will take.
Agreed concessions regarding the consequences of Part 36
Mr Martin, counsel for the defendant, has made some sensible concessions in connection with the application of Part 36 in light of my finding that it is not unjust in principle for the consequences of Part 36 to apply to those costs to which the claimant is entitled and which have been incurred after the relevant time.
First, that the claimant is entitled in any event to the additional amount pursuant to CPR 36.14(3)(d). As he states in paragraph 5 of his Supplemental Note on Costs of 8 February, "this was an all or nothing case, the claimant is entitled to her damages in full and thus logically to Part 36 damages enhancements in full".
Secondly, that he does not suggest that there should be a proportionate costs order to reflect the fact that the claimant failed to establish that a Caesarean section should be performed on the 3 occasions after 13.50 hours when she says the opportunity to do so was missed. He accepts that the first limb of the claimant's case was that there should have been a Caesarean section at some time before vaginal delivery and that she succeeded on that. The fact that she was unsuccessful in respect of some of the sub-allegations is not, he accepts, a ground for depriving her of the costs of establishing that the birth was mismanaged by the failure to administer a Caesarean section.
Thirdly, he does not seek the defendant's costs in successfully defending the Second Limb. He merely asserts that the claimant should not be awarded a proportion of her costs to reflect that she lost on that issue.
A proportionate order?
It seems to me that the first question that I must address is whether, even in the absence of a Part 36 offer, a proportionate costs order would have been appropriate. Such an order is permitted pursuant to Part 44.2 and in particular Part 44.2(6).
It is right however to recognise that the general rule is that the unsuccessful party should pay the costs of the successful party. In Day v Day [2006] EWCA Civ 415 at paragraph 17 the test applied by the court to identify the successful party was to ask which party it was that was writing the cheque as a result of the judgment. By that test the successful party is emphatically the claimant. A proportionate costs order would therefore be a departure from the general rule.
In Multiplex Constructions UK Ltd v Cleveland Bridge UK Ltd 2008 EWHC 2280 TCC Jackson J as he then was set down some propositions of general application concerning issues based orders which he had identified from a review of previous cases. I do not intend to set them out in detail, they are summarised in volume 1 of the 2014 edition of Civil Procedure at page 1392. Suffice it to say for these purposes that;
a. An issues based (or proportionate) costs order need not be confined to exceptional cases. The extent to which costs should be disallowed should be left to the evaluation of the judge "by reference to the justice and circumstances of the particular case".
b. The reasonableness of taking failed points can be taken into account
c. There is no automatic rule that an issues based order should be made because the successful party loses on one or more issues and indeed the mere fact that such a party was not successful on every issue cannot, of itself, justify an issue based costs order. This is so because in complex litigation including complex personal injury cases any winning party is likely to lose on one or more issues in the case.
In an assessment of the "justice and circumstances of the particular case" it is right to recognise that the first limb of the claimant's case was an attack upon the management of her labour by the obstetricians responsible for the labour. The second limb of her case was an attack on the midwives' management of the actual delivery. Neither allegation is dependent on the other; each is a separate, self contained, discrete claim.
Each limb was supported by its own separate expert evidence. In respect of the first limb I heard from obstetric experts and in respect of the second I heard from midwifery experts. It is true to say that the experts in each discipline were asked, and had something to say, on the appropriateness or otherwise of the conduct of the defendant's staff in relation to the limb formally outside their specific discipline but their evidence in relation to that was, in my view, peripheral.
I note for example that in reaching my conclusion in the substantive judgment from paragraph 160 to paragraph 195 that the defendant was negligent at 13.50hrs I refer only fleetingly to the evidence of Mrs Brydon, the expert midwife instructed by the defendant, in the context of her belief that a Caesarean was not necessarily indicated and not at all to Mrs Tranter, the claimant's expert midwife.
As for the conclusion that the delivery was not negligently managed, it is right to say that in reality, and as I recognised at paragraph 218, this was a determination of fact. The experts were agreed that if the delivery had been managed as the claimant's mother and her lay witnesses suggested then the delivery was negligently managed. If it was managed as the defendant's witnesses of fact contended then it was not.
On the question of the reasonableness of prosecuting the failed allegation, it is right to note what the allegations were. They were that the midwives;
a. failed to put the claimant into the McRoberts position,
b. applied fundal, as opposed to suprapubic, pressure
c. applied excessive traction.
The evidence in respect of McRoberts was at best only that it had not been achieved. Even the claimant's mother's evidence and that of the other lay witnesses suggested that it, or something approaching it, had been attempted.
The evidence of the application of fundal pressure rather than suprapubic pressure was wholly unsatisfactory. Indeed I found at paragraph 254 that there was no evidence that fundal pressure had been applied.
Only Mr Webb, the claimant's father, had a recollection of excessive traction being applied. The picture he painted though of 2 midwives pulling on the claimant's head to force a birth of the body in a manner reminiscent of a tug of war was wholly unconvincing and it was not evidence that only emerged at the trial, it was his evidence in his witness statement.
It is clear, and it is a point conceded by Mr Sheldon, that at all times the Second Limb claim was decidedly weaker than the First Limb claim. Yet it was pursued as a separate, stand alone claim.
It is of course easy to bring hindsight to bear. The Second Limb issue was essentially an issue of fact. In those circumstances a party may well feel that it is right to let the court decide the disputed facts but on the claimant's mother's written evidence and that of the rest of the family present at the birth the claim in respect of the delivery was far from strong even though I accept that I found at paragraph 256 that the excessive traction point was more difficult to resolve than the other 2 complaints centred on the delivery.
It is also right to recognise that the allegations went to the professional competence of 2 or 3 midwives still actively practicing midwifery. It is not surprising that, the allegation having been put, they would wish to defend the claim and seek to achieve some vindication and absolution from the charge that they were responsible for a serious birth defect that will affect the claimant throughout her life. In my view these are factors that go to the reasonableness of taking the failed point.
As to the principle enunciated in paragraph 23 (c) above, it seems to me that Mr Martin embraces this point by the concession referred to in paragraph 19 above. The point he makes is that the Second Limb allegation is a cause of action based on a factual matrix that is entirely different from the First Limb claim – all that they really have in common is that they are both allegations of negligence against the defendant hospital arising out of the birth of the claimant.
Mr Sheldon makes the point that an order depriving the claimant of part of her costs will mean that some of her damages may be lost to costs and that that is wholly undesirable where the damages are to compensate a minor for serious injury. In fact, as a matter of fact that may not be the case here in the light of the fact that the defendant accepts that since I have found that the Part 36.14 consequences apply in principle, the claimant is entitled to the 10% enhancement in her damages provided by Part 36.14(3)(d). That is a windfall over and above the damages appropriate to compensate for loss. It is a windfall to which the claimant is entitled by virtue of the Rules but it is a windfall nevertheless. I emphasise that the fact that this enhancement is due is not a reason for making a different costs order to the one which would be made if it was not due. I mention it simply to address the concern expressed by Mr Sheldon that the claimant may be out of pocket. Having said that, I accept that it would be wrong in principle to apply a different approach where the claimant is a minor to that which would be applied if the claimant had capacity. If a proportionate costs order is appropriate in respect of a claimant with capacity then in my view it is appropriate where the claimant is a minor.
Mr Sheldon also makes the point that the Second Limb occupied a relatively small proportion of the time spent on the case. I am not in the best position to know how the legal representatives' time was divided between both limbs but in terms of the time devoted to each at trial it would be unrealistic to say that the second limb was a negligible or even a small issue. We had 2 experts and all of the live lay evidence other than that of Dr Adams was directed to the Second Limb. In any event in so far as the time spent on the Second Limb was not so small as to be discounted that issue would go to the size of the percentage deduction from costs rather than the principle.
Finally, Mr Sheldon argues that the defendant could have sought to settle the liability claim by making an offer on the basis that the Second Limb was abandoned. That is true, but so too could the claimant. In so far as it is contended that the claimant did so by her Part 36 offer, I shall come to that shortly.
Having considered all these matters I am bound to say, taking matters in the round and having regard to the principles in Multiplex and the observations I make above that, albeit an issues based or a proportionate order is a departure from the general principle, nevertheless, in the absence of a Part 36 offer, I would have been disposed to exercise my discretion to make a costs order that required the defendant to pay only a proportion of the claimant's costs to recognise the failure of the claimant to establish her Second Limb claim.
In reaching that conclusion I have not overlooked the claimant's complaint that the defendant's approach to settlement was inflexible and their offer to settle at 30% of total damages was overly parsimonious. The answer to that is to do precisely what the claimant did here, namely make a Part 36 offer which has the effect of exposing the inflexible party to the possibility of the full rigours of the Part 36 consequences being visited upon them. The defendant's conduct therefore, while a matter to go into the balance, does not swing the scales against a proportionate order in my judgment. The question now is how my decision that a proportionate order would have been appropriate absent a Part 36 offer is affected by the actual Part 36 offer.
The Part 36 Offer
The claimant's position is that Part 36 is a self contained regime and costs have to be considered in the context of that regime, not the regime created by Part 44. In this case the claimant offered to settle on Part 36 terms for 65% of the damages, the award gave her 100% of the damages and Part 36.14(2) requires that the court will permit the Part 36 enhancements if the claimant betters the Part 36 offer unless it is unjust to do so. Mr Sheldon makes the point that the court has already determined that it is not unjust for Part 36 to apply hence it cannot be unjust for the claimant to be awarded all her costs and for the Part 36 enhancements to be applied across the board.
In effect the claimant's position is that the existence of a Part 36 offer that was bettered by the final outcome insulates the claimant from a proportionate or issues based costs order. What is the basis for such a contention? It is summarised I think in paragraphs 10 and 11 of Mr Sheldon's Further Submissions on Post Judgment Issues namely that the self contained Part 36 regime offers a complete code for the resolution of costs in cases to which it applies. There is no provision for an issues based approach to costs in Part 36 as there is in the Part 44 regime and to import an issues based approach would be directly contrary to the clear authority that Part 36 is a complete self contained code.
Here it is contended that the claimant made a Part 36 offer in respect of the whole of the claim and so the costs consequences apply to the whole of the claim, not just that aspect upon which the claimant succeeded. Her decision to pitch the Part 36 offer at 65% of the damages was a balanced and realistic reflection of the strengths and weaknesses of the two limbs of the claim and in particular was reflective of the relative weakness of the Second Limb claim and it was open to the defendant to accept it but they chose not to do so.
Mr Sheldon argues that other than making a Part 36 offer there was no way that the claimant could protect itself against the "draconian order for which the defendant now contends" viz an issues based order whereby the shortfall in costs would have to be met by eating into the damages awarded.
He points out that the defendant did not seek to follow up the Part 36 offer by any attempt to separate out the one limb of the case from the other for example by suggesting that such an offer may at least provide a good starting point for settlement if, in reaching a settlement, the Second Limb claim was abandoned. By the same token of course that was not a suggestion put forward by the claimant.
At paragraph 19 of his Further Submissions on Post Judgment Issues Mr Sheldon suggests that making an issues based order against the background of an effective Part 36 offer would frustrate the aim and purpose of Part 36 which is to encourage parties to settle before trial. He argues that this case should have settled before trial because the claimant had made a reasoned and sensible Part 36 offer before trial indeed, as it turned out, it was a very generous offer to the defendant because 35% of the damages that the claimant was prepared to forgo may well equate to a very many thousands of pounds if not tens of thousands.
Mr Sheldon suggests that to accede to the defendants contention that an issues based order is permissible and appropriate notwithstanding the existence of a valid Part 36 offer would be to take a step not validated by any existing authority and would be directly contrary to authority that the Part 36 regime is a self contained code.
Mr Martin disputes the contention that there is no authority for the course of action he proposes namely a proportionate costs order because it would be otherwise unjust for the successful party to recover all its costs. He has in mind Thinc Group Ltd v Jeremy Kingdom [2013] EWCA Civ 1306.
Mr Martin argues that the court in Thinc rejected the notion that where Part 36 applies all the consequences of Part 36.14 must be applied or none of them. Thinc he argues is authority for the proposition that it is not a matter of "all or nothing". He refers me in particular to paragraph 22 in which Macur LJ considers the notion of injustice in the context of a consideration of a disapplication of the consequences of failure to accept a Part 36 offer. Her conclusion is that the consequences of Part 36.14 will apply unless and to the extent that it is unjust that they should do so. It is clear that that analysis allows the court to consider permutations. There need not be simply a bipolar approach whereby the Part 36 offeror gets all his or her enhancements or none of them. That same approach was adopted by Andrews J in Davison v Leitch 2013 EWHC 3092 (QB) where the learned Judge visited some of the consequences of Part 36.14 on the unsuccessful defendant but not all of them.
Mr Martin argues that the importation of permutations to avoid injustice cannot simply be confined to whether the successful Part 36 offeror receives all the enhancements on costs awarded to him or her, it must also permit the court to take the view that not all costs should be awarded per se in circumstances where to do so would cause injustice. Such an approach is not inconsistent with a finding that Part 36 consequences should be suffered by the defendant because they are not in principle unjust. The exercise involves first considering whether Part 36 consequences should apply to any of the costs and if that is answered in the affirmative, as in this case, the next step is to consider how to apply them.
Mr Martin argues at paragraph 24 of his Supplemental Note on Costs that "in Part 36 terms it would be unjust if the costs order pursuant to Part 36 did not reflect the extent to which the defendant succeeded on a discrete, important part of the case".
I am satisfied that the fact that there was a successful Part 36 offer does not mean that the court is unable to make an issues based or proportionate costs order. I accept that Part 36 is a self contained regime and that the Rule itself makes no reference to such orders - in distinction to Part 44.2. Nevertheless in so far as such an order is necessary to avoid injustice it is in my view permissible for the court to make it.
In short I do not accept that the existence of a Part 36 offer in principle insulates the offeror from such an order. That protection does not appear to be consistent with the approach adopted in Thinc or Davison. Perhaps even more importantly it would prevent the court from making an order that would not be unjust in circumstances where the Rule specifically states that the Rule can be disapplied if its application leads to injustice. I have already found that in the absence of a Part 36 offer I would have made a proportionate costs order. I do not accept that such an order ought not to be made simply because there has been a Part 36 offer. In reaching that conclusion of course I have in mind all the factors that led to my conclusion at paragraph 39 above.
Conclusion as to Costs
In the circumstances I propose to make a costs order in favour of the claimant limited to a percentage of her costs. The figure shall be that which is appropriate to reflect the percentage of time expended on establishing the First Limb but not the Second and 100% of the disbursements directly incurred in establishing the First Limb but not the disbursements directly incurred in seeking to establish the Second Limb. In this context I have particularly in mind the fees of the experts but there may be others. The costs order shall include all the enhancements stipulated in Part 36.14 from the Relevant Time. The starting point is that the Part 36.14 costs consequences will apply to those costs awarded to the offeror. I see no injustice in applying them.
In so far as the defendant argues that it is appropriate to disallow the enhanced interest payable on damages, then as a matter of principle I would not do so. I can see no distinction between that enhancement and the 10% enhancement permitted by Part 36.14(3)(d) and which the defendant concedes as being due. I refer to paragraph 18 above.
Future Steps
I do not feel that I have sufficient information to determine what the percentage deduction should be. I shall hear oral submissions on that at a telephone hearing.
At that hearing I shall formally hand down this judgment and shall also deal with outstanding issues in relation to amendments to cost budgets, costs on account, interim damages, permission to appeal the substantive judgment and any applications arising out of my conclusions in this supplementary judgment thus far, including costs. I shall also determine the rate of interest applicable to the costs and damages under Part 36.14(3)(a) and (c) if that has not been agreed.
I have allocated 45 minutes to the hearing. If the parties believe that it should be allocated a different time estimate they should notify the court as soon as possible. I would remind the parties that in the context of any application for interim damages the claimant is a minor and so the court will need details about to whom the money is to be paid and for what purpose it will be applied. All relevant evidence shall be filed and served no later than 7 days before the hearing.
HH Judge Saffman |
The Honourable Mr Justice Blake:
On 13 February 2015 I handed down judgment in the claim brought against the second and third defendants for injuries suffered when the claimant nearly drowned on 5 July 2000 during the course of a school swimming lesson. In that judgment I concluded that both Deborah Maxwell (the second defendant) as the lifeguard on duty at the pool and Paula Burlinson as the swimming teacher in charge of the group of advanced swimmers of which the claimant was a member, were liable in negligence. It was agreed that the third defendant's claim for a contribution should be adjourned pending the findings of fact and thereafter could be determined by written representations that have been made to me between 5 and 16 March 2015.
By reason of the decision of the Supreme Court [2013] UKSC 66, it has been established that the third defendant owed the claimant a non-delegable duty of care in the conduct of school swimming lessons. By reason of my conclusions in the principal action, the third defendant is in breach of that duty, although it had no role in the provision of the swimming lessons.
Neither Ms Maxwell nor Ms Burlinson were employed by the third defendant. They were both swimming teachers engaged to provide their services by the first defendant (Beryl Stopford) against whom the claimant discontinued proceedings shortly before the start of the trial. The claimant did not proceed against Paula Burlinson because she was not insured for the claimant's injuries suffered at the time of the incident. By contrast, Ms Maxwell was insured through the professional association of swimming teachers for this damage. Although no finding has been made on the issue, for the reasons given in Ms Stopford's witness statement, there were reasons to believe that both Ms. Maxwell and Ms. Burlinson were self-employed for the purposes of the swimming lesson in which the claimant received her injuries.
The third defendant brings a claim for a contribution against the second defendant pursuant to Civil Liability (Contribution) Act 1978 s. 1. By s.2 (1) of the Act the amount of the contribution recoverable from any person shall be 'such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question'. S 1 (2) permits the court to direct that that the contribution shall amount to a complete indemnity.
The third defendant seeks first a complete indemnity of 100% of its liability to the claimant from the second defendant and in the alternative a contribution of 50%.
The claim for an indemnity is based on the following propositions:
i) A contribution claim made by an employer who has not been personally negligent but is vicariously liable for the damage caused an employee may be a 100% indemnity.
ii) If the claimant had sued both the second defendant and Paula Burlinson for negligence they would be joint tortfeasors and jointly and severable liable for 100% of the damage caused to the claimant.
iii) The third defendant was not personally negligent and should thus be able to receive the totality of its liability to the claimant against the swimming teacher who was insured as the claimant would have been able to, if she had sued both Ms Maxwell and Ms Burlinson.
Both parties refer me to the judgment of Hobhouse LJ in Downs v Chappell [1997] 1 WLR 426. In that case the plaintiff successfully sued the first defendant for deceit in misrepresenting the value of a book shop business that it was selling and the second defendant for negligently assessing the value of the business when asked to do so by the claimant. There were contribution proceedings between the defendants where the second defendant objected to a finding of 50% contribution on the basis that negligence was less culpable than deceit. Hobhouse LJ rejected this contention observing that the claimant relied on the second defendant's valuation in order to proceed with the purchase. He concluded:
'The extent of a person's responsibility involves both the degree of his fault and the degree to which it contributed to the damage in question. It is just and equitable to take into account both the seriousness of the respective parties' faults and their causative relevance. A more serious fault having less causative impact on the plaintiff's damage may represent an equivalent responsibility to a less serious fault which had greater causative impact.'
I do not find that it is just and equitable that the second defendant indemnifies the third defendant for the totality of the claimant's damage. The second defendant is not an employee of the third defendant who is liable for her actions despite, for example, a gross breach of trust or a failure to obey directions or training instructions of the employer.
The third defendant's personal responsibility to the claimant should not be passed on entirely to another just because there is an insurance company standing behind them. If Ms Burlinson had been insured or had substantial assets of her own, there is no reason why the third defendant could not have sought a contribution from her as well as Ms Maxwell in that eventuality the just and equitable exercise would be undertaken having regard to the comparative assessment responsibility and causative impact between them.
I reach no conclusion on what the position would have been if the claimant had sued both swimming teachers personally. I find that their responsibility for the injuries caused to the claimant is different.
The third defendant called Ms Burlinson as a witness and to some extent sought to defend her interest in the proceedings. It seems to me in the circumstances that I should find what is just and equitable by way of contribution by examining the comparative degree of fault and contribution as indicated by Downs and Chappell. This is the exercise that I undertake in the following paragraphs of this judgment.
I find that the prime responsibility for the claimant's injuries lay with Ms Burlinson who was the teacher in charge of the group of advanced swimmers, was responsible for them entering the water and undertaking the tasks set in the lesson, and was under a duty to constantly monitor those in her charge. I was satisfied that that she seriously under-estimated the time the claimant was in the water and was unable to explain why she was not observed to be in difficulties when a few feet away.
By contrast, Ms Maxwell was the lifeguard on duty for the whole pool, located on the opposite side of the pool to where the claimant's swimming lesson was being conducted, and would have been entitled to give her primary attention to the group of less experienced swimmers immediately in front of her. On any view it would have taken a number of seconds for her to have been able to respond to a near drowning incident once observed. Nevertheless, she was performing the lifeguard function that the pool rules and past experience both emphasised was the primary role in securing the safety of swimmers. She was trained in rescue procedures whereas Ms Burlinson was not.
Making the assessment of comparative culpability and causative responsibility between the two people whose personal conduct fell below the standards to be expected of them, I assess that Ms Maxwell's contribution to be one third.
In all the circumstances, I find that it is just and equitable to find for the third defendant in the contribution claim in the same figure of one third. I will order Ms Maxwell should contribute one third to the third defendant's liabilities to the claimant both in respect of damage and legal costs. |
MRS JUSTICE THIRLWALL:
The background to this litigation is well known. I do not repeat it. On 11th September 2014 I acceded to an application to adjourn the trial listed for 6th October 2014 pending resolution of litigation between Transform and its insurers, Travelers. I ordered Transform and Travelers to pay the costs of the application and the costs of and occasioned by the adjournment of the trial. That order had been agreed between them and the claimants. I also ordered that Transform and Travelers "shall make a payment on account of their costs liability under paragraph 3 of this Order. The amount of the said payment on account is to be assessed by the Managing Judge on paper if not agreed. The payment on account is to be paid to the claimants' solicitors no later than 14 days after the quantum has been agreed or assessed by the Managing Judge". (See paragraphs 3, 4 and 5 of the order dated 12th September 2014).
The claimants have served a costs schedule totaling £588, 956.46 plus VAT of £116,977.37, making a total of £705,933.93 for counsel's fees, expert fees and solicitor's fees. There has been no negotiation, still less any agreement. I have therefore received written submissions from the claimants, Transform and Travelers, as directed at a hearing on 8th December 2014.
The starting point is CPR 44.2 (8) (as amended): "Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to."The issues for me therefore are: i) is there a good reason not to order that Transform and Travelers pay a reasonable sum on account of costs? If no,ii) what is a reasonable sum?
Travelers and Transform submit that since the claimants are being represented on conditional fee agreements they have no current liability to costs because they have not yet "won". To order payment now would be a breach of the indemnity principle. Mr Harvey, solicitor for the claimants, sets out the following clause from the claimants' conditional fee agreements. It reads "Where a summary assessment of costs or payment on account is made in your favour, you are immediately liable to pay your share of Hugh James's charges to the extent of the relevant summary assessment or payment on account". As he points out this clause is commonly found in CFAs as detailed in the Law Society model conditional fee agreement, "if on the way to winning or losing you win an interim hearing, then we are entitled to payment of our basic charges and disbursements related to that hearing together with a success fee on those charges if you win overall". It is clear that the interim award of costs prior to the final completion of the case may be charged and recovered irrespective of the requirement to win the case at trial or later final determination.
In my judgment a payment on account of costs here would not involve a breach of the indemnity principle.
Transform and Travelers submit that I should make no order and leave the matter to the costs judge. They rely on the decision of this court in Dyson Ltd v Hoover Ltd (no 4) (Ch D). There, a successful party at trial made an application for an interim payment to a judge who was not the trial judge. That is not this case. I have been managing the litigation since October 2012. As recently as September 2014 I ordered that it should be the managing judge who considered the amount of the interim payment on the papers. Nothing has changed since then, other than the service by the claimants of the costs sought. There is nothing unusual about this application, no novel point of law arises. The application is not complex. There is no good reason not to order that Transform and Travelers pay a reasonable sum on account of costs.
I turn to the second question, what is a reasonable sum?
Counsels' fees
There are two leaders and two juniors. Transform make the point that they have one leader and one junior, both of whom are senior to their opposite numbers for the claimants. They have only one client. Travelers is separately represented (there have been a number of leading counsel and one, consistent junior). A third set of solicitors (Bevan Brittan LLP) were involved on Transform's behalf in the hearings in respect of insurance cover. Separate leading counsel was instructed there. Bevan Brittan LLP submitted a statement instead of submissions on behalf of Transform on this issue. Each of the other defendants have their own legal teams. Plainly the workload is much heavier on the claimants' legal team. There are several hundred claimants and numerous defendants and third parties who participate at different levels. I see no difficulty in principle with a team of two leaders and two juniors.
The brief fees (which do not include success fees) are £150,000, £125,000 (leading counsel) and £150,000 and £110, 000 (junior counsel). This is over four times the total brief fees agreed by Transform which were £80,000 for leading counsel and £40,000 for junior counsel, payable in stages. Transform's position is, effectively, that absent any detailed breakdown by way of justification I should not grant anything above the sums agreed on their side. Transform further submit that the brief fees should have been payable in stages, as they were to counsel for Transform. This wholly overlooks the fact that at each case management hearing Mr Preston QC repeatedly reminded the defendants of the claimants' willingness to engage in mediation. He reminded them that there would come a time when briefs would be delivered. Transform entered into stage payments with their solicitors and counsel presumably on the basis that they considered that settlement was possible. That settlement became impossible was not the fault of the claimants. An earlier mediation would have brought to light – for the claimants – that there was an intractable problem that needed to be resolved. The defendant and its insurers knew for months about the difficulties between them. The claimants' team did not. In those circumstances there can be no legitimate complaint about the delivery of the briefs with full fees.
As to the brief fees, this was to be a 20 day trial. I know the issues. Counsel must have cleared their diaries for (as a minimum) the month of September, as well as for the trial itself. Work would have been done by some in August. Given the case management decisions made in the run up to September the claimants' representatives could not have been completely confident (after the failure of the mediation on 29th August) that the trial would be adjourned although they must have thought it very likely. What is not clear to me, however, is the division of labour as between silks and juniors. At first blush the payment of a higher brief fee to a junior than to his leader is unusual and whilst it may well be to reflect a greater number of hours work done, albeit at a lower rate, it is not for me to speculate, even on an informed basis at this stage.
I take Mr Harvey's point that the general rule is that sums of in the region of 70% are paid on account of costs in this sort of situation. I am not persuaded that I should take so high a percentage given the disparity between the individual fees for the barristers on the two sides (irrespective of the difference in the size of the teams). I have decided therefore that in respect of counsels' fees the sums payable on account shall be one half of the brief fees as agreed. That is a total of £267,500. I make no separate allowance in respect of the costs of the application to adjourn the trial. I accept Transform's submission that this risks double recovery at this stage.
Solicitors' costs
Travelers' submissions in respect of the solicitors' costs of £20,000 are unhelpful. The rate claimed by the solicitors is well within the band of fee rates to be paid to solicitors conducting group litigation of some complexity on behalf of many hundreds of claimants. The submission to the contrary is unarguable. The sum claimed is plainly reasonable; Transform do not really suggest it is not. The overwhelming likelihood is that this sum will be awarded in full. Out of an abundance of caution I award 80% of it, £16,000.
Conference fees
Mr Preston put it very simply: the conference was arranged so that the case would be ready for trial. By the time of the adjournment it was too late to cancel (without incurring the costs in any event). The costs have therefore been thrown away. Transform and Travelers argue that the conference will be necessary in any event and the claimants will have the benefit of it. It may not be necessary to repeat it. Mr Preston argues that if it is not necessary to repeat it there will be no further costs arising and so there is no difficulty. If it is necessary to hold a further conference then there will be further costs to be adjudicated upon. This overlooks the fact that if no further conference is needed and the defendants succeed at trial they will have paid costs which were not truly thrown away and for which they were not liable. That is not to say that the claimants may not, in the end, be entitled to these costs, but at this stage I am not prepared to order an interim payment under that head.
Decision
Accordingly I direct that there be an interim payment on account of costs by Travelers and Transform in the sum of £283,500. I await an agreed order from the parties. |
Mr Justice Warby:
This afternoon I heard an urgent application on behalf of the two claimants in this action for an injunction to prohibit publication by the defendant, the publisher of the Daily Mail, of what the claimants contend is confidential and private information about them.
The information concerns a personal relationship between the claimants which they say is private and confidential, both in its nature and in the sense that the claimants have taken steps to keep it secret, so that it is known, so they say, to only a handful of people. The injunction sought seeks to restrain the disclosure of the fact of the relationship, details about it, and pictures of the claimants together.
The claimants' case is that there is no lawful basis for the disclosure of this information by the defendants to the public at large via the pages of the newspaper. The defendant's case is that if there is any privacy and confidentiality attaching to the information it wishes to publish then it is of a low level, and that in any event there is a legitimate public interest in its disclosure which is such as to outweigh the rights of the claimants.
At the outset of the hearing I granted an application made by Mr Tomlinson QC on the claimants' behalf that the application should be heard in private. Mr Browne QC, who appeared for the defendant, and vigorously resisted the injunction, did not really oppose that initial application. He realistically accepted that it was, as Mr Tomlinson submitted, a necessary measure because a public hearing would have defeated the purpose of the application before it had been heard and decided.
Having heard the argument in private, I concluded that the claimants should be granted the injunction they seek, until the return date of an application notice which the claimants have undertaken to issue, seeking the continuation of the injunction until trial. In the event, it has been agreed that the further hearing will take place on 6 May 2015.
In a short private ruling I gave brief reasons for the conclusion I had reached, before opening the court to the public and providing a public but brief account of the proceedings and my conclusions. The amount of information I could include in that account was necessarily curtailed by my conclusion that it neither the fact nor details of the claimants' relationship ought to be made public, at least at this stage. This short written judgment is intended to make a slightly fuller but still necessarily brief summary available to a wider public.
The first claimant is married, though the couple are separated. The first claimant holds a senior position in an educational institution. The second claimant is an adult who is also associated with that institution. The two have been in a personal relationship for some two years. They have taken steps to keep the relationship secret so that the fact of the relationship is known, according to the evidence of the first claimant, to some but only a small number of others associated with the institution.
There is evidence that the fact of the relationship is also known to some in the media, not limited to the defendant, Associated Newspapers. That appears to have come about because an anonymous letter has been circulated amongst certain media organisations giving some information about the relationship, although it does not name the second claimant. There is no evidence that the relationship is in the public domain. It is said by Mr Tomlinson that the information is protected by the laws of breach of confidence and misuse of private information.
The principles to be applied on an application of this kind are well established.
i) Section 12(3) of the Human Rights Act 1998 provides that an applicant for an injunction of this kind must satisfy the court that they are likely to succeed at trial in establishing that publication should not be allowed. In this context "likely" means more likely than not.
ii) In order to succeed in a claim for breach of confidence it must be shown that the information in question is confidential in character, that the defendant owes the claimants a duty of confidence in respect of it, and that the use or disclosure that is threatened would represent a breach of that duty.
iii) To make out a claim in misuse of private information a claimant must show that they enjoy a reasonable expectation of privacy in respect of the information in question; if that is established the court must engage in close scrutiny of the specific rights in play before it and determine whether, on the one hand, the privacy rights of the claimants should yield to the rights of the defendant and others to the free flow of information or, on the other hand, the claimants' rights should prevail over those of others. The competing rights are of inherently equal value. The answer is determined by the yardsticks of necessity and proportionality.
iv) The question at this stage is therefore whether, on the evidence now before the court, the claimants have shown that it is more likely than not that the court will at trial reach the conclusions necessary for the establishment of these claims.
I emphasise that the decision on an application such as this has to be made on the basis of the evidence before the court on the application. That evidence is often incomplete, and can leave some uncertainties about relevant facts. The court must do its best, without engaging in speculation, to arrive at an assessment of the most likely outcome if all the evidence was before it at a trial.
This is a case in which the details of the relationship are not at the heart of the argument. The defendant contends that it does not have and is not interested in publishing details of what has passed between the claimants but only the fact that they are and have been in an intimate personal relationship. There is no argument of substance advanced in response to those parts of the injunction sought that seek to restrain the disclosure of details of the relationship, and pictures of the two together.
Whether the fact of a relationship is private or confidential information will depend on the circumstances of each case. Very often it will not be confidential or private. The relationship between married people is a public fact and in no way confidential, for example. Other relationships involving less formal, public, or enduring commitments can also be public information and not private or confidential. In this case I accepted the claimants' submission that the fact of their relationship is at the present time an item of information that is both confidential and private. The extent to which it is known appears to be very limited. At this stage I consider that Mr Tomlinson's submission that the claimants have a right to choose who they tell about the relationship and when is one that is likely to be accepted at trial. I also consider that it is likely that at trial the court would conclude that the defendant is under a duty of confidence in respect of the information. The core of the argument seems to me to relate to the question of breach of duty (in the law of confidence) or the second, balancing, stage of the misuse claim.
Mr Browne has submitted that the fact of the relationship between these claimants is an item of information which it is in the public interest to make known. To put it another way, the Article 10 rights of the defendant and the general public to impart and receive this information are said to outweigh the limited weight to be given to the claimants' rights. At its highest, his argument has been that the claimant, in entering into and conducting this relationship, has misconducted himself in such a way that it is legitimate to make the facts known. Alternatively, Mr Browne has submitted that there are grounds to believe or suspect that the way the first claimant has behaved represents an abuse of his position and a breach of trust, which it is legitimate to make public. In the further alternative, he has submitted that the fact of the relationship between these two is of itself something that some members of the public may legitimately regard as improper, because of the position held by the first claimant; and that the fact should therefore be made public in order that a debate can be had about whether it is improper.
As Mr Browne accepted, it is impossible for me on this application to determine whether the first claimant has been guilty of the kinds of misconduct which at times were alleged as a fact. I am not satisfied that there are, on the evidence presently available on this short notice application, good or reasonable grounds to believe or suspect that the first claimant has engaged in any breach of trust or abuse of his position. The proposition appears speculative. I accept that there is a genuine public interest in debating the ethics of personal relationships within an educational context, and how these should be approached and dealt with. I accept also that it is important for such a debate to be more than an arid theoretical one. There is a legitimate interest in such a debate being informed by concrete examples or illustrations. I do not consider it likely however that at a trial the court would conclude that the facts of and surrounding the relationship between these two claimants are such that it is in the public interest to make those facts known for those purposes.
Having reached these conclusions I granted the injunctions sought, including an order anonymising the parties. I considered this to be clearly the appropriate course. To adopt what was Mr Browne's fall back position, of granting an injunction restraining publication of the information, but permitting disclosure of the parties' identities would in practice have led to the information becoming public within a short period of time. That is because there is other information in the public domain that would enable an interested observer to piece together the jigsaw without difficulty.
These are, in brief summary, the reasons why I have granted the claimants the temporary injunctions they seek. I add that the evidence necessarily put together in haste did not include a witness statement from the second claimant, but Mr Tomlinson undertook on her behalf that one would be made, filed and served by 4pm next Monday. The evidence did not include anything from the first claimant's spouse, which is another element of the picture of potential significance that may become clearer in due course.
The evidence was also lacking in detail or clarity about a third matter, namely when and how and in what terms the fact of the relationship was made known to those responsible for the governance of the institution in question. It is clear that the senior executive officer knows, and the first claimant's evidence suggested that it was the first claimant that made the disclosure. It is not clear, however, and there is nothing as to when the disclosure was made. This therefore is another area of the evidence that I would expect to be clarified in further evidence. At present it seems to me more likely than not that the claimant made disclosure, and did so at an appropriate time. |
Mr Justice Nicol :
The essential facts of this claim are short and tragic. In 2007 the Claimant's father ('F') shot and killed the Claimant's mother. He was convicted of manslaughter on grounds of diminished responsibility and sentenced to a Hospital Order under the Mental Health Act 1983 s.37 and made subject to a Restriction Order in accordance with s.41 of the same Act. He was detained at the Shaftesbury Clinic which is part of Springfield University Hospital which in turn is run by the Second Defendant. In 2009 it was suspected that he was suffering from Huntington's Disease and he was referred to St George's Hospital which is the responsibility of the First Defendant. While he was at the Shaftesbury Clinic he was also seen by a social worker who was employed by the Third Defendant. For present purposes I can refer to all three Defendants collectively. It is not necessary to distinguish between them. In November 2009 it was confirmed that F did indeed have Huntington's Disease.
Huntington's Disease is an extremely serious condition. It is also genetic in origin. If a parent has it, there is a 50% chance that his or her child will have it as well. For good reason therefore, the various health professionals sought F's consent to disclose the diagnosis to his daughter. As it happens, the Claimant was pregnant at this time. It is pleaded that the Defendants were aware of this and aware that the Claimant would be very concerned about having a child who might also have Huntington's Disease. F refused to allow the medical staff to tell his daughter about this diagnosis. They did not do so and F's daughter ('C') was born in April 2010. In August 2010 the Claimant was told accidentally by one of her father's doctors that he had Huntington's Disease. In January 2013 the Claimant herself was diagnosed with the same condition. It is too early to tell whether C also has Huntington's Disease since it is not usual to test for it until adulthood. In her Amended Particulars of Claim the Claimant alleges that the failure to tell her of her father's condition was (a) actionable negligence on the part of the Defendants and (b) a violation of her rights under Article 8 of the European Convention on Human Rights. She pleads that if she had been informed of her father's condition, she would have undergone a test to see whether she had it as well. Once that showed positive, she would have terminated her pregnancy. She says she has suffered psychiatric damage because of the Defendant's failure to inform her, and, if her daughter does have the disease, the Claimant says she will also incur additional expense which would otherwise have been avoided.
The claim is at an early stage. The Claim Form has been issued and Particulars of Claim have been served. Draft Amendments to the Particulars have been proposed. The Defendants apply, however, to bring the claim to an end. They submit I should strike it out because it discloses no reasonable cause of action. They have also sought summary judgment but, Mr Havers QC on their behalf, accepted that this added nothing to the strike out application.
In short, Mr Havers submits that, even if all the factual allegations in the Draft Amended Particulars of Claim are proved, it is plain that the Claimant will not be able to establish a relevant duty of care on the part of the Defendants and she does not have an arguable claim that her rights under the Convention have been violated.
I need to add a little more detail from the pleadings (for simplicity I will refer to the Draft Amended Particulars of Claim as 'POC'). The Claimant and her sister from time to time attended the Springfield Clinic for family therapy. I can see from the medical records that this was suggested to F in January 2009. There was a meeting between a representative of the family therapy team, F and the Claimant in March 2009 and further meetings between the three of them in October, November and December 2009. The Claimant pleads as well that she attended multi-disciplinary meetings relating to her father's care. In August 2009 one of the doctors noted that F had said that he had told his brother of what would then have been a possible diagnosis of Huntington's Disease. There was discussion among the medical staff as to whether the Claimant should be told about the diagnosis (particularly in view of her pregnancy) but the prevailing view seems to have been that the confidentiality of the information should be respected and should not be overridden. The notes record that F "was concerned that his daughters should not be informed about the possibility of HD as he felt they might get upset, kill themselves or have an abortion." The notes record the professionals' concern as to the wisdom of his decision.
A person who is detained as F was must be discharged if a tribunal so orders. In the past the Tribunal in question was the Mental Health Review Tribunal. Now it is the First Tier Tribunal (Health Education and Social Care Chamber) Mental Health. On 5th August 2010 the Tribunal made a conditional order for F's discharge. On 9th December 2010 it confirmed that the conditions were in place and discharge could proceed on the previously specified conditions.
The Claimant placed considerable reliance on a report of a Joint Committee of the Royal College of Physicians, the Royal College of Pathologists and the British Society for Human Genetics. This was published in April 2006 and was entitled, "Consent and Confidentiality in Genetic Practice: Guidance on Genetic Testing and Sharing Genetic Information." One section of the report dealt with disclosure of information. At paragraph 2.5.3 the Report discussed the position where consent to release information had been refused. It said,
"The Human Genetics Commission, the Nuffield Council on Bioethics and the GMC have all expressed the view that the rule of confidentiality is not absolute. In special circumstances it may be justified to break confidence where the aversion of harm by the disclosure substantially outweighs the patient's claim to confidentiality. Examples may include a person declining to inform relatives of a genetic risk of which they may be unaware, or to allow the release of information to allow specific genetic testing to be undertaken.
Before disclosure is made in such circumstances, an attempt should be made to persuade the patient in question to consent to disclosure; the benefit to those at risk should be so considerable as to outweigh any distress which disclosure would cause the patient; and the information should be anonymised and restricted as far as possible to that which is strictly necessary for the communication of risk.
We recommend that before disclosure is made when consent has been withheld, the situation should be discussed with professional colleagues and the reasons for disclosure documented. Current GMC guidance states that the individual should generally be informed before disclosing the information."
The reference to the GMC was to its report in 2004 on Confidentiality. Updated Guidance was published by the GMC in 2009. This identifies as one of the principles to be applied that,
"Confidentiality is central to the trust between doctors and patients. Without assurances about confidentiality, patients may be reluctant to seek medical attention or to give doctors the information they need in order to provide good care. But appropriate information sharing is essential to the efficient provision of safe, effective care, both for the individual patient and for the wider community of patients."
The Guidance recognises that the duty of confidentiality is not absolute. Disclosure may, for instance, be permitted in the public interest. Under the heading, "Disclosure to Protect Others" the Guidance says,
"Disclosure of personal information about a patient without consent may be justified in the public interest if failure to disclose may expose others to a risk of death or serious harm. You should still seek the patient's consent to disclosure if practicable and consider any reasons given for refusal.
Such a situation might arise, for example, when a disclosure would be likely to assist in the prevention, detection or prosecution of serious crime, especially crimes against the person. When victims of violence refuse police assistance, disclosure may still be justified if others remain at risk, for example from someone who is prepared to use weapons, or from domestic violence when children or others may be at risk.
If a patient's refusal to consent to disclosure leaves others exposed to a risk so serious that it outweighs the patient's and the public interest in maintaining confidentiality, or if it is not practicable or safe to seek the patient's consent, you should disclose information promptly to an appropriate person or authority. You should inform the patient before disclosing the information, if practicable and safe, even if you intend to disclose without their consent."
It is convenient to address first the question as to whether the Claimant's claim in negligence should be struck out before considering the claim under the Convention.
The Defendants' submissions: negligence
Mr Havers referred to the familiar tripartite test of a duty of care in Caparo v Dickman [1990] 2 AC 605. For the purposes of the present application, the Defendants were prepared to proceed on the basis that the Claimant would be able to establish at trial that injury to her would have been reasonably foreseeable if they failed to inform her that her father had Huntington's Disease. Again, for the purposes of the present application, they were prepared to accept that there was sufficient proximity between the Claimant and the Defendants for a duty of care to arise. However, there was no reasonable prospect of the Claimant establishing that it would be fair, just or reasonable to impose on the Defendants a duty of care towards the Claimant in this regard.
Mr Havers emphasised that the Claimant was seeking to impose liability for an omission – a failure to inform her of her father's condition. Ordinarily that required either some special relationship between Claimant and Defendant or the Defendant assuming a responsibility for the care of the Claimant. Yet the present situation could not be characterised in either way. Furthermore, the Claimant was seeking to recover damages in a novel situation. Of course, the categories of duty of care were not closed. However, they should be expanded only incrementally. The Claimant could not point to any situation where a duty of care was recognised to exist which was at all comparable or close to the present one.
As the GMC Guidance stressed, it was very important that a patient should be able to rely on his or her doctor respecting the confidential character of the information which passed between them. The law recognised this by imposing a duty of confidence on the doctor. It was not absolute. The public interest in preserving confidence could, in certain circumstances, be outweighed by the public interest in disclosure, but that did not make it fair, just or reasonable, to impose a duty of care on the Defendants to the Claimant. Mr Havers advanced nine reasons why I should come to that conclusion.
i) What was put against the public interest in preserving confidence in the present context was not a public interest in disclosure, but the private interest of the Claimant.
ii) The law of confidence allowed a doctor to disclose confidential information in certain circumstances – see for instance Attorney-General v Guardian Newspapers (No.2) [1990] 2 AC 109 (and I would add W v Egdell [1990] Ch 359). The Claimant was contending for a duty to do so. Consciously or unconsciously, this might encourage doctors to breach confidence where it might not otherwise have been justified.
iii) Doctors would be subject to conflicting duties, liable to be sued by their patient if they disclose information which should have remained confidential, liable to be sued by a third party, such as the Claimant, if they fail to disclose information which they should have revealed.
iv) If a doctor is subject to a duty of care in some situations to disclose information to third parties, it will undermine the trust and confidence which is so important to the doctor/patient relationship. It may lead to patients being less candid with their doctors. The same point had been made by the European Court of Human Rights in the context of Article 8 of the Convention – see Z v Finland (1998) 25 EHRR 371 at [95].
v) If doctors owed a duty of care to third parties, it may result in doctors putting pressure on their patients to agree to disclosure to avoid the risk of being sued by third parties.
vi) Some third parties may not wish to receive information. Yet a doctor may not be able to explore whether this is the case without effectively imparting the information itself.
vii) It is possible that the third party may suffer psychiatric harm if he or she is told the information in question. The doctor will be in a dilemma as to how to explore whether this is the case when the third party is not or may not be his or her patient.
viii) Doctors receive a very great deal of confidential information. It would be burdensome to place on them a duty to consider whether any of it needs to be disclosed to third parties. The time and resources committed to this will be a distraction from treating patients.
ix) This significant extension of a doctor's duty of care would be contrary to the incremental way in which the law of negligence ought to progress.
Claimant's submissions: negligence
Ms Gumbel QC for the Claimant reminded me of the caution with which I should approach an application to strike out a claim. Not only must I assume that the Claimant would be able to prove the facts pleaded in the PoC, but I should also not foreclose the possibility of her being able to establish a duty of care unless it was clear that this was doomed to failure. On many previous occasions the higher courts had lamented that the examination of whether a duty of care existed had been tested against hypothetically assumed facts rather than by reference to facts proved at trial. She also stressed that what mattered was whether this Claimant on these facts could establish a duty of care. I should not be diverted into resolving the precise limits that such a duty would entail.
Of particular importance in this case was the fact that F was a detained mental patient. The Claimant was not just any third party, but the Claimant's daughter. Issues such as the existence of a special relationship and the assumption of responsibility were usually important where there would not otherwise be a sufficiently proximate relationship between Claimant and Defendant. For the purpose of this application, however, the Defendant was prepared to accept that there was the necessary proximity between them. Furthermore, the Claimant herself had been undergoing family therapy with the Defendants. She was in that sense their patient, like her father. The purpose of the therapy was to help her come to terms with the fact that her father had killed her mother, but that was not possible if she was kept in ignorance of this aspect of her father's condition which may have been material in what had led him to do what he had done. There was, she submitted, no proper assessment of her father's ability to make an informed decision as to whether it was right to withhold information about his diagnosis from her. In addition, the Claimant was in discussion with the doctors about her father's release into the community. F had told his brother about the diagnosis of Huntington's Disease. That may mean that the information was likely to get out anyway.
The Defendants recognised that a doctor was not always required to preserve patient confidentiality. The GMC Guidance contemplated that doctors would not simply be at liberty on occasions to disclose confidential information, but might be under a positive duty to do so. The duty of care for which the Claimant contended would not therefore be so novel a development as the Defendants submitted.
Negligence: Discussion
The Hospital and Restriction Orders to which F was subject clearly curtailed his liberty. For all practical purposes, he was not going to be discharged from hospital until the Tribunal determined that this was consistent with the protection of public safety. But in many important ways the relationship between him and the doctors who were treating him was the same as between any other doctor and patient. Thus, it was not disputed by the Claimant that the starting point was that the Defendants were obliged to respect the confidentiality of his medical information. Manifestly, this was a qualified duty. It could not, for instance, prevent the Defendants from reporting relevant matters to the Tribunal. They did disclose to the Tribunal the fact of F's diagnosis of Huntington's disease. It was thought this might have had some bearing on the killing of his wife. The Claimant was engaged in discussions with the medical staff about her father's discharge into the community. I cannot see, however, how that has any bearing on the current issue. The duty of care for which the Claimant contends was not in relation to her father's eventual discharge. That did not occur until December 2010. Her complaint is that she was not given information about his genetic condition in time for her to test herself and to terminate her pregnancy well prior to C's birth in April 2010.
F's conviction for manslaughter implied acceptance that he was (at least in 2007) suffering from a disease of the mind which diminished his responsibility for his criminal act. It did not mean that he lacked capacity to give or withhold his consent to his daughter being told of the diagnosis of Huntington's Disease. The Mental Capacity Act 2005 establishes the principles to be applied in that regard. Importantly, a person is assumed to have capacity until the contrary is established (2005 Act s.1(2)). Capacity is determined issue by issue (ibid s.2(1)). A person is not to be treated as unable to make a decision simply because he makes an unwise one (ibid s.1(4)). The Claimant does not plead that her father did lack capacity to make a decision that she should not be told of his diagnosis. In Ms Gumbel's written and oral submissions it was argued that the Defendants did not properly consider whether F was able to take informed decisions. However, this does not take the Claimant far enough absent an assertion (which is not made) that, if the issue had been examined, the Defendants would have realised F did not have capacity to instruct the doctors to withhold the information from his daughter.
It is of little importance that F had apparently told his brother of his condition. This did not strip the information of its confidential character. It could only be a matter of speculation as to whether this would lead to the information being circulated more widely and, it was not this but the accidental disclosure by one of the hospital doctors which led to the Claimant learning of the diagnosis.
One of the particulars of negligence is that the Defendants "failed to give proper advice and counselling to [F] so as to persuade him of the need for his daughters including the Claimant to be told of the diagnosis." I cannot, though, see how this assists the Claimant unless she were to assert (which she does not) that, if her father had been given this advice and counselling, he would have consented to the disclosure being made to her. The other particulars of negligence are steps along the way to the Claimant's primary case that the Defendants were negligent in not disclosing this information to her despite the absence of consent from her father.
Does it make a difference that the Claimant was undergoing family therapy with the Defendants? It has to be said that there was no reference to this in the original Particulars of Claim and, even with the proposed amendments, the references are scant and do little to explain its relevance. It did feature more prominently in Ms Gumbel's written and oral submissions. She argued that because the Defendants were encouraging the Claimant to take part in family therapy and because she had agreed to do so, there was a doctor / patient relationship between her and them. This also meant that her complaint was not just of an omission to act, but amounted to negligence in the way in which the family therapy was carried out.
Attractively as this was argued by Ms Gumbel, I am not persuaded that it significantly affects the viability of the Claimant's case that the Defendants owed her a relevant duty of care. The purpose of the family therapy was, as I have said, to help the whole family (and particularly the Claimant and her sister) come to terms with what had happened. I will assume for present purposes that F's Huntington's Disease was a contributory factor in his mental condition which led him to shoot his wife. It may well be that the Defendants owed the Claimant a duty of care in the way in which they carried out the family therapy. But none of this means that the Defendants were obliged to disclose to some family members information which they held under a duty of confidence to another family member. I do not accept that the claim can be characterised as badly performed family therapy rather than the omission to disclose information which the Claimant would have wanted to know.
In my judgment the duty of care which the Claimant is trying to construct is entirely novel. I asked Ms Gumbel what was the nearest situation in which a duty of care had been recognised. She referred me to A v East Kent Hospitals University NHS Foundation Trust [2015] EWHC 1038 (QB). In that case a mother who had been receiving ante-natal care from the defendant complained that she had not been told that her baby might be suffering from a chromosomal abnormality. If she had been so advised, she said she would have had an abortion.
However, this was an entirely conventional duty of care owed by a doctor to his patient. It was common ground that if there had been evidence at either of two ante-natal consultations of a material risk that the baby was suffering from chromosomal abnormality then this ought to have been disclosed to the Claimant. That is far removed from the duty of care which the Claimant needs to establish in the present case.
Ms Gumbel referred me as well to the case of Angela P v St James and Seacroft University Hospital NHS Trust [2001] EWCA Civ 560 where a sterilisation procedure had gone wrong and the woman concerned had given birth to a child with a disability. It was held that the hospital was liable for the costs of bringing up a disabled child, but not the costs which would have been incurred in bringing up a healthy child. This, too, however, is far removed from the present situation. In that case the Claimant was the doctor's patient. It was plain that he owed her a duty of care. The debate revolved around its precise content and, in particular, whether it included duties in relation to the different economic losses which the Claimant had suffered. Angela P is not helpful in providing a springboard or stepping stone to the very different duty for which the Claimant in the present case contends.
On the other hand the Defendants pointed to authorities which strongly suggested that no such duty of care would be owed to the Claimant. In Powell v Boladz [1998] Lloyds Rep Med 116 CA the parents of a young boy who had been treated by the Defendant brought a claim in negligence. They alleged that certain documentary records of their son's treatment had been altered after his death and the realisation of this had caused the father psychiatric harm. The claim was struck out because, amongst other reasons, the doctor owed no duty of care to the parents. The duty of care was owed to the child, his patient and no other - see p.123. The Court of Appeal followed the decision of the House of Lords in X v Bedfordshire County Council [1995] 2 AC 633. In that case parents of children who had been taken into care following allegations of abuse brought claims in negligence against the local authorities involved on the grounds that the abuse assessments were carelessly made. The claims were struck out as disclosing no reasonable cause of action. The House of Lords confirmed that no duty of care was owed to the parents. Mr Havers relied on this as well for confirmation of the incremental approach to novel duties of care (see Lord Browne-Wilkinson at p.751) and for recognition of the danger of imposing duties of care which might lead to a defensive and cautious approach by public authorities (ibid at p.750). The claims of parents wrongly suspected of child abuse were again unsuccessful in D v East Berkshire NHS Trust [2005] 2 AC 373. Once again the parents' claims were struck out as disclosing no reasonable cause of action because no duty of care was owed to them. Considerable stress was laid on the danger of creating duties which could potentially conflict, exposing the doctor to a claim from the parent if he acted on his suspicion of abuse and from the child if he did not - see Lord Nicholls at [85], Lord Rodger at [110] and Lord Brown at [129] and [137].
In my judgment, therefore, this is not a case where the Claimant can show that a novel duty of care would be but an incremental development from some well established duty. It would, on the contrary, be a radical departure to impose liability in circumstances such as these. It would be an example of the "giant step" which Lord Toulson in Michael v Chief Constable of the South Wales Police [2015] UKSC 2 at [102] contrasted with the proper development of the common law of negligence by incremental steps.
While in some circumstances, it may be difficult to distinguish between negligence which takes the form of an omission, on the one hand, from careless positive action, on the other, I struggle to see how the Claimant's complaint can be characterised as anything other than an omission. The Claimant's involvement in family therapy provided by the Defendants may come closest to positive action by them. Yet still, on analysis, the complaint remains, as it is put in the PoC about what the Defendants did not do – they did not tell her about her father's condition. Whether that is actionable depends on whether they were under a duty to do so. There was no assumption of responsibility towards the Claimant in this regard and, even taking account of all the facts pleaded in the PoC, I do not accept Ms Gumbel's submission that there was a special relationship between the Defendants and the Claimant. I recognise that the search for a common principle uniting such relationships is somewhat elusive. In Barrett v Ministry of Defence [1995] 1 WLR 1217 Beldam LJ suggested at p.1224 that,
"The characteristic which distinguishes those relationships is reliance expressed or implied in the relationship which the party to whom the duty is owed is entitled to place on the other to make provision for his safety."
Yet that does not begin to describe the relationship between the Claimant and the Defendants. There is nothing analogous in that to the situations where a special relationship has been found to exist, such as an occupier of land to neighbours, an employer to his employees, a parent or a school to a child. In Barrett itself the Court of Appeal held that the Army owed no duty to an off-duty serviceman to prevent him consuming excessive alcohol in the mess bar. In her skeleton argument, Ms Gumbel submitted "It would be very curious if the Defendants' clinicians were entitled to discuss the Claimant's pregnancy and the possibility she would have an abortion but not owe any duties to advise her as to the risks to her fetus of developing a genetic disorder." But in my judgment this juxtaposition does not strengthen the Claimant's contention. The clinicians were "entitled to discuss the Claimant's pregnancy and the possibility she would have an abortion" because on the pleaded facts she had made them aware of these matters. They were matters properly to be taken into account in the discussions they had with F and the advice that they gave to him. However, they fall well short of demonstrating that the Defendants owed a duty of care to the Claimant to disclose information about her father's diagnosis to her against the wishes of her father, their patient. Ordinarily, therefore, I accept the absence of a special relationship and the absence of assumption of responsibility mean that the Claimant cannot establish a duty of care.
Ms Gumbel is entitled to observe that the Defendants have been prepared to concede for the purpose of the present application that there was a sufficient degree of proximity for a duty of care to exist. Sometimes the existence of a special relationship or the assumption of responsibility is said to be important only because there is no such proximity. Whether that is so or not, Mr Havers, as I have indicated, submitted that it would not be fair, just or reasonable, to impose a duty of care of the kind contended for by the Claimant.
Ms Gumbel urged me to focus on the facts of the present case. She did so, presumably, to discourage me from being deflected by the wider implications which Mr Havers had argued would follow if there was a duty of care in the present case. Yet, unless there is some limiting principle inherent in the facts of the immediate case, a court must take into account the potential consequences of a new duty of care. I was not able to discern any such limiting principle in the Claimant's submissions and, while individually there may be scope for debate about Mr Havers' submissions, cumulatively they provide a formidable argument as to why it would not be fair, just or reasonable to find a duty of care of the type for which the Claimant contends.
There have, as Ms Gumbel submitted, been numerous warnings about the caution which must be exercised before striking out a claim at the pleadings stage – see for instance X v Bedfordshire (above) at p.740 and Barrett v London Borough of Enfield [2001] 2 AC 550, at 557. On the other hand, if it is plain and certain that the pleaded facts do not disclose a reasonable cause of action it is to the advantage of all concerned that the claim should not proceed to what would be a costly but inevitably fruitless trial – see D v East Berkshire Community Health NHS Trust (above) at [99]. I have reached the clear conclusion that that is how the Claimant's cause of action in negligence should be described. There is no reasonably arguable duty of care. The claim is bound to fail. It should be struck out.
The Human Rights claim
It is not unfair to characterise this part of the argument for the Claimant as an afterthought. The Claim Form alleges a claim in negligence. It makes no reference to the Convention. On the contrary, it is said in terms that the claim does not include any issues under the Human Rights Act 1998.
The PoC makes scant reference to this claim. It is alleged that
"The failure of the First, Second and Third Defendants, their servants and agents to notify the Claimant of the diagnosis of her father and/or that she was at increased risk of inheriting the disease herself, which had a devastating effect on her own life was a breach of duty of care and was contrary to the Claimant's rights under the Human Rights Act 1998." [my emphasis].
Towards the end of the pleading it is said,
"Further the Claimant claims damages under the Human Rights Act 1998 for breach of Article 8 of the European Convention on Human Rights."
That is all.
In her skeleton argument Ms Gumbel submitted that the Claimant's right to family life was obviously affected by the diagnosis of her father's condition. The Defendants were obliged to consider and weigh those interests against her father's right to have his confidentiality respected. The balancing of those interests could only be done at trial.
Mr Havers submitted that, even assuming Article 8 was engaged, any interference would plainly be justified under Article 8(2) for all of the reasons relied upon in answer to the common law claim. This afterthought on the Claimant's behalf therefore added nothing of substance.
Ms Gumbel argued that the Convention was relevant in two respects: it could inform the development of the common law and there were the independent rights under the Human Rights Act. The Claimant relied on both.
It has to be the Claimant's case that the positive duty implicit in Article 8 required the Defendants to disclose her father's condition to her. Only then could their failure constitute an interference with her rights under Article 8 (whether to her family life or, as I think is more accurate, her private life). It may not matter whether the debate is seen as taking place over the existence of such a positive duty or the justification for any interference. Either way there is plainly a balance to be struck between the value to the Claimant of knowing that her father had this genetic condition (and so that she had a 50% chance of also being afflicted) on the one hand and her father's right (also under Article 8) to have the confidentiality of his medical information preserved.
I agree with Mr Havers that all the reasons which I have set out in the context of the common law claim, mean that the balance comes down decisively against the Claimant. The Convention does not assist the Claimant in either of the ways she puts her case.
Conclusion
It follows that I accede to the Defendants' application. The claim is struck out.
Publicity
At the beginning of the hearing, Ms Gumbel applied for an order that the Claimant, her father and her daughter should be anonymised. Mr Havers was neutral in respect of that matter.
Ms Gumbel referred me to JX MX v Dartford and Gravesham NHS Trust [2015] EWCA Civ 96 and A v East Kent Hospitals University NHS Foundation Trust [2015] EWHC 1038 (QB) where the authorities, legislation and provisions of the Civil Procedure Rules are fully set out.
I recognised that the normal principle is that hearings should be conducted in public and be fully reportable. What was sought was a departure from this. Such a departure could, in principle, be justified in the interests of the administration of justice and/or by virtue of the Claimant's rights under Article 8 of the European Convention on Human Rights.
There were no members of the press present at the hearing. I was conscious that I should be particularly cautious about making an order affecting freedom of expression when there was no argument in opposition. Nonetheless, I considered that such an order was necessary and I granted it.
I briefly explain my reasons why. As is clear from the judgment above, the Claimant's father has been diagnosed with Huntington's Disease. This is a genetic condition. A sufferer's child has a 50% chance of inheriting it. The Claimant has subsequently discovered that she, too, has Huntington's Disease. It is her case that if she was given the information when she should have been, she would have terminated the baby she was then carrying. She was not. That child was born. It is her daughter. It is usual not to test a child for Huntington's Disease until she is an adult. The daughter does not at present know her mother has Huntington's Disease. The daughter does not know that she has a 50% chance of inheriting it herself. I accepted that there could be serious consequences for the daughter if she found out about these matters through a report of the present proceedings. This together with the rights of the Claimant and her daughter not to have their private lives interfered with by the action of the court, appeared to me to justify the restriction on publicity which the Claimant sought.
I should make clear that I was less impressed by Ms Gumbel's argument that it would be harmful for the Claimant's daughter if she were to learn through publicity of these proceedings that her grandfather had killed her grandmother. Sadly, such family killings are not unique. Normally, the suffering which is caused to family members cannot be allayed by restricting publicity of court proceedings.
I was moreover aware that there had been publicity at the time of the Claimant's father's trial. The order which I made included provision for service not only on the Press Association (by whom it may be distributed to their members) but to those publishers whom the Claimant was aware had written stories about the case in the past. The order, as is usual, included the opportunity for an application by the press to set aside or vary the restrictions which I imposed. If such an application is made, I will, of course, consider afresh whether they ought to continue. |
Mr Justice Green :
A. Introduction
There is before the Court an application for permission to appeal (and if granted the substantive appeal) against an Order of District Judge Khan made on 28th January 2015 in which the Judge permitted the Claimant to adduce expert evidence from a Mr J Franklin in the discipline of "cycling skills and safety".
The situation which has arisen upon this appeal is somewhat unusual. The actual report of Mr Franklin has been prepared and served upon the Defendant in accordance with the Judge's Order. However, it was served in a brown paper envelope upon condition that the Defendant did not review the report pending this application. Accordingly, the Defendant has been required to advance this application without having seen the expert report in question and, therefore, upon somewhat hypothetical points of principle only, which are to the effect that the Judge erred in granting permission to adduce the report upon the basis that he took account of irrelevant considerations but, equally, ignored relevant considerations.
In particular, the Grounds of Appeal are couched in the following way:
"(1) The learned district judge was wrong to give the Claimant permission to call expert evidence on the issue of what would amount to the exercise of reasonable care by a cyclist on the road where the accident occurred because such evidence is not reasonably required to resolve the proceedings. In particular:
a. The standard of care to be expected of a road user, whether a car driver, a pedestrian or a cyclist, is a matter for the court, not expert evidence; and/or
b. Expert evidence on the issue would be inadmissible and/or unnecessary.
(2) Alternatively, the learned district judge was wrong to give permission for evidence of this nature without first requiring the Claimant to produce it so that he could be properly satisfied it was both admissible and reasonably required to resolve the proceedings;
(3) Alternatively, having granted the Claimant permission to call evidence of this nature, the learned district judge ought to have granted such permission to both parties. His failure to do was wrong because it failed to ensure that the parties were on equal footing in a claim which is of high value".
B. Summary of relevant facts
The facts may be summarised shortly. The Claimant was a cyclist who was injured whilst cycling on a downhill section of Mill Hill, Lelant Downs, Cornwall. The Defendant is, and was at all relevant times, the Highway Authority in relation to that road. At approximately 3.45pm on 27th August 2010 the Claimant was lawfully cycling on the downhill section of Mill Hill just prior to the Water Mill Inn Pub Restaurant ("the Restaurant") when his bicycle came into contact with the verge which encroached into the carriageway causing the Claimant to lose control and for the bicycle to stop suddenly. The consequence was that the Claimant was thrown over the handlebars and he fell sustaining severe injuries.
Mill Hill is an unclassified highway which descended, in the Claimant's direction of travel, at a relatively steep gradient of between 8% and 14% towards a dip in the road by the Restaurant. There are photographs of the relevant stretch of road before the Court and I have reviewed these. The road is subject to the National Speed Limit for unlit single carriageways, namely 60mph. It is a designated and signed tourist route in and out of St Ives. It is a busy road not least because it is the preferred and signed route for HGVs and coaches going into and from St Ives. The verge to the Claimant's nearside, situated just before the Restaurant and towards the bottom of the dip in the road, encroaches into the carriageway thereby reducing the width of the nearside lane road. The point at which the verge encroaches is also the site of an ancient Cornish hedge stonewall and drain ("the Cornish hedge").
Shortly before the location of the accident, the nearside of the carriageway narrows with the Cornish hedge encroaching into the carriageway thereby removing any intervening verge. The Claimants aver that at this point the "safe line of travel was difficult to anticipate and distinguish". It is pleaded that this was exacerbated by the presence of debris and degraded tarmacadam coupled with vegetation and soft earth. It is also claimed that visibility for road users descending the hill was substantially reduced in the prevailing circumstances at the time of the accident by reason of strong sunlight and full foliage which caused a deep shadow over the location.
C. The claim
The Claimant's case is that he was lawfully riding down the slope of Mill Hill with a motor vehicle behind him and that there was traffic approaching in the opposite direction which thereby reduced the overall available road space. He claims that he was riding appropriately close to the nearside edge of the carriageway in order to give motor vehicle users the maximum available space to overtake if they so chose. He claims that having come into contact with the verge where it encroached into the width of the carriageway he lost control of the bicycle which stopped suddenly throwing him over the handlebars.
He alleges that the Claimant's accident was caused by the Defendant's breach of statutory duty, nuisance or alternatively the negligence of the Defendant's employees or agents. Particulars are provided in the Particulars of Claim but, in essence, allege a failure to maintain or repair Mill Hill and, in particular, at the point in the road where the verge encroaches into the width of the carriageway with the consequence that the condition of the road was dangerous contrary to section 41 of the Highways Act 1980 Further, the Defendant caused or permitted the road to be or become or to remain a danger or a trap to persons lawfully using the same and that they failed to take any or any adequate or timely measures to warn persons such as the Claimant of the danger caused by the sudden narrowing of the nearside lane by the encroaching verge. In addition the Defendant failed to place proper warnings or markings on the road and failed to institute or enforce adequate systems of inspection or maintenance. Generally it is alleged that the Defendant failed to take account of concerns about safety caused due to visibility in all weather conditions, but in particular summer months where bright sunlight and deep shadows could restrict visibility of the verge to cyclists.
In its defence, the Council pleads, inter alia, contributory negligence and it is this which has given rise to the desire on the part of the Claimant to adduce expert evidence in relation to cycling safety. Paragraph 8(f)-(h) set out a number of particulars of alleged contributory negligence:
"(f) If he could not see because of bright sunlight or deep shadow, then failed to adjust his speed accordingly and/or dismount;
(g) Cycled too fast for the conditions, which on his own case involved poor visibility due to a combination of sunlight and shade;
(h) Cycled too close to the edge of the metalled carriageway".
D. The Judgment below
During the case management conference on 28th January 2015 the Judge heard argument upon the issue of the admissibility of experts. In particular, the Claimant contended that in view of the Defendant's averment of contributory negligence based upon a failure to adjust the Claimant's speed and cycling too close to the verge, the Claimant wished to call upon the services of an acknowledged expert, Mr Franklin, who had considerable expertise in cycling safety, and indeed was an advisor to the Government upon such issues. The Defendant, in opposition, contended that Mr Franklin's skills did not amount to expert evidence as that term was properly understood in the law; but in any event, it was not relevant to the pleaded issues because the trial Judge would be able to form his or her own view as to the allegations of contributory negligence and would not be assisted by expert opinion.
In response the Claimant submitted that a typical High Court Judge did not ordinarily have experience in cycling, or at least in non-urban cycling, so that what was or was not reasonable would not be a matter upon which the Court would have particular expertise and that the Court would hence benefit from such expert opinion.
The gist of the reasoning of the Judge was that he was satisfied that the expert evidence met the test in CPR 35.1. This provides: "Expert evidence shall be restricted to that which is reasonably required to resolve the proceedings". The text in the White Book (2015) makes plain that the purpose of CPR 35.1 is to enable Courts to control the use of expert evidence to "bolster" cases. Authority makes clear that where the evidence in issue is "factual or obvious" then Courts are unlikely to be prepared to permit expert evidence to be adduced.
The Judge in the present case, as is apparent from the transcript which records his very short reasons for acceding to the Claimant's application, was sympathetic to the application. He said as follows:
"Can I tell you what goes through my mind, and that is this, that I will hear whatever else you have to say, Mr Willems makes out a powerful case for this expert, Mr Franklin, and I think you should be given permission. I think it would be disproportionate to give you permission and not further the overriding objective at this stage for a number of reasons. Firstly, I'd borrow some of the submissions that you make. So far, the Court does not need it, but it may be when you see Mr Franklin's report, there is no hint here, you may want to abandon what you say at (f), (g) and (h) and maybe at (i), (j) and (k) and if you do then you do not need an expert, but if you do then you can come back and ask me for one".
There then followed a short interchange between the Judge and Counsel for the Defendant. The Judge then stated this:
"But expert evidence is evidence that is reasonably required and what is reasonably required is triggered by the issues in the statement of case and you may read Mr Franklin's report and may think to yourselves, well, on the facts those allegations of contributory negligence really cannot be made out, when looked at against what Mr Franklin says and what the other witnesses say, so maybe we do not need an expert and maybe we will make some concessions".
Thereafter the Judge, assisted by Counsel, moved on to the issue of other experts, and in particular highways engineers.
It is important not to read the Judge's reasoning, given concisely and in an extemporary manner, in an overly technical way. The Judges conclusion, in essence, was that Mr Franklin was a legitimate expert, that the discipline upon which he was instructed to express an opinion was properly one which could be described as "expert", and that his evidence might be of assistance to the Judge in the sense that it might be reasonably required to resolve the proceedings.
E. Discussion: The admissibility of the expert evidence
The starting point for my consideration is to recognise two features of the decision taken by the Judge.
First, it is important to acknowledge the provisional nature of the Judge's conclusion. It is relevant that a decision to permit expert evidence is usually one taken considerably prior to trial. It will, moreover, usually be a decision in principle since the Judge will not have before the Court the actual evidence that is sought to be adduced. The decision is thus not one which can or will bind the trial judge, who having seen the expert evidence, might be wholly unimpressed with it and reject is as inappropriate as expert evidence and/or as not helpful. But that will be a judgment formed in the light of the evidence at trial and with the Judge having had the advantage of seeing the expert opinion itself. It must follow that when, in the present case, the Judge ruled in favour of the admission of the evidence he was not, upon any definitive basis, ruling that the evidence was necessarily relevant to the task which the trial Judge would confront. The Judge took into account the acceptance expressly made by Mr Willems QC for the Claimant, and recorded in the transcript of the hearing below, that the trial Judge might, having seen the report, conclude that it did not add anything or much to the trial in which case the Claimant would take the "costs risk". The Judge was therefore addressing a threshold issue which was, for the purpose of case management, whether the evidence should be admitted but that this was without prejudice to any more mature and considered view which a trial Judge might subsequently take.
Secondly, it is also relevant that the Judge adopted a staged approach to the question of expert evidence. The Judge was of the view that, even if he granted the Claimant permission to adduce the expert report, there was no benefit in granting the Defendant permission, at that stage, to adduce responsive evidence since the Defendant, having reviewed the report of Mr Franklin, might decide to abandon allegations of contributory negligence. In such a case there would be no need for the Defendant to instruct their own expert. However, if, having seen the Claimant's expert opinion, they persisted in their averment of contributory negligence they were then entitled to return to Court and apply for permission to adduce a responsive expert.
This application is for permission to appeal. I am not taking de novo the case management decision that has already been taken by the Judge. My task is limited to assessing the lawfulness of the Judge's ruling. These two features or considerations are relevant context to the position that I must adopt towards the application.
Mr Miller QC, who appeared for the Defendant, submitted that the Judge erred in concluding that this was a case requiring expert evidence. He submitted that the standards to be expected of road users, whether drivers, pedestrians or cyclists were matters for the Court. They do not require technical or scientific analysis beyond an application of the Highway Code. Courts routinely determine issues of liability and contributory negligence in cases involving road users, including cyclists upon a weekly if not daily basis and the type of evidence which the Claimant proposed to call from Mr Franklin was neither admissible nor necessary. He also drew my attention to the reasoning of the Judge to the effect that High Court Judges were not cycling experts, and in particular were inexpert in cycling matters away from urban areas. He submitted that this was (even assuming it to be true) an irrelevant consideration. It was submitted in the alternative that given the novelty of this type of evidence and the fact that the use of expert evidence in road traffic cases was exceptional, that the Judge erred and ought not to have reached the view that such evidence was reasonably necessary without first requiring the Claimant to produce the report so that its admissibility and relevance could be properly tested and demonstrated. Finally, he contended that the refusal to grant permission to the Defendant to adduce responsive evidence was unfair and a breach of the principle of equality of arms.
Mr Miller QC cited, in support of his arguments, the well known judgment of the Court of Appeal in Liddel v Middleton [1996] PIQR P36. In that case the Court was concerned with a traditional road traffic accident in which a pedestrian was injured by a moving car. A question arose as to the admissibility of an expert. Lord Justice Stuart-Smith stated of the test of admissibility then laid down in the Civil Evidence Act 1972:
"But that section in no way extends the principles upon which expert evidence is admissible. An expert is only qualified to give expert evidence on a relevant matter, if his knowledge and expertise relate to a matter which is outside the knowledge and experience of a layman. In the reference to an "issue in the proceedings in question" relates to a factual issue and not to the conclusion of law based upon such fact".
(ibid., P41)
Later, Stuart-Smith LJ identified categories of case where expert evidence was both necessary and desirable in road traffic cases including: those where there are no witnesses capable of describing what happened, those where deductions may have to be made from circumstantial evidence or from the position of vehicles after the accident, marks on the road or damage to vehicles, the speed of a vehicle, or the relevant positions of the parties in the moments leading up to the impact. The Judge then proceeded to lay down the limits of expert evidence:
"In such cases the function of the expert is to furnish the Judge with the necessary scientific criteria and assistance based upon his special skill and experience not possessed by ordinary laymen to enable the Judge to interpret the factual evidence of the marks on the road, the damage or whatever it may be. What he is not entitled to do is to say in effect "I have considered the statements and special evidence of the eyewitnesses in this case and I conclude from their evidence that the defendant was going at a certain speed, or that he could have seen the plaintiff at a certain point". These are facts for the trial Judge to find based on the evidence that he accepts and such inferences as he draws from the primary facts found. Still less is the expert entitled to say that in his opinion the defendant should have sounded his horn, seen the plaintiff before he did or taken avoiding action and that in taking some action or failing to take some other action, a party was guilty of negligence. These are matters for the Court, on which the expert's opinion is wholly irrelevant and therefore inadmissible".
(ibid P42, P43)
In that same case the Court emphasised that trial in this jurisdiction was by Judge not expert and that there was a regrettable tendency in personal injury cases involving road traffic and industrial accidents for the parties to enlist the services of experts whether necessary or not. The Judge observed that this simply added to the already high cost of litigation and the length of trials.
The observations of Lord Justice Stuart-Smith are as apposite in 2015 as they were in 1995. Indeed, Lord Justice Gibson specifically endorsed these observations as did Lord Justice Hutchinson. Both were emphatic in their condemnation of the growing use and non-medical cases of the instruction of experts "where no help was really needed" (ibid., P44 per Gibson LJ).
In my view none of this is or should be controversial. Indeed, as already observed the basis of CPR 35.1 is to enable the Court at an early stage to adopt a hands-on and rigorous approach to the control of expert evidence.
Mr Willems QC, for the Claimant, does not, in any material way, dispute the correctness of the above propositions. He submits simply and pithily that it is simply inappropriate for me to re-consider the merits of the Judge's decision because his order, quintessentially, was a classic case management decision falling squarely within his discretion, based upon the above principles. He referred me to two illustrations of judgments of the Court of Appeal making the point that appellate Courts do not, save in narrow well defined circumstances, interfere: See Re U(children) [2015] EWCA per King LJ at paragraphs [32], [33]; and per Arden LJ in Wallbrook Trustee (Jersey) Limited v Fattal [2008] EWCA Civ 427. These emphasise that appellate Courts should not interfere with case management decisions by a Judge who had applied the correct principles and who had taken into account matters which should be taken into account and left out of account matters which were irrelevant unless the Court was satisfied that the decision was so plainly wrong that it had to be regarded as outside the "generous" ambit of the discretion entrusted to the Judge (cf per Arden LJ in Wallbrook at paragraph [33]).
In my judgment the Judge, in the present case, in admitting the evidence of Mr Franklin was squarely within the confines of his legitimate discretion. This is for the following reasons.
First, he has had carriage of the case management of this case throughout and had a far better all round view of the case than is available to this Court on this short appeal.
Secondly, the Judge did no more than answer the threshold issue about admissibility. His decision will not bind a trial Judge. If that Judge concludes that the evidence was not truly that of an expert or not relevant, having heard a far greater volume of evidence than did the Judge below, then I would expect the trial Judge to say so and make the Claimant bear the costs of the exercise. I take into account the peculiar circumstance that has arisen in this case, namely that the Defendant has not seen the actual report of Mr Franklin, and nor has this Court. Accordingly, neither the Defendant nor this Court is able to assess the content of the report against any proper standard of expertise and relevance. In upholding the judgement of the Judge below I bear in mind the cautionary remarks of Lord Justice Stuart-Smith in Liddel (above) about the risk of a waste of time and expense and the need not to encourage the use of experts in road traffic cases as a matter of routine for issues that may fall within the province of the Court. Nonetheless, the facts of the case are somewhat unusual. They do not involve a typical road traffic accident involving a collision of a pedestrian or cyclist with another motor vehicle. In the course of the application before me, Mr Willems QC drew my attention to the submissions that he made in front of the Judge to the effect that the expert would be of assistance to the Judge in expressing an opinion as to whether the allegations of contributory negligence were realistic and fell within the confines of what might be expected in the context of the Highway Code. It was pointed out that nothing in that Code indicated upon which part of the road a cyclist ought to cycle or whether he should dismount in the circumstances which prevailed. The issue before me is not whether I would have adopted the same decision as the Judge; but only whether he acted outside of his case management discretion, which he did not.
Thirdly, the Defendant's second argument is that the Judge ought not to have allowed the application without the report first being prepared and produced. It is said that there are substantial costs consequence in adopting the approach that he did. I can see the practical force in this complaint. I can also see that an applicant for permission under CPR 35.1 might be well advised to have available to the Court a summary or provisional précis of the areas that the proposed expert is to be instructed to cover, and also the experts proposed instructions. This would at least enable a judge to gain some more specific idea of what the proposed evidence would entail. But this was not done in the present case and the Judge, doing the best that he could, formed a view as to possible relevance without that assistance and ruled accordingly. However, the Defendant's complaint is no more than an invitation to me to re-exercise a discretion which the Judge exercised against him. Another Judge might well have adopted Mr Miller's sensible suggestion and adjourned so that further information about the proposed expert could be placed before the Court. But I cannot conclude that the Judge erred in principle in not adopting this approach; his decision not to do so does not mean that he erred in adopting a different course. He plainly had well in mind the costs implications having, implicitly, accepted the submission of the Claimant that if it turned out at trial that the evidence was of no or no real value then the trial Judge could impose a costs sanction upon the Claimant.
Fourthly, with regard to the submission alleging inequality of arms, this is not, in my view, sustainable. The Judge made plain that his Order did not preclude the Defendant from making his own application later having had, first, sight of Mr Franklin's report. He adopted no more than a staged approach thereby creating a possibility that the scope of the issues might be reduced and costs saved. This was entirely sensible and was in any event a matter falling squarely within his discretion and the Defendant was not, in any realistic sense, prejudiced by this.
I would add one final point which does not bear upon the reasons for refusing the application. Although I understand the reasons why the Claimant declined to permit the Defendant to open the envelope and see the experts report prior to this hearing, it would in my view have been far better if the report had been before the Court and available to the Defendant. Part of the logic of the Judges reasoning below was that the Defendant should have sight of the report before deciding whether to seek its own expert report. Had the Defendant seen the report it is conceivable that this appeal might therefore never have occurred. Whilst making the report openly available might have affected the way in which argument developed it would in my view have been a more realistic and proportionate way for the matter to be addressed.
At the conclusion of the application I gave the result with reasons to follow and took this point into account when making the order that the costs of the application were to be reserved to the trial judge rather than to be made in favour of the Claimant in any event.
F. Conclusion
For these reasons, and despite the persuasive submissions of Mr Miller QC for the Defendant, I reject the application. It seems to me that the proper course to adopt is to refuse permission to appeal, notwithstanding that had I granted permission I would have dealt with this matter in exactly the same way as I have above. |
Mr Justice Cranston:
Introduction
This is an appeal brought by the claimant, Sheikh Tahnoon Bin Saeed, against the orders of Master McCloud dated 23 January 2014 and of Deputy Master Eyre ("Master Eyre") dated 24 November 2014. The issue is whether the orders properly give permission to the defendant to amend his defence and counterclaim in the significant manner he purports to do and to withdraw admissions made in the original. The claimant contends that neither Master complied with the Civil Procedure Rules ("the CPR") in making these orders.
Background
The facts in this litigation are at present hotly disputed. At base the claimant is an Emirati national who invests, inter alia, in real estate. The defendant carries on various hotel businesses in Greece and Cyprus. The claimant invested money with the defendant for the purposes of the hotel businesses.
The claim issued on 8 July 2013 alleged that the defendant owed a sum of some €2.4 million, nearly £2 million, under a Framework Agreement which obliged him to discharge certain obligations defined as the "operational debts" and to indemnify the claimant against certain costs. It was said that the Framework Agreement was entered between the parties on 23 April 2012. It is governed by English law.
The defence and counterclaim of 29 August 2013 admitted the Framework Agreement and alleged that the defendants had paid many of the operational debts but not all of them. The counterclaim alleged that the claimant had broken the Framework Agreement to procure the release of certain personal guarantees given by the defendant to banks in respect of loans made in connection with the project. It referred to how the Framework Agreement should be properly construed.
A defence to the counterclaim was served on 7 October 2013.
The defendant filed a notice of change of solicitors on 21 November 2013.
Draft amended particulars of claim were sent to the defendant sometime in December 2013. The amendments were underlined in the ordinary way. Under them the amount claimed was increased to a sterling equivalent of some £18 million, importantly by reference to sums owing under a Promissory Note, introduced in the amendments, and governed by English law.
On 10 January 2014, the defendant's solicitor wrote, enclosing by way of service a costs budget, although stating that they understood that the value of the claim was outside the costs budget regime. The letter stated that the case management conference, which was scheduled for 23 January 2014 was, in their view, premature in light of the substantial amendments to the defence and counterclaim they had advised the defendant to make. Information was still being collected regarding the proposed amendment and it would therefore be a little while before the draft amended pleading would be ready for service.
"We are currently of the view that our client will require 35 days after the amended claim is formally served to serve his amended defence."
The costs budget in the form of Precedent H stated:
"Following a review of the claim by [his new solicitors] and preliminary Counsel's advice the Defendant will be applying for permission to amend his Defence beyond those amendments caused or occasioned by the Claimant's propossed [sic] amendment to the [particulars of claim] to allege that the relationship between the Claimant and the Defendant was that of a joint venture which gave rise to fiducary [sic] duties. In breach of the duty the Claimant owed to the Defendant the Claimant threatened not to provide any or any sufficient funding to the joint venture and to terminate it without any or any sufficient notice and without any other justification. Such threats were intended to and did induce the Defendant to enter into a number of agreements including the Framework Agreement and the Promissory Note alied [sic] to it. As such, the Framework Agreement and the Promissory Note were procurred [sic] by economic duress or undue influence and as such are voidable by the defendant. Additionally, or alternatively the Defendant is entitled to damages for breach of the joint venture and compensation in lieu of recission [sic]."
The claimant's solicitor replied on 13 January 2014. Although pleadings are not set in stone, the email read, there was no intention for the moment to amend the particulars of claim further. There was no reason to adjourn the case management conference, since the draft amendments to the particulars of claim had been available for some time. "Will you please therefore indicate whether you are agreeable to the amendments."
The defendant's solicitors served a slightly amended version of the costs budget the same day.
The defendant's response of the 14 January 2014 noted the rejection of the proposal to adjourn the case management conference. The letter acknowledged the power of the court to permit amendments at any stage, but noted that the discretion must be exercised "judiciously". The letter added:
"[O]ur client will require 42 days from the date of the [case management conference] and re-service to plead to the new claim and to amend his defence and counterclaim in the manner foreshadowed in our client's costs budget.
On the basis set out above our client will consent to the amendment on the usual terms as to costs…"
On 15 January 2014 the defendant's solicitor wrote again in anticipation of the case management conference. Among other things, the letter said:
"As you are aware, our client now intends to amend his Defence and Counterclaim to allege that there was a joint venture between him and your client which gave rise to fiduciary duties and of which your client has been in breach. In those circumstances, we believe that the litigation arising from the dispute should be conducted in the Chancery Division rather than the Queen's Bench Division. Accordingly, at the [case management conference] we will be seeking that the proceedings be transferred to the Chancery Division."
The request to adjourn the case management conference was repeated, on the basis that the time requested to amend the defence was short.
On 17 January 2014 the defendant's solicitor filed a directions questionnaire indicating an intention to call the defendant and at least three other persons as witnesses to the material facts, including the circumstances giving rise to undue influence and duress.
The Masters' orders
On 23 January 2014, Master McCloud conducted a case management conference. The claimant was represented by Mr Davis, his solicitor, the defendant by Mr Gibson of counsel. The Master began with the proposed transfer to the Chancery Division, which Mr Davis said he opposed. Mr Gibson explained that it was because the proposed amendments to the defence related to fiduciary duties and told the Master that the basis of the amendments was set out in the costs budget. There would be amendments as well consequent on the claimant's amendments to the particulars of claim. Mr Gibson added that once the claimant had seen the defendant's amendments he would have an opportunity to reply and in that event the case management conference should be relisted. There followed this exchange:
"MR GIBSON: I understand we are in agreement ----
MASTER McCLOUD: Save on the transfer point then, you are agreed on the basis put forward.
MR DAVIS: Yes.
MASTER McCLOUD: I am happy to order that. As I say, the pleadings I did not see in the terms of the case but ----
MR GIBSON: No, of course.
MASTER McCLOUD: ---- but I can still do it."
There was then a discussion about transfer to the Chancery Division, with the claimant being asked to reconsider once he saw the amended defence and counterclaim, and about the defendant bearing the costs associated with it.
The Master's order following the hearing, dated 23 January 2014 but sealed on 14 March 2014, provided that by 24 January 2014 the claimant should file and serve his amended particulars of claim in the form set out in the case management conference bundle. In addition, by 7 March 2014 the defendant should file and serve an amended defence and counterclaim. Other parts of the order provided for relisting of the case management conference, possible transfer to the Chancery Division (automatically should the claimant agree) and an obligation on the defendant to pay the claimant's costs occasioned by his amended pleading.
The amended defence and counterclaim was served on 7 March 2014. It responded to the amendments of the particulars of claim but also introduced, in detail, allegations of breach of fiduciary duty, undue influence and duress, giving "chapters and verse" (as Mr Laddie QC put it) of events leading up to the signing of the Framework Agreement on 23 April 2012. There was no highlighting of the amendments by underlining, since essentially it was a substituted defence and counterclaim, advancing the defendant's case in a different and more elaborate way.
On 12 March 2014 the claimant's solicitor wrote accepting and acknowledging the amended defence and counterclaim and refusing consent to transfer to the Chancery Division. A fortnight later, on 27 March 2014, he wrote that in light of the amended defence and counterclaim the defendant would need permission to retract the admissions in relation to the Framework Agreement made in the original defence and counterclaim.
The claimant's amended defence to the counterclaim dated 15 April 2014 replaced the original defence to the counterclaim in its entirety. Two points were taken at the outset about the amended defence and counterclaim (1) it amounted to a withdrawal of admissions previously made without the court's permission and it contained assertions which, if true, should have been pleaded in the original; and (2) it disclosed no counterclaim or cause of action with any or any real prospect of success.
The defendant filed an application notice on 22 May 2014, sealed on 26 June 2014, for permission to withdraw admissions, should any permission be necessary; for the claim to be transferred to the Chancery Division; and if no transfer took place, for the adjourned case management conference to be scheduled. There was a time estimate of six hours.
Served with the application of 22 May 2014 was a witness statement of Mr PJ Gould, the defendant's solicitor. After setting out some background, the statement asserted that the defendant's change of stance could not fairly be characterised as a withdrawal of an admission as normally understood but as a qualification of a position previously accepted. The statement then worked through the factors a court should take into account when considering whether to give permission to withdraw admissions. In terms of the overriding objective, it said, if the defendant were to be prevented from proceeding with his case as amended that may result in a grave injustice to him. The costs of litigating the issues paled into insignificance to the general importance in achieving a fair outcome and there was reference to the sums at stake in the litigation.
Mr Gould's statement then turned to the factors set out in CPR 14PD, 7.2, which deals with withdrawing admissions. As regards the first factor, the grounds upon which the applicant seeks to withdraw the admission, the statement explained that this was at a relatively early stage of the proceedings as a result of instructing a new legal team. An explanation in the statement with respect to the next factor, the conduct of the parties, was deleted. With respect to prejudice, the witness statement asserted that the defendant would otherwise suffer serious prejudice since he would have to proceed on the basis of the case as originally pleaded. The statement added that no prejudice would be caused to the claimant if permission was given, the application was made at an early stage in the proceedings and no date had been set for trial.
On 21 May 2014 the defendant's solicitor wrote that given the nature of the allegations made by his client in his amended pleading he had considered it appropriate that the defendant countersign the statement of truth. The claimant was twice invited to do likewise but Mr Davis, on his behalf, said that he did not think it necessary.
There was a hearing on 1 September 2014 before Master Eyre, Master McCloud being indisposed. The claimant's solicitor, Mr Davis, indicated that the claimant proposed to argue that as well as the defendant being required permission to withdraw admissions, Master McCloud's order of 23 January 2014 had only granted him permission to make amendments consequential to the claimant's amended particulars of claim. The claimant was ordered to serve evidence in reply to the defendant's evidence, but because that evidence was late he applied on 2 October 2014 for an extension of time and relief from sanctions.
There was further correspondence between the parties and also with Master McCloud. In an email to Master McCloud on 17 September 2014, the claimant's solicitor stated:
"My note of what occurred when the matter came before you on 23rd January 2014 was that I met the Defendant's Counsel Nicholas Gibson and that it was agreed in the corridor that they would consent to our having leave to amend our Particulars of Claim in return I agreeing [sic] to allowing them to amend their Defence and Counterclaim.
…
No consideration was given by either of us or yourself to the Precedent H Forms in view of the fact the CMC was going to be adjourned for further consideration once the amended pleadings had been exchanged.
…
It was assumed by myself and Paul Burton of Counsel that the amended pleading of which there was no draft presented to either you or ourselves, would simply be in response to these additional claims by way of quantum, the Claimant's position having not changed essentially from his original pleading."
The parties came before Master Eyre on 12 November 2014. Mr Burton was away at the time and the claimant was represented by Mr Tunkel. Near the outset of the hearing the Master commented that the defence and counterclaim appeared to be a substitution, and Mr Laddie QC leading Mr Gibson for the defendant agreed. Mr Laddie QC then developed three arguments: there had not been any admissions, so no permission was required; if there had been an admission, Master McCloud had given permission for its withdrawal on 23 January 2014; and if there had been an admission and no permission had been given, and this was clearly a case where it should be given. Representing the claimant, Mr Tunkel submitted that all Master McCloud was doing was agreeing to an amended defence and counterclaim in principle. Mr Tunkel then submitted that, under Council Regulation (EC) No. 44/2001, the English court did not have jurisdiction to hear the claim regarding the dissolution of the joint venture.
During the hearing, Master Eyre remarked:
"I ought to say I am quite satisfied that the [M]aster gave leave and, if she gave leave without seeing the prospective amendments, so be it. But I am quite satisfied that is what happened and that the statements of case in this action ought to be approached in that way."
The Master saw the jurisdiction point as a submission for a strikeout. To Mr Tunkel's objection that there had been no satisfactory explanation of the amended defence and counterclaim, the Master said:
"[Y]our side had two, and I think even possibly three, warnings before the hearing in late January that there was going to be a challenge to the validity of the framework agreement and the promissory note based on unfair pressure, and that hearing would have been a perfect opportunity to say "We know about this and may we have a direction that any application for leave to amend the defence and counterclaim be supported by a witness statement explaining how this delay in revealing this important component of the defence comes about?" But that did not happen, so I am afraid that door is locked now, Mr Tunkel."
Prior to finalising his order, Master Eyre circulated a draft for the parties' comments. Paragraph 8 provided, "So far as the claimant seeks to object to the amended defence and counterclaim on the ground that the amendments render this court without jurisdiction or on any other ground, he must make those objections by application to be issued and served forthwith for consideration on 22 December 2014". On 24 November 2014 the claimant's counsel submitted comments on the draft order, which included a request that the words "or on any other ground" be deleted.
Master Eyre's order, dated 24 November 2014, sealed on 27 November 2014:
"1. The court declares that by her Order of 23 January 2014, Master McCloud must be regarded as having given the Defendant leave to amend in the terms set out in the Amended Defence and Counterclaim filed and served on 7 March 2014.
2. The Defendant accordingly does not require any leave to withdraw any admissions made in his original Defence."
Paragraph 8 of the order required that the claimant should apply for summary judgment or a strikeout on the ground of article 22 of Council Regulation (EC) No. 44/2001 at the adjourned hearing on 22 December 2014.
Subsequently Master Eyre gave as his reasons for making the order the following:
"7. At the hearing of the application, the evidence adduced by the Defendant made it obvious that, in the absence of evidence to the contrary from the Claimant, the Master must be regarded as having given the Defendant leave to make the amendments in question.
8. However, that mattered little if at all, because Counsel for the Claimant opposed the Defendant's application without reference to any evidence, and solely on the basis that:
a) The Master must be regarded as having given leave "in principle;" but
b) For reasons of European Law, the Defendant's amendment entailed that this court was now without jurisdiction.
9. The consequence of that approach was that:
a) There was no dispute that the Master had given leave; and
b) The Claimant was in reality seeking an order either for striking-out or that this court decline jurisdiction.
10. For those reasons, the Defendant's application is granted to the extent necessary, and the Claimant is ordered to issue and serve an application for striking-out, &c., [sic] to be considered at an adjourned hearing."
Jay J refused the claimant's application to this court for permission to appeal, but Warby J granted permission at a renewed oral hearing.
In recent correspondence the defendant's solicitor has confirmed that should the claimant issue an application for summary judgment or strikeout, based upon, or arising from, the amended defence and counterclaim, no assertion would be made that the claimant was precluded from making it.
The claimant's case
For the claimant Mr Burton submitted that the orders of Master McCloud of 23 January 2014 and of Master Eyre of 12 November 2014 were flawed as there had never been a decision about, or proper exercise of discretion in relation to, the withdrawal of the defendant's admission under CPR 14 and the amended defence and counterclaim under CPR 17. The admissions were those in the original defence where the defendant admitted that he had entered into the Framework Agreement and further, that he would refer to the Framework Agreement for its full terms and effect. The amended defence and counterclaim involved radical changes, raising breach of fiduciary duty, misrepresentation, economic duress, actual duress and undue influence. All of these factors, Mr Burton said, rendered the Framework Agreement and Promissory Note liable to be set aside. Moreover, Mr Burton added, there was a stand alone ground of appeal because Master McCloud had not given reasons for her order and Master Eyre's reasons were quite unsatisfactory. There is a duty on judges to give reasons for their decisions: English v. Emery Reimbold & Strick Ltd [2002] EWCA Civ 605; [2002] 1 WLR 2409.
Mr Burton submitted that the two declarations in Master Eyre's order, quoted earlier, were plainly a non-sequitur. Master McCloud could not be considered as having given permission for amendments in terms she had not seen. The defendant made an oral application for permission to amend his defence and counterclaim without an application notice, evidence in support or draft pleading. It was an abuse of process for substantial amendments to be foreshadowed in a few lines in a Precedent H costs budget rather than in accordance with the rules. In any event Master McCloud did not consider the Precedent H costs budget. It was wrong for Master Eyre to regard Master McCloud as having made an order she had not in fact made or reaching a decision she had not expressed herself as having reached. There was nothing in Master Eyre's reasons justifying his conclusions on this point.
Even if Master McCloud had expressly, let alone impliedly, given leave for the amended defence and counterclaim on 23 January 2014, Mr Burton submitted that the separate issue of permission to withdraw admissions was not even in the contemplation of the parties at that hearing, much less the Master's. The claimant had not seen a draft of the amended defence and counterclaim and had not directed his mind to this issue. Self-evidently neither Master McCloud nor Master Eyre considered any of the issues in paragraph 7.2 of the Practice Direction, CPR 14PD. Having made no such decision neither had expressed any reasons. Master McCloud made no order on the defendant's application as it was not before her and Master Eyre made the declaration at paragraph 2 of his November order, which is plainly wrong.
In summary, Mr Burton submitted that permitting amendments to a statement of case is a significant step in the proceedings and must be completed in accordance with CPR, Part 17. Crucially, the court must consider whether proposed amendments have a real prospect of success before permitting them. Moreover, the issue of the withdrawal of the defendant's admissions in the original defence have never been tested against the quite separate factors set out in CPR, Part 14. Mr Gould's witness statement addressing these factors was quite inadequate. Owing to the November order of Master Eyre the claimant has been deprived of his right to have the defendant's amendments to the defence and counterclaim tested in any shape or form other than on the jurisdiction point under Article 22 of Council Regulation (EC) 44/2001.
Legal framework
CPR 14.1 provides:
(1) A party may admit the truth of the whole or any part of another party's case.
(2) The party may do this by giving notice in writing (such as in a statement of case or by letter).
[…]
(5) The permission of the court is required to amend or withdraw admission (Rule 3.1(3) provides that the court may attach conditions when it makes an order).
The Practice Direction to CPR Part 14 provides:
7.1 An admission made under Part 14 may be withdrawn with the court's permission.
7.2 In deciding whether to give permission for an admission to be withdrawn, the court will have regard to all the circumstances of the case, including –
(a) the grounds upon which the applicant seeks to withdraw the admission including whether or not new evidence has come to light which was not available at the time the admission was made;
(b) the conduct of the parties, including any conduct which led the party making the admission to do so;
(c) the prejudice that may be caused to any person if the admission is withdrawn;
(d) the prejudice that may be caused to any person if the application is refused;
(e) the stage in the proceedings at which the application to withdraw is made, in particular in relation to the date or period fixed for trial;
(f) the prospects of success (if the admission is withdrawn) of the claim or part of the claim in relation to which the offer was made; and
(g) the interests of the administration of justice.
Guidance on granting permission to withdraw was given by the Court of Appeal in Sowerby v. Charlton [2005] EWCA Civ 1610; [2006] 1 WLR 568. In giving the judgment of the court, Brooke LJ said:
"[35] Finally, the unreported judgment of Sumner J in Braybrook v. Basildon and Thurrock University NHS Trust [2004] EWH 3436 (QB) at [45] appears to us to offer valuable guidance on the way in which a court should exercise its discretion when determining whether or not to permit the withdrawal of an admission that was made after an action was commenced. After referring to a number of earlier cases he said, at para[graph] 45:
"From these cases and the CPR I draw the following principles. (1) In exercising its discretion the court will consider all the circumstances of the case and seek to give effect to the overriding objective. (2) Amongst the matters to be considered will be: (a) the reasons and justification for the application which must be made in good faith; (b) the balance of prejudice to the parties; (c) whether any party has been the author of any prejudice they may suffer; (d) the prospects of success of any issue arising from the withdrawal of an admission; (e) the public interest, in avoiding where possible satellite litigation, disproportionate use of court resources and the impact of any strategic manoeuvring. (3) The nearer any application is to a final hearing the less chance of success it will have even if the party making the application can establish clear prejudice. This may be decisive if the application is shortly before the hearing."
[36] Above all, the exercise of any discretion will always depend on the facts of the particular case before the court. The words "will consider all the circumstances of the case" have particular resonance in this context."
Part 17 of the CPR deals with amendments to statements of case. Under CPR 17.1(2) if a statement of case has been served a party may amend it only with the written consent of all the other parties or the permission of the court. The White Book states at paragraph 17.3.2 that on an application under CPR 17.3 a copy of the statement of case should be filed with the application notice. In considering amendments withdrawing an admission the court must have regard to CPR 14.1 and the practice under that rule. At paragraph 17.3.6 the White Book opines that an application to amend a defence will be refused if it is clear that there is no prospect of success. Prejudice is greater when amendments are sought to be introduced close to the trial date: paragraph 17.3.7.
In Cobbold v. London Borough of Greenwich, CA, 9 August, 1999, Peter Gibson LJ said this about amendments to the statement of case:
"The overriding objective is that the court should deal with cases justly. That includes, so far as practicable, ensuring that each case is dealt with not only expeditiously but also fairly. Amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon provided that any prejudice to the other party or parties caused by the amendment can be compensated for in costs, and the public interest in the efficient administration of justice is not significantly harmed."
Cluley v. RL Dix Heating [2003] EWCA Civ 1595 was a case where the judge had allowed amendments and the withdrawal of an admission by the defendant following the expiry of the limitation period for the joinder of other defendants. The judge had acknowledged that the claimant was prejudiced. The Court of Appeal held that notwithstanding the width of her discretion the judge had been wrong to allow the amendments. In his judgment, with which the others agreed, Jonathan Parker LJ highlighted the point that in deciding whether to grant permission to make amendments, the extent to which a party will be prejudiced were permission to be granted must, on any footing, be a highly significant factor: [66].
Discussion
In deciding in this appeal whether in making their orders Master McCloud and Master Eyre were wrong or unjust because of serious procedural or other irregularity, I cannot be blind to how the claimant approached the issue of the amendments to the defence and counterclaim before and at the hearings in January and November. Before the hearing before Master McCloud the defendant warned the claimant in correspondence that there would be substantial amendments to the defence and counterclaim and proposed an adjournment. The claimant's solicitor, Mr Davis, was put on notice of the nature of the new defence in the directions questionnaire and the Precedent H costs budget. Even if he had not appreciated the exact nature of the amendments being proposed, he must have had some inkling given the reference at the hearing before Master McCloud to fiduciary duties and the appropriateness of transferring the case to the Chancery Division. Master McCloud was in the same boat, although she was somewhat further back since she was not taken to Precedent H. The defendant's amended pleading clearly went beyond those consequential to the claimant's amendments to his particulars of claim since the defendant accepted that he should bear the costs. Mr Davis's only objection was to the proposed transfer to the Chancery Division: in the passage quoted earlier he certainly would have given the impression to Master McCloud that he agreed to the defendant amending his pleading.
So pausing there, it seems to me that there can be no objection to Master McCloud's order giving leave to the defendant's amended pleading. No doubt it would have been better if she had not given leave until she actually saw the defendant's amended defence and counterclaim. However, given the circumstances she thought, unsurprisingly, that she was acting in accordance with what both sides proposed. And that is what Mr Davis subsequently accepted in his email to Master McCloud dated 17 September 2014. His assertion in that email (now abandoned) that he had assumed that the defendant's amended defence and counterclaim would simply respond to the claimant's amended pleading simply did not hold water in the light of what was said at the hearing, quite apart from what was in the correspondence beforehand. Master Eyre sagely commented at the hearing on 12 November 2014, in the passage quoted earlier, that Mr Davis could have requested protective provisions in the order for when the defendant's amended pleading emerged but did not do so.
It was not until three weeks after the defendant's amended defence and counterclaim was served that the claimant's solicitor asserted that permission would be needed to retract admission in the original. There was nothing explicit at this point about the defendant's amended pleading being in breach of Master McCloud's order, confirming to my mind both parties' understanding that it granted permission to an amended defence and counterclaim. The claimant's amended defence to the counterclaim reiterated the admissions point. When there was an application notice for the adjourned case management conference, it was the defendant not the claimant who lodged it. Before me, Mr Burton said that the claimant was assembling his case that the defendant's amended pleading had no reasonable prospect of success (a basis inter alia for refusing leave to amend under CPR 17). I find that explanation underwhelming especially when that case has not been made to this day. Finally, on 1 September the claimant raised the need for permission to be given for the defendant's amended pleading, as well as for his withdrawal of admissions.
At the hearing before Master Eyre the claimant then raised the jurisdiction point with the intention, it would seem, of landing a knockout blow. That was the basis on which Master Eyre drafted the order in paragraph 8 at the request of the claimant's counsel: that objections to the amended defence and counterclaim at the next case management conference be limited to the jurisdiction point.
In my judgment there was nothing wrong with Master Eyre's approach, order or reasons. Before him the claimant accepted that Master McCloud had agreed to the amended defence and counterclaim "in principle", majored on the jurisdiction point, and subsequently requested that the adjourned hearing for late December 2014 as regards the defendant's amended pleading be confined to the jurisdiction issue. Again a Master was taking a decision consistent with the claimant's position. The claimant cannot now credibly seek to appeal against Master Eyre's order on the basis that there has been a serious procedural irregularity.
Further, it cannot be said that Master Eyre was wrong in what he did. The claimant accepted that Master McCloud had agreed "in principle" to amendment of the defence and counterclaim. That was an adequate basis on which to make his order. When Master Eyre's draft order left the door open to subsequent argument, the claimant closed it. As to the Master never making a separate decision under CPR 14 as to the withdrawal of admissions in the original defence, the defendant made clear before Master McCloud that, at the least, he was alleging a fiduciary relationship between the parties and breach of it. Permission for the withdrawal of the admissions was inherent in the Master's decision to allow the amended defence and counterclaim. There was no error in the Master not addressing expressly the factors in CPR 14PD, 7.2.
In any event I cannot see any prejudice to the claimant in the outcome of the Master's orders. As Peter Gibson LJ pointed out in Cobbold v. London Borough of Greenwich, CA, 9 August 1999, amendments to pleadings should generally be allowed so long as any prejudice to the other party can be compensated for in costs. Here the amended defence and counterclaim was introduced at a very early stage, and there was no hint of prejudice to the claimant's position. Moreover, the claimant has never presented any positive case under CPR 17 that there are no real prospects of success with the defendant's amended pleadings despite having the opportunity to do so. Despite paragraph 8 of Master Eyre's order, Mr Laddie QC reiterated before me the undertaking in correspondence that the defendant will not object to the claimant applying for summary judgment or a strikeout on that ground with respect to the amended defence and counterclaim. The claimant is thus not shut out from addressing the issue of the defendant's reasonable prospects of success.
As to the factors in considering the withdrawal of admissions under CPR 14, I cannot see how they advance the claimant's case. In the circumstances of this case the factors very much overlap with those which bear on a decision under CPR 17: the balance of prejudice, the stage of the proceedings and the prospects of success. The prejudice here is not in the least comparable to that in Cluley v. R L Dix Heating, where it was incurable. I have already dealt with the other two factors.
Conclusion
Procedure, it has been said, lies at the heart of the law. But procedural rules are a means to the end of justice. The history of English procedure is that this truth has sometimes been lost. At one time the rules of common law pleading meant complexity and formalism with cases being lost on a technicality. Reforms ultimately confirmed in the Judicature Acts of 1873 to 1875 introduced the modern approach to pleadings. Parties were still bound to their pleadings, but as Sir Jack Jacob noted, that was mitigated by liberal powers of amendment to enable the real controversy between the parties to be addressed. The reforms following Lord Woolf's Access to Justice report reaffirmed the Bentham principle that the rules of the system should ensure that persons with a good claim in law are able to obtain an appropriate remedy or relief from the court. The Overriding Objective of the CPR is to enable the court to deal with cases justly and at proportionate cost. That includes ensuring compliance with the rules but also dealing with cases fairly. As Peter Gibson LJ stated in Cobbold v. London Borough of Greenwich, amendments to a party's pleading should be handled in that spirit.
For the reasons I have explained in the judgment while the Masters may not have applied the rules precisely, the appellant has been treated fairly given the manner in which he has pursued his claim over the last 18 months. He is in as good a position to obtain the remedy or relief from the court he seeks as he would have been had the Masters approached the procedural issues differently. There is no prejudice. I dismiss the appeal. |
The Honourable Mrs Justice Swift :
Introduction
This is an appeal by the Appellants, Mr and Mrs Axton, against an Order of His Honour Judge Armitage QC, sitting at Manchester Crown Court, dated 14 November 2014 by which summary judgment was entered for the Respondent pursuant to CPR 24.2 in respect of the whole of the Appellants' claim against the Respondent.
Background
The Appellants are the owners of a residential property at Coalville, Leicestershire. On 27 October 2010, they commenced proceedings in Leicester County Court against two companies. The first company, GE Money Mortgages Limited (the First Defendant to the Appellants' claim and Respondent to this appeal), was a company which provided personal, secured and unsecured loans to consumers. The second company, The Money Group (Cornwall) Limited (the Second Defendant to the claim, but not involved in this appeal) provided credit and brokerage services.
The two companies were not unrelated. It is a matter of public record that, between October 2004 and March 2006, an individual named Mr Anthony Murtagh was Director and Chief Executive of a company called GE Money Home Lending Limited, which was an Associate of the Respondent. In addition, Mr Murtagh was and remains Managing Director of the Second Defendant. In September 2004, another associate of the Respondent acquired effectively the whole of the Second Defendant. As a broker, the Second Defendant placed a large amount of business with the Respondent.
The loan agreements
In November 2000, the Appellants entered into a written fixed sum credit agreement with the Respondent whereby the Respondent agreed to provide them with a loan in the total sum of £37,138, which was secured by way of first charge on the Appellants' property. The total sum comprised a cash loan of £34,998 and fees amounting to £2,140. The written Agreement (the First Agreement) was signed by the Appellants on 30 November 2000 and by the Respondent on 12 December 2000. It provided for repayment of the loan and interest thereon by way of monthly payments over a period of 240 months.
On 14 May 2002, the Appellants signed a further written fixed sum credit agreement (the Second Agreement). The Respondent signed the agreement on 27 February 2002. On this occasion, the Appellants agreed to borrow the total sum of £45,333, comprising a loan of £43,833 and fees totalling £1,500. The Second Agreement provided for repayment of the loan and interest thereon by way of monthly repayments over a period of 240 months. The amount of the loan in the Second Agreement included the amount outstanding under the First Agreement. The loan was once again secured against the Appellants' property.
By a written fixed sum credit agreement signed by the Appellants on 1 September 2003 and by the Respondent on 23 September 2003 (the Third Agreement), the Respondent agreed to provide a loan to the Appellant in the total sum of £95,890, consisting of a cash loan in the sum of £92,390 and fees of £3,500. The Third Agreement again included the amount outstanding under the Second Agreement. It provided for repayment of the loan and interest thereon by way of monthly payments over a term of 300 months. Again, the loan was secured over the Appellants' property.
On 22 September 2004, the Appellants signed a further written fixed sum credit agreement (the Fourth Agreement). The Respondent signed the Agreement on 4 October 2004. The Respondent agreed to provide a loan in the total sum of £108,724, consisting of a cash loan of £107,224 and fees of £1,500. The loan included the amount outstanding under the Third Agreement and was secured over the Appellants' property. It remains live with a balance of approximately £95,000 still owing.
Each of the four Agreements was sold to the Appellants by the Second Defendant, acting as broker. There was no face-to-face contact or other direct communication between the Appellants and the Respondent. All such contact and/or communication took place between the Appellants and the Second Defendant. A brokerage fee was paid by the Appellants to the Second Defendant being transferred to the Second Defendant out of the monies loaned to the Appellants by the Respondent.
The Personal Protection Insurance policies
None of the four Agreements provided for Payment Protection Insurance (PPI). PPI is a type of insurance which will cover loan repayments in the event that the borrower becomes ill or loses his/her job or in the event of the borrower's death. The Second Defendant offered PPI policies and the Appellants arranged with the Second Defendant to purchase such policies in respect of their payment obligations under the First, Second and Third Agreements, but not the Fourth Agreement.
The relevant PPI policies were not provided by the Respondent. The first two policies were provided by a company named Marketing and Management Services Limited (MMS). MMS was one of the UK's leading providers of PPI policies. It did not sell such policies directly to the public, but supplied them indirectly through a number of business partners, including the Second Defendant. As from May 2003, the Second Defendant began to obtain its PPI policies from a different company, CIGNA, and the PPI policy to protect the Appellants in relation to the Third Agreement was purchased from CIGNA, rather than MMS.
The Appellants' claim
The Appellants' claim against both the Respondent and the Second Defendant was based on the factual premise that the premiums paid by them for the three PPI policies were grossly in excess of the cost of comparable policies obtainable on the open insurance market. Amongst other things, they alleged that, unknown to them, the true cost of the PPI insurance was only a small proportion of the premiums charged to them, with the balance being paid by way of commission or monetary compensation to those responsible for selling the policies. They alleged also that they had not been properly informed or advised about the duration of the insurance cover or the extent of the cover provided and that they should not have been offered single premium policies. In other words, the claim is one of the alleged mis-selling of PPI to the Appellants.
In their Particulars of Claim, the Appellants relied on multiple causes of action against the Respondent and the Second Defendant. They claimed that the Respondent and the Second Defendant had acted in breach of contract and in breach of fiduciary duty and of other duties of care which the Appellants alleged were owed to them. Both the Respondent and the Second Defendant filed Defences, denying liability. In addition, the Respondent filed an application to strike out the claim against it, or specified parts thereof, on the grounds that the Particulars of Claim disclosed no reasonable grounds for bringing the claim. The Respondent also applied for judgment to be entered in its favour summarily on the ground that the claim had no real prospect of success. The application came before District Judge Whitehurst on 22 March 2011. He adjourned the applications generally, pending disclosure of documents. Disclosure duly took place. Meanwhile, judgment was entered against the Second Defendant. That judgment was later set aside, but the Order setting aside the judgment was then appealed. That appeal was unsuccessful, so the case against the Second Defendant proceeded.
District Judge Whitehurst had given liberty to restore the Respondent's applications for summary judgment and strike out and the Respondent availed itself of that liberty by applying on 6 February 2013 to restore. The hearing of the applications came before HHJ Armitage QC later in 2013, but the hearing was adjourned for lack of time. It eventually took place on 13 August 2014. The Judge reserved his judgment, which was handed down on 14 November 2014. It is that judgment which forms the subject matter of this appeal.
The application for permission to appeal was considered by Kenneth Parker J on paper on 19 December 2014. He granted permission to appeal and the oral hearing of the appeal came before me on 19 March 2015, when I heard submissions from Mr Andrew Clark, Counsel for the Appellants, and Mr Henry Warwick, Counsel representing the Respondent. At the conclusion of the hearing, I informed Counsel that, for reasons of time, I would reserve my judgment which I now hand down.
At the hearing in the County Court, the Judge had before him statements from a number of witnesses. Mr Rodney Gardner, director of Mills Gardner Ltd, the Appellants' solicitors, provided witness statements dated 12 April 2013 and 31 July 2014. The Respondent relied on a witness statement dated 7 March 2011 from Ms Claire Vila, who is employed by the Respondent as Case Manager in their specialist Litigation Department, and a further statement dated 6 February 2013 from Mr Tom Simpson, Manager of the same Department. There was also a witness statement dated 15 April 2013 from Mr Anthony McClay, Director of MMS, and a further statement dated 22 April 2013 from Mr Anthony Murtagh, Managing Director of the Second Defendant.
The provisions relating to summary judgment
CPR 24.2 sets out the circumstances in which the court can give summary judgment. It provides that:
The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if -
(a) it considers that -
i) that claimant has no real prospect of succeeding on the claim; … and
(b) there is no other compelling reason why the case or issue should be disposed of at trial.
In order to defeat an application for summary judgment, it is sufficient for the relevant party (the Appellants in this case) to show some "prospect", i.e. some chance, of success. That prospect must be "real", not false, fanciful or imaginary. It follows therefore that the relevant party does not have to prove on a balance of probabilities that its case will succeed at trial. When determining an application for summary judgment, the court must not conduct a mini-trial. Where the application is based on a short point of law or construction, the court may, indeed should, decide the point if it has before it all the evidence necessary for a proper determination of the point. The overall burden of proof rests on the party applying for summary judgment to establish that there are grounds for believing that the opposing party has no real prospect of success and that there is no other reason for a trial. If the party applying adduces credible evidence in support of its application, the other party then becomes subject to an evidential burden of proving some real prospect of success or some other reason for a trial.
The Appellants' claim under the Consumer Credit Act 1974
By the time of the hearing of the Respondent's applications before the His Honour Judge Armitage QC, the Appellants had abandoned most of the causes of action previously relied upon in their Particulars of Claim. Somewhat surprisingly, no application had been made to amend the Particulars of Claim and no draft Amended Particulars of Claim had been prepared to reflect the changes to the Appellants' case. However, it was made clear at the hearing before the Judge that the only cause of action then relied upon by the Appellants was their claim for an Order pursuant to section 140A-C of the Consumer Credit Act 1974 (the 1974 Act).
The relevant provisions of the Consumer Credit Act 1974
Section 140B of the 1974 Act gives the court a wide range of powers to redress the consequences of an unfair relationship between a debtor and a creditor in connection with a credit agreement. Those powers include the power to make an order requiring the creditor, or an associate or former associate of his, to repay in whole or in part any sum paid by the debtor by virtue of the agreement or any related agreement.
Section 140B places the burden of proving the fairness of the relevant agreement on the creditor. Section 140B(9) provides that, if the debtor alleges that the relationship between the creditor and the debtor is unfair to the debtor, it is for the creditor to prove to the contrary.
Section 140A sets out the three separate circumstances in which the court can exercise its power to make an order pursuant to section 140B. The provisions relevant for these purposes are:
"(1) The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following -
(a) any of the terms of the agreement or of any related agreement;
(b) (not relevant for these purposes)
(c) any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement)."
The provisions of section 140A-C of the 1974 Act came into force on 6 April 2007, having been introduced by section 19 of the Consumer Credit Act 2006. The First, Second and Third Agreements had been redeemed before that date and were therefore no longer in operation. Accordingly, it was not open to the Appellants to seek an order under the provisions of section 140B on the basis of any of those three Agreements alone. Moreover, it was not open to the Appellants to seek an order on the basis of the Fourth Agreement alone. The "unfair relationship" upon which they were seeking to rely related solely to the provision of PPI and the Appellants had not taken out PPI in respect of the Fourth Agreement. No other complaint was made about the fairness of the terms of their Agreements with the Respondent.
The parties' cases at the hearing of the Respondent's application
The Appellants' case at the hearing of the application was that the First, Second and Third Agreements were "related" to the Fourth Agreement for the purposes of section 140A. Thus, it was argued, an order pursuant to section 140B could be made by the court in respect of the Fourth Agreement (which was still in operation when section 140A-C of the 1974 Act came into force), if it were "taken with" the three earlier Agreements.
Before the Judge, Counsel for the Appellants, Mr Clark, advanced a number of grounds upon which the First, Second and Third Agreements could be regarded as "related" to the Fourth Agreement for the purposes of section 140A(1) of the 1974 Act. He relied in particular on section 140C(4) which provides:
"(4) References in sections 140A and 140B to an agreement related to a credit agreement (the "main agreement") are references to –
(a) a credit agreement consolidated by the main agreement;
(b) a linked transaction in relation to the main agreement or to a credit agreement within paragraph (a);"
Mr Clark pointed out that the amount of the loans which were the subject of each of the Second, Third and Fourth Agreements had included the outstanding part of the loan still owing from the previous Agreement. Each successive Agreement had therefore "consolidated" the later Agreement. He submitted that, applying section 140C(4)(a), the Fourth Agreement should therefore be regarded as "related to" the three previous Agreements for the purpose of section 140A. He argued that the court was therefore entitled to consider whether the relationship between the Appellants and the Respondent arising from the Fourth Agreement, when taken together with the previous Agreements, had been "unfair" to the Appellants.
Mr Clark also pointed out that, pursuant to section 140C(4)(b) of the 1974 Act, a "linked transaction" in relation to the main agreement or to a credit agreement consolidated by that agreement is itself an agreement "related to" the main agreement. He acknowledged that the Fourth Agreement was not a regulated consumer credit agreement, but was an exempt agreement within section 16 of the 1974 Act. However, section 140C(5) of the 1974 Act provides that:
"In the case of a credit agreement which is not a regulated consumer credit agreement, for the purposes of subsection (4) a transaction shall be treated as being a linked transaction in relation to that agreement if it would have been such a transaction had that agreement been a regulated consumer credit agreement."
The meaning of a "linked transaction" in relation to a regulated agreement is set out at section 19 of the 1974 Act. By section 19:
"(1) A transaction entered into by the debtor or hirer or a relative of his with any other person ("the other party") except one for the provision of security, is a linked transaction in relation to an actual or prospective regulated agreement (the "principal agreement") of which it does not form part if –
(a) not relevant for these purposes;
(b) the principal agreement is a debtor-creditor-supplier agreement and the transaction is financed, or to be financed, by the principal agreement; or
(c) the other party is a person mentioned in subsection (2), and a person so mentioned initiated the transaction by suggesting it to the debtor … who enters into it".
The Appellants' case was that it was arguable that each of the PPI policies that was sold to them was a "linked transaction" in relation to the relevant credit Agreement with the Respondent, pursuant to either section 19(1)(b) or (c). In respect of (b), the Appellants argued that the Respondent had entered into each of its Agreements with the Appellants under pre-existing arrangements between itself and the Second Defendant and in the knowledge that the credit provided by it would be in part used to finance the purchase of PPI as between the Appellants and the Second Defendant. Alternatively, they argued that the Second Defendant had acted as the agent of the third party insurer who provided the PPI. The Second Defendant had also negotiated the terms of the Agreements in respect of which the PPI policies were purchased. Accordingly, the Appellants contended, the PPI policies were all "linked transactions" and therefore agreements "related to" the Fourth Agreement.
The Judge's findings
For the purposes of the application for summary judgment, the Judge accepted that the Appellants had a real prospect of proving as a matter of fact and law that the successive loan agreements made between them and the Respondent were "related" within the meaning of Section 140A. He also accepted that the Appellants had a real prospect of proving that the First, Second and Third Agreements were "linked" to the PPI policies which had been purchased to protect the Appellants' ability to make repayments in respect of their Agreements with the Respondent .
In the context of those assumptions, the Judge then went on to consider the issue of whether the relationship between the creditor and the debtor (i.e. the Respondent and the Appellants) had been "unfair" to the Appellants. He questioned whether it could reasonably be argued that the Respondent's conduct had been causative of unfairness in its relationship with the Appellants. For those purposes, he indicated that he was prepared to assume that the terms of the PPI policies sold to the Appellants were unfavourable to them.
The Judge reminded himself, correctly, that it was not appropriate for him to carry out a mini-trial or to make findings of fact on matters that were controversial. However, as he observed, many of the facts were not in dispute. He proceeded to set out the factual background. He noted that the Respondent, as the lender, did not provide the PPI policies to the Appellants. There was no requirement in the terms of the Agreements that the Appellants should take out PPI at all, let alone from the Respondent. Moreover, the PPI premiums were not added to the amount of the loan which the Respondent had initially agreed to provide to the Appellants. The premiums were paid using part of the sums which the Respondent had agreed to provide and in response to a written request made to the Respondent on the Appellants' behalf by the Second Defendant.
The Judge referred also to the business relationship between the Respondent and the Second Defendant. He noted that the Second Defendant had entered into an Introducer Accreditation Agreement (IAA) with the Respondent, which had placed on the Second Defendant the responsibility for providing information to borrowers about any PPI policies arranged by the Second Defendant on the borrowers' behalf. The IAA required the Second Defendant, inter alia, to explain fully to a borrower the terms and conditions of any PPI policy arranged in connection with a loan, including any limitations of policy cover, and to inform the borrower that the taking of PPI cover was entirely optional, not obligatory. The IAA also required that, if fees were to be deducted from the loan advanced by the Respondent in order to pay the insurance policy premiums, the Second Defendant should ensure that the borrower was in full agreement to that course, had signed an appropriate authority and fully understood the nature and purpose of the fees to be deducted. No individual provider of PPI was specified in the IAA and there was no requirement by the Respondent that PPI should be purchased. The Judge found that, although the Respondent had required the Second Defendant to enter into its IAA, the obvious inference to be drawn was that it was the Second Defendant, not the Respondent, which influenced the Appellants' choice of PPI provider and the terms on which PPI was obtained – for instance the duration of the cover and the fact that the policies were single premium, rather than, for instance, annual sums – which the Appellants now claimed were unfair.
The Judge also noted that the Respondent's loan application forms in respect of the First and Second Agreements strongly recommended that borrowers should take out PPI and mentioned an enclosed leaflet giving relevant information. However, whilst recommending that PPI be taken out, all four of the written Agreements made between the Appellants and the Respondent made clear that PPI was optional. On each occasion, the Appellants had ticked the "None" button, indicating that they had chosen not to take the option offered. There is no suggestion that the Respondent had any personal discussions with the Appellants in relation to the sale of PPI. Nor did it give the Appellants any advice on that topic or any other.
The Judge observed that the Respondent's principal argument appeared to be that the Appellants would not be able to demonstrate that the Respondent had done or failed to do anything which gave rise to an unfair relationship between the Appellants and the Respondent. He set out his conclusion in these terms:
"My conclusion is that the mere promotion of PPI, without more, is not sufficient to amount to a causative act, even if the claimants then, through TMG (the Second Defendant) or any other provider, entered into a particular PPI contract on (assumed) unfavourable terms. Similarly, although TMG introduced their clients to GE (the Respondent) for the purpose of obtaining each loan, and PPI was promoted in GE's application forms, the provision of PPI was by or through TMG. GE did not require PPI as a condition of making a loan. In my judgment the Appellants will not prove that TMG acted on behalf of GE even in the broad sense of "playing a material part" in bringing about the transaction (PPI provided by or through TMG) giving rise to the allegedly unfair relationship."
It was for those reasons that the Judge concluded that the Appellants' claim did not have a real prospect of success.
The Appellants' case on the appeal
For the Appellants, Mr Clark argued first of all that the Judge should not have attempted to determine the issue of unfairness in the context of the hearing of an application for summary judgment. He relied on the observation made by Peter Smith J in Bevin v Datum Finance Limited [2011] EWHC 3542, when he stated (at paragraph 53 of his judgment) that it was difficult at an application for summary judgment to resolve the issue of unfairness one way or the other. In making this comment, Peter Smith J drew attention to the provisions of section 140A(9) of the 1974 Act, which places the burden of proving fairness on the creditor, without the need for the debtor even to show a prima facie case of unfairness.
Mr Clark argued also that the Judge had erred in basing his conclusion that the Appellants had no real prospect of proving unfairness on the issue of whether the Respondent's conduct had been causative of any unfairness that arose. He contended that it was at least arguable that there was an unfair relationship under section 140A(1)(a) of the 1974 Act by reason only of the terms of the PPI policies. He pointed out that the Judge had assumed for the purposes of the application for summary judgment that the policies were "related agreements" within the meaning of section 140A and had also assumed that the terms of those policies were "unfavourable" to the Appellants. Mr Clark argued that, having made those assumptions, the terms of section 140A(1)(a) made clear that the PPI policies might be found to have given rise to an unfair relationship. He contended that, once the Judge had made the assumptions he did, it was not open to him to proceed to make a decision based on the fact that the unfair relationship, if proved, could not be said to have been caused by the Respondent. He argued that the terms of the PPI agreements amounted to a "cause" of unfairness in their own right, without the necessity for any causal act on the part of the Respondent. Thus, he argued, it would have been wrong to conclude that the Appellants' case under section 140A(1)(a) could not succeed by reason of a failure to prove causation. However, Mr Clark suggested that, in fact, the Judge had misunderstood a passage of the witness statement of the Appellants' solicitor, Mr Gardner, and had wrongly believed that, at the hearing of the applications, the Appellants were relying solely on section 140A(1)(c), and not on section 140A(1)(a) as well. As a result, he said, the Judge had not properly considered the Appellants' case pursuant to section 140A(1)(a).
Because of the decision of the Supreme Court in the case of Plevin v Paragon Personal Finance Ltd and another [2014] UKSC 61, which was handed down after the hearing before the Judge, the Appellants did not pursue in the appeal what had been their primary case at the hearing. They had argued that the actions and omissions of the Second Defendant had amounted to things "done (or not done) on behalf of the creditor (i.e. the Respondent)" and therefore came within section 140A(1)(c) of the 1974 Act. The Judge had dismissed that argument, saying at paragraph 21 of his judgment:
"In my judgment the Appellants will not prove that TMG acted on behalf of GE even in the broad sense of "playing a material part" in bringing about the transaction (PPI provided by or through TMG) giving rise to the allegedly unfair relationship."
At the appeal hearing, Mr Clark accepted that, following the Supreme Court's decision in Plevin, it was no longer open to the Appellants to rely on their Ground of Appeal that the Judge's finding as to the relationship between the Respondent and the Second Defendant had been wrong.
Plevin involved a claimant who had entered into a credit agreement with a lender under which she had borrowed a sum of money to be repaid by monthly instalments. The agreement had been arranged by a broker and the claimant had had only one episode of direct contact with the lender: a telephone call for anti-money laundering compliance purposes. As part of the agreement, the broker had arranged for the claimant to take out PPI from a third party who was the lender's designated PPI provider. The claimant paid a single upfront premium which was added to the loan. The lender paid commission to the broker in respect of both the loan and the PPI and the lender itself received commission from the PPI provider. Some 71% of the PPI premium was made up of the commission shared by the broker and the lender. That fact was not disclosed to the claimant. The claimant brought proceedings against both the broker and the lender contending that the agreement, so far as it related to PPI, had arisen from an unfair creditor/debtor relationship within section 140A of the 1974 Act and sought relief under section 140B of the Act. The case against the broker was settled. The case against the lender proceeded. The unfairness was said to arise from the failure of the lender to disclose to the claimant the amount of PPI commission and/or to assess the suitability of the PPI policy for the claimant's needs.
At first instance, the Recorder dismissed the claim on the basis that there was no obligation on the lender to assess the suitability of the policy for the claimant and that there was no relationship of agency such as to make the lender responsible for any failure of disclosure by the broker within the meaning of section 140A(1)(c). The Court of Appeal dismissed the appeal in relation to the non-disclosure of commission, but held that the ambit of section 140A(1) extended to all conduct beneficial to a lender/creditor in that it played a material part in bringing about the transaction giving rise to the allegedly unfair relationship. Thus, even the acts and omissions of a broker without an agency relationship with the lender could constitute things done "on behalf of" a creditor within section 140A(1)(c). The Court of Appeal therefore remitted to the County Court the issue of whether the broker (on behalf of the lender) had failed to assess the suitability of the PPI for the claimant's purposes.
The Supreme Court affirmed the decision of the Court of Appeal, but on different grounds. Giving the judgment of the Court, Lord Sumption JSC stressed that the unfairness with which the Court was concerned was to be found in the relationship between the creditor and debtor. He observed at paragraph 10 of his judgment that "what must be unfair is the relationship between the debtor and the creditor". He observed also that, where the terms themselves were not intrinsically unfair, the unfairness may be caused because the relationship between creditor and debtor is "so one-sided as substantially to limit the debtor's right to choose". However, he said also that there may be features of a transaction which operate harshly against the debtor, but it does not necessarily follow that the relationship is unfair since the features "may be required in order to protect what the court regards as a legitimate interest of the creditor". He observed also that, whilst many relationships between commercial lenders and private borrowers are inherently unequal, "it cannot have been Parliament's intention that the generality of such relationships should be liable to be reopened for that reason alone". The Supreme Court disagreed with the Court of Appeal's dismissal of the claim in respect of the lender's non-disclosure of the information about PPI commission. Lord Sumption said at paragraph 19H-20D:
"Where the creditor has done a positive act which makes the relationship unfair, this gives rise to no particular conceptual difficulty. But the concept of causing a relationship to be unfair by not doing something is more problematical. It necessarily implies that the Act treats the creditor as being responsible for the unfairness which results from his inaction, even if that responsibility falls short of a legal duty. What is it that engages that responsibility? Bearing in mind the breadth of section 140A and the incidence of the burden of proof according to section 140B(9), the creditor must normally be regarded as responsible for an omission making his relationship with the debtor unfair if he fails to take such steps as (i) it would be reasonable to expect the creditor or someone acting on his behalf to take in the interests of fairness, and (ii) would have removed the source of that unfairness or mitigated its consequences so that the relationship as a whole can no longer be regarded as unfair.
On that footing, I think it clear that the unfairness which arose from the non-disclosure of the amount of the commissions was the responsibility of Paragon. Paragon was the only party who must necessarily have known the size of both commissions. They could have disclosed them to Mrs Plevin. Given its significance for her decision, I consider that in the interests of fairness it would have been reasonable to expect them to do so. Had they done so this particular source of unfairness would have been removed because Mrs Plevin would then have been able to make a properly informed judgment about the value of the PPI policy. This is sufficiently demonstrated by her evidence that she would have questioned the commissions if she had known about them, even if the evidence does not establish what decision she would ultimately have made."
The Supreme Court did not agree with the Court of Appeal's finding that the claimant had a claim against the lender in respect of a failure on the part of the broker, as the lender's agent, to assess the suitability of the PPI policy for her needs. They found that "the ordinary and natural meaning of the term "on behalf of" imported agency and there was nothing in the context of the 1974 Act to import a wider interpretation. They found that there was no basis for a finding that any relevant acts or omissions of the broker had been done or not done 'on behalf of' the lender and that the lender itself was not obliged to carry out an assessment of the suitability of the PPI for the claimant's needs.
Mr Clark contended that, despite the decision in Plevin, the issue of whether there had been an unfair relationship because of things done or not done by or on behalf of the Respondent was not limited to the question of whether the Respondent was responsible for the acts or omissions of the Second Defendant. Mr Clark pointed out that, in Plevin, the Supreme Court decided that non-disclosure of the commissions payable to the broker and lender from the premium of a PPI policy purchased by the claimant made her relationship with the lender unfair because of the "extreme inequality of knowledge and understanding" between the two. Further, the Court determined that the lender must be regarded as responsible for the non-disclosure, making it unfair if it failed to take such steps as would be reasonable to expect it to take in the interest of fairness. The lender was found responsible for the unfairness arising from non-disclosure of the commissions because it was the only party "who must necessarily have known the size of both commissions".
In their Particulars of Claim, the Appellants based their case on the factual assumption that both the Respondent and the Second Defendant in the present case had received commissions in respect of the sale of the PPI policies and, in particular, that the Respondent had paid commission to the Second Defendant. However, both the Respondent and the Second Defendant had provided evidence to the effect that no such commission was paid. Nevertheless, Mr Clark submitted that, even if the Respondent had not paid commission to the Second Defendant, it did not follow that - given the close relationship between the Respondent and the Second Defendant - the Respondent would not have known the amount of commission received by the Second Defendant from the third party insurers (i.e. MMS in the case of the First and Second Agreements and CIGNA in the case of the Third Agreement). He suggested that the Appellants had a real prospect of succeeding in their claim and that the Judge had been wrong to conclude that they had no such prospect.
The Respondent's case on the appeal
For the Respondent, Mr Warwick emphasised that the case was not what might be termed a "classic" broker sale PPI claim, whereby complaint is made about the circumstances in which a broker sold a lender's policy (or one obtained through the lender) which had been funded under the terms of a credit agreement with the lender. Instead, the PPI policies in the present case had been purchased from third party insurers by the Appellants through the Second Defendant. It is true that the Second Defendant had also introduced the Appellants to the Respondent for the purpose of the provision of credit. However, the PPI policies were separate from the credit Agreements. They were purchased using part of the sums advanced under the Agreements, but the Agreements did not impose a requirement on the Appellants to purchase PPI policies, still less policies provided by the Respondent. Mr Warwick submitted that the decision to take out PPI provided by a third party insurer had been a matter of choice for the Appellants in which, apart from paying out the money for the premiums when requested to do so, the Respondent had played no part. Moreover, save for the fact that some of the money loaned under the Agreements had been used to fund the PPI premiums, the Appellants had made no complaint that the terms of the Agreements between themselves and the Respondent had been in any way disadvantageous to them.
The Respondent also relied on the terms of the contracts for the purchase of PPI. Mr Warwick pointed out that the application forms for PPI made clear that they were the Second Defendant's own policies. The forms requested that payment for premiums should be made direct to the Second Defendant and requested also that, in the event of any queries, the Appellants should contact the Second Defendant. In the case of the application form in respect of the Third Agreement, it stated specifically that the PPI plan was "a separate agreement from the relevant mortgage or loan agreement". The disclosed documents also included a letter from the Second Defendant providing a refund to the Appellants of part of the premium in respect of the first PPI policy. That document made clear that the Second Defendant had been responsible for arranging the sale of the policy and that the Respondent had had no involvement in the sale.
Mr Warwick referred to the provisions of section 140A of the 1974 Act which states that, in order for an order to be made under section 140B, what is unfair must be "the relationship between the creditor and the debtor". He cited the judgment of Lord Sumption in Plevin in which the Supreme Court made clear that this relationship was critical. Mr Warwick also referred to the fact that, in the judgment of Briggs LJ in Plevin, the Court of Appeal had made clear that the three categories set out in section 140A(a) (b) and (c) of the 1974 Act must be "in some sense causative of the perceived unfairness of the relationship to the debtor": [2014] Bus LR 557 (CA) at 566D-F. He noted also that, in the Supreme Court, Lord Sumption had observed that the standard of conduct by which fairness would fall to be assessed at trial is the "standard of conduct reasonably to be expected of the creditor".
The Respondent also relied upon the evidence of Mr McClay of MMS and of Mr Murtagh of the Second Defendant, which was to the effect that MMS, the provider of the PPI policies for the first two Agreements, did not pay any commission to the Second Defendant. Instead, MMS sold large numbers of policies to the Second Defendant at the wholesale net premium rate, plus the applicable insurance premium tax. The Second Defendant then charged its customers (in this case, the Appellants) a retail premium rate. The Second Defendant was responsible for setting that rate. The Second Defendant did not act as agent for MMS. The PPI policy in respect of the Third Agreement was purchased by the Second Defendant from CIGNA; the mode of payment for the premium remained the same. The evidence of the Second Defendant is also that it received no commission from the Respondent in respect of the sale of the PPI policies. Its case is that the only commission received was in relation to the provision of the loans made by the Respondent to the Appellants.
Mr Warwick accepted that it is very difficult at a summary stage to resolve an issue as to unfairness, largely on account of the reverse burden of proof. Nevertheless, he argued that there were in this case incontrovertible facts which demonstrated that there was no realistic prospect of the Respondent failing to discharge the burden of proving that its relationship with the Appellants had been fair.
Conclusions
The Judge's judgment made clear that he had in mind the burden of proof and the observation of Peter Smith J in Bevin. However, as he recognised, there were before him a background of uncontroversial facts and a number of contemporaneous documents. It cannot be that the burden of proof imposed by section 140B(9) of the 1974 Act was intended to mean that, in a case where an unfair relationship is alleged, no summary disposal should ever take place. The Judge was not being asked to carry out a "mini-trial" and did not attempt to do so. His decision was based on the facts and documents before him, on the three assumptions he had made for the purposes of the applications (all of which were favourable to the Appellants) and on his interpretation of the relevant statutory provisions.
At paragraph 4 of his judgment, the Judge said that Mr Gardner's witness statement had made clear that "the claim against the Respondent was limited to that founded on s.140A and more particularly s.140A(1)(c) of the Act." I do not accept that the Judge's observation indicated that he erred in misunderstanding the nature of the Appellants' case at the hearing before him. He did not limit his reference solely to section 140A(1)(c), but merely laid emphasis on that aspect of the claim by using the phrase "more particularly". In the next paragraph, he specifically quoted both section 140A(1)(a) and (c), but not section 140A(1)(b). Had he believed that the Appellants had abandoned their case on section 140A(1)(a), it is difficult to see why he would have quoted that sub-section. The reality is that, at the time of the hearing of the application for summary judgment, the Appellants were laying significantly more emphasis on section 140A(1)(c) than on section 140A(1)(a). That is clear from Mr Gardner's witness statement. After the hand down of the decision in Plevin, the claim under section 140A(1)(a) assumed more significance for the purposes of the appeal. However, I am satisfied that the Judge paid proper regard to the claim under section 140A(1)(a) and the issues relating thereto.
It is clear that, in this case, the circumstances were not the usual arrangement, whereby a broker sells to a borrower a PPI policy provided by or through the lender and funded under the terms of the credit agreement. The factual background is therefore very different from the case of Plevin. In that case, the claimant entered into a credit agreement arranged by a broker who also arranged PPI from the lender's designated PPI provider. The PPI premium was added to the loan and the lender paid commission to the broker in respect of both the loan and the PPI. The lender also received commission from the PPI provider. Therefore, as the Supreme Court found, the lender was the only party which must necessarily have known the size of the commissions received by all parties and the fact that the commissions represented no less than 71% of the premium paid by the claimant.
By contrast, in this case, the Second Defendant and the third party insurers (MMS, then CIGNA) had an agreement whereby the third party insurers provided PPI policies to the Second Defendant. The Respondent was not a party to that agreement. In the present case, the premium was not added to the amount of the loan to be provided by the Respondent, as happened in Plevin. Rather, the amount of the agreed loan remained the same and the Respondent merely responded to a request made by the Second Defendant on the Appellants' behalf to pay the premium out of the sum to be loaned. Furthermore, there was compelling evidence from the Respondent, the Second Defendant and MMS to the effect that no commission was paid by or to the Respondent in respect of the PPI policies provided to the Appellants.
The Judge made clear in his judgment that he was accepting for the purposes of the application for summary judgment that the PPI policies might be found to be "related agreements" and that their terms might be found to be "unfavourable" to the Appellants. However, section 140A(1) provides that the court may make an order under section 140B in connection with a credit agreement only if it determines that the relationship "between the creditor and the debtor" arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one of the circumstances set out at section 140A(1)(a)-(c). One difficulty faced by the Appellants in making a successful claim under both section 140A(1) (a) and (c) was in establishing that any unfairness that might have occurred could be said to have arisen in a "relationship between" them and the Respondent, or that, given the lack of any real "relationship" between them, that there could have been any unfairness at all. It seems to me that it was this issue to which the Judge was referring when he spoke of "causation". The importance of the relationship between creditor and debtor was certainly emphasised by the Supreme Court in Plevin and that of causation was referred to by the Court of Appeal. As His Honour Judge Armitage QC pointed out, it was an undisputed fact that the Respondent had taken no part in the provision of PPI to the Appellants save that, when requested to do so, it paid the premiums to the Second Defendant out of the loans provided to the Appellants. It appears to have offered PPI as part of the "package" of its loan agreements, but the Appellants did not take up the offer. Instead, they negotiated directly with the Second Defendant, as their broker, in order to secure their PPI. The Appellants sought to rely on the contention that, since the Respondent paid the PPI premiums to the Second Defendant, and the fact that the Appellants required part of the loans for that purpose was evident from the Third Agreement, there was the necessary relationship between the parties. In the circumstances, I find it difficult to see how that very limited involvement by the Respondent could be sufficient to found a successful claim based on the existence of a "relationship between the Respondent and the Appellants". Moreover, even if the Judge's assumptions were correct, and the PPI policies were found to be "related agreements" and their terms were found to be unfavourable to the Appellants, I doubt whether a Court would find that an unfair relationship between the Appellants and the Respondent would have been caused by the Respondent's limited involvement in the transaction. It is difficult to see how the imposition of a duty on the Respondent could meet "the standard of conduct reasonably to be expected of the creditor" referred to by Lord Sumption in Plevin.
So far as the claim based on the Respondent's failure to disclose to the Appellants information about commissions paid in respect of the PPI policies is concerned, reliance on Plevin is difficult for the Appellants because of the different factual circumstances between that case and the present case to which I have already alluded. In the IAA, the Respondent made specific requirements of the Second Defendant in an attempt to ensure that the proper procedures were followed in relation to the provision of PPI and the giving of appropriate information to borrowers. Those requirements made it clear that responsibility for compliance with those requirements lay with the Second Defendant. The relevant statutory regulations also placed responsibility for compliance on the Second Defendant.
Furthermore, there was compelling evidence from all the parties concerned to the effect that no commission was paid or received by the Respondent in respect of the PPI policies. If that was correct, no question of disclosure would occur. The Appellants' suggestion that, even if the Respondent had not received commission, it would have known the amount of the commission (if any) received by the Second Defendant from the third party PPI insurers and should have disclosed that information, did not seem to me to be compelling. Again, the factual circumstances were different from Plevin (where the lender was the only party with full knowledge of the commission paid). Furthermore, the duty to disclose such information plainly lay with the Second Defendant, rather than the Respondent.
In the circumstances, I consider that it was fully open to the Judge to find that the test in CPR 24.2 was satisfied and to give summary judgment for the Respondent. I am satisfied that his decision cannot be regarded as wrong or unjust because of any serious procedural or other irregularity. I therefore dismiss the appeal and uphold the Judge's Order.
Costs
As to the costs of the appeal, the Appellants accept that, in accordance with the general rule, they, as the unsuccessful parties, should pay the Respondent's costs. However, they have evinced their intention to seek permission from the Court of Appeal for a second appeal. They have also indicated that they will apply for a stay of any costs order made against them, pending determination of that second appeal. In the circumstances, they submit that, rather than this Court undertaking a summary assessment that "might ultimately be futile", it would be a more efficient and proportionate use of the Court's resources to adjourn the assessment of the appeal costs until the second appeal has been determined. An adjournment would also, it is suggested, have the advantage of allowing the parties to agree the amount of costs, if such agreement was necessary. The Respondent contends that there is no reason why summary assessment should not take place in the usual way.
CPR44 PD9.2 provides that the general rule is that the court should make a summary assessment of the costs at the conclusion of a hearing which has lasted not more than one day unless there is good reason not to do so. I do not consider that the fact that the unsuccessful party is intending to mount an appeal and to seek a stay of any order for costs pending the outcome of that appeal can of itself amount to a "good reason" for not following the general rule. If it were, then it would be open to every unsuccessful party to use it as a reason for avoiding summary assessment and to delay the payment of costs. Moreover, a major advantage of summary assessment is that the assessment is made by the Judge who dealt with the hearing at the time when the circumstances are clearly in his/her mind. If, however, the assessment was adjourned and the appeal proved unsuccessful, the assessment would take place long after the event and might be carried out by a different Judge.
A decision to delay summary assessment would, in effect, amount to a stay of the assessment of costs. CPR52.7 provides that "Unless – the appeal court or the lower court orders otherwise … an appeal shall not operate as a stay of any order or decision of the lower court". The relevant authorities make clear that the grant of a stay is an exceptional remedy. If an appellant desires a stay, it must make a formal application and put forward solid grounds why a stay should be granted. There is no such application before me and no grounds (other than the convenience of the Court) have been put forward. In any event, it is far more appropriate that the decision as to whether or not a stay is granted in this case should be taken by the Court of Appeal. It would be for that Court to consider any grounds put forward by the Appellants and to balance the risks and likely prejudice to the parties. It would be wrong for me to make an assumption that the Court of Appeal will grant a stay and, on that basis, to decline to carry out a summary assessment. Furthermore, the assessment of the costs is a very straightforward exercise which, even if it does indeed "ultimately prove futile", will not have resulted in a significant waste of Court resources. I therefore intend to proceed to summarily assess the costs of the appeal.
The Appellants challenge the costs claimed by the Respondent in their Statement of Costs dated 18 March 2015 on four grounds. The first ground relates to the costs incurred by Optima Legal, the legal practice initially instructed by the Respondent to act in the proceedings on its behalf. The Statement of Costs states that profit costs of £585 were incurred in respect of correspondence, telephone calls, emails and meetings. No other details (such as rates per hour or time taken) are given. In their written submissions, the Appellants argued that it was impossible to know from the documents provided what the figures represented and therefore the whole claim should be disallowed.
The Respondent has now produced a further signed Statement of Costs dated 28 January 2015 which sets out the relevant information. The costs amount to 4½ hours at a Grade B fee earner's rate of £130 per hour. The work involved instructing Counsel on the appeal and considering the necessary documents. In the circumstances, neither the work nor the costs appear to me to be excessive or disproportionate.
The second ground of challenge is the sum of £2,847 claimed for work on documents. The claim is for 14.1 hours' work done by four different fee earners and includes internal discussions between fee earners. The Appellants argue that the claim for the time of two fee earners in respect of the same discussions is not reasonable. The Respondent submits that discussions between members of its legal team are a normal occurrence in a case such as this which involves complex legal issues.
I accept that discussions between different solicitors, especially between the Principal Associate and a Grade B Solicitor, were reasonable in the circumstances of this case. However, I am not satisfied that the involvement of a second Grade B solicitor (Dorian Morris) was warranted. I therefore discount his (very modest) fee of £39 and the VAT on that sum which amounts to £7.80. By my calculation, the total of the Part 2 costs (inclusive of VAT) is thereby reduced to £5,409.60.
The Appellants also challenge Counsel's fees. The Respondent's Counsel's fees are claimed at a total of £5,200 (plus VAT), comprising £1,700 for work done before the appeal hearing and £3500 for the hearing itself. The fees of the Appellants' Counsel, as claimed in their Statement of Costs, totals £2,750 (plus VAT), made up of £1,250 for advice, conference and the preparation of documents and £1,500 for the hearing. There is, therefore, a difference of £2,450 between the two fee levels. The Appellants contend that the difference amounts to a discrepancy and suggests that the fees of the Respondent's Counsel are unreasonable and should be reduced. The Respondent argues that it was entitled to instruct Counsel of its choice and that the fees claimed are not unreasonable or excessive, given the complexity of the issues in the case.
I accept that discrepancy alone is not the appropriate test and recognise also that the case may well have had a wider importance for the Respondent and was not straightforward. A considerable amount of work was required in preparing for and conducting the hearing. However, the fee of £3,500 for the hearing does seem to me to be somewhat excessive. I consider that a reasonable fee for conducting the hearing would have been £2,500. I therefore reduce the total fee to £4,200, plus VAT on that sum which amounts to £500. By my calculation, the total of the Part 3 costs (inclusive of VAT) is thereby reduced to £4,248.
Finally, the Appellants challenge the total costs claimed, which, with my reductions, amount to £10,359.60, on the basis of lack of proportionality. They rely in particular on CPR 44.4(3)(b), which requires the court to have regard to the amount or value of the money involved in the claim. They point out that the amount of costs claimed by the Respondent represents a very significant proportion of the value of the claim which was stated in the Appellants' Claim Form to be less than £15,000. They submit that, for reasons of proportionality, I should reduce the total amount of the Respondent's costs claim.
It does not appear to me that this argument has any merit. It is true that, when compared with the stated value of the claim, the Respondent's costs of the appeal are very high. However, the Appellants chose to bring a claim of this modest size and, when summary judgment was given against them, to appeal that decision. No doubt the claim, and the subsequent appeal, has proved to be a great deal more complex than they or their legal advisers at first anticipated. However, I consider that it would be unfair to penalise the Respondent on the grounds of proportionality for successfully fighting the claim and the appeal. The case no doubt has a wider significance for them and they are entitled to defend their position as they have done.
In the circumstances, therefore, I summarily assess the costs payable by the Appellants to the Respondent in the sum of £10,359.60.
The Appellant ask me to consider staying enforcement of these costs pending the determination of the proposed application for permission for a second appeal. However, for the reasons set out at paragraph 59 of this judgment, I do not consider it appropriate to do so. The application for a stay, if made, will have to be directed to the Court of Appeal.
The Respondent, in its written submissions, requests me to consider making an order for interim payment on account of costs of the hearing before His Honour Judge Armitage QC. However, I do not consider it appropriate to make such an order without hearing from the Appellants. |
Mr Justice Warby :
Introduction
Three years ago, the claimant in this action for breach of confidence and misuse of private information obtained an interim injunction against the defendant, including an anonymity order, to prohibit the disclosure of information of a sexual nature. An injunction, with anonymity, has remained in place ever since. The claimant now applies for summary judgment. The core proposition advanced on his behalf is that findings made by the Employment Tribunal (ET), when dismissing with costs proceedings brought by the defendant against the claimant and others, make it clear beyond argument that the defendant has no answer to the claim.
The defendant has a cross-application, issued two weeks ago, which seeks orders for the committal to prison of the claimant for perjury or contempt of court, the discharge of the existing interim injunction, costs, and other procedural orders. His central claim is that the claimant has lied to the court in witness statements made in this action.
I have heard both applications in private, in order to maintain the anonymity of the parties and the secrecy of the information, until I could reach a conclusion. The defendant did not oppose the hearing taking place in private. This judgment is public, and for that reason needs to omit some identifying detail. It is possible however to give a reasonably full and clear account.
Summary
Having heard the parties I have concluded that the findings of the ET, which are binding in this action, leave the defendant with no realistic prospect of successfully defending the claim on the merits, and that the claimant is entitled to summary judgment. In the event, the defendant has not pursued his challenge to the injunction. Indeed, he did not oppose the grant of a permanent injunction in the same terms as the interim order. As explained below, I would in any event have granted such an injunction.
The defendant's allegations of lying cannot be finally evaluated on the evidence presently available. They cannot be upheld, but nor can they be dismissed as manifestly unfounded. The defendant needs permission to proceed, and his application is procedurally defective. The procedural defects are not trivial. The requirements that have not been met represent important safeguards for a respondent charged with quasi-criminal conduct. But the defects are curable, and it would be quite wrong to dismiss the defendant's application at this stage on procedural grounds. On the contrary, it is appropriate to grant the defendant permission to amend his application notice, and to give him an opportunity to put his evidence in proper form.
I am therefore adjourning that aspect of the defendant's application, with liberty to restore as an application for permission to bring proceedings pursuant to CPR 32.14 for contempt of court by making a false statement without an honest belief in its truth. I am giving directions to ensure that the procedural requirements of Part 81 are complied with.
It may be that, if the defendant is given permission and then succeeds in proving his allegations of contempt of court the court would, in addition to penalising the claimant, modify the injunction I am granting, and make costs orders in this action to reflect the facts found proved. I am therefore giving the defendant liberty to apply to vary the injunction in the light of any findings made on any application for committal, and I adjourn both parties' applications for costs, with liberty to restore.
However, my order does not contemplate that the injunction I have granted might be discharged if the defendant proves his case of dishonesty. Not only has the defendant not sought any order or provision to that effect, I also accept the submission for the claimant that in the unusual circumstances of this case the alleged lies, even if proved, could not provide the defendant with an answer to the claim. Lying to the court, if proved, is always a serious matter but, as the Supreme Court made clear in Summers v Fairclough Homes Ltd [2012] UKSC 26, [2012] 1 WLR 2004, such behaviour will only exceptionally lead to the forfeiture of a remedy which the law would otherwise provide. Normally, penalties for contempt, which may be significant, coupled with appropriate costs orders, will be proportionate and sufficient sanctions. Here, the lies – if there were any – were incidental rather than central to the case. It is possible to say at this point that there is no real prospect that a court would find that the lies alleged, even if all were proved, would justify the removal of anonymity, or the refusal of an injunction to protect information which is private and intimate sexual information, the disclosure of which would lack any public interest justification.
The result of the applications is therefore that the claimant has obtained final judgment and a permanent injunction in substantially the same terms as the orders that have been in place since 13 March 2012; I have given directions to enable the defendant to seek permission to proceed with an application to commit the claimant to prison for contempt of court by giving dishonest evidence in witness statements; if the claimant is found to be in contempt the defendant can apply for an appropriate variation of the injunction, but not its discharge; the question of costs will await the outcome of any contempt proceedings.
Background
The claimant is the CEO of a substantial group of companies (the Group). The defendant was the managing director of one of the Group's subsidiaries. In March 2012 the claimant applied for and was granted an injunction to restrain the defendant from disclosing (a) information of a sexual nature consisting of or concerning text messages, sent by the claimant to the defendant in 2009 and 2011, relating to sexual activity or planned sexual activity between the claimant and others, and (b) photographs sent by the claimant to the defendant by email in September 2011. The injunction also prohibited the defendant from disclosing information liable to lead to the identification of the claimant as the subject of the proceedings. Such orders remain in force today, subject to some variations, one of which I shall come to.
The claimant's case when he first applied to Bean J at short notice on 13 March 2012 was, in summary, that in texts and emails to the defendant over the period 2009 to 2011 he had provided the defendant with information about sexual matters that was confidential, personal, and private, and photographs. It was said that there was no public interest in its disclosure. On the contrary, the public interest was said to favour an injunction as the defendant was blackmailing the claimant and the Group.
The blackmail alleged consisted of a demand for a huge and unjustified sum of money by way of "severance", backed up by a threat to make public private the messages and photos that had passed between the claimant and defendant, as well as allegations that the claimant and his wife (whom I shall call CLJ) of had sexually abused the defendant. Particular reliance was placed on an email from the defendant to the claimant of 10 February 2012 entitled "Notification of intention to make public and to shareholders of [the Group]". This contained a list of allegations of impropriety which the defendant proposed to publicise. The list included at 5 "Abuse of powers of a sexual nature by [the claimant]."
The claimant's case was that, whilst it did not affect the merits of his claims, the defendant's allegations were untrue. The claimant asserted that the reason for the blackmail threats was that the defendant had been found out in serious corporate dishonesty and was seeking to avoid the consequences.
The defendant's response, set out in correspondence from his solicitors, was that he had good claims for breach of contract, constructive unfair dismissal and sexual harassment, which he had been discussing with the "owner" - that is, the principal shareholder - of the Group. The defendant denied doing anything tantamount to blackmail. Through his solicitors he said that he regretted suggesting that he would make his allegations to the public generally, which had been a mistake. He was entitled to make his allegations to the Group and its shareholders, he maintained, as they were true. The solicitors said they had instructions to pursue proceedings in the Employment Tribunal (ET). They opposed any injunction that would restrict the defendant's right to pursue such claims. The correspondence was put before the court, but the defendant was not represented at the hearing before Bean J, who granted the injunction.
On 16 March 2012 the matter came back before Tugendhat J for further argument about whether there should be an exception to allow the defendant to pursue the threatened ET claims. On 2 April 2012 Tugendhat J handed down his reserved judgment on that issue. He varied the injunction to allow pursuit of the ET proceedings, ruling that it was a matter of high public importance that people should have access to a tribunal such as the ET, unfettered by those against whom they might make allegations in such a tribunal; that there was no real risk that the defendant would abuse the ET's process; and that the appropriate way to control any risk of unjustified disclosure in that context was for the ET to consider the exercise of its powers to impose reporting restrictions: [2012] EWHC 778 (QB) [70]-[74].
Apart from that variation, Tugendhat J continued the injunction order until trial or further order the principal injunctions were continued. The Particulars of Claim were served on the same day as the judgment and order of Tugendhat J.
On 16 April 2012 the defendant served his Defence in this action. His case was that the claimant is a man of a dominant and bullying nature, whose explicit messages to him were unwanted and offensive. He denied that the claimant had any reasonable expectation of privacy, or was owed any duty of confidence in respect of the information in the messages. The sending of the messages was alleged to amount to sexual harassment and a breach of a duty to maintain trust and confidence in the employment relationship. It was said that some of the content of the messages referred to criminal and/or unlawful acts, in respect of which there could be no legitimate expectation of privacy. The claimant's right to a permanent injunction was disputed on the basis that, contrary to the claimant's case, the content of the messages was true; and that the claimant had improperly obtained an injunction by untruthful assertions such that no injunction should be granted or continued. Particulars of the pleaded case were set out in a Confidential Schedule to the Defence. Details of the alleged untruths were contained in Part C of that Schedule. No Reply has been served.
On 3 May 2012 the defendant issued ET proceedings against the claimant and others. He advanced claims for unfair dismissal, automatically unfair dismissal, detriments imposed for public interest disclosure (whistleblowing), sexual harassment and sex discrimination, sexual orientation harassment, victimisation, unlawful deductions from pay and unpaid holiday pay. The respondents to the ET claim were the Group, a company within the Group, the claimant, and the majority shareholders. The claimant was named as a respondent to the claims for discrimination, harassment and victimisation. A further claim was brought later, on 13 July 2012, against the claimant and another Group company for victimisation and detriment for whistleblowing, but subsequently withdrawn.
The ET granted a an order under Rule 49 of the Employment Tribunal Rules of Procedure 2004 (the Rules) requiring the exclusion from any document entered in the public register of matter identifying (among others) the claimant, CLJ or the defendant. On 12 May 2012 the ET also granted a Temporary Restricted Reporting Order (TRRO) under Rule 50 of the Rules. This prohibited, among other things, the identification of the claimant, CLJ, and the defendant. Orders to that effect have remained in effect ever since.
As there was a substantial overlap between the issues in the ET proceedings and this action, the trial of this action was vacated by order of Tugendhat J dated 15 October 2012, and the action was stayed, with the parties having permission to re-fix after the final determination of the ET proceedings. Tugendhat J accepted the submission made on behalf of the claimant that "the ET, which will have to determine the financial allegations made against the defendant, will be better placed than this court would be to determine the truth or otherwise of the sexual allegations that the defendant makes": [2012] EWHC 2827 (QB) [17].
The ET claims were tried over 19 days during March, April, May and June 2013. By a Judgment, duly anonymised, of August 2013 the ET unanimously dismissed all of the defendant's claims. Findings of the ET on which the claimant particularly relies are that:-
i) The claimant did not sexually harass the defendant at any time; his claims to that effect were rejected. He had deliberately exaggerated the nature of the relationship between him and the claimant. His evidence about sexual encounters involving the claimant was held to be "very unreliable."
ii) The defendant had dishonestly misappropriated well over £500,000 of company monies for his own use, and deliberately concealed this within the financial returns. The misappropriations included an admitted expenditure of £50,000 on cocaine and £40,000 on prostitutes, out of a total of some £170,000 in cash withdrawals made for those and other entertainment purposes.
iii) The defendant had sought to blackmail the claimant, the Group and the majority shareholders into paying him a very large sum of money to leave his employment, and had provided false evidence to the ET in that respect. The defendant's blackmailing activities included, though they were not limited to, the sending of the Notification email.
iv) The defendant did not have any genuine belief in what he alleged were "protected disclosures", but was motivated by revenge and blackmail.
The ET subsequently made an order for costs against the defendant, on the basis that his pursuit of the claim had been unreasonable. The defendant did not seek to appeal the ET's decisions.
Despite its findings against the defendant, the ET refused an application on behalf of the claimant to make permanent the TRRO. However, it did continue that TRRO in respect of the claimant and CLJ pending an appeal to the Employment Appeal Tribunal (EAT) against its refusal to extend the order.
Whilst that appeal was pending, on 16 May 2014, the claimant issued his application for summary judgment, supported by a witness statement of Duncan Ledrum of his solicitors dated 15 May. The claimant's application came before HHJ Moloney QC sitting as a High Court Judge on 17 July 2014. Judge Moloney adjourned the application generally with liberty to restore for hearing not less than 14 days after judgment in the EAT proceedings. No doubt the Judge took the view that if the EAT upheld the ET decision and anonymity was lost, that would have an impact on the outcome of the summary judgment application.
In March 2015, however, the claimant's appeal was allowed by the Employment Appeal Tribunal (Slade J), on the basis that the ET had erred in law and in its assessment of the competing rights, which plainly favoured the protection of the Article 8 rights of the claimant and CLJ over any Article 10 rights that were engaged. The Judge concluded that the grant of a permanent RRO was the only option open to an ET properly directing itself. Accordingly, an order was made in relation to the claimant, CLJ, and the defendant, permanently preventing the following:-
"the publication in Great Britain of identifying matter in a written publication available to the public or the inclusion in a relevant programme for reception in Great Britain. 'Identifying matter' in relation to a person means 'any matter likely to lead members of the public to identify him as a person affected by, or as the person making, the allegations in the proceedings."
The defendant's identity was and remains protected, despite the findings of the ET, not for his own sake but for the sake of the claimant, CLJ, and their son. Identification of the defendant would be likely to lead to identification of the claimant, which would in turn lead to identification of CLJ.
It is relevant to note some of the points that featured in the reasoning that led Slade J to make a permanent RRO to protect the identities of the claimant and CLJ.
i) First, Slade J found that the claimant and his wife had "an undoubted right to privacy" in relation to their sexual lives.
ii) Secondly, aside from open justice, there was no public interest in revealing the identity of CLJ.
iii) Thirdly, there was no discernible public interest, properly so categorised, in revealing the identity of the claimant: the ET's findings did not suggest any wrongdoing on his part; and the defendant had brought the ET proceedings out of revenge, having failed in an attempt to extract a large sum of money by blackmail.
iv) Fourth, one effect of not continuing the RRO would be to expose a child to having his mother identified as a participant in a pornographic photograph.
In the wake of the EAT's decision, the claimant has brought his application for summary judgment back before the court. He has done so more swiftly that he would otherwise have done, for pragmatic reasons, because of the defendant's application, also issued in the wake of the EAT decision.
The applications
The witness statement of Mr Lendrum in support of the claimant's application for judgment and a final injunction sets out the history I have outlined above, and exhibits among other things the judgment of the ET. The statement explains that the application is made on the basis that
"[The defendant] in the light of the findings of the Employment Tribunal, now has no real prospect of successfully defending the claim and there is no other compelling reason why the claim should be disposed of at trial. Put simply, the defence he advanced in answer to [the claimant's] claim for an injunction to prevent the threatened publication cannot be sustained in the face of the [ET's] findings."
The first sentence of this quotation reflects of course the requirements which must be satisfied in order for the court to grant summary judgment to a claimant pursuant to CPR 24.2. The principles to be applied are equally well-known. Key points are that a "real prospect" is one that is not fanciful. The court must not, however, conduct a mini-trial. The test is absence of reality not improbability.
The defendant's application notice, dated 8 April but issued on 15 April 2015, seeks the following orders and directions:
"(A) Claimant be convicted of perjury and sent to prison for lying and giving false statements to the High Court
(B) Claimant to pay defendant's cost as directed by the Hon. Mr Justice Tugendhat as defendant had already agreed not to disclose any information to the media except to the Employment Tribunal when the injunction was first applied.
(C) Claimant's injunction be dismissed as the claimant had lied that he head never been unfaithful to his wife but the claimant later admitted to having sex with [EXD] in his second statement given to the High Court.
(D) The court to set a hearing date as soon as possible as the claimant had delayed the case for almost 3 years for fear of being send to prison if convicted for perjury for lying to the High Court.
(E) The court to subpeona [CLJ] (claimant's wife) to give evidence as she was party to the sex parties involving [EXD], defendant and the claimant. These sex parties had been denied by the claimant."
In support of this application the defendant says the following, over a statement of truth, in the application notice.
"The claimant had lied in his original statement given to the High Court for obtaining the injunction. This is evident in the claimant's subsequent statements which were made to cover lies in his original statement after further evidence was given by me and [EXD] to the High Court. The court can identify the claimant's lies by examining the claimant's statements given to the High Court. He had committed perjury by giving false statements to the High Court. I have enclosed a witness statement from [EXD] which proves clearly that the claimant lied when said he had only met [EXD] only once. The claimant had in fact had sex with [EXD] for over a period of time and even paid her £3,000 for breast enlargement. The payment came in form of a cheque together with a letter from the claimant. The letter from the claimant to [EXD] and her bank statement is presented to this court as evidences. The claimant believes because he is a multi-millionaire he can do whatever he likes including giving false statements to the High Court knowing that they are untrue. Finally I asked the court to examine closely the signed statements given by the claimant to the High Court. The claimant's statements clearly show he had deliberately misled the court that he never had sex with [EXD] in his original statement but then changed it and admitted having sex with [EXD] in his second statement after evidence produce [sic] by me and [EXD]. I am no a lawyer but is this not perjury. [EXD] will give evidence at the hearing"
The defendant has also filed a bundle of documents, entitled "Defendant's list of documents (Bundle)" which includes a witness statement of EXD; a letter from the claimant to EXD, and a bank statement of hers; "sample" texts passing between the claimant and EXD, CLJ and the defendant, and CLJ and EXD; emails from the claimant to the defendant; and extracts from the claimant's witness statements in the action.
In the course of the hearing I have been able to ascertain with greater clarity from the defendant what it is that he seeks. He has made very clear that he does not now resist the grant of an injunction to restrain public disclosure of the information at issue. He claims, however, that he has never "threatened" to make public disclosure, other than briefly before the initial injunction application, and in the ET proceedings. His position is therefore that there was therefore never any good reason for an injunction. The defendant's overriding aim, as explained by him at the hearing, is to hold the claimant to account, and to see him punished by the court, for statements made by the claimant to the court in his witness statements in this action which the defendant maintains are lies. In addition, the defendant complains that he has been financially ruined by the proceedings and he wishes to obtain costs orders against the claimant to compensate for that.
The defendant now alleges 7 instances of lying. All are denied by the claimant. The defendant's application notice was issued only recently, and his Bundle failed to reach the claimant's legal team. Thus, the claimant has not yet had a full opportunity to respond. It is nonetheless convenient to summarise what is currently alleged, together with such responses as Mr Nicklin QC has been able to provide on behalf of the claimant, as follows:
i) The defendant alleges that the claimant lied by saying he had only met EXD once. The claimant says this is a misreading of his witness statement.
ii) The defendant alleges that the claimant lied about whether he had paid for EXD to have breast enlargement. The claimant says he did not lie about the matter. It is something not mentioned in his initial statement but added in his later evidence.
iii) The defendant alleges that the claimant lied by saying that he had never had sex with EXD, and then admitted in his second statement that he had. The claimant responds that he had candidly admitted having sex with EXD in his first statement – albeit he did not name her - and that he confirmed this in his statement for trial.
iv) The defendant alleges that the claimant lied by asserting that messages he sent to the defendant were false and/or invented for entertainment whereas they were true and reflected real events; this is the first of four lies alleged in Part C of the Confidential Schedule to the Defence.
v) The defendant alleges that the claimant lied by claiming that he was unfaithful to his wife on only one occasion whereas he had sexual relations with numerous persons, not limited to EXD, and "attended several orgies and sex parties at which he had sex with persons other than his wife". The claimant says that his evidence truthfully stated that he had been unfaithful to his wife as set out in his witness statement for the injunction application, but not otherwise.
vi) The defendant alleges that the claimant lied by suggesting that his relationship with his wife would be adversely affected by disclosure; Mr Nicklin says that this disputed allegation of lying has not hitherto been pursued.
vii) The defendant alleges that the claimant lied by suggesting that he did not take drugs, and that a reference in one of the messages to him bringing the "white stuff" was a joke, whereas he did take drugs, in particular cocaine, on a number of occasions and would bring drugs to parties for that purpose. That is denied by the claimant, and as Mr Nicklin observes, it would require a trial of the facts as it was not the subject of any finding by the ET.
The defendant has made clear that, contrary to what might appear from his application notice, he is not inviting the court to make any findings against the claimant at this hearing. Rather, he wishes the court to give directions for a hearing to determine whether his allegations are correct and to punish the claimant accordingly. It is for that purpose that he seeks to subpoena CLJ.
Issues
As Mr Nicklin acknowledged in his Skeleton Argument, there is an obvious inter-relationship between the issues arising from the applications. Further, whilst he maintains on his client's behalf that the allegations of lying are false, Mr Nicklin has not suggested that I am in any position to determine their merits at this stage. He accepts that I have to treat them as matters that might be proved. His case is, however, that the matters alleged do not provide any vestige of a defence on the merits, and that it is possible to see now that if a principled approach is taken the court could not conceivably refuse his client the injunction he seeks, even if the alleged lies were told. He thus submits that the requirements of CPR 24.2 are met.
It is therefore convenient to deal with the following issues in the following order, on the footing that all of the defendant's factual allegations are arguable:
i) Does the defendant have any real prospect of successfully defending the claim on its merits? If not,
ii) Is there any real prospect that a court would withhold the grant of a permanent injunction in the terms sought? If not
iii) Is there any other compelling reason why the claim should be resolved at a trial? If not
iv) What should be done about the defendant's applications?
The Summary judgment application
Is there any real prospect of a successful defence on the merits?
By "on the merits" I refer to the intrinsic merits of the claims for misuse of private information and breach of confidence, as opposed to any considerations of abuse of process or the like, which I shall address at the next stage.
I can take this quite shortly, in view of the defendant's stance and what I consider to be the obvious merits of the case. I shall focus on the requirements of the cause of action for misuse of private information, which are well-established. The first is that the claimant enjoys a reasonable expectation of privacy in respect of the information in question.
Here, the information relates to sexual conduct, and messages about such conduct. In his judgment of March 2012 Tugendhat J ruled that "While there is no doubt that a person normally has a reasonable expectation of privacy in respect of sexual activity, that cannot be the case where the activity is abusive or amounts to sexual harassment": [2012] EWHC 778 (QB) [61]. Mr Nicklin describes this as "prophetic". His submission is that it is now conclusively established by the decision of the ET that the defendant's case was false, and that there was no sexual harassment or abusive sexual conduct by the claimant towards the defendant. Therefore, the defendant can no longer dispute the existence of the first element of the cause of action on that basis, and he has no other answer.
In my judgment that is correct. The information concerns sexual activity in private between consenting adults, which is a prime candidate for the protection of the law. The authorities suggest that some information of that kind may be protected from disclosure to the general public, even if it is criminal: see Mosley v News Group Newspapers Ltd [2008] EWHC 1777 (QB), [2008] EMLR 20. Here, however, the information does not relate to acts which are criminal or otherwise unlawful. To the extent that the information discloses infidelity, that is not sufficient to deprive the information of its private nature: CC v AB [2007] EMLR 11 [24]-[25].
The truth or falsity of what the claimant has said in his witness statements about the number and nature of his sexual encounters with EXD, or with other people apart from CLJ, is not in my judgment a significant consideration when assessing the merits on this issue. The defendant's case is that the information he threatened to disclose was true. The claimant's case is that some of it was false, but false information can be and often is the subject of a reasonable expectation of privacy, particular when mixed up with true information. In general, the truth or falsity of the underlying facts is irrelevant: McKennitt v Ash [2006] EWCA Civ 1714, [2008] QB 73 [86]. Hence the grant of the interim injunctions in this case.
My conclusion is that the claimant plainly had, and continues to enjoy, a reasonable expectation of privacy in respect of this information. That conclusion accords with that of Slade J in the EAT.
The second stage, in determining whether a cause of action for misuse of private information is made out, is to decide whether the claimant's claims ought to yield to, or prevail over, some competing rights or freedoms. This is a balancing exercise in which the rights under Articles 8 and 10 of the Convention are to be treated as in themselves of equal weight. The decision involves an intense scrutiny of the specific rights in play in the individual case, with the outcome being determined by considerations of necessity and proportionality. Again, I agree with the conclusions of Slade J in the EAT on this issue.
The defendant's status as a blackmailer, and the claimant's status as a blackmail victim are both established as facts by the final judgment of a competent tribunal which is binding on both parties. The claimant's rights are to be accorded significant weight, not merely because they relate to information of an intimate, private and personal nature but also because he is a blackmail victim. As I said in YXB v TNO [2015] EWHC 826 (QB) [17]: "Victims of blackmail or extortion deserve protection from the court; and the court must adapt its procedures to ensure that it does not provide encouragement or assistance to blackmailers."
The defendant's right to speak publicly of his part in, or of what he knows of, the claimant's sexual adventures is one that deserves little weight in striking a fair balance. He is not asserting such a right. As a blackmailer, although he has Article 10 rights, they are limited. As Tugendhat J explained in AMM v HXW [2010] EWHC 2457 (QB):
"38. The fact that a person is making unwarranted demands with threats to disclose information does not of itself mean that that person has no right to freedom of expression. As Lord Atkin pointed out in Thorne [v Motor Trade Association [1937] AC 797, 817] the blackmailer may even be under a duty to disclose the information. But if a person is making unwarranted demands with threats to publish, that is a factor in deciding whether that person has any Art 10 rights, and, if so, then the weight to be accorded to them in balancing them with the applicant's Art 8 rights.
39. In my judgment, the need to have regard to the Art 8 rights of the Claimant, and to promote the public interest in preventing and punishing blackmail are both factors which weigh strongly in favour of the grant of an anonymity order. There is a strong case that Defendant has no right to publish the information which she seeks to publish about her relationship with her former husband. On this view her Art 10 rights are not strong. And as an alleged blackmailer, her Art 10 rights are much weaker. …."
As for the rights of others to learn of the claimant's sexual exploits, it may be that such rights could in a proper case be held to outweigh a claimant's right to protect the privacy of their sexual life, even in a case of established blackmail. Such a case would however be highly unusual. In this case, as Ward LJ observed in K v News Group Newspapers Ltd [2011] 1 WLR 1827 [23]: "Publication may satisfy public prurience but that is not a sufficient justification for interfering with the private rights of those involved." Disclosure of the information in this case could not make any significant contribution to a debate on any matter of legitimate public concern.
There is an additional factor. As in K, so also here, there are third party rights involved. Third party rights can be decisive in a case which is otherwise evenly balanced. Here, they include those of EXD and those of CLJ and the couple's son. I do not attribute great weight to the right of EXD to make public her own experiences. She is not asserting those rights, and they must in any event be of limited significance in the absence of any public interest justification for disclosure. The rights of CLJ to protect her own privacy carry greater weight but I agree with Slade J in concluding that the son's right to a family life untrammelled by disclosure of this information carries the greatest weight. The balance would in any event have come down on the claimant's side, but the son's rights add considerably to the balance in his favour.
Is there any real prospect that a court would withhold the grant of a permanent injunction?
This issue requires attention to three questions. The first is whether the claimant has shown that a court at trial would inevitably find that there is sufficient evidence of a risk of unlawful publication to justify the grant of an injunction. In my judgment he has. The defendant's claim that there neither is nor ever was any need for an injunction cannot be accepted, in the light of the ET's findings of blackmail. Where a blackmailer responds to a claim for an injunction by claiming that he never intended to carry out his threat, the court will inevitably take a good deal of persuading that the threat was and is an entirely empty one. Here, there is manifestly sufficient evidence of a threat to justify the court in granting an injunction. The threat was explicit in the email of 12 February 2012; the defendant's credibility is destroyed by the conclusions of the ET; the ET's finding that the defendant pursued the ET proceedings for motives of revenge would itself be sufficient to justify concern that he would, if not enjoined, make private information public.
The second question is whether it is clear at this stage that, other things being equal, the court would exercise its discretion to grant the equitable remedy of an injunction even if, as may yet be the case, the claimant is shown to have lied to the court in the respects identified? A claimant must come to equity with clean hands, and a remedy may be withheld if he does not. Thirdly, it is necessary to consider whether at trial, if the defendant's allegations were established, the claim might be struck out by the court as an abuse.
In my judgment there is no real prospect that the court would withhold a remedy on either of these grounds in this case. I shall deal first with the third question. The right approach to issues of this kind was comprehensively considered by the Supreme Court in Summers v Fairclough Homes Ltd (above). The Court held that there is an inherent jurisdiction as well as a power under CPR 3.4(2) to strike out a statement of case on the ground that it is an abuse of the process of the court, at any stage, even after trial; but that the test must be what is just and proportionate, and it would be a very rare case in which, at the end of a trial, it would be just or proportionate to strike out a case rather than to dismiss it in a judgment on the merits or, where both liability and quantum could be assessed fairly, to give judgment in the ordinary way.
The Court accepted, at [48], the submission on behalf of the claimant that "in deciding whether or not to exercise the power the court must examine the circumstances of the case scrupulously in order to ensure that to strike out the claim is a proportionate means of achieving the aim of controlling the process of the court and deciding cases justly". At [49] it emphasised that:
"The draconian step of striking a claim out is always a last resort, a fortiori where to do so would deprive the claimant of a substantive right to which the court had held that he was entitled after a fair trial. It is very difficult indeed to think of circumstances in which such a conclusion would be proportionate. Such circumstances might, however, include a case where there had been a massive attempt to deceive the court but the award of damages would be very small."
The court gave careful consideration to the question of whether orders striking out a claim were necessary in order to provide a disincentive to false and fraudulent claims. It identified a number of other deterrents which could have such an effect and would generally be preferable. The Court concluded at [61] as follows:
"The test in every case must be what is just and proportionate. It seems to us that it will only be in the very exceptional case that it will be just and proportionate for the court to strike out an action after a trial. The more appropriate course in the civil proceedings will be that proposed in both Masood v Zahoor [2010] 1 WLR 746 and Ul-Haq v Shah [2010] 1 WLR 616. Judgment will be given on the claim if the claimant's case is established on the facts. All proper inferences can be drawn against the claimant. The claimant may be held entitled to some costs but is likely to face a substantial order for indemnity costs in respect of time wasted by his fraudulent claims. The defendant may well be able to protect itself against costs by making a Calderbank offer. Moreover, it is open to the defendant (or its insurer) to seek to bring contempt proceedings against the claimant, which are likely to result in the imprisonment of the claimant if they are successful. It seems to us that the combination of these consequences is likely to be a very effective deterrent to claimants bringing dishonest or fraudulent claims, especially if (as should of course happen in appropriate cases) the risks are explained by the claimant's solicitor. It further seems to us that it is in principle more appropriate to penalise such a claimant as a contemnor than to relieve the defendant of what the court has held to be a substantive liability."
The Supreme Court's decision on the facts of Summers indicates how "very exceptional" a case would need to be, to justify its dismissal as an abuse a claim on the grounds of fraud or other dishonesty. The claim was for injuries sustained in an accident at work, including an injury to the claimant's heel. He served a Schedule of Loss claiming £800,000 on the basis that he was grossly disabled, dependent on crutches, unable to work, and likely to remain so. Surveillance on behalf of the defendant revealed that the claimant was leading a normal existence without any significant disability, including playing football, and was in fact working. His claim was ultimately held to be worth £90,000. The Supreme Court dismissed the defendant's challenge to the refusal of the trial judge and the Court of Appeal to dismiss the claim as an abuse holding that despite the claimant's serious abuse of process, it would not be just or proportionate and would therefore be wrong to strike out the claim, since on the judge's findings of fact he had suffered significant injury as a result of the defendant's breach of duty for which he was entitled to damages.
I accept that the court could not, applying these principles to the hypothetical situation in which the court has found the claimant in this case to have lied as alleged by the defendant, conclude that the claim should be struck out or a remedy withheld. That is for reasons that will be apparent from what I have already said. Not the least of those features is that to allow disclosure would be to grant a proven blackmailer permission to carry out his initial blackmail threat, and publish intimate personal information, in circumstances where no public interest would be served, other than punishment of the claimant.
As Mr Nicklin submits, this case is to be distinguished from YXB v TNO (above), where there had been non-disclosure of highly material facts on a without notice application, and the order was discharged and not continued on the return day. In YXB the claimant's rights were given relatively little weight in the light of his inadequately explained failure to give direct evidence in support of his case; his main objective appeared to be to prevent the publication of intimate pictures, which was enjoined; the defendant was asserting a right to disclose; there was little detailed information that could be disclosed; and the claimant's allegation of blackmail was an improbable one.
Returning to the doctrine of clean hands my conclusion is that, without wishing to trivialise what is alleged against the claimant, the allegations are of falsehoods about the detail of his sexual life. I accept Mr Nicklin's submission that these are not matters that could be seen as justifying the court withholding an order that would otherwise be merited.
Is there any other compelling reason for a trial?
None has been suggested, and I can see none. There is every reason to conclude this action at this stage, when there is no possible answer to the claim on the merits and the defendant does not even assert a right to publicise the information. The grant of summary judgment in favour of the claimant will not preclude the defendant from pursuing if he wishes the application for committal which he has threatened, to which I now turn.
The defendant's applications
Committal
The defendant's allegation is that the claimant has made witness statements, verified by statements of truth, which contain false and dishonest statements. This is not perjury, but it is or may be a contempt of court. CPR 32.14(1) provides that: "Proceedings for contempt of court may be brought against a person if he makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth."
The defendant seeks the claimant's committal to prison. The procedure is provided for by CPR 81 and Section VI of the Part 81 Practice Direction. Section VI applies where, as here, the committal application relates only to a false statement of truth: r 81.17(2). By rule 81.18(1):-
"A committal application in relation to a false statement of truth or disclosure statement in connection with proceedings in the High Court … may be made only –
(a) with the permission of the court dealing with the proceedings in which the false statement or disclosure statement was made; or
(b) by the Attorney General."
The claimant therefore needs permission, if he is to proceed on his own behalf. Mr Nicklin resisted any suggestion that I might deal with the claimant's present application as if it were an application for permission, submitting that there are important procedural safeguards built into Part 81 which have not yet been complied with by the defendant. The procedure is as follows.
CPR 81.18(2) provides that where permission is required under paragraph 81.18(1)(a), rule 81.14 applies, with modifications. Rule 81.14 as so modified provides as follows:-
"(1) The application for permission to make a committal application must be made by a [Part 23 application notice] which must include or be accompanied by –
(a) a detailed statement of the applicant's grounds for bringing the committal application; and
(b) an affidavit setting out the facts and exhibiting all documents relied upon.
(2) The [application notice] and the documents referred to in paragraph (1) must be served personally on the respondent unless the court otherwise directs.
(3) Within 14 days of service on the respondent of the [application notice], the respondent –
(a) must file and serve an acknowledgment of service; and
(b) may file and serve evidence.
(4) The court will consider the application for permission at an oral hearing, unless it considers that such a hearing is not appropriate.
(5) If the respondent intends to appear at the permission hearing referred to in paragraph (4), the respondent must give 7 days' notice in writing of such intention to the court and any other party and at the same time provide a written summary of the submissions which the respondent proposes to make.
(6) Where permission to proceed is given, the court may give such directions as it thinks fit, and may –
(a) transfer the proceedings to another court; or
(b) direct that the application be listed for hearing before a single judge or a Divisional Court."
The Part 81 Practice Direction includes the following provisions:-
"5.2 Where the permission of the court is sought under rule 81.18(1)(a) or 81.18(3)(a) so that rule 81.14 is applied by rule 81.18(2) or 81.18(4), the affidavit evidence in support of the application must –"
(1) identify the statement said to be false;
(2) explain –
(a) why it is false; and
(b) why the maker knew the statement to be false at the time it was made; and
(3) explain why contempt proceedings would be appropriate in the light of the overriding objective in Part 1.
5.3 The court may –
(1) exercise any of its powers under the rules (including the power to give directions under rule 81.14(6));
(2) initiate steps to consider if there is a contempt of court and, where there is, to punish it; or
(3) as provided by rule 81.18(5), direct that the matter be referred to the Attorney General with a request to consider whether to bring proceedings for contempt of court.
Here, the defendant has issued a Part 23 application notice, but it does not include nor is it accompanied by an adequate statement of his grounds for bringing the committal application; his evidence is not in affidavit form; and the evidence does not comply with the requirements of CPR 81.14(1)(b) and paragraph 5.2 of the Practice Direction. These are not fatal defects by any means. They can be put right. The defendant acts in person and lacks means, and it is appropriate to permit him to amend his existing application notice so as to comply with the rules, rather than require the issue of a fresh notice. But the deficiencies of his evidence will need to be made good.
I therefore grant the defendant permission to amend his application notice so as to seek permission under CPR 81.18(1)(a) to bring an application to commit the claimant to prison for contempt of court. Any such amended application notice must comply with the procedural requirements I have set out above, and be accompanied by the affidavit evidence on which the defendant relies. I set a deadline for the filing and service of the amended application notice of 29 May 2015.
It may be that the reference to an acknowledgment of service in r 81.14(3)(a) is meant to be omitted when applying that rule to an application for permission under r 81.18(1)(a), but for the avoidance of doubt I require the defendant to acknowledge service, as well as to serve any evidence relied on. After that, the application for permission will be considered by the court at an oral hearing, unless the court considers that a hearing would be inappropriate. If the claimant intends to appear at the permission hearing (or to make submissions if there is no hearing) he must give 7 days' notice in writing of such intention to the court and the defendant and at the same time provide a written summary of the submissions he proposes to make.
Other matters
I have dealt with the matters raised by paragraphs (A), (C) and (D) of the defendant's application notice. As to paragraph (B) (costs), there are no costs "as directed by the Hon Mr Justice Tugendhat". What the defendant is really aiming at is a costs order that reflects his position on the necessity or otherwise of these proceedings and the claimant's alleged lies. To ensure that full argument can be addressed to those issues I direct that the costs of the claimant's application and of the action are reserved to be determined at or following the Committal Application, as to which the parties have general liberty to apply.
By paragraph (E) of the defendant's application notice he applies for a "subpoena" compelling CLJ to give evidence. This is at best premature in my judgment. The defendant evidently hopes to obtain evidence from CLJ to support his case that her husband had sex with other people at sex parties in her presence. Procedurally, the defendant is not wrong to make this application: the court's permission is required for the issue of a summons for a witness to attend court to give evidence at a hearing other than a trial: CPR 34.3(2)(c). The evidence would be given at the committal hearing, if permission was granted. The question of whether permission should be granted to compel CLJ to give evidence for the defendant at such a hearing is best considered in conjunction with the question of whether the defendant should have permission to bring committal proceedings at all. |
Mr Justice Supperstone :
Introduction
At about 11am on Sunday 24 July 2011 a collision occurred on the B3399 Newport Road between a Yamaha motorcycle owned and ridden by the Claimant and a New Holland T8080 tractor and Gurak 2 axle trailer driven by the First Defendant. The First Defendant was executing a right-hand turn from a field known as Hanging Prospect ("Field A") onto the B3399 when the Claimant's motorcycle proceeding east along the road collided with the tractor.
The Claimant claims damages for the injuries, loss and damage he sustained.
This trial is concerned with liability only.
The Evidence
The B3399 Newport Road is a rural road. It has a speed limit of 60 miles per hour. It is regularly used by slow moving agricultural vehicles, in particular in the vicinity of Tapnell Dump which is approximately half a mile from the accident scene.
At all material times visibility was good and the road surface was dry.
The Claimant, aged 40 at the time, suffered severe injuries in the accident including a head injury. As a result of his injuries he has no recollection of the accident. The last thing he can remember from before the accident is going out with his wife and some friends the previous evening.
He is an experienced motorcycle rider. He said he was a safe rider and never raced on the road.
He has been told that on the day of the accident he had gone out early for a ride on his bike and met up with a group of friends, including Mr Warren Godfrey, for breakfast before coming back home to prepare for a track day later in the week. He said that this is typical of what he used to do at weekends.
Mr Godfrey (who's date of birth is 25 May 1963) confirmed that he and the Claimant, who are good friends, used to go out on their bicycles together. He said that he too was an experienced rider.
When the accident occurred he was riding his motorcycle behind the Claimant. He was also involved in the accident and sustained some injuries. He too has brought a claim against the First Defendant. He has agreed to be bound by the findings of fact in the present claim.
Mr Godfrey said that they were travelling in single file along the road, the Claimant in front of him. They had overtaken a tractor and a car, the car having overtaken the tractor. He said that when they overtook the car they were not going much above 60mph and not more than about 70mph. They then came to a slight bend in the road when they slowed down a bit. The road then goes up a hill. He said there was no visibility over the brow of the hill until you get near the top and can then see down the other side. He estimated that he was travelling about 60mph when he got near the top of the hill. He said that the Claimant was going at a similar speed.
Mr Godfrey said that the Claimant was in front of him as they went up the hill. As the Claimant reached the brow of the hill he saw the Claimant's brake light suddenly come on. This was his first warning that something was happening. In response he also braked and slowed down. As he came over the brow of the hill he saw a large tractor and trailer in the road. The tractor was pulling out from the left-hand side and was across the road, blocking the carriageways. As soon as he saw the tractor he braked hard. He tried to steer to the left to avoid the tractor but the trailer that the tractor was pulling also blocked the verge. He went onto the grass and lost control. His bike slid under the trailer between the wheels and came out the other side.
Mr Godfrey said that he blacked out when he hit the ground but he did not think he was out very long because he was able to get to his feet and walk round to see what was happening with the Claimant.
Mr Godfrey said that he spoke to the tractor driver who told him that he was an ex-biker. The tractor driver said that as he was turning out into the road he thought to himself that he hoped no bikes were coming along the road whilst he was turning. He said that he tried to get some speed up so that he could turn quicker but he could not get any speed up whilst turning. Mr Godfrey said he did not understand the tractor driver to be accepting blame; he was just concerned.
Some time after the accident Mr Godfrey returned to the location. He said he noticed a number of things. The turning on the left-hand side of the road that the tractor was coming out of was not a side road nor was it a gravel track. It was really just a hole in the hedge, a grassy area from the fields. Mr Godfrey said that he knew this road extremely well and had been along it very many times. He had never noticed the grassy turning before.
Mr Godfrey said that he and the Claimant were definitely not racing.
The Claimant was familiar with this stretch of the road. He used this stretch of the B3399 almost every Sunday through the summer since he moved to the Isle of Wight in 2003. He described it as very much a farming area and knew the road was used by agricultural vehicles, including tractors. He had never noticed the exit from where the tractor had emerged before. There is a "slow" sign before the bend, which he thought was for the bend. He said one should slow to about 50mph. He said one cannot see over the brow of the hill but you do not expect anything to be over there. He said he would be going up the hill at 40-50mph, having shut the throttle off and letting the bike roll as it was going up the hill. That would make it easier to brake, if necessary. The Claimant said that any speed over 60 would be fast and 63mph would be too fast. He said 63mph is obviously not a safe speed.
Mr Godfrey said that he would slow to about 50mph to take the bend. He would then continue at that speed or increase a bit, going up to the top of the hill at about 55-60mph. With hindsight he accepted that there is a hazard over any brow of a hill. There were many hazards which included there being something in the road, a parked car and gravel. He said that 45mph would be a safe speed to go over the brow of the hill. He just did not think there would be anything over the brow. He took a risk, but not a big risk.
If he had known there was an exit from the field Mr Godfrey said that would have affected his speed as he would have known that there was a hazard or something possibly pulling out from the field.
Mr Reed was driving the car that was overtaken by the Claimant and Mr Godfrey. He is very familiar with this road. He estimated his speed at about 55-60mph when they overtook. He then followed behind the motorcyclists. He slowed down to 40-45mph when he went up the hill. He said he was not sure why he slowed down because normally he would actually have driven up the hill at quite a reasonable pace, nearer to the speed limit of 60mph. However on that day he said fortunately he was going slower.
As he came over the brow of the hill at about 40mph he said he was suddenly confronted with the tractor and a trailer across the road and saw a motorcyclist lying on the road in front of the tractor's wheel. He immediately braked hard and came to a stop a short distance (7-10ft) from the tractor.
Mr Reed said that from the way the motorcyclists had been driving he thought that they were experienced riders, not "boy racers" or doing anything that concerned him.
He too said that prior to the accident he had never been aware of there being a turning out from the fields at the point that the tractor was joining the road.
Mr Symes, the First Defendant, is a self-employed farm contractor, who on the morning of the accident was undertaking come contract work, forage harvesting, for Turney's Farming at East Afton Farm. This involved collecting and hauling grass silage from the harvester and hauling it back to the clamp at the farm.
The tractor he was driving was owned by Langmead Farms Ltd from whom he leases five tractors and one telehandler on an annual basis. He arranges the appropriate insurance for these vehicles, and other agricultural vehicles. However due to "a clerical oversight" this particular vehicle did not have valid insurance at the time of the accident, for which he accepts responsibility. He was issued with a fixed penalty notice for driving without insurance.
Mr Symes said that he drove the tractor towards the road with the intention of leaving the field and turning right towards Freshwater. Shortly before he reached the road he switched on the tractor's twin amber beacons which are set approximately 4m above ground level. They were switched on and flashing at the time of the collision. The track from the field runs 90 degrees towards the Newport Road, the view of which is un-obscured. As you get nearer the road the track bends to the right slightly so that the actual exit is approximately 45 degrees to the Newport Road facing in the direction of Freshwater. The exit from the field is simply a gap between a wire fence and hedgerow. He said the exit was frequently used and there is a clearly defined track.
Mr Symes said that as he left the exit he was moving very slowly and at no more than 4-5mph. The front of his tractor was just about in the middle of the road when a motorcycle came over the brow of the hill at speed. He jammed on his brakes and came to an immediate stop. He said that "in a split second" the motorcycle hit the tractor's fuel tank in front of the back wheel. Almost immediately after, a second motorcyclist came off his machine, sliding along the road and under the trailer. He said that he could not have done anything to have avoided the accident. It was caused solely by the speed of the motorcyclists.
In response to an allegation of negligence made against him that he should have used an alternative access point to and from the field, Mr Symes said in his witness statement made on 7 October 2014 as follows:
"31. … This was not an option. There was, and still remains, no alternative access to or from the field.
32. Specifically, it is alleged that I should have used an access point at the rear of the field onto Broad Lane, rather than the Newport Road access. There is no access point.
33. At the time of the accident the perimeter of the field was fenced off by barbed wire and the entrance/exit from the Newport Road was the only access. This remains the case.
34. If I was to exit onto Broad Lane as alleged, not only would I have to remove several sections of barb wire fencing owned by the farm, but once done so it would involve driving the large tractor and heavily loaded trailer over a grass bank which is raised from the road.
35. I have seen and agree with the statement of James Knight which exhibits several recent photographs showing the field adjacent to Broad Lane, the fence and the bank. Broad Lane, the fence and the bank have changed little since the accident.
36. Even if I could have removed the fence, which I couldn't, the narrow width of Broad Lane coupled with the width of the tractor and loaded trailer would mean that I would need to approach at a very acute angle. Any attempt to drive off the field and down the grass bank at such an angle would put the tractor and, more likely the trailer, at risk of damage or may well cause the trailer to topple over, especially when loaded.
37. In addition, at places along Broad Lane there is a trench on the opposite side of the road which would also have presented a further risk.
38. Even if it was safe, practical and possible to have driven the tractor and trailer onto Broad Lane, which I deny, the tractor and trailer would have taken up almost the entire width of the two-way road.
39. Finally, even if I could have practically and safely reached the junction of Broad Lane with Newport Road, which I deny, the junction has very poor visibility to the right and presents a greater hazard for slower moving agricultural vehicles. Visibility to the right is severely restricted by a fence, with the road bending uphill and slightly to the right. Newport Road has a 60mph limit and vehicles approaching from the right of Broad Lane travel downhill with no sight of the junction.
40. The fence remains in place and the entrance/exit used remains the only access to this day.
41. I had no alternative other than to use the entrance/exit that I did.
…
46. I have used this exit without incident on many occasions and I am therefore very familiar with it. In fact I have worked in this field for the last 10 years or so."
In a second statement dated 23 April 2015 Mr Symes states:
"2. I refer to paragraphs 33, 34, 35, 36 and 40 of my statement dated 7 October 2014 and specifically to the comments made regarding a fence separating the northern edge of the field in which I was working with Broad Lane, referred to as Field A.
3. Prior to the accident, I had not worked in that field for at least two years. I'm not always invited to be part of the foraging team but I have worked in that field about half a dozen times before.
…
7. As I have previously stated, I exited the field at the same point that I had entered, where it meets the B3399. Having used it before and not considered it dangerous, there was no reason for me to have thought differently and no reason for me to have considered circumnavigating the field for an alternative access when I believed no other access existed.
8. Field A and the fields around it are typically bordered by wire fencing and I had assumed that the Northern Edge was also. Since speaking with the farm manager, Daren Moore, I have learned that this was not the case. There was in any event a raised grass bank making any potential exit with a tractor and loaded trailer dangerous.
9. I therefore accept that I was mistaken that there was a fence at the Northern Edge of Field A.
10. I must also accept that I have previously incorrectly identified the field referenced at paragraph 35 of my first statement. Having now seen an aerial photograph of the fields, I am able to correctly identify Field A.
11. I maintain that I did not consider the exit used by me at the time of the accident dangerous."
Mr Symes was asked about the inconsistency between paragraph 46 in his first statement and paragraph 3 in his second statement. He said that he had visited that field (Field A) about half a dozen times in more than ten years.
He said the tractor he was driving on the day of the accident was powerful. He agreed that when moving right onto the road it would block the whole road very briefly. He said it took about 3-4 seconds from the edge of the field to where the tractor stopped. He accepted there was still some way to go before he could complete the turn. However he said it did not occur to him that there was a hazard with cars coming over the brow of the hill. He estimated that his view to the right to the brow of the hill was approximately 75m from the field exit. He remembered talking to Mr Godfrey but he had not said anything about thinking about bikes coming down the road. He did not think there was any danger at all in doing what he did. He did not see the need for a banksman as he did not deem the exit he used to be dangerous.
Asked about how he could have been confused about the fencing, he said that when he last went to Field A a few weeks back, which was the first time for some time, it was clear there was no barbed wire fence. It was a surprise to him. It was a Dairy Farm and you would expect fencing.
He now agreed that there were other exits from Field B, but he did not accept that the other options put to him were safer; if any were, it was only marginally so.
Mr Hayward, aged 20 at the time, was a farm worker. He was employed by Turney's Farming between 2008 and 2014. On the morning of the accident he was driving a tractor and trailer, travelling at approximately 20-30mph. He was very familiar with this road. He said that he had just turned out of the Tapnell Dump gates, when he became aware of two big powerful-looking and sounding motorcycles passing him very quickly on his off side. He estimated they were travelling at a speed well in excess of the 60mph speed limit and still accelerating. He said the motorcyclists appeared to be racing one another. He described their riding as dangerous due to the close proximity that they were riding to each other, their speed and the approaching hazards in the road.
At paragraphs 51-56 of his first witness statement dated 1 October 2014 Mr Hayward gives very similar evidence to the evidence of Mr Symes at paragraphs 31-41 of his first witness statement. Mr Hayward says that at the time of the accident Field A was fenced off by barbed wire and the entrance/exit from the Newport Road was the only access. He also says (at para 54) that the fence remains in place and the entrance/exit used remains the only access. In his second witness statement made on 23 April 2015 Mr Hayward says, as does Mr Symes in his second witness statement, that he was mistaken about this. He states (at para 5) that the fields in the area are bordered by wire fencing and he had incorrectly assumed that the northern edge of Field A where it meets Broad Lane was also bordered by a wire fence.
Police Constable Gunby was the forensic investigating officer on the scene. He said the complete cab of the tractor would have been visible to the Claimant from 93.6m. He stated that if the motorcycles were being ridden at a constant 60mph, the speed limit, it would take approximately 3.5 seconds to cover the 93.6m of available view afforded to the tractor driver.
Police Constable Turner was the senior investigating officer on the scene. He said that Newport Road passes through an area of busy farm land. It is common to see farm vehicles working in the area.
He himself is a keen motorcyclist. He knows that the Newport Road is a favourite for motorcyclists, particularly on a Sunday. He is aware of numerous complaints about speeding by motorcyclists along the Newport Road.
Dr Walsh and Mr Parkin gave expert evidence for the Claimant and the Second Defendant respectively. Dr Walsh's report is dated 12 November 2014 and Mr Parkin's report is dated 6 November 2012. They produced a Joint Statement dated 15 January 2015 and a Second Joint Statement dated 17 April 2015.
On the basis of the evidence of PC Gunby that the Claimant could see the cab from a distance of 93.6m (see para 36 above), and the parties agreeing that that was a fair measurement to adopt, Dr Walsh re-calculated the likely speed of the Claimant's motorcycle when he came over the brow of the hill as being 65mph. Mr Parkin, on the evidence he had heard during the course of the trial, calculated the likely speed as being a little in excess of 70mph.
The main issue between the experts which accounts for the difference between these two estimates of speed relates to what has been described as "rise time". Dr Walsh, relying on the Kasanicky research, suggests that it takes quite a long time for full braking to take effect after braking has commenced. Dr Walsh deals with this in his report at paragraphs 59 and 60:
"59. Kasanicky et al have published a series of test results relating to the braking of modern motorcycles under emergency braking conditions. In addition to measuring the average deceleration rates, the average delay in the braking effect was also measured. This is a delay which occurs not only through the process of pressure building up in the hydraulic braking system on the motorcycle, but also because the front forks initially compress, and it is only when they have reached an equilibrium position that there is a full transfer of the braking force.
60. Of eight tests of modern motorcycles the average delay was 0.7 seconds. The range was between 0.496 seconds and 1.01 seconds. The delay in the efficacy of the brakes on motorcycles is often referred to as the rise time, and it is the period where, after application of the brakes, the weight shifts forward onto the forks. As this happens, the braking efficacy rises to the maximum after the rise time is complete."
Mr Parkin's response to this point is set out at paragraph 23 of the Joint Statement, in particular at sub-paragraph (b):
"Research on reaction times has been based on car drivers. The reaction time for car drivers including the times for perception, decision, and movement of the foot from the accelerator to the brake, followed by application of the brake. Motorcycle riders have the same perception time, decision times, and application of the brake time, but they do not need to move from one part of the machine to the other before applying the brake. Their hand is already on the brake and therefore this represents a significant amount of saved time compared with the driver of a car. In Mr Parkin's opinion that amount of time saving is probably about equivalent to the time that the front forks take to sink and for force to transfer for braking. In effect, the delay in braking effect should probably be ignored and considered to exist within the standard reaction time (as it generally is by other accident reconstruction experts)."
By the use of the word "ignored" what Mr Parkin intended to convey is that one cancels out the other.
Mr Parkin said that he had never previously come across reference to the Kasanicky research on this issue. He noted that page 159 of the research document relied upon by Dr Walsh states:
"All the used motorcycles were rented from private owners, with an average wearing of all components, especially of tyres and brakes. The testing rider was a 34 years old male with seven years of experience, in total about 60,000km, with no experience in motorcycle sports. Before the actual experiments the rider performed a 2km long test ride with repeated braking."
Mr Parkin observed it must therefore be borne in mind that the research is based on a single rider with limited experience, riding rented machines that he would be concerned not to damage. The delay in braking effect of 1.23 recorded for the Kawasaki motorcycle is an astonishingly long time. By contrast the Claimant is a very experienced motorcyclist, riding his own machine. Mr Parkin said that from his experience of in excess of 25 years motorcycles are not known to take significantly longer than cars to stop in brake tests.
At paragraph 11.5 of his report Mr Parkin sets out stopping distances from different speeds (the ranges incorporating a reaction time of 1.0 to 1.5 seconds).
"(1) Total stopping distance from 60mph: 75.7 to 89.1m (9.9 to 23.3m short of the point of impact).
(2) Total stopping distance from 55mph: 65.7 to 78.0m (21.0 to 33.3m short of the point of impact).
(3) Total stopping distance from 50mph: 56.3 to 67.5m (31.5 to 42.7m short of the point of impact)."
Findings of Fact
I find the evidence of Mr Symes to be unsatisfactory in material respects:
i) In his first witness statement (at para 46) he said that he had used this exit without incident on many occasions and that he had worked in this field (Field A) for the last ten years or so. In his second statement (at para 3) he said that prior to the accident he had not worked in that field for at least two years, but that he had worked in it about half a dozen times before. I agree with the observation of Mr John Foy QC, for the Claimant, that Mr Symes appears to change his tune depending on the context. The first statement was made in the context of showing that the exit was safe; the second statement was made in the context of showing that he did not know about the fencing.
ii) Mr Symes said that he did not think there was any danger at all in driving his tractor and trailer onto the road (see para 31 above). However in his first witness statement (at para 49) he said that he approached the exit very slowly, at a speed slow enough to stop if traffic appeared over the brow of the hill. This suggests that he was being very careful because he appreciated the potential risk.
iii) This appreciation is consistent with the statement that Mr Godfrey said he made to him that he thought to himself that he hoped no bikes were coming along the road whilst he was turning (see para 14 above). I reject Mr Symes denial that he said this.
iv) Mr Symes stated repeatedly at paragraphs 31-41 in his first witness statement that there was no alternative access to or from the field in which he was working. That is plainly not correct, as he now accepts.
v) In his first witness statement he stated, again repeatedly, that Field A was fenced off by barbed wire at the time and that this remained the case when he made his statement on 7 October 2014. This was not so at the time of the accident. The Google map shows that there was no fencing in 2009. Mr Symes now accepts there was no fencing at the time of the accident or when he made his first statement, nor has there been since that time.
vi) His excuses for not using the alternative exits, if he had wished to do so, are not supported by the evidence: (a) he could have taken the north exit from Field A onto Broad Lane and turned left towards the farm; (b) he could have gone out the north exit from Field A and turned right and down towards the junction. Mr Foy accepts there is a limited restricted view to the right when coming out of Broad Lane, but this is a designated junction with a warning sign and therefore less of a risk than the exit he used; (c) there are three exits from Field B. He could have gone into Field B through the gate from Field A. The three exits are 62m, 206m and 334m west of where the accident occurred and therefore posed less of a risk than the exit he used. Mr Symes said that he was concerned about driving over the crops in Field B, however he later accepted that Field B is grazing land and he could therefore have used those exits. It was not part of Mr Symes' case that he was in a hurry and that there would be delay in taking any of the other exits. It was his case that the exit he took was safe and therefore he had no need to consider other exits.
I consider that that Mr Symes exaggerated the problems that he said existed in driving the tractor and trailer out of other exits (if he had thought it necessary to do so). I am not satisfied that there was any real difficulty in driving the tractor and trailer over the various grass verges.
Mr Symes is in his mid-fifties. He has lived and worked in the area for many years. He has run his farm contracting firm since 1977 and has over 45 years' experience of driving tractors and other such vehicles. It is difficult to understand how he could have made so many mistakes about the fencing and layout of the field in which he was working on the day of the accident. His statements in his first witness statement that "there was, and still remains, no alternative access to or from the field" (para 31) and that the perimeter of the field was fenced off by barbed wire and "this remains the case" (para 33, and see para 40) suggest that he had checked since the accident what the position was and that it had not changed. This was plainly incorrect.
Paragraph 35 of his first witness statement referring to the statement of Mr Knight and the photographs exhibited thereto suggests that the photographs are of the field in which he was working. However that is not so. In the foreground is Field B (albeit that Field A can be seen in some photographs in the background).
I am driven to the conclusion that Mr Symes appreciated the risks that he was taking when he drove his tractor and trailer out onto the B3399 from the exit he used. When he was just about in the middle of the road he saw a motorcycle come over the brow of the hill at speed, he jammed on his brakes and "in a split second" the motorcycle hit his tractor (see his first witness statement at paras 52-54; and see the evidence of PC Gunby at para 36 above as to the time it would take to cover the distance of available view afforded to the Claimant). He knew motorcyclists used that road, in particular on Sundays in summer. I accept Mr Foy's submission that either he foresaw the danger and took the risk or he did not foresee it when he should have done. Whichever it was he was negligent.
In his closing submissions Mr Foy accepted, in the light of the evidence, that the Claimant was contributorily negligent. He submitted that the Claimant and the First Defendant were equally to blame. Ms Nina Goolamali, for the Second Defendant, in her submissions on behalf of both Defendants, contended that, if contrary to her primary submission, the First Defendant was negligent, then the Claimant was contributorily negligent to the extent of 80%.
I reject the suggestion that the Claimant and Mr Godfrey were racing one another, but in my view the Claimant was driving much too fast. On the evidence of his own expert he was driving at 65mph. The range of speed advanced in the expert evidence is between 65 and a little in excess of 70mph. On the issue of "rise time" I prefer the evidence of Mr Parkin to that of Dr Walsh for the reasons put forward by Mr Parkin (see paras 42-45 above). I consider the likely speed of the Claimant when he came over the brow of the hill to be closer to 70 than 65mph.
The dangers associated with driving at speed over a blind summit are obvious. Both the Claimant and Mr Godfrey knew, or should have appreciated, the hazards. I do not accept Mr Godfrey's evidence that he was not taking a big risk. In my view he and the Claimant were running a very great risk of colliding with anything that may have been in the road over the hill. I accept that they did not know of the exit from which the First Defendant's tractor emerged, but as Jackson LJ observed in Hames v Ferguson and others [2008] EWCA Civ 1268 (at para 17) "When driving along country roads in the summer, it is not unusual to encounter slow-moving agricultural vehicles driving into or out of fields". (See also Arnott v Sprake and another [2001] EWCA Civ 341, per Kay LJ at paras 36 and 38; and Lambert v Jenny Natasha Clayton (Administratrix of the Estate of Paul Michael Clayton, Deceased) [2009] EWCA Civ 237, per Smith LJ at para 33).
In my judgment the Claimant was at fault in driving much too fast under the circumstances. I consider that he was two-thirds to blame for the collision that occurred.
Conclusion
For the reasons that I have given, in my judgment, (1) the collision was caused by the First Defendant's negligence, (2) for which the Claimant was two-thirds contributorily negligent. |
The Honourable Mrs Justice Slade DBE:
The Claimant / Receiving Party appeals from the Order of Senior Costs Judge Master Gordon-Saker made on 21 October 2014 refusing to award an additional amount under CPR 36.14(3)(d) on a detailed assessment of costs. The law with which this judgment is concerned is CPR 36 as it was prior to its amendment on 6 April 2015.
The claim giving rise to costs proceedings was for clinical negligence arising out of the fatal treatment of the Receiving Party's late wife at Broomfield Hospital in December 2008. The Respondent agreed to pay the Receiving Party the sum of £90,000 and his costs to be assessed on the standard basis if not agreed.
The Receiving Party put in a Bill of Costs of about £262,000. Within about five weeks after the paying party served points of dispute and about seven months before the costs assessment hearing the receiving party made a Part 36 offer to settle for £152,500. At a detailed assessment hearing on 21 October 2014 Senior Costs Judge Master Gordon-Saker ordered the paying party to pay the receiving party costs in the sum of £173,693.78. As the costs judgment was more advantageous to the Claimant than the proposal contained in the Part 36 offer, CPR 36.14(3) applied.
The Master observed that the application of CPR 36 to detailed assessment proceedings was fairly new. He directed himself that the Court may decline to apply CPR 36.14(3) if it would be unjust to do so. He referred to the previous position under which timely Calderbank offers would be taken into account when deciding what costs order to make. The Master held that in this case it would not be unjust to require the paying party to pay the following:
i) Under CPR 36.14(3)(a), interest on the Bill of Costs at 10.5%;
ii) Under CPR 36.14(3)(b), costs of the detailed assessment on the indemnity basis;
iii) Under CPR 36.14(3)(c) interest on the costs of detailed assessment at 10.5%.
The Master observed:
"4. The Defendant's failure to accept the Claimant's offer has led to a delay in payment to the Claimant's solicitors, and has led to the costs of detailed assessment proceedings in terms of the preparation for and attendance at this hearing."
However, Master Gordon-Saker declined to order the paying party to pay the additional amount under CPR 36.14(3)(d). He held:
"5. However, in my judgment it would be unjust to require the defendant to pay an additional amount, which in this case would be 10% of the costs which have been allowed, so a figure of about £17,000."
The Master observed:
"6. I think costs have to be treated slightly differently to judgments. Generally, the only issue on detailed assessment is how much. Had the rule permitted me to allow a figure fixed by applying the prescribed percentage to the difference between the sum which the claimant offered to accept and the sum which was allowed, then I think that may have been a just result, but that is not what the rule anticipates. In circumstances where there has been a significant reduction in the claimant's bill, it seems to me that it would be unjust to reward the claimant with an additional amount prescribed by 36.14(3)(d)."
CPR47.20 provides:
"(4) The provisions of Part 36 apply to the costs of detailed assessment proceedings with the following modifications –
(a) 'claimant' refers to 'receiving party' and 'defendant' refers to 'paying party';
(b) 'trial' refers to 'detailed assessment hearing';
…
(e) a reference to 'judgment being entered' is to the completion of the detailed assessment and references to a 'judgment' being advantageous or otherwise are to the outcome of the detailed assessment."
CPR 36.14 provides:
"(1) Subject to rule 36.14A, this rule applies where upon judgment being entered –
(a) a claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer; or
(b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant's Part 36 offer.
(1A) For the purposes of paragraph (1), in relation to any money claim or money element of a claim, 'more advantageous' means better in money terms by any amount, however small, and 'at least as advantageous' shall be construed accordingly.
In addition to the sums awarded under 36.14(3)(a),(b) and (c), CPR36.14(3) provides that:
"(3) Subject to paragraph (6), where rule 36.14(1)(b) applies, the court will, unless it considers it unjust to do so, order that the claimant is entitled to –
… (d) an additional amount, which shall not exceed £75,000, calculated by applying the prescribed percentage set out below to an amount which is –
(i) where the claim is or includes a money claim, the sum awarded to the claimant by the court; or
(ii) where the claim is only a non-monetary claim, the sum awarded to the claimant by the court in respect of costs –
Amount awarded by the court Prescribed percentage
up to £500,000 10% of the amount awarded;
(4) In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3) above, the court will take into account all the circumstances of the case including –
(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made; and
(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated."
I accept the submission by Miss Lambert, counsel for the Claimant, that CPR 36.14(3)(d) represents a significant change from the previous costs regime. The rule was introduced not only to provide an incentive to a claimant to make a timely realistic Part 36 offer but also to penalise a defendant for not accepting such an offer. As Miss Lambert pointed out, in the Court of Appeal in McPhilmey v Times Newspapers Ltd and others [2001] EWCA Civ 933 Chadwick LJ held that under the previous costs regime, 'old' CPR36.21, a defendant who refused a Part 36 offer made by a claimant and who failed to beat that offer at trial was at risk of being ordered to pay more than he would have been ordered to pay if the offer had not been made. However Chadwick LJ held at paragraph 19 that the incentives to accept an offer are "not to be regarded as producing penal consequences."
Lord Justice Jackson in his "Review of Civil Litigation Costs: Final Report" of December 2009 considered at paragraph 3.9 that "the claimant was insufficiently rewarded and the defendant insufficiently penalised when the claimant has made an adequate offer." To remedy this defect Lord Justice Jackson proposed an addition to CPR 36.14(3) of a new sub-paragraph (d). The proposed rule was enacted with some refinements but with the same purpose as that in the draft. When outlining in paragraph 3.15 the benefits of the proposed reform, Lord Justice Jackson considered that the third benefit of the proposed new rules would be that "in those cases which do go to trial, despite the claimant having made an adequate offer, the claimant will recover a significantly larger sum."
Mr Marven, counsel for the Defendant, rightly acknowledged that the additional amount awarded under CPR 36.14(3)(d) is penal. The policy reasons for introducing the change brought about by CPR 36.14(3)(d) are set out in Lord Justice Jackson's report.
Mr Marven contended that the Master did not err in holding that costs have to be treated slightly differently from the damages when considering CPR 36.14(3)(d). He pointed out that in a case such as this before the change in the CFA rules, the claimant would retain the additional amount as success fees would be recovered from the paying party. I recognise that claimants whose costs fall to be dealt with on the pre change CFA rules will benefit more than those to whom the new CFA rules apply. In paragraph 3.16 of his Report Lord Justice Jackson observed that the gains which a claimant would make under the amended CPR 36.14(3) should enable them to pay the success fee which would not be recoverable from the paying party under the new CFA regime. I agree with Miss Lambert's contention that if CPR 36.14(3)(d) were not to apply in cases in which success fees are recoverable from the defendant, the rule could have so provided.
Mr Marven further contended that costs are to be treated differently from damages for the purposes of CPR 36.14(3)(d) as the reasonableness of a costs offer is more difficult for a defendant to assess than an offer to settle a damages claim. There is disclosure in claims for damages which enables a defendant to make an informed assessment of an offer to settle a damages claim. There is no such disclosure in costs proceedings. What is expected is a realistic claim. Mr Marven did not accept the proposition advanced by Miss Lambert that costs claims are frequently reduced by a third on assessment.
By CPR 47.20(4), Part 36 applies to the costs of detailed assessment proceedings with specified modifications. CPR 36.14(3)(d) clearly applies to costs proceedings. In the absence of any provision excluding pre CFA amendment cases, the rule applies to cases under the old CFA regime such as the case under appeal.
Miss Lambert contended that Master Gordon-Saker failed to consider the circumstances required to be taken into account by CPR 36.14(4) when deciding whether it was unjust to make the orders under CPR 36.14(3). The answers to all the factors required to be taken into account favoured the Claimant: the Claimant's Part 36 offer was lower than the assessed costs; the Part 36 offer was made some seven months before the assessment hearing and about five weeks after the Defendant lodged points of dispute; no complaint had been made of failure by the Claimant to give information to enable the Defendant to assess the reasonableness of the offer.
Sir David Eady in Downing v Peterborough & Stanford Hospitals NHS Foundation Trust [2014] EWHC 4216(QB) observed at paragraph 62 in respect of indemnity costs under CPR 36.14(3)(b) that:
"One could imagine that a court might well think it 'unjust' to order indemnity costs if the individual defendant had rejected a Part 36 offer on the basis of inaccurate information through no fault of his own and, especially, where he has been misled by the claimant or his advisors through (say) non-disclosure of a material fact of document."
There is no suggestion that this occurred in this case.
Miss Lambert contended that this case was unlike that of Thinc Group Limited v Jeremy Kingdom [2013] EWCA Civ 1306 in which Macur LJ held at paragraph 20 that there was "a lack of clarification of costs." In Thinc, the same day as receiving the Part 36 offer, the Appellant's solicitors reasonably asked the Claimant "please confirm what your costs are in order that we may properly consider the offer made." There was no response to the request.
Counsel for the Claimant submitted that the solicitors for the Defendant were experienced litigators. As observed in Bent v Highways and Utilities Construction and another [2011] EWCA Civ 1539 at paragraph 2, this could be taken into account. The Defendant's solicitors had the experience which enabled them to evaluate the Part 36 offer.
Mr Marven accepted that the Master does not have an unfettered discretion to refuse to award the additional amount under CPR 36.14(3)(d) where the Claimant's Part 36 offer was lower than the sum of costs assessed. However the fact that there is no mechanism for disclosure in costs proceedings is to be taken into account. This makes it more difficult for an accurate assessment of a Part 36 costs offer to be made. In this case the reason the Master considered that it would be unjust to award the additional amount was the size and proportion of the reduction made on assessment to the costs claimed. This is perhaps supported by Miss Lambert's contention that it is not unusual for costs claimed to be reduced on assessment by about a third.
Miss Lambert rightly accepted that it could not be said that a high bill which is much reduced on assessment is not a valid reason for refusing to make an additional award under CPR 36.14(3)(d). In circumstances in which the inflated level of costs claimed leads the Defendant to incur expense in investigating the claim before the Part 36 costs offer was made it may be unjust to make such an award.
Where judgment against a defendant is at least as advantageous to the claimant as the proposals in the claimant's Part 36 offer, the claimant is entitled to an award under each of the provisions in CPR 36.14(3) unless it is unjust to do so. CPR 36.14(4) requires all the circumstances of the case to be taken into account including those set out in (a) to (d). Sir David Eady held in Downing at paragraph 61:
"It is elementary that a judge who is asked to depart from the norm, on the ground that it would be 'unjust' not to do so, should not be tempted to make an exception merely because he or she thinks the regime itself harsh or unjust. There must be something about the particular circumstances of the case which takes it out of the norm. Naturally one cannot define exhaustively what those circumstances might be. Each case will turn on its own facts."
The starting point is that where rule 36.14(1)(b) applies, the court will make an order that the Claimant is entitled to an award under each of the sub-paragraphs of CPR 36.14(3). It is only if the court considers it unjust to do so that such awards will not be made. Whilst the pre-condition of CPR 36.14(1)(b) for entitlement applies so that if it is met, an entitlement to an order under all sub-paragraphs will be triggered, the disentitlement condition is, in my judgment, to be considered in relation to the payments under each of the sub-paragraphs, (a), (b), (c) and (d).
Mr Marven rightly recognised that the court does not have an unfettered discretion to decide that a Claimant is not entitled to payments under CPR 36.14(3). Miss Lambert's criticism of the approach of the Master to the question of whether it would be unjust to make an award under, in this case, CPR 36.14(3)(d) is well founded.
In considering whether it would be unjust to make an award under each of the sub-paragraphs the court is required to take into account each of the factors set out in CPR 36.14(4). On a fair reading of the judgment, the Master referred to and took into account the amount of the offer, (CPR 35.14(4)(a)), and the stage of the proceedings at which the offer was made, (CPR 36.14(4)(b)). The factors in CPR 36.14(4)(c) and (d), were not referred to.
It appears that the low level of the Claimant's offer compared with the high level of the bill and with the costs assessed was considered to be in the Claimant's favour in deciding whether it would be unjust to make awards under CPR 36.14(3)(a) to (c) but a point rendering it unjust to do so in relation to CPR 36.14(3)(d). Master Gordon-Saker held:
"In circumstances where there has been a significant reduction in the claimant's bill, it seems to me that it would be unjust to reward the claimant with the additional amount prescribed by 36.14(3)(d)."
Whilst a particular factor under CPR 36.14(4) may carry more weight when considering whether it would be unjust to make an award under the different sub-paragraphs of CPR 36.14(3), in this case no reason was given why a factor rendering it not unjust to make an award under 36.14(3)(a) to (c) should be the factor rendering an award under CPR 36.14(3)(d) unjust. In my judgment the Master erred in relying on the degree of reduction made on assessment to the costs claimed as rendering it unjust to make such an award in circumstances in which the Part 36 offer was lower than the sum at which the costs were assessed.
If the precondition for entitlement to payments under CPR 36.14(3) is triggered by judgment being entered for a claimant which is at least as advantageous as their Part 36 offer, unless the court considers it unjust to do so, having taken into account all the relevant circumstances including those set out in CPR 36.14(4), there is no discretion as to whether an order for payment under each of the sub-paragraphs is to be made. There is only a discretion as to the percentage interest to be awarded under CPR 36.14(3)(a) and (c). There may be circumstances in which it would be unjust to make an award under CPR 36.14(3)(d) where it is not unjust to do so under the other sub-paragraphs. It could be said that the provision of interest under CPR 36(3)(a) and (c) is primarily compensatory although the possibility of an award of a higher rate than would be available in the market introduces a penal element. However as is rightly recognised by Mr Marven, the purpose of CPR 36.14(3)(d) is penal.
The reason given by the Master for holding that it would be unjust to 'reward' the Claimant with the additional amount prescribed by CPR 36.14(3)(d) was the size of the additional award. The Master considered that had the rule permitted him to award a figure fixed by applying the prescribed percentage to the difference between the sum which the Claimant offered to accept and the sum which was allowed on assessment, that may have been a just result. The reason the Master held it to be unjust to make the additional award was because there was a significant reduction to the Claimant's bill of costs. The approach adopted by the Master penalises the Claimant for making what turned out to be a reasonable Part 36 offer. It is the terms of the Part 36 offer not the level of the sums claimed in the bill of costs which are to be considered under CPR 36.14(4). Whilst all the relevant circumstances are to be considered in deciding whether it would be unjust to make an award under any of the paragraphs of CPR 36.14(3), it was not suggested that there was any particular feature or consequence of the bill of costs other than its size which would render the making of an order under CPR 36.14(3)(d) unjust.
The making of an order of the level required by CPR 36.14(3)(d) was decided as a matter of policy as explained in the Jackson Report. Under the previous regime it was considered that a claimant was insufficiently rewarded and the defendant insufficiently penalised when the claimant has made an adequate part 36 offer. In my judgment the Master fell into the temptation referred to by Sir David Eady in paragraph 61 of Downing of making an exception by not making an award under CPR 36.14(3)(d) not because he considered the making of such an award unjust but because he thought it unjust to make an award of the required amount, 10% of the assessed costs. The Master considered it would not have been unjust to award an additional amount based on the difference between the Part 36 offer and the sum of costs allowed on assessment. However this is not the regime specified in CPR 36.14(3)(d). In this case it is the Claimant who has been penalised for making a reasonable Part 36 offer rather than the Defendant for not accepting it. In my judgment that approach is contrary to the intent and effect of CPR 36.14(3)(d).
As he stated, Master Gordon-Saker was dealing with fairly new provisions in CPR 36. His judgment was given extempore. However, whilst recognising his expertise in matters of costs I have concluded that he erred and the appeal is allowed.
At the conclusion of the appeal Counsel were asked for their submissions on the consequence if such a conclusion were reached. Mr Marven was asked whether but for the high level of the bill of costs it would have been unjust for an order for an additional amount to have been awarded under CPR 36.14(3)(d). Mr Marven replied that there was none that he could see. In those circumstances, properly directing himself, in my judgment the Master could only have concluded that it was not unjust to make an order under CPR 36.14(3)(d). Accordingly this court orders that the Claimant is entitled to an additional award calculated in accordance with that sub-paragraph.
I have benefited from the practical experience of the Assessor, Master Campbell, for which I am grateful, but this judgment is mine alone. |
His Honour Judge Cotter Q.C.
Introduction and outline facts
The Claimant was a successful and well respected chartered accountant with a private practice, Channon & Co, which had a significant turnover and a loyal client base. At all material times for the purposes of this claim the practice was not registered to give financial advice and the Claimant repeatedly told his clients that he did not give such advice.
The Claimant was also personally involved in significant property development projects and was the director of a number of companies. In the run up to 2004 his involvement in property development had brought healthy returns and he had high hopes for the future. He was a director of a company called Mill house Partnership Limited (“"MHP”") together with two others, Mr Bromage and Mr Morris. The company had ambitious plans for purchase and development of property with the aim of no doubt very significant profit, however it required additional funds to put such plans into practice.
The Claimant who described himself as an accomplished networker, had as a matter of longstanding practice, referred any clients who wanted investment advice to a friend, Mr Armitage, who was familiar with at least some of the projects undertaken by the companies with which the Claimant had been involved, and I think likely, the significant profits that had been made. In any event he knew of MHP’'s proposed projects and suggested to his then girlfriend, later his wife that she discuss investment in MHP with the Claimant as she had spare capital, having previously been involved in investing in property. A meeting took place at the Claimant’'s home and Mrs Armitage (as she now is) brought along a friend Ms Stevens. Neither Mrs Armitage or Ms Stevens were clients of Channon & Co. or had never previously sought professional advice from Claimant. The Claimant stated that MHP was looking for capital and described what the company was doing. Both Ms Armitage and Ms Stevens decided to commit capital to the projects. A further meeting took place and agreements were subsequently drawn up by Channon & Co on the instruction of MHP and signed.
Subsequently five other individuals, who were also clients of Channon & Co, also decided to commit capital to MHP after discussions with the Claimant. Again agreements were subsequently drawn up by the practice on the instruction of MHP and signed. The total invested approached £1 million.
Sadly for all concerned and for so many others the financial crisis then hit the property markets. MHP could not honour its commitments under the agreements. Meetings took place between the officers of the company and the investors with heated exchanges. It was clear that the sizeable investments made would not be repaid. The Claimant had also personally lost very significant sums.
A decision was taken by Ms Stevens, presumably after legal advice, to threaten to bring an action against the Claimant alleging professional negligence. A letter before action was sent to the Claimant in October 2009.
Although he believed that at all times he was acting as director of MHP and not as an accountant the Claimant sent through the details of Ms Stevens’' claim to the Defendant, his long term insurance broker and also a friend, who operated a small “"one man band”" brokerage. The Claimant subsequently received and passed on to the Defendant details of claims from the other individuals, investors in and now creditors of MHP (“"the investors”"), who were then acting as a group. Together they were seeking approximately £1.8million.
However, the Defendant had not put professional indemnity insurance cover in place since 2006. The Claimant thought that it was in place for the years following 2006 and the Defendant even supplied policy numbers to the Claimant so that he could enter them on his annual professional returns; this despite the fact that no insurance cover existed. How and why the Defendant came to fail to obtain cover or act as he did is unclear. His wife was seriously ill, subsequently diagnosed with cancer, and it appears that he was under pressure and failing to cope. In any event there was no insurance policy in place and so no insurer to assist the Claimant.
The seven individual investors then issued claims against the Claimant. The Claimant defended the claims brought by the investors with some legal assistance. He entered fully pleaded defences, stating that he had never given investment advice, rather only information as to what the company was doing and that in any event at all times he was clearly acting as a Director of the company, as he had told the individuals, and not in his professional capacity as an accountant with Channon & Co.
The investors proceeded with the assistance of solicitors, Bynes & Co and Counsel, Mr Adams. The Claimant told the investors that he had very limited funds and produced a schedule of assets. The investors knew by late August /early September 2010 that the Claimant was uninsured, but pressed on. The Claimant did not seek to join the Defendant into the action brought by the investors as a part 20 Defendant seeking a contribution or an indemnity on the basis of a failure to ensure that insurance was in place. However a claim alleging negligence against Defendant was issued on or around 23rd November 2011.
A settlement was reached in the action brought by the investors against the Claimant as set out in a consent order dated 19th June 2012. By that order judgment was entered for each investor on the issue of liability with damages to be assessed. The Claimant also authorised the investors to pursue the then ongoing action against the Defendant, and agreed to them taking the proceeds of the action, to use his best endeavours to assist with the claims and to indemnify the investors in respect of all costs incurred pursuing the claims and any subsequent claim against the Financial Services Compensation Scheme (“"FSCS”").
It is an important feature of this claim that the Claimant has subsequently stated that he believed and indeed still believes that the investors'' claims against him were wholly unmeritorious and that he stands by the content of his defences, but that his financial position was such that he was on the verge of entering an IVA and could not afford to defend the claims so considered settlement his best option, particularly as by virtue of the agreement he was able to continue in practice and was only required to pay a limited sum of £85,000 over a period of time with annual payments of £10,000. So despite the consent agreement the Claimant was and remains adamant that he was not liable to the investors. He did not seek to negotiate on the overall sum sought by the investors, as it was to a large degree academic. He agreed to commit to beast endeavors in an action against the Defendant as there was hope that if a judgment could be obtained against the Defendant, he could then be made bankrupt if, as was overwhelmingly likely he could not pay the sums agreed by the Claimant with the investors (as set out in a further order of 5th December 2012) and the FSCS would then step in and make payments to the investors.
The Defendant, who was clearly struggling in both his personal and professional life failed to respond to the claim against him in time and judgment was entered on 16th April 2012. He subsequently tried to set judgment aside on 8th September 2013, principally relying upon his wife’'s serious illness and the effect that it had upon him, but was unsuccessful. Having now had the benefit of considering all the relevant evidence, including oral evidence from the Defendant it was to his benefit that liability was so swiftly concluded as he was almost certainly would have been found liable and he would not have been able to meet the consequential costs bill.
Following his unsuccessful application on by what Mr Dyson referred to as “"the skin of his teeth”", the Defendant, who is now well over seventy years of age, managed to avoid a bankruptcy order arising out of his costs liability to Claimant. So the Claimant and the seven individual investor claimants in the original action became aware, if not already well aware, of the Defendant’'s inability to meet any significant judgment, let alone one for £1.8 million. However, as the investors believe that if the Defendant is made bankrupt they will be eligible for payments from the FSCS the claim has been vigorously pursued. As I have set out the Claimant is indemnifying the seven individual investors as to their costs, so there is little or no incentive for them to do otherwise than pursue the action regardless of its merit.
It is an usual, and as I stated at the outset of the hearing in my view somewhat worrying, aspect of this case that notwithstanding that there is a Tomlin agreement in force between the Claimant and the investors with subsisting obligations, the Claimant’'s case has been conducted by the same solicitor and Counsel who previously acted and no doubt continue to act for the investors against him in the action leading to that agreement. I shall return to this in a moment.
So the position reached in this claim was that the Claimant had a judgment against the Defendant in default of a defence in respect of the claim for breach of duty in failing to ensure that insurance was in place. What remained were the causation and quantum aspects of the Claimant’'s claim. These are the matters that have been addressed in the hearing before me.
The respective cases
In essence it is Claimants case, in all practical effects as presented by the investors, that he would have been entitled to an indemnity, if he had been insured, up to a limit of at least £1.3m (the limit as agreed as applicable between the parties). This means that he would not have suffered any loss, whether or not the claims would have been successful, if properly defended, over and above a £1,000 excess in respect of each claim. As a result damages should be assessed as the difference between his total liability under the consent orders, some £1.8m and £7,000 reflecting the excess payments.
On behalf of the Claimant, Mr Adams submits that it is the task of the court, as a matter of evaluative judgment, to assess in monetary terms the difference between the position he finds himself in and the position he would have been in if he had been insured (assessed on an expectation or loss of a chance basis). He submitted that in all the circumstances there was little or no prospect of the Claimant having been refused an indemnity under his professional indemnity insurance policy in respect of these claims and from which he therefore ought to have been held harmless. He acknowledges that the judgment recovered is in one respect academic as the Defendant will not be able to meet the judgment, but that obtaining judgment is a necessary step to making a claim for an award out of FSCS.
The Defendant’'s case is that the claim is a contrivance and unmeritorious. The Claimant’'s sole objective is to secure the Defendant’'s bankruptcy to act as a conduit to access the FSCS as a source to repay the debts owed to the individual investors by a failed property development company in which the Claimant was director. The Claimant was a property developer and acting as such and the investors, being successful business people, hence their ability to invest have simply “"caught a cold”" as so many others did when the property market crashed. They have looked for any route to recoup losses and have pursued what was in the Claimant’'s own view an unmeritorious professional negligence action against him (as he was not acting qua accountant), and having faced little defence as he was impecunious, obtained a judgment for all sums claimed and forced the Claimant to pursue this action, also unmeritorious, against the Defendant.
Mr Dyson submitted that the action is unmeritorious, notwithstanding the judgment entered in default, as had insurance been in place the insurers would have undoubtedly rejected the claim and there would have been no indemnity. This was not a true professional negligence claim as the Claimant has always asserted and would have not fallen within the cover under the policy. Further and in any event exemptions in the policy as to warranties or guarantees in relation to investments and/or in relation to losses caused by trading losses/liabilities of a company managed by the insured would have been raised by the insurer.
Somewhat surprisingly in my view no point has been taken by the Defendant about a failure to mitigate, specifically arising out of the failure to contest the allegations and/or the settlement reached whereby the full sums claimed by the investors were conceded. This agreement was reached notwithstanding the Claimant’'s continued assertions, including before me, that these were wholly unmeritorious claims, the content of available documentation which provided some support for his position and the fact that he had some funds and could have defended himself.
So the issue between the parties and which falls to be determined is essentially that of causation of loss.
Potential conflict
I raised concern at the outset and in open court my concern about the Claimant’'s representation and the role of the solicitor and Counsel who, I was informed, were “"acting for him”". They did so with the individual investor claimants for whom they also acted in the past (and presumably still act) against their current client sat at the back of the court. I stated that I was concerned about potential conflict between the interests of the Claimant, who thought the investors claims were unmeritorious and in effect “"a try-on”" to recover commercial losses by framing a claim in professional negligence, and those individual investors who had the benefit of the Tomlin order and would wish to pursue this action through to the bitter end regardless of cost and the financial interests of the Claimant who was personally liable for the costs and had no real interest in the financial outcome. I raised the issues of what would happen as regards the confidentiality of his instructions and /or if it was thought that settlement should be considered and /or if it was thought that the Claimant was not complying with the terms of the Tomlin order.
I was assured by Mr Adams that he saw no conflict but would keep the matter under review. I cannot say that my sense of unease has at any stage disappeared. However there is a limit to how far a Judge can pursue these matters at the beginning of a trial given what he is told by professionals subject to specific codes of practice and the Claimant’'s apparent happiness to proceed having heard what I said in open court. So the matter proceeded.
However as the hearing progressed the unusual relationship between the Claimant and his representatives did have a clear effect on matters. Whilst the Claimant obviously sought to comply with his best endeavours to assist with this litigation it was clear to me that his heart was not in the claim. What he really wanted when the investors brought claims against him was some legal assistance and guidance to enable him to defend unmeritorious claims based on professional negligence and he hoped when passing on the details of the claims to the Defendant that the involvement of an insurer would bring this at least initially. In my judgment it is abundantly clear that he did not believe and still does not believe that an insurer or other body should be liable to pay the sums claimed to the investors.
The Issue to be determined
The principal issue that remained for determination at the conclusion of the hearing was summarised by Mr Adams as follows; what are the chances that the insurers would have refused to indemnify Mr Channon in respect of the claims either because at all times he was acting in his capacity as a director of MHPL and not as an accountant or relevant exemptions in the policy?
Issues of whether the policy limit would have limited the indemnity available because all the claims ""arise from the same cause"" and also whether the Claimant was contributorily negligent on the basis he knew or ought to have known that he was not paying any insurance premium fell away during the hearing.
Evidence
I heard from the Claimant and Mr Cowper his office manager, on the issue of contributory negligence. I then heard from the Defendant, again principally on the issue of contributory negligence.
I had the benefit of expert evidence from Mr Black, on behalf of the Claimant and Mr Dowlen on behalf of the Defendant. I heard from both experts during the hearing.
Findings of fact
I will now set out the relevant facts in respect of the claims against the Claimant, the likely approach of an insurer upon notification and the Claimant’'s likely subsequent steps bearing in mind what an insurer may or would have done. I do so bearing in mind Mr Adams'' submission that what would have happened had there been a policy in place, albeit a matter of speculation, is an evaluative exercise, the object of which is to determine what in fact might have happened. It is in other words a question of fact, not law - as set out by Lord Mance delivering the opinion of the Privy Council in Phillips & Co. (A firm) v. Whatley [2007] PNLR 27 at paragraph 31. Mr Adams'' specific submission was that:
“"In all cases the starting point in the no-negligence world is that there is an insurance policy in place and the claimant makes a claim under it. The question for the court is to assess as a matter of fact what might have happened in that scenario.
I agree.
In deciding and analysing the facts I have borne in mind that the Claimant finds himself in a situation which he ought not to be in due to the defendant''s wrongdoing, so the very long standing principle in Armory v. Delamirie [1722] 1 Strange 505 applies, namely there is an evidential presumption in favour of the claimant which gives him the benefit of any relevant doubt (the ""fair wind"" principle) - see Phillips & Co. (A firm) v. Whatley at paragraph 45.
My findings are as follows.
The Claimant was in practice as a chartered accountant, being a partner, together with his company Totally Taxation Ltd, in the firm Channon & Co. The Defendant was already known to the Claimant when he established Channon & Co in 1991 and he was his insurance broker from the outset, advising him on what insurance he needed, sending him renewal notices and contacting him when he needed information.
The Claimant, a self professed networker, was involved in a number of companies involved in property development. Between 2004 and 2007 several individuals were persuaded by the Claimant to loan money to his property development company, MHP. The Claimant was a director, shareholder and company secretary of that company. The auditor of the company, unsurprisingly, was Channon & Co. MHP needed funds to pursue the purchase and development of properties. The Claimant first secured investments from Candice Armitage and Karen Stevens who were introduced to him by the financial advisor he referred people to who wanted investment advice (also being Mrs Artmitage’'s then boyfriend). Neither was a client of Channon & co.
Subsequently Mr and Mrs Whitmoor-Pryer, Mr and Mrs Cemm-Evans, Mr and Mrs Hender, Mrs Graham and Mr and Mrs Cross all invested in MHP. With high rates of contractual interest offered the individuals were persuaded and motivated to lend in the expectation of receiving a large profit. By way of example of how the Claimant saw matters he referred in a letter (on MHP letterheading with all the relevant company details) to Mr and Mrs Cross on 14th March stating
“" I now enclose a signed and witnessed copy of the heads of agreement re your investment in Mill House Partnership… welcome to our investors club – thank you for your interest in this project”"
Whereas the individuals were initially investors they eventually became and remained at the time of the issue of their own proceedings against the Claimant, creditors of the company.
What nobody involved in the case saw was the impending financial crisis and property price slump. By 2008, possibly earlier, MHP began to fail. The various creditors began to call in their debts and the company could only manage to defer repayment for a limited period, stating that any legal action against MHP would trigger the banks taking possession of the company’'s assets as they were the only truly secured creditors. Various debentures had been issued to certain creditors but not over MHP’'s assets rather in respect of a company called Homebrick Limited which turned out to hold insufficient assets as security.
Once the creditors realised that MHP had no money to repay their loans or suitable available assets for security they began communicating with each other. Meetings attended by the Claimant and creditors were convened during 2010 and during those meetings the creditors expressed their concern and anger about the way in which the Claimant had managed MHP. By way of example the creditors were very angry that the Claimant and his co-directors had apparently preferred themselves rather than the creditors upon the sale of one of MHP’'s properties, which had generated a distributable cash surplus.
Strategies to avoid impending insolvency by MHP were mooted but rejected as unworkable. The creditors wanted redress for their losses in some form and so looked as to how they might bring a claim against the Claimant. They concluded and/or were advised that by framing their claim against Claimant qua professional accountant they could effectively gain access his professional indemnity insurance cover.
On 6th October 2009 the Claimant received a letter of claim from a Ms Stevens, being the first of a number of related claims by the investors, complaining that he had been negligent when acting for and advising an investor in his professional capacity, in connection with an investment. The Claimant notified the Defendant of the claim.
The Claimant was able to make obvious points in relation to the first claims in time. Ms Stevens and Mrs Armitage had met the Claimant at his home for details of a proposed investment opportunity as the Claimant was professionally and socially acquainted with Ms Armitage’'s partner; an Independent Financial Advisor who invested in property. Neither was a professional client of Channon & Co. Further, as the heads of agreement subsequently drawn up expressly state, the Claimant represented the company i.e. was acting on behalf of the company. The agreement differentiates between the Claimant and Channon & Co which is referred to as that entity.
The Claimant set out in his Defence, as verified by a statement of truth that
“"The Defendant told her that he was a director of Mill House and was acting on behalf of Mill House”"
and
“"( the) sole purpose of the meeting was for the Defendant, as a Director of Mill House partnership to brief the Claimant on the activities of Mill House and Hugh Bromage..it was not a professional consultation and no investment advice was sought or given.”"
and
“" the affairs of Mill House were not part of the Defendants professional practice”"
and
“"it is denied any investment advice was given.. the Defendant steered all of his clients requiring financial advice to Richard Armitage ”"
Ms Armitage also brought a claim and the others followed. I shall give brief details of each investor and the relevant facts as alleged.
Mr and Mrs Whitmoor-Pryer were clients of Channon & Co. They owned a care home and understood that the Claimant was carrying out some property development. The Claimant introduced Mr Bromage stating that he was a partner in his property business. There was then a meeting in which it was alleged that the Claimant advised/induced them to invest i.e. they say that he gave investment advice. The defence to their claim denied that any professional advice was given and set out that Mr and Mrs Whitmoor-Pryer had previously invested in the property market, had their own solicitor and were in contact with Mr Bromage.
Ms Graham was informed by the Claimant that he was involved in a property development company ; she had never been a professional client. Again Hugh Bromage was heavily involved in securing an investment from her.
Mr and Mrs Cemm-Evans also owned a care home and were clients of Channon & Co. They had their own Independent Financial Advisor and solicitor Mr Moore who apparently advised in relation to their investment
Mr and Mrs Cross owned a care/nursing home and were clients of Channon & Co. Their claim followed a similar pattern to the other investors as did the defence to it. However this claim can be used as an example of how documentation could lend support to the Claimant’'s case that he was not acting in a professional capacity when discussing investments in MHP. A letter of 30th November 2006 that followed on from a meeting between Mr (Clive) and Mrs Cross and the Claimant and Mr Brommage would have been of obvious significance in any analysis and defence of the claim. It stated
“" At my recent meeting with Clive I did explain that Channon & co are not authorised to give investment advice. Hence, whilst I am happy to discuss with you the opportunities that exist for you to invest with Mill House Partnership and/or Hugh Brommage''s main trading company (Goldhart Properties Limited) I cannot give you any specific investment advice. Clive and I have already discussed this fact and Clive understands that any final investment decisions made are entirely your own to make, you should take professional advice in this matter”"
Mr and Mrs Hender were farmers and clients of Channon & Co who had also previously invested in property.
So although there were some variations within the Claims the Claimant defended each of them on the basis that he had not given any advice and in any event had not been acting in his professional capacity as an accountant, rather as a director of MHPL.
The claims were consolidated and the litigation process abridged when the parties eventually entered into an agreement as reflected in a consent order on 19th June 2012.
I now turn to the findings relevant to the question of whether the an insurer would have refused to indemnify or provide Mr Channon with any assistance in respect of the claims.
Firstly it is clear that the Claimant did refer the matter to the Defendant for consideration by the insurer.
It is then necessary to consider what the Claimant has said and would have said on the matter alleged against him and other information available to the insurer. In my judgment his overarching position as presented to any insurer would have been that these were wholly unmeritorious. Further the following matter would have been raised ;
(a) Channon & Co was not authorized by the Financial Services Authority (“"FSA”") to conduct FSA business. Clients were expressly told this, as evidenced by its engagement letter such as that sent to Mr and Mrs Hender of 27th March 2003 which stated
“"We are not authorized by the Financial Services Authority to conduct investment business. If you require investment business services we will refer you to a firm authorized by the Financial Services Authority”"
The Claimant would have stressed that he well knew this limitation and was careful not to give any financial advice. So he would have provided evidence that he specifically warned clients of Channon & Co that the partnership did not give investment advice.
(b) It would have been and still is his case that he did not in fact give any investment advice. As he stated at paragraph 3 of his witness statement of 24th November 2014
“"I deny that I gave any investment advice whatsoever to the said persons who have claimed against me and who are now my Judgment creditors. I took this stance in my defence and my position has not changed.”"
(c) He would have pressed the insurer to defend the proceedings on the basis that he had not provided investment advice or at any stage acted in his professional role as an accountant (see paragraph 3 of his witness statement of 24th November 2014). As I have set out he only reluctantly compromised what he believed were unmeritorious claims as he had not got the funds to defend them. I find as fact that his instructions would never have wavered. He would have told any representative of an insurer (including any lawyer) that the claims arose out of disappointment at the losses of a trading company of which he was a director and were nothing to do with his role as an accountant for Channon & Co.
(d ) The first claim in time, so the first to be considered by an insurer, was that of Ms Stevens as notified in a letter of 6th October 2009. On initial perusal by any insurer or legal representative of an insurer, and given the matters that I have already set out, it would have appeared that the Claimant was on strong ground to, as he put it, “"personally totally and entirely refute the claim”". Taking the claim of Ms Stevens together with that of Ms Armitage, available information would have revealed that
(i) Neither Mrs Armtiage or Ms Stevens had ever been a professional client in any capacity at any time;
(ii) Mrs Armitage was the partner, now wife of an Independent Financial Advisor, Mr Armitage, to whom the Claimant, as part of a long established arrangement, “"steered”" any clients wanting financial advice;
(iii) Ms Stevens was a client of Mr Armitage and a successful investor in property, including with Ms Armitage;
(iv) The first and main meeting took place at the Claimant’'s house at the instigation of Mr Armitage. This was the first time that the Claimant had met Ms Stevens;
(v) The Claimant’'s evidence was that he told them that he was a director of MHP; which was true, and that
“"the sole purpose of this meeting was for the Defendant (as a director of MHP) to brief Ms Stevens on the activities of Mill House and Mr Hugh Bromage”"
and
“"It was not a professional consultation of the defendant as an accountant. No investment advice was sought.”"
and
“"the affairs of Mill House were not part of the Defendant’'s professional practice as an accountant”"
and
“"the defendant told the Claimant he was meeting them in his capacity as a director of Mill House and not in advisory capacity”"
and (in relation to Ms Stevens)
“"it is denied that the defendant agreed to advise (professionally or otherwise) or held himself out as acting for the Claimant”";
(vi) That the offer as accepted was that Ms Stevens invest £100,000 with a return of a guaranteed minimum of 10% (the letter before action stating that Ms Stevens made it clear that she wanted her investment “"guaranteed”"); the return to be repaid by her receiving a penthouse flat up to a value of £165,000. The security for the loan was to be a debenture charge over the company;
(vii) That Ms Stevens rejected the offer to seek independent financial advice and asked the Claimant (acting as director for an on behalf of Mill House to draw up the agreement);
(viii) The loan agreement stated
(a) the Claimant represented MHP
(b) that the agreement was drawn up by Channon & Co on the instructions of MHP
(c ) that the investors had been advised to seek independent legal advice.
I take the above matters as underpinning a statement made by Mr Dowlen, the expert instructed on behalf of the Defendant, that when presented with the claims as made and the response and initial evidence provided by the Claimant any insurer’'s likely initial reaction would be that “"the facts stink”". By that he meant that the initial view would be as Mr Dyson described when he set out in his submissions that
“"The third parties have been advised by professional negligence experts to shoehorn their commercial claim against MHP into a professional negligence claim in order to tap into the Claimant’'s PII cover. But it is like trying to squeeze a square peg into a round hole. This is because the true nature of their claim is not one for professional negligence.”"
The insurer would also have noted that the Claimant’'s initial reaction to the claim in correspondence had been that he personally and Mill House Partnership Limited would have to appoint solicitors to defend past actions which “"we would do very vigorously indeed”". Indeed in due course and in his own defences, he did just that.
So given these matters what would the approach of the insurer have been?
The approach of the insurer
To briefly put my findings in context Mr Adams submitted that the question for the court to determine is whether there was a chance that the insurers would have refused to indemnify the Claimant, because they would have taken the view, and succeeded in maintaining such stance in proceedings if necessary, that at all times he was acting in his capacity as a director of MHPL and not as an accountant or that a relevant exclusion applied. He further submitted that the court had to consider the matter as a matter of chance, because what would actually have happened in the hypothetical situation that the Claimant had been insured is a matter of speculation, which in the real world would have depended on a whole host of different matters including the choices made and the exercise of discretion by the third party insurer. He submitted that the question is not whether the insurer could have relied upon its strict legal rights to repudiate the policy or refuse an indemnity, but whether insurers, with standing and reputation to maintain, would as a matter of business have done so i.e. it is a matter of determining the facts as far as it is possible to do so given that a third party is involved.
So what would have happened?
To answer this question it is necessary to start with the extent of the indemnity under the policy.
The parties have approached the matter on the basis that the content of the 2006 policy of insurance with Aviva provides the relevant terms that would have been in force.
As for the scope of the cover the policy wording at Clause A.1 of the policy provides as follows:
“"We will indemnify you in respect of any claim arising out of the conduct of your Business, first made against you and notified to us during the Period of insurance...”"
Your Business”" is defined ( 229) as:
“"(1) The provision of advice or Services by you or on your behalf as declared to us in the proposal or shown in the schedule as the Business.
(2) Any individual personal appointment (other than as company secretary or registrar or director) held by You but only in respect of advice or Services shown in (1) above.
(3) Any individual personal appointment as company secretary or registrar or director, but only in relation to the performance of Services.”"
“"Services”" is defined as:
“"All services performed or advice given by you in connection with tax matters, secretarial work, share registration, financial advice to management, book-keeping, management accounting, financial investigation and reports, financial claims (including their negotiation and settlement), company formations, investment advice, insurance and pension scheme advice and computer consultancy.”"
The relevant declaration contained in the Schedule for the purposes of what is “"your business”" made by Claimant in respect of his 2006 insurance policy was “"Chartered Accountants”" .
However, the wording of the minimum terms of insurance required by the relevant professional body for accountants ( ICAEW), which the parties agree had to met by the terms of any policy, were wider than the policy terms and required the insurer:
""To indemnify the Insured against any Claim or Claims . . . . in respect of any civil liability whatsoever and whensoever arising . . . incurred in connection with the conduct of any Professional Business"" which is not exhaustively defined, but rather as including ""advice given or services performed irrespective of whether or not a fee is charged.""
It is then necessary to consider potentially relevant exemptions.
The policy states that indemnity would not be provided in respect of any claim in three relevant respects.
Clause three
“" … loss arising from any express or implied warranty or guarantee relating to the financial return of any investment or portfolio of investments”"
Clause five
“" … loss arising from or caused by you acting as company secretary or registrar or director other than where the claim or loss arises from the performance of services”"
Clause six
“"or loss arising from any trading losses or trading liabilities incurred by any business managed by or carried on by you.”"
It is then necessary and important to recognise some matters that were not in dispute before me. As a result of the experts’' analysis the following matters were agreed by the parties ;
(a) that the insurers could not have repudiated the insurance for non-disclosure.
(b) that if the Claimant gave investment advice in the course of his business as an accountant, then claims that such advice was negligent could not be excluded under the ICAEW minimum policy requirements.
(c) that the insurers would have found it difficult to refuse an indemnity on the grounds of fraud or misrepresentation.
(d) That the insurer would have considered the claims as a whole and taken a consistent stance in respect of all of them.
I then consider it helpful to briefly set out the rival contentions.
At the outset of the claim Mr Adams submitted that even a cursory examination of the particulars of claim in the seven actions brought by the investors against the Claimant would have revealed to an insurer that the complaints were that trust and confidence had been placed in the Claimant as an accountant, who either acted for the claimants, their associates or spouses, and relied upon the advice he had given in that capacity. Further that he had provided his services as an accountant when drafting the relevant agreements. The focus of the insurer could not properly have been on what the Claimant said in defence to the claims, rather than on the nature of the claims as presented. As a result it followed that the insurer would have decided that the Claimant was entitled to an indemnity in respect of the claims whether the claims were well founded or not and even if his defence to the claims was that he was not acting in his capacity as an accountant, but rather as a director of MHP.
Although, as I shall set out, neither the lay or expert oral evidence given before me was as Mr Adams had not hoped it would be, his closing submission remained that the finding of fact should be that and insurer would not have sought to argue that there was no right to an indemnity and or that an exemption could be relied on and any defence would have been funded by the Claimant’'s insurers and the maximum extent of his liability would have been the extent of his excess. It appeared to me that given the content of the expert evidence, including evidence that he called, which ran contrary to his case, he was forced to rely very heavily on an argument that, regardless of what the initial view of the insurer might have been, given the size of the claims there would subsequently have been expert legal advice provided and that advice would have ruled out refusing to indemnify or reliance on any exemption clause. As I had no evidence in relation to what legal advice would have been provided to an insurer in 2009 about these matters he then advanced his own interpretations of the meaning and scope of the indemnity and the exemptions.
Mr Dyson''s outline submission was that the insurer’'s approach would surely have been that “"the facts stink”" and that the creditors’' true or real claim was against MHP which was not a risk covered by professional indemnity insurance and they had no cause of action against the Claimant qua accountant.
He submitted that the court should find that an insurer would have believed that he/she was entitled to look beyond the way in which the claim was framed by the creditors in order to determine its true nature. The true nature of the claim would then have been measured up against the operative indemnity/policy exclusions. The approach must always be objective as for construing any contract, and that this would have been appreciated by the insurer or any lawyer advising the insurer. Put simply the true nature of the creditors’' claim was that it arose out of a commercial transaction with a business that was separate to the Claimant’'s professional role as accountant with Channon & Co and as a result the response of an insurer (in line with the approach taken by the insurer on the facts in Thorton Springer-v-NEM [2000] 2All ER 489 where the question arose of an accountant’'s private business dealings apart from his work for the practice) would have been that it did not trigger the indemnity and/or in any event would fall within a relevant policy exclusion (as a policy exclusion may still operate even if the indemnity is in principle triggered). He submitted that an insurer would have noted that
a) MHP is a property development business it is not a firm of chartered accountants.
b) The Claimant’'s directorship of MHP was not in relation to ‘'Services’' under the policy. The fact that he was an accountant is merely incidental and of little more relevance than if he had been some other form of professional person
c) The Claimant did not give investment advice in respect of MHP. He made representations on behalf of MHP as its director in order to persuade the creditors to lend it money. The rate of interest was a term of the loan agreement and not advice. In fact certain creditors actually specified their own interest rate such as Mr and Mrs Whitmoor-Pryer .
d) All the creditors realised or ought reasonably to have recognised that the Claimant was procuring the loans on behalf of MHP as the loan agreements was signed by the Claimant for and on behalf of MHP and the creditors were either seasoned business owners themselves or were advised/referred by Mr Richard Armitage - a financial advisor. They would have been able to distinguish between the Claimant’'s professional role and the fact that he was a director of a separate property development company;
e) the Claimant generally corresponded with the creditors on MHP headed letters naming him as a director and setting out the company’'s address and details (see e.g. letter of 14th march 2007 to Mr and Mrs Cross) On the rare occasions he used Channon & Co stationery he used words such as “"The company I am personally involved in, Mill House Partnership Limited is seeking investment funds”"; in such correspondence reference was made by the Claimant to “"our company”" and to discussing matters with his “"fellow directors”"
f) when the creditors realised MHP may be unable to repay the loans a meeting was convened at which they discussed with the Claimant ways in which it could be resolved by MHP trading out of the difficulty through his management. There was no accusation of breach of duty as an accountant at that stage.
Although it was for the insurer to consider the matter independently Mr Dyson also relied upon the fact that the Claimant’'s solicitor, referred to by Mr Adams when making submissions as “"an expert solicitor in the relevant matters”", Mr Redfern of Beale & Co considered that the prospects of proving that the Claimant was acting in the course of his profession were “"laughable”" as “"everyone could see he was acting as a director of MHP”" (see attendance note of 11th April 2011).
Mr Dyson also submitted that the insurer would look at the issue of whether the claims arose by virtue of a matter arising from the Claimant’'s profession as an accountant, together with as opposed to wholly separate from the exceptions at clauses 3 and 6 as each may add weight to the other in terms of a route to avoid providing an indemnity or assistance with the defence of the matter. He argued that clause 3 would have been seen to clearly apply as the claims made were that the Claimant had given investment advice or misrepresentation about guaranteed returns on an investment. It was and indeed still is his case that there was no investment advice, however, to the extent that he did give investment advice the clause would obviously bite as the very heart of the complaint was that he negligently gave advice “"when he knew or ought to have known that the investment was speculative”" and that could not adequately be secured.
As regards clause 6 the insurer would again obviously note that the losses arose directly from MHP’'s trading liabilities (its liabilities to its creditors incurred whilst trading) which was a business managed by the Claimant who was a director. Again at the heart of the claims were allegations about his actions as a director of MHP, including a failure to provide adequate security.
Mr Dyson argued that faced with a claim that was on the Claimant’'s instructions in effect “"a try-on”" i.e. an attempt to “"get at”" professional insurance when no other avenue would bear any fruit and also when the insurer had more than one reason to refuse to indemnify and/or assist the Claimant the overwhelming likelihood would be that it would take a firm line and reputational considerations would play little part.
As for assistance short of indemnity Mr Dyson relied upon the fact that the Claimant did not have separate legal expenses insurance. He submitted that it is not in the nature of the ICAEW required policy that it should provide the accountant with a partial indemnity just to cover legal expenses.
I next turn to the expert evidence. In light of the central importance of the approach that would have been taken by an insurer both parties had obtained expert evidence.
Before I do I should observe that both parties seek to make a point that the other had failed to call a representative from the insurer concerned, Aviva, to give evidence as to its general, or indeed likely specific, approach at the material time, including whether legal advice would indeed have been sought and if so internally or externally. Rather the parties chose to instruct experts. Of course approaching the relevant institution for evidence has risks attached. However the other side of the equation is that expert evidence has its obvious limitations. For the reasons which I shall set out in due course, it is my judgment that it was the Defendant who took much the great risk as he shouldered the relevant burden of proof.
In this case I heard from David Black of Fraser Russell who gave evidence on behalf of the Claimant. His principal area of expertise is the investigation of insurance claims and loss adjusting but he is also a Chartered accountant. I also heard from Tim Dowlen on behalf of the Defendant; he is an insurance expert with a principal area expertise in commercial insurance broking and a specialism in professional indemnity insurance. The two experts prepared their own individual reports and prepared a joint statement .
As I have set out for the purposes of the joint statement, the experts agreed that the relevant wording to be applied when assessing this claim is that contained in the 2006 version of the Norwich Union (Aviva) policy . They then agreed that:
a) Any insurer would have considered very seriously not indemnifying the Claimant;
b) Although he stated that he did not give investment advice if there was a claim that he had given investment advice it could still be a risk covered by the policy but if so it would still remain subject to any relevant exception or condition under the policy;
c) on the basis of the evidence provided to the experts there would be little basis for rejecting the claim on the basis of fraud (notably this was subject to the level of evidence available to the experts enabling them to conclude whether there was any fraud);
d) it could have taken anything up to 12 months for an insurer to accept or reject a claim under the policy.
On paper the experts had disagreed on the following matters:
a) whether or not the Claimant’'s activities would qualify as an insured risk pursuant to the definition of Business and Services;
b) whether the actual Defence raised by the Claimant would have been amended in a material way upon the involvement of the insurer i.e. whether his actual defences as pleaded (although signed with a statement of truth) were relevant (a very curious position having been adopted by Mr Black);
c) whether the creditors’' subjective understanding of the Claimant’'s role would have influenced an insurer’'s liability to accept the claim: that is, whether they (the creditors) believed he was acting as an accountant providing services to them as clients or as a director of MHP raising loan finance;
d) whether the exceptions at clause 3 would apply;
e) whether exception at clause 5 would apply;
f) whether exception at clause 6 would apply.
I formed very different views of the experts. I regret to say that I found Mr Black to be a rather unimpressive and unreliable expert witnesses. In his report he appeared to reach a firm conclusion and clearly dismissed what he subsequently had to concede in evidence were obvious matters that required detailed consideration. Specifically
(i) he could not justify his conclusion at paragraph 4.12 that
“"from a loss adjuster’'s perspective I would expect indemnity to (the Claimant) to be given and liability to be admitted in all cases subject to the £1 million policy limit”" (underling added).
This was on my view a wholly unsustainable assertion that provided insight to the way that he had approached his task. His view as set out in his report was that the insurer would accept that it should indemnify and then accept that it was going to have to pay out.
(ii) he failed to adequately consider the potentially relevant exemptions in his main report (he did not deal with exemption at clause 6 at all) and gave confused and confusing explanations as to why he did not think that they would be raised. Then after reflection during his oral evidence he conceded that they would be raised even by a novice insurer
In re-examination of Mr Black Mr Adams appeared to me to be commencing down the path of cross-examining his own expert to seek to what to limit what he saw as damaging concessions.
Mr Dowlen gave more measured and impressive evidence. Mr Adams tried to question his expertise but it was clear he was experienced in the insurance world and well placed to give an opinion on the only issue that expert evidence could properly assist on; how an insurer would approach the situations such as would have been faced had a policy been in force? Having said that his opinion also altered when giving oral evidence, but nothing like the extent that Mr Black’'s did.
At the conclusion of the expert evidence oral evidence there was in my judgment in effect a significant degree of elision with the result that there was in effect agreement on the following matters
(i) the insurer would have approached these cases with considerable caution not just because of the value but also because of a sense that all was far from right with the claims and/or the facts underlying the claims.
(ii) that given all available information the insurer would be looking to avoid liability to indemnify, would have queried why these claims were considered covered by professional indemnity insurance and the “"first reaction would be to avoid it”" ( per Mr Black).
(iii) The experts did not seem to attach any real weight to Mr Adams’' suggestion (that he repeated in closing submissions) that the reputation of insurer would be a very relevant consideration i.e. that an insurer would not want a reputation for refusing to indemnify. It may well be that this has to be seen in light of the first two points and in contra distinction to where a view could be taken that an insurer was taking a technical point to avoid indemnifying in an otherwise straightforward case. In any event neither expert supported Mr Adams'' submission. Mr Dowlen stated “"reputation is not that important when it comes down to the insurer’'s product.”"
(iii) the insurer would have taken time to consider the claims as presented and would not have reached a snap judgment. In the interim it may have given some advice to the Claimant as to how to protect his position.
(iv) the issue of whether indemnity could or would have been refused because the Claimant was not acting in the course of his business for the purposes of the policy was a difficult one to assess. Whilst the Claimant was adamant that he was not so doing and had evidence to support his case, the allegations in the claim were that he was. Had the issue of whether the Claimant was acting in the course of his business been the sole issue for the insurer it would probably have continued to provide assistance, whilst preserving its position as regards indemnity; although this would have been difficult to achieve it was a path sometimes taken.
(v) The insurer would not have relied on the exception at clause 5.
(vi) the insurer, indeed even a novice insurer, would have raised and sought to rely on exemption clauses 3 and 6. Both experts had considerable experience of how the insurance business works and they were both of this view (albeit that Mr Black had failed to deal with clause 3 in any significant way, or clause 6 at all, in his expert report). As regards clause 6, Mr Dowlen stated that he had some experience of this clause, that it must be remembered that it is a professional indemnity insurance policy and that in simple terms the clause was present because the policy was not intended to “"(be) there to cover where there is a muck up on (his) own business”". He said it was “"a very simple exemption”" and would be applied as such. It appeared to me that for the experts it was not just a possibility or even a probability; it would have happened (in his report Mr Dowlen previously stated that these clauses “"would certainly have been given by insurers as reasons to avoid an indemnity”"; paragraph 9.5.6.). As I indicated during the expert evidence this accorded with my own impression when I first considered the policy terms which was that given the facts of these claims these exemptions would obviously have been closely considered given all the relevant facts.
Mr Dowlen considered himself “"up stream”" of Mr Black in terms of involvement in the insurance and claims process (Mr Black having a main expertise in loss adjusting) and therefore better qualified to give an opinion having had considerable experience in dealing with insurers when a claim is made on a commercial or professional policy. He was of the view that reliance upon exemptions at clauses 3 and 6 would have emboldened the insurer’'s view as to the option of also seeking to refuse to indemnify on the scope of cover issue. In his report he had arrived at the conclusion that the insurer would have refused to indemnify. He laid emphasis on the fact that it was the Claimant’'s own case, as he would have repeatedly asserted to the insurer, that he was not acting in the course of his business and that the claims as presented were misleading or a “"try-on”" in seeking to advance a claim based on professional negligence. In his oral evidence he very largely stuck to this view and stated that in practice once an insurer has made up its mind it will usually stick with the decision and will seek to reinforce it. In his opinion there was “"not a chance”" that an insurer would not have refused indemnity.
So it was Mr Dowlen’'s clear opinion that the insurer would have refused indemnity in this matter on at least two and probably three grounds; the two exemptions and also that the Claimant was not acting in the course of his business. He conceded that the insurer would face a “"theoretical risk”" (he had no experience of such a scenario) that if it relied on the argument that the Claimant was not acting qua accountant and it was found at trial that he had been that the insurer could then face a liability. However the thrust of his evidence was that the insurer would have relied on this argument in addition to the exemptions.
Having carefully considered these areas of agreement between the experts, as further expanded upon by Mr Dowlen, I accept that they accurately reflect what would have been the view of an insurer. This means I find that the insurer would certainly have sought to rely on exemptions 3 and 6.
I also find that in all probability the insurer would also have relied upon an argument that the Claimant was not acting in the course of his business. In so doing I have found the submissions of Mr Dyson at paragraphs 71-73 above to have force. Whilst that may have been a stance taken on less certain ground I take the view that it would have been used, at the very least, to add ballast or as Mr Adams described (in a slightly different context as I shall set out ) as an additional “"lever”".
So it is my finding of fact that the insurer would certainly have been set to refuse indemnity or any further assistance.
In his closing submission Mr Adams made three points which I should now address. First, he stated that
“"It is not, however, necessary for the court to resolve the question of construction (both in relation to the scope of the policy and exemptions) as it is only concerned to assess what might have happened as matter of fact, The better view is that the insurers might have used any such argument, in so far as it was available, as a lever in negotiations with the investors in order to drive down a settlement, as advocated by Mr Black in his notional role as investigating loss adjuster - see also Phillips & Co. (A firm) v. Whatley at [32].”"
There was nothing in the evidence before me to adequately support this assertion; quite the contrary. I see no reason why the Insurer would not rely on any ground to refuse to indemnify but still raise the arguments. In my view and indeed that of both experts, an insurer would have been raised the grounds and sought to avoid involvement in the litigation.
Secondly he submitted that the insurers would consider that there might be obvious “"reputational risks”" in seeking to rely on exclusion clauses, which might be perceived as a technical and artificial device to avoid liability, in the face of a number of investors telling a consistent story of how they had suffered over £1m of losses due to the negligence of their accountant.
There was no direct evidence as to the approach of Aviva to “"reputational risks”". I have set out the combined view of the experts which did not support the submission. It was Mr Dowlen’'s view that such risks would hold little force against the ability to avoid significant commercial exposure. As a matter of simple commercial sense and given that these claims concerned significant investments in the property market, not an area likely to invoke considerable sympathy (even though the individual circumstances did vary) I think his view correctly sums up the position. I see no reason to believe that a large insurer such as Aviva would see a significant risk to its reputation and deviate from an available path away from liability.
Thirdly Mr Adams submitted that the initial stance of an insurer would have been the subject of, and altered by, legal advice.
Legal advice
I had no direct evidence on the issue of legal advice would have been taken or not. Mr Black opined that once initial conclusions had been reached there would probably be a conference between solicitors and insurers to agree on a common response and reasoning (report paragraph 3.64).
Mr Dowlen stated that in practice with claims such as these the insurers would consider the matter carefully, and may take time to do so, but once a decision had been taken the insurer would stick with it. However he stated that it would go to a senior person; the claims director.
In the absence of direct evidence from Aviva (which is a very large organisation with no doubt many very experienced insurance practitioners) I am not persuaded that Mr Black’'s opinion is right, as the insurer is likely to have considered that the clauses were sufficiently clear and it was on sufficiently strong ground that this was not needed. I also did not see (and neither expert saw) inconsistency with the balance of the policy or any in-built restriction within the clause that raised a question requiring expert legal interpretation.
I also find that the reasons why they were relied upon would have been easily communicated to and understood by the Claimant; there was no need for great care in the wording of any letter such that legal input was needed.
However there is certainly a possibility that legal advice may have been taken, so I now turn to what such advice may have been. I start with the exemptions.
Clause 6 set out that indemnity would not be provided
“"in respect of any claim ...or loss arising from any trading losses or trading liabilities incurred by any business managed by or carried on by you.”"
It is also found in the Institute of Chartered Accountant’'s minimum approved policy wording.
Firstly it would have been noted by any lawyer that
(a) The losses incurred by the investors/creditors arose as a result of a failure of MHP to be able to meet its financial obligation to them;
(b) The Claimant was a director of MHP with day to day involvement in its management. Indeed the investors complained about his management of the company at the meetings when its difficulties had become apparent.
(c) Any relevant claim under the policy would have to be a claim against the Claimant in relation to loss incurred by reason of advice or conduct.
(d) The clause covers “"any claim”" in relation to “"any business”" and is not limited to a claim by a business managed by the Claimant in respect of loss arising from its trading losses or liabilities.
The exemption seems to me to be clear in scope albeit likely to be of limited application for many of those covered by a professional indemnity insurance policy. It is widely phrased in that it concerns claims for losses incurred which arose from the trading losses or liabilities of businesses managed by the accountant (save for claims for negligence in the course of receivership or procedures under the Insolvency Act). On first reading the claims would appear to be caught by this exemption. As Mr Dyson neatly submitted,
“"The loan arrangements were commercial transactions between the Claimant’'s company MHP which he managed with his co-directors and the third parties.”"
Mr Adams submitted that the obvious application of this exclusion clause was to claims by a company managed by the insured accountant and its effect was to exclude cover for claims that included claims for compensation for trading losses and trading liabilities. He said that there was an obvious purpose to such clause, as it would be difficult to draw any sensible line between the accountant''s role in providing advice and services qua accountant and his role in managing the business. However I see no reason why a lawyer would advise that there is a limit to what is, on its clear wording, a wide a clause. Mr Adams’' interpretation of a limited scope if it were the true intention could have been easily provided for by different wording. His submission that there was an intention to have a limited effect, without more, cannot override the plain meaning of a clause.
Mr Adams also submitted that “"the solicitor would however also point out that … it may be argued that it is difficult to say that the liability of Mr Channon ""arises from"" such trading losses”". Again I see no reason why this would be so. The cause of the Claimant’'s liability, if there was any, was the failure of the company he managed to be able to meet its liabilities as a result of the property crash. If it had met its contractual liabilities to the investors they would have made a very healthy profit upon their investments. That the investors did not deliberately employ him to manage their business is to my mind of no consequence and I cannot see why a lawyer would have advised differently.
In my judgment this is, on its face, an unambiguous clause. Accordingly I do not believe there is a significant possibility that advice would have been taken and that such advice would have been advised that this exemption could not be relied upon.
Clause 3 set out that
“"we will not provide indemnity in respect of
any claim … or loss arising from any express or implied warranty or guarantee relating to the financial return of any investment or portfolio of investments.”"
It is also found in the Institute of Chartered Accountant’'s minimum approved policy wording.
The experts stated in the joint agreement that
“" (Mr Dowlen) is of the opinion that this clause would apply in this matter while (Mr Black) is not sure that there is sufficient financial certainty in the outcomes to comply with the requirements.”"
As I have already set out Mr Black changed his mind and was of the view that there would have been reliance on this exemption. I did not find this surprising as his view that there was insufficient financial certainty in the promised outcomes was untenable on the facts. The very basis of the claim presented against the Claimant was that he had negligently advised or misrepresented the facts in relation to guaranteed returns albeit of slightly differing forms. As I have set out Ms Stevens'' claim was in relation to an investment £100,000 “"with a return of a guaranteed minimum of 10%”" (the letter before action stating that Ms Stevens made it clear that she wanted her investment “"guaranteed”"); the return to be repaid by her receiving a penthouse flat up to a value of £165,000. The security for the loan was to be a debenture charge over the company.
Mr and Mrs Cross’' claim was that they were “"guaranteed a rate of return of 10% of loan interest with 2% net bonus”", Ms Graham was promised 10% compound interest with a 5% bonus, Mr and Mrs Cemm-Evans 10% and profit share, Mr and Mrs Hender a guaranteed rate of 10% plus profits in respect of the agreement with MHP and 12.5% in the agreement with Mr Brommage and Mr and Mts Whitmoor-Pryer a guaranteed 10% return. As one financial advisor pointed out at the time this level of return was way beyond the then current costs of borrowing and in all cases there was to be a guaranteed return of at least 10% on a secure investment.
It appeared to me when first reading this clause that the loss of the sums invested was loss arising from an express guarantee relating to the financial return of an investment. The guarantee was that the investment was secure and would produce at a minimum this large return. So my initial view on considering the policy wording was that this exemption applied and I could see no reason why if legal advice was provided it would have given a different opinion.
Channon & co were not authorised to give financial or investment advice. The Claimant’'s annual declarations to ICAEW and proposal forms state he did not supply investment advice. However, others the subject of professional indemnity cover may be authorised and the definition of services included investment advice. However I do not see this exemption as inconsistent with general cover. It appears to me that there is likely to be a wide range of potential investment advice that does not require express or implied warranties or guarantees relating to financial return.
Mr Adams submitted that the claims (the exemption is that indemnity will not be provided in respect of “"any claim or loss”") were not wholly arising from guarantees relating to the financial return of an investment. Put simply he argued that if the guarantee was a secure investment (as in Ms Stevens'' case of £100,000) with a return of 10% and the whole investment was lost the exemption would only bite in respect of the loss of £10,000, being the guaranteed return, but not the sum invested, despite the guarantee as to security or return of £110,000. He said that the clause was present to make a “"distinction between tortious and contractual loss”". When I asked him who the contracting parties would be he answered that it would be the client and the accountant. I confess I did not follow his reasoning as to why that would be so. Rather I see no reason why a lawyer would have advised that it was necessary to read into the wording the distinction between tortious and contractual loss and to restrict the application accordingly. Again I see an unambiguous clause that means that an accountant who provides investment advice which is itself, or causes reliance upon, a warranty or guarantee relating to the financial return of an investment is not covered by this professional insurance.
Accordingly, I do not believe there is a significant possibility that advice would have been taken and that such advice would have been advised that this exemption could not be relied upon.
So in my judgment there is no significant possibility that legal advice would have been taken and that it would have steered the insurer away from reliance upon these two exemptions.
I now turn to legal advice as to the scope of the indemnity given my finding that an insurer would in all probability have also sought to avoid indemnity on the basis that the Claimant was not acting in the course of his business. I have already set out the reasons why I believe the insurer would have done so.
The Claimant was adamant that he provided no investment advice whatsoever and at all times was acting as the disclosed director of a property company. As I have set out I am satisfied that his instructions to the insurer would have been these were clearly not claims arising out of the conduct of his business and were a “"try –on”".
However the claims were formulated as a professional negligence claim.
In my opinion the overwhelming likelihood is that any legal advice to the insurer would have set out that the first step was to ascertain the true nature of the creditors’' claim in order to determine whether the insurer was obliged to indemnify. I think that any lawyer would have relied upon well know approach outlined by Devlin J in West Wake Price & Co v Ching [1956] 3 All ER 821 at 828
“"I do not think that the underwriters are bound by the way in which the claimant has chosen to formulate his claim. I think the underwriters can properly invite the court at this stage to ascertain the true nature of the claim and to make such inquiry as may be necessary for that purpose.”"
The insurer’'s concern as likely expressed would surely have been that professional indemnity insurance is intended to cover the risk of the professional carrying out his professional duties and not to cover liabilities arising out of commercial transactions for the purposes of operating the business side of his practice or especially to cover liabilities for operating a distinct and separate business to that of his professional practice. In my judgment an insurer would have seen the matter as Mr Dyson submitted ; that the creditor/investors had been advised by professional negligence experts to shoehorn their commercial claim against MHP into a professional negligence claim in order to tap into the insurance cover and that the true nature of the claim is not one for professional negligence.
It is likely that any legal advice would also have been that the cover under the policy was for civil liability (and the Claimant’'s costs) in respect of any claim “"arising out of the conduct of your business”" and in addition to an indemnity the insurer was liable to pay “"other costs”". In respect of such other costs they were not defined under the policy but the Institute’'s minimum wording was that there shall be an indemnity in respect of all costs and expenses incurred with the written consent of the insurer in the defence or investigation of a claim which “"falls to be dealt with”" under the policy (such consent not to be unreasonably withheld). So if the claim did not fall to be dealt with under the policy there was no obligation to pay towards the costs of defending the claim or to indemnify. So the issue was whether the claim fell to be dealt with under the policy which threw the focus back on whether it was a claim “"arising out of the conduct of your business”".
So having ascertained the true nature of the claim the issue was whether the claim in substance was capable of falling within the scope of this requirement.
Mr Adams submitted that the obligation to pay defence costs being subject to a power to refuse consent to such costs being incurred, such consent not to be unreasonably withheld or unreasonably delayed meant that there was a risk for the insurers that if they refused an indemnity in respect of costs, then their decision can be challenged on this ground alone. However, I do not see the ground as in any way divided. In my judgment the insurer would have been advised that the trigger for indemnity and the justification for refusal to pay additional costs was one and the same; a claim “"arising out of the conduct of your business”".
In so far as Mr Adams argued that the insurer would have been advised that the trigger was simply the actions of the third-party claimant by either making a demand or threatening proceedings against the insured and there was therefore no merits threshold, I reject his submission. In my judgment it is highly likely that any specialist lawyer advising the Claimant would have been aware of Thornton Springer v. NEM. [2000] 2 All ER 486. In that claim the allegations of the claimant in the action in issue were that the accountant had acted as a professional accountant as distinct from in his personal capacity. The insurer refused indemnity in respect of any element of the claim or costs attributable to private dealings; a similar stance to that which I find would have been adopted here. Coleman J concluded that the basic principle of liability insurance is that the required intrinsic character of the eventuality insured against was the true liability of the assured, rather than the alleged liability advanced by the claim. I find that this would have been the advice given the insurer in this claim. I do not accept Mr Adams'' submission for a moment that anticipation and adoption of the reasoning of the Court of Appeal in Rust Consulting Limited –v-PB Ltd ( No2) [2012] EWCA Civ1070 would have taken place.
As regards the costs clause in that policy Coleman J stated (at p506 b-e)
In order to ascertain whether the claim is in substance within the scope of the Insuring Clauses it may be necessary to investigate what the basis of the claim really amounts to, as distinct from the manner in which it is expressed in the claimant''s pleadings, adopting an approach similar to that of Devlin J in West Wake Price & Co v Ching, supra, at page 53. In a case where on the face of it the claim is so formulated that it falls in substance partly within the scope of cover and partly outside that scope, Special Condition I has the effect that only to the extent that it falls within the scope of cover can the claim be treated as “"falling to be dealt with”" under the policy. Accordingly, insurers might properly confirm their consent to the assured incurring costs and expenses in respect of the defence or settlement only of that part of the claim which is in substance within the cover. However, this is not required to satisfy a high threshold of substantiality. Thus, if a claim were to be formulated against the Practice for breach of its professional duty and in the alternative against a partner in his personal capacity, relying on the same allegations of fact, there would, in my judgment, be a claim within Special Condition I unless the claim for breach of professional duty was on the face of it so manifestly untenable as to justify being struck out, if it had been pleaded.
I think that this would have been the test referred to in any advice as applicable to the requirement to provide indemnity or assistance with costs.
To say that the claims were manifestly untenable on their face is at first blush a high hurdle although, as I have already set out there were obvious areas for attack.
However I return to the fact that it was the view of the Claimant himself that at all times he acted as a Director of MHP, that Channon & co did not conduct investment advice and that there was correspondence that clearly supported his position that the creditor/investors well knew this (see generally witness statement of 24th November 2014). Further his view was fortified by the opinion of his solicitor that it was “"laughable”" to suggest otherwise.
This issue exposes the tension in Ms Adams’' submissions. He submitted on behalf of the Claimant that if such threshold did apply, there was ample evidence that the claims were not obviously hopeless: given their nature, the consistency of the accounts between the parties and the contemporaneous and subsequent documentation disclosed, and that they plainly required a substantive response and to be defended (it is to be borne in mind that he pleaded the claims in question and presumably also advised upon them). However, his client, the Claimant had and has a very different perspective and that is the view which would have been advanced to the insurer. Mr Adams failed to recognise that any insurer would be inclined in these circumstances to take the claimant at his own word.
I find that if legal advice had been taken, itself only a possibility, the probability is that the advice that would have been was that it was a difficult argument to run with any certainty of success that the claims as presented were manifestly untenable and to a degree the insurer would have been taking a risk in relying on it. However, given the Claimant''s own case it certainly could be advanced as a secondary and backup argument as for him to challenge the ground it would require him to rely upon weaknesses in his own case that he had not acknowledged.
I now turn to the Claimant’'s reaction to a refusal to indemnify or to provide any assistance with the Defence of the claim.
Claimant’'s reaction to the Insurer’'s stance
The Claimant stated that he had passed on the claims to the Defendant to put before the insurer as “"they were complaints about my firm”" and his hope was that Aviva would take up the issue on his behalf and help him “"sort it”". So much is to a degree understandable. However despite knowing what the issues before the court were and being intelligent, highly articulate and an astute business man he really was at a loss to explain to me, even in general terms, during oral evidence why he thought that the insurance company should have provided an indemnity given that
(i) The claim is that he gave investment advice about the “"guaranteed”" return from an investment, but he knew that Channon & Co was not authorised to give investment advice (as his own correspondence repeatedly stated) and the exemptions in the policy.
(ii) That he was adamant that the claim did not arise out of the fact that he was an accountant, rather at best was a misrepresentation claim when he was acting qua director and in respect of a separate business.
The best he could do was to suggest that I ask Mr Adams.
For the avoidance of doubt I should set out that the Claimant could not explain the comment in his witness statement of 29th August 2013 at paragraph 13 in response to application to set aside Judgment that
“" the real issue is whether exclusions apply…. although I contended that I was not giving investment advice, the allegations that were made that I was and as I have admitted liability I concede that. I believe that any mainstream professional indemnity insurance policy would have to respond to the allegations that were made against me by the Claimants.”"
This statement was flatly contradicted by his second witness statement of 24th November 2014 ( Bp133) which stated that
“"I deny that I gave any investment advice whatsoever to the said persons who have claimed against me and who are now my judgment creditors. I took this stance in my defence and my position has not changed… I would have wanted my insurers to defend proceedings to trial.”"
He also exhibited the letter of engagement to Mr and Mrs Hender to which I have already referred to support the proposition that Channon & co did not give investment advice.
The Claimant accepted that the extract in the first statement was plainly wrong. He made no such concession and never would have done. This is important as any concession that the claims were meritorious would potentially be relevant to the question of what he would have told the insurer and as a result the insurers’' likely stance.
It is worrying that a statement that was clearly incorrect was used to oppose an application to set aside judgment. I was also concerned by the Claimant’'s initial comment when shown his statement that this is what “"he agreed to sign”". As I have already set out having heard the Claimant I have little doubt that he pursues this case with no passion or indeed clear belief in its merits. This is very far removed from a case in which a committed claimant believes that he should win. I repeat my impression was that he was going through the motions as required by the settlement reached with the investors.
So, rather than stating that he firmly believed that he was covered for these claims and expected an insurer to indemnify him, he stated that he passed the complaint onto the insurer because it was a complaint about his firm and he hoped for some help of some form.
Further, when asked if he thought that the insurer would have defended the actions on his behalf rather than state that this was of course what he expected he stated that he thought that they would give him “"some legal support and tell him what his best options were”". He also stated that it was on the basis of what the Defendant had told him that he thought that they would help, but when asked why he accepted that the matter would have been “"difficult”" but thought at the time that the insurer would “"support me in some manner”". This was hardly the evidence of someone who would have inevitably taken on the insurer if indemnity and assistance were refused.
Although he did state in re-examination that he found the news that he was not insured “"devastating”", and within correspondence had stated that he was “"traumatized”" in my judgment this has to be seen in the context of his immediate appreciation (as can be seen from his actions and contemporaneous documents correspondence, such the attendance note of the Claimant’'s conversation with the Institute of Chartered Accountants on 20th August 2010) that the failure to have insurance cover in place was a disciplinary matter and therefore he was exposed to regulatory sanction and was advised to “"protect his position”". Indeed he was fined by the Institute in due course.
Mr Adams set out in his closing submissions that “" there is no question that Mr Channon would have made a claim”". Of course in so far as he means by this that the matter would have been referred to the insurer then he is of course correct, as the Claimant was hoping for some legal assistance. However in so far as this phrase means that if the insurer has refused to provide indemnity or assistance he would have sought legal advice and /or commenced proceedings against the insurer to obtain what he thought the insurer was contractually obliged to provide then that is quite a different matter.
Indeed having heard the Claimant and carefully considered his evidence with the contemporaneous documentation it is my finding of fact that there is no likelihood, let alone certainty, that he would have challenged the insurer''s position. Very far from it. As I pointed out during submissions he was not directly asked what he would have done by Mr Adams. It may be that Mr Adams was uncertain as to the answer he would have elicited, I know not. However had the position truly been that he would have challenged it then he could have given firm evidence to this effect. Mr Adams'' closing submissions as to what a litigant faced with a refusal to indemnify would have done are a very poor substitute for the litigant’'s own evidence on the point a fortiori where it is very far from clear what he would have done given the difficult position he would have faced if he sought to challenge the insurer. Whilst he would have been very disappointed if an insurer chose not to assist him in his battle and indemnify him if he sought to challenge the insurer''s view he would have been fighting on two fronts with all the accompanying costs.
My distinction impression is that he would have had some sympathy with the insurer if it had relied on the approach which I believe would have been taken, as it was consistent with his own view of the claims i.e. they were a device to try get around the problem of the company having no money and to get to his professional insurance cover, whereas the true dispute solely concerned what he did or do not do on behalf of a separate company when acting as a director.
He would have faced a choice of contesting the insurer’'s decision or focusing his mind on defending what he believed to be unmeritorious claims.
Cognisant of the fact that the Claimant had no money to progress litigation, which would have been a very significant hurdle to positive reaction, Mr Adams suggested in his closing submissions (without there being any evidence on the point) that not only would the insurer have been joined into the actions as a Part 20 Defendant, but that the seven investor claimants would have assisted with the funding of this step.
I found this a difficult submission to accept given that, as the Claimant made abundantly clear, what he wanted was assistance to fight what he viewed as wholly unmeritorious claims, not a contribution to settlement. As I have set out there was clear evidence that supported the Claimant’'s case and there is no reason to believe that anyone advising the investors would have seen it likely to be anything other than a fully contested matter if the Claimant had the means to fight it. So seeking to arm the opposition before liability was determined would have been a very strange step to take. Further litigation against the insurer would have been a long way from litigation in which success could be seen as highly likely (so easily distinguishable from the merits of the claim against the Defendant based on an apparently obvious breach of duty; I should add that I bear in mind that the Claimant commenced a claim against the Defendant).
Whilst I well appreciate that the investors would have liked to see an insurer capable of satisfying any judgment obtained standing behind the Claimant I do not accept that, when carefully considered, they would really have wanted to support the Claimant in a fight with the insurer upon the points set out above in relation to the policy (with consequential costs exposure) with the by-product of fuelling the defence of what would then have become long and expensive litigation.
Further and to the extent that it is a relevant consideration I have little doubt that the defendant if consulted would have put up little resistance against the insurer''s decision. He would have seen the force in what the insurer was saying.
I remind myself that it is necessary, so far as I am able, to decide the issues of causation and loss of a chance on the facts as I find them on the evidence before me. I can draw inferences from such evidence when considering what may have happened, but speculation without some evidential foundation is just that; speculation. Whilst some degree of speculation can sometimes be necessary in the process of assessing a loss of a chance and the principle in Armory v. Delamirie can put some fair wind in the sails for the Claimant’'s suggested successful voyage to the avoidance of loss considerable care must be taken to recognise what is in reality a rudderless ship on a shoreless sea.
The issue for me is not what some reasonable person or indeed specialist lawyer could conceivably have done faced with this situation rather what this Claimant and the insurer concerned would or could have done in the circumstances which would have been faced. In his closing Mr Adams appeared to me to stray too far from the evidence before me, and legitimate inferences from such evidence, into the dangerous waters of reliance upon assertion as to what, in his opinion as recently formed, could have been done. Mr Adams'' views have to be treated with very great caution not the least of the reasons for which is that he would have been the last person to have been advising the Claimant given that he was Counsel acting against him and in any event his opinion of the merits of the investors’' case would not have been, and is still not, accepted by the Claimant.
Underlying and colouring my assessment of the evidence and what inferences can be taken from it was the Claimant’'s consistent belief that the claims were unmeritorious, a device, and did not truly concern his practice as an accountant rather his other life as a property developer. Of course if help was available from an Insurer he would have gladly taken it, but it seems to me that the overwhelming likelihood is that he would not have so strongly thought that it was his right as to risk litigation against his insurer if it was refused.
Conclusion
I find that the insurer would have refused an indemnity based on three grounds. I also find that the Claimant would not have challenged the insurer’'s approach or that if there had be some challenge that the insurer’'s decision would not have been revoked or reversed.
These findings are not just on mere balance of probabilities leaving a significant possibility that matters would have progressed otherwise. Returning to the issue as framed by Mr Adams I do not find that there is a substantial and not merely speculative chance that the end result would have been different had insurance been in place. I am not persuaded by the proposition that there is a substantial chance that an insurer would have provided an indemnity or such a significant contribution as to costs as significantly alter the position that the Claimant found himself in when he was, on his account, effectively forced into a position where he had to compromise the claims of the investors.
For the reasons that I have set out the claim fails.
Finally, I should make it clear that this is not a case which has been decided because of where the burden proof rested. However, for the avoidance of doubt I should address the issue of who carried the burden as there were rival submissions.
Burden
I treated the burden as on the Defendant throughout to establish that the insurer would have refused to indemnify or assist and that this would have not been the subject of challenge and that as a result the chances that the insurers have provided an indemnity and /or assistance were no more than speculative. That burden has been successfully carried and the test met.
However given the time spent on argument on the issue I shall set out my reasoning in detail.
Mr Dyson submitted that the burden rested at all times on the Claimant. He stated that there is a clear distinction between a claim that prima facie falls within the scope of a professional indemnity insurance policy but is declined as the insured is in breach of a condition precedent and the question as to whether or not a claim falls within the scope of such a policy at all. The latter is for the Claimant to prove and the former depending on the construction of the particular policy potentially for the Defendant to prove.
It was Mr Adams’' submission that the burden of proof rested upon the Defendant. He relied upon relied upon Jackson & Powell (Seventh Edition 16-136-140 in particular Fraser-v-BN Furman [1967] 1 WLR 898 and submitted that in all cases the starting point in the “"no-negligence world”" is that there is an insurance policy in place and the Claimant makes a claim under it. The question for the court is to assess as a matter of fact what might have happened in that scenario. As the Claimant finds himself in a situation which he ought not to be in due to the defendant''s wrongdoing, the principle in Armory v. Delamirie applies, namely there is an evidential presumption in favour of the claimant which gives him the benefit of any relevant doubt (the ""fair wind"" principle) - see Philips & Co. (A firm) v. Whatley [2007] PNLR 27... PC). It is only if the Defendant can prove that in no circumstances would the insurers have provided an indemnity that the claim will fail.
However in my opinion the position is not as clear cut as either advocate suggested.
A convenient starting point is Everett –v- Hogg Robinson [1973] Lloyds Rep 217, a case which turned on the issue of whether a re-insurer would have repudiated by reason of a failure to disclose an adverse claims record had the broker not been negligent. It was held by Kerr J that if a broker relies on a causation defence he must satisfy the court that the insurer would in fact have exercised its rights and declined to meet the claim; if this is established no loss flows from the breach. If it is not established then damages are assessed on a loss of a chance basis i.e. the court will value the chance of recovering a full or partial indemnity. He stated at page 223
"". . . once a plaintiff has proved that as the result of the defendant''s negligence he has lost the benefit of a contract which would have been valid if concluded, but which would have been voidable at the election of the other party, then in my view the burden of proof shifts to the defendant to show that on the balance of probabilities the plaintiff would in any event have lost all or part of the benefit of the contract as the result of the probable action of the other party.""
In my judgment this statement, which I have adopted, is in no way inconsistent with the starting point adopted by Mr Dyson that where the insured claims that he has suffered a loss of chance of claiming upon his insurance, then established tortious principles that relate to the hypothetical action of a third party must apply. The Claimant must show that there was a “"substantial and not merely speculative chance that the third party would have taken the action and confer the benefit or avoid the risk”"; see Allied Maples Group Ltd v Simmons & Simmons [1985] 4 All ER 907 (see Stuart-Smith LJ at page 1610G-H and 1614D). I fully accept that the Claimant must establish on the balance of probabilities the causative link between the breach of duty and his loss. However the Claimant’'s path with the burden can be just one step.
The first step is whether the Claimant has established the first base of a loss the benefit of a contract which would have been valid if concluded. It is a well settled principle of insurance law dating back to the early 19th century that an assured has the burden of proving that the loss was caused by a peril insured against. That means that if it is a policy that provides only limited cover the burden remains on the assured to bring himself within the terms of the policy. If there is a qualification of the general risk which covers its whole scope (so that there is no unqualified risk left), the burden is on the insured to prove facts which bring the case within the general risk as qualified. In Munro Brice & Co-v-War Risks Association [1918] 2 K.B.78 Bailhache J set out the principles succinctly and with clarity as follows [1] ;
When the promise is qualified by exceptions, the question whether the plaintiff need prove facts which negative their application does not depend upon whether the exceptions are to be found in a separate clause or not. The question depends upon an entirely different consideration, namely, whether the exception is as wide as the promise, and thus qualifies the whole of the promise, or whether it merely excludes from the operation of the promise particular classes of cases which but for the exception would fall within it, leaving some part of the general scope of the promise unqualified. If so, it is sufficient for the plaintiff to bring himself prima facie within the terms of the promise, leaving it to the defendant to prove that, although prima facie within its terms, the plaintiff''s case is in fact within the excluded exceptional class….
When a promise is qualified by an exception which covers the whole scope of the promise, a plaintiff cannot make out a prima facie case unless he brings himself within the promise as qualified. There is ex hypothesi no unqualified part of the promise for the sole of his foot to stand upon. ..
Whether a promise is a promise with exceptions or whether it is a qualified promise is in every case a question of construction of the instrument as a whole.
So once the assured has proved that the loss was caused by a general peril otherwise within in the relevant policy, the burden switches to the insurer to bring into play any exception.
Turning to the present case it is my view that a burden lay on Claimant to establish that but for the negligence of the Defendant there would have been a policy in existence that covered the claim in question. Ordinarily such a step will not be difficult. Thereafter the burden is carried by the defendant broker if he seeks to establish that the insurer would have repudiated for some reason, whether that be by reason of breach of a condition or exemption.
In so as far as reliance upon the exemptions (and the reaction to such reliance) is concerned it seems to me clear cut that the burden lay on the Defendant. Accordingly the risks associated with the failure to call direct evidence from the insurer, and to rely on expert evidence instead, were risks taken on by the Defendant (see the observations of Diplock J in Fraser-v- BN Firman).
Whilst I view it as technically the case that as that the general promise was to insure in respect of any claim “"arising out of the conduct of your business”" the burden lay on the Claimant to establish that there would have been a valid insurance contract covering the risk (or more specifically a substantial chance that this would be established or accepted by the insurer), it would be artificial in a case such as this to separate out this element. The reality here, as in many cases when more than one route is available, is that the insurer''s analysis would consider matters in the round and take a view as to whether to indemnify or not taking into account the ability to rely on exemptions or conditions. In such cases it is my view that the appropriate course is to treat the burden as on the Defendant’'s shoulders throughout.
I now leave the parties to see if an agreed draft order can be lodged.
Judgment as handed down
His Honour Judge Cotter Q.C.
SUP>th May 2015
..
Note 1 Cited with approval by the Court of Appeal in Force India Formula One Team Ltd v Aerolab SRL (an Italian company) and another [2013] EWCA Civ 780 per Lewison LJ paragraph 55 [Back] |
Mrs Justice Cox:
Introduction
This is a desperately sad case, as counsel for the Defendants rightly observe. On 16 March 2010 the Claimant, Shahinoor Choudhury, then aged 42 suffered an ischaemic stroke. He developed "locked-in syndrome" due to infarction in the brainstem and cerebellum, secondary to basilar artery thrombosis. He is virtually totally paralysed, apart from limited vertical eye movements, tiny movements of his mouth and right index finger and automatic breathing. He is doubly incontinent. He has a tracheostomy, requires regular suctioning and is fed through a PEG tube. He cannot speak or swallow, his ability to communicate is extremely limited and he is utterly dependent on 24-hour nursing care. The nature and extent of his disability and of the difficulties in caring for him are clearly demonstrated in the DVD prepared by those representing him, which I saw before the trial started.
The Claimant's cognitive ability is impaired, such that he does not have the capacity to conduct this litigation, and his brother, Saminoor Choudhury, is acting as his Litigation Friend. The Claimant is, however, fully aware of his condition and the psychological consequences of this must be profound. There is no prospect of improvement and his life expectancy is markedly reduced. The experts have agreed that, on the balance of probabilities, he is likely to survive for only another seven years.
After being discharged from hospital in 2011 the Claimant was initially cared for by Saminoor Choudhury and his wife, Nikola, at their family home, with the help of carers. The evidence as to the challenges and difficulties they had to overcome and the constant, determined and devoted care provided, in particular from Nikola Choudhury, merits recognition and the Defendants rightly pay tribute to it, as do I. Since August 2013, however, the Claimant has lived at the registered nursing home "Cams Ridge" in Fareham, Hampshire where he is being provided with high quality, professional care.
The Claimant has suffered from locked-in syndrome since 17 March 2010. He brings this claim for damages for negligence against the First Defendant, as providers of emergency ambulance services, and against the Second Defendant, as the employers of medical staff at the Queen Alexandra Hospital in Portsmouth, where the Claimant was brought by ambulance on the previous day. It is alleged, in summary, that there was negligent delay in taking him to hospital on 16 March, in diagnosing his condition and in providing the necessary treatment for him.
Significant breaches of duty have been admitted by both Defendants, but there is a dispute as to causation of injury. The Claimant contends that on the balance of probabilities those breaches of duty, and in particular the failure promptly to start the Claimant on aspirin, caused his deterioration and the development of locked-in syndrome on 17 March. The Defendants submit that treatment with aspirin would not have resulted in a better outcome for this Claimant in the particular circumstances of this case; or rather that it cannot be shown to the requisite civil standard that he would have been left less disabled than he is now.
The hearing before me was originally listed to determine both causation and various quantum issues, which narrowed in the weeks leading up to trial. I heard oral evidence from Saminoor and Nikola Choudhury relevant to both issues and I read a witness statement from the Claimant's friend, Ben Farodoye. In light of the admitted breaches of duty it was unnecessary for the Defendants to call any factual evidence.
The causation issue turns on expert evidence, principally the evidence of the stroke experts, Professor Martin Brown, consultant neurologist called on behalf of the Claimant, and Dr Elio Giallombardo, consultant stroke physician for the Defendants, who both gave oral evidence. The parties also relied on the reports and joint statement of the consultant neuroradiologists, Dr Nelson (Claimant) and Dr Molyneux (Defendants); and, in relation to breach of duty, on the joint statement of the Accident and Emergency consultants Mr Cottingham (Claimant) and Mr Holburn (Defendants).
The causation issue is complex, being far easier to formulate than to resolve. In the event, having heard the causation evidence over three days, it was agreed that I should hear counsels' submissions and determine that issue first before proceeding to the quantum issues, if appropriate. My decision and the reasons for resolving the causation issue in the Defendants' favour are now set out in this judgment, which was reserved following the helpful submissions from both leading counsel.
The Relevant Facts
Events Before the Claimant Arrived at Hospital
In March 2010 the Claimant was living on his own in a flat on the top floor of a block of flats in St Simon's Road, Southsea. He was a generally fit, healthy and active man and for several years he had been working full time at the computer company IBM.
At around 1.00 am on 16 March he began to feel seriously unwell, because at 01:24 he called the ambulance service. He complained of feeling dizzy and short of breath, of being sweaty and having sharp pains in his head. The recording made of this call shows that he was breathing fast and deeply and was having difficulty talking because of his rapid respiratory rate.
An ambulance was sent and a paramedic attended him at his home at about 01:29. The ambulance report indicates that the Claimant referred to his partner having left him two weeks earlier, since when he had been working excessively and training, having little sleep. Observations made at 01:33 and 01:40 include observations that the Claimant's respiratory rate was raised, that his Glasgow Coma Scale (GCS) score was recorded as 15 (out of 15), and that his oxygen saturation was normal. No formal diagnosis was recorded. The paramedic advised rehydration, gave the Claimant a glass of water and assisted him to bed. The Claimant was advised to contact the Portsmouth Out of Hours GP service, if needed, and to see his GP in the morning. The paramedic left at about 02:15.
Allegations of negligence are made in relation to this first visit. It is alleged that the call taker failed to brief the paramedic fully; and that the paramedic failed to undertake an adequate neurological examination and to arrange the Claimant's admission to hospital for further investigation. These allegations are all denied by the First Defendant, but it is unnecessary to consider them further because it became apparent, given the views of the experts, that they added nothing in terms of causation of damage to those allegations which are admitted. Thus, although not formally abandoned, these disputed allegations have not been pursued at this hearing.
At 03:11 the Claimant did telephone the GP Out of Hours service. A doctor called him back at 03:17 and the Claimant explained that he was having problems breathing and was feeling sick and dizzy; that he had vomited several times and passed out; and that he was unable to drink water or lift his head. The doctor advised him to call 999 with a view to his admission to hospital.
The Claimant called the ambulance service for the second time at 03:20, telling the call taker that he was having problems breathing and was being sick. He also described feeling pins and needles, and dizziness to the point that he felt he was spinning around. The recording of this call reveals that his speech was slurred and that the Claimant was still breathing fast and deeply. The call taker was unsure as to whether he was fully alert.
An ambulance was sent to the Claimant's home, arriving at 03:27. The paramedic had been told only that the Claimant was sick and conscious, and that his breathing was abnormal. The observations he recorded included a respiratory rate of 36, which he considered to be normal. The Claimant's oxygen saturation was 100 per cent, his pulse was 72 and his blood pressure was 130/80. His GCS score was recorded as 15. Before he left, the paramedic recorded the following on the report form:
"Presenting complaint – hyperventilating and vomiting.
History of presenting complaint – similar episode 2 hours ago. Called ambulance - later called OOH ? 999.
Previous medical history – nil
Observations A [Airway] B [Breathing] – hyperventilating – calms down when talking. Has vomited - strained to vomit. Has been to gym - worked out, had sauna, then ate – has vomited his food.
Advised patient re rehydration. Not needed to go to hospital. Advised patient to sip fluids and go to bed."
The First Defendant has always admitted that the failure to take the Claimant to hospital without delay, following this second 999 call, was a breach of duty. There is no dispute that, if he had been taken immediately to hospital, the Claimant would have arrived at about 04:00 and therefore before the first, significant deterioration in his condition, which I now relate.
At about 04:15 the Claimant rang his friend, Ben Farodoye, and left a voicemail message, as follows:
"Ben I can't come into work as I have been told by the paramedics that I have food poisoning. Please pass this message on to my colleagues at work."
Mr Farodoye said in his statement that the Claimant sounded unwell and very tired and that his speech sounded slurred and unclear.
Shortly after the Claimant left this message it is agreed that, at around 04:30, he suffered a serious collapse. At 04:23 the Claimant rang Nikola Choudhury's mobile phone. Aroused from sleep she called him back. The Claimant answered the phone, but she struggled to understand what he was saying because his speech was slurred and he sounded as if he had no control of his tongue. She asked questions, to which he was able to reply "no" or "yes". The Claimant was someone who regularly socialised and enjoyed having a drink with friends and, at the time, Mrs Choudhury thought that he may just have been drinking. She understood from his responses that he wanted them to go to him and Mr and Mrs Choudhury therefore drove over to his flat, which was about a mile away.
On their arrival Nikola Choudhury phoned the Claimant again and he answered her call. She was still unable to understand him and she also heard him being sick. By now it was about 04:35 or 04.40. She asked him to press the entry release button to let them in, but she got no clear response. On pressing the entry button she heard what sounded like loud snoring noises at the other end. After trying unsuccessfully to get in or to get any response from the Claimant, and hearing continued snoring, they both concluded that he had probably fallen asleep after drinking heavily and left. They knew the Claimant to be a snorer because he had previously lived with them for a while.
Nikola Choudhury went back to the block of flats at about 07:00 am, before she went to work, but the Claimant was not answering his phone. When she pressed the entry button she could still hear him snoring. She then had to go to work but, getting no response from him during the morning and feeling worried, both Mr and Mrs Choudhury decided to go back to the flat during their lunch breaks.
After pressing the entry button and still hearing the sound of snoring, Nikola Choudhury gained entry to the building by alerting neighbours. The front door to the Claimant's flat was ajar and it was difficult to push open, because of an obstruction. Pushing harder, she found the Claimant lying on his side on the floor, blocking the way and with his feet facing the door. He was not moving and, although his eyes were open, she assumed that he was unconscious because she could not rouse him or get any response from him. He was still making the same snoring sounds and she could see vomit on the floor next to him. Mr Choudhury joined her and both of them were obviously extremely distressed. She called 999 and the Claimant remained as he was until the ambulance came, making no voluntary movements of any kind and making what she described as "light breaths".
The paramedic arrived at 13:00 and, as he was dealing with the Claimant, Nikola Choudhury noticed that vomit was spread around different parts of the flat. On examination the paramedic recorded that the Claimant's airway was partially compromised, that his breathing was laboured and deep, and that his GCS was down to 8 out of 15 (Eyes 3 out of 4, Verbal Response 1 out of 5, and Motor Response 4 out of 6). The ambulance arrived at 13:13 and the Claimant was taken to hospital, where his arrival in Accident and Emergency was recorded at 13:48.
Events at the Hospital
In A&E the Claimant was assessed initially by a nurse at about 14:00, who noted "Collapse? Cause". At 14:50 the recorded observations included a temperature of 37.5, a respiratory rate of 28, a pulse of 85 and a GCS score of 10/15. His oxygen saturation was 100 per cent and remained at that level throughout the afternoon.
The Claimant was next seen in A&E by Dr Bradbury, whose note is untimed. Neurological examination was limited to ascertaining the size of the Claimant's pupils and noting the absence of meningism. It was decided to intubate him so that he could have a CT brain scan. There was no diagnosis or differential diagnosis at this time.
The CT scan was performed at 15:30 and was reported as showing no abnormality. The report reads:
"No haemorrhage, infarct or space-occupying lesion seen. The ventricular system is within normal limits. Conclusion: No cause for collapse seen. "
It is accepted that the radiologist's report was incorrect. The scan in fact showed abnormalities, including an abnormal high density in the upper part of the basilar artery, consistent with acute thrombosis, and patchy low densities, consistent with non-haemorrhagic infarctions in the cerebellar hemispheres, subsequently confirmed on the MRI performed on 19 March.
Following the scan the Claimant was extubated, at which point he was able to open his eyes and was noted to have an "Excellent cough" and to be able to lift his head off the pillow for three seconds. He was then referred back to Accident and Emergency and reviewed at 17:20, when the doctor noted that the CT scan was normal. His observations remained stable and his GCS score was recorded as 11/15. No diagnosis was noted and a medical opinion was sought.
Dr Brown, Medical Specialist Registrar, attended at 20:00 and noted that the Claimant was snoring, with a GCS of 9/15. He noted possible left-sided weakness, but no detailed neurological examination was recorded. The Registrar made a differential diagnosis of encephalitis, toxin or ischaemic CVA not seen on the initial CT scan. A range of blood tests and a lumbar puncture were requested.
The lumbar puncture was performed at 22:30 and was recorded as revealing clear, colourless cerebrospinal fluid, with an opening pressure of 18.5cm. The Claimant was then noted to be "lying flat – no complications" and was referred to the ITU Registrar.
Overnight, however, the Claimant's condition suddenly deteriorated further. At 02:30 on 17 March his GCS was noted to have dropped to 6/15 and it had then dropped to 3/15 by 04:00. He was admitted to the ITU at 06:57, where he was first seen by Dr Knighton at 10:25 on 17 March. That doctor was also unable to make a diagnosis and ordered further tests. The Claimant was reviewed by Dr Knighton at 14:54, when his eye movements were first noted to be abnormal. At 17:00 Dr Knighton noted that there was still no clear diagnosis and that the Claimant appeared unable to move his limbs at all, even to painful stimuli.
On 18 March Dr Knighton saw the Claimant at 08:20 and considered that he might be suffering from a "pontine locked-in type vascular event." He requested a neurological opinion and at 15:12 the Claimant was examined by consultant neurologist, Dr Halfpenny, who also reviewed the CT scan and correctly regarded it as abnormal. He concluded that the Claimant had suffered an infarct in the left upper cerebellum. He also established that the Claimant was conscious and he considered, correctly, that he was suffering from locked-in syndrome. The Claimant was first given aspirin on 18 March. The MRI scan carried out on 19 March showed "Basilar occlusion with brainstem and cerebellar infarcts."
On 20 March Dr Knighton explained to the Claimant that he had suffered a stroke, caused by the blockage of an artery at the base of his brain. He was transferred to the Stroke Ward on 9 April and underwent rehabilitation, without improvement, until he was transferred to the Phoenix Rehabilitation Centre on 27 July 2010 for multi-disciplinary input. He was eventually discharged home to live with Mr and Mrs Choudhury on 5 April 2011.
The Second Defendant has admitted a number of allegations of breach of duty at the hospital, namely: delay in performing the CT brain scan; incorrectly interpreting the scan as normal, when in fact, in the clinical context, it showed a basilar artery occlusion; consequent delay in providing treatment with aspirin, which should have been given after the CT scan had excluded haemorrhage; and consequent performance of a lumbar puncture to investigate meningitis, which would have been avoided if the basilar artery occlusion had been diagnosed.
The Causation Issue
Helpfully, the parties have agreed a chronology of the events that would have happened in this case but for the negligence of both Defendants, as follows:
(i) The paramedic who arrived at the Claimant's home at 03:27 on 16 March would have taken him to hospital.
(ii) The Claimant would have arrived there at about 04:00 but in any event before 04:30.
(iii) On arrival the Claimant would have been triaged and would have had some basic observations taken.
(iv) At around 04:15 the Claimant's speech would have become slurred, as in fact it did.
(v) He would have had vomiting, as in fact he did.
(vi) At around 04:30 he would have suffered a major collapse and been unresponsive, as in fact he did and was. He would have become incapable of movement and of speech and his eyes would have been fixed and unreactive.
(vii) That major collapse would have prompted the doctors to suspect an intracranial event.
(viii) An out of hours CT scan would have been requested soon after the collapse.
(ix) The Claimant would have needed to be intubated, in order to protect his airways before the CT scan could have been performed.
(x) The CT scan would have been performed by 06:00.
(xi) Radiologically, the signs of a basilar artery occlusion would have been difficult to assess, but in combination with the clinical picture, a diagnosis of suspected basilar artery occlusion would have been made.
(xii) The Claimant would have been treated with aspirin. That treatment would have been started shortly after 06:00.
Originally the Claimant's case was that, if he had been taken to hospital by either the first or the second paramedic, he would have been treated with intravenous thrombolysis. In the course of preparation for trial the evidence established that thrombolysis was not available out of hours at Queen Alexandra Hospital and so would not have been given. That allegation is therefore no longer pursued. By the time of this hearing the Claimant's case was clearly advanced on the basis that anti-thrombotic therapy in the form of aspirin would have been administered, as part of the good quality stroke care that the Claimant would have received. As is now well understood, the role of aspirin in stroke prevention is to inhibit platelet stickiness and thereby to inhibit clot formation or propagation.
The Claimant's pleaded case on causation, based on the opinion of Professor Brown, is as follows:
"29. Had the Claimant been taken to hospital on either of the occasions when a paramedic attended him at home, he would or should have received an adequate neurological examination promptly on arrival in hospital followed by a CT scan within 60 minutes of arrival and then treatment would or should have been commenced. In the case of basilar artery thrombosis, the Basilar Artery International Cooperation Study found that the outcomes in the case of basilar artery thrombosis were similar whichever treatment was given such that even had he only been given aspirin or anticoagulation [heparin], the probability is that he would have avoided reaching the point of suffering from locked-in syndrome and would have been left with no more than some residual disability such as being slightly unsteady on his feet, some residual impairment of fine motor coordination and possibly some slurring of the speech. On the balance of probabilities, he would have been able to walk, care for himself and work.
30. By the time the Claimant actually arrived at hospital, it is unlikely that he would have made a good recovery. However, the deterioration in his condition which occurred while he was in hospital would have been avoided. Further or alternatively, had he not been extubated and had he not been exposed to the lumbar puncture, but still suffered from locked-in syndrome, the probability is that he would have been left with some movement of the fingers or head sufficient for him to be able to operate a communication device. As it is, he is effectively virtually totally paralysed."
The Claimant now accepts that the serious collapse he suffered at 04:30 on 16 March could not have been prevented by either Defendant. Further, he accepts that the basilar artery occlusion that occurred at that time caused irreversible brain damage, resulting in permanent disability. The injury in respect of which he claims damages is therefore the difference between that level of disability and the locked-in syndrome from which he now suffers and which, as is now agreed, developed after his further deterioration on 17 March.
The issue to be determined is essentially this. On the balance of probabilities, if aspirin and good stroke care had been given to this Claimant in hospital between 06:00 on 16 March and 02:30 on 17 March, would he have avoided the further deterioration and locked-in syndrome that occurred? Professor Brown's opinion is that he would. Dr Giallombardo considers it more likely that the outcome would have been the same.
The Cause of the Stroke
Professor Brown originally considered, in his causation report date 7 May 2014, that the cause of the Claimant's basilar artery thrombosis would probably never be known. However, he has since concluded, as he stated in evidence, that the most likely cause of the Claimant's basilar artery symptoms was embolism of thrombus from the vertebral artery.
He considers the evidence to indicate that the course of the Claimant's symptoms and signs was one of step-wise deterioration. The onset of symptoms at around 01:00 am on 16 March was followed by the Claimant's sudden, serious deterioration and collapse by his front door at about 04:30. While he sadly remained in that position, unattended, for just over eight hours the Professor's view, given the descriptions of the Claimant's condition on arrival at hospital, is that his stroke symptoms had not deteriorated over that eight hour period. Further, while in hospital his neurological condition remained stable from about 14:00 until his second, serious deterioration in the early hours of 17 March. At that point, starting at about 02:30 there was a sudden drop in his GCS score from 9 to 3 over a short period, so that by 04:00 he had suffered the catastrophic deterioration which led to his locked-in syndrome.
Professor Brown considers the Claimant's step-wise deterioration, marked by sudden episodes of this kind, to be typical of embolism. He points out that the commonest cause of basilar artery symptoms is embolism of thrombus from the vertebral artery (see Ferbert A, Bruckmann H, Drummen R. Clinical features of proven basilar artery occlusions. Stroke 1990; 21: 1135-1142). In this case, the nature of the step-wise deterioration indicates that the sudden deterioration on 17 March was probably the result of recurrent embolism. In his view, that is the most likely mechanism in the Claimant's case.
The scientific process involved mirrors the Claimant's symptoms. Blockage in the basilar artery reduces the supply of the blood to the cerebellum and brainstem, resulting in infarction. The cerebellum is responsible for the coordination of motor actions, including walking and speaking. The brainstem contains important nerve cells, including those that control breathing, heart rate and conscious level, and centres that control eye movements and are responsible for initiation of vomiting. The reduction in blood supply from occlusion of the basilar artery therefore results in infarction in the territory of the blood vessels supplied by branches of the basilar artery.
The extent of that infarction will depend on the position and extent of the thrombus in the basilar artery, and the extent of collateral blood supply reaching that artery from the other blood vessels. The initial symptoms of basilar artery thrombosis often include dizziness, visual disturbance, slurred speech and vertigo caused by ischaemia in the brainstem. Dilation of the collateral blood vessels trying to get blood to the brain via other pathways often results in headache.
When the Claimant first called 999 at 01:24 he was clearly suffering from symptoms recognised to indicate the onset of the thrombosis. His symptoms when he called 999 for the second time were similar in nature, indicating that there had been no significant change at that stage.
It is also clear on the evidence that a serious and dramatic deterioration in the thrombosis occurred at around 04:30, with resulting ischaemia in the cerebellum and brainstem. The description by Mr and Mrs Choudhury of the Claimant's symptoms, as at that time, indicates that the Claimant had a reduced level of consciousness and was unable to produce any speech. The fact that, through the entry button system, they could hear him producing a snoring sound indicates that he was probably lying in the position where he was subsequently found, suffering weakness in some or all of his limbs and unable to move. The Claimant accepts that this deterioration was sufficient to cause permanent and irreversible brain damage affecting his mobility, motor control and speech.
The experts are agreed that, after this collapse at 04:30, the Claimant's neurological condition then remained stable until the next, serious deterioration in the early hours of 17 March. The Claimant's case, which I accept, is that the abnormal high density seen on the CT scan in the upper part of the basilar artery, at the level of the dorsum sellae, suggests that the basilar artery thrombosis was then at a high level and not blocking all the branches of that artery. This, in my view, would be consistent with the "Excellent cough" noted after the scan, together with the Claimant's recorded ability to lift his head off the pillow for three seconds and his consistent GCS scores.
Tragically, it is likely that the Claimant had a recurrent stroke when a further embolism from the vertebral artery suddenly broke away in the early hours of 17 March and added to the thrombus in the basilar artery, "back-filling" the artery completely and blocking the remaining lower branches. The resulting, extensive infarction transacted the brainstem at the level of the pons, causing the Claimant to develop locked-in syndrome.
Dr Giallombardo initially saw embolism as one of two equally possible mechanisms of injury, the other being partial occlusion of the artery initially, with the thrombus enlarging gradually to full occlusion on 17 March. However, he accepted in the witness box that embolism of clot followed by further embolism on 17 March was consistent with the clinical picture overall and he did not disagree with Professor Brown's analysis. I find on the balance of probabilities that this is, in fact, what occurred. It did not however affect Dr Giallombardo's conclusion that the Claimant's thrombosis would have followed its natural course in any event, and that aspirin would not have prevented the outcome. To that issue I now turn.
Prevention of the Claimant's deterioration and the outcome
Stroke is the third most common cause of death and the most common cause of disability in the UK adult population. The experts agree, however, that basilar artery thrombosis is relatively uncommon, accounting for only 1 per cent of all strokes. Further, as Professor Brown explained, basilar artery thrombosis has a different pathological substrate compared with other types of stroke, as evidenced by its tendency to show step-wise deterioration of the kind that occurred in this Claimant's case. It is a serious condition because of its connection to the brainstem and the serious and sometimes fatal damage that can result. He recognised, at paragraph 7.7 of his causation report, the "high risk of progression" in cases involving thrombosis of the basilar artery.
Given this tendency for step-wise deterioration, the normal approach towards a mild stroke, namely that it will stay a mild stroke and that the patient will not get worse, simply does not apply. The prognosis for patients with basilar artery thrombosis is worse than for those afflicted by other strokes. The authors of the Basilar Artery International Cooperation Study (BASICS) in 2009, upon which Professor Brown places considerable reliance in this case, noted that "Despite recent advances in the treatment of acute stroke, the rate of death or disability associated with BAO [basilar artery occlusion] is almost 80 per cent."
The consensus of the literature considered by both experts in this case is that recurrent stroke is relatively rare. Professor Brown said in cross-examination that, in general, the rate of recurrent stroke within one year is 4 per cent. No literature addresses specifically the incidence of recurrent stroke in cases of basilar artery thrombosis, but it would seem likely, given its characteristics, that it is higher than the incidence in other types of stroke. Both experts are agreed that the further, sudden deterioration suffered by the Claimant in the early hours of 17 March was entirely consistent with what is known of the natural history of this relatively rare condition.
The Claimant's case is therefore that, but for the negligent failure to provide treatment with aspirin as part of good stroke care, from 06:00 onwards on 16 March, the recurrent basilar artery thrombosis starting at about 02:30 on 17 March would have been prevented. The Defendants, although accepting that in general it has been established that the beneficial effects of aspirin outweigh the risks of providing it, submit that there is simply no evidence that, in the circumstances of this Claimant's case, giving him aspirin as part of good stroke care after 06.00 on the 16th would have prevented his deterioration in the early hours of the following morning. The suggestion that it would amounts only to speculation.
Both the experts who gave evidence in this case are highly experienced in the treatment of stroke patients. Professor Brown is rightly acknowledged by the Defendants as an eminent authority on stroke and he is also a highly experienced expert witness. He is Professor of Stroke Medicine at the Institute of Neurology, University College London, and Consultant Neurologist at the National Hospital for Neurology and Neurosurgery (NHNN) at Queen's Square and University College Hospital (UCH). His CV is extensive and impressive. As he explained in evidence, together with his colleagues he has been closely involved in developing a comprehensive service for patients with stroke at these institutions. This work has involved several innovations in service delivery, including the Hyperacute Stroke Clinic at UCH and other Acute Stoke Units at the NHNN. He was a founding member and then President of the British Association of Stroke Physicians and was the first Chairman of the National Stroke Medicine Subspeciality Advisory Committee (2002-2008). As the Royal College of Physicians' representative on the Intercollegiate Working Party for Stroke he was involved in the development of the National Clinical Guidelines for Stroke, in that the College fed into those Guidelines, which were issued in 2008 and remain in place.
Since 2006 Dr Giallombardo has been Consultant Stroke and General Physician at North Hampshire Hospital in Basingstoke. He is also the Principal Investigator in a number of multicentre trials supported by the UK Research Network. He has been a consultant physician in the UK since 1995 and now has special responsibility for stroke, caring almost exclusively for patients referred with stroke or suspected stroke. Unlike Professor Brown, Dr Giallombardo is, on his own admission, an inexperienced expert witness. He frankly admitted that he found the balance of probabilities approach to causation puzzling from the medical perspective and his reports, in part, reflected that. His work has, however, involved him spending considerable time in the Emergency Department assessing and treating stroke patients in the hyper-acute period, and there is no doubt that he has extensive clinical experience.
Both experts agree that there has in general been a vast improvement in stroke management and treatment since the 1990s. Since 2008, as Professor Brown explained, the accepted view has been that stroke patients admitted to Accident and Emergency should be sent immediately to the stroke unit/department at the relevant hospital, to be managed appropriately. There was such a specialist stroke service at Queen Alexandra Hospital in March 2010. Those patients who have received this specialist treatment have been observed to have improved outcomes, when compared with patients for whom there is a delay in assessment by the specialist stroke team and management by general medical services instead. Quite apart from the prescription of appropriate medication in the form of thrombolysis, aspirin or anticoagulant (heparin), much of the benefit has come, in Professor Brown's view, from early recognition of the diagnosis of stroke, appropriate monitoring, the prevention of complications and early interventions to manage deterioration through the correction of dehydration, with early intubation and ventilation of the unconscious patient.
In general terms none of this is controversial. It is Professor Brown's transposing of these generalities to the specifics of this case, and the way in which that has been done to which the Defendants object. It is submitted that, while his opinions have been confidently expressed, they are, on a correct analysis, unsupported by the underlying material in this case; and that he has been prone to overstate the conclusions that can properly be drawn, in particular as to the effects of aspirin. A number of criticisms have been raised of his approach and of the way his views in this case have changed, which I address at this stage. Save for some minor changes made in the witness box, irrelevant to these criticisms, Professor Brown, in his evidence-in-chief, adopted all his reports and letters as representing his analysis and conclusions in this case.
His first report for the Court, dated 25 February 2013, addressed the Claimant's condition and prognosis. It is clear, from paragraphs 7.1 and 8.1, that at that stage he considered the CT scan of 16 March to show not only that there was abnormal density in the basilar artery, but also that the brainstem in the region of the pons was swollen and that the adjacent pontine cisterns were effaced. This led him to conclude that the infarction in the pons, secondary to basilar artery thrombosis and which then resulted in locked-in syndrome, had in fact occurred on 16 March and not in the early hours of the following day.
He maintained this position in his causation report of 7 May 2014, expressing the same opinion (at paragraph 5.1) as to the abnormalities he considered were shown on the scan. It is clear from paragraphs 6.5 and 6.6. that he considered the pontine infarction to have occurred after the second 999 call, at about the time the Claimant collapsed.
At paragraph 8.5, assuming that the Claimant had been taken to hospital after 03:20, as he should have been, his view was that the Claimant's deterioration and collapse would have occurred in hospital at around 04:30. This would have mandated an emergency CT scan which, in the clinical context, would have been diagnostic of basilar artery thrombosis. This, he said, would have led:
"… to the immediate prescription of medication to prevent thrombosis. The usual antithrombotic treatment recommended by neurologists for basilar artery thrombosis, if thrombolysis and thrombus extraction are not available, is anticoagulation with heparin. This is preferred over aspirin in patients with progressive symptoms because heparin has a very rapid action within minutes after administration. ... the heparin would have had an immediate effect on the process of thrombosis halting any progression."
In relation to the Claimant's subsequent deterioration, Professor Brown expressed the following view in addition at paragraph 8.6:
"It is notable that he deteriorated after the lumbar puncture and it is likely, on the balance of probabilities, that at least part of his deterioration was the result of the lumbar puncture lowering the pressure of cerebrospinal fluid. It is therefore likely that he sustained additional, unnecessary brain damage as a result of not being cared for by a specialist stroke service, as a result of not being ventilated or monitored closely while he had impairment of his Glasgow Coma Score and as a result of the unnecessary lumbar puncture. Thus it is likely that Mr Choudhury's outcome would have been better in the event if he had been admitted and diagnosed earlier after the first or second 999 call, irrespective of specific treatments for basilar artery thrombosis. "
He concluded, at paragraph 10, that by arriving at hospital by 04.00 the Claimant would have had the benefit of the diagnosis of stroke, heparin treatment and correction of dehydration. He would have avoided respiratory compromise, the adverse effects of lumbar puncture and being 'locked-in' by his stroke. He considered it likely, on the balance of probabilities that the Claimant would have been far less disabled, requiring some help but able to walk unassisted, with the probability of further improvement with rehabilitation.
It is clear from paragraph 8.11 that his view at this time was that, by the time the Claimant was admitted to hospital at 13:48 on 16 March, it was already too late to avoid locked-in syndrome. He arrived at the following conclusions:
"If he had been treated properly when he eventually arrived in hospital at 13:48 after becoming unresponsive, it is unlikely on the balance of probabilities that he would have made a good recovery. By the time he was eventually taken to hospital, it was too late to prevent the devastating pontine infarction which led to his locked-in syndrome. On the other hand, his outcome would, on the balance of probabilities, have been better if the diagnosis of basilar artery thrombosis had been made, and he had been referred to a specialised stroke service with avoidance of respiratory compromise and had not had the lumbar puncture. Most patients with locked-in syndrome who have survived as long as Mr Choudhury recover some slight movement of the fingers or head, sufficient for them to operate a communication device and I therefore consider it likely, on the balance of probabilities, that he would have recovered at least to this level if he had been properly managed when he eventually arrived in hospital."
A number of criticisms were made of the opinions expressed in these passages, quite apart from Professor Brown's use of the BASICS findings which I will consider later on in this judgment.
First, the Defendants submit that his opinions were expressed on the basis of an interpretation of the CT scan which was incorrect, and which was not supported by the consultant neuroradiologists instructed in this case. Relying on his own interpretation of the scan, Professor Brown proceeded on the basis that the window of opportunity to avoid locked-in syndrome had already closed by the time of the Claimant's actual admission to hospital at 13.48.
They point out however that, by the time of this causation report, Dr Nelson had already reported (December 2013), and had found no evidence of pontine changes on the CT scan. In his evidence Professor Brown made it clear that he would defer to neuroradiological opinion as to the imaging, but he had not at any stage revisited the views expressed in his report to reflect it, or to set out his conclusions having regard to it. Nor did he do other than adopt this report in his evidence-in-chief.
There is some force in this criticism. What the scan showed was very relevant to the Claimant's condition at the time, to the step-wise deterioration described by Professor Brown, and therefore to the issue of causation. I make allowance for the complexity of the case and the usual evolution of expert opinion as a fuller picture of events is obtained, but this is an important factor in the case. It would have been helpful to the court if, with the benefit of further analysis, Professor Brown had considered whether any amendments were required to what were on any view robustly expressed conclusions, in particular as to the probability of avoiding locked-in syndrome by the provision of good stroke care and heparin, even after the serious brain injury he then believed had occurred by 04.30.
When giving evidence, far from contending that the scan showed a "devastating pontine infarction", as he had reported, he sought in cross-examination to rely on the fact that the scan showed that there had been no extensive damage to the brain at 15.30, stating that "…. the infarcts we could see developing were not extensive."
He relied upon this in seeking to resist the Defendants' suggestion that the deterioration suffered at 04.30 and the Claimant's resulting injury were severe, when the conclusions in his report were clearly based on his view that the deterioration at this time had been serious and had led to locked-in syndrome by the time of his admission to hospital.
There was an obvious inconsistency between his evidence at the hearing, that the Claimant was in a stable, neurological condition from 04.30 until his sudden, step-wise deterioration in the early hours of the 17 March, and the description in his report, that just two hours after the Claimant's admission to hospital, the scan showed devastating damage. I accept that, at the time he wrote this report and indeed some of his subsequent reports or letters, he may not have had a clear picture of the Claimant's progress, and that his views had evolved over time, as he explained. It was, however, unfortunate that he did not revisit his report and clarify the position before the hearing, in particular in a complex case where he would be aware that his opinion as to causation was the subject of challenge, and that clarity and consistency would be of particular importance in evaluating his evidence.
The Defendants make further criticisms in this respect, in relation to the views Professor Brown now advances as to the cause of the Claimant's stroke and the imperative of immediate treatment with aspirin, neither of which featured in his causation report. That they are absent from this report is correct, but his views on these matters became perfectly clear during the subsequent joint meetings and reports. These criticisms are, in my view, unfounded.
As to the cause of the stroke, I reject without hesitation the suggestion that embolism has been advanced as the cause, late in the day, to lend support to his reliance on recent research by Professor Rothwell into the effects of aspirin (to which I shall refer later on). Before he set out his detailed conclusions as to the cause, answering the Defendants' questions (23 February 2015), the tendency of basilar artery thrombosis to show step-wise deterioration had already been referred to by Professor Brown at the first joint experts' meeting in October 2014; and the recurrence of stroke was addressed in his supplementary causation report dated 28 January 2015. For the reasons I have already set out above, I accept his analysis as to the probable cause of the Claimant's stroke on the totality of the evidence. Ultimately, Dr Giallombardo did not disagree with his analysis.
In relation to heparin, I accept Professor Brown's evidence that he referred only to heparin, and not aspirin, in his original report because in 2010 neurologists tended to prefer anti-thrombotic medication in the form of heparin for patients with basilar artery thrombosis. However, at the first joint meeting in October 2014, he agreed with Dr Giallombardo that, once haemorrhage had been excluded by the CT scan, either aspirin or heparin could have been given; that either were acceptable alternatives; and that the conclusions in his report were based on treatment with either medication. His position was clear at that stage.
In his witness statement Dr Jarrett, consultant physician at Queen Alexandra Hospital, states that aspirin would have been the main treatment in the Claimant's case. And the 2008 NICE Guidelines recommended aspirin for people suffering acute ischaemic stroke. Professor Brown readily accepted that, for arterial disease, heparin and aspirin are now thought to have similar effects and with similar speeds. There is therefore no difficulty or inconsistency caused by his failure to refer to aspirin specifically in his original report, or with the arguments he now advances as to the importance of aspirin and its likely benefits in this case.
The relevance of the lumbar puncture
As shown by the extracts from his report set out above, it was Professor Brown's clear view at that stage that the lumbar puncture performed at 22.30 was causative, at least in part, of the Claimant's subsequent deterioration and of additional, unnecessary brain damage. He stated, at paragraph 7.8, that lumbar puncture is contraindicated in patients with basilar artery thrombosis "…because of the risk that the reduction in cerebrospinal fluid pressure resulting from the lumbar puncture will cause coning in the presence of stroke."
Dr Giallombardo considers there is no evidence that the lumbar puncture contributed in any way to the final outcome. In cross-examination (it was not addressed in his evidence-in-chief) Professor Brown did not resile from his view as to the relevance of the lumbar puncture, but it is fair to say that he advanced it with less enthusiasm. He described it as "conceivable" that fluid had continued to leak out of the theca after the procedure, lowering the pressure and possibly "sucking down" the already swollen brain, causing a shift in the intracranial contents and compressing the brain stem.
Dr Giallombardo was unfamiliar with this theory and Professor Brown accepted that there was no evidence of this in fact having occurred on any of the imaging. The neuroradiologists agreed that the MRI scan on 19 March showed no evidence of significant posterior fossa swelling or coning. While Professor Brown suggested that this could be explained by the theca having sealed up again by the time of the MRI, he accepted that any contribution to the Claimant's deterioration on 17 March was a possibility rather than a probability. There is, however, no evidence at all in this case of hydrocephalus, or of significant swelling of the cerebellum, or that the basilar artery was compressed by any swelling of the brain stem.
At the joint experts' meeting in October 2014 Professor Brown accepted that the Claimant's clinical progression could simply have been caused by the thrombosis, unrelated to the lumbar puncture. He accepted in his evidence that it was more likely that the Claimant's deterioration was caused by another blood clot and that overall, on the balance of probabilities, there was more evidence that the cause of the deterioration could just as well have been a thrombosis. I find on all the evidence that the lumbar puncture had no effect on the Claimant's condition, or on his deterioration in the early hours of 17 March.
Causation: the competing expert opinions
Essentially, Professor Brown's analysis and opinion is as follows. In assessing its benefits, the giving of aspirin cannot be seen in isolation. It forms an important part of the appropriate and necessary treatment for a patient who has suffered an ischaemic stroke, including basilar artery occlusion. Aspirin will work only in an environment where the patient is stabilised and well-positioned, and where he is properly hydrated and there is no hypoxia. These are all cumulative benefits. For aspirin to work the patient should therefore be in optimum condition, as the Claimant should and would have been if he had been admitted to hospital by 04.00 on 16 March and treated appropriately.
The taking of all these steps in specialist stroke units have, in general terms, resulted in a fall in the stroke mortality rate and in improved outcomes, which are now well understood. Recent research, in particular the findings in BASICS, provides good evidence that, for patients in optimum condition, aspirin is more effective than was previously thought.
In this case, based both on his experience and the BASICS findings and other research he referred to in evidence, it is his opinion that, if the Claimant had been in optimum condition and had been given aspirin from about 06.00 on 16 March, he would not have deteriorated in the early hours of the following day. On the balance of probabilities he would not have suffered a recurrent stroke and would not have developed locked-in syndrome. He would have been left with moderate or moderately severe disability, but his level of disability would have improved with continued rehabilitation and on balance he would have been able to return to work with appropriate aids or support.
Dr Giallombardo agrees that there is now compelling evidence that organised stroke care can, in general, reduce mortality and severe disability. He also accepts that early use of aspirin can, in general, increase a patient's chances of surviving a stroke with better functional outcome. He agrees that this Claimant should have had both aspirin and appropriate stroke care. However, he disagrees that BASICS and the other research referred to in evidence can assist the Claimant in this case. His view, based in particular on two randomised controlled trials in 1997 and his own clinical experience, is that it cannot be said to be more likely than not that, in the particular circumstances of this case, the Claimant would have avoided the deterioration that occurred. There is, in his view, a greater than fifty per cent chance that good stroke care and the early use of aspirin would not have altered the actual outcome in this case.
The Literature
The way in which the various studies referred to emerged in this case is relevant in evaluating these competing expert opinions. None of them directly addresses the specific causation issue arising in this case. As in all cases where statistical and epidemiological evidence is referred to, its significance and its assistance will depend on the nature of that evidence and of the particular facts of the case (Sienkiewicz v Greif [2011] UKSC 10).
In his causation report of May 2014, in stating his opinion as to whether earlier treatment would have been beneficial for the Claimant, Professor Brown referred only to BASICS, a large study published in the Lancet and entitled: "Treatment and outcomes of acute basilar artery occlusion in the Basilar Artery International Cooperation Study (BASICS): a prospective registry study", Wouter J Schonewille and others on behalf of the BASICS study group (The Lancet, neurology, Vol 8 August 2009.) Professor Brown relied heavily upon this study in advancing the contentions in his report, upon which the pleaded case on causation was based, and he has continued to rely upon it in his subsequent reports and joint statements, and in evidence at this hearing.
As its title indicates, BASICS was a "prospective, observational international registry of consecutive patients aged 18 years or older who presented with an acute symptomatic and radiologically confirmed BAO [basilar artery occlusion]" between 1 November 1 2002, and 1 October 2007. The authors referred to the almost 80 per cent rate of death or disability associated with BAO, despite the recent advances in the treatment of acute stroke, as I have noted earlier in this judgment. They also stated that BAO had not been studied in isolation in randomised clinical trials because of its low incidence, noting that "….only about 5 per cent of all patients given thrombolysis for stroke have BAO."
The primary aim of the study was expressed as being "….to obtain a better understanding of outcomes after acute BAO and to study potential differences in treatment response in anticipation of a definitive randomised controlled trial of acute treatment in these patients." This was not therefore a randomised, controlled trial and the authors recognised that, as such, it had "….all the limitations of a non-randomised study" and that "….data collection in a registry is generally not as accurate as it is in a randomised treatment trial." The study compared the efficacy of three different types of treatment, intra-venous thrombolysis (IVT), intra-arterial thrombolysis (IAT) and antithrombotic treatment (heparin or, in most cases, aspirin) relative to each other. It did not compare or purport to compare the efficacy of one or more of these treatments with no treatment at all. There was no "placebo" group.
The results suggested that "… there is a difference in the efficacy of treatment strategies in patients with an acute BAO, depending on the severity of the stroke." Most patients in the study received IAT but, perhaps surprisingly for those involved in the research, the results did not support unequivocal superiority of IAT over IVT. The conclusion was that "….the efficacy of IAT versus IVT in patients with an acute BAO needs to be assessed in a randomised controlled trial."
For the purposes of the study, stroke severity was categorised as "severe", which was defined as "coma, locked-in state, or tetraplegia" or "mild-to-moderate", namely "any deficit that was less than severe." Clinical outcomes were determined in accordance with the modified Rankin Scale (mRS), the scores on that scale being commonly used in the weeks that follow a stroke to measure the degree of disability or dependence of stroke patients. Each score reflects a different outcome, as follows:
0 – No symptoms at all
1 – No significant disability: able to carry out all usual duties and activities despite some symptoms
2 – Slight disability: unable to carry out all previous activities but able to look after own affairs without assistance
3 – Moderate disability: requiring some help, but able to walk without assistance
4 – Moderately severe disability: unable to walk without assistance, and unable to attend to own bodily needs without assistance
5 – Severe disability: bedridden, incontinent and requiring constant nursing care and attention
6 – Patients who do not survive.
There is no dispute that the Claimant is at point 5 on that scale and has remained at that point since March 2010. The debate in this case has been whether, on the balance of probabilities, he would have been at a lower point if treated appropriately and given aspirin from 06.00 on 16 March and, if so, at which point.
It is common ground that the findings of BASICS indicated that the outcomes for patients were similar, whichever treatment was given. Professor Brown expressed the view in his report that, if admitted after the second 999 call (ie as now agreed, at 04.00), the Claimant would at that stage have been in the "mild-to-moderate" category. Dr Giallombardo has agreed with that view since that category, by definition, includes any patient who was not in a coma, locked-in or tetraplegic.
Professor Brown's opinion, in these circumstances was expressed as follows:
"Overall, the outcome of the condition was poor. However, if the patients were treated when they only had mild-to-moderate stroke, then 114 out of 245 patients (47%) were left dead or very disabled (score 4 or greater on the modified Rankin score when measured at one month after admission…The remaining 53% had less degrees of disability, although few made a full recovery….On the other hand, of patients not treated until they had severe deficit, 288/347 (83%) were left dead or very disabled with a Rankin of 4 or more."
The percentage figures referred to were obtained from Figure A in the article, representing outcomes at one month according to the severity of the deficit at the time of treatment, which was reproduced in his report and is as set out below:
His evidence is that the finding shown by this bar chart was that more than half the patients who were started on treatment at a time when they had mild to moderate deficit, as in the case of this Claimant, had a modified Rankin score of 3 or better. Thus he states that 70 per cent of patients did better than mRS 5, whatever treatment was given.
Professor Brown regards these findings as consistent with his views as to the benefits of early assessment and treatment, including treatment with antithrombotic agents halting the spread (or recurrence) of the thrombosis. He considers it likely that the Claimant would have been dehydrated or volume depleted when he arrived in hospital due to vomiting repeatedly, which increases the viscosity of the blood, promoting thrombus formation. Intravenous fluid to correct this, if he had been admitted at 04.00, would also have reduced the risks and improved his outcome.
He acknowledged in his letter of 23 February 2015 (paragraph 3.1.5.2) that the best chance of benefit from aspirin would have been if the Claimant had been started on aspirin before his collapse at 04.30, but he nevertheless considers it likely that the Claimant would have benefitted from aspirin if it had been started after the scan, at about 06.00 as now agreed. On the balance of probabilities he considers that, if the Claimant had been admitted after the second 999 call, promptly diagnosed and treated appropriately, he would have avoided being locked-in and would have been left with an mRS score of at least 3 at one month after onset, 3 being taken by him as the midpoint of the scores of the BASICS patients started on treatment when they had mild-to-moderate stroke.
Since the majority of patients improve with rehabilitation beyond one month after admission, he considers that the Claimant's final condition would have improved further, although he would have remained disabled. Professor Brown then described what, in his view, was the likely level of that disability and what the Claimant would have been able to achieve, which it is unnecessary for me to refer to here, save to emphasise that his views are very much in dispute in this case.
In his report of 27 May 2014, and in subsequent discussions and reports Dr Giallombardo considered that BASICS, as an observational study, did not assist the Claimant. That remains his view. While it showed, as might be expected, that outcomes tended to be better in patients with less severe symptoms at the time of presentation, whatever the treatment, BASICS was not designed to study the efficacy of different forms of treatment as against no treatment at all, or as against delayed treatment. Further, as the authors stated, "The time to treatment in patients treated only with AT [ie aspirin or heparin] was not recorded accurately." There was therefore no reliable information on the timing to treatment for patients who were given aspirin. The findings suggested to him that the various treatments had a relatively minor impact on the natural course of BAO; and there was insufficient evidence to demonstrate the superiority of one treatment over another.
Dr Giallombardo relied, in his report and in evidence, upon the findings of two major, randomised controlled stroke trials carried out in 1997 which, enrolling around 40,000 patients in total, tested the effectiveness of early use of treatment with aspirin versus no aspirin treatment (the placebo group) in cases of acute ischaemic stroke. Designed to provide reliable evidence, for the first time, about the effects of early aspirin treatment in such cases, these large trials were the Chinese Stroke Trial (CAST), a "randomised placebo-controlled trial of early aspirin use in 20,000 patients with acute ischaemic stroke" (Lancet 1997; 349: 1641-49); and the International Stroke Trial (IST), a "randomised trial of aspirin, subcutaneous heparin, both, or neither among 19,435 patients with acute ischaemic stroke" (Lancet 1997;349:1569-81).
Neither of these trials was referred to by Professor Brown in his causation report, and the Defendants criticise his failure even to refer to trials which were clearly relevant and which, it is said, still remain the best available evidence as to the efficacy of aspirin in preventing deterioration after major ischaemic stroke, as measured against no aspirin therapy. Dr Giallombardo considers that they remain the most representative studies of the effect of aspirin and points out that they have been recently endorsed by the Cochrane Collaboration review published in 2014.
It is common ground that the results of the CAST and IST trials showed that, overall, the beneficial effects of aspirin were modest and increased the chances of surviving with a better functional outcome by only a limited extent. In his report Dr Giallombardo, proceeding on the basis that one hundred patients needed to be treated for one of them to benefit (there was shown to be a real reduction of about 10 deaths or recurrent strokes per 1000 patients), considered both trials to show that early use of aspirin prevented death or stroke recurrence by only 1 per cent, when tested against the placebo group.
He increased this Claimant's chances of a better outcome to 10 per cent in his report, on the basis only that aspirin intervention in patients with evolving symptoms and optimal management "…could conceivably be more efficacious." He frankly admitted in the witness box that the 10 per cent figure referred to had no scientific or statistical basis and was effectively no more than "a hunch". However, whatever the relevant percentage chance of a better outcome, he remains of the view that, even if given aspirin soon after the CT scan, the outcome for this Claimant would not have changed.
Both experts have agreed, as recorded in their last joint statement, that the combination of aspirin therapy and good stroke treatment started after 04.30 would have "…improved the chances of the claimant avoiding the deterioration on 17 March." The question for me to determine is whether the Claimant has demonstrated on all the evidence that it is more likely than not that he would have avoided that deterioration. If that were to be my conclusion, they are agreed that, on the balance of probabilities, the Claimant would have had a modified Rankin score of 3 or 4 at one month after onset; and that with continued rehabilitation for up to 12 months his condition would have improved further by at least one point on the scale.
On all the evidence I find that, if the Claimant had not suddenly deteriorated on the 17 March, the stroke that he had already suffered, involving an undoubtedly serious collapse at 04.30, would have left him with a modified Rankin score of 3, even after continued rehabilitation. That, in my judgment, would have been the most likely outcome for this Claimant on the totality of the evidence. There remains a dispute between the experts as to the nature and extent of that improvement, in terms of his employability, but it is not necessary for me to address that here in view of my conclusion on the main causation dispute.
Discussion and Conclusion
Deciding what, if any conclusions can properly be drawn from the studies referred to above in the circumstances of this Claimant's case is no easy task. There is no doubt that basilar artery thrombosis is a rare condition, and that there are therefore only relatively low numbers of patients with that particular condition within the category of ischaemic strokes. In the CAST and IST studies, posterior artery stroke (of which basilar artery thrombosis would form part) accounted for only 1 per cent and 12 per cent, respectively, of patients treated with aspirin.
Since these randomised studies demonstrated that aspirin was of some benefit to stroke patients generally, and the findings led to aspirin being given as routine, studies of aspirin therapy versus placebo could not now be repeated. There has not therefore been, nor can there be any randomised controlled trial showing how patients with basilar artery thrombosis would react. BASICS was an observational study and it is the only observational study undertaken so far for such patients. It was not however concerned with the efficacy of aspirin versus no aspirin.
Further, it is agreed that, in general terms, recurrent stroke is rare. The incidence of recurrent stroke in CAST and IST was about 4 per cent and 2-3 per cent respectively. The particular features of basilar artery thrombosis, in particular the tendency for step-wise deterioration, would suggest that the incidence of recurrent stroke is likely to be higher in such cases and, as I have stated earlier, it is accepted to have a worse prognosis than for other types of stroke.
However, as Sir Robert Francis QC points out, BASICS does not relate the outcomes for basilar artery thrombosis to their causes. Of the 183 patients given aspirin, the thrombosis was caused by embolism in 55 cases and by other factors (eg atherosclerosis or dissection) or by cause unknown in the other 128. We have only the outcomes for patients studied after one month of treatment, with no information as to the cause of the thrombosis, or as to how many or which patients suffered a recurrence. There is therefore no information as to how many patients suffered a single stroke which had a poor outcome, or had step-wise deterioration, or clot propagation with gradual deterioration, or as to the effects of the various treatments broken down in relation to these different circumstances, or even in relation to age, gender or the other factors referred to in the baseline characteristics listed in Table 1 in the study. Of the 55 patients with an embolic cause there is no information as to whether they had had milder symptoms to start with.
The BASICS findings are nevertheless relevant in this case. While it was not a controlled study, I accept that the court should look at all the available evidence which bears on the question to be determined. However, the CAST and IST trials are clearly relevant on this basis in addition. Professor Brown's explanation for failing to refer to those studies at all in his causation report is that he did not consider them to be relevant to the Claimant's case. This was because at the time they were carried out stroke management was generally poor; the number of cases of basilar artery thrombosis included would have been very low; and the incidence of deterioration or recurrent stroke was low.
While I accept that these would constitute reasons for suggesting that these trials provide little or no assistance in this case, they cannot reasonably be regarded as having no relevance. They are the only randomised controlled trials comparing aspirin therapy with a placebo group and they provide information as to the percentage contribution made by aspirin in preventing recurrent stroke in some circumstances over a period of time. As an investigator himself in the IST trial, Professor Brown's failure to refer to these studies, even if only to discount their validity, is even more inexplicable.
Further, the studies were reviewed as recently as 2014 by the Cochrane Collaboration (Oral antiplatelet therapy for acute ischaemic stroke (Review)) and were at that stage, in my view, still being regarded as methodologically sound and as having continuing relevance, the bulk of the data referred to coming from those two studies. As Professor Brown accepted, the Cochrane reviews are widely regarded as the gold standard in the assessment of randomised controlled trials and there is nothing in the review to suggest that these studies are regarded as no longer relevant. Notwithstanding the advances in stroke treatment since these studies were done, Dr Giallombardo considers that, were they to be repeated today, similar results would probably be obtained, so far as the effectiveness of aspirin is concerned.
In circumstances where these studies do not assist the arguments that Professor Brown advances, their omission and his explanation for that omission is unsatisfactory. I do not accept the Defendants' submission that Professor Brown has gone beyond giving an objective expert opinion in this case and has become an advocate for the claim. But I do consider that their omission and his reference only to the BASICS findings as "the best evidence available concerning the effectiveness of aspirin therapy in basilar artery thrombosis" was influenced by the Professor's own, strongly held personal views as to the general potency of aspirin for patients with ischaemic stroke.
That would not, in itself, undermine the validity of his views if they were supported by the underlying data and by other evidence in the case, as Mr Kent QC contends. And Dr Giallombardo was also the subject of criticism in this case.
In opening the case for the Claimant, Mr Kent was critical of the approach adopted by Dr Giallombardo to the interpretation of evidence from the CAST and IST randomised controlled trials, having regard to the necessary civil standard of proof. It is correct that, in his report and in the last joint statement signed on 28 March 2015, Dr Giallombardo's view was that the appropriate statistic to apply for that interpretation was the absolute risk reduction of adverse outcome. That, as he had stated, was about 1 per cent for aspirin. He disagreed with Professor Brown's view that the appropriate statistic to use in this case was the relative risk reduction in the rate of recurrence or worsening of stroke during the Claimant's time in hospital.
This criticism, indicating his unfamiliarity and discomfort with the correct legal test, was justified on the basis of his written opinion, maintained until the start of this trial. However, at the very start of his evidence in chief, Dr Giallombardo frankly and fairly acknowledged what he described as an 'error of judgment' in this respect. Having heard counsel's opening submissions and having considered the matter further, he now accepted that the relative risk reduction was the appropriate statistic to apply in this case.
That concession was properly made and it was consistent with what I found overall to be a careful approach to this case by this expert. As Professor Brown points out, the Claimant's condition did in fact deteriorate in hospital. Referring to the absolute number of stroke patients that needed to be treated with aspirin for one patient to avoid deterioration does not therefore provide the information required to answer the question whether this Claimant would have avoided his current condition if aspirin had been given to him as from 06.00 on 16 March, because most stroke patients do not deteriorate.
Both experts agreed during their evidence that, in the CAST and IST trials, the percentage contribution made by aspirin in preventing recurrent stroke, having regard to the Cochrane review (at page 40), was therefore approximately 23 per cent. There is no evidence as to what that percentage contribution would be in a case where aspirin was given for some twenty hours following earlier basilar artery thrombosis, which had already caused moderate brain damage. However, even if we were to add a small additional percentage, as Dr Giallombardo did, to reflect the benefits of today's more advanced stroke management in such cases, that extra percentage would not be anywhere near 28 per cent.
Dr Giallombardo's view remains that, on the basis of these studies, it could not be said that aspirin would have made a difference. It could not therefore be said, on the balance of probabilities, that this Claimant would have avoided the outcome that in fact occurred. Professor Brown fairly accepted that, on the basis of the results obtained from the CAST and IST studies alone, it could not be said that giving aspirin to patients with basilar artery thrombosis would, on the balance of probabilities, prevent their further deterioration.
In paragraph 6 of his supplemental causation report Professor Brown referred, by way of further support for his views, to an analysis, or re-analysis of randomised trials, recently carried out by Professor Peter Rothwell. These were said to be trials which studied the effect of aspirin versus placebo in patients who had suffered a transient ischaemic attack (TIA) or minor stroke (that is, a stroke with symptoms lasting more than 24 hours but from which a good recovery is expected).
In a subsequently amended passage in Professor Brown's report, this analysis was said to show that although on average, in all stroke patients combined, aspirin resulted in a reduction of recurrent stroke of about 25 per cent, those patients treated in trials excluding major stroke had more than 50 per cent benefit in the reduction of early recurrence of disabling or fatal stroke compared with those treated with placebo. The Professor relies upon this research as providing "good evidence" that, in the modern context of patients managed hyper-acutely in specialist units, with treatment commenced within a few hours of onset of symptoms, aspirin is likely to be far more beneficial than the average benefit reported in the older CAST and IST trials.
In subsequent correspondence Professor Brown also referred to an earlier study in which Professor Rothwell was involved, namely the "Effect of urgent treatment of transient ischaemic attack and minor stroke on early recurrent stroke (EXPRESS study): a prospective population-based sequential comparison" Peter M Rothwell and others (Lancet 2007; 370: 1432-42). This was said to show a much lower rate of recurrent stroke within 90 days for patients with TIA or minor stroke, who were not admitted directly to hospital and who had been started on treatment with aspirin immediately, when compared with those for whom treatment was delayed.
There are, however, a number of difficulties with both the EXPRESS study (which was not a randomised study and contained very few, if any patients with basilar artery thrombosis) and the recent Rothwell research and Professor Brown's reliance upon it.
First, neither the study nor the recent research seems to me to provide assistance in this Claimant's case. It is agreed that the Claimant suffered a major collapse at 04.30, which could not have been prevented, and Professor Brown himself accepted that the best chance of benefit from aspirin would have been if treatment had been started before that time. After 04.30 it is clear that the Claimant could not be said to be suffering symptoms of TIA or minor stroke. None of the patients given aspirin in the study had any major stroke symptoms at the time their treatment was started. I do not therefore see how this research can help in answering the specific causation issue arising on the facts of this case.
Secondly, the recent research relied upon was said to be "data presented at UK Stroke Forum 2014 and personal communication from Peter Rothwell." Only when asked further questions by the Defendants about this data did Professor Brown disclose two slides provided to him by Professor Rothwell, in personal email communications between them following a lecture given by Professor Rothwell at the Forum in December 2014.
These slides are said to show, in graph form, the early effects of aspirin in cases of TIA or minor stroke. However, this research is as yet unpublished. It has not been peer reviewed and it was provided to Professor Brown privately. It is doubtful whether Professor Rothwell understood that it was going to be referred to in court and subjected to forensic examination, or relied upon as support for this Claimant's case on causation. I do not for one moment doubt Professor Rothwell's considerable expertise in the area of stroke prevention treatment and trials, but the Defendants and the court are entitled to examine the underlying data before deciding what weight can be placed on the findings and the expert opinions expressed.
As it is, there is no underlying data available concerning the numbers of patients who were given aspirin or who were in the placebo group. Nor is there any data as to how many patients in the two groups had recurrence of stroke within 12, 24 or 48 hours. Further, as Professor Brown concedes, the proportion of patients in the early stages of basilar artery thrombosis in this trial would be likely to be around 1 per cent or less. It is also unclear which randomised controlled trials Professor Rothwell had analysed. In the circumstances I accept the Defendants' submission that this is not research upon which the court can properly rely, but in any event its particular focus does not seem to me to assist in determining causation in this case.
There is one final, randomised study to which Professor Brown referred, in the course of the expert meetings and in evidence before me, which is said to provide further, recent evidence as to the effectiveness of aspirin in recurrent stroke prevention. This is the CADISS study, "Antiplatelet treatment compared with anticoagulation treatment for cervical artery dissection (CADISS): a randomised trial", The CADISS trial investigators (Lancet, neurology Vol 14 April 2015).
This trial, as is clear from its title, was not concerned with basilar artery thrombosis. In addition, of the 250 patients studied, those with severe symptoms who could not consent were excluded. The presenting signs and symptoms were stroke, TIA and local symptoms (eg headache or neck pain) and the table of baseline characteristics suggests that the patients involved in this study were in a far less serious condition at presentation than this Claimant. In addition, some patients were apparently treated with a combination of antiplatelets, rather than just aspirin. Once again I do not find this study to be of assistance in this case.
In the circumstances I do not consider it necessary or helpful to consider these other studies in any further detail in this judgment. In cross-examination Professor Brown accepted that the study he was really relying upon in this case was BASICS, because it described data which he believed was most relevant to the Claimant's condition. He fairly accepted that, if he were wrong as to the conclusions which could be drawn from BASICS, his arguments in this case were less strong, and that the other studies and statistical evidence did not, on their own, meet the necessary balance of probabilities threshold in answering the causation issue in this case.
His approach to BASICS is straightforward, as set out above (paragraphs 89-93). Looking at the bar chart it appears, at first glance, to be correct to say that the majority of patients in the mild to moderate category had a better outcome than an mRS score of 5 and that, statistically, the Claimant's chances of a better outcome were therefore 70 per cent.
The problem is that, without a control 'no treatment' group, it is simply not possible to assess what proportion of patients in that category might have had a similar outcome to the Claimant in any event, in particular given the particular features that Professor Brown identified as distinguishing basilar artery stroke from other kinds of stroke. It is a rare condition, and it carries a high risk of mortality and morbidity. The incidence of recurrent stroke generally is low, though it may well be higher in the case of basilar artery strokes. What we do know is that in the Claimant's case his further deterioration occurred rapidly, just less than 24 hours after his earlier collapse at 04.30. This was therefore a rare event in a stroke which accounts for less than 1 per cent of strokes overall.
In my judgment BASICS tells us nothing about the extent to which aspirin would be likely to prevent a recurrence of basilar artery stroke after some 20 hours of treatment, in someone who has already suffered a stroke which caused moderate and permanent brain damage. It tells us nothing about whether aspirin would result, for someone in the Claimant's condition after 04.30, in a better outcome than if no treatment were provided. There are too many unknown variables which could affect the end result.
It is important to keep in mind the aim of this observational study, namely to compare the efficacy of different types of treatment, relative to each other. In my view the figures reported do not provide a proper basis for proving, to the requisite civil standard, and comparing like with like, that starting this Claimant on aspirin at 06.00 on 16 March would have prevented his further deterioration from mRS level 3 disability in the early hours of the following day. I accept the Defendants' submissions in this respect.
We know in this case, as I have found, that after his serious deterioration at 04.30 on 16 March, the best and most likely outcome for this Claimant on the evidence was a modified Rankin score of 3, even after rehabilitation. I agree with Sir Robert Francis that, in those circumstances, it is illogical to include those patients who achieved an mRS score of 0, 1 or 2 in the calculation of the percentage chance of a better outcome for this Claimant. The error in doing so is that you are not then comparing like with like, having regard to what the evidence shows to be established in this case, either as undisputed fact or on the balance of probabilities.
As the Defendants point out, if the relevant group for the purposes of the calculation is adjusted to as to include only the percentage number of patients who achieved mRS scores of 3, 4 and 5, (given that the Claimant survived), then 39 out of 107 patients achieved an mRS score of 3 which, expressed in percentage terms, is 36.44 per cent. This demonstrates, in my view, the flawed approach adopted by Professor Brown towards these BASICS figures and the caution that has to be applied in determining what can properly be drawn from them.
There is a further point as to the validity of including those patients who achieved an mRS score of 0 – 2 in calculating the percentage chance of a better outcome, even on the approach adopted by Professor Brown. There was some dispute between the experts in evidence as to where precisely this Claimant would have been placed on the National Institutes of Health Stroke Scale (NIHSS) after his collapse at 04.30. The Scale is a systematic assessment tool that provides a quantitative measure of stroke-related neurologic deficit, now widely used as a clinical assessment tool to evaluate the acuity of stroke patients.
There is insufficient evidence, in my view, to ascribe accurately the relevant numerical score to the Claimant, under each head, and assess the total figure. I do not consider it necessary to do so however. Professor Brown fairly accepted that the category of "mild to moderate" patients in BASICS covered an extremely broad range of disability, given that it effectively covered everyone other than those with coma, locked-in syndrome or tetraplegia. Within that range he accepted that after 04.30 the Claimant would have been at the moderate end of the range.
On the evidence there is the Claimant plainly had a reduced level of consciousness and was unable to produce speech. Although the extent of the weakness in his limbs cannot be assessed accurately, we know that he was lying on the floor unable to move and unable to communicate. In my judgment the Claimant would properly fall to be placed at the upper, more serious end of that mild to moderate range. For that reason in addition, it was illogical to include those patients who achieved an mRS score of 0 -2 in the percentage calculation for this Claimant.
Mr Kent rightly points out that Professor Brown's opinion on causation is not based solely on the BASICS findings and his calculation of the likely effect of aspirin in the Claimant's case. He relies, rather, on his experience and upon the giving of aspirin as part of good stroke management, which this Claimant would have had from the moment he arrived in hospital, and on the cumulative benefits those measures would have provided.
The factors emphasised by Professor Brown in this respect were hydration, the avoidance of hypoxia and good positioning, all of which would have been properly monitored and maintained if he had arrived at hospital by 04.00 on 16 March. There is no evidence that poor positioning on its own played any part in this case and in evidence the experts concentrated on dehydration and hypoxia.
In relation to hydration I accept Professor Brown's opinion that the Claimant was likely to have been dehydrated to some extent by the time he was admitted to hospital at lunchtime. The evidence shows that he had been vomiting repeatedly from the early hours and, after his collapse at 04.30, he had been lying on the floor and not drinking any more water. Dr Giallombardo accepts that dehydration could increase the chances of a negative outcome.
However, there is no evidence that, on his arrival at A&E, the Claimant was significantly dehydrated. Further, the records show that intravenous fluids were prescribed soon after his admission at about 14.00 or 14.50 and, although the time they were actually given after prescription is unclear, there is no evidence that the Claimant was dehydrated either at or after that time.
Dr Giallombardo drew attention to the record of urine output of 700 ml at 14.00, probably on catheterisation, which he regarded as inconsistent with prior dehydration. A further 270 ml of urine was obtained between 14.00 and 17.00. Professor Brown contends that, in assessing the level of the Claimant's dehydration, no reliance can be placed on a single urine output reading of 700 ml; and that the absence of clinical signs of dehydration can be explained by the fact that external signs, such as skin changes, do not show until later on.
There is, however, no evidence of any abnormal blood test results and therefore no evidence that his blood viscosity had been affected, such as could increase the risk of clots. And as Dr Giallombardo observed, many people sleep through the night for a long period without any fluid intake and do not become dehydrated, or at any rate not dangerously so. In my view therefore there is no evidence in this case that the level of dehydration that existed before the Claimant's arrival at hospital was sufficient to cause any adverse effect, or that it did in fact have any such effect.
Nor is there any evidence that the Claimant was hypoxic on admission. The records show that oxygen saturation was and remained at 100 per cent from 14.50 to 17.30 and, notwithstanding the note made by the paramedic that the Claimant's airway was partially compromised, he took measurements of SPO2 at 99 per cent at 13.30 and 13.40 after oxygen was given at 13.00. There was no evidence of a rise in his CO2 levels when the arterial blood gases were measured on admission, which Dr Giallombardo said you would expect to see if there had been any significant drop in oxygen levels. Nor was there any evidence of respiratory failure due to weakness in the respiratory muscles.
Professor Brown points out that the Claimant was heard to be snoring earlier on and I accept that snoring can indicate a compromised airway, in particular in someone with a depressed level of consciousness. However, the experts are agreed in this case that the Claimant remained in a stable neurological condition from the time of his collapse at 04.30 until his deterioration in the early hours of 17 March, which indicates in my view that he suffered no significant hypoxia or hypoxic brain damage during the period he lay unattended at home.
For all these reasons, having considered all the evidence and counsels' submissions with care, I have concluded that the Claimant has not demonstrated, on the balance of probabilities, that if aspirin and good stroke care had been provided to him in hospital, between 06:00 on 16 March and 02:30 on 17 March, he would have avoided the further catastrophic deterioration and locked-in syndrome that occurred.
This is, as I recognised at the outset, a tragic case. The Claimant suffered a rare form of stroke, which is acknowledged to be associated with a high rate of death or serious disability. He sustained significant brain damage in the early hours of 16 March. In the context of admitted breaches of duty by both Defendants he then suffered a recurrence in the early hours of the following day while he was in hospital. Locked-in syndrome was, however, the outcome for a large number of those patients in the BASICS mild to moderate category, even though they had the benefit of antithrombotic therapy and good stroke management. On all the evidence I found the opinion of Dr Giallombardo in this case to be the more persuasive, based as it was on his extensive clinical experience of the management of acute stroke patients. I therefore find in favour of the Defendants on the issue of causation.
Accordingly I now invite further submissions from the parties as to the appropriate order and directions required in this case. |
JUDGE SEYMOUR: The claimant in this action, Cirencester Friendly Society Limited carries on business as an insurer. It specialises in providing income protection insurance against illness and accidental injury to its members. The defendant, Mr Christopher Parkin, applied on 9 March 2007 to become a member of the claimant. The significance of becoming a member of the claimant is that one has to become a member, because it is a mutual society, in order to participate in the benefits which the claimant provides.
The consequence of the application of the defendant to the claimant to become a member and be entitled to benefits is that on 21 May 2007 the claimant offered to accept the defendant's application, subject to some qualifications which are presently immaterial. What is material is that, in making his application to become a member of the claimant, the defendant answered a number of questions on the application form which are material for present purposes. There was a question, "Do you have any symptoms for which you might seek medical attention in the future?" to which Mr Parkin answered, "No". There was a question, "Have you consulted or received any advice or treatment from a health practitioner in the last five years?" and Mr Parkin answered that by reference to indigestion, which, for the purposes of this judgment, I need not elaborate on further. There was a question on mental health:
"Have you EVER had (a) depression, anxiety, stress, tension, insomnia, mental illness, anger management, nervous breakdown or counselling? (b) any debility, post viral/chronic fatigue or ME (Myalgic Encephalopathy)?"
Mr Parkin answered no to those questions. Finally, so far as is material for present purposes, Mr Parkin was invited to answer these questions:
"Have you EVER (b) been advised by any other doctor, practitioner, counsellor, chiropractor, osteopath, physiotherapist, acupuncturist, herbalist etc, on your health or wellbeing? (c) had any other illness or injury or condition requiring investigation or hospital treatment not already referred to in any other question? (d) had any diseases, disorders or disabilities in the past that are not already disclosed in any other question? (e) used drugs other than for prescribed purposes?"
Mr Parkin answered "No" to all of these questions. The truth of the matter is that, had he answered those questions correctly, Mr Parkin would have disclosed that he had had a number of panic attacks, that he had consulted his doctor in relation to chest pains, and he would have disclosed that he had been a habitual user of cannabis. Had he answered these questions correctly, the application which the claimant accepted on about 21 May 2007 would have been rejected.
However, the claimant having been misled, it permitted Mr Parkin to become a member of the claimant on 1 July 2007. He was issued with a certificate of membership and an income protection insurance contract pursuant to the rules of the claimant. It is, in the circumstances, perhaps not altogether surprising, certainly to those with a cynical cast of mind, that, having become a member of the claimant on about 1 July 2007, on 31 August 2007 Mr Parkin made a claim under the insurance which the claimant provided, contending that he suffered from Myalgic Encephalopathy and was unable to perform his job from 29 August 2007.
That claim was rejected by the claimant on 6 December 2007, but on about 2 January 2008 Mr Parkin complained to the Financial Ombudsman Service that the claimant had wrongly rejected his claim for income protection and had cancelled the contract from the start. The role of the Financial Ombudsman Service is statutory. There is a statutory disputes resolution procedure established by section 225 of the Financial Services and Markets Act, 2000. Having gone through the Ombudsman Service process, on 10 September 2010 a lady called Melissa Collett, who was the, or an, Ombudsman in the Financial Ombudsman Service, made a decision upholding Mr Parkin's complaint. The decision is plainly based upon fraudulent assertions which had been made by Mr Parkin in the course of the consideration by the Ombudsman of his particular circumstances, the frauds in particular being that he suffered from Myalgic Encephalopathy, which he did not, that he was unable to work, which he was not, and that he had not dishonestly, but, as it were, inadvertently, failed to disclose his previous cannabis use.
What happened thereafter was that the claimant accepted, at least initially, the decision of Ms Collett , and consequently on 22 July 2011 the claimant paid Mr Parkin an amount of £19,096.84, including interest, in respect of the claim relating to the period from 29 August 2007 to 20 March 2008. Mr Parkin then decided that he was going to make another claim, or rather he was going to claim in respect of another period, that is to say beginning on 21 March 2008. In respect of that period, he alleged that he was now suffering from chronic fatigue syndrome. That claim was again rejected by the claimant, and again there was a complaint to the Financial Ombudsman Service. Again the Financial Ombudsman Service, in the person of a lady called Lindsey Wolosky, was deluded by the frauds of Mr Parkin, so that on 25 July 2012 she was persuaded to uphold the complaint of Mr Parkin. However, on that occasion the claimant did not accept the decision and did not make any payment. Instead this action was commenced in 2013, following investigations as to the circumstances of Mr Parkin.
This action has had a somewhat unusual history since being commenced on 20 March 2013. Basically, Mr Parkin has participated only to a limited extent, and he certainly has not participated in any of the parts of the litigation process which would obviously have been adverse to him. In particular, he has failed to give proper disclosure and he has failed to attend for a medical examination by a psychiatrist. As a result of that failure, Mr Parkin's defence and counterclaim in this action has been struck out. An unless order, that is to say an order providing that it would be struck out unless he attended for a medical examination by Dr Holden, was made on 23 May 2014.
Mr Parkin has not appeared or been represented today, which is the trial of this action. Notwithstanding that the defence and counterclaim has been struck out, there has to be a trial because of the nature of the relief which is being sought on behalf of the claimant. It is right to say that in the course of pursuing claims against the claimant Mr Parkin has been guilty of a number of fraudulent representations. There have been fraudulent representations in the claim form in which he asserted what his condition was and that he was incapacitated from working. Moreover, however, on 11 January 2011, Ms Caroline Roper, the health claims consultant instructed by the claimant, visited Mr Parkin at, I think, his parent's address, and, in response to her inquiries, Mr Parkin basically told her a load of lies. He said that he was separated from his wife, that his wife lived in Cyprus, that he lived with his parents, that his condition had deteriorated in terms of physical weakness and depleted energy and he gave an account of his daily activities which essentially meant that he was incapable of performing any worthwhile tasks. On 15 April 2011, Dr AH Lister, consultant physician in occupational medicine instructed by the claimant, visited Mr Parkin at his parent's home. Mr Parkin misled Dr Lister in a similar fashion to that in which he had misled Ms Roper as to his circumstances.
Nemesis overtook from Mr Parkin most dramatically because, like so many people nowadays, in particular those who seem minded to seek to perpetrate frauds, he seemed incapable of keeping off the Internet and sharing the true nature of his activities through social media. So it was that it has transpired that, far from being incapable of working and suffering from any such condition as he has described, he is actually an aficionado of a type of sports supercar called "Noble" and seems to have spent the greater part of the last 10 or 12 years refurbishing a Noble sports car and driving it, sometimes racing it, principally in Cyprus. Mr Parkin seems to live in Cyprus, or at least lived in Cyprus certainly until 2012, with, and not separately from, his wife and seems to have continued to use cannabis.
In those circumstances, all of these facts being abundantly demonstrated by evidence which has been put before me in the form of witness statements, documents which have been obtained from the Internet and which have been downloaded and printed and, indeed, in some YouTube contributions showing the Noble sports car and its use, I am satisfied that it is appropriate for me to rectify the injustices which have been perpetrated by the misleading of the Ombudsman, resulting in the awards which I have mentioned on 10 September 2010 and 25 July 2012, by making these orders, which I do.
I set aside the award made by the Financial Ombudsman Service on 10 September 2010 and I declare that Mr Parkin obtained the award by the Financial Ombudsman Service on 10 September 2010 by fraud and, as a consequence, that award is, and was, unenforceable. I set aside the award made by the Financial Ombudsman Service on 25 July 2012 and I declare that the defendant, Mr Parkin, obtained that award by fraud and that, as a consequence, that award is unenforceable.
I make a declaration that the income protection contract with the claimant, which I have mentioned was obtained by the defendant's fraudulent misrepresentation, and that the claimant was entitled to avoid the contract ab initio by its solicitors' letter of 29 January 2013, which it did. I declare that Mr Parkin has made reckless and fraudulent statements or declarations to the claimant in connection with his application for membership and/or his claims for benefits under the contract from 29 August 2007 until 28 February 2013, and continuing, in breach of the rules of the claimant, and that the claimant is entitled to avoid the contract between the parties ab initio and/or to expel the defendant from its membership as an alternative to the declaration which I have already granted that the income protection contract is void ab initio.
I order repayment of the sum of £19,096.84 which I have already mentioned was paid by the claimant to Mr Parkin. |
JUDGE COLLENDER QC
INTRODUCTION
This is a claim for damages for personal injuries and consequential loss arising from the performance of a medical diagnostic procedure, an angiogram, upon the Claimant, Mrs Connolly, on 19 June 2009 at the Mayday University Hospital, in Croydon.
The Defendant is the National Health Service Trust responsible for the medical and surgical services at the hospital. It is agreed that the Defendant is vicariously liable for the acts and omissions of its staff in the course of their NHS employment.
Mrs Connolly asserts that before the procedure was carried out the staff of the hospital negligently failed properly to obtain her consent for its performance, that during the procedure, the staff failed to halt the procedure upon her requiring it to be stopped and that in consequence, its continued performance amounted to a battery.
Breach of duty, causation, and quantum, are all in issue.
THE FACTS
I will set out the facts that are not, or I consider, on the evidence before me, cannot sensibly be disputed.
Mrs Connolly was born on 21 July 1956 so, at the time of the procedure, was 52 and is now 59.
Mrs Connolly's medical history shows that she has for a long time suffered from a range of medical conditions including heart burn, indigestion, Myalgic Encephalomyelitis (ME), and irritable bowel syndrome. In the past she has had episodes of depression, has complained of panic attacks and has for long been anxious about her health. She has, in common with many, exhibited a dislike of medical procedures.
On 14 April 2009, Mr Connolly complained to her GP of symptoms that were consistent with, or suggestive of, angina pectoris. As a consequence, she was referred to the hospital where she attended for investigation on 28 April 2009. Following that consultation, Dr Sreekumar Sulfi of the hospital staff wrote to her GP:
"- chest pain history - considered to be suggestive of angina … Occurred on exercise, relieved by rest ... Risk factors for heart disease- patient stop smoking started 1970 stopped 2000 smoked on average 20 per day no history of strokes ... Examination heart sounds normal Apex beat, JVP normal. Carotid pulse was a normal. The following heart murmurs were present: ESM Grade: 3 Respiratory system: normal. Investigations- ECG. Clinical diagnosis of possible angina. Patient referred for echocardiogram … Typical chest pain, ex smoker, systolic murmur at the base of the heart. Echo and ETT arranged as urgent."
An echocardiogram was performed on Mrs Connolly on 25 May 2009, the results of which were normal. On 3 June 2009, Mrs Connolly performed an exercise test following which Dr Goulielmos of the hospital recommended that an angiogram be performed on Mrs Connolly.
I should describe my understanding of certain terms material to this case. Angiography is a medical imaging technique used to visualise the inside of blood vessels done by injecting a radio-opaque contrast agent into the blood vessel via a catheter introduced into a patient's arterial system with the assistance of guide wires and imaging the vessels so injected using X-ray techniques. The film or image of the blood vessels is called an angiogram and that term is commonly used to encompass the whole procedure. Angioplasty is a procedure in which initially the same techniques are used as for the production of an angiogram but after insertion of a catheter into a patient's arterial system various other items may also be introduced into the arterial system via the catheter, namely guide balloons and stents. A balloon may be used to open a narrowed or blocked artery. Most modern angioplasty procedures also involve inserting a stent, i.e. a short wire-mesh tube, into the artery during the procedure. The stent is left in place permanently to allow blood to flow more freely.
Dr Goulielmos provided Mrs Connolly with a consent form preparatory to performance of an angiogram on her. In addition, Mrs Connolly was sent an information sheet that explained the procedure in detail, and described risks involved with the procedure.
In particular, the information sheet stated that:
"… As all blood vessels are connected to the heart, gently passing the catheters through the arteries and veins carries them painlessly into the heart … In skilled and experienced hands problems are uncommon. Nevertheless, there is a small risk that a badly narrowed artery will block during the test. This can cause a myocardial infarction (heart attack) which can have serious consequences. This is more a risk of the disease rather than the technique …"
Mrs Connolly duly signed the consent form and, on 19 June 2009, attended the hospital for the procedure to be performed in what is called a catheter laboratory. The laboratory was equipped with an operating type bed or table, an X-ray machine, and equipment to monitor the patient's vital signs. Medical staff in the laboratory included the Dr Mechery, the operator, Mr Griffiths, a senior cardiac physiologist, who attended to monitor Mrs Connolly's vital signs from a glass screened off area to protect him from the X-rays, and Ms Shadbolt, a nurse.
I will give a little more detail of the procedure. Under local anaesthetic, either via the radial or the femoral artery, the operator introduces a catheter into a patient's arterial system. The radial artery is smaller than the femoral artery. Different sizes of catheter can be used in these vessels. Relevant to this case are French catheters size 5 and 6. The catheter is passed up the artery to the aorta and the coronary artery into which an opaque contrast dye is injected to enable good views of the arteries and vessels of the heart. These can be viewed in real time by means of the X-ray machine.
The timing and sequence of events in the course of Mrs Connolly's angiogram was not fully recorded as the equipment used does not automatically record what is visible during the procedure. However, the operator may record sequences of moving pictures of interest, in the course of the procedure and on a CD of Mrs Connolly's angiogram, 48 sequences of moving pictures showing the procedure at different times are recorded. I have viewed those sequences in the course of the trial.
In Mrs Connolly's case the procedure commenced at about 11.00 a.m. when a local anaesthetic was given to Mrs Connolly and an incision was made in her right arm to permit access for a catheter via her radial artery. Soon after the insertion of the catheter Mrs Connolly began to suffer from spasm in her right arm and pain, so the catheter was withdrawn. Another attempt to perform the angiogram via the radial approach was unsuccessful and therefore some minutes later, Dr Mechery abandoned that approach and decided to attempt access via the femoral artery. Mrs Connolly was given a local anaesthetic in her leg and at about 11.30 a.m. a catheter was inserted via the femoral artery.
During the procedure, Mr Griffiths monitored Mrs Connolly's blood pressure and ECG record. At the commencement of the procedure the ECG record was calibrated to zero at 10.55 a.m. and a baseline ECG was undertaken at 11.05 a.m. The ECG was continuously monitored by Mr Griffiths but it was not continuously recorded.
The prescription record shows dispensation of 3 mg of morphine and 1.25 mg of diazepam at 11.20 a.m. It shows that between 11.20 a.m. and 11.50 a.m. a further 3 mg of morphine and 2.25 mg of diazepam was dispensed.
In the course of the procedure Mrs Connolly's complained of pain in her right arm and of severe pain across her back, chest and jaw. It is agreed that she complained of pain in the right arm as soon as the spasm developed in her right arm; when she first complained of the other symptoms of pain is a central issue in this case.
At an early stage in the course of the procedure Dr Mechery saw from images obtained of Mrs Connolly's heart that her left descending artery, known in the medical profession as the "LAD" was occluded. This is a serious and potentially life threatening condition as that artery serves about 40% of the muscle of the heart. The detection of that condition turned the procedure being performed on Mrs Connolly from an angiogram to an angioplasty.
In Mrs Connolly's case the identified occlusion was cleared by insertion of a balloon and then two stents being inserted into the arterial system of Mrs Connolly's heart, the stents being employed at about 12.30 p.m. when it first became visible on X-ray that there had been a dissection of the left main stem artery. Whether that occurred shortly after the angiogram procedure was begun via the radial route or only after the femoral route was begun is another important issue in this action.
At some time after Dr Mechery determined that the LAD was occluded he called for the attendance of Dr Beatt, the supervising cardiologist who probably arrived at or about the time when the femoral catheter was inserted.
In consequence of the dissection, on 19 June 2009, Mrs Connolly was transferred to Kings' College Hospital. On 29 June 2009, at that hospital two further stents were inserted into Mrs Connolly's arterial system. She was discharged from King's College Hospital on 6 July 2009.
THE ISSUES IN THE CASE
It is Mrs Connolly's case that, firstly, she did not provide a valid consent for the angiogram as she was provided with misleading information before the commencement of the angiogram. Secondly, it is her case that she withdrew such consent as she had given before access via the femoral route was undertaken and it was only after this time that she sustained a dissection of the LAD.
The Defendant dispute that overall, misleading information was given to Mrs Connolly before she gave her consent to the performance of the angiogram. Even if it was, they deny that this vitiated her consent. They do not admit that her consent was withdrawn in the course of the procedure.
The Defendant asserts that, at the material time, Mrs Connolly did not have capacity to withdraw consent and, therefore, any apparent withdrawal of consent was not valid. Mrs Connolly ripostes that at the time that she withdrew her consent she was fully conscious and aware of events such that she could withdraw her consent as, in particular, the medication that she had received would not have been sufficient to have affected her capacity. The Defendant also asserts that an event that threatened Mrs Connolly's life occurred before withdrawal of her consent such that the staff of the hospital were entitled to ignore any suggestion from her that she wished them to halt the procedure.
Relevant to the issue of liability, rulings are sought from the court on the following questions.
(i) Before she gave her consent for the angiogram procedure, was Mrs Connolly provided with sufficient and accurate information so that her consent was effective, or was it vitiated by inadequate or misleading information?
(ii) When did dissection of the LAD occur – in particular, was it before or after the femoral approach was undertaken?
(iii) When in the sequence of events did Mrs Connolly suffer from the pain from which she complained in her right arm, chest, neck and back, which she described as excruciating?
(iv) Did Mrs Connolly withdraw her consent to the continuance of the procedure before access was attempted via the femoral route?
(v) Did Mrs Connolly lack capacity to withdraw her consent due to the effects of medication given to her and if so, what is the legal effect of that circumstance?
(vi) Did an event that threatened Mrs Connolly's life occur before any withdrawal of her consent, and if it did, what was the legal effect of that happening?
(vii) On the premise that Mrs Connolly was given insufficient or misleading information before she consented to performance of the procedure, would she have refused an angiogram had she not been given that insufficient or misleading information?
(viii) On the premise that Mrs Connolly withdrew her consent to the continuance of the angiogram procedure after the radial approach was abandoned, would Mrs Connolly have consented to the continuation of the procedure had she been asked?
(ix) Had the hospital staff halted the procedure when consent was withdrawn, would the outcome have been any different?
THE LAW
The test to be applied in respect of breach of duty in respect of clinical negligence is well known. It was set out in a jury direction by McNair J in Bolam v Friern Hospital Management Committee [1957] 1 WLR 583 as follows:
"I myself would prefer to put it this way, that [a medical practitioner] is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of medical men skilled in that particular art. ... Putting it the other way round, a man is not negligent, if he is acting in accordance with such a practice, merely because there is a body of opinion who would take a contrary view."
In his speech in Bolitho v City and Hackney Health Authority [1998] A C 232 Lord Browne-Wilkinson commented on the Bolam test as follows at 241F-242B:
"in my view, the court is not bound to hold that a defendant doctor escapes liability for negligent treatment or diagnosis just because he leads evidence from a number of medical experts who are genuinely of opinion that the defendant's treatment or diagnosis accorded with sound medical practice. In the Bolam case itself, McNair J. stated [1957] 1 W.L.R. 583, 587, that the defendant had to have acted in accordance with the practice accepted as proper by a "responsible body of medical men." Later, at p. 588, he referred to "a standard of practice recognised as proper by a competent reasonable body of opinion." Again, in the passage which I have cited from Maynard's case, Lord Scarman refers to a "respectable" body of professional opinion. The use of these adjectives -responsible, reasonable and respectable--all show that the court has to be satisfied that the exponents of the body of opinion relied upon can demonstrate that such opinion has a logical basis. In particular in cases involving, as they so often do, the weighing of risks against benefits, the judge before accepting a body of opinion as being responsible, reasonable or respectable, will need to be satisfied that, in forming their views, the experts have directed their minds to the question of comparative risks and benefits and have reached a defensible conclusion on the matter."
At 243 A-D after reference to authorities, he said:
"These decisions demonstrate that in cases of diagnosis and treatment there are cases where, despite a body of professional opinion sanctioning the defendant's conduct, the defendant can properly be held liable for negligence (I am not here considering questions of disclosure of risk). In my judgment that is because, in some cases, it cannot be demonstrated to the judge's satisfaction that the body of opinion relied upon is reasonable or responsible. In the vast majority of cases the fact that distinguished experts in the field are of a particular opinion will demonstrate the reasonableness of that opinion. In particular, where there are questions of assessment of the relative risks and benefits of adopting a particular medical practice, a reasonable view necessarily presupposes that the relative risks and benefits have been weighed by the experts in forming their opinions. But if, in a rare case, it can be demonstrated that the professional opinion is not capable of withstanding logical analysis, the judge is entitled to hold that the body of opinion is not reasonable or responsible.
I emphasise that in my view it will very seldom be right for a judge to reach the conclusion that views genuinely held by a competent medical expert are unreasonable. The assessment of medical risks and benefits is a matter of clinical judgment which a judge would not normally be able to make without expert evidence. As the quotation from Lord Scarman makes clear, it would be wrong to allow such assessment to deteriorate into seeking to persuade the judge to prefer one of two views both of which are capable of being logically supported. It is only where a judge can be satisfied that the body of expert opinion cannot be logically supported at all that such opinion will not provide the bench mark by reference to which the defendant's conduct falls to be assessed."
A patient is entitled to the provision of sufficient information to permit an informed choice as to whether to consent to a procedure. A failure to have provided sufficient information gives rise to a cause of action in negligence. In Sidaway v Board of Governors of the Bethlehem Royal Hospital [1985] 1 AC 871, Lord Bridge said at 900:
"… a decision what degree of disclosure of risks is best calculated to assist a particular patient to make a rational choice as to whether or not to undergo a particular treatment must primarily be a matter of clinical judgment. It would follow from this that the issue whether non-disclosure in a particular case should be condemned as a breach of the doctor's duty of care is an issue to be decided primarily on the basis of expert medical evidence, applying the Bolam test …
But I do not see that this approach involves the necessity "to hand over to the medical profession the entire question of the scope of the duty of disclosure, including the question whether there has been a breach of that duty." Of course, if there is a conflict of evidence as to whether a responsible body of medical opinion approves of non-disclosure in a particular case, the judge will have to resolve that conflict. But even in a case where, as here, no expert witness in the relevant medical field condemns the non-disclosure as being in conflict with accepted and responsible medical practice, I am of opinion that the judge might in certain circumstances come to the conclusion that disclosure of a particular risk was so obviously necessary to an informed choice on the part of the patient that no reasonably prudent medical man would fail to make it. The kind of case I have in mind would be an operation involving a substantial risk of grave adverse consequences, as, for example, the ten per cent. risk of a stroke from the operation which was the subject of the Canadian case of Reibl v. Hughes, 114 D.L.R. (3d) 1. In such a case, in the absence of some cogent clinical reason why the patient should not be informed, a doctor, recognising and respecting his patient's right of decision, could hardly fail to appreciate the necessity for an appropriate warning."
Implicit within the scope of the duty to provide sufficient information to permit a patient to make a proper informed choice is the obligation to provide accurate information. The giving of inaccurate or misleading information to a patient may vitiate their consent and amount to negligence that gives rise to a cause of action if causation of damage is established. However, English law has avoided adopting the American doctrine of informed consent. (See Lord Diplock in Sidaway [Supra] at 894.)
In In Re T (Adult: Refusal of Treatment) [1993] Fam 95 Lord Donaldson said at 114:
"… On the other hand, misinforming a patient, whether or not innocently, and the withholding of information which is expressly or impliedly sought by the patient may well vitiate either a consent or a refusal …"
When providing information, a reasonable effort should be made to communicate the information to the patient so that the patient can understand what is being stated. In Smith v Tunbridge Wells Health Authority [1994] 5 Med LR 334 QBD at 339 Morland J said:
"When recommending a particular type of surgery or treatment, the doctor, when warning of the risk, must take reasonable care to ensure that his explanation of the risk is intelligible to his particular patient. The doctor should use language, simple but not misleading, which the doctor perceives from what knowledge and acquaintanceship that he may have of the patient (which may be slight), will be understood by the patient so that the patient can make an informed decision as to whether or not to consent to the recommended surgery or treatment"
NHS guidance on consent is set out in a "Reference Guide to Consent for Examination or Treatment". At 5 and 6 it states:
"4. To give valid consent the patient needs to understand in broad terms the nature and purpose of the procedure. Any misrepresentation of these elements will invalidate consent …
5.3 In considering what information to provide, the health profession should try to ensure that the patient is able to make a balanced judgment on whether to give or withhold consent"
An important recent decision upon the nature of the duty of care owed by members of the medical profession to patients in relation to advice and information given to patients before their consent is sought to the performance of an operation is the unanimous decision of the Supreme Court in Montgomery v Lanarkshire Health Board [2015] UKSC 11.
The judgment of the Court was given by Lords Kerr and Reed with which the five other Justices sitting on the appeal agreed. In the judgment the decision of the Court of Appeal in Pearce v United Bristol Healthcare NHS Trust [1999] PIQR P53 and the dissenting opinion of Lord Scarman in Sidaway v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital [Supra] were approved.
The Court said at para. 86:
"... because the extent to which a doctor may be inclined to discuss risks with a patient is not determined by medical learning or experience, the application of the Bolam test to this question is liable to result in the sanctioning of differences in practice which are attributable not to divergent schools of thought in medical science, but merely to divergent attitudes among doctors as to the degree of respect owed to their patients."
The principles to be followed in determining the duty of care to be applied in considering whether or not a medical practitioner has fulfilled their duty of care when informing a patient in respect of a medical procedure or operation to be performed on that patient so that they can decide whether or not to consent to that procedure or operation were summarised at para. 87 as follows:
"An adult person of sound mind is entitled to decide which, if any, of the available forms of treatment to undergo, and her consent must be obtained before treatment interfering with her bodily integrity is undertaken. The doctor is therefore under a duty to take reasonable care to ensure that the patient is aware of any material risks involved in any recommended treatment, and of any reasonable alternative or variant treatments. The test of materiality is whether, in the circumstances of the particular case, a reasonable person in the patient's position would be likely to attach significance to the risk, or the doctor is or should reasonably be aware that the particular patient would be likely to attach significance to it."
The Court noted the need to consider the full facts and circumstances of the individual patient in each case, stating at para. 89:
"... the assessment of whether a risk is material cannot be reduced to percentages. The significance of a given risk is likely to reflect a variety of factors besides its magnitude: for example, the nature of the risk, the effect which its occurrence would have upon the life of the patient, the importance to the patient of the benefits sought to be achieved by the treatment, the alternatives available, and the risks involved in those alternatives. The assessment is therefore fact-sensitive, and sensitive also to the characteristics of the patient."
A patient has the right not to consent to a medical procedure or to withdraw consent should it have been given. In Sidaway v Board of Gov of Bethlem Royal Hospital & Maudsley Hospital [Supra] Lord Templeman said at 903:
"… If the doctor making a balanced judgment advises the patient to submit to the operation, the patient is entitled to reject that advice for reasons which are rational, or irrational, or for no reason …"
Similarly, in Airedale NHS Trust v Bland [1993] AC 789 Lord Mustill said at 891:
"… If the patient is capable of making a decision on whether to permit treatment and decides not to permit it his choice must be obeyed, even if on any objective view it is contrary to his best interests. A doctor has no right to proceed in the face of objection, even if it is plain to all, including the patient, that adverse consequences and even death will or may ensue …"
NHS guidance on the withdrawal of consent is set out in the Reference Guide already referred to at 10:
"Withdrawal of consent
18. A patient with capacity is entitled to withdraw consent at any time, including during the performance of a procedure. Where a patient does object during treatment, it is good practice for the practitioner, if at all possible, to stop the procedure, establish the patient's concerns, and explain the consequences of not completing the procedure. At times an apparent objection may reflect a cry of pain rather than withdrawal of consent, and appropriate reassurance may enable the practitioner to continue with the patient's consent …"
If a patient has capacity to refuse treatment a doctor has no lawful entitlement to treat the patient even if the doctor considers that the treatment is reasonable or necessary to save life. In the absence of consent there is a battery. See In Re T (Adult: Refusal of Treatment) [Supra] Fam. 95 at 102 per Lord Donaldson:
"The law requires that an adult patient who is mentally and physically capable of exercising a choice must consent if medical treatment of him is to be lawful, although the consent need not be in writing and may sometimes be inferred from the patient's conduct in the context of the surrounding circumstances. Treating him without his consent or despite a refusal of consent will constitute the civil wrong of trespass to the person and may constitute a crime. If, however, the patient has made no choice and, when the need for treatment arises, is in no position to make one - for example, the classic emergency situation with an unconscious patient - the practitioner can lawfully treat the patient in accordance with his clinical judgment of what is in the patient's best interest.."
At 112 in the same authority, Lord Donaldson said:
"Society's interest is in upholding the concept that all human life is sacred and that it should be preserved if at all possible. It is well established that in the ultimate the right of the individual is paramount. But this merely shifts the problem where the conflict occurs and calls for very careful examination of whether, and if so the way in which, the individual is exercising that right. In case of doubt that doubt falls to be resolved in favour of the preservation of life, for if the individual is to override the public interest he must do so in clear terms."
The issue of the withdrawal of consent was considered in the Court of Appeal of Ontario in Ciarlariello v Schacter [1993] 2 SCR 119 where it was stated at paras. 20 to 22:
"Whether or not there has been a withdrawal of consent will always be a question of fact. The words used by a patient may be ambiguous. Even if they are apparently clear, the circumstances under which they were spoken may render them ambiguous. On some occasions, the doctors conducting the process may reasonably take the words spoken by the patient to be an expression of pain rather than a withdrawal of consent. Obviously, these are questions of fact which will have to be resolved by the trial judge. … While the doctor's interpretation of the patient's cries in Mitchell v McDonald may have been reasonable in that case, generally if there is any question as to whether the patient is attempting to withdraw consent, it will be incumbent upon the doctor to ascertain whether the consent has in fact been withdrawn. It should not be forgotten that every patient has a right to bodily integrity. This encompasses the right to determine what medical procedures will be accepted and the extent to which they will be accepted. Everyone has the right to decide what is to be done to one's own body. This includes the right to be free from medical treatment to which the individual does not consent. This concept of individual autonomy is fundamental to the common law and is the basis for the requirement that disclosure be made to a patient. If, during the course of a medical procedure a patient withdraws the consent to that procedure, then the doctors must halt the process. This duty to stop does no more than recognize every individual's basic right to make decisions concerning his or her own body……
An individual's right to determine what medical procedures will be accepted must include the right to stop a procedure. It is not beyond the realm of possibility that the patient is better able to gauge the level of pain or discomfort that can be accepted or that the patients premonitions of tragedy or mortality may have a basis in reality. In any event, the patient's right to bodily integrity provides the basis for the withdrawal of a consent to a medical procedure even while it is underway. Thus, if it is found that the consent is effectively withdrawn during the course of the proceeding then it must be terminated. This must be the result except in those circumstances where the medical evidence suggests that to terminate the process would be either life threatening or pose immediate and serious problems to the health of the patient.
The issue as to whether or not a consent has been withdrawn during the course of a procedure may require the trial judge to make difficult findings of fact. If sedatives or other medication were administered to the patient then it must be determined if the patient was so sedated or so affected by the medication that consent to the procedure could not effectively have been withdrawn. The question whether a patient is capable of withdrawing consent will depend on the circumstances of each case. Expert medical evidence will undoubtedly be relevant, but it will not necessarily be determinative of the issue. Indeed, in cases such as this where the patient must be conscious and cooperative in order for the procedure to be performed, it may well be beyond doubt that the patient was capable of withdrawing consent".
These and other authorities, deal with two particular questions that may confront a medical practitioner in dealing with the question of the validity or otherwise of a patient's withdrawal of their consent to a medical procedure. These questions are, had the patient capacity at the material time to withdraw consent and the extent to which, if at all a medical emergency confronting a medical practitioner may entitle them to continue with a procedure in the face of objection from a patient.
In Border v Lewisham & Greenwich NHS Trust 21.1.15 [2015] EWCA Civ 8, where Richards LJ stated at para. 21:
"… In a medical emergency, when the patient is incapable of giving consent, a doctor may proceed without consent provided that he or she is acting in the patient's best interests (see, for example, St George's Healthcare NHS Trust v S [1999] Fam 26 at 45B). The judge may have had that principle in mind. On the evidence, however, this was not such a case of medical emergency. The claimant was in the emergency room – the resuscitation room – but she was fully conscious and capable of giving or withholding her consent. The judge was therefore wrong to regard the issue of consent as unimportant".
In MB (Caesarean Section) [1997] 2FLR 426, the Court of Appeal noted that an individual's capacity to make particular decisions may fluctuate or be temporarily affected by factors such as pain, fear, confusion or the effects of medication and the assessment of the capacity of a patient validly to withdraw consent must be time and decision specific.
The question of necessity, was discussed by the House of Lords in Re F (Mental Patient: Sterilisation) [1990] 2 AC 1. The scope of the doctrine was stated by Lord Goff of Chieveley, at page 75 as follows:
"...to fall within the principle, not only (1) must there be a necessity to act when it is not practicable to communicate with the assisted person, but also (2) the action taken must be such as a reasonable person would in all the circumstances take, acting in the best interests of the assisted person."
Lord Donaldson (in the Court of Appeal) said in the same authority at page 17:
"In an emergency a doctor has little time to ponder the choices available. He must act in the best interests of his patient, as he sees them, but he can be more readily forgiven if he errs in his judgment."
What a patient would have done if a procedure is temporarily halted by a medical practitioner further to explore an apparent withdrawal of consent must be answered in part on an objective analysis (see Smith v Barking Havering and Brentwood NHS Trust [1994] 5 Med LR 285).
THE EVIDENCE
I turn now to the evidence. I heard from Mrs Connolly and her husband. For the Defendant I heard from Dr Goulielmos, Nurse Shadbolt, Mr Griffiths and Dr Mechery. I heard expert medical evidence for the Claimant, from Dr Perry, and for the Defendant from Dr Freeman, both consultant cardiologists. For Mrs Connolly I received in evidence written reports, of Dr Steadman, a psychiatrist and ENT evidence from Dr McCombe. I received a character reference from Mrs Connolly's pastor, at the Christ Central Church, that speaks in warm terms of Mrs Connolly and, in particular, notes that she is one of the "most honest and real people" that he knows.
Mrs Connolly told me that she has a clear recollection of what she was told by Dr Goulielmos as set out in her witness statement dated 2 April 2014. In particular, he told her that the angiogram procedure was a
"brilliant and safe test…that there is only a risk to someone with diseased arteries."
Her evidence was that from this she understood that there was no risk to her as she knew that her arteries were healthy; had she been told there was a risk that healthy arteries could be damaged by the performance of an angiogram, she would not have proceeded with the procedure. It was only because of the advice that she received to have the angiogram, and that the procedure was safe if she did not have diseased arteries, that she decided to go ahead with the procedure.
She told me she read the information leaflet given to her. She said in the course of her evidence:
"I just thought I will go because that is what they want me to do. I did not realise what a major operation this was. I was being persuaded by my husband."
She said in her statement that after the procedure began she felt an extremely severe pain in her right arm of which she complained to the medical staff. She said that she heard the doctor, Dr Mechery, say, "is she 32 or 52?" and she said, "I'm 52, ..why does this matter?" to which Dr Mechery replied that younger women usually go into spasm if it is put in the arm. He then said, "We'll go in her leg instead" to which Mrs Connolly said "I don't want you to" to which Dr Mechery answered, "It won't take long as we've put it in your leg now." Mrs Connolly said that she was confused and afraid and that she had lost confidence in the ability of the staff to carry out the procedure painlessly and repeatedly said, "I need this to stop now."
Dr Mechery said, "I've seen one side and the artery's clear and looks good, I just need to get round the other side. It shouldn't take a minute." Mrs Connolly said, "I don't want you to, I need this to stop now. …I then experienced the most excruciating pain of my life across my back and my chest and my jaw." She said in her evidence before me that in the course of the procedure he was calm, reassuring, sought to put her at her ease and seemed "fine in his attitude."
Mrs Connolly's case was that Dr Mechery should have abandoned the procedure after she complained of pain in her right arm that was consistent with spasm. She told him at that stage that she wanted it to stop and if he had done so she would not subsequently have agreed to it being continued, whatever the doctor had said to her, and the dissection would not therefore have occurred. She withdrew her consent for the procedure to continue before access was attempted via the femoral route and that she did not complain of "excruciating" pain until after access to her arterial system had been gained by the femoral route.
Mrs Connolly was cross-examined about a number of matters. She said she did not know if she would have agreed to the procedure continuing if she had been told that an artery in her heart was blocked and there was a significant danger to her heart; she said she may have agreed.
She was asked about a passage in an addendum report of Dr Perry dated 4 June 2013. Amongst the documents listed by Dr Perry at the beginning of that report were the following documents:
6. A detailed statement from Mrs Connolly
7. Medical notes from a telephone consultation on 14.02.2013 with Mrs Connolly
The material passage was:
"she [Mrs Connolly] stated that she was particularly uncomfortable during the procedure and asked on at least two occasions that the procedure be stopped and felt that she had withdrawn her consent. She was unaware of a different arterial approach via the femoral artery."
The observation in the last sentence of that quotation was clearly inconsistent with what Mrs Connolly said in her statement of 2 April 2014. Initially, Mrs Connolly accepted in cross-examination that Dr Perry had correctly recorded the position. She was asked, "You were unaware on the day of the procedure of the approach via femoral artery?" To which question she replied "I think so." Dr Perry accepted in cross-examination that this was the correct reading of his noted record.
Later in her evidence Mrs Connolly retreated from this position. She asserted that the pain she suffered, apart from the pain in her right arm, occurred after the femoral approach was adopted. She said that she was not overly sedated.
In the course of final submissions an attempt was made on Mrs Connolly's behalf to put in evidence part, or parts, of a previous statement made by her. It was clear that the application was made to rebut the suggestion that Mrs Connolly had told Dr Perry that at the time of the procedure she was unaware of a different arterial approach being made via the femoral artery. I have not seen that statement and nothing was said when the attempt to use it was made about when the statement was made or whether it was signed. The statement was not shown to the Defence before or during the application and it was made clear on behalf of Mrs Connolly that only part or parts of the statement would be put in evidence. Objection was taken by the Defence to the admission of the statement on that basis.
The court indicated in the course of the application that, in line with the authority of Great Atlantic Insurance Company v Home Insurance Company Ltd [1981] 1 WLR 529, the court would not countenance privilege being waived as to only part, or parts, of the statement and after a short adjournment for Mrs Connolly and Counsel to consider the position, the application was not further pursued.
The parties' final submissions were completed on 17 March 2015. On 26 March 2015 Mrs Connolly lodged an application for an order:
"That the Claimant be given permission to re-open her case prior to judgment to address one issue and this is to rebut the allegation that C only became aware after Dr Perry's telephone conversation on 14.2.13 that access had been gained via the femoral route."
The application was supported by a witness statement from Mrs Connolly's solicitor, a copy of a witness statement of Mrs Connolly dated 14.02.13, Dr Perry's notes of the consultation on 14.03.13, and an email from Dr Perry dated 26.03.15, addressing the meaning of his notes.
The court was asked to deal with the application at a telephone hearing with a time estimate of 30 minutes and a draft order was attached to the application. I required the parties to attend court for a conventional oral hearing of the application at which I heard full submissions of the parties on the application. At the conclusion of that hearing the position was reached that the parties agreed that I would consider the material submitted in support of the application de bene esse and would include my conclusions upon the significance of the material in my judgment.
I will not set out the detail of that material in this judgment. In summary, the evidence supported the contention of Mrs Connolly that before Dr Perry's telephone call of 14.02.13 Mrs Connolly was aware that in the course of the angiogram, arterial access had been gained via the femoral route. The history given meant that the Defendant had no opportunity to cross-examine Mrs Connolly and Dr Perry upon the evidence placed before the court by means of the application dated 26 March 2015.
Mrs Connolly confirmed the evidence in her witness statement as to the effects of the incident on her health and life and her claim for damages. She was asked about a letter from her GP, Dr Byrne, dated 24 September 2009, i.e. three months after the procedure, and in particular the last sentence of a passage in which the doctor reported:
"since discharge she has had significant problems with her combination of dual anti-platelet therapy with stomach cramps and a variety of symptom. Although this was eased to some degree by Ranitidine, the Ranitidine itself also caused other problems. She also complains of some neck tightness when she is stressed but has no problems with exercise and can run and walk the dog without limitation."
She said in giving this evidence the doctor had, "got the wrong end of the stick."
She was asked about a note from the outpatient cardiac clinic dated 15.10.2009 that read;
"We saw Mrs Connolly to offer psychological support and cardiac rehabilitation following this event. She declined referral to the cardiac rehabilitation and education programme and has indicated that she no longer feels that she would benefit from continued contact with us."
Mrs Connolly said that she did not want to continue to go to the clinic because the clinic did not understand how to treat her and were not helping her at all.
She accepted in cross-examination that she had produced no figures to support her husband's loss of earning claim earnings and nothing to demonstrate the amount of her own earnings before 2009.
I heard from Mr Connolly. He confirmed before me his witness statement dated 27 March 2014 that gave confirmatory evidence of Mrs Connolly's account of what happened. Much of his evidence was hearsay. His statement was given many years after the events described.
For the Defendant I heard firstly from Dr Goulielmos. He detailed to me his standard practice for consent, which he adopts with 300 patients per year. He commented in his evidence upon Mrs Connolly's evidence about what she said she was told by him about the risks of the angiogram procedure. He told me that these are not the type of comments that he would have made. He said that he would have told her that there was a need to investigate by angiogram because there was evidence that there was something wrong with her heart. He would have given Mrs Connolly the opportunity to ask questions. He would not have told her that her arteries were normal.
Ms Shadbolt's evidence was that she had no specific recollection of the angiogram procedure performed on Mrs Connolly. Her evidence was that if anything unusual happened in the course of a procedure she would know and hear about it because the catheter laboratory was quite small; she had never seen a doctor ignore a patient's request to stop a procedure. She would have been about a metre away from Dr Mechery during the procedure.
Mr Griffiths also had no specific recollection of the angiogram procedure performed on Mrs Connolly. He told me that the log of events he compiled was (perforce) not complete because of his other duties in the course of such a procedure. In the course of a procedure he is located behind a glass screen. He is able to see everything that happens but not always hear everything being said. He noted that he has to be very focused on the various monitors to ensure that the patient remains haemodynamically stable. Mr Griffiths says he cannot recall Mrs Connolly having asked for the angiogram procedure to stop.
The evidence of Dr Mechery was of central importance in the case. He described in his written statement of 21 March 2014 how he had reviewed the relevant medical notes on Mrs Connolly and gave his recollection of the procedure carried out on her. It is material to relate his evidence to the event log, and the clinical and prescription records kept in the course of this procedure.
At 11.03 a.m. a vasodilator drug having been administered, a catheter was inserted into the Claimant's right radial artery. Dr Mechery said he managed this, quickly and without difficulty. Thereafter, he made several injections of contrast dye into Mrs Connolly's arterial system between 11.06 a.m. and 11.08 a.m. These injections revealed the left main and circumflex arteries, but the left anterior descending artery (LAD) could not be visualised because it was occluded. As he could not see evidence of dissection, Dr Mechery suspected that the artery had gone into spasm. He knew it was of the utmost importance that the LAD was opened to prevent permanent disabling damage to the myocardium or even death.
Dr Mechery says he removed the catheter with difficulty because of spasm in the right arm. At 11.10 a.m. he attempted to insert a right sided catheter but could not do so because the radial artery was still in spasm. A drug was administered to try and resolve the spasm and the last entry in the event log detailing the attempt to gain access by the radial artery is at 11.23 a.m.
As already noted, at 11.20 a.m. a number of drugs were written up in the prescription record, including diazepam and morphine. A clinical record timed at 11.30 a.m. notes:
"c/o [complaining of] chest discomfort, neck pain & back pain
I/V diazemuls, morphine given in divided doses & GTN spray S/L also given
ECG changes noted
Dr Beatt in – proceeded"
This entry is consistent with the drugs prescribed at 11.20 a.m. being administered in response to what Mrs Connolly described as the excruciating pain that developed across her back, chest, and jaw, after Dr Mechery said, "I just need to get round the other side." As already noted above, the point at which Dr Mechery attempted to use a right sided catheter was at 11.10 a.m.
Dr Mechery described the situation in his witness statement as follows:
"I had not yet seen the right coronary artery ("RCA"), and I was conscious that we did not know what condition the RCA was in. With the LAD blocked I needed to urgently get access to the coronary arteries."
Considering its importance, I will set out a substantial passage from Dr Mechery written statement evidence that deals with the question of Mrs Connolly's consent to what followed.
"I do not recall Mrs Connolly requesting the procedure to stop at this point. However, the procedure had now turned into a medical emergency and I was not concentrating on conversations with Mrs Connolly, but rather was concentrating on saving her life and ensuring that all necessary analgesics and sedatives were provided to make her as comfortable as possible in the circumstance. It is possible that Mrs Connolly asked for the procedure to stop due to the pain of predominantly the blocked coronary artery, and also secondarily due to the radial spasms. If Mrs Connolly had asked for the procedure to stop it would not have been possible to do so at this stage without catastrophic and life threatening consequences. I do not recall feeling at any point that Mrs Connolly was "withdrawing consent" and I would certainly recall if this was the case. I do not undertake any invasive procedure without consent unless it is a lifesaving emergency situation. In this case, Mrs Connolly was in a critical situation very soon after the start of the procedure and needed rapid emergency treatment. In this situation it is my job, and the job of the nurses, to try and relieve the patient of any pain and reassure them. I note that intravenous diazepam, midazolam and morphine were administered to Mrs Connolly to provide pain relief and to give sedation. We had a low threshold to give sedative and opiate analgesics intravenously for pain in the catheterisation lab in 2009. We would give as much analgesia as needed and the dose may vary between individuals. Mrs Connolly received multiple doses of diazepam, midazolam and morphine. My angiogram report says a total of 13mg morphine and 6mg of diazepam was administered soon after Mrs Connolly experienced pain. As these are given intravenously, their effect is almost instantaneous. It is standard practice for the nurses to be talking to the patient throughout the angiogram procedure and explain what is happening, as the operator is under great pressure and needs to make very important decisions quickly. However, explaining what is happening to a patient who is in pain and under the influence of the above mentioned drugs is very difficult. I note that that Mrs Connolly says that she believes she may have lost consciousness and she states that her recollection of events is patchy. The diazepam and morphine could have caused her to have a period of no recollection/ 13mg of morphine is a high dose for patient not accustomed to taking morphine and 6mg of diazepam is enough to make a person of low body weight such as Mrs Connolly very sleepy."
In his oral evidence to me, Dr Mechery said that although everything happened very quickly he very clearly remembers the sequence of events. When he saw that Mrs Connolly had a blocked LAD he knew that there were various possible causes, spasm, dissection or thrombosis. Pain for the patient would follow within seconds or minutes. The situation he faced was catastrophic. He thought that the drugs prescribed between 11.20 a.m. and 11.50 a.m. were most likely given one after another. It was likely that he asked for the morphine to be given first and that it would have been given successively in small doses. He called the consultant on duty. He decided to attempt to gain access via the femoral artery. There is an entry in the event log at 11.23 a.m., "femoral approach attempted." At 11.31 a.m. a catheter was inserted, and Dr Mechery noted that by this stage Dr Beatt, the consultant, for whom Dr Mechery had sent, had arrived.
It was put to Dr Mechery that a Cardiac Catheterisation Report that he prepared on 19 June 2009 that noted: "pain back and neck after the angiogram with JL4 6F" evidences the fact that Mrs Connolly only suffered the described pain as opposed to only pain in the right arm from spasm in that arm, after the femoral approach was undertaken. The use of a 6 French catheter was only consistent with the femoral route, not the radial route for which a J5 catheter should have been used.
Dr Mechery did not accept that analysis. He told me that the two catheters J5 and J6 were interchangeable and that there was no particular significance in the fact that he had written down J6 rather than J5. He said he might well have used a J5 catheter although he wrote down J6. He told me that a proper reading of the Catheterisation report shows that it was chronologically set out. So reading the report demonstrates that the pain there recorded was experienced by Mrs Connolly early in the procedure in the course of the radial, not the femoral entry of the catheter.
I turn to the evidence of the cardiologists. I should say this at the outset of my review of the evidence of these experts. Inevitably, in my conclusions I have had to decide on certain matters between the differing views of the cardiologists. However, I must say that my task has not been made easier by the fact that I found the evidence of both Dr Perry and Dr Freeman generally to be authoritative, clear, open and helpful.
Dr Perry considered that the information sheet was:
"misleading as it implied that coronary dissection or major complications did not happen in patients who had normal coronary arteries."
However, the experts considered this issue and concluded in their Joint Statement in answer to the question:
"Was there a breach of Duty with regarding to [sic] informed consent-
Both experts agree that there was no Breach of Duty in respect of obtaining informed consent prior to undertaking the angiogram. In particular they agree that there was no duty to inform of specific risks of dissection or spasm – whether the artery was stenosed on in an otherwise healthy artery. Both experts also agree that there was no Breach of Duty in respect of the information sheet provided. If the Court finds that 'the Claimant was informed orally that the risk of stroke and heart attack was only present if she had arteries that were not healthy' - both experts agree this to be misleading and inaccurate if stated, but not Breach of Duty."
There was considerable further common ground between the experts. They agreed that:
(i) the LAD was occluded at the time of the first angiographic injection at 11.06 a.m. at which time there were no ECG changes;
(ii) there were no further ECG's taken until 11.33 a.m. at which time the ECG showed ST elevation and that Mrs Connolly's blood pressure was 125/63 and that at 11.48 a.m. her blood pressure was 105/58. The first noted time was the point at which Mrs Connolly's condition became life threatening - at the second she became haemodynamically unstable;
(iii) whilst it is possible the LAD was occluded before the angiogram procedure was carried out due to underlying coronary disease, it was most likely that the LAD was occluded due to instrumentation of the left main stem at 11.06 a.m.;
(iv) the LAD was still occluded at the next repeat coronary injection despite anti-spasm medication having been administered;
(v) radial artery spasm was present at 11.17 a.m. Both experts agree that the cause was catheterisation and that such is an acknowledged risk of the use of the radial route for an angiogram;
(vi) at 11.20 a.m. the drug sheet shows that Mrs Connolly was prescribed 1.25mg diazemuls and 3mg morphine to alleviate symptoms;
(vii) the correct further treatment was for the administration to the patient of sedation and nitrates, (the patient already having been administered some vasodilator drugs at the start of the procedure), withdrawing the catheter and changing the arterial access route either to the left radial or femoral to assess the state of the LAD.
A fundamental issue upon which the cardiologists disagree is as to when the dissection occurred. Dr Perry's considered that whilst the LAD appeared occluded from its first visualisation, symptoms suffered by Mrs Connolly before access was sought via the femoral route were consistent with spasm alone being responsible for that occlusion.
Dr Freeman considered the evidence did not demonstrate that the dissection occurred following access to Mrs Connolly's arterial system via the femoral route. Her opinion was that Mrs Connolly sustained the rare complication of dissection of the left main stem at the time of initial intubation with the coronary catheter at 11.06 a.m. although it was not then visualised. The short interval of time before Mrs Connolly suffered from excruciating pain matched the development of myocardial ischaemia due to interruption of her coronary blood flow.
Dr Freeman considered it to be very rare for spasm to persist for such a prolonged period as contemplated by Dr Perry and for the LAD to be in spasm with the other arteries still functioning normally and that the circumstances in Mrs Connolly's case of the occlusion of her LAD were atypical for spasm.
Dr Freeman's gave as her opinion that Mrs Connolly had "temporal incapacity" before 11.31 a.m. by reason of the drugs administered to her by that time. In contrast, Dr Perry did not consider that 3 mg of morphine and 1.25 mg of diazepam would have rendered Mrs Connolly "incapable of withdrawing her consent".
In the course of cross-examination Dr Perry accepted the following:
(i) That it is rare to encounter arterial spasm that causes a complete occlusion;
(ii) That spasm is more common on the right (65%) than on the left (35%);
(iii) Less than 10% of cases of spasm persist for the length of time postulated by Dr Perry in Mrs Connolly's case;
(iv) That upon occlusion pain would be expected to start more or less straight away;
(v) That it was highly likely that Mrs Connolly's excruciating pain started after 11.10 a.m. and before 11.25 a.m.
(vi) That it would have been sensible to prescribe the analgesic drugs prescribed and apparently administered between 11.20 a.m. and 11.50 a.m. for the chest pain complained of by Mrs Connolly and that it would have been reasonable to give the morphine prescribed in a series of doses at 5 minute intervals;
(vii) That the drugs prescribed for Mrs Connolly would have had a minor impact on her capacity;
(viii) That it would have been consistent but unusual to prescribe morphine for pain consequent upon radial artery spasm alone;
(ix) If the LAD becomes occluded there is a risk to a patient of serious damage and death within minutes;
(x) It would be a reasonable view in Mrs Connolly's case to suggest that the dissection occurred from the outset of the performance of the angiogram;
(xi) He would not criticise the decision to initiate the femoral approach after spasm was encountered in the radial artery;
(xii) That the period of recovery for Mrs Connolly after the procedure and the consequent treatment was about two months.
In the course of cross-examination Dr Freeman accepted the following:
(i) She would expect an operator to call the consultant very quickly once an occluded LAD was detected;
(ii) That an edge dissection, which Dr Mechery considered to be the type suffered by Mrs Connolly, is often related to the insertion of a stent or stents;
(iii) There was no difference in the angiogram images at the dissection site between 11.06 a.m. and 11.33 a.m.;
(iv) An operator might give morphine for severe radial spasm pain.
That concludes my review of the evidence in this case. I turn to my conclusions.
CONCLUSIONS
I will take the questions upon which I am asked to rule in the order set out above; some can conveniently be taken together. Some of my conclusions, especially on the first question have relevance in relation to my conclusions on other questions. The first question is,
(i) Was Mrs Connolly provided with sufficient and accurate information so that her consent given for the angiogram procedure to be carried out was effective, or was it vitiated by inadequate or misleading information?
This question is two in one. Was all or any of the information given to Mrs Connolly before she gave her consent to the procedure misleading and inaccurate, and if it was did that result in her not properly giving consent for the procedure?
There were two possible sources for the assertion that Mrs Connolly was misinformed, her conversation with Dr Goulielmos, and the information sheet.
As already noted, I heard evidence from both Mrs Connolly and Dr Goulielmos on their conversation. I was generally impressed by Dr Goulielmos's evidence and his account of that conversation. I find it hard to accept that he departed from his usual practice when advising Mrs Connolly and used the disputed words in that advice.
I consider the evidence of Mrs Connolly on this point. I have to say that, in general, I did not find Mrs Connolly a witness upon whose evidence I felt confident to rely. It is clear from the history I have already given that I have not seen all the statements given by Mrs Connolly in this case. From those that I have seen, I have obtained a developing and sometimes confusing or contradictory case. Similar comments may be made of her evidence before me including that given in cross-examination in respect of her medical and smoking history, the events leading up to, and of, the angiogram procedure, the extent of her recovery and the detail of her claim for damages. I consider that over the years, as a result of the undoubted misfortune of this angiogram procedure that went wrong, Mrs Connolly has persuaded herself of the correctness of a case on a number of issues in this case that are not correct and the question under review is one of them.
I turn to the information sheet. It is agreed that this was misleading as noted by the experts. However, having considered all the evidence that Mrs Connolly had before she signed the consent form and considering the legal principles that I must follow as set out above, I agree with the opinion of the experts on this point although I would express the answer to the question slightly differently; I do not consider that Mrs Connolly's consent was vitiated by the information sheet.
I will take the next two questions together.
(ii) When did dissection of the LAD occur – in particular was it before or after the femoral approach was undertaken?
(iii) When in the sequence of events did Mrs Connolly suffer from the pain from which she complained in her right arm, chest, neck and back pain which she described as excruciating?
The case that Mrs Connolly now firmly asserts is that the temporal relationship between the "excruciating" pain she described in her served witness statement at paragraph 44 was experienced by her after access to her arterial system was gained via the femoral route and this is most persuasive evidence that dissection occurred after that route was chosen. Supportive of this contention is said to be the fact that there is an absence of visual sightings of the dissection before access was sought by the femoral route and that such a dissection may be consequent upon insertion of a stent.
This is the heart of the case on liability. As necessary planks of her case on liability, Mrs Connolly must persuade me on the balance of probability that the dissection occurred after the femoral route was undertaken; to do so, considering the experts agreement, she must also establish that the "excruciating" and diffuse pain she described was experienced by her after access to her arterial system was gained via the femoral route.
On the evidence I have heard I am not so persuaded, indeed, in my judgment I am satisfied that the dissection and excruciating pain suffered by Mrs Connolly were suffered by her before access to her arterial system was gained via the femoral route.
I reach this conclusion for a number of reasons. Firstly, I was impressed by, and accept, the evidence of Dr Freeman that it would be unusual for the artery to be in spasm for a long period of time and for the LAD to be in spasm with the other arteries still functioning normally. In his evidence, Dr Perry appeared to take the view that the occlusion of the LAD at the start of the procedure was coincidental spasm (not to be confused with the arterial spasm in the arm), and that the true damage, the dissection of the LAD, did not occur until later. However, he has not provided any reasons for this, other than that the damage is first identifiable on the imaging at 12.30 p.m.
Secondly, I consider the weight of the evidence favours the conclusion that the "excruciating" pain described by Mrs Connolly was experienced by her before the femoral route was undertaken. I consider a proper consideration of all the medical records in the case supports that view. In particular Dr Mechery's report of the procedure which I consider clearly to be chronological, supports the fact that severe and diffuse pain was suffered by Mrs Connolly before the femoral approach was adopted. The drug record, and in particular the prescription of strong analgesics before the femoral route was adopted supports this view. Finally, I consider highly significant on this point what I might fairly describe as Mrs Connolly's developing account as to this matter.
I am persuaded that until Mrs Connolly became aware of the significance of the point, her recollection of events did not include knowledge that the excruciating pain she suffered occurred after the femoral route was undertaken, or indeed even an awareness that the femoral route was undertaken. This chimes with the weight of the evidence that between 11.10 a.m. and 11.20 a.m. Mrs Connolly developed severe pain in her chest as a consequence of the occluded LAD, and as a result a number of drugs were administered, including diazepam and morphine.
I should expand on my comment as to Mrs Connolly's "developing account" of this matter. In general terms, this claim has been characterised by the late service of witness evidence from Mrs Connolly; more specifically, the history already set out in relation to the attempts to introduce rebuttal evidence to deal with the note in Dr Perry's report as to Mrs Connolly's lack of knowledge of the femoral route being undertaken does little credit to her case. The most obvious and best opportunity to have dealt with this matter was in re-examination of Mrs Connolly; a familiar forensic step is to put to a witness whose evidence has been challenged on the basis of "recent invention" a previous record of the witnesses' evidence that contradicts that assertion. That was not done. The matter could have been dealt with by producing in re –examination of Dr Perry the statement of Mrs Connolly referred to in his report to demonstrate that he had misinterpreted Mrs Connolly's evidence on this point. That was not done. It was not until closing that the initial attempt was made, as already described, to introduce a statement apparently given sometime in 2012, the final attempt being made in respect of a different statement. This whole history raises as many questions as it answers.
In particular, what is the content of the statement of 2012? Mrs Connolly has now produced the statement dated 6 February 2013 that is consistent with an account of having been aware of the femoral approach on 19 June 2009. However, I agree with Mr Barnes contention that that statement adds to the impression that her evidence is unreliable, as her evidence on some key issues has become more entrenched with time as demonstrated by a comparison of the content of paragraphs 39, 54 and 56 of the statement dated 6 February 2013 with paragraphs 40, 55, and 57 of the statement dated 2 April 2014.
In respect of this matter I consider the further evidence of Dr Perry about this. I have already raised the uncertainty as to which statement was provided to Dr Perry for the provision of his initial report bearing in mind his answers to the questions about this in cross-examination. In any event, that further evidence provides support for the conclusion that Mrs Connolly was unclear as to the events on 19 June 2009. As Mr Barnes contended to me, it is difficult to interpret Dr Perry's note on 14 February 2013, "wasn't sure of leg" other than as meaning that when he discussed the claim with the Claimant on 14 February 2013, she was not aware that they had changed the point of access to the femoral artery in the leg. Dr Perry's evidence in an e mail to Mrs Connolly's solicitor dated 26 March 2015 about this is as follows:
"My notes are mainly bullet points and in general confirm the statements in the witness statement. I have noted she was unsure of what was going I [sic] the leg meant(verbatim note ('Wasn't sure of leg').
I think this is what my sentence at para 1c 'she was unaware of a different arterial approach via the femoral artery' means. I think I meant she was unsure about the fact/concept one could go in the leg not that she was delirious to the point of not knowing it was happening at all."
I do not find this persuasive.
I further accept Mr Barnes contention that Dr Perry's notes are remarkable in their lack of analysis of any timing issues, which is significant in the context of this claim, whether it is because Mrs Connolly was not able to recall the timings, or because Dr Perry failed to understand the importance of the timing issues.
I turn to the next question for my decision, namely,
(iv) Did Mrs Connolly withdraw her consent to the continuance of the procedure before access was attempted via the femoral route?
Strictly, in the light of my above findings this question is largely, if not wholly academic, but I consider I should answer it. In my judgment, whilst I accept that so soon as Mrs Connolly started to suffer from excruciating and diffuse pain as a result of the performance of the angiogram the dissection and the occlusion of the LAD she became anxious, stressed, and complained of severe and diffuse pain, I am not persuaded that she withdrew her consent to its continuance. I note that none of the three witnesses involved in the procedure remember anything as significant as a withdrawal of consent. It is also significant that the Claimant did not complain that the angiography had been continued without her consent in the aftermath of the procedure.
The next question is,
(v) Did Mrs Connolly lack capacity to withdraw her consent due to the effects of medication given to her and if so, what is the legal effect of that circumstance?
Again, strictly, in the light of my above findings this question becomes academic but I will answer the question. In my judgment based in particular upon the evidence of Dr Freeman, I consider that she did lack capacity.
The next question is,
(vi) Did an event that threatened Mrs Connolly's life occur before any withdrawal of her consent, and if it did, what was the legal effect of that happening?
At the time the femoral approach was begun Mrs Connolly was in considerable pain. She had been given doses of morphine and diazepam. It was reasonable for Dr Mechery to proceed with the procedure in circumstances where he was faced with what he rightly regarded as a medical emergency. He knew that Mrs Connolly's LAD was occluded, but did not know at what point. That occlusion meant that a large portion of her heart was not being supplied with blood supply. If the blood supply was not quickly restored the potential consequences were permanent damage and death. It was imperative that time was not wasted in detailed explanation to a patient affected by excruciating pain and drugs as to the procedure upon which he was about to embark. In the light of the authorities outlined above I do not consider that Dr Mechery or any of the hospital staff were in breach of duty in undertaking the course of treatment that they did once the occlusion of the LAD was detected.
I turn to the next question for my decision, namely,
(vii) On the premise that Mrs Connolly was given insufficient or misleading information before she consented to performance of the procedure, would she have refused an angiogram had she not been given that insufficient or misleading information?
On the evidence before me I consider that she would not.
The next question is,
(viii) On the premise that Mrs Connolly withdrew her consent to the continuance of the angiogram procedure after the radial approach was abandoned, would Mrs Connolly have consented to the continuation of the procedure had she been asked?
Mrs Connolly's witness statement did not expressly deal with the circumstance she would have found herself in, namely that her LAD was occluded, that this had the potential to cause permanent damage or death and needed to be resolved without delay, and further angiography to examine the condition of the LAD was mandatory. Faced with this, I consider that the probability is that the she would have accepted the advice of those treating her, and would have consented to further angiography via the femoral approach. In any event, authority already referred to demonstrates that the question of what Mrs Connolly would have done if the procedure had been temporarily halted must be answered in part on an objective analysis and the only realistic conclusion on that basis is that she would have consented to the angiography continuing.
I turn to the last question for my decision, namely,
(ix) Had the hospital staff halted the procedure when consent was withdrawn, would the outcome have been any different?
In the light of my above answers this question is hypothetical, if not unreal. I have found that Mrs Connolly was properly consented for this procedure and that the dissection occurred before the femoral route was undertaken. Once the emergency arose, there would have been significant difficulties for Dr Mechery and his team in giving detailed explanation to Mrs Connolly of the emergency and the proposed further procedure and being convinced that Mrs Connolly was validly withdrawing her consent, by reason of the circumstances to which I have already referred. As confirmed by the experts, it was clearly reasonable for Dr Mechery to proceed with the procedure. However, answering the question as posed, in my judgment, the consequence of the hospital staff halting the procedure would have been the death of Mrs Connolly. Even on the postulate, against my finding of fact, that Dr Perry were to be correct that the dissection occurred during the insertion of the catheter by the femoral approach, the answer is probably the same. The expert evidence was that in the light of the undoubted occlusion of the LAD it was mandatory for Mrs Connolly's continuing proper care to insert a catheter in the femoral artery.
It follows from the foregoing that I consider that Mrs Connolly's claim fails both on the issue of breach of duty and causation.
However, as I have heard the evidence and submissions upon the issue of quantum, it would be prudent for me shortly to make findings on that evidence.
QUANTUM
GENERAL DAMAGES
The detail of Mrs Connolly's treatment, present condition, and the prognosis appears from the medical reports and evidence before me. Mrs Connolly had a very unpleasant time, firstly in the Mayday hospital, then at King College Hospital and then recovering at home. However, on the evidence before me, although she continues to suffer from some residual disabilities, such as the fact that she is now required to take lifelong medication which exacerbates nose bleeds and heartburn from which she suffers, I consider that she has made a generally good recovery from this life threatening episode. I conclude that her condition was approaching her pre- procedure state within about three or four months of the procedure.
Mrs Connolly's case is that her life expectancy has been reduced by 5 years based on the evidence of Mr Perry. Dr Freeman states that one year "may be pragmatically reasonable." I accept Dr Freeman's evidence on this point and award 1 year for loss of expectation of life.
Mr Meredith Hardy contends that for this head of claim the award for general damages should fall into the Judicial College Guidelines for the assessment of General Damages in Personal Injury Cases bracket of £53,075 to £81,400 (with the uplift).
I consider this to be unrealistic. In my judgment the proper assessment of this head of claim should be one of £25,000.
ENHANCEMENT FOR "AGGRAVATED DAMAGES" FOR BATTERY
Mrs Connolly seeks an enhancement of her general damages for battery due to injury to her feelings. If I had found in Mrs Connolly's favour that by reason of the procedure being continued without her consent then I accept that the percentage increase contended for would be appropriate.
LOSS OF EARNINGS AND CARE CLAIMS
Mrs Connolly's claims for loss of earnings and care are not supported in the Joint Statement of the cardiologists, nor by the evidence before me and I reject these claims.
OTHER LOSSES
Mrs Connolly claims future treatment and miscellaneous expenses in the Schedule of Loss. The evidence in support of these claims is exiguous. Doing the best I can I will assess this loss at the sum of £250.
That completes my quantification of this claim but for the reasons already given, this claim is dismissed. |
Mr Justice Kenneth Parker :
The Claimant, ("EXP") was born on 18 June 1965. She is married with two teenage daughters.
On 5 September 2005 the Claimant was appointed to the role of full-time District Judge, having previously worked as a barrister for about eighteen years. By 2011 the Claimant was sitting as a District Judge.
The Claimant had been involved in a road traffic accident in 1991 leading to discomfort in her neck and back. The Claimant had been referred to a consultant orthopaedic surgeon, Mr Osborne, in November 1991.
The Claimant made a relatively good recovery from her neck and back whiplash injuries within 18 months of her accident in 1991. In 1997 the Claimant suffered a recurrence of the problems in her neck after a toddler jumped on her and pulled her neck awkwardly.
In about March 1999, whilst working as a barrister in court, the Claimant experienced an episode of visual disturbance that lasted approximately 90 minutes. The Claimant was taken to A & E at the Queen Alexandra Hospital in Portsmouth, where her vision returned to normal and she was advised to see her GP for further investigation.
The Claimant attended at her GP on 4 March 1999 and was privately referred to Mr Harley, consultant orthopaedic surgeon, with symptoms of longstanding neck pain extending into the back. The Claimant was seen by Mr Harley on 24 March 1999 at the Wessex Nuffield Hospital in Chandlers Ford. Mr Harley made a provisional diagnosis of spinal spondylosis and organised an MRI scan on the spine. In his letter to the Claimant's GP of the same date, Mr Harley went on to comment that: "I am not happy that this explains her double vision and her incoordination could be primarily a neurological problem, rather than a mechanical compression. I think there must be some concern that demyelination is a possible diagnosis. I have therefore arranged for her to have an MRI scan of her brain, visual evoke potentials and have checked her routine bloods. I will see her again once we have the results"
The Claimant subsequently underwent an MRI scan of the lumbar spine and MRI scan of the brain on a private basis. The Claimant retained the original packaging for these scans, which indicated by way of annotation that the MRI of the lumbar spine was reviewed by Dr Vince Batty and the MRI of the brain by the Defendant, Dr. Charles Simon Barker.
Dr. Batty and Dr. Barker were both consultant radiologists working in Southampton at that time. Dr Barker had specific expertise in the reporting of brain scans.
On about 12 April 1999 the Claimant saw Mr Harley again to discuss the results of the MRI scans. At this consultation, the Claimant was told that she had the hb57 gene for ankylosing spondylitis and that the MRI scan of the lumbar spine had revealed multi-level degenerative changes. As a result Mr Harley recommended referral to a consultant rheumatologist.
Mr Harley told the Claimant that her brain scan was entirely normal. In his letter to the Claimant's GP dated 12 April 1999 Mr Harley confirmed: "I am pleased to say that her brain scan is entirely normal and so I think this rules out any demyelinating problem".
On 8 September 2011, some 11 years later, the Claimant had returned to her home after a judicial training course in London and then proceeded to go downstairs with her daughter to do an exercise DVD together. The last thing that the Claimant can remember is complaining of a headache, following which she collapsed and lost consciousness.
The Claimant was taken by ambulance to Accident and Emergency at the Queen Alexandra Hospital in Portsmouth where the Glasgow Coma Scale was noted to be 4 on arrival (having been 3-4 upon attendance of the ambulance crew).
A CT brain scan was performed which revealed a 5 x 4.5cm acute parenchymal haemorrhage centred on right temporal lobe with a 2½cm shift from the midline. The appearances of the scan were reported as most likely representing a right sided middle cerebral artery (MCA) aneurysm that had ruptured.
The Claimant was then transferred to the Wessex Neuro Centre during the early hours of 9 September 2011. A CT angiogram taken at 01.29 hours on 9 September 2011 revealed a partially thrombosed aneurysm originating from the right middle cerebral artery.
Emergency surgery was carried out by Mr. Duffill (consultant neurosurgeon) who identified a large clot in association with a bi-lobed aneurysm which was partly calcified. Mr Duffill proceeded to clip the MCA aneurysm and evacuate the haematoma.
Further CT scanning post surgery revealed a right sided haematoma and associated MCA aneurysm. The appearance of the aneurysm was noted to be complex with features of local arterial dissection.
The Claimant was discharged home on 30 September 2011 into the care of the Community Stroke Rehab Team. The Claimant now suffers from a range of disabilities, including a left homonymous hemianopia (left field visual field loss causing 50% blindness); left sided hemiparesis; paralysis/weakness in the left leg; chronic pain and spasticity; weakness and imbalance; cognitive impairments; impaired speech, hearing, swallow, smell and taste; fatigue; headaches; periodic bowel and bladder incontinence; disinhibited behaviour; depression and panic attacks.
The Claimant was seen by Mr Duffill at an outpatient appointment on 14 December 2011. The Claimant took the 1999 images with her to that appointment and on viewing those images Mr Duffill believed that he could identify on them the aneurysm that had subsequently ruptured. Mr Duffill subsequently wrote to the Claimant's GP on 28 December 2011, noting the Claimant had brought copies of the MRI brain imaging taken in 1999 to the appointment and that "I think in retrospect one can see that the middle cerebral artery bifurcation on the right is abnormal and that this represents a small aneurysm which was present twelve years ago."
The Claimant alleges that the Defendant negligently failed to identify and to report the presence of a right middle cerebral aneurysm in his analysis and reporting of the MRI brain scan carried out on 6 April 1999. That is now the only issue in the trial before me. Mr McCullough QC, who appeared at trial for the Defendant having been instructed shortly before trial, no longer pursues the pleaded defence on causation. For completeness, however, I shall briefly mention the Claimant's case on causation.
The Claimant maintained that, if the aneurysm had been correctly identified in April 1999, the Claimant would have been referred for a neurosurgical/neurovascular opinion. If she had been referred, the aneurysm would have been characterised by means of either CT angiogram or a digital subtraction angiogram and on the balance of probabilities, a bi-lobed aneurysm measuring around 5-6mms would have been identified.
It was then very likely that active treatment would have been offered due to the Claimant's young age. In 1999 this may have taken the form of either a coiling or clipping procedure. It was most likely that a clipping procedure would have been offered.
The Claimant would have accepted the diagnosis and the recommendation for active treatment. The Claimant would have proceeded to open operation and a craniotomy to clip the aneurysm.
Given that this was an incidental aneurysm that had not ruptured, the clipping procedure would have had a 95-98% certainty of curing the aneurysm and have a largely unremarkable post-operative course and outcome. The Claimant would have returned to her full activities within 6-12 weeks.
The long-term prognosis would have been excellent, albeit her blood pressure and hypercholesterolaemia would have been scrutinised more carefully. Even if the Claimant would not have decided to have the aneurysm secured, the Claimant would have been subject to ongoing surveillance and annual MRI imaging. Given that the aneurysm upon rupture in September 2011 was significantly larger than at the time of the MRI brain scan in April 1999, the ongoing surveillance would have identified this progression and led towards active treatment for the same. On either scenario the catastrophic events of 8 September 2011 would not have occurred.
The issue
The issue is now a relatively narrow one, namely, whether the MRI scan in 1999 did indicate the presence of an aneurysm which a reasonably competent neuroradiologist would have identified and reported. The issue, though narrow, has sharply divided the two neuroradiology experts who gave evidence before me.
The expert evidence
The Claimant relied on Dr Paul Butler MRCP FRCR. Dr Butler is a consultant neuroradiologist in the department of neuroradiology at the Barts and The London NHS Trust. He also consults privately at the King Edward VII Hospital, Beaumont Street, W1G 6AA. Dr Butler has been a consultant since 1986, holding appointments at a number of hospitals and clinics. He was an examiner for the FRCR examinations at the Royal College of Radiologists, as well as lecturing in neurology. He has made many presentations in his specialist area and has been involved in various publications.
In his report of August 2014 Dr Butler stated:
"As a neuroradiologist one is first and foremost influenced by the clinical details on a request form and initial attention is directed to the regions on the scan relevant to these. There follows a general survey as Dr Barker describes. The reasonably skilled neuroradiologist should include a perusal of the basal cerebral arteries in this survey.
Even taking a sceptical view there is, at the very least, a high index of suspicion of an aneurysm on the 1999 scan, notably study 2, image 33 on that study. I would have expected that a responsible neuroradiologist would have raised this possibility in the report and requested further imaging, notably a magnetic resonance angiogram.
The site of the subsequent haemorrhage was centred this region and, on the balance of probabilities, the aneurysm identified in 1999 was responsible for it.
DISCUSSION OF THE 2011 CT ANGIOGRAM
Because the suspected aneurysm was not characterised fully in 1999 it is not possible to make a direct comparison between the 'routine' cranial MR scan at that time and the September 2011 CTA.
Equally it is not possible to comment on the precise shape of the aneurysm on the 1999 MR scan.
By far the more likely scenario is that the aneurysm, which I firmly believe to have been present in 1999, ruptured in 2011 and correspondingly it is extremely unlikely that an aneurysm arising 'de novo' in exactly the same location was responsible for the haemorrhage."
Earlier in his report Dr Butler had depicted image 33, study 2, taken from the relevant MR study, which related to the right sylvian fissure, transmitting the right middle cerebral artery. Dr Butler drew an arrowhead pointing to what he considered was "an aneurysm on that artery and not tortuosity of that artery". In discussing the cranial CT scan from The Portsmouth Hospitals NHS Trust of 18 September 2011, he said:
"There is a right temporal haematoma intimately related to the right sylvian fissure. There is widespread subarachnoid haemorrhage. There is evidence of raised intracranial pressure with shift of midline structures to the left and effacement of the basal cisterns".
In referring to the CT angiography from Wessex Neurosurgical Centre of 9 September 2011 Dr Butler observed that it showed a right middle cerebral artery aneurysm in close relation to the temporal haematoma. As to the MR scan, Dr Butler said:
"On such a routine investigation the aneurysm cannot be characterised fully, nor can its size be accurately measured. It is however of the order of 5mm."
On 6 October 2014, in answer to a question on behalf of the Defendant, Dr Butler sought to clarify his opinion by stating:
"Rapidly flowing bloods in arteries (and blood flowing in patent arterial aneurysm) is displayed as a 'signal void' on MRI and is black on T2 and T2 FLAIR sequences.
The middle cerebral arteries travel in the sylvian fissure on each side. In EXP's case the signal void in the right sylvian fissure is too prominent to be explained on the basis of the normal middle cerebral artery and its branches alone. There is no evidence of undue arterial tortuosity or arterial ectasia on the subsequent CT angiogram and the two sides on the MR scan are different, the left being normal.
A CT angiogram is a special investigation utilising thin axial sections of 1mm to display arterial anatomy in some detail, incorporating 3D.
The MR examination of 1999 was a routine scan with a slice thickness of the order of 5mm. Accordingly the abnormal signal void in the right sylvian fissure is a composite mainly of the aneurysm sac and immediately adjacent arteries. "
In the Joint Report dated 17 November 2014 Dr Butler maintained his opinion. As to the location, direction and measurements, he said that in the 1999 scan the aneurysm was in relation to the distal M1 segment of the right MCA. It was not possible to determine the detailed anatomy of the aneurysm. However, the aneurysm was likely to be in the order of 5-6mm. The direction was "difficult to determine because of the limitations of the scan". Dr Butler agreed that on the CT angiogram of September 2011 the (ruptured) aneurysm was "laterally directed from the posterior aspect of the vessel."
Dr Andrew Molyneux MA MB B.Chir. D.Obst RCOG FRCR, honorary consultant neuroradiologist, University Hospital of North Staffordshire NHS Trust, gave evidence for the Defendant. He was consultant neuroradiologist at the Radcliffe Infirmary, Oxford, from 1999-2004. Among other positions he was an examiner for the MSc degree in radiology, and honorary senior clinical lecturer at Oxford University. His main interest has been in the development of science, practice and techniques of interventional neuroradiology, primarily the treatment of cerebral aneurysms and brain AV malformations by endovascular techniques. The Radcliffe Infirmary was the leading UK centre and had one of the largest experiences in the world in the treatment of cerebral aneurysms by interventional techniques. His curriculum vitae provided an impressive list of articles in peer reviewed journals since 1998, a large number of which covered his special area of aneurysms.
In his report dated 6 August 2014, Dr Molyneux stated:
"MRI scan of Brain performed at Alliance Wessex Nuffield on 06 April 1999. This scan is provided as hard copy images. This scan consists of Axial Dual echo (Proton density and T2 images), Saggital T1 and Coronal FLAIR images.. I have reviewed the findings on this scan and in my opinion there is no abnormality seen in the brain. I am not able to identify any clear evidence of a cerebral aneurysm on this scan. The right sylvian fissure is prominent, with a prominent CSF space. The proximal middle cerebral arteries (MCA) are quite prominent on both sides, and all the vessel flow voids seen in the circle of Willis are quite prominent. I am not able to definitely identify an aneurysm on this scan. The findings on this MRI scan are within the range of normal in an adult patient and I would have reported this scan as such."
Later in the report, he stated:
"I have received the MRI scan done in 1999 again. There is no visible abnormality on the 1999 MRI scan at the right MCA bifurcation. The aneurysm that 12 years later ruptured and caused the subarachnoid haemorrhage and intra-cerebral clot in 2011 was pointing laterally from the posterior aspect of the trifurcation of the right MCA.
In addition, Dr Molyneux stated:
Incidental intracranial aneurysms occur in the adult population with a frequency of about 3%. The time course of formation and rupture of intracranial aneurysms is unknown. The most widely held opinion amongst experts in this field is that the majority of small aneurysms that present with rupture causing a SAH do so relatively soon after their formation. This is the only realistic explanation for the discrepancy in the observed natural history of small unruptured cerebral aneurysms found incidentally which, based on the best literature evidence, have a very low likelihood of rupture and the observed fact that in the most patients who present with a haemorrhage after an aneurysm rupture, the size of the aneurysm is small and usually less than 7mm."
In an attachment to his report, showing image 14, study 2 and headed "EXP MR1 April 1999", Dr Molyneux drew a blue arrow with the legend "Axial Proton density image showing tortuous MCA trifurcation anteriorly of the artery". In respect of image 33, study 2, Dr Molyneaux drew a blue arrow with the legend "Axial T2 Image same slice level showing slightly tortuous MCA trifurcation anteriorly".
In the Joint Report Dr Molyneux said:
"… the findings on the MRI scan of 1999 are shown in retrospect to represent what [I regard] as complex bifurcation pattern of the right MCA and that the findings are within normal limits".
In respect of image 33, study 2 of the MRI scan, Dr Molyneux stated that the flow voids "relate to the complex branching pattern of the MCA shown on the later CT angiograms".
As to the location of the aneurysm found on the CT angiogram in September 2011, Dr Molyneux repeated that the aneurysm was "arising from the posterior aspect of the proximal MCA at the first branch of the artery just proximal to the second branch origin which is arteriorly directed", and that the aneurysm on the CT angiogram was not the same aneurysm postulated by Dr Butler on the MRI in April 1999.
The Defendant gave evidence. He had no recollection of reviewing the MRI in April 1999, but explained the normal procedures he would have followed in any event. That evidence was not challenged as such. The inescapable inference was that, if he had reviewed the relevant images, he had found them to be normal and to reveal no indication of any aneurysm, in particular, no evidence of any aneurysm at the location of the ruptured aneurysm later shown by the CT angiogram in 2011. The Defendant expressed no view either way as to what he now thought, having had the opportunity in the context of this litigation to review all the relevant images from the MRI scan of April 1999, in the light of the angiogram of September 2011. He left the interpretation of those images to the rival experts.
The Claimant also relied on an expert report of Peter Kirkpatrick BSc MB Ch.B MSc FRCS (SN) F Med Sci, consultant neurosurgeon at the University of Cambridge Hospital Trust since 1995. In his report dated 11 August 2014, after reviewing the available neuroradiological material, including the MRI scan of April 1999, he stated:
"On the T2 – weighted horizontal images a flow-void in the region of the right middle cerebral artery is identified. The globular flow declares very clear aneurysm in the region of the middle cerebral artery bifurcation. It looks multi-locular It measures about 5-6mm in its maximum dimension. The lesion is also identified on the TI – weighted images but is slightly less obvious."
Later in his report, under the heading "Comments on the Defence Pleadings", he stated:
"The key issue here relates to whether or not the images of 06.04.99 were abnormal. I have reviewed these myself, and from a neurosurgical perspective who sees hundreds of MRI scans on an annual basis, the images are clearly abnormal and, unequivocally in my view, demonstrate the presence of a sizeable right middle cerebral artery aneurysm measuring between 5-6mm in its maximum dimension. This is not a small aneurysm, and the suggestion that the images show no vascular abnormality, or at best a small aneurysm, in my view is wrong. It would of course be for the expert neuroradiological and general radiological commentary to identify standards of reporting in this matter, but from a neurosurgical and neurovascular perspective I have no doubt in my mind what the MRI scans show. Indeed, I note the commentary from Dr Paul Butler in his expert report that he also considers that the aneurysm was visible on the cranial MRI scan performed in April 1999. He considers that the site of the subsequent haemorrhage was centred in this region and on balance of probabilities the aneurysm identified in 1999 was responsible. From the neurovascular point of view I would totally agree with his views."
There was a written report, and two purported "supplementary reports" in November 2014, on behalf of the Defendant, from Mr Paul Bryne FRCS (SN), consultant neurosurgeon at the Nottingham University Hospital NHS Trust. Mr Byrne was not called to give evidence, and the Defendant did not seek to rely on his report. However, I should note the following two paragraphs in Mr Byrne's main report of August 2014:
"In 1999 I was part of the neurovascular team in my neuroscience centre and was involved in the management of incidentally found unruptured cerebral aneurysms.
In 1999 I would have referred to the enclosed article (New England Journal of Medicine Volume 339 No.24 10 December 1998 pages 1725-1733 "Unruptured Intracranial Aneurysms – Risk of Rupture and Risks of Surgical Intervention. The international study of unruptured intracranial aneurysms investigators" (ISUIA) That paper, which was widely held as the definitive scientific evidence on the risk of rupture of unruptured aneurysms, looked at a group of patients from 53 participating centres in the United States, Canada and Europe. In patients who had no history of subarachnoid haemorrhage the conclusion of the paper was "The likelihood of rupture of unruptured intracranial aneurysms that were less than 10mm in diameter was exceedingly low". The risk was noted to be about 0.05% per year. The paper notes "The management of unruptured aneurysms depends on the natural history of these lesions and on morbidity and mortality rates associated with repair. On the basis of the rupture rates and treatment risks in our study, it appears unlikely that surgery will reduce the rates of disability and death in patients with unruptured intracranial aneurysms smaller than 10mm in diameter and no history of subarachnoid haemorrhage"."
Evidence at the trial : Summary
In the event the important witnesses at trial, who were extensively cross-examined, were Dr Butler and Dr Molyneux (consultant radiologists) and Mr Kirkpatrick (neurosurgeon). All these witnesses expressed views on the core issue, and in essence their views remained the same as those expressed in their reports.
Evidence at the trial : admissibility/weight of Dr Molyneux's evidence
The Defendant attached a curriculum vitae to his witness statement of 10 July 2014. It showed that he had received his medical education at the teaching hospitals in Bristol and Birmingham, before he became a registrar in radiology at "Oxford RHA" in August 1984. He remained a registrar until March 1989, when he became senior registrar in neuroradiology at the Radcliffe Infirmary, Oxford. He remained in that position until October 1991. He stated that he had spent four and a half years in "general radiology", saying that:
"The Oxford course provided a wide general radiological experience as well as the specialised techniques of a teaching Hospital, the latter allowing concentrated experience of body computed tomography, ultrasound, neuroradiology, angiography and interventional radiology…."
As to his "neuroradiology training", Dr Barker stated:
"The Department of Neuroradiology, Radcliffe Infirmary, provided comprehensive service for the Oxford Region. I spent a total of nine months on rotation through the Department prior to my appointment as Senior Registrar in Neuroradiology and then two and a half years in this specialist post. I received training in myelography, angiography, computed tomography, magnetic resonance imaging and interventional neuroradiology."
In these passages Dr Barker did not mention Dr Molyneux at all. Dr Molyneux produced a curriculum vitae, as already noted, in which he stated that he had been a consultant neuroradiologist at the Radcliffe Infirmary, Oxford.
Someone comparing these respective CVs would reasonably infer that Dr Barker would have had contact, possibly significant contact, with Dr Molyneux from about August 1984, and in particular from about March 1989, when he became senior registrar, until October 1991 when he became a consultant neuroradiologist in Southampton. However, someone looking at the respective CVs would not know the exact nature and extent of any connection between Dr Barker and Dr Molyneux, because neither of them in their written statements condescended into setting out particulars of any such connection. On the contrary, neither referred explicitly to any such connection.
Mr Angus McCullough QC, on behalf of the Defendant, suggested that the respective CV's should have put the Claimant, or at least her legal representatives and proposed experts, on notice that there was likely to have been some sort of connection, and that they ought then to have pursued the matter with the Defendant.
I do not accept that suggestion. In my view, the burden was fairly and squarely on the Defendant, in particular on Dr Molyneux who was to be the Defendant's key (in the event, sole) expert witness at the trial, to state frankly, with adequate particulars, the nature and extent of any connection between Dr Barker and Dr Molyneux.
The Defendant knew the details; it is both fair and economical that the Defendant should disclose them. The Claimant should not be expected to engage in the time consuming detective work, the output of which might be incomplete or inaccurate, in order to ascertain the full picture bearing on Dr Molyneux's independence as an expert witness. Furthermore, if the Claimant had been given full particulars, the issue of Dr Molyneux's independence could have been explored, as it should have been explored, before the trial began.
It emerged only in cross-examination at the trial that the connection between Dr Barker and Dr Molyneux had been lengthy and extensive. Dr Molyneux had trained Dr Barker during his seven years of specialist radiology training, and in particular had trained him for two and a half years as a registrar and senior registrar in neuroradiology, including the particular area of interventional radiology in which Dr Molyneux specialised and in which Dr Barker had a special interest. It is clear that they had worked together closely over a substantial period. They had written together a paper for the 14th International Symposium on radiology, a paper not shown on Dr Molyneux's list of publications, and Dr Molyneux told the Court that they might have co-operated on other papers which he could no longer specifically recall. Dr Molyneux helped Dr Barker to obtain foreign placements: Dr Barker had been a Visiting Fellow at the Department of Neuroradiology, University of California at San Francisco in February and March 1990; and William Cook International Fellow, Department of Neuroradiology, Sahlgren Hospital, Gottenberg, with Dr Barker taking care, in this instance, to note in his CV that this enabled him to gain further practical experience "under the supervision of Dr P Svendsen". Dr Barker accepted that Dr Molyneux had guided and inspired his practice, and Dr Molyneux had helped Dr Barker become a consultant in Southampton. They had also been officers together on the committee of the British Society of Radiologists, Dr Barker having been Treasurer at the time when Dr Molyneux, being a committee member, was nominated President.
It also emerged that Dr Barker had suggested that Dr Molyneux should be a defence expert. He had first been asked in cross examination whether he had chosen Dr Molyneux as an expert, which he denied, and he had had to be prodded with a further question to elicit the full picture.
Mr McCullough QC suggested that most, if not all, of the above cast no real doubt on Dr Molyneux's independence, because it was now in effect ancient history. I also reject that suggestion. Where a medical practitioner such as Dr Molyneux has played a relatively prominent part as mentor of another practitioner's career, the bond may well have a very lasting effect, and it is imperative that the connection, even if well in the past, should be disclosed if the mentor is to be put forward as an independent expert witness whose evidence would benefit the person who had been under his or her tutelage. In any event, Mr McCullough's suggestion was wholly undercut by Dr Molyneux, perhaps in an unguarded moment, referring to Dr Barker in his oral evidence by his first name, "Simon". I was somewhat taken aback by this use of nomenclature, because it both tended to show that traces of the relevant bond could still be found, and also that Dr Molyneux was not presenting himself as an expert having the necessary emotional distance from, and professional objectivity about, the practitioner whose competence had been called into question.
In my judgment, there was in this case a very substantial failure indeed, both on the part of the defence more generally but also specifically on the part of Dr Molyneux himself, to disclose, with adequate particularity, the nature and extent of Dr Molyneux's connection with Dr Barker, so that the Court would have a complete understanding of all matters that could realistically affect Dr Molyneux's independence as an expert witness. That failure occurred nothwithstanding paragraph 17 of the order of Master Cook on 2 June 2014 in which he specifically directed that:
"Experts will, at the time of producing their reports, incorporate details of any employment or activity which raises a possible conflict of interest."
In these circumstances Mr Grahame Aldous QC, on behalf of the Claimant, submitted that I should entirely exclude the evidence of Dr Molyneux. I was taken to a number of authorities in support of, and in opposition to, that submission. However, those authorities have been analysed with considerable scholarship in Phipson on Evidence at paragraph 33-29, and it seems to be that at paragraph 33-30 the learned editors summarise the principles that emerge from the authorities with admirable lucidity, as follows:
"The current state of the law may be summarised by the following principles.
(1) It is always desirable that an expert should have no actual or apparent interest in the outcome of the proceedings.
(2) The existence of such an interest, whether as an employee of one of the parties or otherwise, does not automatically render the evidence of the proposed expert inadmissible. It is the nature and extent of the interest or connection which matters, not the mere fact of the interest or connection.
(3) Where the expert has an interest of one kind or another in the outcome of the case, the question of whether he should be permitted to give evidence should be determined as soon as possible in the course of case management.
(4) The decision as to whether an expert should be permitted to give evidence in such circumstances is a matter of fact and degree. The test of apparent bias is not relevant to the question of whether an expert witness should be permitted to give evidence.
(5) The questions which have to be determined are whether:
(a) the person has relevant expertise; and
(b) he is aware of his primary duty to the Court if they give expert evidence, and are willing and able, despite the interest or connection with the litigation or a party thereto, to carry out that duty. "
(6) The judge will have to weigh the alternative choices open if the expert's evidence is excluded, having regard to the overriding objective of the Civil Procedure Rules.
(7) If the expert has an interest which is not sufficient to preclude him from giving evidence the interest may nevertheless affect the weight of his evidence.
Even where the court decides to permit an expert to be called where his independence has been put in issue, the expert may still be cross-examined as to his independence and objectivity."
The authorities emphasise the importance of disclosure, indeed early disclosure, of any conflict. The Guidance of the General Medical Council published on 25 March 2013, with effect on 22 April 2013, entitled "Acting as a witness in legal proceedings" also rightly emphasises the importance of early disclosure, as follows :
Conflict of Interest
If there is a possible conflict of interest – for example, you have been professionally or personally involved with one of the people involved in the case in the past, or you have a personal interest in the case – you must follow our guidance on conflicts of interest. "You must also make sure the people instructing you, the other party and the judge are made aware of this without delay. You may continue to act as an expert witness only if the court decides the conflict of interest will not affect the case." (my emphasis)
Failure to make early disclosure may lead to the kind of chaotic situation that has arisen in this case, where the nature and extent of the conflict became clear only in the course of the trial and led to a submission, after all the evidence had been heard, that the evidence of the Defendant's expert, upon which the defence in the event exclusively depended, should be ruled inadmissible by the Court. Failure to make early disclosure, particularly of an obvious conflict, also tends to raise a natural suspicion that the default was not inadvertent, and to reinforce the Court's concern that the witness has, most exceptionally, become so compromised that the evidence must be altogether excluded.
Dr Molyneux apologised for his failure, but I must look at the issue objectively. Dr Molyneux also said that the conflict had not in any way affected his impartiality, independence and objectivity as an expert witness. He referred to other cases where he had not hesitated to state an expert opinion that was adverse to the interests of a practitioner who was known to him. I am not in a position to evaluate the strength of such a point. However, a further matter did arise which again raised doubts in my mind about Dr Molyneux's independence in this case.
I have already referred to an extract of Mr Byrne's expert report. Anyone reading the relevant passage (see paragraph 43 above) would reasonably have believed that the paper referred to was a model of scientific excellence in its day and was uncontroversial. However, "Surgical Neurology" in 1999 asked several well known vascular neurosurgeons to comment on the article published in the New England Journal of Medicine. The published response was highly critical, the dominant themes being that the study suffered from systemic bias in the selection of patients, was contrary to current orthodoxy and at odds with accepted medical practice. In January 2002 the Journal of Neurosurgery published a number of articles and editorials about the study, and the conclusions drawn contradicted those of the report, with the editorial echoing the original criticisms in 1999. The editor of Surgical Neurology in 2002 went as far as saying that the credibility of those involved in the challenged study had been "severely compromised" and that the interpretation of the retrospective arm, at least of the study, was scientifically flawed.
In these circumstances it was wholly unclear why Mr Byrne had referred to the study in the terms that he did and why he had made no reference at all to the criticisms mentioned above. He did not give evidence, so the mystery remained. The significance of this in the present context is that Dr Molyneux had been an executive committee member of the ISUIA and could have been expected to know of the criticisms of the study and to realise that Mr Byrne's evidence was seriously deficient and misleading. Dr Molyneux accepted in cross examination that he had seen a copy of Mr Byrne's proposed report that contained the relevant passage and he also agreed that the study could not accurately be described in the terms used by Mr Byrne, given the criticisms and controversy already mentioned.
He knew that Mr Bryne's report was being relied upon in respect of what, until very shortly before the trial, was an important contested issue, yet Dr Molyneux did nothing at that stage to draw the attention of Mr Bryne, or anyone else, to what he knew to be the case. The justification for this appeared to be that Mr Byrne was the expert on neurosurgery, and it was not within Dr Molyneux's remit to comment on any aspect of the neurosurgical evidence.
I find that explanation difficult to accept. Dr Molyneux was put forward as, and indeed is, an eminent neuroradiological expert with exceptional and extensive expertise in respect of aneurysms. He held an important position in ISUIA, and he well knew, as he admitted, that the 1998 ISUIA paper was not generally accepted in the neurosurgical community as scientifically unbiased and reliable. The issue of causation between the parties remained important. I would have expected Dr Molyneux in these circumstances to have done something to alert someone to what he knew to be the case. That failure, in my view, reinforced the concern that in this case Dr Molyneux might not have been as disengaged from the party in the litigation as he said that he had been in other cases.
Where does all this leave the Court? I must say that, in the light of the accumulation of facts and matters that I have set out at some length above, I came very close indeed to ruling that Dr Molyneux's evidence was not admissible, on the ground that I could not properly have the confidence which the Court demands it should have in the impartiality and objectivity of an expert witness. However, I did hear the evidence, and the consequence of non admission would be potentially fatal for the Defendant. There is no doubt about Dr Molyneux's expertise and competence to assist the Court on the remaining central issue.
I believe that I can fairly admit the evidence, but I must bear powerfully in mind, when I assess the weight that I should give to the evidence, the reservations that I retain about Dr Molyneux's independence and objectivity in this case.
Discussion
It is first important to appreciate that the Defendant was engaged with a patient where the concern related to double vision, not to the possible presence of an aneurysm. The specific MRI scan in 1999 was not intended to detect aneurysm, and all the experts agreed furthermore that such a scan was in general not an effective instrument for reliably determining the possible presence of an aneurysm. The alleged abnormality appears on only a few images from about 80 images in all. The minimum size of detectable aneurysm was about 4-5mm, and, if there was an aneurysm in 1999, it would have been at about the minimum that could with any degree of confidence have been detected. If the neuroradiologist believed, incorrectly and without sufficient reason, that there might be an aneurysm shown on the scan, and further investigation was pursued (as would be likely), the patient would be likely to undergo an angiogram, a procedure that carries its own risks and that would on this hypothesis be unjustified. On the other hand, if there is an aneurysm, and it remains undetected and untreated, the potential consequences are devastating. Even allowing for the context in which the relevant scan was carried out in this case, and the significant limitations of the scan for detecting aneurysms, the consideration of the scan for the possible presence of an aneurysm, given those potential consequences, called for close scrutiny.
Three practitioners believed that the 1999 imaging showed the presence of an aneurysm in the location of the actual aneurysm that ruptured in 2011. The operating surgeon, Mr Duffill, expressed that opinion when he viewed the relevant imaging in 2011. However, Mr Duffill did not give evidence, and I do not believe that I should attach significant weight to his opinion, particularly as it might have been informed by an understandable confirmation bias, a matter that could not in the event be explored in cross-examination.
Mr Kirkpatrick, a neurosurgeon, believed that the 1999 imaging showed a "very clear aneurysm", "a sizeable right middle cerebral artery aneurysm… not a small aneurysm", "a very obvious aneurysm". This language was much stronger than that used by the Claimant's expert neuroradiologist.
Mr Kirkpatrick is not a neuroradiologist, but, as a neurosurgeon, he has substantial experience in reviewing and interpreting MRI scans for the purpose of, among other things, considering whether there is evidence of the possible presence of an aneurysm. The Defendant criticised Mr Kirkpatrick's evidence in a number of respects. For example, he had initially stated that "the size of the aneurysm described by Mr Duffill and reported on the radiological material at the time of the ictus in 2011 was substantially larger than on balance the aneurysm would have shown some degree of progression over the years and this would have promoted a re-visit towards active treatment". However, on proper analysis of the evidence, there was no reliable support for the conclusion that the putative aneurysm had enlarged, or that the actual aneurysm was a "giant" aneurysm measuring 3.5cms in dimension.
Notwithstanding these criticisms, I am entitled to give some weight to Mr Kirkpatrick's opinion, as a neurosurgeon, that the 1999 imaging revealed an abnormality. At the end of the day, however, the critical neuroradiological evidence for the Claimant was that of Dr Butler, which is set out at length in paragraphs 26-31 above. I have no doubt that Dr Butler is a distinguished neuroradiologist and that he was honestly and carefully stating his opinion on the core issue in the case. What objectively divided Dr Butler and Dr Molyneux was whether the 1999 imaging, notwithstanding its acknowledged limitations, displayed such features of "abnormality" as to require further investigation for the possible presence of an aneurysm. Dr Molyneux considered that the imaging did no more than reveal "tortuosity", and did not display any "abnormality" that required further investigation. The use of the word "tortuosity" was perhaps unfortunate, if not misleading, because it suggested, and was taken to suggest, unusual branching of the brain vessels that would not ordinarily be expected in someone of the Claimant's age. However, it became clear when he gave oral evidence that Dr Molyneux was not referring to any such unusual characteristics. With the aid of a textbook of brain anatomy (Brain Atlas) he explained that the relevant region under consideration was where the MCA divides into different branches, that those branches may twist in ways that differ from person to person, and that for an individual the branching pattern may differ from right side to left side. Dr Molyneux believed that the branching would better explain what otherwise might have been considered to be an "abnormality" in the 1999 imaging: the apparent broadening of the signal flow void in that region was explicable by reference to normal, not unusual or worrying, anatomy.
It did not seem to me that Dr Butler disagreed with Dr Molyneux's basic propositions concerning brain anatomy. Initially Dr Butler suggested that the absence of "tortuosity" (in the relevant usage) on the left side of the MCA in the 1999 imaging was inconsistent with Dr Molyneux's interpretation of the right side of the MCA. However, Dr Butler accepted in his evidence that a branching pattern may differ from side to side, and in any event the left side did not appear to have a dissimilar branching pattern in the light of the 2011 CT scan. Ultimately, it appears that Dr Butler was relying upon his considerable experience in concluding that there was sufficient evidence of an aneurysm on the 1999 imaging to require further investigation. That has to be set against the opinion of Dr Molyneux, that it was reasonable for a competent radiologist to interpret the 1999 imaging as showing no relevant abnormality. I have to decide, of course, whether a competent neuroradiologist in the position of the Defendant could reasonably have concluded that there was not sufficient evidence of "abnormality" to require further investigation for the presence of a possible aneurysm.
I have not found it easy to resolve this conflict between two leading experts. I do see force in Dr Molyneaux's opinion that the features of the 1999 imaging were consistent with the normal anatomy of the brain in that region, and did not evidence abnormality that required further investigation. However, it does appear to me that that opinion in this particular case rests ultimately upon a judgement informed by accumulated experience and expertise in the relevant area. Dr Butler, based on his experience and expertise, believed that the putative abnormality could not be safely and adequately explained by normal anatomy of the brain and that it required further investigation. That was his judgement. It did not seem to me that Dr Molyneux thought that that was an unreasonable judgement, although he did not agree with it.
Where the core issue in a case turns, as it does here, on the court's ability to evaluate the competing and finely balanced medical judgements of rival experts, the court's confidence in the independence and impartiality of the respective experts must play an important role. I have to say, with considerable regret, that by reason of the matters set out earlier in this judgment my confidence in Dr Molyneux's independence and objectivity has been very substantially undermined. On the other hand I have complete confidence in the independence and objectivity of Dr Butler, and I much prefer to accept his judgement, formed on the basis of his great experience and skill, that (i) a competent neuroradiologist would have been considerably troubled by the relevant images from the 1999 MRI scan; and (ii) would not have concluded that those images could be prudently and adequately explained by "normal brain anatomy", contrary to Dr Monlyneux's view; and (iii) would have concluded that the images did show the presence of an aneurysm.
I am fortified in accepting Dr Butler's evidence by the fact that it was supported by Mr Kirkpatrick, and, for the reasons given, I am entitled to give weight to the evidence of Mr Kirkpatrick as an experienced neurosurgeon. On the other hand, the Defendant offered no assistance to the Court in relation to the interpretation of the images of the 1999 MRI scan, even if any such assistance could have been offered only in retrospect.
That leaves only the final question whether there was an aneurysm present in 1999 that ruptured in 2011. As is already clear from the recital of the evidence, the experts divided sharply on this issue. Dr Butler firmly believed that the actual aneurysm that ruptured in 2011 was in the same location as the putative aneurysm visible from the images of 1999 MRI scan. Mr Kirkpatrick held the same opinion. Dr Molyneux considered that the putative "abnormality" in the 1999 images of the MRI scan was not in the same location as the actual aneurysm that ruptured in 2011. A central difficulty on this question was that the 1999 MRI scan was a relatively crude instrument for ascertaining the precise location and exact features of an aneurysm, if an aneurysm were indeed present. Dr Butler stressed the difficulty in seeking to interpret the precise characteristics of the putative aneurysm.
Dr Butler did accept, within the significant limitations of the 1999 MRI scan that the orientation of the feature which he identified as an aneurysm in 1999 appeared to be anterior. It was agreed that the actual aneurysm on the detailed imaging in 2011 emanated from the posterior wall, laterally directed. That apparent discrepancy has to be set against the improbability that the aneurysm that ruptured in 2011, albeit on any view in at least very close proximity to the abnormality that appeared in the 1999 images, was a different and more recent aneurysm. Furthermore, Mr Kirkpatrick in his oral evidence stated that the vessel may have rotated as a result of the haematoma. It is correct that Dr Butler had not mentioned such a possibility but I do nonetheless attach weight in this context to Mr Kirkpatrick's explanation, given as it was on a matter within his acknowledged medical expertise.
Having considered the evidence on this question, I conclude, following the evidence of Dr Butler and Mr Kirkpatrick, that on a balance of probability the aneurysm that ruptured in 2011 was an aneurysm that was present in 1999, as shown by the abnormality visible in the 1999 images of the MRI scan which revealed the presence of an aneurysm in the same location.
Conclusion
For the reasons stated, I find that a competent practitioner would have concluded that the images in the 1999 MRI scan showed the presence of an aneurysm, and that the aneurysm that ruptured in 2011 was the same aneurysm as that evidenced by the abnormality in the 1999 images of the MRI scan. No questions of causation call for decision and I therefore conclude the issue of liability in favour of the Claimant. |
The Hon Mr Justice Turner:
INTRODUCTION
The claimant, Mr Griffiths, is tetraplegic. This issue in this case is whether or not the defendant is, at least in part, responsible for his condition.
THE ACCIDENT
Mr Griffiths is a retired vet. His practice was on the Isle of Wight where he has lived for many years. He had alcohol problems. Every so often he would go on binges. They could last for days. His wife, Carol, is an Alcohol Specialist Nurse.
On the morning of 21 July 2010, Mr Griffiths was carrying out some DIY work at home which involved respraying decorative tools. This required the application of several coats of paint. He filled in the time while waiting for the paint to dry by working on his computer upstairs and drinking vodka and orange. Mrs Griffiths was, at the time, at the dentist's.
At about noon, or shortly thereafter, Mr Griffiths was coming downstairs, empty tumbler in hand, when he lost his footing and fell. The consequences were disastrous. He broke his neck. He ended up sprawled out at the foot of the stairs with his legs resting on the lower steps.
When Mrs Griffiths arrived home she seriously underestimated the seriousness of her husband's condition. She found him still lying at the bottom of the stairs and saw the abrasion where he had banged his head. She also saw the empty glass which smelt of alcohol. Mr Griffiths was, by this time, conscious and, not realising how serious his injuries actually were, protested that he would get up unaided in due course.
For her part, Mrs Griffiths was annoyed that he had been drinking again. She did what she had done on previous occasions when she had found him incapacitated. She took a photograph of him. Her intention was to confront him with the photograph later and thereby administer a dose of therapeutic discomfiture.
About twenty minutes later, Mr Griffiths was still lying at the foot of the stairs when his wife took another photograph of him. In the period between the two photographs she had removed the empty glass and her husband's spectacles which had fallen off in his fall.
It was not until about 1.45pm that Mrs Griffiths began to suspect that her husband's condition was potentially serious. She examined him and found that he had no grip strength. She shone a torch into his eyes which reacted unequally. She thought, mistakenly, that he might have had a stroke. She called the GP surgery and was advised to call an ambulance, which she did. Her call was received at 2.15pm. The ambulance arrived about ten minutes later. By this time, Mr Griffiths had been lying at the foot of the stairs for over two hours.
THE MISTAKE
The ambulance crew, for whose actions the defendant is legally responsible, comprised a paramedic, Mr Hamilton, an ambulance care assistant, Mr Edisbury, and a student nurse who was simply there to observe. Of these, only Mr Edisbury was called to give evidence.
Almost from the outset, Mr Hamilton made a serious error. He assumed, as had Mrs Griffiths, that Mr Griffiths had suffered a stroke and he acted accordingly. There is no dispute that his assessment was negligent. The upshot was that no steps were taken to immobilise Mr Griffiths' neck. He was lifted into a sitting position, carried into the lounge and sat on a sofa. Thereafter, he was taken to the ambulance in a carry chair. It was only after he arrived at hospital that the correct diagnosis was made.
The central issue to be determined is whether the admitted failure to immobilise Mr Griffiths' neck was responsible for at least part of his residual disability.
THE DOCUMENTS
Before moving on to the substantive issues, I must make a passing observation on the sheer scale of the documentation which has been accumulated and offloaded onto the court in this case. In an otherwise meticulously prepared claim, the approach to the preparation of the trial bundle has been egregiously over-inclusive. No fewer than seventeen lever arch files were deposited with the court. They contained well over five thousand pages of documentary material. About a dozen of these lever arch files remained unopened throughout the trial and reference to the contents of three others was confined to just a few pages. It would be no exaggeration to say that about 90% of the documentation was entirely redundant.
With disarming frankness, the claimant's written opening provides at paragraph 10:
"There are seventeen trial bundles and a core bundle and application bundle. Files four to seventeen contain largely irrelevant documents…"
Sedley's Laws of Documents[1] provides, in so far as is material:
"Eighth Law: At least 80 per cent of the documents shall be irrelevant. Counsel shall refer in Court to no more than ten per cent of the documents..."
In marked contrast, Practice Direction 39A of the CPR 3.2 identifies ten limited categories of documents to be included in the trial bundle together with "any other necessary documents".
In this case, the trial bundles entirely fulfilled the expectations of parody but signally failed to comply with the Practice Direction. Of course, the court should not be too ready to criticise solicitors who may understandably err a little on the side of generosity when deciding which documents to include but this pragmatic indulgence does not excuse wholesale profligacy. CPR 1.3 imposes a duty upon the parties to help the court to further the overriding objective. This duty is not fulfilled by documentary carpet bombing. Those responsible for putting trial bundles together should bear in mind that if they are in breach of the Practice Direction then, in appropriate cases, adverse costs consequences may flow.
I will now return to the substantive issues in the case.
ETIOLOGY
The victim of a serious spinal cord injury remains vulnerable to further trauma in the immediate aftermath of his injury. Those structures which protect both the cord and the integrity of the spine have been damaged and the cord itself is rendered more vulnerable to further deterioration through movement. As the British Orthopaedic Association (BOA) publication "The Initial Care and Transfer of Patients with Spinal Cord Injuries" 2006 records on page 16:
"Any spinal cord injury will have an area of cord tissue at critical levels of ischaemia which surrounds an area of necrosis. Any factor increasing this ischaemia has the potential to cause a deterioration of neurological function and, on occasion, this can be permanent."
This is why, as the experts agree, any patient with a broken neck should be kept flat and his cervical spine immobilised. As the BOA publication goes on to state on page 16
"Mobilisation requires a graduated and carefully monitored approach. Simply allowing a patient with an acute cord injury to sit without such a programme is unacceptable." [Emphasis not added].
In this case, it is agreed that Mr Griffiths had sustained a severe injury to his spinal cord as a result of his fall. His head had been thrust backwards by the impact and this had forced his neck into a degree of extension well beyond that which his spine was designed to accommodate. As a result, the third vertebra was pushed back and out of place with respect to the fourth vertebra (retrolisthesis). The space through which the cord ran was thus reduced and the neurons in the cord were damaged. An MRI scan performed on the day after the accident revealed extensive ligamentous disruption and an unstable injury.
THE SCIENTIFIC LITERATURE
Issues of fact arise as to the actual extent to which Mr Griffiths was manhandled by the ambulance crew. I will deal with these later in this judgment. Firstly, however, I must deal with the scientific literature relevant to the issue of causation.
Mr Gardner and Professor Fairbank, both highly regarded spinal injury specialists, reported and gave evidence on behalf of Mr Griffiths and the defendant respectively.
Both experts relied in part upon the scientific literature but, for reasons upon which I will expand, I am satisfied that, in one important respect, the literature failed to support the conclusions which each of them sought to draw from it.
Of particular significance is the extent to which the literature assists in determining the likelihood that, in any given case, inappropriate handling will lead to preventable deterioration.
Both experts relied upon a study of Poonnoose and others published in 2002 in the Journal of Trauma. The study comprised a retrospective review of the records of 569 patients. A prompt diagnosis of spinal cord injury had not been made in 52 of these cases. It was concluded that in 26 out of these 52 cases mismanagement had resulted in neurologic deterioration. Professor Fairbank contended, inter alia, that 26 is only 50% and so does not meet the legal test of balance of probabilities. Mr Gardner countered with the suggestion that a number of the 52 had suffered complete injuries from the outset and deterioration cannot always be demonstrated to occur in complete cases. Accordingly, at least some of these complete injury patients could safely be assumed to have suffered camouflaged deterioration and that this additional cohort would, therefore, tip the balance.
Having read and analysed the Poonnoose paper in preparation for this trial, I was left with serious reservations about the extent to which it assisted me. I raised these reservations during the course of Mr Bishop's opening on behalf of Mr Griffiths. I noted, in particular, that:
i) the population of 52 patients was, statistically speaking, extremely small, particularly in the absence of other studies relating to the same issue (a point which was also made by Professor Fairbank);
ii) The study was entirely insensitive to the actual mechanics of the manhandling in each case. It was unsafe to apply the concept of "manhandling" mechanistically as if it were simply a box to be ticked without each incident of manhandling being treated as having a greater or lesser claim to causative potency. For example, in no fewer than 34 instances the patient in question suffered not only mismanagement through lack of care but also direct and inappropriate therapeutic intervention;
iii) The periods over which proper treatment of the patients in this study had been delayed varied considerably. It is to be noted that it covered a wide array of cases in which the delay in recognition of spinal cord injury ranged from between ten hours to six weeks;
iv) The study was also insensitive to the nature and severity of the original injury. For example, in seven of the patients, the neurological deficit at the time of initial presentation was, in stark contrast to Mr Griffiths' condition, minimal.
Against this background, I formed the strictly preliminary view that any attempt to deploy this study to support a generic conclusion that, all other things being equal, manhandling would, on a balance of probabilities, cause neurologic deterioration in a spinal cord injured patient could well be spurious.
Having heard the experts, my view remains unchanged. The experts accepted that the value of the study was limited and that it fell far short of the first level of evidence for clinical studies. This is not a criticism of Poonnoose. A high quality prospective randomised trial, for example, would for obvious reasons have been wholly unethical. Accordingly, whilst acknowledging the elegance and ingenuity with which he presented his interpretation of the significance of this study, I have formed the view that, in his written evidence at least, Mr Gardner placed too much reliance upon it.
My conclusion is that this study alone does not entitle this court to conclude, without more, that, generically speaking, evidence of manhandling of a spinally injured patient must lead to the conclusion that it is more likely that not that such manhandling caused deterioration.
CAUSATION
At first blush, my interpretation of the Poonnoose study might be thought to put the claimant in serious difficulties. After all, in his closing submissions, counsel for the claimant, realistically in my view, resisted the temptation to present this case as one in which an increase in material risk would be sufficient to establish legal causation. Thus, the conventional "but for" test is to be applied.
However, there is a further and particular feature of this case which requires careful consideration. Mr Gardner relies upon studies which tend to show that neurological motor deterioration is quite uncommon. He also refers to a letter dated 27 August 1999 from the joint author of a National Acute Spinal Cord Injury Study (NASCIS 3) of 1997, which reveals that of 371 patients showing some motor deficit on admission only 3 were in a worse ASIA category at six months. An earlier study, Marshall and others (1987), had found a somewhat higher proportion of patients in which deterioration had occurred of just short of 5%. However, in most of these cases decline in function could be attributed to specific management procedures which were not in themselves indicative of suboptimal care but the deployment of which reflected the challenges of dealing with these types of injury.
Professor Fairbank properly points out that there are limitations upon the extent to which the NASCIS results can be relied upon. In particular, the trial itself was not designed to find out whether manhandling made any difference to the outcome and there is no evidence to suggest that the NASCIS patients were all perfectly handled before arriving at hospital. Nevertheless, he accepted in paragraph 18 of his report of 15 April 2015 that: "mishandling is the main cause of neurological deterioration when it is clearly established".
A combination of the literature and the expert opinion in this case thus leads me to the conclusion that where there is evidence of material deterioration after significant manhandling then the court would normally conclude that, on a balance of probabilities, the deterioration would not have occurred but for the manhandling.
The resolution of the issue of causation in this case therefore rests upon the answers to two questions:
i) Was there a level of negligent manhandling liable to cause further injury to the spinal cord?
ii) Did Mr Griffiths' condition deteriorate between the time he was found by the ambulance crew at the bottom of the stairs to the time he arrived at hospital?
I propose to deal with each issue in turn.
MANHANDLING
The starting point must be that any failure to immobilise a broken neck which is compromising the spinal cord has the potential to cause further injury. In this case there is some measure of agreement as to what took place:
i) Mr Griffiths was lifted from his prone position and was sat up in the hall;
ii) He was lifted from this position, moved and deposited on the sofa in the lounge;
iii) He was lifted off the sofa and taken down the front steps and across the garden to the ambulance in a canvas chair;
iv) He travelled in the ambulance to hospital.
His neck was allowed to move freely throughout these manoeuvres.
There is an issue as to whether Mr Griffiths was sat on the edge of the sofa and then fell backwards. I am satisfied on a balance of probabilities that this is what happened. The defendant points out that neither Mrs Griffiths' letter of complaint of 1 August 2010 nor the letter before action makes specific mention of this. This is true but I am not satisfied that the omission of this level of detail is a compelling reason for concluding that this is something that Mrs Griffiths and her husband imagined or invented after the event.
I note, in particular, that Mr Hamilton, the paramedic, was interviewed on 11 August 2010 by an investigating officer about the sequence of events. I have concluded that his responses were very candid. When asked on reflection what he would have done differently he said that "he would have done 101 things differently". He said he would have immobilised the spine with a spinal board and put a collar on. Thus, I have formed the view that he was doing his best to give honest answers in his interview.
He said that Mr Griffiths sat upright in the sofa and that he got the impression that he was supporting himself. Mr Hamilton did not give oral evidence at trial but his colleague, Mr Edisbury did. He said that Mr Griffiths was placed on the sofa with his head supported by cushions. In his interview shortly after the events in question he said that Mr Hamilton's assessment was carried out when Mr Griffiths was sitting back in the cushions of the sofa but he gave no description of how he got there.
Mr Griffiths' evidence was that he recalled sitting up for a time because he remembers seeing his own feet directly beneath him. Mrs Griffiths supports his account. I was impressed by Mr Griffiths as a witness. For example, when examined in chief about the likelihood that he would use various items of equipment in respect of which claims had been made, his responses were measured and restrained. When he considered that some items might be of limited value or seldom used he was frank about it. It would have been very easy for him to increase the potential value of his claim by adopting a tone of confected enthusiasm. This he did not do and he thereby enhanced his general credibility.
The evidence is unclear and contradictory about whether attempts were made to put Mr Griffiths in a standing position. On balance I am not satisfied that he was ever raised to the vertical despite Mrs Griffiths' recollection of hearing the crew saying: "Come on mate. Let's get you to your feet." Mr Hamilton gave a fairly detailed account of how Mr Griffiths was taken to the sofa in his interview and I conclude that he was giving an honest and accurate account which did not involve attempting to get Mr Griffiths on his feet. I recognise, of course, that Mr Hamilton did not give evidence and was not therefore subject to cross examination but this is a matter which goes to weight and not admissibility. On this issue, however, I am able to give his evidence sufficient weight to lead me to the conclusion that he was accurate in his recollection.
Accordingly, I conclude that in addition to the factors listed in paragraph 34 above Mr Griffiths was also allowed to slump from a more or less upright seated position on the sofa back onto the cushions behind him.
DETERIORATION
The importance of the issue as to whether Mr Griffiths' condition deteriorated over the period from the time when the ambulance crew arrived to the time of his arrival at hospital has been properly recognised by both sides. The defendant advanced the following proposition in its written closing submissions:
"…the issue of causation devolves to this simple question: did the risk, inherent in the failure properly to immobilise the neck, of further neurological deterioration in an existing spinal cord injury, actually eventuate in this case?
There is, or appears to be, consensus that that question is, in turn, answered by the determination of whether or not there was any deterioration in neurological function between the time of the Claimant's fall down the stairs and his arrival in the Emergency Department."
I agree with this approach. Particularly in the light of my assessment of the limited value of the Poonnoose study, I would not be prepared to conclude, without more, that the level of manhandling which I have found to have occurred was causative of a poorer outcome than would otherwise have been the case. However, if I were to find in addition that there was evidence to show that on a balance of probability Mr Griffiths was in a worse state when he arrived at hospital than he had been before he had been manhandled then this would establish that Mr Hamilton's negligence probably caused a poorer outcome for Mr Griffiths.
At the time Mr Griffiths was examined in hospital he was found to have no voluntary muscle power or conscious sensation below the level of his injury. The central question, therefore, is whether there is evidence that this marked a deterioration from his earlier state or whether his condition was no worse than it had been before the ambulance crew arrived.
Mr Gardner relies upon four indications that there had been such deterioration. Each indication depends upon what findings of fact I make. I propose to deal with each in turn.
MOVEMENT
The question arises as to whether before arriving at hospital Mr Griffiths was able to move his limbs and torso below the level of his injury.
Doubtless when Mrs Griffiths took the two photographs of her husband at the bottom of the stairs she had no conception of the forensic use to which they would subsequently be put. Indeed, until a few weeks ago no apparent difference between Mr Griffiths' posture in the photographs had been spotted. However, a careful comparison appears to show that Mr Griffiths' left arm extends further from his body in the second photograph than in the first. The photographs were taken from different angles and so some care should be exercised. However, Mrs Griffiths took measurements at her home based on the photographs and concluded that the movement was of some seven or eight inches. I accept her evidence on this issue and find it to be consistent with what is depicted in the photographs.
The fact that the movement is limited and undramatic explains why it had not been noticed earlier. The defendant denies that the photographs depict movement but argues, in the alternative, that the most likely explanation is that Mrs Griffiths moved the arm when she was testing her husband's grip. However, in her witness statement she stated that she did not touch or move him. It was about 1.45pm when she tested his grip. At the time she signed her witness statement she had not appreciated the difference in the position of her husband's left arm illustrated in the photographs and so had no motive, subconsciously or otherwise, to misrepresent the extent and timing of her intervention. The second photograph was taken at about 1.15pm which was about half an hour before she tested her husband's grip. I am therefore satisfied that Mrs Griffiths did not move her husband's arm during the period of twenty minutes between the photographs. He achieved this himself as a result of some level of residual function remaining below the level of his spinal injury.
In interview, Mr Hamilton described Mr Griffiths as being in a position which, on the face of it, is different from that depicted in either of the photographs. However, this evidence is inconsistent with all of the other evidence on the issue in this case and on this point I am not satisfied that his recollection, albeit honest, was an accurate one.
TRUNCAL SUPPORT
Mr Griffiths' case is that for about thirty seconds he was supporting himself on the sofa before falling back. If this is correct then it is evidence that he had retained at least some level of function below the neck. I have already addressed this issue with reference to the degree of manhandling to which Mr Griffiths was exposed at the hands of the ambulance crew. I find that Mr Griffiths did indeed remain unsupported for a relatively short time but long enough at least to demonstrate some residual function.
Professor Fairbank made the point under cross examination that it would be unlikely that Mr Griffiths could have had truncal support without movement in his upper limbs. However, the value of this point is inevitably diminished by my finding that Mr Griffiths did, indeed, manage to move his left arm whilst he was lying at the bottom of the stairs.
FLACCIDITY
Mr Gardner deployed a vivid anthropomorphic simile in his description of the presentation of a patient with complete flaccid tetraplegia as being like a "puppet whose strings have been cut". He made the point that an experienced paramedic would not be likely to miss this. In his interview, Mr Hamilton recorded that his assessment of Mr Griffiths included not only the observation that he appeared to be supporting himself but that he had bilateral arm weakness and little to no grip strength. This description is not consistent with complete flaccidity. I am satisfied that an important (but not exculpatory) reason why Mr Hamilton did not appreciate that Mr Griffiths was spinally injured was that he did not initially present as being entirely flaccid.
The defendant draws attention to the fact that in her letter of complaint to St Mary's Hospital in the Isle of Wight Mrs Griffiths described her husband's arms as being flaccid. However, I bear in mind that, unlike Mr Hamilton, she was not trained or qualified to make a formal assessment and I find it likely that her examination was limited to a test of grip strength which is not determinative of whole limb flaccidity.
There are references to loss of limb function and inability to move in the ambulance crew notes and Emergency Department records but these fall short of describing complete flaccidity. The notes from Southampton to the effect that Mr Griffiths was found to be quadriplegic with flaccid paralysis are ambiguous and capable of being interpreted as being a reference to Mr Griffiths' condition on admission and not when at home. References to "quadriplegic@scene" in the Daily Review Sheets take the matter no further. It is not disputed that Mr Griffiths was quadriplegic at the scene. This issue is as to whether his quadriplegia was complete.
BLOOD PRESSURE
There was a level of agreement between the experts that if a complete tetraplegic is suddenly raised he is likely to suffer a sharp fall in blood pressure which could well manifest itself in paleness, faintness or perhaps loss of consciousness. The risk is higher with movement to a standing position than to a sitting posture. There were no signs of this in Mr Griffiths' case and he consistently scored highly on the Glasgow Coma Scale with respect to verbal response.
Of the four indicia relied upon by Mr Gardener, however, I find this to be the least strongly probative of residual function. The absence of symptoms of sudden loss of blood pressure are consistent with the suggestion that he was not suffering from a complete injury before he was manhandled but I would not have considered this factor, if standing alone, to have been a sufficiently robust indication to discharge the burden of proof.
CONCLUSION ON CAUSATION
I summarise my findings thus:
i) The mere fact of manhandling on the scale revealed in this case would not have been sufficient, without more, to justify a conclusion on the balance of probabilities that the negligence had caused injury;
ii) Deterioration of spinal injury is relatively uncommon and the most common cause is manhandling;
iii) There was evidence of both manhandling and deterioration in this case sufficiently compelling to support the conclusion that the manhandling was responsible for the deterioration.
OTHER POINTS
Professor Fairbank suggested that the anatomical nature and extent of the extension injury was such that, but for the application of a very considerable level of further force, there was little further damage to be done. The strength of this argument, however, is substantially undermined by the MRI results which reveal an unstable fracture. I do not, therefore, consider that this point is sufficiently strong to rescue the defendant from the conclusions I have drawn from the rest of the evidence in the case.
Professor Fairbank also relies on the undisputed fact that Mr Griffiths has made a remarkably good recovery. He contends that such a good outcome is inconsistent with a serious injury upon which further trauma caused by manhandling is superimposed. He further points out that there is no literature to the effect that manhandling will cause a less good eventual recovery as opposed to deterioration.
I am unpersuaded by these arguments and share the scepticism of Mr Gardner in this regard. Mr Griffiths' good recovery does not prove that he suffered only one insult rather than two or more successive insults to the spinal cord. The starting point from which the good recovery proceeded was the complete tetraplegia recorded upon his admission to hospital. I fail to see how his later progress would provide any reliable evidence as to whether his condition upon admission had been caused by one severe trauma or the combination of a less serious trauma which had been made more severe by later manhandling.
I am equally unimpressed by the contention that there is no evidence that manhandling can lead to a less good recovery as opposed to a deterioration. The likely extent of recovery is, in part, determined by the severity of the original injury. The more severe the initial presentation the greater the chance that the outcome will be poorer. I find that the manhandling caused additional damage to Mr Griffiths' spinal cord. I agree with Mr Gardner that the logical conclusion is that, good as it was, Mr Griffiths' recovery would have been even better but for the manhandling.
I accept Mr Gardner's description of the etiology which lies behind this conclusion. Any given neuron in the spinal cord will, if damaged, either remain permanently incapable of conducting electrical impulses or it will recover sufficiently in time to function effectively once more. The greater the extent of the damage to the neuron the lower the chance that it will recover. Accordingly, additional damage sustained by neurons caused by manhandling will lead to a lower proportion of neurons as a whole returning to full function. The consequence is a more limited recovery than would otherwise have been the case. In many respects Mr Griffiths' recovery has brought him to the cusp of useful functionality and thus even if a modestly higher proportion of neurons had returned to full function this would have been likely to have brought significant benefits. The manhandling has deprived him of those benefits.
CONCLUSION
In his reports, Mr Gardner has attempted to assess what the extent of Mr Griffiths' recovery of function would have been but for the manhandling. The defendant seeks to persuade me that this exercise, upon which Professor Fairbank has declined to embark, is so speculative that no useful conclusions are permissible and the claim must fail in any event. I disagree. Of course, the task which Mr Gardner has set himself has involved an inevitable element of speculation but his approach is both coherent and consistent with the reasoning which lies behind it. Accordingly, this claim must now be quantified, either by agreement or further adjudication by the court, with reference to the "but for" assessments of comparative function which are set out in Mr Gardner's reports.
Note 1 Which, for the avoidance of doubt, is a work of parody. [Back] |
MRS JUSTICE McGOWAN :
Introduction
The Claimant and the Defendant are father and son. They are both Austrian nationals, the father now lives mainly in Thailand and the son in England. Both share an enthusiasm for vintage cars and in particular for Lancia Stratos cars. It is four such cars that are the subject of this dispute. The cars are worth something in the region of 3 million Euros.
Proceedings
The Defendant seeks a declaration that the cars are, in fact, his property and the Claimant seeks the return of the cars which he says are, and always have been, his property.
The important areas of dispute in this case are fairly narrow. It is agreed that the Claimant acquired the four cars at different times and that they were most recently in the possession of the Defendant. Whether the Claimant actually made a gift of the cars to the Defendant or simply pretended to make a gift of them is the issue that has to be determined. It is accepted that there is no documentary evidence of a gift.
There are a number of issues of fact, very few of which need to be resolved to determine the central issue. In the course of evidence, each of the parties has had their credibility tested beyond breaking point. It is accepted by both parties that neither has reached the end of their evidence as a wholly reliable or creditworthy witness.
Law
There are no legal issues to be determined in this case. The only points that arise are agreed as follows:
a. The transaction took place in Austria and both parties agree that for a valid gift to be effected under Austrian law, in the absence of a notarised deed of gift, both parties must intend that there is to be a gift and the property must be handed over in completion of that joint intention.
b. No question of either party having any beneficial interest in the cars has been pursued in this hearing.
c. No question that the Defendant owned the cars before the date of the purported gift arises.
Issues
Both parties made lengthy witness statements, gave evidence and called a witness or witnesses to support their case. It is not necessary to determine every issue of fact in dispute between them, only those sufficient to reach conclusions on the sole issue. This has become an acrimonious conflict which on occasion became emotionally charged. That being said there were a substantial number of areas of agreement.
On occasions it was clear that the Claimant found the proceedings very difficult. He has a number of health problems. His English is limited to the extent that he required an interpreter but good enough that he either did understand some questions or thought he did. Giving evidence through an interpreter adds to the difficulty and that requires some allowance. In addition his memory let him down on occasions and there were times when he appeared to have moments of genuine confusion. There were also occasions when he was unable to remain in court to listen to his son's evidence.
The Defendant is much younger and speaks very good English. He did not appear to have the same emotional difficulty as his father in dealing with the proceedings. He did not have the same age-related problems of recollection.
The history of the acquisition of the cars was agreed in large measure. Those limited areas of dispute may be genuine errors of recollection but in any event do not need to be determined to assist in reaching a decision.
Father and son shared a love of cars and it was clear that, for them that shared passion was evidence of the good relationship that existed between them. The Claimant had made and apparently lost large wealth throughout his career, certainly he had sufficient to have amassed such a valuable collection.
There is a calendar of events in the world of such car enthusiasts. It is a community in which there are strong ties and even stronger rivalries. The acquisition of such cars is a passion; it appears that completing a set is an obsession.
By 2000 the Claimant had acquired the four cars in this case: the Street car, the Prototype, the Safari and the Turbo. The cars were sometimes identified by colour but more consistently by those labels. Both the Claimant and the Defendant played a role in the process of acquiring the cars. The Claimant accepted in his witness statement that he had acquired some of the cars in a manner designed to avoid tax. He also accepted that he had been convicted of tax fraud and sentenced to a short term of imprisonment, apparently varied to a community penalty.
The Claimant lived in Austria during that period and generally kept the cars at his home address unless one or more was at an exhibition or meeting.
There is no dispute that the Claimant had intended that his collection was to pass to his son at some stage. It was a matter discussed between the two of them, within the family in general and it was an intention advertised to the community of car enthusiasts. The core issue is, was that gift actually made at the time of the World Stratos meeting organised by the Claimant in 2000?
The Claimant says that the long talked of gift was not actually made, the Respondent says it was.
Relevant Evidence
The evidence in the case ranged back over 15 years. Both protagonists made lengthy witness statements and gave evidence at considerable length. A recital of the evidence in witness statements or given orally by them or their witnesses is unnecessary. Nor is it necessary or helpful to investigate and determine all those issues raised in order to reach a judgment in this case. The better course, in part led by counsel in their helpful written submissions before trial, is to concentrate on the salient occasions and even then, only on the important details. Accordingly the evidence is dealt with under the following headings,
a. 2000 World Stratos Meeting.
i. This was a lavish and expensive meeting organised and paid for by the Claimant. It was held at Castle Rosenberg in 2000. It is common ground that the Claimant told people at the show that he would make a gift of the cars to his son. Therefore the detailed rehearsal of such statements does not help the fundamental question. The Claimant maintains that he was content to allow their fellow enthusiasts to believe that the cars belonged to his son. This would enhance the Defendant's reputation in that world and be a first step for him to building up his own collection. He was prepared to encourage the deceit so that people involved such as Sandro Munari, would write a letter in the period 2004-2005, [D2-1068], saying that the Prototype belonged to the Defendant, further adding weight to the pretence. Equally telephone cards were printed showing the Defendant as the owner and labels were created for the cars themselves bearing the name "Hrabi". There was some dispute as to whether that was a nickname used by one or both of the parties but as it is accepted that the intention was to declare to the world at large that the Defendant had become the owner of the cars, truthfully or otherwise, resolution of that issue is not necessary. In any event such publicity material had been created in the years before the purported gift in 2000.
ii. There is evidence of the Defendant's carrying on after 2000 as though he were the owner of the cars from that date. The Claimant says as part of the ongoing pretence, the Defendant says as evidence of the true position, that he was the owner.
iii. The Claimant denies giving physical possession of the cars to the Defendant at this meeting in 2000. It is agreed that they continued generally to remain in the physical possession of the Claimant during the greater part of the following decade. There is no dispute but that the Defendant was able to take them and show them on occasion, although the Claimant contended that such an undertaking would always require his permission.
iv. There had been previous proceedings involving the cars. The Claimant had tried to institute criminal proceedings in Germany for the recovery of the cars. They appear to have failed on jurisdictional grounds.
v. It is said by both Eveline, the Claimant's ex-wife and Michaela, his daughter that he had said he would make the gift at the time of the Defendant's graduation. It is clear that such statements were made.
b. Erste Bank Loan for the purchase of the Turbo
i. The Claimant had failed in his first few attempts to buy the Turbo from its owner, Shiro Kosaka, who lived in Japan. Eventually he decided to use a third party, Tarek Esreb, a Syrian national who was a school friend of the Defendant. It is accepted that Mr Kosaka was to be deceived as to the identity of the purchaser.
ii. It was necessary that a loan be raised for the purchase of this car. That was done with Erste Bank through its employee Mrs. Reidl. The bank documentation is clear on its face but does not appear to reflect the true position. The purchase price, as declared is almost certainly not to be relied upon. The liability for repayments under the loan was apparently to fall on the Defendant but neither party could even begin to give a satisfactory account of the transaction with the bank. Why the Defendant would be liable for the loan if the car was a gift to him by the Claimant remains totally opaque. A clear inference is that both parties were less than straightforward with the bank in order to secure the loan, again that is not a matter that is determinative of the issue in the case.
c. Private Communication Between the Parties about the Gift
i. This is the only area of evidence where any real reliance can be placed on what either party has said. In these communications neither is creating an impression for the outside world. Both parties have lied in their dealings with others and cannot be relied upon in their evidence in these proceedings. The only declarations that can safely be relied upon to disclose the truth of what was happening and what was intended to happen can be found when they speak directly to one another and when those communications are reliably recorded for posterity in email and text message traffic between the two. Neither is creating an image for public consumption or seeking to refashion events or recollections for the purpose of these proceedings.
ii. On the Defendant's account the cars had been his since the Summer of 2000. He says that the gift spoken of at the World meeting in 2000 and on many other occasions had been completed at that time. That the cars had been passed to him with the full intention of his father. The Claimant's case was that there had merely been the pretence of a gift to deceive the public but that father and son had always known the true position. He accepted that he had often talked of making such a gift to family, friends and the public but had never put the act of giving the cars to his son into effect.
iii. The email of 14 August 2007 sent at 12.49 by the Defendant to the Claimant is one of the most important and reliable documents presented by either party. It is written at a time when the relationship between father and son is still good and affectionate, it deals with ordinary, everyday family matters and against that background it is the most valuable insight into the position most likely to demonstrate the truth of the issues in this case. It appears in the original German at [D1-431] and in translation at [D1-433].
"Hello Daddy,
Thank you for your email!
It is a pity that the game never arrived.....I also sent one to Tarek (in Syria). I didn't even use a recorded delivery, and funnily enough it actually arrived! Okay, no problem, I will give you one when we see each other again!
Yes, I think I am now okay with getting acquainted with your new family, and I would like to come visit you in Phuket. However, I have to take care of my affairs here first...otherwise I can't really go away for any length of time!
Thank you for your willingness to give me the prototype. It means more to me than every other Stratos, even the Safari, on which I worked for several months of my life together with Luigi, for which I searched for parts, and from which I acquired my detailed knowledge of the Stratos.
The prototype means a lot to me, and has a kind of value for me that cannot be associated with money. I would really like to hand down this car from generation to generation - always to the firstborn son, and I want it to always remain under "Hrabalek ownership".
The car means so much to me because I not only found it, but I also think that I have contributed a lot to the increase in its value. Even the fact that the car was in Geneva in 2005 helped. I also associate with the car a relationship to yourself, because when I was just 16 years old we did a lot of things together. The prototype is the Stratos and it means everything to me.
Ultimately it is your decision.
I also know that you have always tried to be "just" and "fair", and that you have mostly succeeded in doing so. The prototype does not have any "numerical value" for me. In principle, it does not matter to me whether it is worth €50,000 or €5 million. I will NEVER sell this car...for this reason the value is also strictly nominal.
It would of course be nice if I could maintain the Stratos collection in full, but I understand that this would not be fair, and I also understand that you want to divide the cars and their effective value among your children. As I have said, I had never intended to sell the cars after your death, but wanted to keep the cars in your honour in our family.
I'm aware that in the short term we have to solve a couple of our financial problems!
I am in the process of selling the green one, as well as the Dino. I think I can get 250,000 euros for the green one. But I also think that I would need about two months to do so. For the Dino, I think that I could realistically get E50,000 - E60,000. However, I would have to invest about £4,000 before doing so. The "body" needs £2,500 (in order to remove the rust bubbles and to improve the optical appearance of the car), and the mechanical system needs about £1,500. The muffler is COMPLETELY rusted through...it would have to be replaced…and the clutch is sticking, and the brakes also do not work.
Whatever. I think that I will do it 100% in the medium to long term. I am fighting EVERY DAY for success, and I am really working hard at it. It will work out!
What is important is firstly to solve the financial problems in the short-term, or to find a solution. This is now my current task.
As I have said, I would really need £4,000 to make the Dino ready for sale. Do you think there would be a possibility...any possibility at all to perhaps get or borrow the money from Fellerer?
I still have not paid Tarek his £4,000 back. Instead, I had to borrow another £2,000 from him in order to keep the bank from dissolving my accounts and filing a lawsuit against me. Tarek understands this, and he is giving me several weeks' time to then pay back the 6,000 pounds to him in full. Hopefully by then I will have sold the green one, or the Dino.
Right now things are very difficult for me in financial terms. I know they are the same for you as well, but I would be thankful to you if you happened to have a solution for how to come up somehow in the short term with the £4,000. If the Dino is sold off, you would of course also have money!
We must come up with a strategic solution together. I will help you and you can help me. This is the only way we can get out of the current situation. I am very good at selling, and I think I can achieve more than anyone else, including Roks or DeCillia. In regard to selling old-timers, especially Stratos cars, I think I really am the best.
I hope we can meet up in October in Vienna? I think you wanted to come with your family to Vienna?
Chris
PS: thanks for your decision regarding the prototype! You have no idea how much that means to me!!! THANKS"
iv. It is an open-hearted exchange written at a time when the Defendant and Claimant were both going through financial problems. It shows a tentative willingness on the Defendant's part to meet the Claimant's new family. It harks back to their shared passion for the collection and improvement of the Stratos cars. Of vital importance is the discussion of the gift of the prototype as a future event, not something which on the Defendant's case had happened seven years before.
v. The Claimant responds on the general topics but in particular talks about getting the gift documented in writing before a notary public in the future. [D1-429]
vi. In evidence the Defendant claimed that he had written the email at his father's request because the email was to be used by his father to obtain credit in Thailand. He gave evidence that his father had asked him to use the phrase "first born son" and a few other similar phrases as that would be helpful. How his father's ability to obtain credit would be enhanced by giving away a very valuable asset, such as this car, was never explained. He said the request had been made by his father and the plan had been that this email should just look normal.
vii. That evidence was wholly incredible. He could give no satisfactory account of why he should write such a private email in these terms seven years after he claimed the purported gift had been made. Such explanation that he gave was manifestly untrue and unreliable. Equally he could not explain the rest of the correspondence written in similar terms.
viii. It is proof that neither of the two protagonists believed that the prototype or the balance of the collection had been given to the Defendant by August 2007.
Neither party in this case is generally creditworthy or reliable. The Claimant accepts falsely leading people to believe that he had made a gift of the cars. That list includes the various witnesses in the case to whom the story had been told. Generally the story was to enhance his son's reputation but on the occasion of the loan from Erste Bank it was possibly to facilitate the obtaining of the loan.
He accepts some form of dishonourable conduct towards the tax authorities in Austria and Mr Kosaka, the vendor of the Turbo. There are considerable doubts as to his veracity in his dealing with Erste Bank.
It is clear that he had intended, at some point, to give the cars to the Defendant, in his life-time, and quite possibly, as he told his former wife at the time of his son's graduation. Despite that, it is a safe conclusion from all the personal correspondence between the parties, the most important of which is highlighted in the email of 14 August 2007 that, for whatever reason, he did not make that gift. Further it is absolutely clear from the communication between father and son, that the Defendant knew that the proposed gift had not in fact taken place.
Applying the burden of proof to the Claimant's case throughout, about which counsel did not agree, it is clear that the evidence satisfies it to the required standard and demonstrates that the Claimant did not, in fact, make the gift and further that the Defendant knew that the gift had not been made. The cars were and remain the property of the Claimant. |
Mr Justice William Davis:
This is a clinical negligence claim arising out of the post-birth management of the Claimant HS at the Defendant's hospital in Preston in October 2006. When HS was born she was suffering from a streptococcal infection. Negligent failure by the paediatricians with the neo-natal care of HS to recognise and to treat the infection led to the development of meningitis. As a result HS suffered catastrophic brain injury.
The Claimant sues by her mother and litigation friend JS. HS is now 8 years old. She will never have any capacity to manage her own affairs as an adult.
The action was commenced in September 2012. Liability was admitted in a letter from the Defendant's solicitors dated the 24th September 2013. The hearing before me has been concerned purely with issues relating to recoverable damages. Various heads of claim were agreed in advance of the hearing. I shall deal with the application to approve the agreed sums at the conclusion of this judgment. I was required to determine various matters relating to future loss, the most significant issue being the appropriate measure of damages for the cost of future care.
The current condition of HS
HS is subject to three principal abnormalities. First, she has bilateral spastic cerebral palsy. This means that she has no independent mobility. She can move her body a little, she has some uncontrolled arm movements and she has a limited degree of sitting ability. Thus, she is entirely dependent on others for all aspects of daily living. HS is doubly incontinent. There is no prospect of any improvement in motor functions. It is highly likely that, notwithstanding proper physiotherapy, HS will develop significant contractures and deformities in the future.
Second, HS is profoundly retarded developmentally. She has profound cognitive impairment. She has no speech and very limited ability to interact with her environment. She functions at about the level of a one year old child but without the rapid developmental background of such a child. This will be the permanent position. She manifests serious behavioural problems. These have improved with the input of full time professional carers but the potential for them will remain. The management of them can be improved further with psychological intervention.
Third, HS's sight is very limited. She can recognise people with whom she is familiar. She will watch television though this is likely to be as much an aural stimulus as a visual engagement.
No improvement in HS's condition is expected. She is at risk of epilepsy but this will be controllable with medication. Her life expectancy has been substantially reduced. She is likely to survive until she is 49.
The position to date
HS lives at home with her mother, father and two younger siblings. Her mother is a registered nurse. She works at the same hospital where HS was born. Her father AS works as a machine operator. They were married in 2000 in India which is the country of their birth. JS came to the UK in 2002 and was joined by her husband in 2003. Both have worked throughout their time in this country. They are settled here. Their two other children are ES born in December 2010 and CS born in October 2012. They are normal healthy children.
Until 2014 HS's care was provided by her parents at the then family home. The family home was a three bed roomed house in Ribbleton, a suburb on the north eastern outskirts of Preston. Although some alterations were carried out by the local authority e.g. a lift giving access to the bedroom used by HS, the accommodation was quite unsuitable for the care of someone as disabled as HS. JS and AS only had limited assistance from outside carers i.e. one carer coming in for an hour and a half on weekdays before HS went to school and a carer providing assistance for a similar period when HS returned from school. They also had respite care for two hours on a Sunday morning. Otherwise, the very demanding care needs of HS were met entirely by her parents. They had two other very young children to care for and they had to maintain their working lives as best they could. Not surprisingly both found the situation hugely difficult. JS said that they were completely exhausted the whole time. AS's evidence was that he did not know how he and his wife survived with the very limited assistance they had. It is greatly to their credit that throughout this time they maintained the family home and provided HS with expert and loving care.
From March 2014 a much more comprehensive outside care regime was introduced, the funds for this now being available from interim payments. Two carers now are employed full time during the day i.e. mornings and evenings on school days and throughout the day at weekends and school holidays. A further carer covers the nights. In September 2014 the family moved to a larger home in Preston. This has been adapted to provide proper downstairs accommodation for HS and facilities for her carers. Again this has been funded from interim payments.
In early September 2014 HS underwent surgery to stabilise her left hip. She recovered relatively quickly from the operation. She was in a spica cast for about six weeks. The surgery has been successful. However, there is a significant risk that in the near future she will require stabilisation of the right hip.
The losses sustained to date have been agreed. I shall return to them at the conclusion of this judgment.
The issues in dispute
The matters on which my decision is required are as follows:
• The amount recoverable for future care. There are various aspects of future care which are in issue with closer agreement between the parties on some than on others.
• The amount recoverable for case management.
• The proper figure for loss of earnings.
• The sum recoverable to cover the additional cost of holidays caused by HS's disability.
• Whether the cost of a hydrotherapy pool at HS's home is recoverable.
I have established the principles to be applied in each instance. Having been informed of my conclusions via an initial draft judgment, the detailed calculations have been carried out by the parties. The resulting figures together with the agreed sums appear in the schedule annexed to this judgment.
Future care – issues of principle
I shall deal first with care during the day. There is an issue as to whether the division between day and night care should be 12:12 or 14:10 i.e. when HS is an adult. That is a matter to which I shall have to return. (There is agreement that the division should be 12:12 until she reaches adulthood.) The significant dispute is as to the level of care recoverable until HS reaches the age of 19. Her case is that she should recover the cost of two full time carers throughout the day for the whole of that period. The Defendant's case is that until HS reaches the age of 11 the cost of only one full time carer will be recoverable. From that point until HS reaches the age of 19 the Defendant contends for one full time carer with a second carer for part of each day. Thereafter it is agreed that there will have to be two full time day carers.
In making her case HS relies first on the fact that the current deployment of carers is two full time carers during the day. This is the regime put in place by her parents as their preference. Second, it is argued that JS and AS have full time jobs and two other small children for whom they have to care and that the difficult and varied care needs of HS would place too great a burden on them even if they were to act only as a second carer. Third, both of them have suffered from carpal tunnel syndrome. Although it has been treated, it is the kind of muscular skeletal condition which would be liable to be worsened by manual handling as involved in the care of HS. Fourth, although a second carer might not be occupied the whole of the time with the care of HS, events requiring a second carer are completely unpredictable and could occur at any time of the day. When they do occur, the second carer has to be on hand there and then. There will be many occasions when neither JS nor AS is available. Finally, reliance is placed on the evidence of JS and AS. Each has described the burden of caring for HS until the care regime was introduced in March 2014. Both have said that they do not want to return to the position of being responsible for HS's hands on care even as the second carer being called on from time to time. They want to be able to work full time and to have a proper opportunity to care for the younger children.
Mr Featherby Q.C. on behalf of HS relied on the judgments of Lloyd Jones J (as he then was) in A v B NHS Trust [2006] EWHC 1178 and H.H. Judge Mackie Q.C. in Wakeling v McDonagh [2007] EWHC 1201 in support of the proposition that HS is entitled to recover what is reasonably necessary for her proper care and that, if that means the provision of care is not always utilised to full capacity, this is something the Defendant must bear. He invited the acceptance of two propositions: a Claimant is entitled to the damages required to meet that which is reasonably necessary; a reasonable choice to meet that need as made by or on behalf of a Claimant is (or, as he refined it in oral argument, can be) decisive. He submitted further that the Defendant as a tortfeasor is not entitled to say to HS's parents "you must help us out".
Miss Bowron Q.C. did not argue that HS currently does not require two carers from time to time during the day. Rather, she submitted that in cases of this kind it is usual for there to be stepped changes in the level of professional care, those steps corresponding with the child achieving secondary school age and the age at which compulsory full time education ceases. Her argument was that such gradation is justified by the fact that parents in any event maintain a supervisory role for their children, in particular up to the age of 11. Moreover, if HS's parents were to take no appreciable part in her care from this point onward, that would remove them unreasonably and unrealistically from HS's daily life. Miss Bowron Q.C. accepted that the parents had given evidence to contrary effect. She argued that, on reflection and in reality, the parents would assume a second carer's role. Until the age of 11, one of the parents would be the only second carer. Thereafter, two professional carers would be in place but some part of the second carer role would be taken by one of the parents.
I am satisfied that the cost of two full time carers during the day is recoverable forthwith and throughout HS's remaining childhood and teenage years. The facts of every case are different. Here the Claimant is profoundly disabled. Any kind of movement of her requires the attendance of two carers because of her disability and the potential for behavioural disturbance. The points at which two carers might be necessary will be wholly unpredictable. It is unrealistic to suppose that one of the parents necessarily would be available at the relevant point. Both aim to work full time albeit on differing shift patterns. There are two other young children with whom they will be concerned. The kind of care which HS requires is light years away from the supervisory role which would be required for a child between the ages of 8 and 11. Even though HS is only 8 years old, I am satisfied that a regime of two full time carers is necessary and proportionate. I am further satisfied that, in the particular factual circumstances of this case, JS and AS will maintain that arrangement.
The Defendant's argument accepts that significant input from a second professional carer is justified from the age of 11. It is said that some care can be expected to be provided by the parents. I reject that view. The other burdens on JS and AS will not diminish as HS grows older. The difficulties involved in HS's care if anything will increase as she grows. I am satisfied that the hours of professional care put forward by the Defendant for the teenage years are not sustainable. The same provision of professional care will be required throughout.
Until the commencement of the trial there was a very significant dispute as to the level of night care required. On behalf of HS it was said that a waking night carer was required because of HS's tendency to wake regularly during the night and to become distressed or disturbed if not attended to immediately. The Defendant's case was that a sleeping night carer would suffice. That position changed as a result of the Defendant's care expert considering sleep diaries maintained by HS's current carers from the middle of October 2014 to the middle of February 2015. These demonstrated that a waking night carer was required. However, the need for a second night carer – to be employed as a sleeping night carer – remained in dispute.
There is no doubt that for the period covered by the sleep diaries – as confirmed by the evidence of JS – HS from to time required the attendance of two carers at night. The figures from the diaries as to the number of nights on which a second carer was called on were as follows: October (from the 12th) – 8; November – 13; December – 18; January – 7; February (to the 16th) – 3. Miss Bowron Q.C. argued that this showed a downward trend which ought to be taken into account in any assessment of the need for a second carer at night. I do not consider that the available material is sufficient to warrant any proper conclusion on a statistical trend. The period over which the data was collected was limited. The most one can say is that there was an appreciable spike in December. In any event HS's pattern of behaviour is so unpredictable that the concept of a trend is not particularly apposite. It also was argued that HS will be provided with psychological input to improve her sleep patterns which will reduce night care requirements. I note that this argument has not prevented a concession by the Defendant that a second night carer will be required once HS is an adult. Miss Bowron's closing submission accepted that psychological input to a girl as disturbed as HS would probably only achieve a modest improvement. I am satisfied that the need for a second night carer will be constant throughout HS's life and that there must be provision for such care from this point onward.
The issue then is the identity of the second night carer until HS is 19. Miss Bowron Q.C. submitted that it was reasonable and proportionate to expect the parents to accept this role until that point. It was argued that this would increase the chances of something approaching normal family life. Miss Bowron Q.C. submitted that the waking night carer would be able to deal with all issues "for the vast majority of nights". Insofar as that submission relies on support from the so-called trend in the sleep diaries, I conclude (for the reasons already given) that it is misconceived. Even if it were to be accepted that the data suggested that a second carer now could be expected to be called on 6 or 7 times a month, I do not consider that this equates to the waking night carer being able to deal with HS alone "for the vast majority of nights". Miss Bowron Q.C. also argued that waking to deal with a disturbed child at night is all part and parcel of being a parent. That of course is correct. But any parent who was disturbed to a significant degree by a child aged 8 as often as HS requires two carers during the night would regard himself or herself as extraordinarily unfortunate. Moreover, the nature and extent of the disturbance on any given night is very different to that experienced by the parents of a normal healthy child even if that child's sleep is disturbed. I am satisfied that it is reasonable and proportionate for a second night carer to be provided as a sleeping night carer.
A sleeping night carer is not paid at the same rate as a waking night carer. It is expected that such a carer will be disturbed from time to time. If the disturbance on a given night reaches a certain level there will an ex post facto uplift to the rate paid to the waking night carer for that night. The evidence on when that point would be reached was unsatisfactory. The evidence of the care expert instructed on behalf of HS was that a sleeping night carer would have to have 6 unbroken hours sleep in a night for the basic rate still to apply. I find that evidence difficult to accept. It would mean that the uplift would apply in an arbitrary fashion. The Defendant's expert suggested that two or possibly three disturbances a night would be within a sleeping night carer's expectations. This view avoided arbitrariness but at the expense of uncertainty as to when the uplift would apply. This issue is of significance because the likely frequency of uplifts must be reflected in a head of damage. The expert instructed on behalf of HS referred to it as a contingency. Whatever it is called, it must be quantified on a sound basis.
Analysis of the sleep diaries shows that some of the occasions on which a second carer was required were such that no uplift would have been payable however it might be calculated e.g. 15th October – "good night after the first two hours" – and 9th November – "slept right through" (after about 11 p.m.). There were other occasions where the sleeping night carer would not have had 6 hours uninterrupted sleep e.g. 8th November – HS required two carers for about half an hour at 2.30 a.m. – but on any sensible view no uplift would have been appropriate. I conclude that the number of nights covered by the sleep diaries on which a sleeping night carer would have been entitled to an uplift would have been relatively limited. At one stage it was argued that the contingency figure should be based on 19 weeks' payment of the uplift. In closing Mr Featherby Q.C. conceded that this was excessive and reverted to a figure of 12 weeks. I am satisfied that this would involve over-recovery by HS. The figure for those nights when for which an uplift will be payable should be based on a total of four weeks substantial disturbance over the course of a year. That is a fair reflection of the detailed information set out in the sleep diaries.
As already indicated the Defendant conceded that a sleeping night carer would be necessary once HS was an adult. It was argued on behalf of HS that the contingency uplift figure should remain at 12 weeks for the duration of her life. For the reasons already given I reject that view. Moreover, the sleeping night carer's uplift for four weeks per year for period up to HS's 19th birthday is based on the night care being provided for 12 hours in every 24 hours. Would that uplift continue to be appropriate if the division between day and night care in adulthood moved to 14:10 which is the basis of the calculation put forward by the care expert instructed on behalf of HS? In my view it would not. The sleep diaries, though they are limited in their scope, provide the best evidence of the nature of the current disturbance. That is the only basis for estimating the pattern of disturbance in the future. It is clear that removal of 2 hours from the period during which the night carers have the responsibility of care would make a significant difference to the extent to which a second carer would be required to assist. In turn that would reduce the number of occasions on which an uplift would be payable. I consider that a contingency uplift figure based on payment for 2 weeks per year will be appropriate if the day/night division moves to 14:10.
In one sense whether the division between day and night care when HS is an adult is 14:10 or 12:12 is a purely arithmetical issue. However, it needs to be resolved by reference to some factual basis. I consider that the 14:10 division will be appropriate. Although HS as an adult will not function as such, the longer day is appropriate for an adult. Provision of two on-duty carers for 14 hours will provide better care for HS at the beginning and the end of each day.
These findings deal with the issues of principle concerning care provision. To summarise, the position is this:
• Two full time carers during the day to be provided from this point onwards.
• One waking night carer and one sleeping night carer to be provided from this point onwards.
• Recovery of a contingency uplift figure to allow for disturbance of the sleeping night carer equivalent to 4 weeks per year until HS is 19 and 2 weeks per year thereafter.
• The division between day and night care to be 14:10 after HS's 19th birthday.
It is agreed that care provision until HS is 19 will be on an agency basis. Thereafter there will be a team employed directly to care for HS. There is one minor issue relating to care provision which is linked to the prospect of HS spending 3 to 4 weeks each year on a family trip to India. I shall deal with that when considering the recoverability of the cost of such trips. The schedule annexed hereto is based on these findings of principle. The relevant hourly rates are agreed.
Future care – miscellaneous issues
The Defendant's care expert's revised care figures include a figure of 3 hours per day family support until HS is aged 19. This is based on the assumption that the parents act as second day carer until HS is 11 and as second night carer until she is 19. That assumption is not applicable given my findings as to the recovery of the cost of full time care. Nonetheless, some family support will be recoverable at a modest level. The amount of family support will change as HS grows older and it will vary from time to time. No precise mathematical calculation is possible. I assess the annual figure for family support until HS is 19 in the sum of £5,500. From HS's 19th birthday that annual figure will reduce to £2,500.
In relation to the period until HS's 19th birthday the other recoverable items are as follows. £1,642 will be recoverable annually for domestic support. £1,875 will be recoverable each year in relation to expenses. (This figure is that put forward on behalf of HS. The Defendant's figure is £11 less than this.) A sum will be recoverable to cover training. Although the care will be provided by an agency which can be expected to supply trained care workers, HS's needs are particular and unusual. Some additional training will be required. I consider that the figure put forward on behalf of HS is excessive. The training will be a case of familiarisation of the care workers with HS's particular needs rather than a requirement for significant additional learning. An annual figure of £1,500 will be recoverable.
When HS is 19 and a care team is employed directly, there will be additional costs. I have already dealt with the figure for family support for HS's adulthood. ERNIC will be recoverable. The figure is a mathematical calculation derived from the employment costs; those costs are as identified by the parties. The annual figure for insurance is £135 and for pension £2,500. The annual expenses figure will be £3,128.40. (Again this is the figure put forward on behalf of HS. In this instance the Defendant's expert suggests a slightly higher figure.) The training costs will be greater when the care workers are hired directly. There are likely to be carers engaged who require genuine training rather than engagement with HS and her needs. The figure put forward by the care expert instructed on behalf of HS is based simply on a percentage of the total care package. The figure argued for by the Defendant is rather less and is not supported by any particular rationale. I have no clear evidence on which to base a proper calculation of the annual training costs of directly hired care workers. Doing the best I can based on the likely recruitment I conclude that an annual figure of £4,000 will be recoverable. There is some dispute as to the annual cost of recruitment (to include DBS expenses) and the payroll/accountancy costs each year. It is not necessary to analyse the competing arguments. I assess the former cost at £2,000 per annum and the latter at £1,000 per annum. The final issue in relation to the recovery of care costs for the period after HS's 19th birthday relates to the appropriate uplift (based on hours per week) of the team leader. The difference between the parties is marginal. On behalf of HS an uplift of 37.5 hours per week is sought. The Defendant argues for 30 hours per week. Again it is not necessary to examine the competing arguments. The team leader uplift will be recovered on the basis of 33.5 hours per week.
The care expert instructed on behalf of HS puts forward a contingency cost calculated as 5% of the care package once the directly employed care team is in place. This contingency is said to be required in order to cover holidays, sickness and other unexpected and sudden absences on the part of the employed care workers. I consider that this proposed cost is not recoverable. The calculation of the care package is based on a 60 week year for each carer. This is intended to deal with holidays (approximately 5 weeks per year) and sickness. Any maternity leave will be funded from the public purse given the number of employees. Any other absences will almost certainly be accommodated with the carers' shift patterns.
My conclusions on the various miscellaneous issues have been incorporated in the schedule as referred to above.
Case management
A case manager has been in place since October 2013. In the period up to the hearing the case management costs have been over £51,000. This level of expenditure is explicable by reference to the fact that, prior to the introduction of the case manager, JS and AS had been coping with all aspects of HS's care and management without any significant outside assistance. In the period after the case manager was appointed an entire care package was set up and HS and her family moved into accommodation which had to be adapted. The case management costs to date represent an annual figure of some £34,000. The case manager suggests that hereafter the annual cost can be halved i.e. an annual figure of around £17,000. The appropriate figure for case management thus far is not for me to determine since it has been agreed between the parties. I shall consider it when dealing with the issue of approval. What is in issue is the level of case management recoverable from this point onward.
The care expert instructed on behalf of HS argues for a continuing case management cost based on 10 hours per month plus 20 hours contingency per annum. It is said that this cost will be constant throughout HS's life. The annual figure is £17,260. The Defendant argues that this figure is too high. First, the extent of case management required whilst HS's care package is provided by agency carers will be less than when the carers are employed directly because functions which might have been undertaken by the case manager will fall within the remit of the relevant agency. Second, there is no justification for an annual contingency at the level suggested. Third, whilst the hourly rate for case management itself is agreed, the Defendant contends that both the hourly rate for travel and the hours of travel put forward on behalf of HS is too high.
I consider that there is force in the argument that the case management cost should not be the same irrespective of how the care package is delivered. If an agency is supplying the carers, there is bound to be less time spent by a case manager on that aspect of HS's overall care. As to the other issues the contingency figure is bound to be a guesstimate rather than evidentially based and the difference in relation to travel costs is modest. Whilst I do not ignore the fact that the letter from the current case manager indicates a likely continuing case management cost in the region of £17,000 per annum, I must also have regard to the hourly rates agreed by the care experts and the hours said by each to be necessary. On the totality of the evidence I conclude that the future care management cost until HA's 19th birthday will be £12,094 per annum with an annual cost thereafter of £15,360.
Loss of earnings
There is no dispute about the recoverability of loss of earnings. HS will never be capable of any work. Had she been treated properly by the Defendant, she would have would have been able to pursue whatever occupation or career for which her intellectual and other capabilities suited her. What those capabilities would have been is very difficult to say. Albert Reid, a jointly instructed educational psychologist, concluded that HS probably "would have functioned within the average to good average range of intellectual ability and likely she would have undertaken tertiary education, potentially leading to a Degree level course with vocational qualification". With great respect to the expertise of Mr Reid, that view is not based on any true or considered assessment of HS. Given her condition, that would be impossible.
If HS's siblings were older, there might be some useful information to be gleaned from their progress. Since they are only 4 and 2, there is not. JS is a qualified nurse. Whilst AS works as a machine operative in the UK, his qualifications in India were to post-graduate level. It follows that there is some assistance to be gained from considering the intellectual capacity of the parents. Moreover, they are first generation immigrants to the UK who came here to further themselves and to give their children a better opportunity to progress. Wholesale generalisation of how the children of such families progress would not be a reasonable basis on which the determine HS's likely path had she not been catastrophically damaged by the Defendant's negligence. Equally, the ambition of such families for their children is a relevant consideration.
Those who represent HS have been criticised for late introduction of material seeking to increase the base figure for loss of earnings. Given the difficulty in presenting any concrete basis for calculating this loss, I am satisfied that it was appropriate for Mr Featherby Q.C. to put forward a case based on the most recent ASHE figures. The figures were put in to give a guide to the various levels of earnings for different types of occupations as well as the median gross earnings for all female employees. Although particular calculations were prepared based on those figures, the calculations could not be any more than a broad indication of the likely earnings. Miss Bowron Q.C. invited consideration of the impact of student loan finance in the event that I were to conclude that HS would have been educated to degree level. If the circumstances of the case were different – a claimant with a defined educational path who could be expected to attend university in the next few years – student loan finance would be a significant consideration. Here HS's notional tertiary education is over 10 years away and her educational path is anything but defined.
The various calculations made by the parties provide varying figures between £223,063 and £327,511. At the conclusion of his submissions on this topic Mr Featherby Q.C. suggested that "a round view" of this head of damage might be appropriate. He argued for an award of £300,000 on that basis. I agree with Mr Featherby Q.C. that a relatively broad brush lump sum approach is appropriate. It does leave the risk that HS will be under-compensated. I do not suggest that JS's initial ambition and hope for her first child – that she should become a doctor – would have been achieved. But it is not wholly unrealistic for her to have harboured that ambition. Had it come to fruition HS's earnings would have been very much more than the figures set out above. Nonetheless, I consider that Mr Featherby's proposed lump sum figure is appropriate. I award £300,000 for loss of future earnings.
Miss Bowron Q.C. argued that some modest deduction from any figure for loss of earnings should be made to take account of travelling expenses to get to work. She cited Eagle v Chambers [2004] EWCA (Civ) 1033 as authority for such a deduction. The Court of Appeal in that case was faced with a judgment in which the judge had made such a deduction. The judgment of Lord Justice Waller did not establish any principle that such a deduction should be made. Rather, Lord Justice Waller declined to interfere with the decision of the judge on the basis that it was not wrong in law. The passage cited by Lord Justice Waller from the decision of the House of Lords in Dew v NCB shows that such a deduction was not to be encouraged. I do not propose to make one for the reasons given in Dew.
Holidays
It is agreed that HS's disabilities will mean that any holiday that she takes will cost more than were she able bodied. The issue is where she will take her holidays. JS and AS return to India each year to visit the extended family which remains in their home state of Kerala. JS's evidence was that this trip will occupy around 4 to 6 weeks during the school summer holiday, that being the routine adopted thus far. She said that she and her husband effectively take the entirety of their holiday entitlement in one go to permit the trip to be of this length. The additional cost of the trip to India caused by HS's disability was not clearly defined. It was pleaded as £4,000 per annum though the evidence of JS suggested that the overall cost was a little more than that. Also pleaded was the additional cost of other holidays i.e. within the U.K. That cost was put at £6,897. Save for evidence of a trip to Alton Towers, I was not told of any such other holidays. If JS and AS use up all of their holiday entitlement in the trips to India, it is not immediately apparent how this additional cost could arise.
Miss Bowron Q.C. argued that the trips to India quickly would become impossible as HS grew older. Thus, the claim for additional holiday costs based on trips to India should not succeed. She also argued that the additional holiday costs are exaggerated, not least because the past holiday costs as claimed fall well short of the pleaded figure. If the trips to India were to occur, there would be a knock on effect on the recoverability of future care costs, in particular whilst the care is being provided by agency staff. For four to six weeks those costs would not be incurred. The cost of care in India is very much less than it is in the UK. Some allowance would have to be made in relation to the care package. The detailed closing submissions of Mr Featherby Q.C. made it clear that the annual discount would be very substantial i.e. rather more than costs of the holiday.
It is impossible to say with any certainty where HS will take her holidays in the future, particularly when she is an adult and when her parents are nearing retirement age. The parents assert confidently that the trips to India will continue but the increasing difficulty of transporting HS and accommodating her in India cannot be ignored. That she is entitled to the additional cost of those holidays wherever they may is not in doubt. Whether that cost will be as much as the pleaded cost is unlikely. I consider that a figure of £5,000 per annum is appropriate to reflect the additional cost of holidays. Since I am not able to say with any certainty where those holidays will be taken, I do not consider it necessary or appropriate to engage in an exercise to discount the care award for time spent in India. If there are holidays in India that may involve a windfall for HS. However, the figure of £5,000 per annum is relatively modest for what one might term ordinary holidays given the severity of the HS's disability and the problems that it will cause in a holiday setting. Where HS takes her holidays will be a matter for her and her parents.
Hydrotherapy pool
HS's accommodation as it now is includes a Jacuzzi bath. This is used for purposes other than simple bathing of HS. She enjoys being in the water. The bath is a place in which she can undergo necessary physiotherapy. However, HS claims for the provision of a hydrotherapy pool at her home. This would involve a total cost (including maintenance) of just short of £250,000. It is not said that there is any established therapeutic benefit. The expert evidence – paediatric neurologists, psychologists, orthopaedic surgeon – is unanimous in that view. The claim is put on the basis that HS has few real pleasures in life and that it would be reasonable for her to be provided with something that will give her pleasure for her lifetime. It also is argued that her siblings – at least for the time being – can and will get into such a pool with her and thereby bond better with her.
I have been provided with various first instance judgments in which provision of a hydrotherapy pool has been in issue. With respect to the judges involved I do not intend to cite them seriatim. It is quite clear that none lays down any point of principle. It is sufficient to quote what was said about such cases by Mr Justice Foskett in the very recent case of Robshaw v United Lincolnshire Hospitals [2015] EWHC 923 (QB):
"I do not, with respect, see those cases as providing any rigid test about what needs to be demonstrated in this context in any particular case. The guiding principle is whether a claim advanced reflects a claimant's "reasonable requirements" or "reasonable needs" arising from his or her negligently caused disability (see paragraph 162 above). I respectfully agree with Judge Macduff that just providing pleasure would not ordinarily be sufficient and some real and tangible benefits would need to be demonstrated. Mr Block and Miss Greaney draw attention to the focus of the argument in Whiten which they suggest was whether any "clinical need" for the hydrotherapy pool was demonstrated. However, what Swift J said was that "a clinical need which cannot adequately be met by physiotherapy exercises carried out in an ordinary swimming pool with suitably trained carers and, occasionally, his treating physiotherapist" had not been established. The claimant in that case could go with his "trained carers [in] a suitably adapted vehicle to [to] a swimming pool at a local private leisure club whenever he wishes to go." For the reasons I have given that option will not be available to James. "
"It does not seem to me that other cases provide the answer to the question in this case. Every case is dependent on its own facts and I would repeat what I said in connection with the issue of access to and manoeuvrability to all parts of James' new home (see paragraph 234 above), namely, that the decision in this case should not be seen as a green light for claiming a home-based pool in every other case. James does have complex needs that do require to be met in ways that may not arise in other cases and merely because an example cannot be found in a previous case does not mean that the provision made in this case is wrong. Very many cases are, of course, resolved without the court being required to adjudicate and it is, therefore, unknown precisely how frequently the issue of a home-based pool is raised and either conceded or recognised to some extent in the overall settlement."
The relevant questions here are: to what extent will HS use a home pool, particularly when she grows older; to what extent will her siblings go in the pool with her and for how long will this persist; what alternatives are there to a home pool for HS to get access to such a facility; what collateral advantage is there in such alternatives?
I am satisfied that HS would make some use of a home pool were it to be available. I am doubtful whether it would be on anything like a daily basis, particularly on school days. It probably would decrease as she grew older. In the early years I accept that her siblings would engage with her in a home pool. I do not consider that this would be a longer term prospect, particularly as they grow older and have other demands on their time whether academic or social. HS can go to a pool with private hydrotherapy facilities in Bolton which is about a 40 minute drive from her home. JS told me that this facility could be block booked in advance for sessions of an hour and a half every Saturday. I am sure that other similar facilities could be found if Bolton no longer were available or if a session on a day other than a Saturday were to be sought. JS also told me that HS actively enjoys going out in the car.
In the circumstances I do not consider that provision of a home hydrotherapy pool would be reasonable as a specific head of damage in this claim. I consider that the costs of twice weekly visits to a private facility are recoverable. I am satisfied that it is reasonable for these costs to be recoverable for life. It is argued by the Defendant that it is "highly unlikely" that HS will continue such activity every week for the whole of her life. Since she plainly enjoys the activity and she will not give it up of her own volition, I do not accept that argument. The recoverable amount will be in itself a not insignificant sum. Assuming an annual cost of around £5,000 – the precise sum is to be the subject of agreement – the capitalised amount will be around £125,000. I am satisfied that such recovery is reasonable and proportionate.
Agreed heads of damage
There is a number of heads of damage which, subject to approval, have been agreed between the parties. I shall deal with each of them briefly. They have been considered in detail in an advice dated 7 May 2015 prepared by Mr Featherby Q.C. and Mr Kenny.
The sum proposed for general damages for pain, suffering and loss of amenity (inclusive of interest) is £305,000. Although HS's awareness of her predicament is limited, the scale of her disability is such that the appropriate award must be at the upper end of the range of awards for injuries of maximum severity. The proposed figure satisfies that description.
The award for the cost of care to date has been agreed in the sum of £270,000. The cost of professional care provided to date has been met in full within that figure. Insofar as there has been any discounting of the sum initially claimed, it essentially has been in relation to sums claimed for gratuitous care. The agreed figure assumes a "normal" discount of 25% on the commercial cost of care in accordance with the decision in Evans v Pontypridd Roofing Limited [2001 EWCA Civ 1657. Such a discount is entirely appropriate in this case. It follows that the overall sum identified in relation to past care is appropriate. The other costs and losses incurred to date in large measure are to be recovered as claimed and the agreed figures are sensible and proportionate.
The Claimant has claimed for very many items of equipment to be provided over the coming years. There is an issue as to the recoverability of some of the items e.g. a powered wheelchair. To engage in a line by line consideration of the items is not necessary. The global sum is what matters. That sum is a reasonable assessment of the entirety of the future equipment needs of HS.
The cost of future transport as agreed is very close to the sum initially claimed by HS. It is not necessary to engage in an assessment as to whether one model of vehicle would be necessary as opposed to another model given the sum in fact to be recovered. It is ample to meet HS's transport needs.
The amount to be recovered in respect of accommodation does not fully reflect the actual cost incurred in respect of the house now occupied by HS and her family. That house is larger and better appointed than the kind of accommodation originally envisaged by the accommodation expert engaged on behalf of HS. It follows that the cost of such a house might not have been recoverable in full as against the Defendant. That is not to criticise HS's parents. They had to find a house which was able to meet the needs of HS but also matched their needs i.e. was in the area with which they were familiar and in which they worked. In terms of recovery from the Defendant, the agreed figure is a proper reflection of the appropriate sum.
The cost of future therapies is to a substantial extent a broad brush estimate. Precisely what HS will be able and willing to undertake in the future is speculative. Any discounting of the figures initially claimed is reasonable. The same applies to the future cost of assistive technology.
The Court of Protection costs as agreed are based on the joint statement of experts instructed by HA and the Defendant. It follows that the resulting figure is appropriate.
I approve all of the sums agreed in relation to the various heads of damage as set out herein. Further, I am satisfied that the sums recoverable for future care costs (including case management) will be best met by way of periodical payments in respect of which I have seen a report from Nicholas Leech, an IFA. The annual payment from 2015 to 2024 will be £225,280.80. From 2025 onwards the annual payment will be £246,421.03.
HEAD OF LOSS £Amount
General damages (inclusive of interest) 305,000
Past losses
Care and assistance 270,000
Case management 50,000
Equipment 1,750
Holidays 3,279
Physiotherapy 16,171
Speech and language therapy 2,121
Neuropsychology 7,275
Occupational therapy 6,445
Miscellaneous 20,000
Interest 29,000
Future losses
Care and case management (up to commencement of periodical payments) 146,895
Equipment 400,000
Loss of earnings 300,000
Transport 250,000
Holidays 128,000
Accommodation 820,000
Physiotherapy 134,800
Pool hire 125,440
Speech and language therapy 83,000
Neuropsychology 35,000
Chiropody 4,897
Riding for the disabled 6,500
Occupational therapy 48,000
Assistive technology 60,000
Music therapy 25,000
Court of Protection and deputy's costs 310,263
Miscellaneous 3,500
GRAND TOTAL 3,592,336 |
Section Para No.
Introduction 1
The claimants' factual allegations 3
XYZ 4
HTF 5
ZMS 6
The defendant's position 7
The claimants' pleaded case 8
Approach to the preliminary issue 11
The evidence of Iraqi law 12
Areas of agreement 15
The dispute 21
Professor Hamoudi's opinion 23
Commentary of Sanhuri 25
Commentary of Hakim 31
Mr Dawood's opinion 35
The meaning of a "foreign cause beyond his control" 42
Drowning out 47
Conclusion 52
Mr Justice Leggatt:
Introduction
Among the many hundreds of claims brought by Iraqi civilians against the Ministry of Defence which are currently pending in the High Court, there is a group of claims brought by individuals who were detained by British forces in Iraq and then transferred into the custody of the armed forces of the United States. The claimants in these "handover" cases allege that, while in the custody of US forces, they were tortured or suffered other serious ill-treatment. They contend that the UK government is liable for such ill-treatment and for their allegedly unlawful detention by US armed forces after they were handed over. Like all the claims in this litigation, these claims are advanced on two legal bases. One is the Human Rights Act 1998. The other is the law of tort. It is common ground that, pursuant to Part III of the Private International Law (Miscellaneous Provisions) Act 1995, the law applicable to the tort claims is the law of Iraq.
This judgment follows the trial of a preliminary issue to determine whether the claims in tort made in these handover cases have a valid legal basis under Iraqi law. The issue is raised on the alleged facts of three test cases in which the claimants are referred to anonymously as XYZ, HTF and ZMS. The preliminary issue is as follows:
"Whether, in respect of the claims in tort of XYZ, HTF and ZMS based on their transfer to and subsequent detention and alleged ill-treatment by the armed forces of the United States of America, the law of Iraq provides for joint liability and/or vicarious liability of the defendant for acts alleged to have been done by members of the US forces."
The claimants' factual allegations
Before considering the applicable rules of Iraqi law, I will summarise shortly the factual allegations made by these claimants.
XYZ
XYZ alleges that on 6 July 2003 he was arrested at his home in Baghdad by US soldiers and taken to a holding camp for detainees (Camp Cropper) where he was interrogated and seriously ill-treated by members of coalition forces who may have included UK personnel. After several days he was transferred by plane to Basra Airport, which was under the control of UK forces, where he claims that he was severely assaulted by British soldiers. XYZ was handed back to US forces and taken to Camp Bucca where he was detained until his transfer to Abu Ghraib Prison at some point between late November 2003 and January 2004. It is alleged that, for part of the period of his detention at Camp Bucca, Camp Bucca was under the control of the UK. After his transfer to Abu Ghraib Prison, XYZ was allegedly subjected to torture and abuse of the most extreme nature by US soldiers. He was released from custody on around 13 December 2004.
HTF
HTF was arrested in Basra in the early hours of 27 June 2008. He alleges that he was assaulted by British soldiers during and after his arrest. He was taken to a detention facility at Basra Airport and then transferred to a US detention facility believed to have been Camp Ballad. He alleges that, while there, he was repeatedly interrogated, held in solitary confinement, deprived of sleep, exposed to cold temperatures and loud noise, and physically assaulted. After a few days, HTF was transferred to another US detention facility at Baghdad International Airport where he was interrogated further and allegedly suffered further ill-treatment, including a sexual assault. Over the following months HTF was held at various detention facilities, principally Camp Bucca, and alleges further mistreatment during this period. This includes being made to stand outside for hours at a time in the hot sun and in the cold and rain in winter. He was returned to Basra and released on 28 June 2009.
ZMS
ZMS was arrested by British forces in Basra on the night of 11/12 July 2008. He alleges that he was assaulted at the time of his arrest. On 12 July 2008 he was flown to Baghdad and transferred to the custody of US forces. He was detained until August 2009 at several different detention centres including (for a substantial part of the time) Camp Bucca. ZMS alleges that during his detention he was subjected to serious mistreatment by US personnel.
The defendant's position
The defendant does not admit that any of the claimants was unlawfully detained or suffered the ill-treatment alleged, but accepts that it would be liable for any unlawful acts which are proved to have been committed by British soldiers. The defendant denies, however, that it has any liability for any unlawful acts committed by US forces.
The claimants' pleaded case
Although, as I have mentioned, it is agreed that the law applicable to the claims in tort is the law of Iraq, in each of the three test cases the claimants have set out their claims in their particulars of claim in English law, asserting that it is for the defendant to prove any material difference between English law and Iraqi law. The particulars of claim allege that the defendant is jointly liable for the alleged unlawful acts of US forces on the basis that the UK's armed forces were allegedly operating in Iraq pursuant to a "common design" with the US. Alternatively, it is alleged that joint liability arose through "counselling, procuring, encouraging and/or facilitating" the alleged torts. The second of these ways in which the claims are pleaded has the double disadvantage that not only is English law not the applicable law but that, even if it were, "counselling, procuring, encouraging and/or facilitating" a tort is not sufficient to give rise to liability in English law, even where the facilitation or other assistance is provided knowingly. To establish joint liability in English law, it is necessary to show that the person who provided assistance acted in furtherance of a "common design" with the person who committed the tortious act: see Sea Shepherd UK v Fish & Fish Ltd [2015] UKSC 10, [2015] 2 WLR 694.
At an earlier hearing in which the defendant was seeking to strike out these claims (in so far as they allege joint liability) on grounds of state immunity and act of state, some sterile argument was directed to the exact scope of the doctrine of common design: see Rahmatullah v The Ministry of Defence [2014] EWHC 3846 (QB) at paras 27-34. The argument was sterile because (1) the parties were agreed that the law applicable to the claims is not English law but the law of Iraq and (2) there is no reason to suppose that the principles of Iraqi law governing joint liability in tort bear any resemblance to the common law doctrine of common design. It was indeed the defendant's express contention that there is no equivalent doctrine in Iraqi law, although at that stage the defendant had not pleaded any positive case as to the relevant Iraqi law, having taken the position that it was for the claimants to do so.
Following that hearing, it was agreed that each party should plead its case as to the law of Iraq on joint liability in so far as it is relevant to the claims of XYZ, HTF and ZMS and serve evidence from an expert in Iraqi law on that question. It was further agreed and directed that the existence and scope of such liability in Iraqi law should be determined as a preliminary issue.
Approach to the preliminary issue
The parties are agreed that, in answering the question posed by the preliminary issue, the court should focus on the act of handover itself. Although questions of joint liability may arise in relation to other allegations, such as the alleged participation by UK personnel in interrogations carried out by US forces, the key question which arises in all handover cases is as follows: would the defendant be liable under Iraqi law for the harm caused to the claimant, if it were shown that British soldiers or officials who ordered or approved the transfer of the claimant into the custody of US forces knew or ought to have known that the claimant would or might be subjected to serious mistreatment or unlawfully detained; and, if so, what kind of actual or constructive knowledge is necessary to give rise to such liability?
The evidence of Iraqi law
The principles to be applied when an English court has to decide a question of foreign law are well established and have not been the subject of any dispute. In particular:
i) Matters of foreign law are treated in an English court as matters of fact which must generally be proved by expert evidence.
ii) Where the relevant foreign law is contained in a code or other legislation, the relevant question is how a court in the foreign jurisdiction would interpret the legislation.
iii) The primary evidence to be used in answering that question is evidence of the opinions of expert witnesses. As with any expert evidence, however, the court is entitled and may be bound to look at the sources on which the experts rely in order to decide what weight to give to their opinions.
In accordance with the directions given, each side adduced evidence from an expert on Iraqi law. The claimant's expert was Mr Ahmed Dawood, a practising Iraqi lawyer based in Baghdad. The defendant's expert was Professor Haider Ala Hamoudi, an academic lawyer who is based in the United States but who has spent time working in Iraq.
The experts have provided their own translations of some Iraqi legal materials including certain provisions of the Iraqi Civil Code. There is also a published English translation of the Civil Code, from which I quote below where the experts have not translated the relevant provision themselves.
Areas of agreement
In the event a large measure of agreement has been reached between the parties and their experts as to the effect of the applicable Iraqi law. In particular, the following five matters are agreed.
First, it is agreed that the relevant provisions of Iraqi law are all contained in the Iraqi Civil Code. Although Mr Dawood explained in his report how questions of civil liability to pay compensation can be decided in Iraqi criminal proceedings, the experts agreed that it is still the civil law embodied in the Iraqi Civil Code, and not the criminal law, which the court applies in deciding such a question.
Second, it is common ground that Article 219 of the Iraqi Civil Code makes provision for vicarious liability but that the defendant is vicariously liable only for the actions of the soldiers under its command and control, and not the actions of the soldiers under the command and control of the USA.
Third, it is common ground that there is no concept in Iraqi law of joint liability based on a "common design".
Fourth, it is agreed that Article 217 of the Civil Code is the provision of Iraqi civil law which governs joint liability for harm caused by unlawful acts. The experts have translated Article 217(1) as follows:
"The several persons responsible for an unlawful act will be jointly liable in their obligation to pay damages for the injury done without distinction between the principal, the accessory / accomplice and the causer."
Article 217(2) states:
"He (of the foregoing persons) who has paid the entire compensation may claim from the others such part which is assessed by the court according to circumstances and the gravity of the encroachment committed by each one of them; if it was not possible to determine the extent of the responsibility of each one of them the liability will be apportioned among them equally."
Fifth, the experts agree that, in order for Article 217 to apply, three conditions must be satisfied: (i) each actor must commit an unlawful act or omission (or "fault"); (ii) each of those faults must cause harm to the victim; and (iii) the fault of each actor must cause the same harm. Article 202 is the provision of the Code under which liability for tortious acts and omissions arises. It is agreed that Article 202 encompasses negligence and intentional wrongdoing.
The dispute
The key area of dispute concerns the effect of Article 211 of the Civil Code, which the experts have translated as follows:
"If a person has established that the harm arose from a foreign cause beyond his control such as by an act of God, a sudden accident, a force majeure, the act of another or the fault of the injured himself, then he shall not be liable for the damages unless there is a provision [in the law] or an agreement stating otherwise."
The experts have agreed that Article 211 is a means by which a person (A) can be excused from liability by establishing that the fault of another person (B) was the true cause of the harm. They disagree, however, as to when the requirements of Article 211 are satisfied.
Professor Hamoudi's opinion
In the opinion of the defendant's expert, Professor Hamoudi, the fault of B will operate to sever the chain of causation between A's fault and the harm ultimately caused only when B's fault "drowns out" the fault of A: that is, where it is so much more severe than A's fault that it overwhelms it. According to Professor Hamoudi, the most common cases where this occurs are where B's fault is intentional while A's fault is merely negligent. For example, if a driver negligently fails to lock the door of his owner's car, and a thief steals the car, then the true cause of the injury is the deliberate act of the thief rather than the negligent omission of the driver. By the same token, if British forces transferred a claimant into the custody of US forces who then deliberately ill-treated the claimant, then provided the British authorities did not intend the claimant to be ill-treated or at least realise that they were exposing him to a risk of such ill-treatment when they authorised his handover, the cause of the claimant's injury would be the intentional fault of the US forces. That would be so, in Professor Hamoudi's opinion, even if the British forces were negligent in that they ought to have been aware of the risk to which they were exposing the claimant.
In support of this interpretation of Article 211, Professor Hamoudi relied on the views of two scholars whom he described as the two leading commentators on the Civil Code. They are Dr Abdul Razzaq Al Sanhuri and Dr Abdul Majeed Hakim.
Commentary of Sanhuri
According to Professor Hamoudi, Sanhuri was by far the most renowned Arab legal scholar of the last century. He drafted the Iraqi Civil Code. He had previously drafted the Egyptian Civil Code and later drafted codes for Libya, Kuwait and Jordan. The result is that Sanhuri's commentary on the Egyptian Civil Code is widely available throughout the Arab world and is a commonly used reference source to which all have access. Professor Hamoudi described Sanhuri's commentary as the most authoritative commentary on the civil codes which he drafted, very much including the Iraqi Civil Code.
Although there are some slight textual differences between Article 211 of the Iraqi Civil Code and the equivalent provision of the Egyptian Civil Code, I accept Professor Hamoudi's evidence that for present purposes the differences are not material.[1] Commenting on the latter, Sanhuri states:
"If the fault of each of the defendant and another was a factor in the occurrence of the harm, but one of the faults drowns out the other, the drowning out fault is considered alone the cause of the occurrence of the harm."
Sanhuri explains the meaning of "drowning out" in his discussion of contributory negligence, as follows:
"One of the two faults drowns out the other in two circumstances. The first circumstance is if one of the two faults is much greater than the other in gravity. The second circumstance is if one of the two faults is the result of the other fault.
The first circumstance—One of the faults is much greater than the other in seriousness. Whenever one of the two faults is much greater than the other fault in gravity, this does not mean that the more serious fault drowns out the lighter one except in two scenarios. The first scenario is if one of the faults was deliberate. ...[2]
In this first scenario, one of the two parties, the defendant or the victim, wanted the harm deliberately but the fault from the other was not intentional. So if the defendant wanted the occurrence of the harm deliberately, then his liability is realized and he must compensate entirely for what occurred by way of harm even if the unintentional fault of the victim had a role in the occurrence of the harm. This is because the intent of the defendant in the occurrence of the harm is alone where the cause stops for the occurrence of the harm. As for the fault of the victim, it is only a circumstance which the defendant took advantage of to fulfill his purpose to cause the harm to occur. Hence, if the driver of a car deliberately runs over a blind man walking in the street without a guide, then he may not use the fault of the victim as an excuse to lessen his liability. Nor will his defense be heard that the victim was walking in the street blind without a guide. This is because the driver wanted to run over the victim, and the fault of the victim is only a circumstance that the driver is using to carry out his intention. But if the victim is the one who wanted harm to himself, his fault drowns out the fault of the defendant. And the responsibility of the defendant is lifted in the absence of a causal link as we have said. So if a person wants suicide, and he seizes the opportunity that a driver is driving faster than the speed limit and throws himself before the car, then he alone is the criminal on himself, and he may not use the excuse—he if he survives or his heirs if he dies—that the driver was driving at an excessive speed and that was a fault. His intention for suicide alone stands as the cause for the occurrence of the harm. The fault of the victim is only a circumstance the victim exploited to carry out his intention. . . . .
The second circumstance—One of the faults is the result of the other fault
If the fault of the victim is the result of the fault of the defendant, the second fault drowns out the first fault, and the fault of the defendant is alone what caused the harm. The liability of the defendant is entire. Hence if a person rides with his friend in a car driven by this friend fast, and what arose from this fast driving was a danger which led the passenger under the influence of the fear to make a blameworthy movement that endangers his safety, and harms himself, then the fault of the victim is the result of the fault of the defendant. The fault of the friend drowns out the fault of the passenger and the liability of the friend is entire. Similar is the rule if a sick person commits a fault in treating himself, but this was based on a blameworthy indication from the doctor. The fault of the doctor drowns out the fault of the sick person because the second fault is but a result of the first fault, hence the doctor is responsible entirely for the compensation. The same is true for the client who commits a fault following the blameworthy advice of his lawyer. The fault of the lawyer drowns out the fault of the client because the second fault was the result of the first fault."
As explained by Professor Hamoudi, Sanhuri makes explicitly clear that the same principles apply mutatis mutandis when the two respective faults are the fault of the defendant and the fault of a third party, as opposed to the fault of the defendant and the fault of the victim, in the following passage:
"One of the two faults drowns out the other, as we made clear in the context of the remarks on the fault of the victim, if the fault was intentional or if it was what led to the commission of the other fault."
Professor Hamoudi pointed out what may appear to be an inconsistency in Sanhuri's commentary in that, in a later section dealing with Article 217 and multiple faults causing the same harm, Sanhuri states:
"Nor is it necessary that the faults are one act, or one crime. One might be deliberate and the other not deliberate [i.e. negligent], and there may be a difference in the seriousness of the faults, such that there is a connection of a serious fault with a slight fault. Despite this, the perpetrator of the slight fault is responsible with the perpetrator of the serious fault jointly and severally. And the nature of the faults might differ, so that one is criminal and the second civil, or one is an act and the other is an omission. An example of this is a servant who is negligent and leaves the door of the house open, and a thief enters and steals from the home. In this case, the servant and the thief are jointly and severally responsible despite the differences in the two faults. Hence, one is deliberate and the other is not. One is criminal and the other civil. One is an act and one is an omission."
Although Sanhuri in the above passage indicates that joint liability can arise where the fault of one party was deliberate and that of the other party merely negligent, it is Professor Hamoudi's view that this passage was meant to describe the outcome under the general principles of liability for multiple actors, subject to the causation limitations imposed by Article 211. Otherwise, there would be a flat contradiction between the two parts of Sanhuri's commentary.
Commentary of Hakim
As mentioned, Sanhuri's commentary is focused on the Egyptian Civil Code which, although very similar to the Iraqi Civil Code, is not identical. According to Professor Hamoudi, for this reason Iraqi lawyers often consult commentaries specific to the Iraqi Civil Code in addition to Sanhuri. Professor Hamoudi said that by far the most well known and official of these commentaries is that by Hakim et al, "A Summary of the Theory of Obligation in the Iraqi Civil Code". This commentary was first published by the Ministry of Higher Education and Research in 1980 and is still widely used and available in Iraq.
Commenting on Article 211 of the Iraqi Civil Code, Hakim says:
"The act of another may interfere in the occurrence of the harm and thus cut off the causal relationship [between the original fault and the harm]. However, for this act of another to cut off the causal relationship, it must be a fault that drowns out the fault of the responsible party."
As explained by Professor Hamoudi, Hakim tends to take an even broader view than Sanhuri of when one fault drowns out another. Hakim indicates in his section on contributory negligence that the fault of a victim is deemed to be the sole cause of the harm if it was "intentional or a grave fault that drowned out the fault of the other" (emphasis added). One example given by Hakim is that, if a person who is driving a car finds an adversary jaywalking and deliberately hits him, then the intentional fault of hitting a person with a car drowns out the negligent fault of jaywalking. This example is similar to Sanhuri's example of the driver and the blind person. However, Hakim also deems "drowning out" to occur if two faults are negligent, but one is considerably worse than the other. He gives the example of a person who drives at night without turning on his headlights. A drunk driver runs into the back of the person's car, causing the car to hit someone and cause that person injury. In this situation Hakim indicates that, even if the victim would have avoided being hit if the car which hits him had had its headlights switched on, the fault of that driver is drowned out by the fault of the drunk driver. That is so, even though in this example the drunk driver did not intend to cause harm.
Professor Hamoudi concludes that, while the matter is not free from doubt, Iraqi courts are more likely to follow Hakim's approach rather than that of Sanhuri in so far as there is any difference between them. Hakim is the Iraqi commentator after all, specifically reviewing Article 211 of the Iraqi Civil Code. Moreover, in Professor Hamoudi's view there is no reason to limit the concept of "drowning out" used by both Sanhuri and Hakim to the specific circumstances described by Sanhuri. In Professor Hamoudi's view, the concept is broader, and encompasses any scenario where one person's act is so much more serious than another's that the former act is then deemed the sole cause of the harm, even if the second act had some role in the occurrence of the harm as well. By the same token, Professor Hamoudi accepted that the fact that one act was intentional and the other was not does not necessarily mean that the intentional act must drown out the non-intentional one. The reason why it generally does so is that intentional wrongdoing is generally more serious than wrongdoing which is merely negligent.
Mr Dawood's opinion
The claimant's expert, Mr Dawood, expressed the opinion in his report that Article 211 has no application to these claims. His reason was that, in order for the unlawful act of a third party which causes the injury to be a "foreign cause beyond [the defendant's] control", the third party's act must be one in which the defendant had no involvement. However, that condition is not met in any case where the defendant is jointly liable as an accessory for the acts of the third party. Mr Dawood said:
"By definition, an accessory must intentionally facilitate for the principal in some way. It is not sufficient for the defendant to have a minor degree of fault and claim that the 'cause beyond his control' was the predominant cause of the injury."
Mr Dawood further explained that, in order to be an accessory, a person must facilitate the commission of an unlawful act and possess one of three mental states: (a) an intention to facilitate the commission of an unlawful act; (b) foresight that another person might commit an unlawful act, coupled with failure to act in accordance with a legal duty; or (c) contemplation and acceptance of the risk that his action will facilitate the unlawful act of another.
The impression given by Mr Dawood's report is that he, like Professor Hamoudi, regarded the application of Article 211 as depending on the comparative degree of fault of the defendant who is seeking to rely on that provision and the third party whose act is said to be the cause of the injury; and that, where someone facilitates an intentional act, it is necessary that the facilitation was itself intentional in one of the three ways identified by Mr Dawood in order to avoid the application of Article 211 and give rise joint liability. The implication is that negligence would not be sufficient.
This impression was confirmed by the joint experts' report. In that report the experts agreed that a causer (A) can seek to excuse itself from liability by arguing that the general requirements of Article 211 are satisfied and that the fault of another person (B) was the true cause of the harm. The report continued:
"This only applies when the fault of B is so much more serious than the fault of A that it can be said to 'drown out' the fault of A. For example, a servant who leaves the door of his master's car open has committed a fault of negligence, and a thief who steals the car has committed a fault of intention. … The civil court would hold that the servant was not civilly liable because the intentional fault of the thief 'drowned out' the negligent fault of the servant under Article 211, subject to a finding that the general requirements included in the text of Article 211 are satisfied."
There therefore appeared to be agreement between the experts on the effect of Article 211 in so far as it is relevant to the preliminary issue.
On the day before the trial, however, the claimants' solicitors gave notice that Mr Dawood "does not agree" with two paragraphs of the joint experts' report. Those paragraphs contained statements to similar effect to the passage quoted above (although the passage quoted above was not identified as one which Mr Dawood did not agree with). It was not apparent whether Mr Dawood was saying that the joint experts' report did not accurately represent his view at the time when he signed it or that he had since changed his mind. Nor was any explanation given at that stage of his reasons for disagreeing with the paragraphs in question. The first clue was given on the morning of the hearing when Mr Dawood produced an extract from a commentary on which he wished to rely dealing with the equivalent provision to Article 211 in the Egyptian Civil Code. The interpretation expounded by the author, Dr Sulaiman Marqis, is very different from that found in the commentaries of Sanhuri and Hakim cited by Professor Hamoudi and makes no reference to "drowning out" or any similar concept. Marqis suggests that the provision is applicable only where (1) the foreign cause made the harm inevitable in the sense of being impossible for the defendant to prevent and (2) the cause is one which the defendant had nothing to do with so that it is not attributable to him.
In his oral evidence Mr Dawood explained that, after the meeting between the experts, their joint report was drafted by Professor Hamoudi. Mr Dawood said that he had very little time to read over the draft report before he had to leave for the airport to catch a flight, and that he did not notice that what was said in the draft report about Article 211 and "drowning out" did not accurately represent his view. Mr Dawood also said that, at the time of the experts' meeting, he had no basis for disagreeing with what was said about Article 211 and "drowning out" in the commentaries on which Professor Hamoudi relied. It was only later when he reflected further on the point and looked at the commentary by Marqis that he concluded that the interpretations of Article 211 given in the commentaries relied on by Professor Hamoudi are mistaken.
In so far as Mr Dawood suggested that the joint experts' report did not accurately represent his opinion at the time when he signed it, I reject his evidence. The meaning of Article 211 was evidently discussed at the experts' meeting and, although of course possible, I consider it unlikely that Professor Hamoudi had misunderstood or misrecorded Mr Dawood's view on the point when he drafted the joint report. It is also unlikely that Mr Dawood, even if he did not read the draft report with the care to be expected before he signed it, could have failed to notice either then or soon afterwards the passages which record a common view about "drowning out", giving the example of the negligent driver and the thief. Furthermore, that view is, as already indicated, consistent with what Mr Dawood had said in his own expert report. Finally, Mr Dawood's evidence that he had no basis on which to disagree with the views of Sanhuri and Hakim at the time of his meeting with Professor Hamoudi makes it all the more likely that he knowingly agreed at that stage to what was written in the joint experts' report.
An expert is of course entitled to change his mind. It was not, however, entirely clear from Mr Dawood's oral evidence to what extent he had done so. Thus, in cross-examination he initially agreed that there are cases in which Iraqi courts will find that Article 211 applies because a person's fault is "drowned out" by the fault of another. Later, however, Mr Dawood claimed that the concept of "drowning out" is only relevant in traffic law and not as part of the general law of obligations. I understood Mr Dawood's basic position to be that an Iraqi court would simply apply the express wording of Article 211, which contains no reference to "drowning out". He considered that Article 211 does not apply to excuse from civil liability the servant who negligently leaves his master's car or house unlocked with the result that the car is stolen or the house is burgled because it cannot be said that the act of the thief or burglar is a "foreign cause beyond [the] control" of the servant: in so far as the commentaries of Sanhuri and Hakim suggest otherwise, their views are not consistent with the language of Article 211. In re-examination, Mr Dawood further asserted that commentaries are not referred to in the Iraqi courts and that an Iraqi judge would simply look at the wording of the relevant articles in the Civil Code when deciding how they should be applied.
The meaning of a "foreign cause beyond his control"
It was common ground between the experts that, in the hierarchy of sources of law relevant for an Iraqi judge, the text of the Civil Code has priority over any commentary. Like any text, however, the Civil Code requires interpretation. I cannot accept that the meaning of Article 211 is so self-evident that in the example of the thief who enters the unlocked house it is impossible to interpret the act of the thief as a "foreign cause beyond [the] control" of the servant. Assuming as I do that the words have the same meaning in Arabic, it seems to me that, in the absence of any collusion between them, the act of the thief can perfectly well be described as a "foreign cause". It may be said that, if the servant could have prevented the house from being burgled by locking the door, the act of the thief is not a cause "beyond [the servant's] control". But it is also possible to describe the act of the thief in stealing property from the house as a cause "beyond [the servant's] control" if the servant has done nothing to induce the thief to come and steal property and has simply failed to prevent the thief's entry by negligently leaving the door unlocked.
This ambiguity was reflected in the views expressed by the experts about the alleged facts of the present cases. Both experts agreed that if the court were to find in any case that UK soldiers exercised control over US soldiers during the time of the alleged mistreatment of the claimant by the US soldiers, then the defendant could not rely on Article 211, as the cause would have been within its control. They did not agree, however, about what the position would be if the defendant did not exercise any meaningful control over US soldiers at the time when the alleged mistreatment occurred. Professor Hamoudi considered that in such circumstances the acts of those who inflicted the ill-treatment would constitute a cause beyond the defendant's control. Mr Dawood, as I understood his evidence, considered that the cause would not be one beyond the defendant's control if the defendant could have prevented the ill-treatment from occurring by previously electing not to hand over the claimant. I do not see how the question of which of these interpretations is correct can be resolved just by studying the words of Article 211 and without some additional guidance.
It seems clear from the commentaries cited by Professor Hamoudi that it cannot be enough to make the act of the third party within the control of the defendant so as to preclude the application of Article 211 to show that, if the defendant had not committed a fault, the injury to the claimant would have been avoided. If that were the test, then in, for example, Sanhuri's case of the driver who deliberately runs over a blind man who is at fault in walking in the road without a guide, the blind man would not be able to say that the driver's act was a cause "beyond his control" and therefore could not rely on Article 211. Similarly, the driver travelling at excessive speed and too fast to stop in time could not rely on Article 211 to be excused from liability for running over the man who deliberately commits suicide by throwing himself in front of the car. In each case, however, it is clear that Sanhuri regards the act of the other person as a foreign cause beyond the control of the defendant and regards the relevant question as being whether the fault of one party "drowns out" the fault of the other. The same analysis is adopted by Hakim. These commentaries therefore seem to me to support the interpretation of what amounts to a "foreign cause beyond [the defendant's] control" adopted by Professor Hamoudi.
It would be a strong thing for an English judge to conclude that the language (as translated into English) of a provision in a foreign legal code, which forms part of a legal system not based on English law and with which the English judge is not acquainted, is so clear that the opinions as to its meaning of the leading jurists in the foreign legal system should be rejected. I do not accept Mr Dawood's assertion that an Iraqi court would not have regard to the views of Sanhuri and Hakim. I accept his evidence that the judgments given by Iraqi courts are extremely short and seldom, if ever, refer expressly to commentaries. However, I also accept Professor Hamoudi's evidence that the commentaries of Sanhuri and Hakim are the medium through which lawyers in Iraq are taught about the civil law of obligations and are accorded considerable respect by Iraqi lawyers and judges. Mr Dawood agreed that Sanhuri was the drafter of the Iraqi Civil Code and that Hakim is a leading commentator. He himself cited a commentary on the Egyptian Civil Code in support of his views, albeit one which there is no evidence to suggest has a status in Iraq in any way comparable to that of Sanhuri and Hakim. I think that I can also take notice that in civil law systems where there is no doctrine of precedent – including that of France from which the Iraqi Civil Code is ultimately derived – considerable weight is often given to the opinions of eminent legal scholars. In any event I am satisfied that such weight would be given to the opinions of Sanhuri and Hakim by an Iraqi court if the present preliminary issue were being decided by a court in Iraq. There is, on the other hand, no evidence to suggest that an Iraqi court would have regard to the views of Marqis, at any rate in so far as they conflict with those of Sanhuri and Hakim.
I accept the view of Professor Hamoudi, founded as it is on the commentaries of both Sanhuri and Hakim, that in applying Article 211 an unlawful act of a third party who is not in collusion with the defendant and over whom at the time the act occurs the defendant does not exercise any meaningful control would be regarded by an Iraqi court as a foreign cause beyond the control of the defendant and that the critical question to be asked is whether the fault of the third party "drowns out" the fault of the defendant.
Drowning out
Once it is accepted – as I have no difficulty in accepting – that such an unlawful act of a third party would be regarded by an Iraqi court as a foreign cause beyond the control of the defendant, the wording of Article 211 requires the court to decide whether the harm "arose from" (i.e. was caused by) both faults or whether the act of the third party (or that of the defendant) was the sole cause of the harm. Although the choice of metaphor might be different, the analysis of this question in terms of whether one cause "drowns out" the other makes ready sense to an English lawyer. So too does the notion that the intentional wrongful act of a third party may generally be considered to break the chain of causation between a negligent act of the defendant and the claimant's injury. For example, in Weld-Blundell v Stephens [1920] AC 956, 986, Lord Sumner said:
"In general…, even though A is in fault, he is not responsible for injury to C which B, a stranger to him, deliberately chooses to do. Though A may have given the occasion for B's mischievous activity, B then becomes a new and independent cause. It is hard to steer clear of metaphors. Perhaps one may be forgiven for saying that B snaps the chain of causation; ... in a word, he insulates A from C." [citations omitted]
I quote this statement not because there is any reason to presume that the law of Iraq is the same as English law on this question, but simply to indicate that the Iraqi law as explained by Professor Hamoudi and in the commentaries on which he relies requires no leap of imagination for an English lawyer to grasp.
On behalf of the claimants, Ms Kaufman QC suggested that the examples of "drowning out" given by Sanhuri can be distinguished from the case of the servant who negligently leaves the door of the house unlocked on the basis that Sanhuri's examples involve one person taking advantage of a circumstance created by the fault of another person to advance his own ends. Thus, the driver takes advantage of the fault of the blind man who is walking in the street without a guide in order to run him over; and the man who wants to commit suicide takes advantage of the fact that the driver is speeding and travelling too fast to stop in order to realise his aim of bringing about his own death. However, it seems to me that exactly the same can be said of the case of the negligent servant: the thief takes advantage of the opportunity created by the fault of the servant in carelessly leaving the door unlocked in order to realise his goal of stealing property.
An English court would not regard a deliberate wrongful act of a third party as breaking the chain of causation if the act of the third party is one which the defendant owes a duty to the claimant to take care to prevent. In the case, therefore, of the door left unlocked, the negligent omission of the servant as well as the intentional act of the thief would, in English law, both be regarded as causes of the householder's loss. During the hearing I could not help wondering whether a similar approach might be taken by an Iraqi court. It seemed to me that this could perhaps explain why Sanhuri when discussing the effect of Article 217 expressed the view that the servant and the thief are jointly liable, despite the fact that the fault of the thief is deliberate and criminal whereas the servant is merely negligent. Explaining it as turning on a duty owed by the servant to take care to prevent the deliberate criminal act of the thief could potentially distinguish such a case from the examples given previously by Sanhuri when discussing Article 211 of deliberate acts which "drown out" negligent acts.
There is nothing in any of the passages quoted by Professor Hamoudi from Sanhuri's commentary, however, to suggest that this distinction reflects the law of Iraq. To the contrary, Sanhuri's discussion of "drowning out" in the context of Article 211 identifies two relevant tests, neither of which involves the question whether the defendant has a duty of care to prevent the third party's deliberate act. The commentary of Hakim is also inconsistent with such an analysis. In these circumstances it seems to me that it would be parochial and unwarranted to suppose that Iraqi law employs the same categorisation as English law. I accept Professor Hamoudi's opinion, which I regard as a more reliable guide on the present issue than that of Mr Dawood, that an Iraqi court would not analyse the case of the servant who negligently leaves the door unlocked in the same way as an English court and would be likely to hold that the intentional criminal act of the thief "drowns out" the servant's fault, following the guidance given by Sanhuri and Hakim in their commentaries on Article 211. I also accept Professor Hamoudi's interpretation of Sanhuri's discussion of the servant and thief example in the context of Article 217 as subject to the effect of Article 211.
I am further supported in this conclusion as to what an Iraqi court would decide by the fact that I think it clear that it reflects Mr Dawood's original view of the matter at the time when he wrote his expert's report and agreed the joint expert's report. I consider his first thoughts to be a more reliable guide to how an Iraqi court would approach the matter than his later views which did not, with respect, give a coherent explanation of the concept of "drowning out". According to the analysis in Mr Dawood's expert report, Article 211 does not apply if the defendant's fault was committed with one of the three mental states which Mr Dawood described. Hence, although mere negligence on the part of the servant in forgetting to lock the door is not a sufficiently serious fault to prevent "drowning out", the servant will be jointly liable with the thief if he goes out knowing that he has left the door unlocked and that there is a risk that a thief might enter. I understood Professor Hamoudi to agree that Article 211 would not provide a defence in such a situation.
Conclusion
Applying these findings to the present cases, I conclude that, if the claimants are able to prove that after being handed over by UK forces to the armed forces of the United States they were subjected to serious and deliberate ill-treatment by US soldiers, then, to establish that the defendant is jointly liable for their injuries under Iraqi law, it will not be sufficient to show that the defendant owed a duty to take care not to expose them to a risk of ill-treatment at the hands of US forces and was negligent in exposing them to that risk. In order to establish joint liability for their injuries, it will be necessary for a claimant to prove that the British soldiers or officials responsible for the decision to transfer him to the custody of the US forces had one of the three mental states identified by Mr Dawood in his expert's report. Thus, it will be necessary for the claimant to prove: (a) an intention to facilitate the claimant's ill-treatment; or (b) actual foresight that the claimant might suffer such ill-treatment, coupled with failure to act in accordance with a legal duty to protect the claimant; or (c) contemplation and acceptance of the risk that transferring the claimant would facilitate his ill-treatment.
In answer to the question raised by the preliminary issue, I will make a declaration to this effect.
Note 1 The main difference is that the Egyptian provision refers to the “fault” of another rather than the “act” of another. However, the only acts which could potentially come within Article 217 are unlawful acts (i.e. faults). [Back]
Note 2 Professor Hamoudi explained that the second scenario described by Sanhuri is relevant only in cases of contributory negligence, that scenario being where the victim consents to the harm. [Back] |
Mr Justice Jay:
Introduction
There are three applications currently before the Court. First, by an application notice dated 28th April 2014 the Defendant seeks an order (i) striking out the claims in breach of contract, negligence and misfeasance in public office pursuant to CPR 3.4(2)(a); or (ii) for summary judgment in relation to those claims pursuant to CPR 24(a)(i) and (b); and/or (iii) striking out various specified paragraphs of the Particulars of Claim that plead or rely upon matters protected by Legal Professional Privilege ("LPP"). Secondly, by an application notice dated 14th April 2015 the Claimant seeks specific disclosure, pursuant to CPR 31.19(5) and CPR 31.12 of documents said to be subject to LPP. Thirdly, the Claimants seek permission to serve a Reply to the Defence.
It is convenient and appropriate to consider the Defendant's application first. Not merely does it predate the Claimants' applications, the latter only arise for consideration in the event that this claim survives the Defendant's attack upon it. Furthermore, during the course of oral argument it became clear that Mr John Beggs QC for the Defendant was content to leave the third limb of his application for future consideration, should the need arise.
The Claimants' Case
The Particulars of Claim dated 21st January 2014 is a somewhat lengthy and discursive document, and for present purposes it is necessary to distil its essential elements. In line with well established principles, discussed at great length below, the evidence cannot be tried at this stage, and the facts must – unless plainly contradicted by insurmountable material, or otherwise wholly fanciful – be assumed in the Claimants' favour.
I begin with an outline of the pleaded facts. The four Claimants were at the material time serving police officers within the territorial support group, and as office holders were in a quasi-contractual relationship with the Defendant. I understand that all the Claimants, save for the third Claimant who has retired, remain in active police service. On 2nd December 2003 they arrested a terrorist subject, Babar Ahmad ("BA") who complained of being seriously assaulted during the course of that arrest. Disciplinary charges were brought against the Claimants, and were dismissed in April 2005. In June 2007 BA issued proceedings against the Defendant, claiming that the Commissioner was vicariously liable for the Claimants' torts. No separate claim was brought against the Claimants, as it might have been, and the Defendant did not seek an indemnity or contribution from his officers, as he might theoretically have done. On 18th March 2008 the Claimants attended a conference at the chambers of Mr Jeremy Johnson, then junior counsel, and heard advice to the effect that BA's claims would be "vigorously defended", that if "special measures" to protect their identity were not forthcoming they would not be required to give evidence, and that the Defendant's legal team was also acting for and in the Claimants' interests (see, in particular, paragraph 41 of the Particulars of Claim). At a pre-trial review which took place on 13th February 2009, the Commissioner's application for special measures was rejected. On 19th February 2009 the Claimants were made aware by the DLS that it was seeking to settle BA's claim. The Claimants expressed their profound concerns about what seemed to them to be the recent turn of events, and said that they would have to take independent advice. On 11th March 2009 the Claimants attended a second conference at counsel's chambers, and were told that the Directorate of Legal Services ("DLS") and counsel were no longer instructed to protect their interests. BA's civil trial commenced on 16th March 2009, and on the following day the second Claimant informed counsel that if special measures were not provided, the Claimants would not testify. On 18th March 2009 BA's claim was settled on the basis of agreed damages and costs of £60,000 and £240,000 respectively, together with an admission of liability and an apology for the "gratuitous violence" to which he had been subjected by the Claimants. According to paragraph 82 of the Particulars of Claim, the Commissioner's Office issued a press release stating: "The Commissioner has demanded an immediate investigation into the circumstances surrounding the officers' refusal to give evidence relating to this arrest in 2003. Whilst the arrest and subsequent events are historic this is a serious matter which has been referred to the IPPC". The Claimants aver, and I am inclined at least for present purposes to accept, that this was tantamount to endorsing the Claimants' culpability. On 12th August 2010 the Claimants were charged with various criminal offences arising out of BA's arrest in December 2003, and in May 2011 they were acquitted by the Jury.
On my understanding of paragraphs 39-48 of the Particulars of Claim, the Claimants contend that in the circumstances of this case, in particular the Claimants' participation in the first conference with counsel, and the assurances given during the course of it, "expressly and/or implicitly, a client/solicitor retainer and/or a contractual relationship was created between the DLS and the Claimants". Paragraph 48 of the Particulars of Claim pleads the express incidents of that relationship, and it is necessary to set it out in full:
"(i) expressly that the legal team acting for the MPS were also acting for and to protect the interests of the Claimants;
(ii) expressly that the said legal team would defend the allegations made by BA that the Claimants had brutally assaulted and abused BA as set out at paragraphs 11-12 above;
(iii) expressly that the Claimants would not be expected to give evidence unless the special measures application was successful;
(iv) implicitly that the defence would be handled with reasonable care and in the event that the said legal team reached the view that a conflict of interest had emerged … and/or that the MPS were considering admitting liability and apologising to BA for the Claimants' actions the DLS would consult/warn and explain the reasons and advise them to take independent legal advice in sufficient time …"
Paragraph 102 of the Particulars of Claim avers:
"The Defendant owed the Claimants a duty of care in tort (and concurrently in contract: (see paragraphs 43(i)-(v) and 48 above) as employer/quasi-employer to take reasonable care to safeguard the safety, health, welfare, (including economic and professional welfare) and reputational interests of the Claimants."
Paragraph 103 of the Particulars of Claim avers:
"The scope of the said duties included:
(a) a duty to take reasonable care in the preparation and conduct of the defence to BA's civil claim; and/or
(b) a duty to take reasonable care to protect the Claimants' interests when considering and effecting any compromise/settlement of the said civil claim which involved an admission of liability that BA's allegations … were true."
Further specific incidents of the duty are set out under paragraph 104.
Paragraphs 105-109 set out the various formulations of the Claimants' case. The first formulation (paragraphs 105-107) is what may be described as negligence simpliciter – the Claimants set out the three stages of the well-known tripartite test outlined by Lord Bridge in Caparo Industries plc v Dickman [1990] 2 AC 605. The second formulation (paragraph 108) is voluntary assumption of responsibility, and is based on the assurances allegedly given by counsel during the course of the first conference in March 2008, which for present purposes I must assume against the Defendant were indeed made. The third formulation is breach of the express or implicit retainer pleaded under paragraph 48 of the Particulars of Claim. The Skeleton Argument of Mr Nicholas Bowen QC for the Claimants explains these formulations in somewhat greater detail, and I will be examining that in a moment.
The Claimants aver at paragraph 111 of the Particulars of Claim that the Defendant was in breach of duty in a number of respects, by (i) failing to conduct and prepare a competent defence to BA's civil claim, (ii) failing to keep the Claimants informed of the progress of the investigation, and to protect their interests, (iii) failing to advise and/or warn the Claimants that they were minded to settle BA's claim, and (iv) failing to explain why the Defendant's legal team could no longer represent the Claimants' interests. The facts and matters averred by the Claimants cannot substantially be disputed for present purposes, and I should add that it is an important part of the Claimants' case on item (i) above that shortly before their criminal trial in March 2011 the Crown unearthed evidence obtained by a covert recording device or probe of what happened during the course of BA's arrest in December 2003, or at least a significant part of it. This evidence largely supported the Claimants' version of events, and undermined BA's, explaining why the Jury took very little time to find the Claimants not guilty. It is alleged that had this evidence been available earlier, as it ought to have been, the Defendant's conduct of the civil claim would probably have been different. Again, for present purposes I must assume these facts in the Claimants' favour.
Paragraphs 112-118 of the Particulars of Claim also plead, or purport to plead a cause of action in misfeasance of public office, and I will be returning to that subsequently.
Paragraph 119 of the Particulars of Claim is material. It provides:
"By reason of the aforesaid breaches of duty, particularly the failure to defend BA's civil claim and the failure to disclose/discover the probe caused the loss and damage as pleaded below.
LOSS AND DAMAGE
By reason of the matters aforesaid the Claimants have suffered reputational and economic loss because of the damage to the officers' careers having been branded as abusive thugs and have suffered the fear of being disciplined (and in the first Claimant's case, was disciplined), personal injury, upset, vexation, a sense of isolation and unfairness, stress, economic loss and psychiatric damage …
A full schedule will be served in due course."
Although I was initially concerned that the Particulars of Claim fails to comply with paragraph 4.1 of Practice Direction 16 governing claims for Personal Injuries, I understand that psychiatric evidence has been served along with provisional schedules of loss. The psychiatric evidence has not been examined, and must be assumed to support the claims, but issues arise as to the recoverability of damages for psychiatric injury in these circumstances.
Mr Bowen's Skeleton Argument and speaking note have assisted me in ascertaining more precisely the causes of action on which the Claimants rely, and their exact formulations. First, the Claimants contend that in the circumstances of the instant case a relationship of Joint Retainer and/or Joint Interest existed, by virtue of the fact that the parties retained and shared the same legal team, until the Claimants were informed by counsel in March 2009 that he was no longer representing their individual interests. Additionally, the Claimants contend that in the light of this relationship no LPP exists as between the Claimants and the Defendant (cf. as between the Defendant and third parties). Secondly, the Claimants contend that even if no Joint Retainer was created, expressly or by necessary implication, a common interest privilege existed between the parties such that no LPP exists as between the Claimants and the Defendant. Thirdly, the Claimants contend that, in the light of the quasi-employment relationship between the parties and all the circumstances of the case, the claim in negligence simpliciter is either within the existing scope of the law of negligence, or but a short incremental pace away from it. Fourthly, the Claimants contend that all the preconditions for a voluntary assumption of responsibility are satisfied. Fifthly, and finally, the freestanding claim in misfeasance in public office is accepted to be exiguous, but the Claimants should be given the opportunity to perfect their pleadings once proper disclosure has been furnished.
The Proper Approach to these Applications under CPR r.3.4 and CPR r.24
The parties have reminded me of the relevant principles. In relation to the strike-out application, the threshold is an extremely high one, and caution must be exercised in cases where no actual findings of fact are made and/or the law is developing: see for example Waters v MPC [2000] 1 WLR 1607 (at 1613H-1614A), Barrett v Enfield LBC [2001] 2 AC 550 (at 557E-G) and Hughes v Colin Richards [2004] PNLR 35. In relation to the summary judgment application, the Claimants must show a "real" or "realistic" prospect of success, recognising that this is not the proper forum to resolve complex disputes of law or fact: see Three Rivers DC v Company of the Bank of England (No 3) (2001) 2 AER 513 (paragraph 159), and ED&F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472.
The Retainer Issue
It is convenient to consider this issue first, because it is logically prior to the Claimants' tortious formulations, and Mr Beggs accepts that if he should fail in this respect, the remaining claims should be permitted to proceed. For the avoidance of doubt, here I am examining paragraphs 39-48, 102 (in part), 104 (in part) and 109 of the Particulars of Claim.
Mr Beggs submits that the available material falls short of demonstrating the existence of a contractually binding commitment between the Claimants and the Defendant. The Claimants have not pleaded any facts on which a Court could conclude that the retainer between the Defendant, the DLS and Counsel extended to protecting their interests, and any assurances given by Counsel cannot have the legal effect of creating such a retainer. Mr Beggs also relies on the Defendant's standard operating procedures ("SOP") in support of the contention that the DLS would normally act for all parties who are sued in civil proceedings provided that an appropriate authorisation is signed. The fact that the Claimants were not parties to the underlying civil claim brought by BA is a decisive factor counting against the existence of an express or implied retainer.
Mr Bowen submits that it is arguable on the available material that the parties retained and shared the same legal team. This argument is fortified by the witness statement of Nigel Cowley to the effect that the DLS do act for and represent officers in the absence of a conflict. Here, the Claimants were working closely with the Defendant to prepare and defend the case, and they were effectively being treated as clients and not mere witnesses. Further, Mr Bowen draws attention to a string of emails (see paragraph 32 of his Skeleton Argument) which indicates that the parties were proceeding on the common assumption that the DLS was intending to safeguard the Claimants' interests.
Mr Bowen drew attention to Jackson & Powell, 7th Edition, paragraph 11-005 in support of the proposition that the court may infer an implied retainer from the conduct of the parties and all the circumstances, that the absence of consideration is not a decisive factor, and an intense focus on the facts is required. Support for these propositions, which I would regard as uncontroversial, may be derived from Dean v Allin & Watts (a Firm) [2001] PNLR 39, although in that case the claim only succeeded on the basis of an assumption of responsibility.
Discussion
In my judgment, this issue must be resolved in the Defendant's favour on a narrow albeit conclusive basis. As I have already said, the Claimants were not parties to the civil claim brought by BA against the Defendant, nor did the Commissioner seek any contribution from them under the 1978 Act. They attended the conferences with Counsel as witnesses, not as clients. Although the course and outcome of BA's civil claim might well impact on the Claimants' reputations, either favourably or adversely, that in itself would not be a reason for implying a contractual nexus between the Claimants and the DLS; if it were such a reason, the same implication would arise in all cases where claims are brought against the principal, and the individual servants or agents are not sued. In my judgment, the Claimants have to point to an express contract of retainer with the DLS, and none exists. The present situation is clearly distinguishable from that contemplated by the Defendant's SOP; see, in particular:
"Separate Representation of Officers and Other Staff
Where civil proceedings are started against the Commissioner and members of staff, for actions taken in the course of their various duties and responsibilities, the DLS will normally act for all parties on the condition that the officers and staff concerned sign a retainer authorising the DLS to act for them. Where there is a conflict of interest between the MPS and its staff, officers and staff concerned will normally be asked to seek separate representation …"
Mr Bowen submitted that this paragraph needs careful parsing to extract its possible meaning, but in my view it is clear enough. Indeed, the present case is more aptly covered by the next rubric of the SOP, which provides:
"Support of Police Witnesses at Civil Trials
Giving evidence at a civil trial can be more stressful and intimidating that giving evidence at a criminal court. Witnesses will be required to attend a pre-trial meeting with officers from the CAIU. This meeting is intended to support and prepare witnesses prior to giving evidence at a civil trial … The DLS lawyer will also be available to talk to officers and staff involved in civil action trials, to discuss the procedures and their implications …"
I cannot accept Mr Bowen's attempt to circumvent this conclusion by asserting, as he does at paragraph 29 of his Skeleton Argument, that "this Joint Retainer/Interest was expressly recognised by virtue of the fact that the parties retained and shared the same legal team". Not merely does this formulation tend to obvious circularity, I must reiterate that the Claimants were not parties to the underlying civil claim.
In my view, the Claimants' submissions hereabouts are not improved by invoking the concepts of "Joint Interest" or "common interest". This is to confuse the LPP issue (where those concepts are germane) with the Joint Retainer issue (where they are not).
Accordingly, I accede to the Defendant's application under CPR r.24 in relation to this strand of the Claimants' pleaded case.
The Claim in Negligence Simpliciter
The principles of general application governing the existence of a duty of care are familiar: see, for example, the decisions of the House of Lords in Caparo Industries plc v Dickman [1990] 2 AC 605, Marc Rich Co v Bishop Rock Marine Co Ltd [1996] AC 211, Barrett v Enfield BC [2001] 2 AC 550 and D v East Berkshire NHS Trust [2005] 2 AC 373. An extensive review of recent case-law appears in the decision of Edis J in Sebry v Companies House and another [2015] EWHC 115 (QB). In relation to the tripartite test which remains applicable to claims in negligence simpliciter, at least when his application was opened by Mr Beggs it appeared that the key issue for resolution in the circumstances of the present case is the third stage: is it fair, just and reasonable to impose a duty of care on the Defendant in the present circumstances? However, given the way in which Mr Bowen came to formulate his claim for psychiatric damage, it became apparent that an issue also arose on the first stage, namely foreseeability.
On my understanding of his Skeleton Argument, Mr Beggs' preference was to analyse what may be called the pure negligence claim in two ways: either in relation to a postulated duty owed by the Defendant's lawyers to the Claimants, or as a postulated duty owed by the Defendant qua quasi-employer to the Claimants. In my view, these formulations do not materially differ from each other. Mr Beggs is correct in submitting at paragraph 117 of his skeleton argument that if the Claimants fail to establish a duty of care pursuant either to the Caparo tripartite test or on the basis of an assumption of responsibility, no freestanding duty can arise from the employer/employee relationship. Essentially, this case is about the Defendant's alleged failure to conduct the underlying litigation with BA in such a way that the Claimants' interests were safeguarded, and the foreseeable consequences of that failure. In this regard, the principal focus must be on those giving legal advice to the Defendant, but it is not limited to that. The conduct of the litigation embraces all the evidential steps which the Claimants contend ought to have been taken, but did not. The relevance of the employer/employee relationship (or a relationship akin to it) is that the second stage of Caparo, namely proximity, is clearly satisfied. This relationship may also have some relevance to the critical third stage.
Mr Beggs' core submission is that it would not be fair, just or reasonable to impose a duty of care possessing the scope, incidents and attributes pleaded under paragraphs 103-104 of the Particulars of Claim. The essence of the pleaded case is that the Defendant failed to protect the Claimants' interests in the conduct of the underlying litigation in circumstances where only the Defendant was a named party to BA's suit. The general rule, see, for example, White v Jones [1995] 2 AC 207 is that lawyers owe a duty of care to their clients alone and not to third parties, even if the latter happen to be the employees of the entity to whom the lawyers are giving advice. No exceptional circumstances have been identified to take the instant case out of the general rule. Further, it would not be fair, just and reasonable to impose a duty of care in these circumstances, for at least three overlapping reasons. First, the postulated duty would inevitably conflict with the primary duty owed by the Defendant's lawyers to the Defendant. Insofar as the Claimants rely on vicarious liability for those within the Defendant's organisation who are not lawyers, for example those within the Gold Group who may have accepted legal advice (or indeed who may have ignored or overridden it – that possibility exists, privilege not having been waived), the position is effectively the same: the Defendant was entitled to settle BA's claim having regard to its perception of its own interests, regardless of anyone else's interests. It is irrelevant that the Defendant's reasons for settling BA's claim may have been good, bad or indifferent; the point remains that the Defendant was entitled to pursue a wholly self-interested course, without regard to the interests of its employees. To impose a duty of care would, so the argument runs, disable the Defendant from its appropriate freedom of choice in this domain. Secondly, Mr Beggs submitted that LPP was a policy consideration for not imposing a duty of care in these circumstances. If such a duty existed, the Defendant would in effect be compelled to waive privilege in circumstances where it would otherwise be entitled to assert it, because the correctness or reasonableness of its conduct of the underlying litigation could not be properly examined without relevant legal advice being properly exposed to judicial scrutiny. Thirdly, if a postulated duty existed, the Defendant would effectively be compelled to follow a course of action which it believed was not in its best interests. If it was not so compelled, but merely had to give the Claimants an opportunity to obtain independent legal advice, the Claimants could have no possible complaint, because the outcome would have been the same; the underlying claim would still have been settled, possibly at additional cost to the Defendant if the Claimants' obtaining of advice caused delay. Given that the Claimants were not a party to BA's claim, there was nothing they could do in their own right which might have prolonged the life of litigation which the Defendant was hell-bent on compromising. Put another way, it is inconceivable that the Claimants might have agreed to take over the Commissioner's defence of BA's claim.
Mr Bowen's answer to these submissions was to the effect that the tripartite test in Caparo v Dickman was satisfied. The correct point of departure was to identify the incidents of the postulated duty of care. According to paragraph 20 of Mr Bowen's speaking note, the duty asserted was a duty (i) properly to prepare the defence of BA's claim, and to give timeous notification to the Claimants if a conflict of interest arose, and (ii) not to settle BA's claim with admissions unless that settlement fell within the band of reasonable responses. This, in effect, was the scope of the duty pleaded under paragraphs 103 and 104 of the Particulars of Claim. In the alternative, Mr Bowen submitted that even if the duty was confined to one properly to prepare the defence of BA's claim, everything else – including the settlement on disadvantageous terms – flowed from the Defendant's breach of that duty.
Mr Bowen raised a series of principled objections to Mr Beggs' submissions directed to the third limb of the tripartite test. First, he drew a distinction between the public duties of the police force, in respect of which public policy arguments are relevant, and the private law obligations of the Commissioner to his quasi-employees, in respect of which such arguments are irrelevant. Secondly, he submitted that the court should not succumb to this form of policy objection unless completely satisfied that it is well-founded (see, for example, Lord Lowry in Spring v Guardian Assurance plc [1995] 2 AC 326). Thirdly, Mr Bowen submitted that in Michael v Chief Constable of South Wales Police [2015] 2 WLR 343 the Supreme Court preferred an analysis which eschewed reliance on the third limb of Caparo.
During the course of his oral argument, Mr Bowen refined his submissions in this important respect. Paragraph 118a of Mr Beggs' Skeleton Argument had made the point that the Claimants had failed to plead the essential ingredients of any claim for psychiatric injury. Mr Bowen accepts that his pure negligence case depends on establishing the pre-requisites for such a claim, and avers that paragraph 119 of his Particulars of Claim sufficiently pleads "psychiatric damage" for present purposes (in relation to this cause of action, the remaining heads of claim must be envisaged as consequential or parasitic). However, during oral argument the focus moved away from paragraph 119 to paragraph 105, where the following facts and matters are averred:
"The said duty of care arose because it was foreseeable that in the event of breach/breaches that the Claimants would suffer loss and damage to their safety, health, welfare (including economic and professional welfare) and reputational interests."
In essence, Mr Bowen submitted that psychiatric harm was foreseeable in the present case in the light of at least two key factors. First, BA's civil claim would have an obvious and direct impact on the Claimants' reputations, and the Defendant's general obligation of trust and confidence required it to take reasonable steps to safeguard the Claimants' interests in that regard. Secondly, it was foreseeable that the Claimants might suffer psychiatric injury if those interests were ignored or jeopardised, not least because the Defendant knew or ought to have known that the Claimants were taking an extremely close and sedulous interest in the conduct of the defence of BA's civil claim, and personal threats were being made to them and their families. Accordingly, in the particular circumstances of the present case, the Claimants were vulnerable to the risk of psychiatric injury.
In support of his submissions buttressing paragraph 105 of the Particulars of Claim, and the foreseeability of psychiatric injury in the circumstances of the instant case, Mr Bowen relied on Leach v Chief Constable of Gloucestershire [1999] 1 WLR 1421, McLoughlin v Jones [2002] QB 1312 and Yapp v FCO [2014] EWCA Civ 1512.
Mr Beggs relied on a number of authorities in his Reply which I will address during the course of the discussion which follows.
Discussion
The starting point for my consideration of this issue is that the Claimants have no arguable case that there existed an implied retainer with the Defendant's legal team pursuant to which the latter undertook to safeguard their interests in the underlying civil claim.
Mr Bowen's most compelling argument was that the incidents of the duty relied on must be envisaged as adjunctive to the quasi-employment relationship which undoubtedly existed between his clients and the Defendant, that it was a function of this relationship that the employer would uphold mutual trust and confidence, and that even in a somewhat novel domain such as this the Court should be very wary about defeating the claim on assumed facts for reasons of policy. Indeed, I agree with him that the policy objection, if that is the correct way of characterising the third limb of Caparo, would have to shine in extremely bright lights to find favour at this preliminary stage of the litigation.
Although, as I have said, Mr Beggs' opening latched onto the third limb of Caparo, the focus of the argument at the Bar evolved as the hearing progressed. The duty relied on by the Claimants was to avoid psychiatric injury, and the claims for reputational damage and economic loss are entirely consequential of that particular genus of personal injury. Accordingly, it seems to me that the issue of whether it is fair, just and reasonable to impose a duty on the Defendant in its capacity as quasi-employer to protect the Claimants' interests in the context of the underlying civil claim should not be considered in abstract: the inquiry must be undertaken in the specific context of claims for psychiatric harm, not other personal injury. Indeed, applying a modicum of common sense to this exercise, the Claimants could not conceivably have suffered physical harm from the breaches of duty relied on. That is to not to say that psychiatric injury was foreseeable, but it is to circumscribe the parameters of the current inquiry.
In my judgment, there are two reasons why these claims should not be permitted to go further. The first reason assumes that psychiatric harm is foreseeable, the second reason determines that it is not. Even though the duty should not be artificially sub-divided in this way (see my preceding paragraph), it is convenient to adopt this approach in order to highlight the principled objections to the Claimants' case.
Looking again at paragraph 20 of Mr Bowen's speaking note, which does no more than summarise his Skeleton Argument and pleadings, it is clear that the scope or incidents of the postulated duty of care relate solely to the conduct of the underlying civil claim brought by BA. I agree with Mr Bowen that in terms of the pleaded case this may encompass various elements, namely preparation of the defence (including obtaining evidence and making appropriate applications to the court), notifying the Claimants if a conflict emerges, and settling the litigation appropriately. I do not agree with Mr Bowen that the press statement made by the Commissioner himself could give rise to a claim in the tort of negligence (if any properly constituted claim arose, it would be in defamation), nor do I agree that any separate issues arise as to whether the Defendant took appropriate steps to protect the Claimants and their families from the threat of personal violence. Although that matter may be relevant to the issue of vulnerability to psychiatric harm, it is nowhere being alleged that the Defendant was in breach of duty in this respect.
Even assuming that the first two stages of the tripartite test are satisfied, I consider that an insuperable difficulty arises at stage three. Given that the Claimants were not parties to BA's civil suit, the Defendant's lawyers owed duties solely to their principal, and the Commissioner himself owed a "duty" to protect his own interests, according to his own lights, and no one else's. The fact that the Claimants could well suffer reputational damage, and (let me assume at this stage of the analysis) psychiatric harm, is insufficient to establish the relevant duty. The Defendant, acting in harmony with legal advice or otherwise, remained entitled to settle BA's civil claim as he saw fit. If public money was being inappropriately lavished on an unmeritorious case, or had to be expended because the Defendant failed to prepare its defence properly, that may be a matter for the Home Secretary and others, but it is of no concern to the civil courts.
The principled objection to this claim is that the postulated duty of care cuts right across the rights and obligations of the Defendant itself, and those advising the Defendant, in circumstances where no implied retainer existed. It would not be fair, just and reasonable to impose a concurrent, conflicting duty of care in these circumstances: see, for example, Pacific Associates Inc v Baxter [1990] 1 QB 993 (at 1032), Marc Rich Co v Bishop Rock Marine Co Ltd [1996] AC 211 (at 241-2), and D v East Berkshire NHS Trust [2005] 2 AC 373 (Lord Nicholls, at paragraph 85, and Lord Rodger, at paragraph 110).
The Claimants' case is not advanced by averring that the Defendant owed a duty to warn them when a conflict of interest arose. Such a duty could only arise as adjunctive to a duty of care, and for the reasons I have already given, none exists. In any event, even if analysed as a separate matter, this issue must be examined objectively, not subjectively. If, regardless of the Claimants' actual state of mind, a relevant retainer only existed between the Defendant's legal team and the Commissioner, the quasi-employment relationship would not be a sufficient basis for requiring the Defendant's servants or agents to explain the evident incidents and potential consequences of these legal relationships. Further, I am struggling to understand how a breach of this particular obligation might have caused the Claimants their psychiatric injury. Even had they been warned, the underlying civil claim would still have been settled and it is fanciful to suggest that the Claimants might have applied to be substituted as the defending parties to it.
I should emphasise that my conclusion on the third limb of Caparo does not depend in any way on Mr Beggs' LPP arguments, nor have I been swayed by his submissions on the merits.
Finally in this regard, Mr Bowen sought to persuade me that the third limb of Caparo does not survive the analysis of the Supreme Court in Michael v Chief Constable of South Wales Police [2015] 2 WLR 343. I do not agree: see paragraphs 112-122 of the Judgment of Lord Toulson JSC.
My second reason for holding that this claim must be struck out, and/or summary judgment ordered in the Defendant's favour, is that the claim for psychiatric injury has not been made out. Here, it is necessary to examine some of the authorities which were drawn to my attention. Save in one respect, I shall do this in chronological order.
Mr Bowen relied on Leach v Chief Constable of Gloucestershire Constabulary [1999] 1 WLR 1421. In that case the issue was whether the Police owed a duty of care to safeguard the psychological health of an individual who had volunteered to act as appropriate adult in relation to the interview of Frederick West. The majority in the Court of Appeal (Henry and Brooke LJJ) held that, in the absence of an assumption of responsibility, the Police owed no duty of care to someone who had volunteered herself. Mr Bowen relied on pages 1433/4 of the Judgment of Brooke LJ, but in my view they do not assist.
Mr Bowen also relied on McLoughlin v Jones [2002] 2 QB 1312. In that case the claim was for psychiatric injury based on a solicitor's failure to conduct criminal litigation properly, in consequence of which the Claimant was wrongly convicted and imprisoned. The Court of Appeal held that it was reasonably foreseeable that the Claimant might suffer such injury. Brooke LJ pointed out that the existence of a contract of employment could not, without more, give rise to the relevant duty (at 1323A/B). For him, the critical feature of the case was that it was arguable that the purpose of the Defendant's engagement was that it should use reasonable skill and care in preparing the Claimant's case for trial in such a way as to minimise the risk of his being wrongfully convicted (at 1323E/F). But in the instant case, there was no relevant engagement as between the Commissioner and these Claimants. For Hale LJ, the Claimant should be regarded as a primary victim (by dint of the contract of retainer), and no issue arose as to whether he was a person of "ordinary phlegm" (see 1331D/E). Mr Bowen relied on Hale LJ at 1331E-H where she equated loss of liberty with personal injury, but in the instant case, in contrast with the facts of McLoughlin, no question of loss of liberty arises. The fact that the CPS decided to bring a criminal prosecution against the Claimants is a new intervening cause.
I was also reminded of the stress at work cases, beginning with Colman J's decision in Walker v Northumberland CC [1995] ICR 702, running through Hatton v Sutherland [2002] ICR 613 (in the Court of Appeal) and Barber v Somerset CC [2004] 1 WLR 1089 (in the House of Lords), and culminating in the recent decision of the Court of Appeal in Yapp v FCO [2014] EWCA Civ 1512. In Yapp, Underhill LJ undertook an extensive review of all the authorities, and at paragraph 119 of his Judgment sought to summarise the current state of the law as follows:
"With regard to the issues of foreseeability and remoteness, the following propositions can be established from that review of the cases:
(1) in considering, in the context of the common law duty of care, whether it is reasonably foreseeable that the acts or omissions of the employer may cause an employee to suffer a psychiatric injury, such an injury will not usually be foreseeable unless there were indications, of which the employer was or should have been aware, of some problem or psychological vulnerability on the part of the employee – Hatton.
(2) That approach is not limited to cases of the Hatton type but extends to cases where the employer has committed a one-off act of unfairness such as the imposition of a disciplinary sanction – Croft and Deadman (also Grieves).
(3) However, in neither kind of case should that be regarded as an absolute rule: Hatton contains no more than guidance, and each case must turn on its own facts – Hatton itself, but reinforced by Barber and Hartman."
The issue in Yapp was whether it was reasonably foreseeable that the FCO's conduct in withdrawing the Claimant from his post without having had the opportunity to state his case might lead him to develop a psychiatric illness. Underhill J disagreed with the conclusion of the trial Judge that it was:
"125. I start from the position that it will in my view be exceptional that an apparently robust employee, with no history of any psychiatric ill-health, will develop a depressive illness as a result of even a serious setback at work …
…
127. Against that background I have come to the conclusion that there was nothing about the circumstances of the present case sufficiently egregious to render it foreseeable that the Claimant's withdrawal from his post would cause him a psychiatric injury. I fully acknowledge that his withdrawal was a major setback to his career and was bound to cause distress and anger, exacerbated by the unfairness which the Judge found. But it was not tantamount to dismissal. Nor was it a disciplinary sanction or based on any established misconduct … This was not a case of some gross and obvious injustice of the kind alleged, for example, in Eastwood. In all those circumstances, ... , I do not believe that the FCO should have foreseen, in the absence of any sign of special vulnerability, that the Claimant might develop a psychiatric illness as a result of its decision."
In his Reply, Mr Beggs took me to the decision of the Court of Appeal in French v Chief Constable of Sussex Police [2008] EWCA Civ 312. In that case the Claimant police officers averred that the Chief Constable was guilty of systemic failures which led to the fatal shooting of a suspect; and, thereafter, disciplinary and criminal proceedings brought against them without justification.
The Judgment of the Court was given by Lord Phillips CJ. He observed that the case could be struck out on the very narrow basis that it was not reasonably foreseeable that corporate or systemic failings by the Chief Constable might cause psychiatric injury (see paragraph 27 of the Judgment). However, there were also broader reasons of principle militating against the viability of these claims. In particular:
(i) an employer is usually entitled to expect that an employee will be capable of withstanding the stresses in his or her employment, unless an employer knows or ought to know that these stresses are putting a particular employee at risk (paragraph 29).
(ii) the present case was not a stress of work case or analogous to such a case: the chain of causation was that an untoward event, the shooting of the suspect, resulted in disciplinary and criminal charges (paragraph 30).
(iii) even if the Claimants had witnessed the shooting, they would not have been secondary victims (paragraph 32).
(iv) although it was arguably foreseeable that the stress of the disciplinary and criminal proceedings was capable of causing psychiatric injury (paragraph 33), the Chief Constable owed no duty of care to prevent the occurrence of the untoward event, namely the shooting (paragraph 34).
There are aspects of French which avail the Defendant here, and as Mr Bowen pointed out in his note submitted after the close of argument, other aspects which do not. Although the bringing of BA's civil claim was "untoward" in the sense of being outside the Defendant's control, its defence of that claim was within its control. I would agree that the Defendant might not be able to compel the Claimants to testify, but in other significant respects, and subject always to the court, the Defendant had considerable freedom of action. On the other hand, Mr Beggs is entitled to rely on paragraphs 29 and 30 of the Judgment of the Lord Chief Justice.
Bringing all these jurisprudential strands together, the focus must be on (i) the Claimants' formulation of their case in the Particulars of Claim, and (ii) whether that formulation has a real prospect of success.
Paragraph 105 of the Particulars of Claim alleges that the postulated duty of care arose because it was foreseeable that in the event of breach the Claimants might suffer loss and damage to their health. In my judgment, this is an extremely unpromising basis for founding the duty at issue. The duty must arise for some anterior reason, not from what might happen in the event of breach. Further, paragraph 105 does not make it explicit that the claim is for psychiatric injury. Even allowing the Claimants considerable latitude in this regard, it is necessary to examine the factors which Mr Bowen recruited in oral argument. He submitted that the Claimants were intimately involved in the defence of BA's civil claim, that they were fully expecting it to be robustly defended, that their reputations were undoubtedly on the line, and that the Claimants had to bear the obvious stress of themselves and their families being under physical threat from BA's supporters. Although Hatton may lay down the general rule, ultimately each case must turn on its own facts.
As I made quite clear during the course of the hearing, I have sympathy with the Claimants to the extent that, if their pleaded case is right, it appears that they were let down by the Defendant in very many ways over a considerable period of time. I have to assume for present purposes that the psychiatric evidence is capable of establishing a causal link between the injuries complained of in all four cases and the breaches of duty relied on. However, I am not persuaded by Mr Bowen that the Claimants have a real prospect of proving at trial that it was reasonably foreseeable that the Defendant's breaches of duty might cause psychiatric injury. If French was not a stress at work case, or analogous to one, it is difficult to understand how the instant case might be distinguishable. The defence of BA's civil claim may have been a complete imbroglio, and the admission of liability to BA may have been completely unfair, but by analogy with paragraph 127 of Yapp there was nothing about the circumstances of the present case sufficiently egregious to render it foreseeable that the Claimants might suffer psychiatric injury rather than anger and distress. There was no internal or judicial finding that the Claimants had assaulted BA, and the Commissioner's press release delivered somewhat ex cathedra is nothing to the point. Further, there were no signs of special vulnerability – none have been pleaded, and the fact that the Claimants were justifiably anxious about the physical threats was, in my view, insufficient.
In all these circumstances, I am not prepared to permit Mr Bowen the opportunity to amend his pleadings and remedy the obvious deficiencies in paragraphs 105 and 119 of the Particulars of Claim. There would be no useful purpose in affording him that indulgence. Mr Beggs' application succeeds under both CPR r.3.4(2)(a) and CPR r.24.
Voluntary Assumption of Responsibility
Ultimately, Mr Beggs' application turned on a narrow point.
Mr Bowen's pleaded pathway to a voluntary assumption of responsibility proceeds as follows. Assurances were given in conference in March 2008 that the Claimants' interests would be protected and the claim would be vigorously defended (paragraph 41). These assurances were countermanded, five days before the start of the civil trial (paragraph 60(v)); this was far too late. In consequence of the March 2008 assurances, the Defendant assumed responsibility to the Claimants to safeguard their interests, in particular by undertaking the obligations summarised at paragraph 20 of Mr Bowen's speaking note (paragraph 108).
Mr Beggs' point is that the Claimants fail to plead that they relied on these assurances, and in any event there could be no relevant reliance in the circumstances of the present case.
Discussion
Reliance is an essential ingredient of the Hedley Byrne liability, but what it requires in individual cases is likely to be context-driven. On this occasion, I will work in reverse chronological order. The general principle appears in paragraph 14 of the opinion of Lord Bingham in Customs & Excise Commissioners v Barclays Bank plc [2007] 1 AC 181:
"… Nor do I think that the commissioners can be said in any meaningful sense to have relied on the bank. The commissioners, having obtained their orders and notified them to the bank, were no doubt confident that the bank would act promptly and effectively to comply. But reliance in the law is usually taken to mean that if A had not relied on B he would have acted differently. Here the commissioners could not have acted differently, since they availed themselves of the only remedy the law provided."
As Lord Steyn explained in the earlier case of Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830, at 837:
"The test is not simply reliance in fact. The test is whether the plaintiff could reasonably rely on an assumption of personal responsibility by the individual who performed the services on behalf of the company."
Mr Beggs drew my attention to the fact that the Hedley Byrne principle has been extended beyond the provision of advice to the negligent performance of a service. In Henderson v Merrett Syndicates Ltd [1995] 2 AC 145, Lord Goff explained the position (at 180-1):
"It follows, of course, that although, in the case of the provision of information and advice, reliance upon it by the other party will be necessary to establish a cause of action (because otherwise the negligence will have no causative effect), nevertheless there may be other circumstances in which there will be the necessary reliance to give rise to the application of the principle. In particular, as cases concerned with solicitor and client demonstrate, where the plaintiff entrusts the defendant with the conduct of his affairs, in general or in particular, he may be held to have relied on the defendant to exercise due skill and care in such conduct.
[…] Furthermore, especially in a context concerned with a liability which may arise under a contract or a situation "equivalent to contract", it must be expected that an objective test will be applied when asking the question whether, in a particular case, responsibility should be held to have been assumed by the defendant to the plaintiff: see Caparo v Dickman … per Lord Oliver of Aylmerton. In addition, the concept provides its own explanation why there is no problem in cases such as this kind about liability for pure economic loss …"
Mr Bowen submitted that the Claimants did rely on the Defendant to conduct the defence of the underlying civil claim properly. Further, had a timeous warning of a potential conflict of interest been given, the Claimants might have applied for an adjournment of BA's trial and sought joinder as parties under the rules. I have already observed that this possibility is quite fanciful.
Perhaps Mr Bowen's better point is that the present case is an exemplification of the sort of case recognised by Lord Goff where it is unnecessary to have to show moving to one's detriment: it is sufficient to establish (for present purposes, at least arguably) that the Claimants entrusted their affairs to the Defendant and/or its legal team.
At one stage during the course of the hearing, I was quite attracted by this formulation, but I have come to the conclusion that it is not sustainable. A client entrusts his affairs to his solicitor in the reasonable belief that the latter will discharge his obligations with skill, diligence and care. This, after all, is a necessary incident of the retainer between solicitor and client. In the present case, there is, on my finding, no such retainer. There were no "affairs" which the Claimants were reasonably entrusting to the safeguarding of the Defendant. The Claimants had no direct interest in the litigation, and in my judgment that there might well have been consequential impacts on their reputations is insufficient to create such an interest – in the sense of constituting a matter which the Defendant was required by legal obligation to have regard to and/or promote or safeguard. In the circumstances of the instant case, I consider that the Claimants have to establish some extra factual ingredient to amount to the necessary reliance, but none has been pleaded and in reality none plausibly exists.
In any event, it seems to me that whichever subset of the law of tort is relied on, these claims are for psychiatric damage and other consequential losses, including loss of reputation and economic loss. If psychiatric damage is irrecoverable as not being reasonably foreseeable (see paragraphs 50-51 above), the case is not improved by seeking to bring it within the scope of any extended Hedley Byrne principle.
In order to test this last point, let me imagine that the Defendant did not settle BA's claim and, as a result of gross negligence, it lost at trial with excoriating findings against the Claimants. In my view, the Claimants would have had no claim for psychiatric injury in those circumstances, and this hypothetical case would be clearly distinguishable from McLoughlin v Jones. If that is right, it is impossible to see how a case with less egregious facts from the Defendant's perspective, namely the instant case, could and should be capable of succeeding.
It follows that I must accede to Mr Beggs' application under both CPR r.3.4(2)(a) and CPR r.24.
Misfeasance in Public Office
The factual basis of this claim is that the Defendant failed to disclose the probe until 2011, and had it been available earlier the destiny of BA's civil would have been different. Paragraph 117 of the Particulars of Claim avers that the Defendant had actual or constructive knowledge of the probe, and that it failed recklessly to obtain and/or disclose it before the settlement of the civil proceedings. Some support for the likely impact of the probe on the civil proceedings, had it been available at that stage, is given by DAC Simmonds' redacted memorandum dated 2011.
Paragraphs 113 and 118 of the Particulars of Claim appear to accept that the pleading is inadequately constituted at present, and that the position will be reviewed following disclosure.
Mr Beggs submits that the pleading has to be scrutinised according to its current iteration, and that in any event no application has been made to amend it. The case law establishes that subjective bad faith must be pleaded: either the public officer, who must be identified, specifically intends to injure a person or persons (and acts pursuant to an improper or ulterior motive), or he knows that he has no power to do the act complained of, and that the act will probably injure the claimant: see, in particular, Calveley v Chief Constable of Merseyside Police [1989] AC 1228 and Three Rivers DC v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1.
The Claimants have failed to plead a number of essential components of this tort, and the issue for my determination is whether I should exceptionally adjourn the Defendant's application pending disclosure. In my judgment, there is nothing exceptional about the present case which would warrant such a course, and nothing which has been drawn to my attention to show that the Claimants might have a promising cause of action under the rubric in due course.
Conclusion
I accede to the Defendant's applications under CPR r.3.4(2)(a) and r.24(a)(i) and (b) (to the extent indicated under paragraphs 21, 51, 63 and 67 above) in relation to the entirety of the Particulars of Claim, and there must be Judgment for the Defendant. |
THE HONOURABLE MRS JUSTICE SLADE DBE :
Mr James, the Defendant in a road traffic accident claim, appeals from the Judgment and Order of Master Campbell on 7 August 2014. Master Campbell held that for the purpose of CPR 45.16 and 45.17 the trial of the action had commenced and accordingly the Claimant was entitled to recover a success fee of 100% on base costs. I was told that the 100% uplift in costs results in a sum of about £320,000.
CPR 45 provides for a fixed percentage by which the amount of a legal representative's fee can be increased in accordance with a Conditional Fee Agreement ('CFA') which provides for a success fee. Section III deals with road traffic accident claims. This appeal is concerned with the regime under which success fees payable under a CFA were recoverable from the paying party.
The hearing of the claim was listed for three days to start on 8 June 2011 before Mr Justice Griffith Williams. The trial of the issue of quantum was adjourned on the first day, 8 June 2011. The issue of liability was stood out on 9 June 2011. The Claim was settled before the next hearing. The question before the Master was whether the trial of the issue of liability had commenced before it was stood out on 9 June 2011. The Master held that the liability trial started on 8 June 2011 after the application to adjourn the issue of quantum was determined. Before me Mr Edwards, Counsel for the Claimant, sought to uphold the decision on the grounds relied upon by Master Campbell alternatively on the basis that the trial of liability commenced when both parties came into court at the start of proceedings on 8 June 2011 prior to the application to adjourn the hearing of the quantum issue.
The relevant provisions of the CPR
"CPR 45.15 – (1) This Section sets out the percentage increase which is to be allowed in the cases to which this Section applies.
(Rule 43.2(1)(l) defines "percentage increase as the percentage by which the amount of a legal representative's fee can be increased in accordance with a conditional fee agreement which provides a success fee.)
(2) This Section applies where –
(a) the dispute arises from a road traffic accident; and
(b) the claimant has entered into a funding arrangement of a type specified in rule 43.2(k)(i)
(Rule 43.2(k)(i) defines a funding arrangement as including an agreement or collective conditional fee agreement which provides for a success fee.)
…
(6) In this Section –
…
(b) a reference to "trial" is a reference to the final contested hearing or to the contested hearing of any issue ordered to be tried separately;
(c) a reference to a claim concluding at trial is a reference to a claim concluding by settlement after the trial has commenced or by judgment;
…
CPR 45.16 – Subject to rule 45.18, the percentage increase which is to be allowed in relation to solicitors' fees is-
(a) 100% where the claim concludes at trial; or
(b) 12.5% where –
(i) the claim concludes before a trial has commenced; or
…
CPR 45.17 – (1) Subject to rule 45.18, the percentage increase which is to be allowed in relation to counsel's fees is –
(a) 100% where the claim concludes at trial;
…
(c) if the claim has been allocated to the multi track –
(i) 75% if the claim concludes 21 days or less before the date fixed for the commencement of the trial;
The proceedings before Mr Justice Griffith Williams
The transcript of proceedings before Mr Justice Griffith Williams on 8 and 9 June 2011 was before the court as was his judgment on 8 June on the application to adjourn the issue of quantum. Extracts from the transcripts relevant to the hearings on those dates are set out. Numbers in square brackets are page numbers in the appeal bundle unless otherwise indicated.
8 June 2011
Mr Wilson-Smith QC, for the Claimant, informed Mr Justice Griffith Williams
"My Lord, this is listed as a trial on issues of liability and quantum.
…
As your Lordship will have seen from the papers, the liability issue is restricted to contributory negligence.
The position has arisen whereby I am seeking adjournment of the trial on the issues of quantum."
The application for an adjournment of the quantum issue was opposed by Mr Norris QC for the Defendant. Mr Justice Griffith Williams said that he could not sit beyond 1pm on the third day listed for the trial, Friday 10 June.
Judgment on the application to adjourn the issue of quantum was given after lunch on 8 June 2011. Mr Justice Griffith Williams granted the application to adjourn "limited as it is to the issue of quantum only" [113, paragraph 17]. The Judge then observed:
"It seems to me there is no reason why this case should not proceed on liability today." [114]
Mr Norris QC said that they had liability witnesses waiting and that "it is probably time to crack on." The court adjourned for fifteen minutes to 2.55pm.
When the court reassembled, by consent Counsel asked for an adjournment to 10.30 am on 9 June 2014 [106]. Mr Wilson-Smith QC told the Judge that he had been shown some information by way of disclosure that they would need to consider which would take time. Counsel also needed to take instructions from the Client. Mr Norris QC said that he had made late disclosure of an interview with a police officer, PC Delbridge, and they had a supplementary statement which Mr Wilson-Smith QC needed to consider. Mr Justice Griffith Williams asked how long the liability trial was likely to last. Mr Wilson-Smith QC replied that they thought there would be a day and a half's evidence. The Judge commented that he would like counsel to tell him what to read before the next morning. Both counsel invited the Judge to read various witness statements, principally those by the experts.
When the court convened on 9 June 2014, Mr Wilson-Smith QC informed the Judge [117]
"…as a result of the documentation that was disclosed, it is clear that there was another independent witness to the accident
…
MR JUSTICE GRIFFITH WILLIAMS: And this independent witness, you say, says that he cut that corner?
MR WILSON-SMITH: He cut the corner.
MR JUSTICE GRIFFITH WILLIAMS: Yes,
MR WILSON-SMITH: Now, we have been able to locate the name and address and telephone numbers of the witness. We tried to contact him last night. We believe we will be able to contact him. His evidence is significant for a number of reasons. First of all, both experts have proceeded on the basis there were no independent witnesses.
MR JUSTICE GRIFFITH WILLIAMS: And there is an area of dispute between them as to what I will call the angle of collision?
MR WILSON-SMITH: Precisely, precisely. Dr Mills says that this is significant evidence because, depending on the angle – well, the angle will to some extent influence the trajectory, as your Lordship will anticipate.
MR JUSTICE GRIFFITH WILLIAMS: Obviously, and it could also, reading their reports, have bearing on the issue of whether or not the helmet could have been dislodged?
MR WILSON-SMITH: My Lord, it has a bearing on a whole range of issues, including the force of the impact, and where the injuries are. My Lord, this is a big claim. It is an important claim and I am simply in a position where I have got to have a statement from him. What I invite your Lordship to do – I am anxious not to lose the trial date. I do not know what your Lordship's movements are or your availability?"
Mr Wilson-Smith QC asked the Judge to stand the case out until 2pm. Counsel said:
"Mr Small [the independent witness] regarded the driving as dangerous."[121]
The Judge was taken to some of the documents. Mr Wilson-Smith QC then continued:[125]
"Bearing in mind the importance of it to this Defendant, and bearing in mind the conflict between [the experts] Dr Chinn and Dr Mills, I feel that it is necessary for me to see whether I can obtain a statement from Mr Small. We have reason to believe that we can. How quickly we can do it is something that we are making urgent enquiries into. May I just say this? I understand my learned friend does not oppose to your Lordship to stand this out until two o'clock so that we can make those enquires."
Mr Norris QC referred to the possibility of supplementary witness statements from Mr Delbridge, the police officer, and Mrs Ireland. If there were to be supplementary evidence from the Claimant's side, including from Mr Small, he would wish to see it [130]. As had Mr Wilson-Smith QC, Mr Norris QC asked for an adjournment to 2pm. The case was adjourned until 2pm.
When the court resumed sitting at 2pm, Mr Wilson-Smith QC said:
"My Lord, progress is being made, but it is going to result in me asking your Lordship to stand this case out. …. We hope to have a witness statement by the close of play today. That will need to be considered by us and by the experts. Your Lordship is only sitting until midday tomorrow and my expert is not available next week. Apart from our own professional diaries – it would play havoc with those, but I do not advance that as a reason. It is with regret that I have to invite your Lordship to stand this case out."
Mr Norris QC indicated that there were other potential witnesses referred to in Mr James' supplementary statement of whom they may want to make further enquiries [132]. Mr Norris QC could see the difficulties of time constraints. Mr Justice Griffith Williams said [133]:
"I hope the parties understand that it is with particular regret that I have to stand this case out. But I can understand how this has come about, and I hope they understand too because it must be very frustrating for them to come in and sit at the back of the court waiting for the case to start and nothing actually happens."
Mr Wilson-Smith QC asked whether it was possible for Mr Justice Griffith Williams to reserve the case to himself. Counsel said the Judge had been involved in "a fair bit of reading" and in two applications,
"one in respect of costs and one in respect of quantum and now liability." Mr Norris QC said that he would be content for Mr Justice Griffith Williams to reserve the case to himself since he had "read a lot of the case." If he were to reserve the case to himself Mr Norris QC was content that the costs be reserved to the end. If not, Counsel asked that costs be dealt with.
Mr Justice Griffith Williams said that he would speak to listing and asked for a time estimate for the liability hearing. The Judge rose. When he returned to court he said that there would be no problem if he reserved the case to himself. Mr Justice Griffith Williams said [137]
"The only order it seems to me I can make is to stand the case out for the issue of liability to be tried on a date to be fixed in the second half of the Michaelmas term, with a time estimate of three days."
The Judge continued:
"Just before I rise, can I clear the decks to this extent? Mr Norris, so far as the issue of contributory negligence is concerned, is it restricted solely to what I will call the "helmet" issue?
MR NORRIS: No it also includes –
MR JUSTICE GRIFFITH WILLIAMS: As pleaded
MR NORRIS: Sorry, as pleaded and indeed as described in the opening.
MR JUSTICE GRIFFITH WILLIAMS: Yes. So the opening is-
MR NORRIS: Our case.
MR JUSTICE GRIFFITH WILLIAMS: - is your case. That is very helpful."
The Judgment of Master Campbell
Master Campbell held:
"35. In my judgment, the final contested hearing of the issue of liability began after the short adjournment on 8 June 2011. At that point, the quantum trial had been adjourned because the Claimant was not ready to proceed… as Mr Edwards points out, no similar application for an adjournment of the liability trial was made on 8 June.
…
36. … in my view, the hearing had started because the case had been called on, Counsel had come into court, the Judge had sat listening to submissions about whether he should rise until the morning (to which he could have said 'no') and the request had been occasioned by the fact that the Defendant had given late disclosure of a disclosable document and had served a supplementary witness statement. In addition only an hour's argument would have been possible that afternoon – 'I cannot sit beyond 4.15pm' (see page 24) the Judge had said. The ending of the day's business at that point was for the convenience of the court and the parties, but in my judgment, it does not follow that accordingly, the trial had not begun… Here, Mr Wilson-Smith's opening had effectively been advanced during the application for an adjournment of the quantum trial. He did not need to say it all again at the outset of the liability trial. There had then followed an exchange about the material which the parties wished the judge to read overnight. In my view, these are persuasive factors in favour of the trial having started rather than not. For these reasons, I am satisfied that the determination of this issue on legal grounds must be resolved in favour of the Claimant.
37. I take the same view so far as the facts are concerned. First, I consider there is nothing in the point that the Judge reserved the case to himself. The fact that subsequently, a different Judge might have undertaken the liability trial would not have meant that the exchanges before Mr Justice Griffith Williams would not have been 'at trial'… Second, I consider Mr Arney is reading too much into the words used by both the Judge and Counsel.
… in so far as Mr Arney contends that the language of the transcript points to the fact that the trial had not begun, I disagree with him."
At paragraph 38 of his judgment Master Campbell concluded:
"… the Claimant's claim for success fees falls within CPR 45.16(1)(a) and 47.17(1)(a) because in my judgment the final contested hearing commenced on 8 June 2011 when the liability trial was opened, albeit that the Judge rose very shortly afterwards."
"That being so, since the claim settled after the trial had commenced but before judgment, CPR 45.16(1)(b) and CPR 45.17(1)(c)(i) are not engaged. The success fees are therefore allowed at 100%."
The submissions of the parties
Mr Arney for the Defendant / Appellant helpfully summarised his submissions in the conclusions section at paragraph 12 of his skeleton argument. Counsel submitted:
"By reference both to the established legal principles and the particular facts of the case, the trial did not commence on 8 or 9 June 2011, such that the Respondent is restricted to the lower level of success fees :-
(a) By reference to the decisions in Gandy [Gandy v King [2010] EWHC 90177 (Costs)] and Amin [Amin v Mullings [2011] EWHC 278 (QB)], where the hearing essentially consisted of nothing more than consideration of whether to adjourn the trial to another time or date, this did not constitute the commencement of the "core event" contested hearing of the substantive issues.
(b) The transcript of the exchanges between Counsel and the Judge only serve to strengthen that principled starting position. It is clear from the transcript that neither the Judge nor the advocates considered the trial to have started.
(c) Even if rightly decided on its particular facts, (which is not accepted), the Loizou decision [Loizou v Gordon & Patsias [2012] EWHC 90221 (Costs)]is rightly distinguished: -
(i) Significance was attached to the fact that the 1st Defendant was not going to attend, which was used to distinguish the facts from the Gandy case (see para 45 of the judgment).
(ii) The application to adjourn was refused, such that the hearing remained as the (only) trial of the matter. By contrast, in our case successive adjournment requests were granted, and the trial was ultimately rescheduled to take place on another day (9 months later).
(d) The grant of successive adjournments is decisive. In Loizou the adjournment request was refused such that the claim concluded (by settlement) after the commencement of "the trial". In both Gandy and in our case the trial was adjourned (in Gandy to 2pm that day; and in our case ultimately to another day months later). The claim was then settled before the case came back for "trial." To find for the Respondent in our case, the court would have to conclude that: -
(i) There were to be two "trials", namely "Trial 1" on 8/9 June 2011 and "Trial 2" on the rescheduled date. Such an interpretation finds no support in the CPR or the reported cases; or
(ii) There was to be a part-heard trial, commencing on 8 June 2011 and concluding on the rescheduled date. This was not the basis on which the case was adjourned (or subsequently case managed).
(e) It follows that the June 2011 hearing was ultimately of no more than procedural significance (like the approval hearing in Gandy and which was required in the instant case also), which is insufficient to trigger the entitlement to the higher success fee. It was not the "core event" required."
Mr Arney submitted that Master Campbell correctly held that the application to adjourn the quantum issue did not amount to the commencement of the trial within the meaning of CPR 45.15(6)(b) and (c). What occurred after the decision of Mr Justice Griffith Williams to adjourn the quantum issue to be dealt with at a subsequent hearing was materially indistinguishable from what happened in relation to the liability issue. After judgment on the adjournment of the quantum issue, as a result of additional disclosure by the Defendant, the liability hearing was adjourned by consent to 10.30am on 9 June 2011. As a result of the late disclosure the Claimant's legal representatives wished to take a statement from the independent witness referred to in the statement the Defendant had recently disclosed.
At the start of proceedings on 9 June 2011 Mr Wilson-Smith QC asked the Judge to stand the case out until 2pm in the hope that a statement from the independent witness could be obtained. The request was granted. In the event, the case was not ready to proceed on 9 June 2011 and was taken out of the list. Mr Arney contended that all that happened on 8 and 9 June 2011 after the judgment on the adjournment of the quantum issue and discussion on costs was that there were successive applications to adjourn the liability proceedings which were granted. Just as with the quantum issue, the trial of the liability issue had not commenced.
Mr Arney submitted that Master Campbell erred in failing to consider whether what happened in respect of the liability issue on 8 and 9 June 2011 was a 'core event' at which matters would be finally determined as referred to by Mr Justice Blair in Cutler v Stephenson and Manchester City Council [2008] EWHC 3622 (QB) at paragraph 8, cited by Master Haworth in Gandy. It was submitted that what occurred on 8 and 9 June 2011 was not a 'core event'. What happened on 8 and 9 June 2011 was analogous to what occurred in Gandy to which Master Campbell should have referred. In Gandy Master Haworth held at paragraph 28:
"To my mind the word "trial" denotes an examination and determination of issues between the parties by a Judge, or some other tribunal. I accept that the date fixed for a quantum trial had been reached, namely 3 November 2008. However, it is clear from the transcript of the exchange between Mr Martin (Counsel for the Claimant) and Mr Justice Blake, that the trial did not start. Mr Martin was not ready to start and sought an adjournment until 2.00pm on the day fixed for trial. At that time Mr Martin, in an exchange with Mr Justice Blake, told the Court that the parties had compromised the claim."
Master Haworth held that the trial did not commence on the day Counsel for the parties appeared before Mr Justice Blake.
Not only was it submitted by Mr Arney that Master Campbell erred in failing to apply the correct construction of the words 'trial has commenced' in CPR 45.16(6)(c) as discussed in Gandy but also reached an impermissible conclusion on the facts. The transcript of the proceedings before Mr Justice Griffith Williams on 8 and 9 June 2011 shows that the parties were at no point ready to proceed with the trial of liability. Mr Arney contended that the fact that the hearing occupied one and a half days is not material. What must be considered is the substance of what took place at the hearing not its duration.
Mr Arney submitted that the material question for Master Campbell was 'did the liability hearing start'. It is immaterial that the Judge had read some of the papers and that some facts were outlined for the purpose of the application to adjourn the quantum issue. Mr Arney submitted that nothing other than procedural issues were dealt with at the hearing on 8 and 9 June 2011. Nothing was decided other than that the quantum issue was adjourned and that the parties were not ready to proceed with the liability hearing. There had been late disclosure of important material, the interview conducted by the police with the Defendant. This material named an independent witness who had to be traced and a statement taken from him. This could not be done in time for the trial of the issue of liability to start on 8 or 9 June 2011 before the case was stood out of the list.
Mr Arney submitted that Master Campbell rightly held in paragraph 35 that the trial had not started with the argument on and determination of the application to adjourn the quantum issue. However the Master erred in distinguishing the treatment of the adjournment of the quantum issue from standing the liability hearing out of the list before the hearing of the issue had started. In the language of Cutler referred to in Gandy, a 'core event' at which liability would be determined had not started. There is nothing in the transcript from which it is possible to discern when a hearing to determine liability had started. The hearing was occupied by discussion on the obtaining of further evidence and arrangement for a future liability hearing. It was submitted that Master Campbell erred in holding at paragraph 36 that submissions on when the court was to sit to hear the issue of liability marked the start of the liability trial. It was said that the Master erred at paragraph 36 and insofar as he may have suggested that Counsel did not need to open the liability trial as he had made submissions on the adjournment of the quantum issue.
Further, Mr Arney submitted that Master Campbell erred in holding in paragraph 37 that there was nothing in the point that the Judge reserved the case to himself. The reasons the Master gave for so deciding were all based on examples of unusual circumstances in which the judge who had started a trial could not continue which then had to be taken by another judge. It was submitted that in the ordinary course, the same judge who had started a trial would conduct the adjourned hearing. There would be no need to reserve it to himself or herself.
As for the alternative basis upon which the Defendant seeks to uphold the decision of the Master that the trial had commenced before settlement, Mr Arney submitted that the trial had not commenced within the meaning of CPR 45.15(6) when the parties were called into court on 8 June 2011 to commence the day's business notwithstanding that the first matter to be dealt with was an application to adjourn the determination of the quantum issue. Such a construction would trigger a 100% uplift if the parties turn up to court and all that happens is that the case is adjourned. An application for an adjournment is not the final contested hearing or the contested hearing of any issue ordered to be tried separately within the meaning of CPR 45.15(6)(b).
Accordingly it was submitted that the appeal be allowed and a decision that the claim concluded by a settlement before the trial commenced substituted.
Mr Edwards for the Claimant submitted that Master Campbell adopted the correct approach to whether the trial had commenced within the meaning of CPR 45.15(6). The Master considered what happened at the hearing. This was a question of fact for the Master. He set out his reasons in paragraph 36 of his judgment for holding that the trial had commenced before settlement was reached. Once Mr Justice Griffith Williams had given his ruling on the application for an adjournment of the quantum issue the Judge was expecting the trial to proceed on liability on 8 June 2011. The Judge said that there was no reason why the case should not proceed on the liability issue on that day. The parties appear not to have known what was coming in relation to the evidence that was to be disclosed later.
Mr Edwards submitted that it is clear from paragraph 36 of his judgment that Master Campbell considered that the trial of the liability issue had started before a further opening and hearing evidence. He was right to say that an opening was not needed. Mr Edwards said that it was never in contemplation that there would be a further opening and no suggestion from the Judge that he would want one.
Reliance was placed by counsel for the Claimant on the judgment of Master Leonard in Loizou. The First Defendant and his witness did not attend the hearing in that case, the Claimant's counsel opened the case albeit briefly. The trial judge refused counsel for the First Defendant's application to adjourn to another date. After a short adjournment, liability was conceded on behalf of the First Defendant. Master Leonard held of CPR 45.15(6)(b) and (c) and CPR 45.16
" 43. The above provisions, read together as they must be, refer to the commencement of the substantive hearing of an issue or issues that, not having settled, are still contested. They do not refer to the stage that the hearing has reached.
44. By definition a contested hearing must 'commence' before evidence is heard or submissions made. It does not become a contested hearing only when that happens."
Master Leonard distinguished the case before him on the basis that
"there was no question, as in Gandy, of asking the Learned Recorder to put back the opening of the trial for a short period. The only options for the First Defendant's representatives were to proceed in his absence by putting the other parties to proof, or to make an application to the trial judge for adjournment to another date. Either way they had to wait for the contested hearing to commence. There was (by that point) no other context in which the First Defendant's Counsel could make her application. The Learned Recorder's reference to making a start, after the short adjournment granted for Counsel to take instructions, must be read in its true context as a reference to getting under way with evidence and submissions."
Mr Edwards submitted that the abandonment of a trial does not mean that it has not started. A trial can start if later it has to be adjourned as happened in this case.
If Master Campbell were in error in holding that the trial started after the determination of the adjournment of the quantum issue, Mr Edwards submitted that his decision should be sustained on the basis that the trial commenced when the parties were first called into court on the morning of the hearing on 8 June 2011 rather than at the conclusion of the judgment on the application to adjourn the quantum issue. Mr Edwards contended that there is a point in asking what would have happened if the adjournment application or requests to put the matter back had been refused – everyone understood that the trial or hearing would proceed. This is what makes this case different from a purely procedural application somehow divorced from the hearing that everybody is there to participate in. Although Mr Edwards indicated in his skeleton argument that the belief of the parties was material, at the hearing of the appeal both Counsel agreed that the fact of whether a trial has started is not one of intention. The parties may intend to start the trial but the question under CPR 45.15(6)(b) and (c) and CPR 45.16 is whether the trial has in fact started. There must be certainty.
Discussion and Conclusion
CPR 45.16(1)(a) and 45.17(1)(a) provide that a 100% uplift in solicitors' and counsel's fees are allowed where a CFA has been entered into where the claim concludes at trial. The determination of this appeal turns on whether Master Campbell erred in his interpretation of the meaning of a claim concluding at trial or whether, in deciding that it had, he reached a perverse conclusion on the facts.
Mr Justice Griffith Williams granted the application on behalf of the Claimant for the quantum issue to be tried separately and adjourned until after the determination of liability. In my judgment Master Campbell was correct in holding that at that stage the trial had not commenced. The alternative submission by Mr Edwards that if Master Campbell erred in the basis for his decision, that the trial of the liability issue had commenced after the judgment on adjournment of the quantum issue, the trial of the liability issue had commenced when the case was called on and the application for an adjournment of the quantum issue was made cannot be accepted. The final contested hearing or the hearing of an issue ordered to be tried separately does not commence just because the case is called on and counsel have come into court. Whilst a hearing may commence before counsel start making submissions, a 'trial' for the purposes of CPR 45.15(6)(b) only starts with the commencement of a final contested hearing or of an issue ordered to be tried separately. On 8 June 2011 a hearing took place but it was not the final contested hearing or the hearing of an issue ordered to be tried separately. The hearing was of an application to adjourn the trial of the issue of quantum. Accordingly the Master did not err in holding that the trial of the issue of liability had not started with the application for an adjournment of issue of quantum.
In my judgment it cannot be said that Master Campbell erred in law by failing to refer to the judgment of Master Haworth in Gandy. In Gandy, Master Haworth was considering the wording of a CFA not CPR 45.15(6)(b). Master Haworth distinguished Sitapuria v Khan 10 December 2007 and Dahele v Thomas Bates and Son Ltd. [2007] EWHC 90072 (costs) from the case before him on the basis that those cases relate to the question of what constitutes a 'trial' for the purposes of Part 45 CPR, the fixed costs regime. Master Haworth stated at paragraph 31:
"I distinguish both those cases from the present case on the basis that the fixed costs regime in Part 45 does not apply to the facts of this case."
However, whilst not construing the same provision, decisions on the same wording in a similar context are of assistance.
Loizou, relied upon by Mr Edwards for the Defendant, was a case decided under CPR 45. In Loizou the First Defendants did not attend. Counsel for the Claimant started the opening of the trial by briefly introducing the parties' representatives before giving way to counsel for the First Defendant's application for an adjournment. The application was refused. After a short adjournment, counsel for the First Defendant consented to judgment being entered against him on liability only. Master Leonard held at paragraph 45 that the only options for the First Defendant's representatives:
"were to proceed in his absence by putting the other parties to proof, or to make an application to the trial judge for adjournment to another date. Either way they had to wait for the contested hearing to commence."
Master Leonard held that:
"In those circumstances there was no question, as in Gandy, of asking the Learned Recorder to put back the opening of the trial for a short period."
In Gandy Master Haworth held that it was clear from the transcript that counsel for the Claimant was not ready to start and sought an adjournment until 2pm on the day fixed for trial. When counsel returned to court at 2pm the Judge was informed that the parties had compromised the claim. Master Haworth held at paragraph 28 that the trial did not commence on that day.
Although each case turns on its own facts and the application to those facts of CPR 45.15(6)(b), those of the appeal before me bear striking similarities with those in Gandy.
Whilst, as in Gandy, the Judge had read some of the papers and witnesses were present, the Claimant's counsel was not ready to proceed. The hearing was put back by consent, first to 10.30am on 9 June and then to 2pm. It was then stood out of the list.
In my judgment what occurred after Mr Justice Griffith Williams had delivered his judgment on the adjournment of the remedy issue was that the trial of the liability issue was put back in circumstances in which the Claimant's representatives had to have the opportunity to consider a late disclosed statement by the Defendant to a police officer. When it became apparent from the statement that there was an independent witness to the accident, time was given to ascertain whether and when a statement from him could be obtained. When the hearing resumed on the morning of 9 June both counsel asked for an adjournment until 2pm in the light of the possibility of further witness statements from Mr Delbridge and Mrs Ireland and a statement from Mr Small being obtained. When the court resumed at 2pm, a statement from Mr Small had not yet been obtained. Counsel hoped it would be available by the end of the day but it would have to be considered by the legal representatives and the experts. Mr Wilson-Smith QC asked the judge to stand the case out. The court was only going to sit until midday the next day. Mr Norris QC acknowledged that time constraints caused difficulties. In my judgment these steps cannot be said to constitute the commencement of the trial of the liability issue. The fact that the case had been called on, counsel had come into court and the Judge had listened to submissions on whether he should rise until the next morning do not in my judgment support a conclusion that the trial on the liability issue had started in the afternoon of 8 June.
The question then arises as to whether the trial had started at 10.30am on 8 June, the alternative basis on which the Defendant seeks to uphold the decision of Master Campbell. Master Campbell held that Mr Wilson-Smith QC's opening of the liability issue had effectively been advanced during the application for an adjournment of the trial of the remedy issue. At the beginning of the hearing on the first day, 8 June 2011, Mr Wilson-Smith QC told Mr Justice Griffith Williams that the liability issue was restricted to contributory negligence. However it is clear from the exchanges between the Judge and Mr Norris QC when the case was stood out of the list at the end of the second day, 9 June 2011, that the Judge did not know the scope of the contributory negligence defence which was the main issue in the liability trial. From the transcript of proceedings it is apparent that counsel for the Claimant had not opened the case on the liability issues when applying for an adjournment of the quantum hearing. Submissions were made on evidence about the care regime which would be needed for the Claimant. Discussions about the Claimant's helmet which may have been relevant to the liability hearing did not take place until after the judgment had been given to adjourn the trial of the quantum issue. In my judgment the transcript of proceedings does not support a conclusion that the liability trial had effectively been opened by Mr Wilson-Smith QC's submission in applying for an adjournment of the trial of the quantum issue.
Nor, in my judgment, did Mr Justice Griffith Williams' asking what he should read overnight indicate that the liability trial had started. No doubt counsel and Judge wanted to make the best use of time in the hope that it may have been possible to start the liability trial the next day. This proved not to have been possible. The reading of papers does not indicate that the liability trial had started.
Further, there is considerable force in Mr Arney's submission that the fact that Mr Justice Griffith Williams was asked to and did reserve the liability trial to himself is a strong indication that the liability trial had not commenced. There would have been no need to reserve the case to himself if the Judge had already started hearing the liability trial. He would have conducted an adjourned hearing. No order reserving the case to himself would have been necessary or appropriate. Further, if the liability trial had commenced it would have been adjourned. The liability trial was not adjourned, it was stood out of the list because the liability trial had not commenced.
The 100% percentage increase is payable when a settlement is reached after the commencement of the final contested hearing, or in this case, contested hearing of the liability issue. It is not triggered by the commencement of any hearing of whatever nature related to the contested liability hearing. In this case there may be hearings before the start of the contested hearing of the liability issue to deal with evidence and other case management matters. Whilst the hearing before Mr Justice Griffith Williams which started after his judgment on the adjournment of the quantum issue was related to the trial of the liability issue, it was to put back the start of the hearing of that issue and then to take it out of the list. The hearing which took place from the afternoon of 8 June and on 9 June 2011 was not the contested hearing of the liability issue within the meaning of CPR 45.15(6)(b). The sequential proposals to put the case back, first to 10.30am on 9 June 2011 and then to 2pm on that day were analogous to the facts considered in Gandy. Whilst such requests can be made after a trial has started, that was not so in this case. In my judgment Master Campbell erred in treating the start of a hearing related to the liability issue concerned with when the trial would start as the start of the contested hearing of that issue.
The appeal is allowed. In my judgment on the material in the transcript of proceedings on 8 and 9 June 2011, and applying CPR 45.15(6)(b), the only conclusion which could be reached is that the trial of the liability issue had not commenced on 8 or 9 June 2011. Accordingly the claim for a 100% increase in solicitor's and barrister's fees is dismissed. Counsel are invited to calculate the consequential increase in fees.
I am grateful for the assistance given by the practical experience of the Assessor, Master Haworth but this judgment is mine alone. |
The Hon Mr Justice Turner:
INTRODUCTION
In this case the claimants seek a wasted costs order against solicitors, Kerman & Co. LLP ("Kermans"), and counsel, Mr Robert Levy QC ("Mr Levy").
Kermans and Mr Levy represented the eighth defendant, Mr Alexander Altman, in contempt proceedings brought against him by the claimants. Mr Altman lost and was sentenced to eighteen months imprisonment.[1]
However, Mr Altman has so far escaped justice by remaining outside the jurisdiction. Attempts to extradite him have been unsuccessful. Furthermore, the claimants have incurred substantial costs which Mr Altman was ordered to pay. Predictably, he has not done so. It is against the background of this Pyrrhic victory that the claimants now seek to persuade the court to order Mr Altman's legal representatives to foot the unpaid bill.
THE WASTED COSTS JURISDICTION
Section 51 of the Senior Courts Act 1981 provides:
"(1) Subject to the provisions of this or any other enactment and to the rules of court, the cost of and incidental to all proceedings in-
The civil division of the Court of Appeal;
The High Court; and
Any County Court
Shall be in the discretion of the court…
(6) In any proceedings mentioned in subsection (1), the court may disallow, or (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with rules of court."
Those rules of court are to be found in CPR Part 46.8 which provides:
"(1) This rule applies where the court is considering whether to make an order under section 51(6) of the Senior Courts Act 1981 (court's power to disallow or (as the case may be) order a legal representative to meet, wasted costs).
(2) The court will give the legal representative a reasonable opportunity to make written submissions or, if the legal representative prefers, to attend a hearing before it makes such an order.
(3) When the court makes a wasted costs order, it will-
(a) specify the amount to be disallowed or paid; or
(b) direct a costs judge or a District Judge to decide the amount of costs to be disallowed or paid.
(4) The court may direct that notice must be given to the legal representative's client, in such manner as the court may direct-
(a) of any proceedings under this rule; or
(b) of any order made under it against his legal representative."
The Practice Direction to Pt.46.8 provides additional guidance in relation to the procedure to be adopted at paragraphs 5.6 to 5.8 inclusive:
"5.6 The court will give directions about the procedure to be followed in each case in order to ensure that the issues are dealt with in a way which is fair and as simple and summary as the circumstances permit.
5.7 As a general rule the court will consider whether to make a wasted costs order in two stages-
(a) at the first stage the court must be satisfied-
(i) that it has before it evidence or other material which, if unanswered, would be likely to lead to a wasted costs order being made; and
(ii) the wasted costs proceedings are justified notwithstanding the likely costs involved;
(b) at the second stage, the court will consider, after giving the legal representative an opportunity to make representations in writing or at a hearing, whether it is appropriate to make a wasted costs order in accordance with paragraph 5.5 above.
5.8 The court may proceed to the second stage described in paragraph 5.7 without first adjourning the hearing if it is satisfied that the legal representative has already had a reasonable opportunity to make representations."
In order for the conduct of the respondents in any given case to be such as to engage the wasted costs jurisdiction it must be improper, unreasonable or negligent.
THE SCOPE OF STAGE ONE
On 3 February 2015, I ordered, in accordance with the Practice Direction, that consideration of the wasted costs application should follow a two stage process. The hearing to which this judgment relates is the stage one hearing.
The rationale behind the procedure set out in the Practice Direction is not difficult to discern. Salutary as the wasted costs jurisdiction undoubtedly is in appropriate cases, there lurks the risk that satellite litigation, growing like Topsy, will come to generate costs and absorb the time and resources of the parties and the court to an extent which is disproportionate to the object to be achieved. By splitting the wasted costs application into two stages, the Practice Direction seeks to place a burden on the applicant to demonstrate a prima facie case as one of the preconditions to be fulfilled before a further and more detailed consideration of the substantive merits will be entertained. Thus unpromising applications can be nipped in the bud before they start taking up too much time and giving rise to disproportionate expense.
In the particular circumstances of this application, issues arise as to the proper scope of stage one. This is primarily because Kermans and Mr Levy QC seek to participate very fully indeed at this stage whereas the Practice Direction envisages that the respondents' representations, whether in writing or at a hearing, will be made wholly or mainly at stage two.
One can readily understand why legal advisers against whom a wasted costs application is made should want to engage with the process pre-emptively. By doing so they seek to maximise their chances of achieving a prompt termination of the process whilst preserving the opportunity to take a second bite of the cherry if they are unsuccessful at the first stage. Of course the danger is that the stage one process then becomes overburdened with detail and complexity when it is intended to be pragmatically lean and uncluttered.
It is to be noted however, that the Practice Direction sets out the procedure to be followed "as a general rule". The procedural route therein laid down is not therefore to be treated with mechanistic slavishness where the particular circumstances of the case demand a different approach in order best to achieve the overriding objective. In the more straightforward cases there may be little or no participation at the first stage on the part of the legal advisers against whom the order is sought. However, this case could not be regarded as being straightforward on any analysis and it would be both wrong and artificial for this court entirely to disregard the detailed submissions made on behalf of the respondents. Of course, the court in any case like this must be alert to the possibility that respondents may be tempted tactically to be over-inclusive in meeting a wasted costs application in order artificially to create the impression that the issue is less susceptible to summary determination than is really the case.
THE ALLEGATIONS
The claimants advance six categories of conduct which they contend fall within the scope of the wasted costs jurisdiction:
i) The submission of a dishonest defence to the committal application by Mr Altman;
ii) Actions designed to cause delay including the adjournment of the first listed hearing of the application for committal by way of the submission of that dishonest defence;
iii) Actions which resulted in a successful application being made for the disclosure of part of Kermans' file;
iv) Providing affidavits, witness statements and correspondence which contained incorrect and misleading information in light of the disclosure of Kermans' file;
v) Failing to comply promptly with the order for disclosure of Kermans' file; and
vi) The pursuit of irrelevant topics of cross-examination causing the trial, which had been realistically estimated to last for two days, to run onto five days with a sixth day for written submissions and a further hearing to address sanction and costs.
The claimants contend that costs have been incurred in excess of £400,000 as a result of the conduct of which complaint has been made.
In submissions made on behalf of Kermans, Mr Kirby QC articulated seven grounds upon which the claimants' application should be rejected:
i) Procedure. The wasted costs summary procedure was irremediably unsuited to the scale and complexity of the application in this case;
ii) Delay. The claimants are guilty of inordinate delay in the bringing of this application;
iii) Privilege. The respondents are prevented by the operation of legal professional privilege from being able fairly and fully to respond to the allegations;
iv) Changing allegations. The allegations themselves have changed over time and in some respects are not clear enough to enable the respondents to know with sufficient precision what case they have to meet;
v) Unsuitability. The wasted costs procedure is an inappropriate vehicle through which findings of dishonesty could be made against the respondents in the circumstances of this case;
vi) Particular allegations. In respect of none of the allegations have the claimants passed the threshold test of satisfying the court that it has before it evidence or other material which, if unanswered, would be likely to lead to a wasted costs order being made;
vii) Causation. Even if all of the above challenges were rejected, the claimants cannot establish that the conduct of the respondents was the cause of the alleged or any costs consequences.
These contentions were adopted on behalf of Mr Levy, expanded upon and combined with further submissions of more particular relevance to his individual position.
PROCEDURE
In support of the first ground of opposition, the respondents point out that it has already led to three hearings before this court. The first concerned the giving of directions pursuant to the Practice Direction. The second, which lasted half a day, involved a strongly contested application by the claimants to disapply legal professional privilege in respect of documents held by the respondents. The third, relating to the first stage test, has occupied the court for a full day. If the matter were to go further to the second stage the claimants concede that it would last a further full day and the respondents contend that it would actually last considerably longer, particularly if I were to decide that legal professional privilege should no longer apply to significant numbers of documents which would then have to be perused and analysed.
This first stage application is supported by nine bundles of documents. The claimants' outline submission is fifteen pages long and runs to 61 paragraphs. Appended to it is a thirteen page schedule of specific allegations. A supplementary shorter submission was served shortly before the hearing. Kermans' skeleton argument runs to 36 pages and comprises 102 paragraphs. Mr Levy's skeleton argument runs to 23 pages and comprises 73 paragraphs. I have been provided with three bundles of authorities.
Kermans estimate that their costs of the stage one application amount to about £70,000 plus VAT. Mr Levy is said to have incurred costs up to the end of the stage one hearing in the region of £118,000. It is estimated on his behalf that a stage two hearing lasting two days would give rise to the expenditure of further costs in the region of £60,000 or more. These further costs would be likely to be higher in the event that privilege were waived.
The nature of the wasted costs regime has been considered by the courts on very many occasions. Indeed, I have been provided with reports of no fewer than about thirty authorities which are said to be material to my approach to this case. I will resist the temptation to refer to them all and confine myself to a consideration of a salient few.
Re Freudiana Holdings Ltd (Times, December 4, 1995) involved a dispute over a joint venture concerning a musical based upon the life of Sigmund Freud. Appositely, there was a clash of egos between the two men who were the driving force behind the project. Each accused the other of fraud.
The appellant was the victor in the substantive litigation which ensued. He applied for an order that the legal representatives of the losing party should pay his costs alleging that they had been complicit in the presentation of a case which they knew to be fraudulent. The judge at first instance declined to make such an order and his decision was challenged in the Court of Appeal.
Rose L.J. held at page 5 that the kind of allegations made against the losing party's solicitors were bound, if in issue "to evoke a detailed response and a full investigation of a kind for which summary wasted costs procedures are likely to be unsuitable." He concluded that: "Unless wasted costs orders proceedings can take place in summary form, on or very soon after the delivery of judgment, they are unlikely to be appropriate."
Millet LJ observed that the trial judge would have been in an excellent position to form a prima facie view corrected or reinforced by any explanations given by the legal representative concerned if the allegations had been limited to complaints of conduct before the judge. However, the appellant had chosen to put in issue a number of other matters which included allegations that the respondent solicitors had had knowledge of and had participated in their client's fraud. It had been further alleged that counsel had failed to investigate the truth of their own client's allegations.
There was an additional factor in Freudiana which militated against summary adjudication. The appellant was also seeking to put in issue the outcome of the trial itself. Nevertheless, the judgment of Millet LJ makes it plain that the additional issue relating to the lawyers' knowledge of and participation in the fraud or failure to investigate the truth of their own client's allegations was one of those issues which "were quite unsuitable for a wasted costs application."
Millet LJ went on to hold that the appellant's remedy lay in bringing fresh proceedings against the legal advisers alleging their knowing participation in a fraud and claiming damages, which would include unrecovered costs. He acknowledged that the summary procedure would not necessarily be inappropriate in every case in which knowing or negligent participation in an abuse of process was alleged against legal representatives. However, he went on to hold that it would only be suitable in "a plain and simple case". The example which he gave was of a solicitor advising on the presentation of a winding up petition in order to bring pressure with respect to a debt which he knew to be disputed on bona fide grounds.
It is to be noted that Millet LJ was prepared to have countenanced a two to three day hearing of a summary application for wasted costs in that case but this was on the basis that the issues should have been limited to conduct in the face of the court and in the context of a substantive hearing which had lasted 165 days and which had resulted in a judgment of 500 pages.
Medcalf v Mardell [2003] 1 AC 120 involved an application for wasted costs against legal advisers who had allegedly raised allegations of dishonesty on inadequate material. Lord Bingham held at paragraph 24:
"Save in the clearest case, applications against the lawyers acting for an opposing party are unlikely to be apt for summary determination, since any hearing to investigate the conduct of a complex action is itself likely to be expensive and time-consuming."
Ultimately, as section 51 of the Senior Courts Act 1981 provides, the issue of costs, including the resolution of applications for wasted costs, is a matter for the discretion of the court.
In the circumstances of this case, I decline to embark on any further inquiry into the issues relevant to the application for wasted costs on the basis that the application is demonstrably unsuitable for summary determination. Of particular significance are the following features:
i) The claimants' central allegations would require the resolution of issues concerning matters which did not occur in the face of the court;
ii) These allegations call into question the professional integrity of practitioners all of whom have enjoyed long careers unblemished by any suggestion of impropriety;
iii) The sheer number and variety of allegations and the volume of material generated in support of this application is sufficient of itself to show that this case could not be characterised as "plain and simple";
iv) Despite the relatively high level of costs alleged to be at stake, the further time and resources which would be involved in proceeding to a substantive determination of this application would be disproportionate and inconsistent with the concept of summary determination. Bearing in mind that the stage one hearing lasted a day, I am satisfied that the respondents are right to predict that any stage two hearing would last at least two or even three days. Indeed, there is a high probability that the respondents would wish to give evidence and/or call others as witnesses.
It follows that despite the characteristic skill and restraint with which Mr Ramsden advanced his clients' case, I am satisfied that he falls at the first hurdle. The issues he seeks to ventilate are simply unsuitable for summary determination and I decline to permit this application to proceed further.
OTHER ISSUES
My findings with respect to the unsuitability of this case for summary determination render it unnecessary for me to deal in any detail with the remaining bases upon which the application was resisted. I have kept this judgment deliberately short. One distinct advantage of this is that it has enabled me to distribute it in draft form within two days of the hearing. A detailed analysis of the other issues would have demanded prolonged consideration the uncertain value of which would not have compensated for the further delay to which it would have given rise. I bear particularly in mind the entirely understandable anxieties of Mr Levy and his former instructing solicitors whose professional careers have been put in potential jeopardy by this application. There would be no virtue in prolonging their agonies any further.
I will, therefore, restrict myself to some passing observations on the remaining issues upon which I have expressed no fully reasoned view.
The respondents castigate the claimants for the time it has taken for this application to be made which they characterise as being inordinate and inexcusable. The claimants respond by asserting that the delay is entirely justified in the particular circumstances of the case. The truth, as it so often does, lies somewhere in between. It is difficult to escape the conclusion, however, that one contributory factor to the slow progress has been the relative complexity and broad scope of the application. It should not normally take a year to launch an application suitable for summary determination. Nevertheless, had I found that the application was suitable for summary determination I would not have found that the delay alone was such as to justify striking out the application.
I turn now to the issue of privilege. On 7 April 2015, the claimants applied for specific inspection of documents in the control of Mr Altman for the purpose of furthering their claim for wasted costs against the respondents. The categories of documentation in respect of which the application was made would normally be protected by legal professional privilege. They comprised all instructions received by the respondents in connection with the committal application and all advice given by them to their client in this regard. It is unnecessary for me for the purposes of this judgment to set out the basis upon which the application was made. Suffice it to say that I declined to adjudicate on this issue before I had heard the stage one arguments. In retrospect I am satisfied that I was right so to do.
Even if I had declined to accede to the specific inspection application I would still have found that the wasted costs application fell outside the legitimate parameters of a summary process. Further, the claimants would have faced the additional difficulties which would have arisen in attempting to persuade the court that it would be fair to make a finding against the respondents who would, arguably, have been handicapped by the maintenance of privilege.
On the other hand, if I had ruled in favour of inspection, the inevitable consequence would have been the expenditure by all parties of further significant time and resources on perusing and analysing the material which thereby saw the light of day. It would be impermissible for me to speculate on the likely impact, if any, that such inspection would have had on the merits of the wasted costs application but there would certainly be no guarantee that it would have resolved the merits either way (particularly those relating to causation and quantification) and there would be a very real risk that it would serve merely to extend further the parameters and complexity of the application.
The suggestion that some of the claimants' allegations are insufficiently clear or have varied over time is one which I do not intend to resolve. Suffice it to say that the number of allegations and the level of detail contained within the schedule appended to the claimants' outline submissions always made it likely that issues such as this would arise. The claimants faced a difficult tactical choice. Were they to provide mere bare outline submissions and run the risk of attracting criticism that the respondents did not know the case they had to meet? Or were they to provide fully particularised allegations the detail and extent of which might reinforce the respondents' argument that the application was unsuitable for summary determination? In the event, I am satisfied that no amount of drafting skill could have safely negotiated the passage between Scylla and Charybdis.
I have taken into account the nature and seriousness of the allegations of professional impropriety against the respondents when dealing with the issue of the appropriateness of a summary determination and see no purpose in rehearsing my conclusions under this distinct head of objection.
I also decline to decide whether, in respect of each of the various individual allegations, there is a prima facie case. This, of course, would often be an essential step in the assessment of a wasted costs application at stage one. However, since the application taken as a whole must fail, it would be disproportionate for me sequentially to consider the hypothetical merits of the items recorded in the schedule.
I take the same approach to the issue of causation of loss.
CONCLUSION
For the reasons set out above, I am satisfied that this application must fail at this stage. I am not without sympathy for the position of the claimants who have been the victims of a ruthless and criminal coup but I must end this judgment as Ward LJ began his in Hedrich v Standard Bank London Ltd [2008] EWCA Civ 905:
"A cigarette packet carries the warning that smoking can kill you. Solicitors' standard terms of business should carry a warning that litigation can cost you. For litigation is an inherently risky business: there are no certain winners; and very often even the fruits of success are never recovered. This is just such a case. The moral is caveat litigator."
Note 1 The relevant judgments can be found at Kagalovsky v Balmore Invest limited [2013] EWHC 3876 and Kagalovsky v Balmore Invest limited [2014] EWHC 161.
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Mr Justice Warby :
On 22 January 2015 I granted the claimant's urgent application for an injunction to restrain two men, whose identities were unknown, from harassing the claimant and her 9 year-old son. The acts of harassment of which she complained arose from the conviction and sentence of the claimant's husband for sexual activity with a child by a person in a position of trust. He was a teacher, and the child concerned was a 16-year old student. On 14 January 2015 Mr Kerner received a suspended sentence of imprisonment. His case attracted considerable media attention at the time of conviction and, in particular, sentence. That attention extended to the claimant and the couple's son.
The two men, a photographer and an associate, had been involved in watching the claimant's home and taking photographs on 22 January, in the early morning and afterwards, in a way that I found was likely to be held at a trial to amount to harassment: [2015] EWHC 128 (QB). At that time the claimant's husband was not living at the family home.
The injunction I granted was against those two men, designated as "'WX' and 'YZ' ...Persons Unknown responsible for pursuing and/or taking photographs of the Claimant and her son at their home on 22 January 2015)". The claimant and her son were described in the order as the "Protected Persons". The order prohibited the defendants from harassing the Protected Persons, and paragraph 3 contained some specific prohibitions on:
"3.1 photographing or videoing any Protected Person or any vehicle or premises or house belonging to or occupied by any Protected Person;
3.2 Knowingly loitering within the Exclusion Zone;
3.3 Knowingly pursuing a Protected Person"
The Exclusion Zone was defined to mean a 100 metre radius from the family home, in Kent, the address of which is specified in the order. The claimant gave undertakings to the court to use reasonable endeavours to trace the defendants. She had photographed them, and had the registration number of the car driven by one of the defendants.
On 29 January 2015, the return date of the original injunction, the claimant applied for the injunction to be continued until trial or further order. Neither defendant appeared. A second witness statement of the claimant explained that in compliance with her undertakings she had
i) given notice of the injunction to three newspaper groups; but none had responded; and
ii) contacted the DVLA in an attempt to trace the registered keeper of the car, the registration number of which she had taken; but she had not received that information and her evidence was that it could take 4 weeks to obtain it.
The claimant confirmed that she would serve proceedings if and when she identified a defendant.
I was satisfied that the need for the injunction had not expired, and that it should be continued. I therefore made an order that it continue until trial or further order. But it was by no means a certainty that the claimant would be able to identify either of the defendants. I required the claimant to undertake that if, despite the reasonable endeavours which she had undertaken to use, she had been unable to trace the defendants within three months after the date of my Order she would apply to a Judge for directions as to the further conduct of this action. The purpose was to ensure that the court retained control over the action and that the interim order did not by default become permanent: [2015] EWHC 178 (QB).
On 27 April 2015, in compliance with her undertaking, the claimant issued the application for directions which is now before me. In support of the application the claimant has made a third witness statement, dated 28 April. The directions sought are:
"1. An order that the DVLA release to the claimant's solicitors the identity and contact details of the registered keeper of the Ford Galaxy registration number [*REDACTED*] within 28 days of the order;
2. The Injunction dated 29 January 2015 in this matter to continue until trial or further order."
As the injunction of 29 January 2015 was expressed to continue until trial or further order it might be thought that paragraph 2 was unnecessary. However, it is right for the claimant to raise the issue, as her evidence shows that the facts have changed in a material respect, that might lead the court to reconsider. The claimant's husband has returned to live with his wife and son. As a result, he may incidentally benefit from protection which the injunction is designed to give to them. The prohibition in paragraph 3.1 would serve to prevent filming or photography of the husband when in the home, or in premises or a vehicle which is also occupied by his wife or his son. Paragraph 3.2 would protect him incidentally as would paragraph 3.3, if he was with his wife or son when they were being pursued.
I have considered whether it would be right for those incidental protections to be available to the husband, who is the convicted individual, and has not complained of harassment by these defendants or, so far as the court is concerned, anyone else. Any order of this kind must strike a proper balance between the rights of individuals to be protected from harassment which interferes with their right to enjoy a private and family life, and the rights of others, including the news media, to receive and impart information on matters of legitimate public concern.
I conclude that, provided this injunction remains justified in order to protect the claimant and her son, the fact that the husband also incidentally benefits is not a reason to vary or discharge the order. The injunction does not prohibit photography or videoing of the husband, at any time when he is not at home or not in the company of his wife or son. That is not to say, of course, that it would be legitimate to harass the husband. But it may be legitimate to take pictures or video of him, and nobody is asking the court to restrict such activity.
I therefore turn to consider whether the continuation of the existing injunction in favour of the claimant and her son is justified by the evidence. The claimant maintains in her third statement that such protection remains necessary. She was acting head teacher of Wyborne Primary School. Her evidence is that after her husband returned to the family home she informed her employer, and took the necessary steps to ensure that she could continue in her employment, while living with her husband. The point, of course, is his status as a convicted sex offender and thus a person barred from working with children. On 24 February 2015 the claimant obtained an Ofsted waiver allowing her to work at the school in any capacity, whilst living with her husband. However, there was press "campaign" against her personally she says, which she describes as "relentless". As a result of the pressure she is no longer working at the school.
Media interest in her life continues, she says. She refers to and exhibits a copy of an article published on 24 April 2015 in the News Shopper, online. This article reported suggestions that the claimant had been sacked from her position as acting headteacher of Wyborne Primary School after bringing her husband onto the premises. It referred to criticisms from parents. It featured two pictures of the claimant, one in which she was with her husband and the other a head and shoulders extract from that photograph. The claimant says that much of the article was false.
The claimant says that this continued media interest causes her to anticipate that without an injunction in place she and her son will again be harassed at their home by the defendants. She says that her son Jack has asked to move from his room at the front of the house to one at the back, because he is scared that photographers will come back and photograph him again.
Mr Lawson-Cruttenden has raised two further points in support of the continued need to protect the claimant and her son against the risk of harassment by the defendants. The first is that, as reported in the News Shopper article, the Acting Headteacher who has replaced the claimant for the time being, until a permanent replacement takes up the post in September, is the wife of the local MP. It is submitted that this makes it more likely that media interest in the case will continue. The second is that Mr Kerner is in the process of seeking to appeal against conviction. It is suggested that media interest is bound to revive at any time the appeal reaches a hearing, whether that be an oral application for permission, or a full appeal.
In my judgment there is enough evidence to justify the continuation of the order protecting the claimant and her son. Some of the evidence is lacking in detail. The evidence of the "relentless" press "campaign" against the claimant personally consists only of her assertion. No press coverage other than the 24 April online article is exhibited. No detail of the "campaign" is provided. This makes it hard to determine what exactly has taken place and hard to assess the weight that should be given to the claimant's characterisation of it. As for the article of 24 April 2015, it is not an inflammatory one. It is, rightly, not relied on as itself amounting to any form of harassment.
The evidence taken as a whole does however lead me to conclude that the husband's case and its consequences are likely to remain for some time a subject of some, albeit probably intermittent, media attention and that there are grounds for concern that this might in the absence of continued injunctive relief lead to harassment of the claimant and her son.
The impact on the son of the original harassing conduct is a factor that weighs particularly with me. The circumstances he has to cope with are difficult enough as it is, especially at his age, and in my judgment the evidence of risk needs only to meet a relatively low threshold in order to justify continued protection for him. The claimant herself is an adult, and a professional, and can reasonably be expected to be more robust. Nevertheless, the protection afforded by this injunction is not in any way unreasonable or oppressive.
I turn to the application for disclosure. When I first saw the papers for the application on 28 April I noticed that the application notice did not identify any person on whom it had been or should be served, and the evidence did not suggest it had been served. My view, that it should be served on the DVLA, was communicated to the claimant's solicitors. I now have before me, in addition to the claimant's third witness statement, a certificate of service dated 30 April 2015 and copies of related email exchanges. These show that the application notice and other documents were sent to the DVLA by email at 11:00 that day and that the DVLA confirmed at 11:29 that it "[did] not object to the request of a court order or a court order being granted", and would not be attending the hearing.
A similar position is quite often adopted by third parties against whom orders for disclosure are sought, but that is by no means always the case. It is important that any person against whom a party seeks a court order requiring them, at the risk of contempt of court, to take or refrain from some step should be given due notice and an opportunity to be heard. Where, as here, the application is for information that identifies an unknown person it is by definition impossible to notify the third party concerned. In other cases, however, where the information sought is personal information about an individual the court will wish to be assured that the "target" individual has been given due notice, and an opportunity to make representations, or that there is good reason not to afford them those facilities.
The relevant facts, as set out in the claimant's second and third witness statements, are that she made a written application to the DVLA for the disclosure of the identity of the registered keeper of the Ford Galaxy, using a form provided by the DVLA for that purpose, but the DVLA responded by letter stating that it was not satisfied that it was appropriate to make the disclosure. The present application notice was then issued and served on the DVLA, in response to which the DVLA gave the confirmation I have mentioned, that it would not oppose any order, and would not attend the hearing.
The fact that a third party does not oppose the making of an order for disclosure by it does not of course mean that the court will automatically make such an order. The source of the power to make the order must be identified and any requirements for the exercise of that power must be shown to be satisfied. In many cases, applicants for orders that third parties disclose the identity of alleged wrongdoers are able to invoke the jurisdiction recognised by the House of Lords in Norwich Pharmacal Co v Customs and Excise Comrs [1974] AC 133. Here, Mr Lawson-Cruttenden acknowledges that the Norwich Pharmacal jurisdiction would appear inapplicable, as it is based upon the respondent to the application being someone who has facilitated or become mixed up, innocently or otherwise, in wrongdoing of which the applicant has been the victim. That cannot be said of the DVLA in this case.
Mr Lawson-Cruttenden has therefore advanced his client's application in reliance on CPR 31.17. This provides, so far as relevant, as follows:
"Orders for disclosure against a person not a party"
31.17
(1) This rule applies where an application is made to the court under any Act for disclosure by a person who is not a party to the proceedings.
(2) The application must be supported by evidence.
(3) The court may make an order under this rule only where–
(a) the documents of which disclosure is sought are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings; and
(b) disclosure is necessary in order to dispose fairly of the claim or to save costs."
The relevant statutory provisions are those of s 34 of the Senior Courts Act 1981 which provides, so far as relevant:
"(2) On the application, in accordance with rules of court, of a party to any proceedings, the High Court shall, in such circumstances as may be specified in the rules, have power to order a person who is not a party to the proceedings and who appears to the court to be likely to have in his possession, custody or power any documents which are relevant to an issue arising out of the said claim
(a) to disclose whether those documents are in his possession, custody or power; and
(b) to produce such of those documents as are in his possession, custody or power to the applicant or, on such conditions as may be specified in the order— …"
The application as its stands is for the provision of information rather than the disclosure and production of documents, but that can be catered for by suitably amended wording. The DVLA is clearly a "person who is not a party to the proceedings". It is a certainty that the DVLA has in its possession documents which identify the registered keeper of the Ford Galaxy. I have to ask, though, whether such documents meet the three conditions imposed by s 34(2) and CPR 31.17(3), that is, that
i) the documents are "relevant to an issue arising out of the … claim" within s 34(2);
ii) they are "likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings"; and
iii) "disclosure is necessary in order to dispose fairly of the claim or to save costs."
The wording of s 34(2) and CPR 31.17(3)(a) is perhaps not plainly and obviously apt to confer a power to order disclosure for the purposes of identifying an unknown party. In my judgment, however, it would be inappropriate to construe either provision in a narrow and literal way, as confined (for example) to issues arising from statements of case between identified parties, and not as extending to the question of the identity of an unknown party. To take that approach would tend to obstruct or hinder the fair disposal of litigation. I must not forget that the rights, including the Article 8 rights, of those whose identities might be disclosed pursuant to such an order require consideration; the court must conduct a careful balancing exercise: see Flood v Times Newspapers Ltd [2009] EWHC 411 (QB), [2009] EMLR 18 [25], [29]. But the statute and the rule confer a discretionary power, which is also subject to the express threshold requirements of CPR 31.17(3)(b). Those factors mean there is ample scope for deciding, in an appropriate case, that disclosure would represent an unnecessary and disproportionate intrusion into personal privacy, or should not be ordered for some other reason. It is not necessary, in order to enable the court to reach such conclusions, to adopt a narrow reading of the statute or r 31.17(3)(a).
I am satisfied that the question of the identity of the unknown defendant who was the driver of the Ford Galaxy on the 22 January 2015 is aptly described as an "issue arising out of the claim" in this action. I would regard documents held by the DVLA which identify the registered keeper as "relevant to" that issue, as there is a good chance that they would identify or lead to the identification of the person who was the driver on the relevant occasion. Are the documents such as might "support the case" of the claimant, within the meaning of r. 31.17(3)(a)? I would interpret that phrase as encompassing documents that would advance the case of the claimant by identifying the defendant and answer the question yes.
I am also satisfied that it is "likely" that the documents would assist the claimant in that way. The word "likely" in this context means "may well" rather than "probably will": Three Rivers DC v Bank of England (No 4) [2002] EWCA Civ 1182, [2003] 1 WLR 210. In my judgment the requirement of necessity in CPR 31.17(b) is also met, as the claim cannot be disposed of fairly without identification of the defendants. Moreover, it is likely in my judgment that once one or both have been identified the action will be resolved more swiftly and economically than might otherwise be the case. I have no hesitation in exercising my discretion in favour of the order sought.
I therefore make an order pursuant to CPR 31.17 for the disclosure to the claimant's solicitors by the DVLA of documents in its possession which are sufficient to provide the solicitors identity and such contact details as are known to the DVLA of the registered keeper of the Ford Galaxy, and the production of copies of such documents.
Finally, I note that the DVLA did not seek any order as to its costs of compliance with any order for disclosure made by the court. In another case, it may be that an undertaking or order to that effect would be appropriate, by analogy with the position where a Norwich Pharmacal order is made against an innocent third party. |
Mr Justice Coulson:
1. INTRODUCTION
In these proceedings, the National Crime Agency ("NCA") pursues claims against the defendants under s.243(1) of the Proceeds of Crime Act 2002 ("POCA") for a Civil Recovery Order ("CRO") in respect of seven properties, four bank accounts, and a Rolex watch. These claims have thus far been vigorously disputed.
At the hearing on 21 April 2015, Mr Vollenweider, who appeared pro bono on behalf of both defendants, indicated that, although the first defendant ("Mr Atkinson") did not admit the unlawful conduct relied on by the NCA, he did not oppose the CRO sought. The second defendant ("Mrs Atkinson") was in a different position. She was a defendant in these proceedings because she is registered as the co-owner of one of the properties, the matrimonial home at 9, Owens Farm Drive ("the Property"). She objected to the inclusion of that house in the CRO.
Thus the only issue concerned the Property, and Mrs Atkinson's interest in it. After some discussion with counsel, it was agreed that, notwithstanding the difficulties, it was sensible, fair, and in accordance with the over-riding objective, for the dispute relating to the Property to be determined at the hearing. The underlying problems with any other course were many and various. Three matters in particular should be noted.
First, Mrs Atkinson, who has had a heart/lung transplant, had been hospitalised and was not present in court. It is not the first time that her ill-health has caused procedural difficulties. There was no guarantee that she would ever be well enough to attend court. Secondly, Mr Atkinson did not attend court either, without proper excuse. Thirdly, despite the order of Leggatt J on 17 April 2015, Mr Vollenweider had not been paid any sums at all either in relation to the prior work that he had done on this case, or for his preparation for the trial. Thus whilst he was prepared to attend court on the first day on a pro bono basis (subject to a question as to his fees, to which I will return at the end of this Judgment) there was no guarantee at all that he would be present thereafter.
In the circumstances, I concluded that the dispute in respect of the Property could be properly determined on the first day of the trial. There was a witness statement from Mrs Atkinson which would have stood as her examination in chief. Thus she was not prejudiced by her absence from court. Moreover the presence of Mr Vollenweider, who was aware of all the issues in the case, outweighed the advantages (if there were any) of an adjournment.
At the hearing, having considered the evidence and the careful submissions made by both sides, I concluded that the statutory exception relied on by Mrs Atkinson did not apply to the Property, and that it should form part of the CRO. I gave brief reasons for my decision at the end of the hearing. However, because it is a matter of importance to both Mr and Mrs Atkinson, and because it was necessary for me to make findings as to unlawful conduct in order to determine the dispute concerning the Property, I indicated that I would provide my detailed reasons in writing. That is the purpose of this Judgment.
Accordingly, in Section 2 below, I address the allegedly unlawful conduct of Mr Atkinson, and whether or not the properties which are the subject of the CRO, were obtained through unlawful conduct. In Section 3 below I specifically address the evidence in respect of the Property. In Section 4 below I identify the exception relied on by Mrs Atkinson and refer to the recent authority on that exception. Then at Section 5 I test whether or not that exception can apply to the present case. There is a short summary of my conclusions at Section 6 below.
Often, but not invariably, at this point in my written judgments I pause to thank counsel for their assistance. Rarely is such an expression of thanks more heartfelt than in the present case. The successful resolution of what would otherwise have been a ten day trial was entirely the result of the meticulous written opening prepared by Ms Dobbin on behalf of the NCA, and the clear submissions made by Mr Vollenweider. The public purse has been saved a considerable sum of money as a result of their commitment and hard work.
2. MR ATKINSON'S CONDUCT
Pursuant to s.241(3)(a) of the POCA, the court has to decide on the balance of probabilities whether unlawful conduct has occurred. The court then has to decide, pursuant s.242, whether property has been obtained through that unlawful conduct. If it has, then that property is recoverable property, subject to the exception in s.266 (which I deal with in Section 4).
Although Mr Atkinson does not admit unlawful conduct, I find that there is an overwhelming case against him. The misconduct consists of drug-dealing; money-laundering; and mortgage fraud. I deal with each briefly below.
As to the drug dealing, I note in particular:
(a) Character and Previous Convictions
Mr Atkinson has 12 convictions between 2002 and 2010. In particular, on 20 February 2009 he was convicted and jailed for making a false application for a UK passport. I accept the inference that a false passport is a valuable commodity to a drug trafficker. In addition, Mr Atkinson has a conviction for affray which involved considerable violence to both a woman and a man (who was knocked out).
(b) His Involvement in Drug Importation
Mr Atkinson was arrested as part of the Operation Confection, an investigation by Great Manchester Police and NCA into the importation of cocaine from Spain into the North West of England. 14 individuals pleaded guilty to the supply of cocaine as part of that conspiracy. I find that a transcript of a probe placed in the car of a co-defendant demonstrated Mr Atkinson's general involvement in drug dealing, in particular the conversation between the co-defendant and Mr Atkinson in which the co-defendant was complaining that Mr Atkinson had taken his best drug dealer from him.
Although Mr Atkinson did not eventually stand trial in respect of this conspiracy, that was because it was ruled that the transcript did not support the evidence of the conspiracy particularised in the indictment. That does not, of course, stop the transcript from being relevant and admissible evidence of unlawful conduct for the purposes of the CRO.
Furthermore, although Mr Atkinson has challenged the accuracy of the transcript, in his interview following his arrest he did not deny the conversation, but suggested that it was about hairdressing. That was a fanciful explanation which I reject. Subsequently, in the interview for the purposes of the CRO, he accepted what was said by the co-defendant, but said that during the conversation, he was denying what the co-defendant was saying to him. That explanation too is implausible. Further, these subsequent (and different) versions offered by Mr Atkinson also suggest, at least on the balance of probabilities, that the conversation was indeed about a drug dealer and drugs generally.
(c) The Dispute with Steven Akinyemi
There was a dispute between Mr Atkinson and Mr Akinyemi, a well-known drug dealer in the North West, over the use of the nickname 'Aki'. It appears that Mr Akinyemi wanted to stop Mr Atkinson from using that name and was particularly agitated by the fact that he was driving a Porsche which used 'Aki' in its number plate. The dispute escalated and, although Mr Atkinson was not present, Mr Akinyemi was shot and killed by an associate of Mr Atkinson.
The obvious inference is that both Mr Akinyemi and Mr Atkinson were involved in the same business, namely drug dealing, which is why the nickname mattered to Mr Akineymi. Revealingly, Mr Atkinson indicated in his interview that Mr Akineymi was a serious criminal, "not my kind of scale at all". That strongly suggests Mr Atkinson's involvement, albeit at a lower level, in the same criminal trade as Mr Akineymi.
(d) Mr Atkinson's Associates
Mr Atkinson had numerous associates who were involved in drug dealing and had drug-related convictions. A number of them rented the properties from Mr Atkinson which are now, by consent, the subject of the CRO.
(e) Features of the Property
When Mr Atkinson was arrested, the police found that the Property had a high-value infra-red security system including a biometric data entry system which used finger print technology, six video cameras monitoring the exterior, a thick steel door and bullet proof glass windows. A replica hand gun had been found at the Property on a previous search. I consider that all of these matters point strongly to the conclusion that Mr Atkinson was involved in the dangerous world of drug dealing and thus required these various security measures to protect himself. No plausible explanation for these measures, or indeed any of the points to which I have already referred, can be found in Mr Atkinson's statement.
(f) Summary in respect of Drug-Dealing
For the reasons noted above, I consider that the NCA has made out their case that Mr Atkinson was, on the balance of the probabilities, involved in drug dealing and drug smuggling.
The second area of an unlawful conduct relied on by the NCA concerns money laundering. It is perhaps unnecessary to go through this in any detail. However I note the following:
(g) Moonshine
Moonshine Mobile Valeting was set up by Mr Atkinson on 17 February 2006. The other owner was Gareth Hughes, who was involved in drug dealing. Mr Atkinson later sold the business in January 2010 to Mr Hughes for £50,000.
I find that Moonshine was the sort of cash-intensive business which is commonly used in an attempt to launder the proceeds of crime. Although Mr Atkinson said that his accountant could demonstrate that Moonshine was a legitimate business, the evidence of the accountant was very limited, because he did not audit the business or have any part in its day to day running. The accountant was essentially dependant on the paperwork provided by Mr Atkinson, and was unable to speak to the actual source of any of the money paid into the Moonshine account. In addition, shortly before selling Moonshine to another drug dealer, Mr Atkinson had said of the sale: "I needed some legitimate money". That suggests that the sale of Moonshine was designed to ensure that Mr Atkinson could have what appeared to be a legitimate source of funds.
(h) Pro Audio Tuning
This company was set up in June 2010. The evidence to what it actually did vary but it was essentially another cash-based business. It had one employee, Robin Ocego. Mr Atkinson said that it sold auto accessories and components and was involved in car diagnostics, whilst Mr Ocego said it was solely related to audio equipment, and was similar to a business he had previously run, but which he had given up because it was unprofitable. He was earning £220 a week from Pro Audio Tuning.
I also note the evidence that, following the imprisonment of Mr Atkinson for the passport offence, money has continued to be paid into the Pro Audio and Tuning account, but there was a significant drop-off in cash payments.
Mr Atkinson sought to rely on Mr Ocego's account of the business to show it was legitimate. But there is nothing in that account which demonstrates that this business could have legitimately generated the cash payments that were made into the company's account. I therefore again conclude that this was a money-laundering vehicle.
(i) The Purchase of the Properties
I deal with the purchase of the properties in the next section, relating to mortgage fraud. However, it is important to note that, on the evidence, the properties were purchased using cash deposits which could not be explained by reference to the income declared by Mr Atkinson or revealed in the documents.
(j) Summary in respect of Money Laundering
For the reasons set out above I find on the balance of probabilities that Mr Atkinson was involved in money laundering.
Finally there is the evidence on which the NCA relies which goes to mortgage fraud. Again it is unnecessary to set these out in detail. However, I note the following:
(k) Flats 2, 3 and 6, Clare Court
In respect of these three properties Mr Atkinson signed mortgage declarations saying that his estimated personal annual income from Moonshine was £50,000. This was entirely untrue. For the tax year 2005/2006 Moonshine declared a total turnover of £6,952 with a taxable profit of £3,791. The following year the account showed that Mr Atkinson received £24,119. I find on the balance of probabilities that the extent of Mr Atkinson's inflation of his earnings was such that the declarations that he made could not have been honest. Furthermore, the suggestion in interview that these figures did not allow for his £25,000 wage was a fabrication because there was not such separate wage.
It should also be noted that the evidence is that the deposits were made up of various sums from Moonshine and associated companies and that, in respect of Flat 3, one amount came from Mrs Atkinson's grandmother's bank account. A cash payment of £8,500 was made on 16 May 2005 into that account. On 17 May, the sum of £8,505.20 was paid out of the grandmother's account and into Mr Atkinson's personal account. I accept the submission that that was a classic example of money laundering.
(l) 4, Clare Court
In his mortgage application form in respect of this property, Mr Atkinson untruthfully denied that he had been the subject of criminal proceedings. He also declared an income from Moonshine of £30,000 per annum for both 2005 and 2006. Again, these figures were not supported either by the accounts of Moonshine or the income he declared to HMRC. I therefore find mortgage fraud.
Again the properties were bought with sums advanced by Moonshine and others, again indicating money laundering.
(m) 38, The Quadrant and 20, Walnut Tree Road
Different declarations were made to the mortgage companies in respect of these two properties. The scale of the inflation of Mr Atkinson's declared income was much less for these properties than those noted above. Accordingly I am not persuaded, on the balance of probabilities, that there was a mortgage fraud in these two cases. But that makes no ultimate difference to the outcome because, again with the funds principally coming from Moonshine, I find that the deposits for both properties were further examples of money laundering the cash proceeds of drug-dealing. Another property, at 47, Glenmore Road, is not the subject of the CRO but for the avoidance of doubt, the gross inflation of the declared income did amount to mortgage fraud in respect of that property. It was also purchased by money laundering the proceeds of drug-dealing.
(n) Summary in respect of Mortgage Fraud
Accordingly, on the balance of probabilities, I find that all of the above investment properties, with the exception of 38, The Quadrant and 20, Walnut Tree Road were purchased on the basis of mortgage fraud.
For the avoidance of doubt, I reiterate that the deposits for all of the properties noted above were the proceeds of money laundering, and the cash was generated by drug-dealing.
3. THE PROPERTY
For the reasons set out in Section 2 above, I conclude that all the property that the NCA seek to include in the CRO is recoverable property, as Mr Atkinson belatedly conceded. But I now turn to deal specifically with the Property itself, because, in the light of the argument raised by Mrs Atkinson, that was the live issue at the hearing. I have already described the security measures present at what is the matrimonial home.
The Property was purchased on 7 April 2009 for £270,000. It is held in the joint names of Mr and Mrs Atkinson. There was a mortgage of £200,000. There was a deposit of £70,000. In respect of both the mortgage and the deposit, misconduct is clearly made out.
As to the mortgage, Mr Atkinson said that he has been self-employed by Moonshine since 1 June 2004. That was untrue: the company was not set up until 17 February 2006. Moreover, Mr Atkinson said that his latest year of income was £29,129 whereas in fact his declared income to HMRC for that year was PAYE £5,200 and a dividend payment of £13,000. In addition, in his mortgage form, Mr Atkinson said that he earned income from BM World of £11,496. But in his declared income to HMRC, Mr Atkinson made no mention of this income at all. Furthermore, he significantly overstated his rental income.
As a consequence of these untruths, Mr Atkinson declared an income in his mortgage form which was almost double that which he had declared to HMRC. I find that the mortgage for the Property was therefore obtained by fraud.
As to the deposit for the Property, Mrs Atkinson refers in her statement to borrowing some money for the deposit from her brother and her mother. She also refers to Mr Atkinson borrowing some money from Mr Ocego. She then goes on to say:
"There were no illegitimate funds in the deposit and we enlisted the help of friends and family who were happy to help us out given the illness that I was suffering and the need for us to move to a bigger home."
Unhappily, I consider that this evidence is untrue. First, I do not accept the suggestion that Mr Ocego loaned Mr Atkinson £20,000. Mr Ocego was earning £220 per week and would have no way of accessing such a sum. Moreover, when he was asked about the source or origin of these funds, Mr Ocego was unable to remember. I accept NCA's case that it is simply not credible that, if this was a legitimate loan, Mr Ocego would now be unable to account for the source of the funds. Furthermore, there were no documents evidencing any loan at all: no repayment date, no rate of interest, nothing. Again, I am bound to find that that is typical of a money laundering operation.
Further sums of £5,000, £6,800 and £9,000 came from Moonshine, BM World, and another company run by an associate of the defendants. There is nothing to say that any of these sums represented legitimate income or savings on the part of either the first or the second defendants. I find that they did not. Of course the involvement of Moonshine makes this part of the deposit even more suspicious, given that it was Mr Atkinson's principal money laundering vehicle.
That left £25,000 for the deposit. It is certainly right, as Mrs Atkinson says, that these sums came from accounts owned by her mother and brother. But the analysis demonstrates that these sums were not legitimate loans from family members.
Mrs Atkinson's mother, Mrs Jordan, operated a bank account into which the sum of £11,500 was paid by Mr Atkinson. That sum was then paid out by Mrs Jordan to the Atkinsons, ostensibly for this deposit. Accordingly, this was not a legitimate loan from Mrs Jordan: it was clear money laundering and the source of the funds was Mr Atkinson himself.
The sum from Mark Jordan, Mrs Atkinson's brother, was £13,500. Again, as with Mr Ocego, there were no documents evidencing any sort of loan. I accept the submission that, at least on the balance of probabilities, this was not a legitimate loan and was another transaction based on money laundering.
On the basis of that analysis, I am unable to accept Mrs Atkinson's evidence that in some way the deposit did not include illegitimate sums and that it all came from family members and friends. On the contrary, the money all came from various sources of cash controlled by Mr Atkinson. The only inference to be drawn is that this was money from drug dealing being laundered in one way or another.
4. THE STATUTORY EXCEPTION
Section 266 of the POCA is in these terms:
"266 Recovery orders
(1) If in proceedings under this Chapter the court is satisfied that any property is recoverable, the court must make a recovery order.
(2) The recovery order must vest the recoverable property in the trustee for civil recovery.
(3) But the court may not make in a recovery order-
(a) any provision in respect of any recoverable property if each of the conditions in subsection (4) or (as the case may be) (5) is met and it would not be just and equitable to do so, or
(b) any provision which is incompatible with any of the Convention rights (within the meaning of the Human Rights Act 1998 (c.42))
(4) In relation to a court in England and Wales or Northern Ireland, the conditions referred to in subsection (3)(a) are that-
(a) the respondent obtained the recoverable property in good faith,
(b) he took steps after obtaining the property which he would not have taken if he had not obtained it or he took steps before obtaining the property which he would not have taken if he had not believe he was going to obtain it,
(c) when he took the steps, he had no notice that the property was recoverable,
(d) if a recovery order were made in respect of the property, it would, by reason of the steps, be detrimental to him.
(5) …
(6) In deciding whether it would be just and equitable to make the provision in the recovery order where the conditions in subsection (4) or (as the case may be) (5) are met, the court must have regard to-
(a) the degree of detriment that would be suffered by the respondent if the provision were made,
(b) the enforcement authority's interest in receiving the realised proceeds of the recoverable property.
(7) ...
(8) A recovery order may impose conditions as to the manner in which the trustee for civil recovery may deal with any property vested by the order for the purpose of realising it."
I was referred to a number of authorities, although the only case to which detailed reference was made was the judgment of Andrews J in National Crime Agency v Amir Azam and Others (No. 2) [2014] EWHC 3573 (QB). I note the following general observations made by Andrews J in relation to the POCA in general and the exception at s.266 in particular:
"68…Part 5 of POCA is a statutory scheme which is deliberately structured in favour of the making of a CRO once the court has determined that a particular property is 'recoverable property'…
69. Section 266 provides the only statutory defence once a finding has been made that the property is recoverable, and that must be a deliberate decision on the part of Parliament. As I said in my earlier judgment, the impact of Part 5 is that people who are wholly innocent of wrongdoing may end up having to give up their property.
…
76. Section 266(4) really appears to be aimed at a proprietary estoppel type of situation in which an individual has been promised an interest in identified or identifiable property, and in reliance on that promise acts to his or her detriment, for example by renovating it at his own expense, or working on the land for no reward, in the legitimate expectation of receiving it, then actually receives the property from the transferor (e.g. as a testamentary gift) only to find that it has been purchased with the proceeds of crime."
I respectfully agree with each of those observations. They demonstrate that, in practice, the statutory exception will rarely be applicable.
5. THE APPLICATION OF S.226 TO THE PRESENT CASE
I am in no doubt that Mrs Atkinson is unable to bring herself within s.266. Before going through each of the relevant steps, I note that there was no pleaded reliance on this exception, despite the fact that it is the only exception to the statutory scheme, and it has always been the case that Mrs Atkinson was a defendant solely because of her joint interest in the Property. That omission suggests that s.266 was not originally thought, even by her lawyers, to apply to her. In addition, since Mrs Atkinson is asserting that this exception applies, the onus and the burden are on her to demonstrate that it does. For the reasons noted below, I consider that she has failed to discharge that burden. She is not close to being in what Andrews J called 'a proprietary estoppel type of situation'.
First, as to s.266(4)(a), I am not persuaded that Mrs Atkinson obtained the Property: it seems clear that all of the financial arrangements were made by Mr Atkinson and all the money came from him. In any event, even if it could be said that she had obtained the Property, it has not been demonstrated that the Property was obtained in good faith. On the contrary, for the reasons set out above, the evidence makes plain that it was obtained through a combination of mortgage fraud, and the money laundering of the proceeds of drug-dealing.
It might be said that it is unfair to Mrs Atkinson for this to count against her now. But I disagree for two reasons. First, as noted above, this statutory scheme is designed to penalise even those who are themselves innocent of wrongdoing, provided that all the relevant POCA boxes can be ticked. It would I think make a nonsense of the scheme which Parliament created if the spouse or partner of a criminal could protect that criminal's property, merely by asserting his or her own joint interest in it.
Perhaps more importantly, on the facts of this case, Mrs Atkinson has not discharged the necessary burden that she obtained her interest in the Property in good faith. Her witness statement contains important untruths. I find on the balance of probabilities that she knew that the money that was coming from her mother and her brother had originated from her husband. That in itself is enough to demonstrate an absence of good faith.
S.266(4)(b) concerns steps taken either before or after the obtaining of the property, which would not have been taken if Mrs Atkinson had not believed the property was going to be obtained, or if she had not obtained it. This exception is simply not made out. There is no evidence at all from Mrs Atkinson to address this exception. As to the position prior to purchase, Mr Vollenweider said that the court could take into account the fact that she had borrowed the money from friends and family in order to purchase the property. I do not agree with that submission for two reasons.
First, if there had been any borrowing, that would relate to the obtaining of the property, and so is covered by subsection (a), not subsection (b). In my view, subsection (b) requires something else, some other steps beyond the mere obtaining of the property in question. There is no evidence of any such other steps. But if that is wrong, and borrowing is relevant, the evidence has demonstrated that, on the facts here, there was no borrowing as such, and that the money for the deposit all came, in one way or another, from Mr Atkinson. On the basis of that finding, there were no steps taken by Mrs Atkinson before the property was obtained.
There was no evidence at all of any steps taken by Mrs Atkinson after the property had been obtained. Although Mr Vollenweider gamely tried to argue that the decorating and the maintenance of the property would be sufficient to meet this test, I disagree: if such work had been carried out, I find it would have happened anyway. But there was no evidence of such work, and no evidence that Mrs Atkinson had done or paid for any such work. Moreover, I find that the elaborate security measures would have been wholly Mr Atkinson's doing.
The critical point is that, for an application under this subsection to succeed, evidence is required of steps taken either before or after the purchase of the property, which would not otherwise have been taken, and which caused a detriment on the part of the defendant. That is the essence of proprietary estoppel. There was no such evidence in the present case, either from Mrs Atkinson or anyone else.
Furthermore, that same analysis also means that s.266(4)(d) could not apply either. The recovery order would have to be detrimental to Mrs Atkinson by reasons of the steps taken. It follows that if there were no steps, subsection (d) could not be proved.
For those reasons, the statutory exception has not been made out, just as it was not made out in Amir Azam. Therefore it is unnecessary for me to consider the balancing exercise required by s.266(6). But I should make it clear that I would have concluded that, in undertaking the balancing exercise in this case, given its lengthy procedural history, the number of hopeless points taken by the defendants along the way, the evidence of avoidance identified by the judges who have dealt with this case on an interlocutory basis, and the public interest in the NCA recovering the realised proceeds, the order should still be made. That is despite the unhappy position of Mrs Atkinson and her daughter and their health issues.
The sale of the Property may realise £150,000. It is the single most important asset in the case. I agree with Ms Dobbin that it is important to send out the message that those who are involved in crime not only face the loss of their own property, but they are likely to cause considerable hardship and detriment to those around them, because their property too is likely to be the subject of a CRO.
6. CONCLUSIONS
For the reasons set out above, I find that, on the balance of probabilities, Mr Atkinson was involved in drug dealing, money laundering and mortgage fraud. The Property has been enhanced by security measures which have all the hallmarks of a drug dealer; it was obtained through a combination of mortgage fraud and the proceeds of money laundering, where the cash originated from drug-dealing. It is therefore recoverable property.
Mrs Atkinson cannot rely on section 266 of POCA in order to argue that the Property should not be included within the CRO. The burden was on her to demonstrate that this exception applies. In truth, she was wholly unable to do so. Although I have some sympathy with her plight, just as Andrews J did for the defendant in Amir Azam, the exception simply does not apply on the facts of the case.
I therefore make the CRO in the form sought by the NCA.
There is one final point. Mr Vollenweider asked the court to provide what assistance it could in ensuring that he was paid at least some monies from the frozen accounts. I indicated in strong terms that, for the reasons noted above, I agreed with and supported that application. Thanks to the good sense of Ms Dobbin and those who sit behind her, a provision to that effect has been included in the court order. |
HIS HONOUR JUDGE CURRAN QC:
The claims in this case were the subject of a trial by jury. They arose out of events on 19 July 2009 when armed police attended a block of flats in Townmead Road, Fulham, where the First to Third Claimants were living, at a time when the Fourth Claimant was visiting them. The police were looking for a white man who had been reported by a member of the public ("the informant") to have been on a balcony to one of the flats, holding a firearm. The man had been positively identified by the informant to plain clothes police officers who had gone to the scene in an unmarked car. The suspect was pointed out by her to those officers as he stood on the balcony of the first-floor flat on the right of the communal stairwell ("the suspect flat.") The Claimants' flat, and its balcony, were also on the first floor but on the opposite side of the stairwell. Thus the Claimants' flat was the first floor flat on the left of the stairwell.
The plain clothes officers confirmed the genuine nature of the report to the uniformed duty inspector for the area, Inspector Lisa Renwick, who called for armed officers to attend, and briefed them at a rendezvous point ("the RVP"). Her unchallenged and uncontradicted evidence was that she passed on the correct and accurate information in respect of the location of the suspect flat. The armed officers approached the block, some of them operating as a "containment" unit, to cover the exterior of the premises, offering cover and protection to their colleagues and any members of the public who required it. Another group of officers formed themselves into what they termed a "stick" with the purpose of going inside the block of flats to identify the precise location of the suspect flat from the inside, to obtain entry and to arrest the suspect.
The Claimants' case
The Claimants said in evidence that some of the containment officers, PCs King and Burden pointed their firearms towards the balcony of their flat, and towards them, while they were on the balcony and shouted demands to the First and Fourth Claimant to keep their hands above their heads. They also said that the First and Fourth Claimants were instructed by the containment officers to hold up the children (the Second Claimant aged 8, and the Third Claimant aged 4) so that they were in view of, and they believed in the line of fire of, the armed officers. That amounted to the conduct alleged to be an assault covered by the first two questions to the jury.
Thereafter the armed officers in the "stick" entered the Claimants' flat, and the Claimants alleged that they were then required by the armed police to remain in one room in the flat, gathered on the sofa, while the flat was searched. During this time they said that one police officer remained with them with his firearm pointing at them. These allegations gave rise to the other questions put to the jury which covered trespass, false imprisonment and a further assault by threat of force.
While the armed police were in the Claimants' flat a radio message was received from the plain clothes officers outside the flats that the armed officers in the "stick", had entered the wrong flat. Those officers then went to the suspect flat and obtained entry, arrested the suspect and recovered the weapon.
The Defendant's case
The defence case was that the officers were responding to an extremely serious and credible report of a firearms incident. Their priority was to locate and contain the firearm. As the officers were preparing to deal with the situation up-dated radio reports from the plain clothes officers, or from other officers at the scene, made reference to "a black female" on the balcony which the containment officers interpreted as being the balcony of the suspect flat. The first Claimant was seen on the balcony of her own flat and, as she was the only person who fitted that description, the containment officers erroneously concluded that she was at the same flat as the suspect. Other features of the Claimant's flat (a brushwood screen behind the railings of the balcony, for example) fitted the description of the suspect flat. It was accepted that the officers' firearms were pointed towards the Claimants and that they could well have felt threatened by them. In effect the basic elements of assault in law were made out.
The essential points in the defence case were:
i) As to the alleged assault on the balcony the acts were justified under the provisions of section 3 of the Criminal Law Act 1967: a person may use such force as is reasonable in the circumstances in the prevention of crime, or in effecting or assisting in the lawful arrest of offenders or suspected offenders or of persons unlawfully at large. The officers were engaged in attempting to arrest the suspect who was thought to be in the Claimants' flat.
ii) As to trespass: the officers claimed to have entered the flat lawfully pursuant to s.17 (1) Police and Criminal Evidence Act 1984, which permits a police constable to enter and search any premises for the purpose of arresting person for an indictable offence, but only where he has reasonable grounds for believing that the person whom he is seeking is on the premises.
iii) As to false imprisonment and assault by holding the Claimants at gun-point within the flat, there was a stark issue of primary fact. The Claimants alleged that they had been held at gunpoint, the Defendant, on the basis of the evidence of the relevant officer denied that any such conduct had occurred. Both matters were plainly straightforward jury questions.
The jury's verdict
The case was considered by the jury, who after several hours' deliberation answered the questions put to them as follows:
"First assault – balcony
It is agreed:
That PC King and PC Burden pointed their guns in the direction of the Claimants while they were on the balcony
That the adult Claimants (Claimants 1 & 4) held up the children (Claimants 2 & 3) on the direction of PC King
Question 1: has the Defendant satisfied you on the balance of probabilities that PC King used such force as was reasonable in the circumstances in order to assist in the arrest of a suspected offender, as against
Claimant 1 YES
Claimant 2 YES
Claimant 3 YES
Claimant 4 YES
In respect of Claimants 1 and 4, where use of force was pointing guns in their direction. In respect of Claimant 2 & 3, where use of force was pointing guns following direction being given for them to be held up by Claimants 1 and 4.
Question 2: Has the Defendant satisfied you on the balance of probabilities that PC Burden used such force as was reasonable in the circumstances in order to assist in the arrest of a suspected offender, as against:
Claimant 1 YES
Claimant 2 YES
Claimant 3 YES
Claimant 4 YES
Trespass – entry into flat
Question 3: Has the Defendant satisfied you on the balance of probabilities that the reason the officers entered the Claimants' flat was to arrest a suspected offender?
YES
And
Has the Defendant satisfied you on the balance of probabilities that there were reasonable grounds to believe that the suspect was in the flat?
YES
False imprisonment – inside flat
Question 4: Have the Claimants satisfied you on the balance of probabilities that they were ordered by any officer to remain seated on the sofa in the living room such that their freedom of movement was restricted?
NO
Assault - inside flat
Question 5: Have the Claimants satisfied you on the balance of probabilities that a gun was pointed in their direction while they were seated on the sofa?
NO."
Consequential application by the Claimants
Despite that verdict, counsel for the Claimants asked for the case to proceed further, upon the basis that in the light of certain undisputed facts, liability on the part of the defendant, could nevertheless be established upon a "joint tortfeasor" basis.
The facts the Claimants rely upon, and which the court is invited to find as facts are as follows.
i) The plain clothes officers correctly identified the suspect's flat – they had seen him on the balcony with a weapon and he had been identified by the informant/witness.
ii) This information was accurately passed to Inspector Renwick by the Plain clothes officers – in particular that the suspects' flat was the flat to the right of the stairwell.
iii) At the time the firearms officers were mobilised the correct flat was known.
iv) Inspector Renwick included in her briefing that the flat was to the right of the stairwell.
v) The plain clothes officers remained outside the block of flats with the suspect's flat in continuous observation.
vi) The plain clothes officers had the means by which to communicate with the firearms officers.
For the purposes of this ruling I accept that those matters were established as facts.
It is to be noted that the jury were not asked to answer any question dealing with whether or not the armed officers were provided with the accurate identification of the suspect's flat at the RVP (in particular that the suspect's flat was to the right of the stairwell). The evidence from Inspector Renwick was not contradicted as to this, and was confirmed by PC Waddingham and Pc Daobry. Had the jury been asked to deal with this question, it is not unreasonable to conclude that they would have found on the balance of probability that Inspector Renwick had passed on correct information to the armed officers.
Counsel for the Claimant submits, however, that that is not a finding of fact which is required in order for the Claimants to put forward an argument on their behalf based upon the armed officers who were directly involved being joint tortfeasors with other officers who provided the armed officers with incorrect information, leading to the making of a mistake of fact by them, whether that was a reasonable or an unreasonable mistake.
It is not known what the jury's findings of fact were in respect of the information which was actually given to PC King and PC Burden, nor as to what those officers believed. It is submitted that this is not a matter which should cause any concern: the Claimants simply rely on the fact that the wrong flat was identified by those officers. PC King was clear he thought the Claimants' flat was the suspect's flat. That he was wrong is not disputed. The case for the Claimants is that the police in general were in possession of a wealth of information from which the correct flat could be indentified, and no mistake should have been made at all.
So far as the entry to the flat is concerned, counsel submits that the same legal arguments on joint tortfeasor and unreasonable (or reasonable) mistake may be based on the fact that before the deployment of the armed officers the correct flat had been identified, that plain clothes officers remained outside the flats with it continuously in their view and with the ability to communicate with the armed officers. The Claimants submit that it was the Defendant's officers who were responsible for any confusion created and for the mistake being made.
It is submitted that the Claimants can succeed in their claim for assault on the balcony or trespass on the grounds that the Chief Constable is responsible for the actions of all the officers and the officers should be seen as part of a common design. Further that the mistake made cannot be justified as reasonable where it was the Defendant's own officers who were responsible for the mistake. For this proposition the Claimants rely in particular on the opinion of Lord Scott at para 20 in the case of Ashley v Chief Constable of Sussex Police [2008] 1 AC 962.
Ashley
The facts in Ashley were that James Ashley was shot dead by PC Christopher Sherwood of the Sussex Police Special Operations Unit ("SOU") on 15 January 1998 during an armed raid by the SOU on Mr Ashley's home in Sussex. The armed raid had been authorised by police authorities and a search warrant had been obtained. The raid formed part of police investigations into drug trafficking and into the stabbing of a man by an alleged associate of Mr Ashley. The final briefing of those, including PC Sherwood, who were to take part in the raid was given early on the morning of 15 January. The briefing included details of Mr Ashley and his associates and their alleged activities. At about 4.20am police officers, one of whom was PC Sherwood, made a forcible entry into Flat 6. On entry he and another officer headed towards the bedroom. Mr Ashley and his girlfriend had been asleep in the bedroom but she, having been woken by the noise of the police entry into the flat, had woken him and he was out of bed by the time the police entered the bedroom. He was naked and no light was on. PC Sherwood entered the bedroom with his handgun in the "aim" position and his finger on the trigger. Within seconds of his entry into the bedroom he shot Mr Ashley with a single bullet to the side of the neck. PC Sherwood was subsequently charged with murder, pleaded self-defence, and was acquitted.
The claimants in the case of Ashley were the father and son of the deceased man. They brought actions against the Chief Constable of Sussex as dependants and as representatives of the estate of the deceased on the grounds, inter alia, of assault and battery, and of negligence in the planning and execution of the raid. The chief constable admitted negligence, but denied liability for assault on the basis that the officer had acted in self-defence and applied for that aspect of the claim to be struck out. The judge at first instance granted that application. The Court of Appeal reversed that decision and ordered that the claim should proceed. The chief constable appealed. The main issue before the House of Lords was whether self-defence to a civil claim for assault, where the assailant acted in the mistaken belief that he was under attack, required such a belief to be reasonably held: it was held that the law did require such a belief to be reasonably held. Whether the law further required the assailant to prove that he was actually under attack, or the threat thereof, was left open.
Application of Ashley to this case
In this case, counsel for the Claimant submits, as I understand it, that if, as the jury has found, the officers reasonably used force against them on the information they had, something had obviously gone wrong. The unchallenged and uncontradicted evidence from Inspector Renwick and PC Sowerby was that the suspect's flat was to the right of the stairwell. Miss Gerry therefore submits that for PC King and PC Burden to have believed otherwise demonstrates that a serious error in terms of a breakdown in communication, or some other serious error had occurred between all the officers for whom the Defendant is vicariously liable. The passage in the opinion of Lord Scott which founds Miss Gerry's joint-tortfeasor argument is as follows.
"20 I would, therefore, dismiss the chief constable's appeal against the Court of Appeal's adoption of solution 2 [a mistaken belief must be reasonably held]. It has not been contended on behalf of the Ashleys that solution 3 [whether the assailant is required to prove that he was actually under attack] might be the correct solution in a civil case but, speaking for myself, I think that that solution would have a good deal to be said for it, as appears to have been the view also of Sir Anthony Clarke MR [2007] 1 WLR 398, paragraphs 63–78. I would start with the principle that every person is prima facie entitled not to be the object of physical harm intentionally inflicted by another. If consent to the infliction of the injury has not been given and cannot be implied why should it be a defence in a tort claim for the assailant to say that although his belief that his victim had consented was a mistaken one none the less it had been a reasonable one for him to make? …. If A assaults B in the mistaken belief that it is necessary to do so in order to protect himself from an imminent attack by B, or in the mistaken belief that B has consented to what is done, it seems to me necessary to enquire about the source of the mistake. If the mistake were attributable in some degree to something said or done by B or to anything for which B was responsible, then it seems to me that the rules relating to contributory fault can come into play and provide a just result. If the mistake were attributable in some degree to something said to A by a third party, particularly if the third party owed a duty to take care that information he gave was accurate, the rules relating to contributions by joint or concurrent tortfeasors might come into play. But I am not persuaded that a mistaken belief in the existence of non-existent facts that if true might have justified the assault complained of should be capable, even if reasonably held, of constituting a complete defence to the tort of assault. However, and in my view, unfortunately, solution 3 has not been contended for on this appeal, its pros and cons have not been the subject of argument, and your Lordships cannot, therefore, conclude that it is the correct solution. But I would, for my part, regard the point as remaining open."
The Claimants' submissions
It is self-evident that those dicta are obiter, but Miss Gerry understandably relies upon them as powerful support for her approach. For her part, Miss Mortimer points out that whilst Lord Scott was obviously attracted to the idea that 'solution 3' might be the correct test in a civil case, not all the other members of the House were inclined to agree. At paragraph 89 Lord Neuberger said that he thought the balance of authorities favoured the conclusion that the defendant did not have to go so far as solution 3. At paragraph 76, Lord Carswell said that he would not support Lord Scott in regarding option 3 as possibly containing the correct principle.
For the way in which she puts the vicarious liability of the Commissioner, Miss Gerry relies in particular on some passages in the opinion of Lord Neuberger at paras 91- 94:
"91 … if a reasonable but mistaken belief will do, other questions may need to be considered. One such question is whether, when seeking to justify the reasonableness of his belief, a defendant can rely on factors which were not the claimant's responsibility. There is obviously a strong argument for saying that a defendant can rely on such factors. Otherwise, one would be getting close to holding that the belief must be correct. Further, it could lead to difficulties if one had to decide whether the claimant was responsible for the defendant's belief, especially if only some of the factors which influenced the defendant could be taken into account. However, it can also be said to be unfair on the claimant if matters for which he had no responsibility can serve to justify the reasonableness of the defendant's mistaken belief. The answer may ultimately depend on whether one judges the issue of reasonableness from the claimant's point of view or from that of the defendant.
92 Subject to that point, I believe that it would be inappropriate for your Lordships in this case to cut down the factors which can be taken into account when deciding that issue. When considering the reasonableness of the belief of a defendant in a particular case, it must be for the trial judge to take into account those factors which, provided they are permissible in principle, appear to him relevant, and to give each of them such weight as he thinks appropriate.
93 Arden LJ said below, at para 196, that it might be inappropriate to take into account "any mistake that was not one caused by Mr Ashley but by an earlier inaccurate briefing", apparently on the ground that it "did not form part of the immediate events in which Police Constable Sherwood perceived a real and imminent danger". She may well be right that the inaccuracy of any briefing should be irrelevant because, as discussed, it was (presumably) not caused by Mr Ashley. Subject to that, however, at least if the claim were against PC Sherwood, it seems to me that he would, in principle, be entitled to ask the court to take into account what he had been told at the briefing, when considering whether his belief at the time he shot Mr Ashley was reasonable, even if what he was told was negligently relayed to him."
94 However, given that the defendant in these proceedings is the chief constable, I question whether it would be open to him to rely on what his police officers told PC Sherwood about Mr Ashley as justifying PC Sherwood's belief, at least to the extent that they were negligently inaccurate in their briefing. There must be a strong case for saying that it should not be open to the chief constable to rely on his own (if vicarious) negligently inaccurate imparted information to PC Sherwood to justify the reasonableness of a shooting by PC Sherwood for which he was vicariously liable."
It is submitted that Lord Neuberger was saying first, that "the source" of the mistake is relevant to a finding that a mistake was reasonable, and, secondly, that it was "open to question" whether the chief constable might be permitted to rely on what his own officers had told PC Sherwood as any justification for the mistaken belief.
The Claimants therefore submit by analogy with that case, even though this is not a case of self-defence, that here the basic elements of the torts of assault and trespass are in effect admitted. The actions of all those involved in the operation to arrest the male suspect were in pursuit of a common design, with the consequence that even though PC King and PC Burden and the other armed officers had been found by the jury to have acted reasonably, it is open to the court to conclude that the Claimants' claims should succeed on the basis that the Defendant cannot justify the mistake as to the identification of the Claimant's flat as a reasonable one, as that mistake was the responsibility of his own officers.
Counsel for the Claimants on this basis submits that the Defendant's defence to the assault claim must fail as the mistake was not a reasonable one .A separate argument is also put forward on the basis that even a reasonable mistake would not provide a defence, but she accepts that this is a point which cannot really be taken here, as it was rejected by the Court of Appeal in Ashley, and the House of Lords expressly left the matter open.
In my view, however attractively and persuasively this argument is put, the problem which Miss Gerry faces is that the foundations of it rest upon dicta from opinions in the HL which are obiter or from judgments in the Court of Appeal which are not consistent with the ratio of the House of Lords' decision in the case of Farrell v The Secretary Of State For Defence [1980] 1 WLR 172, which Counsel for the Defendant submits provides a complete answer to these submissions. Farrell is authority binding on this court, and is a case which appears not to have been cited in argument nor referred to in the opinions of any of the members of the House in Ashley.
Farrell
In Farrell three men were killed when they were shot by soldiers serving in Northern Ireland in 1971. An army officer, X, had ordered the soldiers to cover a bank having received information that a bomb attack was likely to be made on a nearby bank. The three men were seen acting suspiciously and failed to respond to a challenge to halt. None of the men was carrying a bomb. The widow of one of them sued the Ministry of Defence alleging negligence and trespass to the person. The House of Lords considered the terms of section 3 (1) of the Criminal Law Act (Northern Ireland) 1967 and held that the phrase 'in the circumstances' did not extend to defects in the planning of an operation leading to the making of an arrest.
The Defendant's submissions
Ms Mortimer puts it as follows: the HL in Farrell were specifically considering a statutory provisions which is in identical terms to section 3 (1) of the Criminal law Act 1967. In the Court of Appeal in Farrell it had been said that in section 3 (1) the words "in the circumstances" meant: "the circumstances in which an operation is conceived and planned and in which the preparatory steps are taken as well as those in which the final decisive act is performed": see the opinion of Viscount Dilhorne at p. 177G.
This is essentially what is contended for by the Claimants in this case and, had Farrell not gone any further than the Court of Appeal, they would have a basis in law for their arguments. Farrell did go further, however, and the House of Lords expressly rejected the approach taken in the Court of Appeal. Viscount Dilhorne said this:
"Further my Lords, I am unable to agree that the phrase "in the circumstances" in section 3 (1) should be given the wide interpretation given to it in the Court of Appeal. That section is contained in a statute dealing with the criminal law. It may provide a defence for a person accused of a crime. It may also provide a defence for a person sued. In each case when such a defence is put forward the question to be determined is whether the person who is accused or sued used such force as was reasonable in the circumstances in which he was place in the prevention of crime or in bringing about the lawful arrest of an offender or suspected offender.
Section 3 (1) would provide no defence to soldier X [the army officer] in respect of a claim for negligence in the planning of the operation. It can only provide a defence for those who used force and if the force the four soldiers used was reasonable in the circumstances in which they used it, the defects, if there were any, in the planning of the operation would not deprive them of that defence and render the force used unreasonable" (178H – 179B)
Counsel therefore submits that Farrell provides a complete answer to the Claimants' submissions in respect of joint tortfeasors.
Miss Mortimer submitted that the Claimants' reliance on the passage at paragraph 20 of Lord Scott's opinion in Ashley had to be read in the light of the following matters.
i) Lord Scott specifically stated that 'solution 3' had not been contended for.
ii) The observations must be read in the context of a case where negligence has been pleaded and admitted.
iii) The importance of point (2) might be appreciated from the words "If the mistake were attributable in some degree to something said to A by a third party, particularly if the third party owed a duty to take care that information he gave was accurate, the rules relating to contributions or concurrent tortfeasors might come in to play".
iv) No duty of care, and no allegations of negligence were pleaded on behalf of the Claimants in this case.
v) Lord Scott said no more than that the rules relating to concurrent tortfeasors "might come in to play."
vi) The passage was thus not authority for the joint tortfeasor proposition the Claimants contend for.
As to paragraph 94 of Lord Neuberger's opinion, counsel for the Defendant makes the following points.
i) This paragraph is also clearly obiter.
ii) It must be read in the context of a case where negligence is pleaded and admitted.
iii) The views are expressly based on a situation where there was a negligently inaccurate briefing. There is no such allegation or issue in the case that is before this court.
iv) The passage is not authority for the proposition contended for by the Claimants.
Conclusion
It is of particular significance, in my view that Farrell was neither cited nor referred to in Ashley. Nor was counsel for the Claimants able to point to any authority which directly supports her submission that liability can be established against the Defendant in the circumstances of this case on a joint-tortfeasor basis, notwithstanding the fact that the jury has delivered its verdict in respect of the individual officers, finding that their conduct is covered by the terms of section 3 of the 1967 Act.
The questions having been answered in the Defendant's favour, the use of force by the individual officers for whose actions he is statutorily responsible was, on the jury's verdict, reasonable in the circumstances and the defence under section 3 (1) of the Criminal Law Act succeeds, entitling the Defendant to judgment.
In the current edition of Clerk & Lindsell on Tort the editors when dealing with section 3 of the Criminal Law Act 1967 set out their understanding of its effect as follows.
"Should excessive or unreasonable force be used to effect a lawful arrest, the arrestor … may still be liable for assault and battery. The degree of force which is reasonable must be judged in light of the circumstances apparent to the arrestor; and he will not be found to have used unreasonable force because of a defect in the planning of the arrest or the crime prevention operation which with hindsight can be seen to render the amount of force used unnecessary. A defence under s 3 (1) is available only to the person actually using force to prevent a crime or effect an arrest; the crucial issue is therefore whether he and he alone acted unreasonably."
The case of Farrell is one of the authorities cited.
Miss Gerry sought to distinguish Farrell on a number of grounds. For example, unlike the present case, Farrell concerned only the four individual soldiers who had fired their rifles. It was very "fact sensitive." Whilst the House of Lords had criticised the wide interpretation of "circumstances" given in the Court of Appeal as including planning, there was in fact no real question of the planning of the operation in that case being relevant. Such distinctions may indeed be made, but they make no difference in my view to the very clear terms of the ratio of Farrell nor of its application to the present case.
Despite all the matters so resourcefully urged by Miss Gerry, I have reached the conclusion that Farrell does provides an inescapably negative answer to the way in which the attempt is made to establish liability against the Defendant despite the verdict of the jury.
In the circumstances there must be judgment for the Defendant.
Friday, 15 May 2015 |
Mr Justice Cooke:
The applications
There are two applications before the Court: (i) the Second Defendant (EMC Corporation) applies to challenge the Court's jurisdiction over the claimant's (Mr Petter's) claim against it (the Part 11 Application); and (ii) Mr Petter applies for an interim anti-suit injunction against EMC Corporation restraining, pending determination of Mr Petter's claim, further prosecution of its proceedings against him in Massachusetts (the Massachusetts Proceedings) (the Anti-Suit Application).
Background
EMC Corporation is a publically traded Massachusetts corporation with headquarters in Hopkinton, Massachusetts. Its business is that of information storage, management and protection. It has numerous direct and indirect subsidiaries globally. EMC Europe Limited (EMC Europe) is one such indirect UK subsidiary. At all material times Mr Petter was employed by EMC Europe in a senior role within the Europe, Middle East and Africa (EMEA) region, most recently within the UK and Ireland. From 2009, his role was Director, Global Accounts, EMEA and then from 2011, he was promoted to Vice President and Country Manager, UK & Ireland. Mr Petter was subsequently promoted again to Senior Vice President and Country Manager, UK & Ireland on 14th April 2014. EMC Europe's business is to provide centralised sales and service support and general and administrative support for various other indirect subsidiaries of EMC Corporation that trade in EMEA. EMC Europe did not provide any such services for EMC Corporation. As Senior Vice President and Country Manager, Mr Petter's job was as managing director of all business in the UK and Ireland.
Pure Storage Inc (Pure) is a California-based competitor of EMC Corporation, with a UK subsidiary, Pure Storage Ltd (Pure Storage). Pure has (EMC Corporation claims) been targeting employees of EMC Corporation and its subsidiaries, lawfully or unlawfully to "poach" them, and – unlawfully – to obtain confidential information and trade secrets.
At some point in 2014 Pure approached Mr Petter, and Mr Petter was actively in discussion with Pure from November 2014 at the latest.
It appears that Mr Petter was orally offered a position at Pure Storage on 9th January 2015 and accepted a written offer on 12th January, following which he resigned from EMC Europe on 15th January. Thereafter he was on garden leave until his termination notice expired on 14th February 2015. He commenced employment at Pure Storage on 16th February.
The issues which arise in the present applications relate to the ambit of section 5 of Chapter II to the Brussels I (Recast) Regulation (1215/2012) which sets out provisions for "jurisdiction over individual contracts of employment". Article 20 provides that "in matters relating to individual contracts of employment, jurisdiction shall be determined by this Section" whilst Article 21 provides as follows:
"1. An employer domiciled in a Member State may be sued:
(a) in the courts of the Member State in which he is domiciled; or
(b) in another Member State:
(i) in the courts for the place where or from where the employee habitually carries out his work or in the courts for the last place where he did so …
2. An employer not domiciled in a Member State may be sued in a court of a Member State in accordance with point 9(b) of paragraph 1."
Article 22 provides that "An employer may bring proceedings only in the courts of the Member State in which the employee is domiciled."
Recitals 15, 18 and 19 of the Recast Regulation read as follows:
"15. The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction.
…
18. In relation to insurance, consumer and employment contracts, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules.
19. The autonomy of the parties to a contract other than an insurance, consumer or employment contract where only limited autonomy to determine the courts having jurisdiction is allowed, should be respected subject to the exclusive grounds of jurisdiction laid down in this Regulation."
Put shortly, the essential issue between the parties is whether or not EMC Corporation, the Massachusetts company which is not domiciled in a Member State is to be considered "an employer" of Mr Petter and whether his contract with EMC Corporation relating to the grant of Restricted Stock Units (RSUs) is to be considered a contract of employment or part of a contract of employment for the purposes of Section 5. The RSU Agreements (of which there are 11) incorporate the Stock Plan issued by EMC Corporation which contains, at clause 13, a jurisdiction and governing law clause providing for submission to the exclusive jurisdiction and venue of the federal or state courts of The Commonwealth of Massachusetts and for the Plan to be governed by its laws. Mr Petter contends that this provision is of no effect as a matter of English law because of the terms of section 5 of the Recast Regulation, and that its terms entitle him to sue EMC Corporation here and require it to sue him here too, rather than in Massachusetts.
The contracts
In 2004 Mr Petter entered into an employment contract with EMC Computer Systems (U.K.) Limited (EMC UK) to work as a district sales manager within the UK. Subsequently, in November 2008, Mr Petter entered into a new employment contract with EMC Europe for a new position with responsibilities across the EMEA region (this being the contract that subsisted until its termination in February 2015 upon the expiry of Mr Petter's notice period following his resignation the previous month).
The letter of engagement dated 12th November 2008 confirmed Mr Petter's appointment as Director, Global Accounts - EMEA and referred to the "Main Statement of Terms and Conditions of Employment" with further details contained in the Employee Handbook. Included in the Main Terms and Conditions were the various provisions which applied following termination or employment. These included clauses 13-18 providing for the return of company materials, a restriction on competition, a restriction on recruiting company employees and other provisions relating to confidentiality and intellectual property. It has been accepted, as between Mr Petter and EMC Europe that the post-termination restrictions in clauses 14 and 15 are unenforceable as a matter of English law, as being in unreasonable restraint of trade. It is accepted by EMC Europe that Mr Petter has not breached clause 14 by working for Pure.
"14. LIMITED NON-COMPETITION
… During your employment with the Company and for the twelve month period following the effective date of your termination of resignation from the Company, you agree not to directly or indirectly develop, produce, market, solicit or sell products or services competitive with products or services being offered by the Company. (You shall not be considered in competition unless you have an ownership interest amounting to at least 1% in the enterprise, whether direct or indirect by way of opinion or otherwise, or an officership, directorship or other policy making executive position with the competing enterprise).
15. RECRUITING COMPANY EMPLOYEES
For the twelve month period following the effective date of your termination for any reason or resignation from the Company, you agree not to directly or indirectly, recruit, solicit, induce or attempt to induce any employees of the Company to terminate, alter or modify their employment relationship with the Company."
The Employee Handbook, to which the letter of engagement referred, stated that it was applicable "to all Employees of EMC Computer Systems (UK) Ltd and all UK based employees of all Associated Companies as listed in Addendum A." Addendum A referred to two companies only, EMC Europe and RSA Security UK Ltd. The handbook was therefore specifically referable to the UK employees of three particular subsidiary companies of EMC Corporation. At paragraph 10.15 of the handbook appeared a heading "EMC's Key Employee Agreement". There the following wording appeared:
"10.15 EMC'S KEY EMPLOYEE AGREEMENT
A. In view of the highly competitive nature of the business of EMC Corporation (together with its subsidiaries, the "Company"), the need of the Company to maintain its competitive position through the protection of its goodwill, trade secrets and confidential and proprietary information, and in consideration for being provided with access to certain trade secrets and/or confidential and proprietary information in conjunction with employment with the Company, every Employee accepts that it is necessary: -
1. Non-Competition. For as long as you are employed by the Company, to devote your full time and efforts to the Company and not to participate … in any business or activity that is in competition with the Company. For the 12 month period following the effective date of termination, for any reason, from the Company, you will not directly or indirectly compete with the Company in any manner, including but not limited to directly or indirectly developing, producing, marketing, soliciting or selling products or services competitive with products or services being developed, produced, marketed or sold by the Company as of the date of your termination. For the purposes of the immediately preceding sentence you shall not be considered to be competing with the Company unless you have an ownership interest amounting to at least 1% in the competing enterprise (whether direct or indirectly by way of stock options (vested or unvested) or otherwise) or an officership, directorship or other policy making position with the competing enterprise.
2. Customer and Vendor Confidentiality …
3. Confidentiality of Company Materials … You must recognise that both during your employment with the Company and thereafter …
4. Recruiting Company Employees. For the 12 month period following the effective date of your termination, for any reason, from the Company, you must not directly or indirectly recruit, solicit or induce, or attempt to recruit, solicit or induce any Employees, consultants or independent contractors of the Company to terminate, alter or modify their employment relationship with the Company.
5. [Further provision for and restrictions regarding confidential information] … during the period of your employment with the Company …
B. …
C …
D. You agree that any breach of this section on restrictions will cause immediate and irreparable harm to the Company not compensatable by monetary damages and that the Company will be entitled to obtain injunctive relief, in addition to other relief in any court of competent jurisdiction, to enforce the terms of this section.
E …"
It will be noted that, in the "Key Employee Agreement", reference is made to "employment with the Company, competing with the Company and recruiting employees of the Company". The confidentiality provisions also referred to the Company and paragraph D constituted an agreement that any breach of the restrictions would cause immediate and irreparable harm to the Company which would give rise to an entitlement on the part of the Company to obtain injunctive relief. "The Company" was defined specifically in the Key Employee Agreement as EMC Corporation, together with its subsidiaries. Its provisions appeared at pages 18-20 of the 38 page Handbook, which as I have already said, related to employees of three specific UK subsidiaries of EMC Corporation. The post termination terms of the various provisions mirrored those in the Main Terms and Conditions, but included some extension or amplification of them, without inconsistency.
In the years 2009-2014, Mr Petter's base salary increased from £150,000 per annum to £231,000 per annum. His bonus/commission ranged from £210,000 to £261,000, so that his total remuneration from EMC Europe amounted to £360,000-£492,000 over the period in question. During this period he was also granted RSU awards by EMC Corporation. On the available evidence, the value of these to him ranged between approximately £49,000 and £651,000 and, save for one year, represented approximately 35%-57% of the total rewards he received in each of the relevant years. Those figures are disputed but there is no doubt that the award of RSUs was of significant value.
The EMC Corporation 2003 Stock Option Plan Description included the following:
"PLAN INFORMATION
The Plan was established to advance the interests of the Company by providing for the grant of certain equity awards to key employees of, and consultants and advisors to, the Company or its subsidiaries who, in the opinion of the Committee (as defined below), are in a position to make a significant contribution to the success of the Company and its subsidiaries. To accomplish this purpose, the Plan authorizes the granting to such participants of the following awards: (i) options to purchase shares of Common Stock; (ii) restricted stock awards; (iii) awards of restricted stock units …
Eligibility. Under the Plan, employees of, or consultants or advisors to, the Company or its subsidiaries are eligible for selection to participate. In addition, each non-employee Board member who is not a 5% shareholder of the Company or a person in control of such a shareholder (each, an "Eligible Director") is also eligible to participate in the Plan.
…
Awards of Restricted Stock and Restricted Stock Units. Restricted stock is Common Stock that is subject to a risk of forfeiture or other restrictions that will lapse upon satisfaction of specified conditions. Restricted stock units represent the right to receive shares of Common Stock in the future, with the right to future delivery of the shares subject to a risk of forfeiture or other restrictions that will lapse upon satisfaction of specified conditions."
The EMC Corporation Amended and Restated 2003 Stock Plan itself, which included the law and jurisdiction clause in favour of Massachusetts, to which I have already referred, defined RSUs as rights "to receive Common Stock in the future with the right to future delivery of the Common Stock subject to a risk of forfeiture or other restrictions that will lapse upon the satisfaction of specified conditions". The Plan was said to have been established "to advance the interests of the Company by providing for the grant to Participants of incentive Awards", the Company itself being defined as EMC Corporation. Clause 3.5 made it clear that nothing in the Plan should be deemed to give any officer or employee any right to participate in the Plan, except to such extent as may have been determined by the Committee or Board of Directors pursuant to the provisions of it.
Nonetheless, in order to be eligible for an award, a "Participant" had to be a key employee of, or a consultant or advisor to, the company (EMC Corporation) or its subsidiaries who, in the opinion of the Committee was "in a position to make a significant contribution to the success of the Company and its subsidiaries". Whilst the Plan was in effect, the Committee had absolute discretion to select, from the persons eligible to receive Awards, the Participants to whom awards were to be granted.
The Stock Plan referred to Award Agreements, providing in clause 6.3 that each award granted under the Plan should be evidenced by a written agreement and that, as a condition of receiving an Award, the Committee might require the proposed Participants to agree to the terms and conditions set forth in the Award by physically and/or electronically acknowledging acceptance and agreement. In the case of each Award granted to Mr Petter, there was such acknowledgement and agreement.
The key provisions of the Stock Plan for current purposes are those which appear in clause 6.6.4 and 6.7.
"6.6.4 Termination of Participant's Service Relationship for any Other Reason. If a Participant's Service Relationship terminates for any reason other than death, Disability or Retirement, all (a) vested Options… held by the Participant shall remain exercisable and shall not expire until 5:00pm United States eastern time on the earlier to occur of (i) the date that is three months after the date of termination or (ii) the date upon which the term of the Award expires; provided, however, that all Awards by a Participant shall immediately expire if the Participant's Service Relationship terminates for Cause or if the Participant engages in "Detrimental Activity" (as defined in Section 6.7), and (b) unvested Options… held by the Participant shall thereupon expire at 5:00pm United States eastern time on the date of termination unless the Award by its terms, or the Committee or the Board of Directors by resolution, shall expressly allow the Participant to exercise any or all of the Awards held by the Participant after termination; … The Company shall have the sole discretion to set the date of termination for the purposes of the Plan, without regard to any notice period or other obligation under the applicable laws of the jurisdiction where the Participant is employed or engaged ...
6.7 Cancellation and Rescission of Awards. The following provisions of this Section 6.7 shall apply to Awards granted to (a) Participants who are classified by the Company or a Subsidiary as an executive officer, senior officer, or officer (collectively, "Officers") of the Company or a Subsidiary, … (… referred to collectively as "Senior Participants"). The Committee or the Board of Directors may cancel, rescind, suspend or otherwise limit or restrict any unexpired Award at any time if the Senior Participant engages in "Detrimental Activity" (as defined below). Furthermore, in the event that the Senior Participant engages in Detrimental Activity at any time prior to or during the six months after any exercise of an Award, lapse of a restriction under an Award or delivery of Common Stock pursuant to an Award, such exercise, lapse or delivery may be rescinded until the later of (i) two years after such exercise, lapse, or delivery or (ii) two years after such Detrimental Activity. Upon such rescission, the Company at its sole option may require the Senior Participant to (A) deliver and transfer to the Company the shares of Common Stock received by the Senior Participant upon such exercise, lapse or delivery, (B) pay to the Company an amount equal to any realized gain received by the Senior Participant from such exercise, lapse or delivery, or (C) pay to the Company an amount equal to the market price (as of the exercise, lapse or delivery date) of the Common Stock acquired upon such exercise, lapse or delivery minus the respective price paid upon such exercise, lapse or delivery, if applicable. The Company shall be entitled to set-off any such amount owed to the Company against any amount owed to the Senior Participant by the Company. Further, if the Company commences an action against such Senior Participant (by way of claim or counterclaim and including declaratory claims), in which it is preliminarily or finally determined that such Senior Participant engaged in Detrimental Activity or otherwise violated this Section 6.7, the Senior Participant shall reimburse the Company for all costs and fees incurred in such action, including but not limited to, the Company's reasonable attorneys' fees. As used in this Section 6.7, "Detrimental Activity" shall include: (I) the failure to comply with the terms of the Plan or certificate or agreement evidencing the Award; (II) the failure to comply with any term set forth in the Company's Key Employee Agreement (irrespective of whether the Senior Participant is a party to the Key Employee Agreement); (III) any activity that results in termination of the Senior Participant's Service Relationship for Cause; (IV) a violation of any rule, policy, procedure or guideline of the Company; or (V) the Senior Participant being convicted of, or entering a guilty plea with respect to a crime whether or not connected with the Company."
Each of the RSU Agreements by which Mr Petter accepted the Award of RSUs stated that the Participant's right to the shares of the Company's Common Stock underlying the Units were subject to the restrictions described in the RSU Agreement and the Plan and to the forfeiture restrictions described. Paragraph 3 of the RSU Agreements provided as follows:
"3. Forfeiture Restrictions
The Units are subject to certain forfeiture restrictions, as described below. These restrictions are referred to in this Restricted Stock Unit Agreement as the "Forfeiture Restrictions". The Forfeiture Restrictions lapse with respect to Units as set forth in Section 4 below and the applicable provisions of the Plan. To the extent Units are no longer subject to the Forfeiture Restrictions, they are referred to in this Restricted Stock Unit Agreement as "Vested Units" and are treated as set forth in Section 5 below. Units subject to the Forfeiture Restrictions are referred to in this Restricted Stock Unit Agreement as "Unvested Units."
... In the event that the Participant's Service Relationship terminates for any reason, except as otherwise provided … with respect to termination by reason of Death or Disability, all Unvested Units shall be automatically and immediately forfeited.
4. Lapse of Forfeiture Restrictions
The Forfeiture Restrictions shall lapse in accordance with this Section 4 and the applicable provisions of the Plan as follows:
(a) (i) On first anniversary of the Grant Date, the Forfeiture Restrictions with respect to one-quarter (1/4) of the Units shall lapse and such Units shall constitute Vested Units.
(ii) On the second anniversary of the Grant Date, the Forfeiture Restrictions with respect to one-quarter (1/4) of the Units shall lapse and such Units shall constitute Vested Units.
(iii) On the third anniversary of the Grant Date, the Forfeiture Restrictions with respect to one-quarter (1/4) of the Units shall lapse and such Units shall constitute Vested Units.
(iv) On the fourth anniversary of the Grant Date, the Forfeiture Restrictions with respect to one-quarter (1/4) of the Units shall lapse and such Units shall constitute Vested Units.
(b) Except as otherwise provided in the Plan or this Restricted Stock Unit Agreement, none of the Forfeiture Restrictions shall lapse with respect to any Units on any date specified above unless the Participant's Service Relationship is then in effect. Section 6.6.3 of the Plan (Termination of a Participant's Service Relationship by Reason of Retirement) shall not apply to this Award. Accordingly, if a Participant's Service Relationship terminates by reason of Retirement, Units shall be governed by Section 6.6.4 of the Plan (Termination of a Participant's Service Relationship for any Other Reason)."
Paragraph 10 of the RSU Agreements was an Entire Agreement provision and in the section dealing with Acceptance, Acknowledgement and Receipt, Mr Petter agreed to be bound by the terms and conditions of "this Performance Restricted Stock Unit Agreement and the Plan (including but not limited to section 6.7 – Cancellation and Rescission of Awards). He acknowledged his understanding that neither the Plan nor the RSU Agreement gave him any right to any Service Relationship with the Company or any Company subsidiary and that the Award was "not part of my normal or expected compensation". He also acknowledged his understanding that the grant of the Award was expressly conditioned on his adherence to and agreement to the terms of the Key Employment Agreement with the Company. The Company was defined as EMC Corporation in the RSU Agreements.
The last two bullet points of the "Acceptance, Acknowledgement and Receipt" signed by Mr Petter provided that:
"By accepting this Restricted Stock Unit Agreement, I, the Participant, hereby:
…
understand that neither the Plan nor this Restricted Stock Unit Agreement gives me any right to any Service Relationship with the Company or any Company subsidiary, as the case may be, and that the Award is not part of my normal or expected compensation; and
understand and acknowledge that the grant of the Award is expressly conditioned on my adherence to, and agreement to the terms of, the Key Employment Agreement with the Company."
Each of the RSU Agreements was therefore expressly made between Mr Petter on the one hand and EMC Corporation on the other but was conditional upon his observance of the Key Employment Agreement, which was expressed to be with EMC Corporation, ("The Company" in the RSU Agreements) thus tying in with the Key Employee Agreement in the Employee Handbook, incorporated as part of Mr Petter's terms and conditions of employment with EMC Europe (see paragraph 11 above).
It is clear from the contractual arrangements, that Mr Petter had no entitlement of any kind to any award of RSUs. His evidence was that he had an expectation of being awarded RSUs as a form of performance related bonus, in addition to the commission/bonus he otherwise received under his contract with EMC Europe. Evidence before the court sets out Mr Petter's subjective understanding that he fully expected to receive RSUs in return for remaining an employee and was consistently granted them within the parameters of the scheme that was operated. The indirect evidence from him is that, without it or something similar, his employment package would have been uncompetitive and that in reality the RSUs were a form of deferred consideration for the work which he did.
The exact mechanism by which the Awards were made is not clear but there was some evidence to support the suggestion that allocation of RSUs was made with some involvement of the subsidiary companies, including EMC Europe. Although Awards could be made to individuals who were not employees of EMC Corporation or its subsidiaries, the only basis for any Award to be made to Mr Petter was his employment by EMC Europe and his past or future performance which could constitute a "significant contribution to the success of the Company and its Subsidiaries".
The dispute and proceedings
It is EMC Corporation's case that Mr Petter engaged in numerous acts that constitute Detrimental Activity within the meaning of section 6.7 of the Stock Plan, details of which appear in paragraphs 60-67 of the Amended Complaint in the Massachusetts proceedings which were commenced on 27th February 2015. It is EMC Corporation's case that, in consequence, having set a date of termination of his Service Relationship for the purposes of the RSUs at 15th January 2015, when Mr Petter gave notice, any RSUs which were issued to him which had not vested as at that date had expired and/or were forfeited. Because of the Detrimental Activity in which he had been involved, the Committee for the Stock Plan rescinded 8,721 shares in EMC Corporation (vested RSUs) issued within the six months prior to January 15th 2015 and ratified the cancellation of the RSUs that had not vested as at that date. That case was advanced in the complaint in Massachusetts.
On 13th March 2015 Mr Petter issued proceedings in this country and served them on EMC Europe that day and on EMC Corporation in Massachusetts on 16th March, on the basis of CPR 6.33(2)(b)(iii), contending that the latter was his employer and party to a contract of employment within Article 20 of the Recast Regulation, in the Claim Form and Particulars of Claim.
Mr Petter sought (inter alia) declarations that:
i) Clauses 6.6.4 and 6.6.7 (an apparent reference to 6.7, since there is no 6.6.7) of the Stock Plan incorporated in the RSUs were unenforceable as an unlawful penalty and/or as an unreasonable restraint of trade, insofar as Detrimental Activity entailed a breach of clauses 14 or 15 of the contract with EMC Europe.
ii) He had not breached the contract with EMC Europe and had not engaged in Detrimental Activity within the meaning of the Stock Plan.
iii) EMC Corporation's purported cancellation and rescission of RSUs granted to him was wrongful, void and of no effect.
On 6th April 2015 EMC Corporation served an Amended Complaint in the Massachusetts proceedings in which reference was made to the proceedings launched by Mr Petter in England. It referred to the final anti-suit injunction which was also claimed in those proceedings and which required EMC to take all reasonably available steps to discontinue the Massachusetts proceedings and prohibiting it from pursuing any proceedings except in England or a court of another Member State party to the Regulation. Relying upon clause 13 of the Stock Plan, EMC Corporation sought, additionally in the Amended Complaint, a declaration that clause 13 was enforceable and that any disputes regarding the enforceability, interpretation and application of the Stock Plan should be adjudicated in Massachusetts and nowhere else. It also sought damages for breach of the exclusive jurisdiction agreement and rescission and restitution of all RSUs and EMC stock granted to Petter at any time in consequence of such "total" breach of contract. In extending the terms of the Complaint, the new amended form included paragraph 19 in the following terms:
"The financial performance and operating results of EMC's subsidiaries contribute to and are accounted for in the results reported by EMC [where the pleading defines EMC Corporation as EMC]. The Stock Plan is designed in part to reward among others, employees of EMC subsidiaries (including its international subsidiaries) for their contributions and to align the interests of those employees with the interests of EMC shareholders."
At paragraph 65 of the Amended Complaint, it was stated that EMC Corporation was not a party to Mr Petter's employment with EMC Europe but took no position as to whether the non-competition provisions in it were enforceable under the laws of England. The Amended Complaint went on to say that, "regardless of the enforceability of provisions contained in the contract between Petter and EMC Europe … it [EMC Corporation] is entitled to treat conduct that is prohibited by the employment contract as another non-exclusive example of Petter's Detrimental Activity under the Stock Plan."
EMC Corporation issued its application challenging the jurisdiction of this court on 21st April, contending that it was not party to any contract of employment with Mr Petter, that it was not his employer and that the Recast Regulation did not therefore apply. On 23rd April, Mr Petter issued his challenge to the jurisdiction of the Massachusetts court.
On 28th April, Mr Petter sought an interim anti-suit injunction in England on the basis of the Recast Regulation and the decision of the Court of Appeal in Samengo-Turner & ors v J&H Marsh & McLennan (Services) Ltd & ors [2007] EWCA Civ 723, [2008] ICR 18. Although the claim for a final anti-suit injunction had been sought in the proceedings originally served, no claim for an interim injunction was made before this date. It is said that the decision to seek an interim injunction was made "once it became clear that EMC Corporation was determined to pursue the Massachusetts proceedings as confirmed by the Amended Complaint dated 6th April 2015 in which EMC Corporation added claims for breach of the exclusive jurisdiction clause and sought rescission and/or restitution in respect of all eleven RSU Awards and not merely those which had vested in the six months prior to January 15th 2015".
Analysis of the Part 11 Application
Service of proceedings on EMC Corporation was made without the permission of the court, on the basis that the claim was one which the court had power to determine under Article 20 of the Recast Regulation. It is common ground that jurisdiction is established by a claimant showing a "good arguable case" that the court has power to determine it under the Recast Regulation. This means showing that the claimant has, on the material before the court, "the better of the argument" or "a much better argument" than the defendant, on the point. On the merits of the case, a claimant has only to show that there is a serious issue to be tried, a point which does not arise here because it is accepted that there are arguments as to whether or not Mr Petter was guilty of Detrimental Activity, whether the provisions in the Stock Plan are unenforceable and/or operate as a penalty and whether or not there is entitlement to a final anti-suit injunction.
The question thus arises as to whether or not there is a good arguable case that Mr Petter's claim against EMC Corporation relates to a contract of employment with the latter and whether EMC Corporation is an employer not domiciled in a Member State for the purposes of Article 21.1(b)(i) and Article 21.2. EMC Corporation is domiciled in Massachusetts and Mr Petter habitually carried out his work in England. The sole issues are therefore whether EMC Corporation was Mr Petter's employer and whether his claim relates to a contract of employment with that Corporation.
It is common ground that the concept of an "individual contract of employment", as enshrined in Section 5 of the Recast Regulation, should be given an autonomous EU meaning. It is equally clear that the respect to be shown to the autonomy of the parties to a contract is limited in the case of employment contracts and that the employee as the weaker party to such a contract is to be protected by rules of jurisdiction more favourable to his interests than the general rules which are intended to be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile (see Recitals 13, 18 and 19 of the Recast Regulation). EMC Corporation contends that none of this justifies any departure from the ordinary rules of ascertaining whether there is a contract of employment and who is to be considered a party to it.
On any ordinary meaning of the word, as a matter of English law, Mr Petter had a contract of employment with EMC Europe and not with EMC Corporation. In WPP Holdings Italy SRL & ors v Benatti [2006] EWHC 1641 (Comm) Field J held that the objective criteria of an individual contract of employment for the purposes of Article 5 of the Brussels Convention consisted of three elements. The first was the provision of services by one party over a period of time for which remuneration was paid. The second was control and direction over the provision of the services by the counterparty. The third was integration to some extent of the provider of the services within the organisational framework of the counterparty. Mr Petter provided services to EMC Europe and was paid remuneration by it. EMC Europe controlled and directed his services and he operated within its organisational framework. The RSU Agreements did not require Mr Petter to work for EMC Corporation but regulated the terms upon which Mr Petter received and retained RSUs which EMC Corporation had, in its absolute discretion, decided to grant to him. Awards under the Stock Plan came about when a Committee of the Board of Directors of EMC Corporation decided, in their discretion to award RSUs to a Participant who might be an employee of EMC Europe or an employee of one of its subsidiaries or a consultant, advisor or non-employee director. The recipient would be someone who was "in a position to make a significant contribution to the success of the Company (EMC Corporation) and its Subsidiaries" and the Plan was established to advance the interests of the company (EMC Corporation) by providing for the grant to Participants of Incentive Awards. It is clear that no Participant had any right to an Award and that the terms of the RSUs governed the position once the decision to make an Award and/or an Award had been made.
The ability to participate in the Stock Plan was dependent upon the Participant being in a "Service Relationship" which meant, so far as Mr Petter was concerned, being an employee of EMC Corporation or its subsidiaries. The manner of termination of the "Service Relationship" had an effect on the Participants' entitlements under the RSU Agreement as set out in clause 6.6 of the Stock Plan, which distinguished between termination by reason of death, by reason of disability, by reason of retirement and for any other reason.
There is unchallenged material showing that Mr Petter lived and worked exclusively in England and that at all material times he worked within the organisation of EMC Europe and never worked for, or within, the organisation of its ultimate parent company EMC Corporation. Mr Petter's case therefore requires him to show that, for European jurisdiction purposes, he had more than one employer and that a document which does not contain the usual elements of employment is a contract of employment or part of a contract of employment for those purposes.
I have already referred to Mr Petter's evidence as to his expectation and understanding that the award of RSUs was a form of deferred remuneration for services rendered to EMC Europe. I have also set out paragraph 19 of the Amended Complaint in which EMC Corporation stated that the design of the Stock Plan was in part to reward employees of EMC subsidiaries for their contributions and to align the interests of those employees with the interests of the EMC shareholders. It is clear from the terms of clause 2 of the Stock Plan itself that the object of the Plan is to advance the interests of EMC Corporation by providing for the grant to Participants of Incentive Awards. In the case of Mr Petter, there can be no doubt that the Awards were made to him by virtue of his position as an employee in respect of his past performance and/or as an incentive to future performance as such an employee of EMC Europe.
I am bound by the decision of the Court of Appeal in Samengo-Turner, for what it decides. The reasoning in this decision was explored fully in argument. It was Mr Petter's contention that the reasoning in Samengo-Turner applied equally to the present case and that there was no material factual distinction which would allow this court not to follow it. EMC Corporation, however, drew attention to differences in the factual situations in the two cases.
In Samengo-Turner the parent company of the employer company had instituted a Senior Executive Incentive and Stock Award Plan and another subsidiary had made a Special Long Term Incentive Grant under the auspices of that Plan, subject to its terms and conditions and to further additional terms and conditions. All these terms and conditions were set out in a document which the Court of Appeal referred to as "the Bonus Agreement" which was signed by each of the employees of the English company which employed the claimant brokers. The Bonus Agreement was subject to New York law and exclusive jurisdiction. The English employing company was not party to it. Awards made under it were of cash rather than stock and were to be paid in instalments over a period of years, subject to cancellation and rescission if the recipient engaged in detrimental activity. Details of these arrangements, so far as material (as Schedule IID was in fact inapplicable) appear at paragraphs 6-10 of the Court of Appeal judgment. There are obvious parallels with the Stock Plan which is the subject of the current action, although the wording of relevant provisions is not identical.
The key questions with which the Court of Appeal grappled are set out from paragraph 29 onwards in the judgment of Tuckey LJ.
i) Is the claim made in New York a matter relating to the claimants' individual contracts of employment? The question is simply whether the claim is based on a contract of employment.
ii) Did the terms of the Bonus Agreement become part of the claimants' contracts of employment?
iii) Has the claim in New York been brought by an employer within the meaning of Article 20?
To all these questions, the Court of Appeal gave affirmative answers on the facts before it.
The court found that the terms of the Bonus Agreement became part of the claimants' contracts of employment for the reasons set out in paragraph 31 of the judgment. The conclusion was reached that the terms upon which the claimants were employed could not be ascertained without looking at both the original contracts with the London subsidiary and the Bonus Agreements with the parent company and/or other subsidiaries. The links with the Bonus Agreement to the employment of the claimants were set out in that paragraph, including the reference in the agreement recitals to the awards as incentives "to remain with" the parent company or its subsidiaries, the conditionality of payment of an award subject to "your continued employment" and the fact that in the Bonus Agreement there were notice, non-solicitation, confidentiality, disclosure and co-operation covenants given to the parent company and its subsidiaries which added to and in some case differed from the terms of the employment contracts with the English subsidiary. The Bonus Agreement provided that its terms should prevail over that of the contract of employment with the English subsidiary, where there was a conflict.
On the evidence before me, the following features are clear in the present case:
i) Mr Petter was selected to receive RSUs because he was a key employee.
ii) The Stock Plan was designed to reward or incentivise employees and therefore represented a form of remuneration for work done.
iii) An RSU Award was dependent upon Mr Petter's continued employment, as can be seen from the definition of Service Relationship.
iv) The RSU was expressly conditional upon Mr Petter's agreement to and observance of the Key Employee Agreement which was not only incorporated in the contract of employment between Mr Petter and EMC Europe but, by reason of the last bullet point in the RSU Agreement, and a definition in that Agreement of "the Company" as EMC Corporation, was incorporated in it. As the Key Employee Agreement itself defined "the Company" as EMC Corporation and its subsidiaries, references within it to the Company as set out in paragraph 12 of this judgment, operated to restrict Mr Petter from competing and recruiting and breaching other terms in relation to each of those bodies. The effect of the last bullet point of the RSU Agreement is to incorporate in the RSU Agreement between Mr Petter and EMC Corporation each of the provisions in the Key Employee Agreement in circumstances where paragraphs A, A1, A3 and A5 talk of employment with the Company, as defined, as EMC Corporation.
v) The RSU Awards were substantial in the light of the remuneration paid to Mr Petter by EMC Europe.
vi) The grounds for cancellation or rescission based on Detrimental Activity specifically included a failure to comply with the terms of the RSU Agreement which incorporated the Key Employee Agreement, a failure to comply with the Key Employee Agreement per se and a violation of any rule, policy, procedure or guideline of EMC Corporation.
vii) EMC Corporation specifically relied on the failure of Mr Petter to observe the various restrictive covenants which appear in the EMC Europe contract of employment, as justifying rescission of the RSU Awards.
As emerges from the decision in Samengo-Turner, the addition, variation or substitution of terms found in a document or agreement with a different party than the "employer" in the classic English law sense, can represent terms of a contract of employment of the employee whose contract or contracts thereby involve two or more employers. Regard is to be had to the substance of the arrangements between the parties, however strained the contractual analysis.
The decision of Field J in Duarte v The Black & Decker Corporation & anor [2007] EWHC 2720 (QB); (2008) 1 AER (Comm) 401 is of relevance here. There, the judge, referring to Samengo-Turner found that a Long Term Incentive Plan issued by the Parent Company, which included non-competition and non-solicitation provisions binding on the employee of a subsidiary company, were to be seen as part of "the overall package" of Mr Duarte's employment terms. He held that the Long Term Incentive Plan Agreement was a contract of employment for the purposes of Article 6 of the Rome Convention. He considered that Article 6 could not be circumvented by hiving off certain aspects of an employment relationship into a side agreement with a different party which contained none of the usual elements of employment to which he had referred in Benatti (ibid.). He referred to the Court of Appeal's view that the terms of the Bonus Agreement in Samengo-Turner (which included non-solicitation covenants) related to and were part of the contract of employment so that one could not ascertain the terms upon which the employee was engaged without looking at both the original employment contract and the Bonus Agreement. In my judgment there is a good arguable case that the terms of Mr Petter's employment cannot be ascertained without looking at both the EMC Europe contract and the RSU Agreements.
As to the distinguishing features upon which EMC Corporation relied, in particular in its skeleton argument at paragraphs 59-68, I find that these either do not hold good or are insufficient to make any material difference. Mr Petter's entitlement to obtain and retain the RSUs was dependent upon his being and/or remaining an employee of EMC Europe in a "Service Relationship" and the terms of the RSU Agreements, as set out earlier in this judgment, specifically referred to the Key Employment Agreement as being made with EMC Corporation and required his acknowledgement both of the agreement with EMC Corporation and adherence to it in the terms of the Key Employment Agreement covenants (non-competition, confidentiality, non-solicitation). Whilst those obligations are not identical to those in the Samengo-Turner Bonus Agreement (there is no co-operation clause), there is no material distinction for current purposes. It is not true to say that the RSU Agreements are entirely self-contained agreements which govern only the terms under which the Participant may receive units of stock in a Massachusetts corporation, because they come into existence only because Mr Petter is an employee, may be cancelled or rescinded if he ceases to be an employee and contained terms in the Key Employment Agreement which can only be said to relate to his employment, whether during its currency or after its termination. It is breach of these terms upon which EMC Corporation relies as Detrimental Activity which is said to deprive Mr Petter of his entitlement to stock or stock units. Whilst it is true that EMC Corporation does not sue in Massachusetts as the employer of Mr Petter as such, it is clear that the whole basis of the claim depends upon the fact that he is an employee of EMC Europe and that his failings in that respect disentitle him from receiving awards that he would otherwise be given and entitle EMC Corporation to recover awards already given. There is an implicit recognition that the award of RSUs is inextricably bound up with Mr Petter's employment, whatever the language used which seeks to distance the award from any employment contract. For the reasons given, however, notwithstanding such efforts, the RSU Agreements, with their cross-reference to the Key Employment Agreement, not only failed to achieve this but specifically link EMC Corporation to Mr Petter as the Company in the contract with him whilst also talking of his employment under the Key Employment Agreement with itself.
In my judgment Mr Petter has a good arguable case that the terms of the RSU Agreement became part of the claimant's contract of employment, despite the entire agreement clause and the penultimate bullet point which stated that he understood it to give him no right to any service relationship with EMC Corporation or any of its subsidiaries and that the award was not part of his normal or expected compensation. The terms of the RSU Agreement did add to the terms of his contract of employment with EMC Europe because, by them, he undertook an obligation to EMC Corporation to observe the various restrictions set out in the Key Employee Agreement which also referred in paragraph A in several places expressly to "employment with the Company", which was defined as EMC Corporation. There was therefore a variation or amendment to the contract of employment with EMC Europe by the addition of a further party in the context of the employee obligations undertaken by Mr Petter.
When combined with the other seven features set out in paragraph 44 above, in the light of Samengo-Turner, Mr Petter has the better argument or much the better of the argument (whichever test is employed) in relation to all three questions posed by the Court of Appeal. His claim in respect of entitlement to the RSUs and non-rescission/cancellation of them is based on the RSU Agreement which is designed to be a reward and an incentive to employees, which refers to employment by EMC Corporation and which provides for undertakings by him to EMC Corporation, in the capacity of an employee. In the light of the reasoning set out in Samengo-Turner, EMC Corporation can be seen as an employer for the purposes of section 5 of the Recast Regulation, although it would not be such as a matter of English law. It follows that both Mr Petter's claim and EMC Corporation's claim are, so far as the Recast Regulation is concerned, matters relating to Mr Petter's individual contract of employment being based upon that contract of employment seen in the wider sense required by the Recast Regulation.
In my judgment I am therefore bound by the reasoning in Samengo-Turner which applies equally to the facts of this case and certainly sufficiently so to give rise to a good arguable case on the part of Mr Petter. In consequence, Mr Petter is entitled to bring his claim against EMC Corporation in this country under Article 21.1(b)(i) and Article 21.2 and EMC is only entitled to bring proceedings in courts of this country against Mr Petter under Article 22. By reason of the terms of Articles 23 and 25.4 the agreement between EMC Corporation and Mr Petter to the jurisdiction of the courts of Massachusetts is of no legal force, so far as the courts of this country are concerned. It has therefore to be ignored even though it is, as found already by the court in Massachusetts, as a matter of Massachusetts law, binding upon the parties to it. This creates a difficulty in relation to the relief sought by Mr Petter, to which I shall now come.
The Anti-Suit Application
In Samengo-Turner an anti-suit injunction was granted because it was held to be the only way in which to make the claimants' statutory right to be sued in this country effective. Damages would not be an adequate remedy. If no injunction was granted, then it is to be presumed that both the Massachusetts and the English proceedings will continue covering much the same ground.
In Samengo-Turner, the position was much the same as appears from paragraph 39 of Tuckey LJ's judgment. The unambiguous terms of the Massachusetts law and jurisdiction clause would have been upheld in this country in the ordinary way but cannot be because the RSU Agreements are to be treated as employment contracts with EMC Corporation and "our law says that we cannot give effect to it". Tuckey LJ posed the question "What shall we do? The only choice it seems to me is between an anti-suit injunction or nothing."
Having then referred to the need for caution in dispensing an anti-suit injunction because of the requirements of comity, he decided (and the other Lords Justices agreed) that doing nothing was not an option. The foreign court could not give effect to the Regulation and the only way to give effect to the English claimants' statutory rights was to restrain the foreign proceedings. He stated that a multi-national business must expect to be subject to the employment laws applicable to those they employ in different jurisdictions. Whilst he did not accept that, where an exclusive jurisdiction was mandated by statute, the position was as strong as the situation where the parties had agreed to the exclusive jurisdiction of that court (paragraph 41) and the case for an injunction was not so strong where the statute in question had provided that an agreed exclusive jurisdiction clause between the parties was of no effect, he nonetheless granted the injunction, referring in passing to the decision of the Court of Appeal in OT Africa Line v Magic Sportwear Corporation [2005] 2 Lloyd's Rep 170.
There was argument before me as to whether or not I was bound by the decision in Samengo-Turner to grant an injunction in this case. As injunctions are always discretionary, I do not consider that I am bound but I must have regard to the reasoning in Samengo-Turner which, it was said by Mr Petter, applied equally to this case. It was said to be a principle of law that where there is a statutory scheme of exclusive jurisdiction, the court would not do nothing but must lend its support to protect that jurisdiction. I reject that submission because the requirement for an injunction must always turn on the particular facts of any case.
On 13th May 2015, the day before the first day of the hearing of these applications the US District Court of Massachusetts ruled on Mr Petter's motion to dismiss EMC Corporation's amended complaint or to stay its action against him. Count 4 of the Amended Complaint had sought a declaratory judgment regarding the Massachusetts court's jurisdiction, seeking a declaration that clause 13 of the Stock Plan was enforceable and that disputes, including those at issue in the action regarding the enforceability, interpretation and application of the Plan, including the issue of Mr Petter's alleged Detrimental Activity, should be adjudicated in the courts of Massachusetts alone.
The court denied Mr Petter's motion to dismiss EMC Corporation's Amended Complaint or to stay the action and instead granted summary judgment in favour of EMC Corporation on count 4. It specifically ruled that clause 13 of the Stock Plan was enforceable and that disputes arising out of it, including those at issue in the action, were subject to the exclusive jurisdiction of the courts of Massachusetts.
I was informed by counsel for EMC Corporation that, until this court ruled on its own jurisdiction, there would be no basis for any application for a Temporary Restraining Order against Mr Petter but that the Massachusetts court had, unsurprisingly in the light of clause 13, unambiguously made a final decision that it had exclusive jurisdiction over the substance of the dispute between EMC Corporation and Mr Petter in respect of the Stock Plan which related to stock in the Massachusetts incorporated company. I was told that this had constitutional implications in the sense that, if the English court granted an anti-suit injunction, the Massachusetts court might consider that it had no option, regardless of the position of the parties who were enjoined, to proceed with the case or to refer the matter to a higher court for its decision as to whether or not the case should proceed in Massachusetts.
It is clear, in the light of my decision earlier in this judgment and that of the Massachusetts court on 13th May 2015 that there is an irreconcilable clash between the two courts in respect of the question of jurisdiction. Under Massachusetts law, which is the governing law of the RSU Agreements, the Massachusetts court has jurisdiction. Under English law, by virtue of the Recast Regulation, this court has exclusive jurisdiction though it will apply the law of Massachusetts. I have to take into account the consequences of granting or not granting an interim injunction in the context of this clash.
Although Mr Petter seeks an interim injunction pending the determination of the dispute about the RSUs in this country and the determination of his entitlement to a final injunction, the reality of this, as with most interim anti-suit injunctions, is that it would almost certainly be final in its effect. It would not in any real sense "hold the ring" since the English court would decide the matters in issue between Mr Petter and EMC Corporation in relation to the Stock Plan. It is highly unlikely that there would be any new factors to take into account in the context of granting a final injunction, above and beyond those which come into play in relation to the interim injunction and it is noteworthy that, in Samengo-Turner, the Court of Appeal granted a final injunction. The effect of the interim injunction would therefore, almost certainly be, that EMC Corporation would be prevented from pursuing its claim in Massachusetts in the forum chosen by the parties.
Given that there is plainly a serious issue to be tried, in the light of Samengo-Turner, in relation to the grant of a final anti-suit injunction (which was what in fact was granted in Samengo-Turner, since all the relevant material was before the court) the question of balance of convenience arises in the context of familiar American Cyanamid principles.
Mr Petter contends that, as in Samengo-Turner, an anti-suit injunction is the only remedy available to the court which will protect Mr Petter's claimed rights and ensure that the English courts' jurisdiction is not undermined by parallel proceedings in Massachusetts which, in his submission, are being pursued contrary to his rights. In this connection it is said that there is a distinction to be drawn between exclusive jurisdiction clauses on the one hand and permissive jurisdiction clauses on the other but since under the different systems of law, both the English and Massachusetts courts consider the matters in dispute should be litigated solely in their own jurisdiction, this does not assist Mr Petter's argument. It is right to say that the effect of Article 23 and Article 25.4 has the effect of rendering the exclusive jurisdiction clause in favour of Massachusetts of no legal force here (see also Mahamdia v Algeria [2013] ICR 1) but this does not mean that an anti-suit injunction should follow as a matter of course. It is right to say that the Court of Appeal in Samengo-Turner gave consideration to issues of comity and concluded that doing nothing was not an option because it failed to give effect to the statutory rights of exclusive jurisdiction conferred by the Convention. It is also right to say that courts have a natural aversion to duplication of proceedings in more than one jurisdiction with the risk of inconsistent decisions or an ugly rush to judgment in the hope of establishing res judicata.
Where does the balance of convenience lie? What will happen in the event that an injunction is granted or is not granted? As matters stand, proceedings will continue in this country and the court here will be asked to make declarations as to the rights of Mr Petter in relation to the Stock Plan, but not to give any monetary judgment. If a declaratory judgment was given in Mr Petter's favour, he would either need to obtain recognition of that judgment in Massachusetts in order to obtain an order relating to the stock or stock units in question or to make a further claim in this country for damages in respect of breach of contract, in the event that EMC Corporation did not recognise the decision of this court or award stock or stock units on the basis of it. The Massachusetts court would, it is clear, consider that the English court had no jurisdiction to determine the rights of the parties under the Stock Plan and would therefore not recognise any judgment of this court in relation to stock in a Massachusetts company, unless EMC Corporation submitted to the jurisdiction of the English court which, of course, it has not yet done, seeking only to challenge that jurisdiction in the current application. I cannot speculate as to EMC Corporation's future decisions but, given the stance already taken in Massachusetts, such a submission appears unlikely.
I should therefore work on the assumption, it seems to me, that although this court does not lightly assume that its orders will not be observed, EMC Corporation is likely to continue with proceedings in the court of Massachusetts and not play any part in proceedings in this country. If proceedings continue in both courts, the losing party in each jurisdiction would be likely to resist enforcement in the other jurisdiction and to succeed in doing so because of the perceived lack of jurisdiction of the other court, and issues of public policy, res judicata and issue estoppel would be unlikely to apply.
Whilst I can understand the desire of the Court of Appeal to grant a final anti-suit injunction in Samengo-Turner in similar circumstances, it seems to me that the requirements of comity do not allow such a solution in the present case. The decision to grant such an injunction in Samengo-Turner has been the subject of criticism which, to my mind, is well-grounded. Although the Recast Regulation differs from the earlier Regulation which applied at the time of Samengo-Turner because of the inclusion of Article 21.2 in relation to employers not domiciled in a Member State, there is nonetheless force in the points which are made in a number of Articles.
I was referred to an article by Professor Adrian Briggs in [2007] LMCLQ at page 433 – "Who is bound by the Brussels Regulation?" which proceeded on the basis of the old Regulation and the absence of any provision in it dealing with jurisdiction agreements for non-Member States. The points made however go wider than that and rely on a number of factors including the following:
i) The ECJ's ruling in Turner v Grovit [2004] 1 ECR 3565 (C-159/02) held that anti-suit injunctions had no part to play in the scheme of the Regulation, which by necessary implication denied that the "right to have the Regulation applied properly" could form the basis for an anti-suit injunction.
ii) The employees had "trousered" the benefits of the incentive agreement only to claim to be free of its burdens when this was inconvenient for them. They were thus seeking an injunction to enforce their right to break a contract, valid under its own law and "to take the money and run". There could be no equity to breach a contract.
iii) The employees could not be said to come to the court with clean hands when "blowing hot and cold" or "approbating and reprobating the incentive agreement".
iv) When the foreign proceedings began, there were no proceedings in England to guard and no jurisdiction to protect.
v) Doing nothing was the only right answer. For the court to invoke equity because of a perception that "something must be done" reduces equity to little more than a technique for cross-border case management which was painfully insufficient.
Similar points are made in an article by Andrew Dickinson in [2008] ICLQ at page 1 – "Resurgence of the Anti-Suit Injunction: the Brussels I Regulation as a source of civil obligations?" In commenting on Samengo-Turner the author there pointed out that the court was deploying a remedy which triggers acute hostility in civil law jurisdictions and which the ECJ has excluded where breach takes place in Member States. As pointed out, the Court of Appeal's decision has two surprising consequences. First, it would appear strongly arguable that other Member State courts should do likewise to restrain breaches of the Regulation committed in non-Member States, if it followed from the existence of the court's exclusive jurisdiction. Secondly, it was not just section 5 of the Regulation which gave rise to exclusive jurisdiction. Article 2, as it then was (now Article 4) was expressed in mandatory terms and anti-suit injunctions on the logic of Samengo-Turner, should be sought by persons domiciled in the EC who are sued in non-Member States.
In an article entitled "The English approach to jurisdiction and choice of law in employment covenants not to compete", Mr Goulding QC who appeared here for Mr Petter, together with his co-author Mr Vinall, pointed out that the ECJ had held that injunctions to restrain proceedings before the courts of other Member States were inconsistent with the Regulation so that it was surprising to see the Regulation being enforced by the grant of an injunction at all. Furthermore, the Regulation creates public law obligations binding on Member State courts in their decisions whether to accept or decline jurisdiction, rather than private law rights and obligations for litigants which can be enforced by injunctions.
All these points have, to my mind, considerable force. The decision by this court that it has exclusive jurisdiction because of the terms of the Recast Regulation does not put EMC Corporation in breach of any contractual obligation it has undertaken, particularly where it has in fact agreed to the exclusive jurisdiction of the courts of Massachusetts. It is Mr Petter who is in breach of contract in pursuing the claim elsewhere, as a matter of the proper law of that contract, which is not challenged, although he is entitled as a matter of English law, by reference to the Regulation to insist on bringing his claim here.
I consider that the grant of anti-suit injunctions is essentially inimical to the Regulation which certainly does not allow such in the context of jurisdictional disputes where the jurisdictions in question are the courts of Member States. Common Law jurisdiction may grant anti-suit injunctions outside the context of the Recast Regulation but, once matters are governed by the Regulation, even if it is open to the court, it would not seem appropriate to do so on the grounds of a jurisdiction granted solely by the Recast Regulation, as opposed to jurisdiction founded on an agreement between the parties.
This is not a case where it is said that the existence of proceedings in Massachusetts is vexatious and oppressive and it cannot be said that the rulings of the Massachusetts court on its own jurisdiction are in breach of customary international law. Regard must be had to the parties' free choice of law which applies, namely Massachusetts law, and the requirements of comity in relation to the decision of that court.
Applying the relevant considerations for the grant of an interim injunction, I come to the clear conclusion that it would not be appropriate to grant the anti-suit injunction sought. Furthermore, since the effect of it is likely to preclude any future decision by the Massachusetts court at all, so that it is, to all intents and purposes, final in its effect, a higher threshold may be necessary to grant such an injunction. If what was being sought was a final injunction, I would not consider the case made out.
Conclusion
EMC Corporation's challenge to the court's jurisdiction therefore fails and Mr Petter's claim for an interim injunction also fails. Absent special considerations, costs should follow the event in respect of both applications and I do not see why there should be any real difficulty in apportioning costs between them. I will not be summarily assessing the costs and would expect to order an interim payment in one direction or the other of a sum which I can be confident would be recoverable by one party against the other after the costs have been agreed or determined by detailed assessment. It may be that the parties will be able to agree on figures, but if not, brief submissions can be made in writing, or if necessary at an oral hearing when this judgment is handed down.
The only points made before me in relation to costs at the end of the hearing were as follows:
i) Mr Goulding QC for Mr Petter submitted that the vast majority of the costs had been incurred on the jurisdiction application rather than the anti-suit injunction.
ii) Mr Bloch QC submitted that the argument that EMC Corporation had entered into a direct contract involving employment terms by reference to the Key Employee Agreement was taken late. This in fact emerged in a witness statement dated 28th April 2015 but was scarcely pursued in Mr Petter's skeleton but was taken up forcefully in oral argument. I do not see how this can affect the issue of costs since the point was there to be taken and it cannot be said that EMC Corporation was unaware of the terms of the RSUs nor would have yielded had the point been taken earlier.
Subject therefore to any special considerations of which I am unaware and any further submissions of the parties, my order would be costs to follow the event in relation to each application, such costs to be subject of detailed assessment if not agreed. I would be prepared to order an interim payment in the circumstances outlined above.
Having heard all the arguments presented, I grant both parties leave to appeal against my decision. |
Sir David Eady :
On 30 April 2015, I heard applications to commit the Respondents for contempt of court with reference to alleged breaches of court orders. I had ruled that the matter should proceed in their absence, having been satisfied that they had chosen not to appear. There was no doubt that they had been notified of the proceedings and had made no response; in particular, there had been no suggestion that an adjournment was required either on health grounds or because of a need for further time to prepare. (I note that on 22 January 2015 Warby J, having granted an adjournment unopposed on that occasion, had then prescribed the procedure to be adopted if any further adjournment was to be sought on grounds of ill health. No such steps were taken.)
Prior to my ruling on that matter, Mr Busuttil had properly referred me to relevant modern authorities as to the circumstances in which it may be appropriate to take such an exceptional course: R v Jones (Anthony) [2003] 1 AC 1, R v Jones; R v Purvis [2001] QB 862, Hammerton v Hammerton [2007] EWCA Civ 248 and Sanchez v Oboz [2015] EWHC 235 (Fam). He pointed specifically to the considerations addressed by Cobb J in Sanchez at [4]-[5], and I took those factors into account in the light of the evidence before the court in the present case.
My conclusion that the Respondents had chosen not to appear seems to be confirmed by a video uploaded on or about 17 April this year, and displayed on one of the websites recently set up, in which the First Respondent is shown setting fire to the box of court bundles sent to him for the purposes of the hearing. They were apparently completely destroyed. The Second Respondent posted a copy of the video on YouTube on 17April. (I make clear that this conduct is not relied upon in itself to support the contempt applications, as no reference is made to it in the Grounds which, of course, pre-date it. Nevertheless, it was legitimate to have regard to this evidence, contained in Mr Wilson's third affidavit, in determining the preliminary issue of whether it would be appropriate to proceed in the absence of the Respondents.)
As appears from the title of the case, there was originally a Second Defendant, Mr Kordowski, but the claim against him was settled last December and he plays no further part in the proceedings.
The Claimant is a solicitor, who sues not only on his own behalf but also in a representative capacity on behalf of a number of "protected parties", in respect of what is alleged to have been a continuing campaign of harassment via the internet. Steps were taken at the outset to protect the Claimant and those he represents by the grant of anonymity. For the same reasons as those given by the Judges who have been seised of the matter so far, I confirmed that such protection should continue on the present applications. Accordingly I shall not identify anyone by name in the judgment and will attempt to avoid giving any information (e.g. by revealing the address of any of the relevant websites) which could lead to their identification.
There are now two applications before me. The first (dated 10 December 2014) related to the First Respondent only and concerned alleged breaches of an interim order made by Slade J on 14 August of last year. The second application relies upon alleged breaches of the final order (dated 16 September), which was made by Stuart-Smith J following the grant of judgment in default.
In the second application, it is not only alleged that the First Respondent has breached the order in a number of respects, but also that the Second Respondent is liable for criminal contempt. He was not a party to the original claim for harassment, and the order was thus not made in relation to him. The case is based on the long established principle that a non-party can be liable for criminal contempt through his actions in encouraging or assisting a party to breach a court order, and/or by setting out deliberately to undermine the court's intention in granting the order in question: see e.g. Att-Gen v Newspaper Publishing Plc [1988] Ch 333 and Att-Gen v Times Newspapers Ltd [1992] 1 AC191.
The procedure to be adopted in relation to such a non-party respondent is laid down now by CPR 81.10(2), which stipulates a Part 23 application notice. This procedure has been correctly complied with in the present case.
It is well established that the Claimant is confined on any committal application to reliance upon the grounds expressly identified for the purposes of the relevant application. Moreover, it is for the Claimant to establish the conduct relied upon to the criminal standard of proof (whether the contempt alleged is to be classified, technically, as civil or criminal in nature). Mr Busuttil took time, therefore, carefully to go through each of the grounds relied upon here, in relation to each of the Respondents, and took me to the evidence in order to demonstrate that this burden was discharged. None of the witnesses went into the witness box to confirm the evidence contained in the relevant affidavits, but they were present and available for cross-examination had either of the Respondents wished to make such an application. Obviously, in the circumstances, none of the evidence was opposed or challenged.
I was satisfied that all relevant documents have been served upon the Respondents in accordance with the rules.
I now turn to the first application and the breaches alleged to have been committed by the First Respondent in relation to the injunction granted by Slade J last August.
Paragraphs 5, 6, 8 and 11 of the interim order were, so far as material, in these terms:
"5 Until the conclusion of the trial of this action or further Order of the Court in the meantime:
5.1 the First Defendant must not (whether by himself, his servants or agents or otherwise howsoever) harass … the Claimant or any person who the Claimant represents in these proceedings;
5.2 in particular (and without limiting the generality of the foregoing), the First Defendant:
5.2.1 must cease forthwith from operating or publishing any of the websites identified as items 1 to 5 in Confidential Schedule B to this order by removing them from the internet in their entirety and not reinstating them to the internet;
5.2.2 must forthwith cause to be removed from the website identified as item 6 in Confidential Schedule B to this order the entirety of his posting on that website that refers to the Claimant and the Claimant's firm [and] must not reinstate that material or any similar material to that website;
5.2.3 must not (whether by himself, his servants or agents or otherwise howsoever) post or cause or permit to be posted anywhere on the internet any material (verbal or pictorial) which:
(i) lists, identifies or otherwise refers to the Claimant or any person who the Claimant represents in these proceedings or the Claimant's firm; or
(ii) is published in juxtaposition with any pre-existing material on the internet that identifies or otherwise refers to the Claimant or any person who the Claimant represents in these proceedings or the Claimant's firm;
…
6 The First Defendant must by 4 p.m. on 21 August 2014 disclose and produce in writing to the Claimant's solicitors:
6.1 the identity of each and every person who to his knowledge has been involved since 1 August 2011 in operating, running and/or publishing the website identified in item 6 in Confidential Schedule B to this Order (in each case, disclosing to the Claimant's solicitors the following details if and in so far as they are known to him: (i) the person's full name; (ii) his or her address; (iii) his or her telephone or mobile phone number; (iv) his or her email address; (v) his or her IP address; (vi) any other contact details); and
6.2 all information and documents within his control evidencing the identity of any person who has been involved since 1 August 2011 in operating, running and/or publishing that website.
…
8 The First Defendant and any third party given advance notice of the Application … and any person who the Claimant puts on notice of this Order must not, except with the express prior permission of the Court, publish or communicate or disclose or copy or cause to be published or communicated or disclosed or copied to any third party by any means whatsoever any document related to or disclosed in or generated in the course of or in connection with these proceedings ('the Litigation Papers') other than (a) this Order (excepting the Confidential Schedules thereto) and (b) any public judgment of the Court in these proceedings.
PROVIDED THAT the First Defendant and any third party given advance notice of the Application and any person who the Claimant puts on notice of this Order shall be permitted to copy, disclose and deliver the Litigation Papers (or any of them) to any solicitor or barrister duly instructed by any such person for the purpose of these proceedings.
…
11 The First Defendant and any third party given advance notice of the Application and any person who the Claimant puts on notice of this Order must not, except with the express prior permission of the Court, publish or communicate or disclose or cause to be published or communicated or disclosed by any means whatsoever any information derived from the Litigation Papers other than (a) this Order (excepting the Confidential Schedules thereto) and (b) any public judgment of the Court in these proceedings.
… "
It is elementary that court orders are there to be obeyed and there is no doubt that the First Respondent was under an obligation to comply with the interim order (and indeed, later, the final order) for so long as it remained in effect, whether he thought it appropriate or not. There has never been an application by him to set aside either of these orders. At all material times, therefore, they remained in effect and binding upon him.
Ground 1 alleges that the First Respondent breached paragraph 5.2.1 of the Order of Slade J by failing to cease forthwith, following service on 16 August 2014, from operating the five websites identified in Confidential Schedule B to that order, and by continuing to operate them, for almost three days, until about 12.30 p.m. on 19 August 2014.
Ground 2 alleges a breach of paragraph 5.2.2 of the Order of Slade J because the First Respondent failed, upon being served, to cause the removal of the entirety of his posting referring to the relevant persons; it remained on the website in question for four days after service until 20 August 2014. I shall refer to this simply as "website 6". It is clear that the continued posting fell foul of paragraph 5.2.2.
I am satisfied, to the appropriate standard, that these first two breaches occurred; that is by reason of the evidence of the Claimant's solicitor, Mr Wilson, contained in paragraphs 14 to 19 of his first affidavit, dated 28 November 2014. He confirmed in each case that the offending material remained on the internet until the domains were cancelled by the Registrar, Webfusion Ltd, on respectively 19 and 20 August. That was not because any attempt had been made by the First Respondent to obey the order, but rather in response to a request made on the Claimant's behalf directly to the Registrar.
Ground 3 relies upon a breach of paragraph 5.2.3 of the interim order by reason of material posted on the website identified as item 1 in the Confidential Schedule annexed to the grounds, and to which I shall simply refer as "website 7". This occurred between approximately 17 August and 8 September 2014. The material consisted of verbal and/or pictorial postings which identified (i) the Claimant, (ii) one of the Listed Protected Parties identified (as No 10) in Confidential Schedule A to the Order, and (iii) the Claimant's firm. Again, I am satisfied to the criminal standard of proof.
The relevant evidence was contained in Mr Wilson's first affidavit at paragraphs 23 to 28 (and in pages 12-17 of his first exhibit thereto). He described how he had discovered on 5 September that there were three further websites publishing the material in question. One of these, "website 7", had been set up earlier, but it was updated on 25 August after the First Respondent had been served with the interim order. (The other two were set up on 3 September 2014 after, and in breach of, the interim order.) The material on this website was in substance the same as that found on website 5. The domain's registration was cancelled on 8 September, but again only after Mr Wilson had contacted the Registrar (Webfusion Ltd). Despite this, however, he recorded how adverse search engine results and snippets persisted up to the date of his first affidavit (28 November). He exhibited an example.
Ground 4 was based on a further breach of paragraph 5.2.3 of the same order. This was covered in Mr Wilson's affidavit at paragraphs 29 to 30 (and in his exhibit at page 7). After he had been served with the order, the First Respondent posted or caused to be posted on one of the original five websites ("website 1") some new material referring expressly to the Claimant's firm. The burden has also been discharged in this instance.
Ground 5 consists of an alleged breach of paragraph 6 of the interim order. The deadline passed and he had failed to produce any of the required information or documents, as Mr Wilson confirmed in paragraph 35 of the same affidavit. That is thus proved also to the criminal standard.
Ground 6 identifies another breach of paragraph 5.2.3. The First Respondent is said to have posted (or caused to be posted), between 3 and 8 September 2014, material to the same effect as that published on the fifth of the original five websites ("website 5"). How this came to be discovered was described by Mr Wilson in paragraphs 36 to 41 of the first affidavit. I shall refer to the relevant website as "website 8" (i.e. the second of the three new websites discovered by him on 5 September). This was found to have been registered by the First Respondent on 3 September, following the removal of the original five by the Registrar. It effectively reproduced the material which had been contained in website 5 (thus, it is said, deliberately flouting the interim order). It identified the Claimant, his firm and one of the Listed Protected Parties. Various pages were exhibited by Mr Wilson (at pages 18 to 28). Again, I find the breach proved.
Ground 7 is once again founded upon a breach of paragraph 5.2.3 of the interim order. What the First Respondent apparently did was to use one of the new websites registered on 3 September (and discovered two days later by Mr Wilson), to which I shall refer as "website 9", for the purpose of reproducing what had been posted on the first four of the original five websites listed in Confidential Schedule B to Slade J's order. This was described by Mr Wilson at paragraphs 42 to 46 of the same affidavit and illustrated by references to extracts from the new website at pages 29 to 35 of his exhibit. There is no doubt that there was thus another breach of paragraph 5.2.3.
"Website 9" also contained a new statement, set out at paragraph 46 of the affidavit and exhibited at pages 29 to 30, which was headed "In the interest of Openness, Transparency and Freedom of Speech on the Internet and NO to secret Courts". This too identifies a number of the people contrary to paragraph 5.2.3. It also involved publishing the "Litigation Papers" (which, in themselves, identified people impermissibly). Accordingly, I am again satisfied that the Claimant's burden of proof has been clearly discharged.
Ground 8 is closely related. Here, it is said that there has been also a breach of paragraph 8 of the interim order, in revealing the content of "Litigation Papers". There is no doubt that he did so in the new material to which I have referred in the previous paragraph, but it would hardly further the court's intentions, as disclosed in the interim order, if I were to list or describe them in the course of this judgment. They are sufficiently identified in the evidence of Mr Wilson. I find this breach also proved.
Ground 9, by the same token, asserts a breach of paragraph 11, on the basis that the conduct described in relation to Grounds 7 and 8 entails that information derived from the "Litigation Papers" has also been impermissibly communicated. That plainly follows and the burden is correspondingly discharged. Mr Wilson made clear that, although he managed to obtain the suspension of the website by approaching Nominet, the Registry for the two domain names ending in "co.uk" (websites 8 and 9), after a relatively short time (four to five days), the postings resulted in a number of adverse search engine results, which he exhibited.
Ground 10 concerns a further breach of paragraph 5.2.3 of the interim order, as described in Mr Wilson's affidavit at paragraphs 53 to 57. He discovered on 11 September that another two websites had been set up (to which I refer as "website 10" and "website 11"). They were available on the internet between 10 and 20 September. They were registered on 10 September (i.e. one day after Nominet removed "website 8" and "website 9"). Eventually, they were removed from the internet on 20 September by the Registrar, a company called Web Commerce Communications Ltd and based in Malaysia. As in other cases, however, adverse search engine results continued for some while thereafter.
Mr Wilson demonstrated that website 10 was substantially the same in content as (new) websites 7 and 8 and (original) website 5. Thus, it is submitted, it inevitably reveals identities prohibited by the interim order. Illustrations are given in his exhibit (at pages 36 to 53). Correspondingly, the burden has again been discharged.
Ground 11 relates to "website 11" and similarly points to yet another breach of paragraph 5.2.3, which also took place between 10 and 20 September. The content was substantially similar to that of websites 1 to 4 and website 9. The evidence is contained in paragraphs 58 to 61 of the affidavit and illustrations are set out in the exhibit at pages 54 to 72. Adverse search results were produced (and illustrated at pages 199 and 202-203). It has, therefore, been proved to my satisfaction that this material, revealing yet again prohibited identities, does indeed constitute a breach of the interim order.
Ground 12 relies upon another breach of paragraph 8 of the interim order taking place between 10 and 20 September on "website 11". As Mr Wilson makes clear, that website also made available seven PDF files, previously available on "website 9". His evidence is set out at paragraphs 62 to 63 of the affidavit and illustrated in his exhibit (at pages 73 to 175). The publication of these "Litigation Papers" was obviously in breach of paragraph 8 of the interim order.
Ground 13 points to the fact that "website 11" also contains the new material contained in "website 9" and referred to in the passage of this judgment dealing with Ground 9. The evidence dealing with this was contained in paragraphs 64 to 66 of Mr Wilson's affidavit and in his exhibit (at pages 54-55). It consisted of information derived from the "Litigation Papers" and there was accordingly a clear breach of paragraph 11 of the interim order. The burden has again been discharged.
I must now address the second application to commit (dated 14 April 2015), which relates partly to alleged breaches by the First Respondent of the final order granted by Stuart-Smith J on 16 September 2014, and partly to the conduct of the Second Respondent in "aiding and abetting" him. I shall first consider the evidence directly concerning the First Respondent. This is contained primarily in the second affidavit of Mr Wilson dated 13 April 2015.
By way of introduction, however, it is necessary to set out the relevant parts of the final order:
"…
7.1 the Defendants and each of them and any person who the Second Defendant [i.e. Mr Kordowski] represents in these proceedings must not whether by themselves, their servants or agents or otherwise howsoever post or cause or permit to be posted anywhere on the internet any material (verbal or pictorial) which:
(a) lists, identifies or otherwise refers to the Claimant or any person who the Claimant represents in these proceedings or the Claimant's firm; or
(b) is published in juxtaposition with any pre-existing material on the internet that identifies or otherwise refers to the Claimant or any person who the Claimant represents in these proceedings or the Claimant's firm;
…
9 The First Defendant must forthwith:
9.1 permanently delete all the data within his control comprising (a) all content (textual and pictorial) that was published at the websites identified as items 1 to 5 and 7 to 12 in Confidential Schedule B to this Order and (b) his posting and other material referable to the Claimant's firm that was published at the website identified as item 6 in Confidential schedule B to this Order; and
9.2 cause all such data to be deleted permanently from the servers or other electronic storage device or system of any third party which to the knowledge of the First Defendant holds such data…"
(The persons referred to in paragraph 7.1(a) and (b) of the final Order were set out in Confidential Schedule A to the Order.)
Ground 1 alleges a breach of paragraph 7.1 of the final order by the First Respondent (by himself and/or by the Second Respondent and/or by other persons unknown). The breach consisted in posting (or causing or permitting to be posted) certain material on the internet on the website identified as item 1 in the Confidential Schedule 1 to the Grounds, but to which I shall refer simply as "website 12" (for the obvious reasons I have already given). The material in question was partly verbal and partly pictorial and it identified (i) the Claimant, (b) one of the persons he was representing in these proceedings and (iii) his firm. The evidence establishing this charge was contained in Mr Wilson's second affidavit at paragraphs 34 and 36 to 38 and in his second exhibit (at pages 71 to 125). He found on 1 April 2015 this new website containing the same material as that which had already appeared on the websites to which I have referred as "website 7", "website 8" and "website 10". (It happens that they are referred to in Confidential Schedule B to the final order as items 9, 10 and 12.)
His further researches revealed a contact email address of [email protected], suggesting that the site was operated by the Second Respondent, who was already known by him to be a friend or associate of the First Respondent. This was confirmed by one piece of new material that also appeared on the site:
"Open Letter …
Mr Wilson of Brett Wilson Solicitors. I am not going to take any notice of you or any civil court trying to hide the truth.
If I have committed a crime, do your duty and inform the police, until then you can stick your injunctions where the sun don't shine. You know where I live, any letters, emails or phone calls will be put on MY websites. Do yourself and the industry a favour and get some urgent legal advice.
Up Yours,
Jim Bloomfield
31 March 2015"
The later postings, between 31 March and 8 April 2015, clearly represent a continuation of the First Respondent's earlier campaign (albeit now aided by, or carried out through, the Second Respondent). It would be quite unreal to come to any other conclusion. I thus find the breach alleged in Ground 1 of the second application proved.
Ground 2 represents a further breach of paragraph 7.1 of the final order. This time it relates to material appearing on a website identified at item 2 of the Confidential Schedule to the Grounds, and to which I shall refer as "website 13". It was published between 31 March and 8 April 2015 and was clearly in breach of paragraph 7.1(a) of that order. It identified (verbally and/or pictorially) (a) the Claimant, (b) all the persons he represents in these proceedings, (c) the Claimant's firm, and (d) a lawyer acting for the Claimant in the proceedings. This was plainly in breach. Although most of what appeared on this new website had been posted earlier, it also contained the same open letter quoted above (in relation to Ground 1 under the second application).
The evidence establishing these matters was to be found in paragraphs 40 to 44 of Mr Wilson's second affidavit and in his second exhibit (at pages126 to 137). With a little persistence, he was able to have the Registrar of the new websites (TLD Registrar Solutions Ltd) suspend the domain names and the websites are no longer on the web.
Ground 3 alleges a breach of paragraphs 9.1 and 9.2 of the final order. The point was shortly dealt with at paragraphs 48 and 49 of the second affidavit, where he points out that the data could not have been deleted as those provisions required; otherwise they would not have been available to be reproduced on the most recent websites. That conclusion is obviously also consistent with the attitude of the Second Respondent in his "open letter" quoted above. I am accordingly also satisfied that the breach has been proved beyond reasonable doubt.
I pause before considering Ground 4, which relates to the Second Respondent, in order to address the particular aspects of the evidence to which Mr Busuttil drew attention as confirming that the First Respondent was indeed responsible personally for the breaches so far alleged in support of the two applications to commit. Obviously, that has to be demonstrated beyond reasonable doubt. The first point he made was that the First Respondent must take responsibility for any posting or publication, even if he did not bring it about directly, if it was done on his behalf (e.g. by the Second Respondent).
The First Respondent was the registrant of the new websites set up after the interim order, to which I have referred as websites 7, 8 and 9. That emerges from Mr Wilson's first exhibit (at pages 181 to 194), which reproduces the results of his searches via "WHOIS".
It is surely an overwhelming inference that the various new websites that were set up, in the sequence described above, were intended to replace those of which complaint had originally been made (after they had been removed by the relevant registrar). There is no reason why these steps should have been taken by anyone other than the First Respondent or someone acting on his behalf. The new domain names were very close to those of the websites being replaced. In any event, the content was substantially similar (as I have described above).
It is also obvious, Counsel submits, from the content of some of the material, that it could only have come from the First Respondent. For example, he cites the new content added on or about 19 August (which constitutes the fourth breach identified above). It was fully quoted in paragraph 29 of Mr Wilson's first affidavit. The reference to litigation papers which had been served upon him also bears this out.
The same point can be made in relation to the new material set out at paragraph 46 of the same affidavit (to which I have already referred in connection with Ground 7). It is, in any event, signed by the First Respondent. My conclusion is consistent also with his warning in that new material to the effect that "… you will eventually work out that I can set up new websites faster than you can take them down".
Ground 4 relates to the involvement of the Second Respondent, who is said to have "aided and abetted" the First Respondent in committing his breaches of paragraph 7.1 of the final order (as reflected in grounds 1 and 2 for the second application). That would be an instance of criminal contempt and also, needless to say, has to be proved beyond reasonable doubt.
Mr Busuttil began by referring to the evidence that the Respondents are friends and associates. This is confirmed in the witness statement of the Claimant relied upon for the harassment proceedings (at paragraphs 179-180) and by Mr Wilson's first two affidavits (at paragraphs 82 and 11 respectively). (The Claimant later attested to the proposition on oath, for the purpose of these committal proceedings, in an affidavit of 4 December 2014.) What is more, the Second Respondent became directly involved in what has been called the campaign of harassment. The witnesses refer to unpleasant and threatening remarks posted by the Second Respondent on the First Respondent's original website.
The new websites to which I have referred as "website 7", "website 8", "website 10" and "website 11" each contained an entry to the following effect:
"UPDATE Due to ill health, Mr Danny Beach is no longer able to continue updating his websites. My name is Jim Bloomfield. I am the new owner of his websites including this one and [another is identified]. I am more familiar with Facebook and Twitter and will be seeking support and help to expose [name omitted] Borough Council".
I note that the later websites, to which the second committal application is directed, contain similar statements from the Second Respondent. He would seem clearly, therefore, to be associating himself with the "campaign" throughout.
Mr Busuttil has applied, in this context, for permission to rely on some later evidence, which has been served on the Respondents but post-dates the applications, pursuant to the provisions of CPR 81.28(1). It is not in my view necessary for this to be admitted in order to establish the allegations of contempt but, nonetheless, it would be appropriate to let the material be included simply to update the position and to complete the narrative. There is in my judgment no unfairness to either Respondent in doing so.
First, the Second Respondent wrote a letter to Warby J on 8 April, on behalf of the First Respondent, to ask that Mr Kordowski (formerly the Second Defendant) be permitted to act as his (i.e. the First Respondent's) McKenzie Friend. Enclosed with the letter were documents which could only have been obtained from the First Respondent. He also provided his own address (that used by the Claimant's solicitors for service) and his email address as [email protected].
Secondly, on 15 April, the Second Respondent posted a statement on one of the new websites in these terms: "Mr Daniel Charles Beach is still unwell and will be for some time, this article has been written on his behalf. Jimmy Bloomfield".
Against that background, Mr Busuttil submits that the evidence now before the court, to the effect that the Second Respondent aided the First Respondent in the breaches of paragraph 7.1 of the final order, is overwhelming. He relies specifically upon the following matters.
When the order of Stuart-Smith J was personally served on the Second Respondent, it was accompanied by a letter of 17 September 2014 inviting him to indicate to what extent it was true, as stated on various new websites, that he was the new owner. It also warned him of his potential liability for criminal contempt if he continued to assist the First Respondent. He did not reply. I accept that there was no obligation on him to do so, but in the absence of any reply or explanation, the inference that he was indeed involved, as suggested on the websites, becomes all the more convincing.
The Second Respondent's email address appeared as that of the registrant in respect of two of the new websites. That is confirmed by Mr Wilson's second exhibit (at pages 33 and 37). Those websites also contained the personal statement of the Second Respondent of 31 March 2015, concluding "Up Yours", and which I have quoted more fully above in connection with Ground 1 of the second application.
Again, Mr Busuttil seeks permission to admit later material, if thought necessary. Specifically, the Second Respondent posted on the evening of 15 April another statement on one of the new websites, which is said to be strikingly similar to the terms of the letter of 8 April which he had sent to Warby J. This was following the service upon him of the committal application and supporting documents. I do not consider it to be necessary, although its admission would hardly be unfair to the Second Respondent, as it represented his own defiant response to the court proceedings.
On 17 April, the Second Respondent posted a copy of the fire-setting video on a YouTube account in his own name. It clearly suggests that he shares the attitude of the First Respondent to the court proceedings, but it is hardly a necessary addition for the purpose of establishing that proposition. It does, however, go to support the decision to proceed in his absence, since it confirms his knowledge of the application and his intention not to attend.
That is also confirmed by his posting a copy of a letter addressed to him by the Claimant's solicitors, dated 20 April, on one of the new websites, together with his response to it. He made his position clear: "… I do not recognise the court's jurisdiction in this instance and will not be attending court nor will I be making any type of apology for my actions". Again, however, I do not regard it as necessary to admit this evidence on the main issue of his liability for contempt. That has been in my judgment well established by the evidence already served.
In conclusion, I am persuaded that both Respondents have been shown to be liable for contempt of court on the grounds alleged. When this judgment is handed down, it would be appropriate for them to be present and to make any submissions they wish (either through legal representatives or in person) on the matter of what penalties (if any) should be imposed. It will clearly be relevant for the court to take into account any medical evidence at that stage. |
Mr Justice Jay:
Introduction
By their Application Notice dated 30th September 2014, the Third, Fourth and Fifth Defendants seek a declaration that the Court does not have jurisdiction over them in relation to the claim brought by the Claimant for damages for personal injuries following an accident which occurred in Belgium on 10th March 2011.
The Claimant is a British citizen who had been working on a railway construction project in Antwerp since May 2010. He contends that his employer was the First Defendant, a company domiciled in England and Wales. The potential liability of the Third Defendant is no longer in issue, because the Claimant accepts that it is not a separate legal person under Belgian law. The focus of this application is the position of the Fourth and Fifth Defendants, being the Main Contractors responsible for the project and comprising a joint venture under Belgian law. These defendants are domiciled in Belgium, and it is convenient to refer to them in this judgment as "the Belgian Defendants".
It is the contention of the Belgian Defendants that this Court lacks jurisdiction over this claim, for the following reasons:
i) Article 6(1) of Regulation 44/2001 ("the Brussels Regulation") does not apply to the instant case, because there is no risk of irreconcilable judgments within its scope. It follows that the general rule provided by Article 2 applies, and that the Court is not properly seized of this claim.
ii) The claim relates to at least one "individual contract of employment" within the meaning of Article 18.1 of the Brussels Regulation. It follows that Article 19 applies, and that the claim against the Belgian Defendants could only have been brought in Belgium.
iii) The claim is in any event an impermissible attempt to circumvent Article 2 of the Brussels Convention, and should be precluded as an abuse of process.
The first and second issues raise questions of EU law which are not altogether straightforward. Their potential complexities emerged more strongly as the oral argument unfolded. Neither party sought to argue that I should be referring preliminary issues for the determination of the ECJ, and I am content to decide these questions myself.
The Claimant's Case
The Claimant contends that he suffered a severe crushing injury to his right foot when it was run over by a Bobcat machine being operated at the project by an employee of the Second Defendant, a French construction company. The machine was, it is said, owned and supplied by the Joint Venture. The immediate cause of the accident was the Claimant stumbling or tripping on debris that had been left on a ramp, leading to his falling to the ground. Notwithstanding the Claimant's warnings, the driver of the machine proceeded to move it in a forward direction, and the Claimant's right foot became trapped.
It is the Claimant's case that the Bobcat machine was defective in three respects. First, the Perspex front window of the machine was badly scratched so that the driver's visibility was impaired. The window had to be removed, but it was then replaced on the instructions of employees of the First Defendant and of the Belgian Defendants. Secondly, the machine suffered from an inherent design flaw in that the view of the driver was restricted by its 'arm'. Thirdly, the design of the machine was such that there was a significant 'blind spot'.
The claim against the First Defendant is brought in breach of statutory duty and negligence. The Claimant, in line with standard practice, has not sought to formulate his claim in contract, on the basis that his employer owed him an implied duty to provide and maintain a safe system of work. It is true that paragraph 1(d) of the Particulars of Claim avers the existence of a contract with the First Defendant, but this should be understood as providing the springboard or backdrop for the tortious duty. As Lord Hoffmann explained in Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310, no doubt drawing on the locus classicus of Wilsons & Clyde Coal Company Ltd v English [1938] AC 57:
"The liability of an employer to his employees for negligence, either direct or vicarious, is not a separate tort with its own rules. It is an aspect of the law of negligence. The relationship of employer and employee establishes the employee as a person to whom the employer owes a duty of care."
Thus, the duty of care arises because the parties are in an antecedent, proximate relationship, but the claim is not formulated as an incident of that relationship. A similar analysis applies to the claims for breach of the duties owed under regulations made pursuant to the Health and Safety at Work etc Act 1974: the existence of an employment relationship is the platform for the imposition of the duty (see, for example, regulation 3 of the Provision and Use of Work Equipment Regulations 1998 – although a relevant duty may arise in the absence of a contract of employment).
The claim against the Belgian Defendants is less familiar because it is based on relevant provisions of the Belgian Civil Code, and Belgian statute law. Analysing paragraph 8 of the Particulars of Claim, the first formulation of claim is that, if contrary to the Claimant's primary contention the driver of the Bobcat machine was in fact a servant or agent of the Belgian Defendants and not the Second Defendant, then the former would be liable under the vicarious liability provisions of the Code Civile, in particular Article 1384. The second formulation is that the machine was defective and inadequately maintained, and that the Claimant's workplace was unsafe. In this context reliance is placed on the general tortious and vicarious liability provisions of the Code Civile, in particular Articles 1382 and 1384. Thirdly, it is said that the Belgian Defendants are in breach of Article 5 of the Act of 4th August 1996 on well-being of workers in the performance of their work.
In the light of the submissions advanced by Mr Oliver Caplin for the Belgian Defendants, it is necessary to examine (i) the evidential basis for the claim against the First Defendant, in particular the assertion that the evidence fails to establish that the Claimant remained in its employment when the accident occurred, and (ii) whether the claims outlined in paragraph 9 above presuppose, or predicate, the existence of a contractual relationship between the Claimant and the Belgian Defendants. This examination provides the setting for the parties' submissions on the Brussels Regulation.
As for point (i), the parties are agreed that this is not the occasion to try the merits of the Claimant's case and that I should be applying a threshold test for determining the existence of a tenable case against the First Defendant as a company domiciled in England and Wales, but the parties are not quite agreed as to the precise formulation of that test. In my judgment, the correct formulation is that of a "good arguable case" flexibly applied to the issue under scrutiny: see, for example, Canada Trust Co v Stolenzberg (No 2) [1998] 1 WLR 547, at 555 and 558E; Masri v Consolidated Contractors International (UK) Ltd [2006] 1 WLR 830, at paragraph 14; and Et Plus SA v Welter [2006] 1 Ll. Rep 251, at paragraph 59 (iii). There was some discussion between Counsel as to whether Lord Hoffmann's formulation in Bols Distilleries BV v Superior Yacht Services Ltd [2007] 1 WLR 12 imposed a more onerous standard, namely "what the Claimant had to show was that it had a much better argument than the Defendants" [at paragraph 28]. Whereas I understand the force of the point made by Mr Richard Wilkinson for the Claimant that the issue in Bols was the scope of the Article 23 exception, I note that in paragraph 15 of Masri Sir Anthony Clarke MR endorsed in a broader context the "much better argument on the material available" formulation, which itself was derived from Canada Trust. In essence, this is another way of expressing the "good arguable case" criterion. In my view, both formulations must continue to be applied in a flexible manner, and in that regard the Claimant's burden of persuasion must be lower in the context of the overall merits of his case than in establishing the "jurisdictional facts" for the purposes of Article 6, in particular the existence of a contractual relationship between him and an entity domiciled in England and Wales.
The Claimant has been able to provide copies of contracts of employment with the First Defendant, covering the period 26th May to 31st May 2010, and 8th June 2010 to 30th June 2010. Pursuant to these contracts, the Claimant was "seconded to work under the direction and control" of the Joint Venture. The Claimant has also disclosed copies of his pay documentation from his employment with the First Defendant, including a P45 confirming the eventual termination of his employment in February 2012. Reliance is also placed on a Limosa Declaration Certificate which lends further support to the contention that the Claimant's employer remained the First Defendant. The Claimant's witness statement dated 10th January 2015 states that he worked at all material times for the First Defendant and not for any other entity.
Mr Caplin's strongest point is that the Claimant has not been able to produce a copy of an employment contract between him and the First Defendant covering the date of his accident. On the other hand, I consider that all the evidence points to the Claimant continuing to be employed by the First Defendant upon expiry of the second contract of employment in June 2010, assuming – against the Claimant – that no further contract or contracts were provided. The bundle includes a copy of a subcontract between the Joint Venture and the Global Tunnelling Experts BV, a Dutch company no doubt related to the First Defendant, but I have seen no evidence that this entity became the Claimant's employer. It may well have been responsible in practice for some of the operations on site in which the Claimant participated, but that is a separate matter. Overall, and applying the "good arguable case" test in its formulation most favourable to the Belgian Defendants, the Claimant has a much better argument than the Belgian Defendants that he was employed at all material times by a company domiciled in England and Wales.
The factual and legal merits of the Claimant's case against the First Defendants cannot be accurately assessed at this stage, and there is no requirement that they should be. This is a fairly typical personal injuries' case where much will depend on the credibility and reliability of the witness evidence, assessed against the legal background of a non-delegable duty of care. On the basis of the available evidence, I consider that there must be a real or serious issue to be tried (see, for example, paragraph 59(iii) of the Judgment of Gross J in Et Plus), and I did not understand Mr Caplin to be submitting to the contrary.
The claim against the Belgian Defendants raises somewhat different questions. Mr Caplin submitted that the claim was necessarily predicated on the existence of an implied contract between the Claimant and the Belgian Defendants because (i) the contracts of employment relied on by the Claimant stated in terms that he was seconded to the Joint Venture (and, if the Claimant remained employed by the First Defendant after June 2010, the secondment must have continued), and (ii) aspects of the pleaded case depend on the existence of a contract of employment.
Mr Caplin analysed paragraph 8 of the Particulars of Claim closely, and sought to persuade me that the relevant averments of breach of duty necessarily presupposed the existence of a contractual relationship. However, it is noteworthy that Mr Wilkinson's pleading does not rely on his client's secondment to the Belgian Defendants created by Clause 1b of the contract of employment. Instead, the principal claim (see paragraph 8(b) of the Particulars of Claim) is advanced in tort, under the relevant provisions of the Belgian Code Civile. Particulars (v) – (vii) may read like standard particulars of negligence in a case of employer's liability (c.f. paragraph 6(i) and (j) of the Particulars of Claim, directed against the First Defendant), but similar obligations would be owed by the Main Contactors to those lawfully and foreseeably working on the project, albeit in a contractual nexus with others.
Mr Caplin also submitted that, as a matter of law, a contractual relationship between the Claimant and the Belgian Defendants was imposed by Clause 1b of the contract of employment, and that the effects of this relationship could not be circumvented by guileful pleading. I invited the parties to undertake further research on this issue, and after the short adjournment I was provided with a number of authorities including Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Ltd [1947] AC 3, Interlink Express Parcels Ltd v Night Truckers Ltd [2001] EWCA Civ 360, and Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] QB 510. I accept the possibility that the Belgian Defendants might have exercised sufficient control over the Claimant's work as to constitute them his joint employers for present purposes, but in my judgment the preponderance of evidence and submission counts against that conclusion. I agree with Mr Wilkinson that the Belgian Defendants do not advance a positive case in that regard, and in any event the level of evidential inquiry undertaken by those advising the Belgian Defendants fails to establish that the requisite degree of control existed. No witness statement to that effect has been filed. In short, not merely does the existence of Global Tunnelling Experts BV complicate the position, I cannot properly conclude on the available evidence, applying the appropriate standard, that control of the Claimant's work, as opposed to responsibility for the Bobcat machine, resided with the Belgian Defendants.
Mr Caplin advanced a much stronger argument on paragraph 8(c) of the Particulars of Claim, submitting that the Claimant's reliance on the Act of 4th August 1996 did presuppose a contractual relationship between him and the Belgian Defendants. Mr Caplin examined Article 2 of the Belgian statute, and submitted that its effect, read in conjunction with Article 5, was that the Claimant could only succeed under the latter provision if some sort of contract existed – the fact that none has been pleaded is irrelevant. Unfortunately, the original French text of the 1996 Act is not available, and I have difficulty in construing Article 2§1(1)(a) in particular. Furthermore, the parties have not placed before me the Council's Framework Directive 89/391/EEC which the Belgian statute was intended to transpose. On the one hand, it is arguable that Article 2 includes those with whom the employer is not in contractual nexus; on the other, some of the provisions of Article 5 (in particular, (j)-(l)) do appear to presuppose the existence of a standard employer/employee relationship. On the available material, it is difficult to reach any satisfactory conclusion on this issue: where that leads me will require careful consideration when I come to examine Mr Caplin's second submission.
Article 6 of the Brussels Regulation: the Risk of Irreconcilable Judgments
The general rule under Article 2 of the Brussels Regulation is that persons domiciled in a Member State must be sued in the courts of that Member State. Article 6 constitutes an exception to that general rule, and must be strictly interpreted by the national courts: see Kalfelis v Schroder (Case 189/87), paragraphs 8 and 12 (applying the Brussels Convention, which was in almost identical terms).
The Claimant is unable to invoke to his advantage the first of the "special jurisdiction" provisions which is found in Article 5 of the Brussels Regulation, but he places reliance on Article 6, which provides:
"A person domiciled in a Member State may also be sued:
1. where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings;…"
It is convenient to consider the jurisprudence emanating from the European Court of Justice on Article 6 before addressing domestic decisions.
In Réunion Européenne SA v Spliethoff's Bevrachtingskantoor BV [Case C-51/97, Judgment 27th October 1998], the ECJ was primarily concerned with the construction and application of Article 5 of the Brussels Regulation, in particular the relationship between the claim in contract (Article 5.1) and in tort (Article 5.3). In the circumstances which arose, the ECJ's observations on Article 6 were not necessary to its decision. The ECJ's reasoning on the Article 6 issue was brief (see paragraph 50):
"It follows that two claims in one action for compensation, directed against different defendants and based in one instance on contractual liability and in the other on liability in tort or delict cannot be regarded as connected".
Although the facts giving rise to the separate liabilities were the same, that the causes of action differed (as they do in the instant case) meant that the special rule laid down in Article 6 did not apply. Plainly, if paragraph 50 of Réunion Européenne accurately represented the law for present purposes, the Claimant would be in difficulty.
In Roche Nederland BV v Primus [Case C-539/03, Judgment 13th July 2006], the issue was whether Article 6 of the Brussels Convention applied to European patent infringement proceedings involving a number of companies established in various Member States in respect of acts committed there, where those companies – belonging to the same group – acted pursuant to a tortious conspiracy between them. Although there were common rules laid down in the Munich Convention on the grant of European Patents, such patents continued to be governed by the national legislation of each of the Contracting States which had granted them. Advocate General Léger did not consider that Article 6 applied, taking a very narrow view of the concept of "irreconcilable judgments":
"…however divergent such decisions may be, they are not necessarily mutually irreconcilable or incompatible. First, as the defendants concerned by each of these decisions are different, the decisions may be enforced separately and simultaneously for each of them. Secondly, the legal consequences of these decisions are not mutually exclusive, because in this scenario each of the courts seized rules only on the alleged infringements of the rights of the patent holder in each of the Contracting States over which those courts have jurisdiction, so that the legal consequences of each of these decisions cover a different territory" (paragraph 108)
At paragraph 113 of his Opinion, the Advocate General explained the circumstances in which Article 6 would apply:
"…For there to be a conflict between decisions, I believe that such a divergence must arise in the context of the same situation of law and fact. It is only in that case that one can imagine there to be a conflict between decisions, since courts have reached diverging or even diametrically opposed judgments on the basis of the same situation of law and fact."
The ECJ agreed with paragraph 113 of the Advocate General's Opinion, and concluded:
"27. However, in the situation referred to by the national court in its first question referred for a preliminary ruling, that is in the case of European patent infringement proceedings involving a number of companies established in various Contracting States in respect of acts committed in one or more of those States, the existence of the same situation of fact cannot be inferred, since the defendants are different and the infringements they are accused of, committed in different Contracting States, are not the same.
28. Furthermore, although the Munich Convention lays down common rules … such a patent continues to be governed by the national law of each of the Contracting States for which it has been granted.
…
31. It follows that … any divergences between the decisions given by the courts concerned would not arise in the context of the same legal situation.
…
33. In these circumstances, even if the broadest interpretation of 'irreconcilable' judgments, in the sense of contradictory, were accepted as the criterion for the existence of the connection required for the application of Article 6(1) of the Brussels Convention, it is clear that such a connection could not be established between actions for infringements of the same European patent where each action was brought against a company established in a different Contracting State in respect of acts which it had committed in that State.
34. That finding is not called into question even in the situation referred to by the national court in its second question, that is where defendant companies, which belong to the same group, have acted in an identical or similar manner in accordance with a common policy elaborated by one of them, so that the factual situation would be the same.
35. The fact remains that the legal situation would not be the same … and therefore there would be no risk, even in such a situation, of contradictory decisions."
The ECJ does not operate a system of precedent, but the scope of Roche Nederland needs properly to be understood. Given the way in which the second question to it was expressed, it is not wholly clear why the Court thought it necessary at paragraph 27 of its Judgment to proceed on the footing that it could not be inferred that the factual situation underpinning the claims was the same. At paragraph 34 the ECJ appears to proceed on the alternative basis that the factual situation was (or, at least, should be presupposed to be) the same. That aside, and assuming that the Court was considering two different potential scenarios, it does appear that it was holding that Article 6(1) cannot be satisfied if either the factual situation or the legal situation are not the same. This extremely restrictive approach is consistent with Réunion Européenne (see paragraph 22 above).
In Freeport plc v Arnoldsson [2008] QB 634, claims arising out of the same factual matrix were brought in Sweden against two linked companies, founded on different causes of action. At paragraph 40 of its Judgment, the ECJ noted what it had pointed out in Roche Nederland about the need for a "context of the same situation of law and fact". However, paragraph 41 of its Judgment appears to represent a slight dilution of this principle:
"It is for the national court to assess whether there is a connection between the different claims brought before it, that is to say, a risk of irreconcilable judgments if those claims were determined separately and, in that regard, to take account of all the necessary factors in the case file, which may, if appropriate yet without its being necessary for the assessment, lead it to take into consideration the legal bases of the actions brought before that court."
At paragraph 47 of its Judgment, the ECJ made explicit that the existence of different legal bases of claim did not necessarily preclude the application of Article 6. In reaching this conclusion, the ECJ did not appear to believe that it was revising Roche Nederland, although it did accept that Réunion Européenne should be understood as a case about Article 5(3) of the Brussels Convention, and not Article 6(1) of the Brussels Regulation, because the action was brought before a court in a Member State where none of the defendants to the main proceedings was domiciled (see paragraph 44).
The ECJ in Freeport did not determine whether a sufficient factual nexus existed between the claims against the two companies, because this was a matter for the national court to assess, having regard to "all the necessary factors in the court file".
In Painer v Standard Verlags Gmbh [Case C-145/10, Judgment 1st December 2011], the ECJ was concerned with breach of copyright claims against a number of defendants. The infringements alleged were "substantially identical", but it was unclear whether a tortious conspiracy was alleged to exist between them. It was not a precondition to the application of Article 6(1) that the claims have the same legal basis, but the ECJ's interpretation of paragraph 47 of Freeport was that this was subject to the proviso "that it was foreseeable by the defendants that they might be sued in the Member State where at least one of them is domiciled" (see paragraph 81 of the ECJ's Judgment in Painer). Furthermore:
"82. That reasoning is stronger if, as in the main proceedings, the national laws on which the actions against the various defendants are based are, in the referring court's view, substantially identical.
83. It is, in addition, for the referring court to assess, in the light of all the elements of the case, whether there is a connection between the different claims brought before it, that is to say a risk of irreconcilable judgments if those claims were determined separately. For that purpose, the fact that defendants against whom a copyright holder alleges substantially identical infringements of his copyright did or did not act independently may be relevant."
Finally in the line of ECJ decisions comes Solvay SA v Honeywell Fluorine Products Europe BV and another [Case C-166/10, Judgment 12th July 2012], which appears to have borne close factual similarities with Roche Nederland, save that two of the defendant companies were domiciled in Belgium, and the third in the Netherlands. At paragraphs 25 and 26 of its Judgment, the ECJ summarised the conclusions of the Court in Roche Nederland, but at paragraph 27 appeared to envisage the factual scenario presently under consideration as being different:
"It follows from the specific features of a case such as that in the main proceedings that potential divergences in the outcome of the proceedings are likely to arise in the same situation of fact and law, so that it is possible that they will culminate in irreconcilable judgments resulting from separate proceedings."
This was because, as was made clear at paragraphs 28 and 29 of the Judgment, the infringements at issue were alleged to have occurred in relation to the same products in the same Member States. Thus, even applying the more stringent approach to Article 6(1) disclosed in Roche Nederland, the proceedings arose "in the same situation of fact and law".
Turning now to the domestic authorities, the first I propose to address is the decision of the Court of Appeal in Casio Computer Co Ltd v Sayo and Others [2001] EWCA Civ 661. In that case, a tortious conspiracy was alleged against a number of defendants, and a breach of constructive trust against one alone. The main issue in the appeal concerned the ambit of Article 5(3) of the Brussels Convention (the Brussels Regulation was yet to come into force), but an issue also arose on Article 6(1). The Court of Appeal rejected the Appellant's submission based on Réeunion Européenne that the existence of different causes of action precluded reliance on Article 6(1) (see paragraph 32 of the Judgment of Tuckey LJ). Further, the Court of Appeal considered that the decision of the House of Lords in Sarrio v Kuwait Investment Authority [1999] 1 AC 32 was relevant to the Article 6(1) question, and said this:
"This judgment [sc. Sarrio] makes it clear that the court is not merely concerned with the risk of conflicting decisions giving rise to mutually exclusive legal consequences. It also makes it clear that the court will be concerned with conflicting decisions on questions of fact as well as law…" (paragraph 35)
and later:
"It seems to me that the judge's approach in this case was entirely consistent with the approach which I have considered above. He did not … simply identify a common question of fact or law and say that Article 6(1) applied. He considered the importance of what he described as the 'upstream facts on legal issues' in terms of the end result and decided that if different courts reached different conclusions as to the propriety of Tsuru's conduct in particular, there was a real risk that for this reason different courts could reach different conclusions as to the liability of Kaiser and Patel." (see paragraph 36)
In Watson v First Choice Holidays and Flights Ltd [2001] 2 Ll. Rep 339, the Claimant sued a tour operator and the owner/manager of the resort for personal injuries sustained in consequence of the actions of a security guard who chased him off the site. The claim against the tour operator was in breach of contract (by the terms of its contract with the Claimant, liability was accepted for the acts and omissions of sub-contractors), and that against the Spanish owner/manager was in tort, founded on direct and vicarious liability. The Court of Appeal extensively analysed the decision of the ECJ in Réunion Européenne, in particular paragraph 50, and concluded that the latter's discussion of Article 6(1) was not strictly necessary to the result. Although the Court of Appeal ultimately referred a number of questions to the ECJ for preliminary ruling, and the case was withdrawn before judicial determination, paragraphs 29 and 31 of its Judgment are relied on by the Claimant in the instant case:
"In terms of facts and of law, there appears to be a substantial connection between the claims by Mr Watson against First Choice and against Aparta. The facts to be investigated are the same, apart from the addition of the contract between Mr Watson and First Choice. The liability of First Choice, as alleged, is based on the fault of Aparta. Moreover, the contractual liability of a tour operator in these circumstances is bound to extend to cover the consequences of events which would give rise to tortious or delictual liability on the part of another, because of the requirements of [an EU Directive]
…
Thus, it is clearly likely that there will be claims arising from package holidays brought against tour operators in contract as a result of the negligent supply of holiday services for which a foreign supplier is responsible. That supplier's fault is likely to give rise to a direct claim in tort or delict by the consumer, in addition to the contractual claim by the consumer against the tour operator … the factual basis of all these claims will be the same. If they cannot be brought in the same jurisdiction there is clearly a risk of irreconcilable, or at the very least contradictory, results in different cases."
In Et Plus SA v Welter [2006] 1 Ll Rep 251, Gross J considered claims brought variously in breach of contract, procuring breach of contract, unlawful interference with business, and tortious conspiracy, against a number of defendants on broadly similar facts. At paragraphs 57-59 of his Judgment, Gross J explained his approach to Article 6(1) of the Brussels Regulation, and considered that the test was that laid down in Kalfelis. To the extent that Réunion Européenne suggested a narrower test, Gross J doubted it. Applying the appropriate test to the facts of the case before him, Gross J concluded that, although there was not an exact overlap between the factual allegations raised, there was "a common core allegation" of tortious conspiracy which readily satisfied the Kalfelis test. Overall, Gross J applied what he called a broad common sense approach which avoided an over-sophisticated analysis.
Finally, in Gard Marine and Energy Ltd v Tunnicliffe [2011] Bus LR 839, the Court of Appeal considered the application of Article 6(1) of the Brussels Regulation to a claim involving the construction of a reinsurance contract and defendants domiciled respectively in England and Wales, and in Switzerland. On my understanding of his Judgment, Thomas LJ did not accept that the decision of the ECJ in Kalfelis had been modified by its later decision in Roche Nederland (see paragraphs 25-32). The ratio of Gard Marine is set out at paragraph 35 of the Judgment of Thomas LJ, as follows:
"In the light of the judgment of the ECJ and in particular the Freeport case, I consider that the court should approach the matter in the light of the policy of the Convention that jurisdiction is generally based on the defendant's domicile. In seeing whether an exception to this general rule exists in a given case, the court must assess the connection between the claims to see whether there is a risk of irreconcilable judgments arising out of separate proceedings such that there may be a divergence in the outcome where there is "the same situation in law and fact". In so doing, it is necessary for a national court to look at all the factors. Beyond this, I do not think it desirable to go in the light of the established case law. It is not necessary to discuss or decide the precise meaning of "irreconcilable judgments" to decide this case … or enter into a wider debate on possible problematic results that might arise in practice."
Mr Caplin drew my attention to Thomas LJ's observation that had the proper law of the relevant contractual document constituting the relationship with the Swiss company been Swiss law, then no risk of divergence would have arisen, because the proper law of the main agreement was subject to English law. As Thomas LJ put it at paragraph 36 of his judgment, "construction of the slip under English law would not necessarily be contradictory to or irreconcilable with a different construction under Swiss law". However, the issue in Gard Marine was confined to the true construction of a reinsurance contract, and in such circumstances the application of different legal regimes would, without more, obviate the risk of irreconcilable judgments. There were no factual issues for the court to determine; the contractual documentation could not be gainsaid. Accordingly, I do not draw out of that authority the wider proposition that it is sufficient for Mr Caplin's purposes in the instant case, where factual issues abound, to demonstrate that different legal regimes govern the claim against the First Defendant on the one hand, and the Belgian Defendants on the other.
Equipped with these authorities, Mr Caplin advanced a number of submissions. He relied heavily on the decision of the ECJ in Roche Nederland as articulating principles of general application. He submitted that it was sufficient for his purposes that English law governed the claim against the First Defendant, and Belgian law the claim against the Belgian Defendants; and even if it was not, the existence of different legal regimes constituted an additional reason for upholding his submission on divergence. Further, although there may be some factual overlap between these claims, a number of allegations are not common to the two groups of defendants. For example, the allegations advanced under paragraph 6(a)-(c) of the Particulars of Claim are confined to the First Defendant, and those under paragraphs 8(b)(v)-(vi), and (c), are limited to the Belgian Defendants. It is not being contended by the Claimant that there is any relevant legal relationship between the Defendants, whether arising in contract, tort or by operation of law, which would make the liability of one Defendant, or pair of Defendants, contingent on the liability of another. The position might be different if the First Defendant were vicariously liable for the acts or omissions of the Belgian Defendants, or if the Claimant's case were founded on tortious conspiracy, alternatively some other basis for a joint and several liability.
Mr Wilkinson's submission was that, in order to establish a risk of "irreconcilable judgments", it was sufficient for the Claimant to show a risk of conflicting judgments on the facts or on the law. As he put the matter at paragraph 12 of his Skeleton Argument:
"This is self-evidently a case in which there would be a risk of irreconcilable judgments if matters proceeded to trial on liability and quantum in both England and Belgium. As liability is in dispute the primary task at trial will be to determine factually how the accident occurred. Different tribunals could reach fundamentally different conclusions on this central issue. The trial judge(s) will need to determine the roles and responsibilities of the different parties to the proceedings. Such findings will inevitably shape the determination of the liability issues …"
In my judgment, it is not possible to articulate a composite set of principles which unify, or harmonise, the decisions of the ECJ in this area, because they are not altogether consistent with one another. The decision which I find to be the most problematic is Roche Nederland, because on one reading of that case a Claimant seeking to rely on Article 6(1) in order to remove his claim from the general rule of Article 2 would fail if the "legal situation" is different, in other words if the causes of action are governed by different national laws. However, I consider that the ECJ has resiled from this strict line in Freeport: see paragraph 47 in particular.
In situations where the outcome is capable of turning on a point of law (e.g. Gard Marine), the application of different legal regimes will mean that no risk of "irreconcilable judgments" arises. However, in cases which are heavily fact-dependant, and which may also turn on questions of law, the ambit of inquiry for Article 6(1) purposes must be much broader: it must embrace "all the necessary factors in the case file" (per paragraph 41 of Freeport), accepting the element of circularity inherent in the use of the epithet "necessary". As in many legal situations, this is a domain where context is all. In short, I am guided by the broad common sense approach, eschewing over-sophisticated analysis, enjoined by Thomas LJ in Gard Marine, approving Gross J in Et Plus (see paragraph 24 of Gard Marine).
The context here is the relatively familiar one of a multi-party claim for personal injuries where the Claimant's principal target is his employer, by whom a non-delegable duty is owed, and his secondary target is the entity responsible for the machine which allegedly caused his accident. The employer is not of course vicariously liable for the employees of the Belgian Defendants and Global Tunnelling Experts BV, but it is directly liable in respect of matters relating to the system of work which it is incapable of delegating. In these circumstances, it seem clear that any court trying this case, whether against the First Defendant or the Belgian Defendants, would have to resolve the following issues of fact, namely:
i) exactly how the accident happened;
ii) the state of the machine, and who knew or ought to have known about it;
iii) the condition of the ramp and surrounding area, and who knew or ought to have known about it;
iv) the system for maintaining the machine and the workplace in general;
v) the overall system of supervision, who gave instructions to whom etc;
vi) the possible contributory negligence of the Claimant.
Although witnesses would doubtless have to be called for the First Defendant, the Belgian Defendants and the Dutch subcontractor, the resolution of these issues of fact is, or should be, common to the causes of action advanced against both sets of Defendants.
Mr Caplin submits that the liability of one Defendant, or pair of Defendants, does not necessarily depend on the liability of the other. I would agree as far as this goes, placing appropriate emphasis on the adverb "necessarily". It is possible to envisage permutations or combinations of factual findings which might lead to liability being established against one Defendant, or pair of Defendants, and not against the other. However, in my judgment that is not particularly likely, and in any event the issue for me is whether there is a risk of "irreconcilable judgments", not a certainty. Adapting a broad common sense approach, it seems to me that the following outcomes are within the bounds of practical possibility:
i) the accident was caused by systemic failings, either in the design or maintenance of the Bobcat machine, and/or in the workplace as a whole (in which circumstances both sets of Defendants would probably be found liable);
ii) the accident was caused by the one-off, adventitious negligence of the driver of the machine, or the Claimant himself (in which circumstances, subject to paragraph 8(a) of the Particulars of Claim, neither Defendant would be found liable);
iii) the accident was caused by specific acts or omissions of the Belgian Defendants in one or more of the respects pleaded against them but not the First Defendant (in which circumstances the First Defendant may conceivably have an argument on liability – this scenario is possible but unlikely);
iv) the accident was caused by specific acts or omissions of the First Defendant in one or more of the respects pleaded against it but not the Belgian Defendants (in which circumstances the Belgian Defendants would not be found liable – this scenario appears far-fetched);
v) The Claimant's case is factually untrue or incorrect, in which circumstances none of the Defendants would be found liable.
Mr Caplin submitted, in line with paragraph 83 of Painer, that it is a material consideration that the Defendants are alleged to be acting independently of each other. I agree that this is a factor in his client's favour, but it is far from being conclusive.
I do not accept Mr Wilkinson's submission that the First Defendant's reliance on the Civil Liability (Contribution) Act 1978 as against the Belgian Defendants advances his case any distance. The invocation of a statutory right of contribution as between Defendants cannot alter the legal status of the Claimant's separate, pleaded case against each of the Defendants. On the other hand, for the reasons I have already given, the fact that the principal claim against the Belgian Defendants depends on Articles 1382 and 1384 of the Belgian Code Civile is not a factor which particularly avails Mr Caplin in the circumstances of this case. That a duty of care, and consequent liability, may be owed by a main contractor to a subcontractor's servant or agents, either directly or vicariously, is not in any event a particularly surprising proposition, being not materially different from the position obtaining in this jurisdiction (see, in this context, paragraph 82 of Painer). I should not be understood as saying that the position under these provisions of the Code Civile mirrors the common law, but I would be surprised if there were major divergences in the context of this case.
In his Skeleton Argument but not his oral submissions, Mr Caplin contended that the Belgian Defendants could not have predicted that a claim against the First Defendant could have proceeded in the English Courts, thereby forming the anchor to the claim to which they now find themselves attached. This submission is based on paragraph 81 of Painer (see paragraph 29 above), and the arbitration clause located in the contract of employment between the Claimant and the First Defendant. I am not much attracted by this submission. Irrespective of the precise effect of the arbitration clause (and whether it applies to claims for damages for personal injuries), I cannot agree that private arrangements between contracting parties could have any logical bearing on the Belgian Defendants' foresight, or lack of it.
In my judgment, having regard to all the necessary factors drawn to my attention by the parties to this application, there is a risk of irreconcilable judgments arising from separate proceedings, and Mr Wilkinson has persuaded me that Article 6(1) of the Brussels Regulation applies to the instant case.
The Application of Articles 18-20 of the Brussels Regulation
Section 5 of the Brussels Regulation, containing Articles 18-20, provides as follows:
"Jurisdiction over individual contracts of employment
Article 18
1. In matters relating to individual contracts of employment, jurisdiction shall be determined by this section, without prejudice to Article 4 and point 5 of Article 5.
…
Article 19
An employer domiciled in a Member State may be sued:
1. in the courts of the Member State where he is domiciled; or
2. in another Member State:
(a) in the courts for the place where the employee habitually carries out his work or in the courts for the last place where he did so, or
(b) if the employee does not or did not habitually carry out his work in any one country, in the courts for the place where the business which engaged the employee is or was situated.
Article 20
1. An employer may bring proceedings only in the courts of the Member State in which the employee is domiciled.
2. The provisions of the Section shall not affect the right to bring a counter-claim in the court in which, in accordance with this Section, the original claim is pending."
Mr Caplin submitted that (a) the present claim relates to an individual contract of employment, being either the Claimant's contract with the First Defendant and/or the Claimant's implied contract with the Belgian Defendants, (b) the provisions of Section 5 of the Brussels Regulation lay down an exhaustive jurisdictional regime which oust both Article 2 and Article 6, and (c) it is sufficient for the purposes of point (b) that any part of the Claimant's pleaded case relates to, in the sense of presupposes the existence of, an individual contract of employment. For the purposes of all these submissions, the Court must examine the substance of the matter rather than the exigencies or happenstances of the Claimant's pleadings.
Mr Caplin placed heavy reliance on the decision of the ECJ in Glaxosmithkline v Rouard [2008] ICR 1375. There, the Claimant sought damages for wrongful dismissal in France against a French company and a UK company, and for the purposes of his second claim sought to rely on Article 6(1) of the Brussels Regulation. The ECJ held that Article 6(1) did not apply because Section 5 of the Brussels Regulation laid down a self-contained, autonomous code for disputes relating to individual contracts of employment. This was a rule of special procedure which fell to be interpreted strictly and narrowly (see paragraphs 27 and 28 of the Judgment of the ECJ). Furthermore, if Article 6(1) could be used in these circumstances, then employees would be deprived of the protections clearly afforded by Article 20.
Mr Caplin also drew to my attention the decision of the Court of Appeal in Alfa Laval Tumba AB v Separator Spares International Ltd [2013] 1 WLR 1110. In that case it was held that claims for misuse of confidential information and breach of contract "related to" an individual contract of employment even if they happened to be formulated in tort or delict rather than in contract. Longmore LJ observed that the substance of the matter could not be circumvented or emasculated by the label attached to a pleading (see paragraphs 23 and 25 of his Judgment, and paragraph 42 of Davis LJ in similar vein).
Mr Wilkinson submitted that (a) the present case is not concerned with an individual contract of employment, in the sense of the sort of employment dispute exemplified by Glaxosmithkline; (b) it is not sufficient for the Belgian Defendants' purposes to demonstrate the existence of a contract between the Claimant and the First Defendant: what is required is the existence of a contract between the Claimant and the Belgian Defendants, and none exists; and (c) to the extent that paragraph 8(c) of the Particulars of Claim may presuppose the existence of a relevant contract then, without prejudice to the foregoing matters, a blue pencil may be put through it.
I do not doubt that Section 5 of the Brussels Regulation establishes a self-contained, exhaustive regime for "matters relating to an individual contract of employment". Mr Caplin was unable to show me a case where either the ECJ or the domestic court has held that a claim for personal injuries brought against an employer is caught by Section 5. The authorities he has relied on are clear examples of employment disputes. Accordingly, and depending on one's point of view, Mr Caplin's case is either novel (but none the worse for that), or seeks to lure me into heterodoxy (and should be treated with circumspection).
In the absence of directly applicable authority, Mr Caplin is forced back to first principles. He points out, entirely correctly, that the present case could have been brought in contract, for breach of implied terms, rather than in the tort of negligence. He would have to accept that it is entirely conventional for those advising Claimants to plead negligence rather than breach of contract, and that the sort of pleading "game" stigmatised by Longmore LJ could not fairly be said to apply to the present case. Further, Mr Caplin draws my attention to Civil Jurisdiction and Judgments, 5th Edition, by Professor Adrian Briggs, where at page 157 the following passage appears:
"Whether a matter relates to an individual contract of employment only if it is founded on the contract is uncertain. There seems to be no reason why a claim formulated as one in tort but which arises from the contractual relationship – based on an allegation that the employer has breached his statutory duty to maintain a safe system of work, for example – would not fall within the Section, and every reason why it should fall within it. "
Professor Briggs does not set out the reasons why such claims should fall within Section 5, but it may be possible to supply at least two. First, the rubric – "matters relating to individual contracts of employment" – should be given a purposive, EU-wide, autonomous meaning. Secondly, as the ECJ explained in Glaxosmithkline, the approach to Articles 18 and 19 must apply equally to Article 20.
Mr Caplin also referred to Employment Contracts and Private International Law by Dr Louise Merrett, Senior Lecturer at the University of Cambridge. At pages 102 and 103 of her work Dr Merrett points out that Articles 5(1) and 5(3) are mutually exclusive provisions, and that a claim which relates to a contract cannot simultaneously be a claim in tort or delict. Thus:
"This would suggest that any claim for breach of an express or implied term of the employment contract and a claim for tort arising from that contract, not only falls within Section 5, but also can only be brought under Section 5."
Dr Merrett suggests that a claim based on a specific regulation made under the Health and Safety at Work etc Act 1974 might be different, because it does not depend on the contract of employment.
In the absence of authority from the ECJ, the point is not easy to resolve, not least because the policy and objects of Section 5 of the Brussels Regulation are not altogether clear. It seems obvious that a special regime should apply to employment disputes, but less patent that the same regime should apply to personal injury claims, particularly in circumstances where the application of Articles 18-20 to such claims renders reliance on Article 6(1) impossible. I see the partial force of the argument that employees need to be protected (see Article 20), but in this particular context there will be only rare situations in which employers will be suing their employees in relation to personal injuries, or anything analogous.
I am just about persuaded by the weight of academic opinion which Mr Caplin has brought to bear in support of his submissions. Not without a measure of hesitation, I conclude that Articles 18-20 of the Brussels Regulation apply to claims for damages in personal injuries where a relevant contract of employment exists.
However, I cannot accept Mr Caplin's submission that it is sufficient for his purposes that a contract of employment exists between the Claimant and the First Defendant. In my judgment, he needs to satisfy me to the requisite standard that a contract of employment exists between the Claimant and the Belgian Defendants, and for the reasons previously explained I am not so satisfied. During the course of oral argument I raised with Counsel the question of the application of evidential/legal burden of proof, and gave the parties the opportunity to revert to me by way of further submissions in writing following the close of oral argument. Only Mr Wilkinson has availed himself of the opportunity, but his additional submissions do not materially add to his oral argument. Mr Caplin submitted that it was incumbent on the Claimant to satisfy the Court that it possessed jurisdiction over the Belgian Defendants in all material respects, but I cannot accept that the Claimant has to shoulder any burden of proof to the effect that his case does not fall within Section 5. That would be to require him to prove a negative.
Ultimately, though, the resolution of this point probably does not turn on the application of any burden of proof, but rather on the correct legal analysis of Section 5 in the particular circumstances of this instant case. Insofar as Article 19 applies to the present case, it enables the Claimant to sue the First Defendant in the courts of its domicile. Articles 18-20 have no application to the claim against the Belgian Defendants, because no relevant contract of employment exists. As I have said, insofar as any contract of employment exists, it permits, rather than precludes, a claim in this jurisdiction. I fail to see how Section 5 should operate to prevent the Claimant from relying on Article 6 in circumstances where the claim against the Belgian Defendants does not fall within that section at all. To hold otherwise would be to re-write the relevant Articles in a fashion which is not mandated by any teleological approach to them.
It follows that paragraphs 8(a) and 8(b) of the Particulars of Claim plead matters which do not relate to any relevant individual contract of employment. I have already expressed my reservations about paragraph 8(c), and Mr Wilkinson indicated in argument that, to the extent that the 1996 Act appeared to be founded on a contractual relationship, this Court could effectively strike out that part of his pleading. I have considered whether this would be an appropriate course, not least because Mr Wilkinson is completely innocent of the sort of pleading "game" criticised by Longmore LJ in Alfa Laval and, not through any deliberate policy, has failed to plead any relevant facts and matters which amount to an averment of a relevant contract between the Claimant and the Belgian Defendants. Ultimately, however, I remain agnostic as to whether paragraph 8(c) of the Particulars of Claim presupposes a contractual relationship (see paragraph 18 above). In those circumstances, I conclude that Mr Caplin has failed to persuade me that paragraph 8(c) brings the claim within the ambit of Section 5 of the Brussels Regulation. The justice of the matter is met by my making it clear that it will not be open to the Claimant at trial to amend his case and/or seek to argue that the 1996 Act applies because an implied contract existed with the Belgian Defendants.
Mr Caplin also submitted that I should hold that the Claimant has abused the process of the Court by impleading the Belgian Defendants in these proceedings. I fail to understand how that submission might operate as a freestanding objection to this claim, assuming that I should find myself in disagreement with Mr Caplin elsewhere. The ECJ in Freeport held, at paragraph 54, that if Article 6(1) was properly engaged, then it was not incumbent on the Claimant to demonstrate in addition that the claim was not brought with the sole object of ousting the court of domicile. Put another way, if the law permits Mr Wilkinson to rely on Article 6(1) of the Brussels Regulation, then he is entitled (without more) to do so.
Conclusion
The Belgian Defendants' application must be dismissed. |
Mr Justice Dingemans:
This is an appeal from the order of Master Eastman dated 20th December 2013 by which he ordered that Pammela Linton ("Ms Linton") should be joined as "the Defendant also known as Patricia Carpenter" in place of the Defendant who was described on the Particulars of Claim as "Persons Unknown (Patricia Carpenter/[email protected])". The appeal was listed to be heard with fresh evidence over the course of 2 days. The appeal raises interesting procedural points about: (1) whether it is permissible to change the name of a party after default judgment has been obtained; and (2) the procedure to be adopted when the party to be joined disputes the factual basis on which that party is being joined.
The order dated 20th December 2013 was made on the basis that Master Eastman was satisfied that Ms Linton was in fact the person who had called herself Patricia Carpenter. Patricia Carpenter had published an online petition entitled "St John's Prep School: Mrs Tardios resign as head of St John's Prep School …" ("the petition") from about 31st May 2013. The petition, the contents of which it is not necessary to repeat for the purposes of this judgment, made various allegations against Calliope Tardios ("Mrs Tardios"), the headmistress of St John's Preparatory Senior School Limited ("the school"). The petition was on a website hosted by "change.org", who removed the petition on about 2nd December 2013.
The procedural background up to the hearing before Master Eastman
After publication of the petition the school emailed Patricia Carpenter using an email address provided on the petition and complained about the publication. Patricia Carpenter responded by email dated 10th June 2013 stating that she believed that the petition was true. Breeze & Wyles Solicitors LLP, acting on behalf of the Claimants, wrote to Patricia Carpenter by emailed letter dated 18 June 2013 complaining about the online petition.
On 10th June 2013 a Norwich Pharmacal order was made by Collins J. against change.org to enable the Claimants to attempt to identify the person responsible for the publication of the petition. By Claim Form dated 10 June 2013 Mrs Tardios and the school brought a claim for damages for libel in respect of the publication of the petition. Permission to serve the Claim Form by email to [email protected] was granted on 1st July 2013. The Particulars of Claim were served in this manner on 9th July 2013.
On 22nd July 2013 an acknowledgment of service was served giving Patricia Carpenter's address for service as: Tariro Self Help Project, c/o Father Francis Connor, 414 22nd Crescent, Glenview 1, Harare, Zimbabwe. Judgment in default of defence was obtained on 21st August 2013. An application to set aside the default judgment was made by Patricia Carpenter on 4th October 2013. This was dismissed as totally without merit by Master Eastman at a hearing dated 22nd November 2013 at which Patricia Carpenter did not appear and at which she was not represented.
On 6th December 2013 Ms Linton received a letter by email from the Claimants' solicitors stating that they believed that Ms Linton was responsible for the publications and requiring this to be admitted failing which an application to add Ms Linton would be made. Ms Linton rejected the allegation, and Ms Linton was served with an application returnable on 20th December 2013. Ms Linton asked for the proceedings to be adjourned because she had not got legal representation. An adjournment was refused and the hearing went ahead.
The judgment of Master Eastman
Master Eastman identified two issues: first whether it was fair to join Ms Linton; and secondly whether he was satisfied on the balance of probabilities that Ms Linton was the person behind the Patricia Carpenter petition. Master Eastman then went on to find that he was satisfied, on the balance of probabilities, that Ms Linton was Patricia Carpenter.
Master Eastman was also concerned about evidence that he had been shown relating to a forged order, and he referred the papers to the Judge in charge of the jury list.
Procedural background leading to this appeal
Ms Linton appealed against the order made by Master Eastman. Ms Linton contended that Master Eastman's order was wrong because she had not created the petition, Master Eastman had been misled by the Claimants and her representatives, and Ms Linton had not had a fair trial. Ms Linton stated that she felt that she was being victimised because she was a litigation friend for her daughter who was bringing discrimination proceedings against the school.
In the grounds of appeal Ms Linton alleged that the Claimants' legal representatives had concealed or withheld vital evidence until after the Master had given judgment, which was handed over after judgment was given. Ms Linton asked for copies of the documents and was provided with them.
Ms Linton also complained that the Claimants had relied on the evidence of Mr Evans who was a hacker for hire who had criminal convictions and whose evidence had been preferred over a Catholic priest. Ms Linton also sought to rely on fresh evidence.
By order dated 10th February 2014 Simon J. directed that the Claimants should respond to Ms Linton's application to adduce fresh evidence and that the papers and response should be put before a Judge to consider on the papers. The Claimants put in further submissions responding to Ms Linton's further evidence.
By order dated 14 March 2014 Patterson J. refused permission to appeal on the papers. Ms Linton renewed her application for permission to appeal and on 7th April 2014 Christopher Ramsay, who is Ms Linton's husband, put in a witness statement and Ms Linton put in further submissions in support of her application dated 7th April 2014 which dealt with aspects of the evidence together with a Refutation to Claimant's Skeleton Argument dated 7th April 2014.
There was a renewed oral hearing on 8th April 2014 and Wilkie J. gave Ms Linton permission to appeal so that the totality of the evidence could be looked at during a longer hearing, given the time limitations which had confronted Ms Linton before Master Eastman.
Wilkie J. gave permission to Ms Linton to serve a witness statement to deal with the points raised by the Claimants in their submissions dated 4th March 2014 within 21 days, and gave the Claimants permission to submit one tranche of evidence within 49 days of the order.
Although Wilkie J. had limited the parties to one further round of evidence, the Claimants applied for disclosure and inspection of documents referred to in witness statements by Ms Linton and Christopher Ramsay, and applications for third party disclosure against others including Google. The application against Google was made because Google hosted the Patricia Carpenter email account.
After a hearing and by order dated 17th June 2014 HHJ Parkes QC sitting as a High Court Judge granted orders requiring disclosure of the documents. An order for costs against Ms Linton was made in the sum of £17,500. The making of the order meant that the appeal, which had originally been listed for 24th June 2014 was adjourned to be heard at the end of July 2014.
However Ms Linton then appealed against the orders made by HHJ Parkes QC. On 25th July 2014 Warby J. adjourned the hearing of the appeal from Master Eastman to allow for the hearing of the appeal from HHJ Parkes QC and compliance with the order made by HHJ Parkes QC. Ms Linton had sought to set aside Warby J.'s order on various grounds but that order was simply part of the procedural history by the time of the hearing before me.
Ms Linton's appeal against the order made by HHJ Parkes QC was dismissed on the papers on 19th December 2014 by Longmore LJ who recorded that it was totally without merit. Longmore LJ also stayed enforcement of the costs order in favour of the Claimants in the sum of £17,500 to avoid Ms Linton being made bankrupt and therefore unable to pursue her appeal. Ms Linton complains that Longmore LJ was not provided with an accurate transcript of the proceedings below. Although there were two different formats of the transcript of the hearing before HHJ Parkes QC in the bundle before me, I was not directed to any details showing in what ways the transcript with which Longmore LJ was provided was inaccurate.
The order of Longmore LJ affirming the disclosure order made by HHJ Parkes QC was then drawn up on 6th January 2015 and served on Google. Google complied with the order, but the Claimants complained that Ms Linton had attempted to persuade Google not to comply.
Although Ms Linton had appeared in person before Master Eastman, made her application for permission to appeal in person, and had appeared in person before Wilkie J on the oral hearing of her renewed application for permission to appeal, Ms Linton had been represented by solicitors for a period when she was seeking permission to appeal from the order of HHJ Parkes QC. Although there was some correspondence, those solicitors did not take any substantive procedural steps and Ms Linton started acting in person again on 13th January 2015. In the interim the appeal had been listed for 6th and 7th May 2015. Ms Linton, acting in person, made an application dated 26th January 2015 to revoke Master Eastman's order dated 20th December 2013 and to set aside the order made by Warby J. dated 25th July 2015. The grounds of the application were that: the Claimants' claim was founded on deceit and tainted with fraud, Master Eastman had no jurisdiction and that Warby J. should not have made the order.
Ms Linton's application was listed to be heard on 10th February 2015 but by order dated 5th February 2015 Turner J. ordered that it should be adjourned to be heard with this appeal, to enable the appeal to proceed without further interlocutory issues.
By order dated 27th April 2015 Spencer J. granted the Claimants permission to rely on the evidence obtained as a result of the orders made by HHJ Parkes QC.
Ms Linton obtained legal representation from Seddons on 16th April 2015, who came onto the record on 17th April 2015 acting under a CFA. However on Friday 1st May 2015 Seddons came off the record.
Issues determined before the hearing of the appeal
Before I was able to deal with the merits of the appeal there were a number of procedural matters which required to be determined. These were: (1) whether the hearing should be adjourned on the basis that Ms Linton's legal representatives withdrew from acting on behalf of Ms Linton on Friday 1st May 2015; (2) whether Ms Linton should not be permitted to be heard because she had failed to comply with orders dated 17th June 2014 made by HHJ Parkes QC and affirmed on appeal by Longmore LJ; (3) whether the appeal should be by way of rehearing or review; (4) whether Ms Linton should give evidence in chief or there should be cross examination of Ms Linton; (5) whether there should be amendment of the notice of appeal to permit Ms Linton to raise certain procedural objections to Master Eastman's order; (6) whether the Claimants should be permitted to rely on the seventh witness statement from Lawrence Northmore-Ball, who identified where the post office money order to provide the fee for the application issued by Patricia Carpenter had been purchased; and (7) whether Ms Linton should be permitted to rely on the witness statement of Elizabeth Hurley, a former pupil of the school.
I heard argument on these issues at the start of the main hearing and made some orders at the hearing and reserved other matters for this judgment.
No adjournment
I refused an adjournment of the hearing and gave oral reasons for that decision at the time. I refused the adjournment because: (1) the appeal had already been listed and adjourned in June 2014 and July 2014, there had been a long delay from the hearing before Master Eastman, and this hearing had been listed since January 2015. I accept Ms Linton's point that she had not caused the whole of the delays, as alleged by the Claimants, but the time had come to determine the appeal; (2) there was no evidence that an adjournment would enable Ms Linton to get legal representation. Although Ms Linton submitted that with a further delay she would be able to get new legal representatives there was no evidence to that effect (and the Claimants' legal representatives had asked for witness evidence to be provided) and although Ms Linton obviously hoped that she would get legal representatives for any new hearing, there was nothing to suggest that she would be more successful in the future than in the past: (3) there would be prejudice to the Claimants caused by further delay, and by the wasted costs of an adjournment which the Claimants estimated at about £30,000. The evidence showed that Ms Linton had not paid the costs order made by HHJ Parkes QC in the sum of £17,500, and although Ms Linton said that members of her family were now willing to help with her legal costs, there was nothing to suggest that sums would be available to pay the Claimants' wasted costs; and (4) Ms Linton had been acting in person throughout most of the proceedings. Ms Linton said that she found it difficult to act in person, and I understand and have personal sympathy for that difficulty, but that matter needs to be considered with the other factors.
Ms Linton can be heard on the appeal
I permitted Ms Linton to be heard on the hearing of the appeal and gave reasons for that ruling at the time. Ms Linton was, at the beginning of the appeal, in breach of the order made by HHJ Parkes QC because she had not provided disclosure which she had been ordered to provide, and she had failed to comply with an undertaking that she had provided to the Court to issue an application notice.
I accept that the Court may strike out proceedings for non-compliance with orders, but that usually follows a process which has included the making of an unless order. Such a process sets out in clear terms to the person in default what the Court orders, and the consequences of non-compliance. In this case it is right to say that the Claimants' legal representatives had made it plain to Ms Linton that they would seek orders preventing Ms Linton from participating in the appeal, but this was against a background where both sides had said that the other was abusing the Court process and in contempt and the Court had not made an unless order. When I asked Mr Rushbrooke QC why no unless order had been sought he made the point that the Claimants did not want to provoke another appeal. However that reasoning would also apply to any order barring Ms Linton from participating in her appeal.
In the event it seems to me that while it is plain that Ms Linton had acted in breach of orders made by the Court, it would not be proportionate or right to bar Ms Linton from appearing at the appeal. The proportionate response would be to take account of the effect of any non compliance when considering the merits of the appeal.
Rehearing
I asked both Mr Rushbrooke and Ms Linton whether this was an appeal by way of review, or by way of rehearing in the light of the order made by Wilkie J. which had provided for fresh evidence to be served. So far as is relevant to this appeal, CPR Part 52.11(1) provides that "every appeal will be limited to a review of the decision of the lower court unless … (b) the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a re-hearing". In Andergon v La Baguette Ltd [2002] EWCA Civ 10 the Court of Appeal noted 5 general observations on whether there should be a rehearing.
It is relevant to note that CPR 52.11(2) provides that an appeal court will not receive either oral evidence or evidence not before the lower court unless it is otherwise ordered, but the effect of Wilkie J.'s order when granting permission to appeal, and the effect of the further orders made by HHJ Parkes QC and Spencer J is that the Court has already ordered that further evidence should be admitted on the appeal. It is apparent from the judgment of Wilkie J. giving permission to appeal that fresh evidence was permitted to be adduced because: Ms Linton had produced a considerable volume of material which she said cast doubt on the Claimants' case (paragraph 5 of the judgment); it appeared to Wilkie J. that the hearing before Master Eastman had been fraught with difficulties (paragraph 6 of the judgment); and because there was a compelling reason to grant permission to appeal so that the material could be considered (paragraph 7 of the judgment). It is established that fresh evidence can be received both on an appeal by way of review and an appeal by way of rehearing.
In my judgment in order to deal with this case in accordance with the overriding objective it is appropriate to hear this appeal by way of rehearing. This is because it has already been determined that a very considerable amount of fresh evidence should be admitted on the appeal. I also note that Ms Linton had complained that she had not had an opportunity to consider the bundle of evidence at the hearing before Master Eastman, and that this appears to have influenced Wilkie J.'s decision to grant permission to appeal and direct a consideration of the material. In my judgment a rehearing will give the parties a full and fair opportunity to have the material which they want considered taken into account by the Court.
No cross examination of Ms Linton
Mr Rushbrooke noted that in her grounds of appeal Ms Linton had complained that she had not had a trial, and indicated that he would be happy for Ms Linton to give evidence so that he could cross examine her, and he also offered to tender for cross examination Mrs Tardios and her daughter, who had both made statements, so that they could be cross examined by Ms Linton. Mr Rushbrooke said that, before Seddons had ceased acting for Ms Linton, the point had been raised in correspondence with them but the suggestion had been rejected. When the point was raised by Mr Rushbrooke at the commencement of the appeal, Ms Linton said that she wanted time to consider the point and wanted to contact legal representatives. I therefore adjourned this issue until after 2 pm on the first day of the hearing, adjourning after the procedural arguments in the morning at about 12.30 pm to give Ms Linton time to liaise with the legal representatives before the hearing commenced again at 2 pm. When Ms Linton came back at 2 pm she confirmed that she had spoken with her legal representatives but had not had time to come to a final view. I therefore adjourned this issue until 10.30 am for the second day of the hearing and in the interim both Ms Linton and Mr Rushbrooke made submissions on the merits of the appeal.
At 10.30 am on the 7th May Ms Linton said that she had now had time to consider the matter. She did not want to give evidence and be cross examined because although she would have been happy to give evidence and be cross examined, she did not feel able to cross examine Mrs Tardios and her daughter, and thought it would be better for there to be consideration of the matter by way of written witness statements.
CPR 32.7(1) provides that "Where, at a hearing other than the trial, evidence is given in writing, any party may apply to the Court for permission to cross-examine the person giving the evidence." Where permission is provided and the person does not attend for cross examination, the evidence may not be used without permission in CPR Part 32.7(2). Mr Rushbrooke continued to ask for permission to cross examine but accepted that if I made an order, and Ms Linton did not attend to give evidence, reliance could still be placed on the witness statement.
I refused the application for cross examination of Ms Linton. This is because it would not have been just to permit cross examination of Ms Linton in circumstances where there had been no formal application made before the hearing of the appeal (even though the point had been raised in correspondence) and where Ms Linton, acting in person and without notice of the offer to cross examine Mrs Tardios and her daughter, would not have been in a position to cross examine. There was also, as appears below, sufficient evidence for me to come to a decision on the merits of the appeal without the need for cross examination of the witnesses.
Ms Linton entitled to raise the points of procedure
In her Appellant's Notice Ms Linton had raised procedural points in relation to the amendment of the name of the action as ground 5. The points raised by Ms Linton at the hearing were sufficiently covered by the Appellant's Notice to enable them to be raised by Ms Linton, and I will address those points when dealing with the merits of the appeal.
Both parties entitled to rely on further witness evidence
Both the Claimants and Ms Linton sought to rely on further witness evidence. The Claimants sought to rely on a seventh witness statement from Lawrence Northmore-Ball, who identified where the post office money order to provide the fee for the application issued by Patricia Carpenter had been purchased. The information had been obtained after an inquiry made by counsel. Ms Linton sought to rely on the witness statement of Elizabeth Hurley, a former pupil of the school who had attended the school from 1993 to 1995, showing that there was another person who had reason to be unhappy with the school. At the hearing I looked at both statements and stated that I would reserve the final decision about whether to admit them in this judgment.
Having considered the guidance set out in Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 WLR 3926 I have decided to admit the further statements. I admitted the statements because although the witness statements were served late, they did deal only with discrete issues and it was possible to take them into account without disruption to the hearing of the appeal. The statements had been served late on either side because the importance of certain issues, for example where the postal order was purchased, and whether another person might have a concern about the school, had not been appreciated until late in the day. In order to deal with the case justly in circumstances where the appeal was intended to allow the issue about whether Ms Linton was Patricia Carpenter to be looked at carefully, and where both sides were in default, it was appropriate to admit the evidence.
The procedural points raised by this appeal
Ms Linton's appeal raises procedural points about: (1) whether it is permissible to change the name of a party after default judgment has been obtained; and (2) the procedure to be adopted when the party to be joined disputes the factual basis on which that party is being joined.
Permissible to change name of a party after default judgment
The Claimants relied on the provisions of CPR Part 17.3 and Part 19.2(4)(b) as providing the Court with jurisdiction to amend the name of the Defendant. CPR 17.3 provides the court with power to give permission to a party to amend its statements of case. CPR 19.2(4) provides "the Court may order a new party to be substituted for an existing one if … (b) it is desirable to substitute the new party so that the court can resolve the matters in dispute in the proceedings".
Mr Rushbrooke submitted that it was desirable to amend the claim form and identify or substitute Ms Linton for "Persons Unknown (Patricia Carpenter/[email protected]") in circumstances where it was now apparent that Patricia Carpenter was Ms Linton.
Ms Linton disputed that she was Patricia Carpenter but also submitted that once the judgment in default had been obtained the Court was not entitled to change the name of the party. In support of her submissions Ms Linton relied on two authorities being Attorney General v Corporation of Birmingham (1880) 15 Ch D. 423 and Kirby v Telegraph plc [1999] EMLR 303.
In Attorney General v Corporation of Birmingham an injunction had been granted against the Corporation of Birmingham ("the Corporation") to prevent sewage flowing into a river, but it had been suspended for 5 years. After expiry of that period the Plaintiffs wanted to enforce the judgment, but the Birmingham Tame and Rea Main Sewerage District ("the District") had succeeded to the rights and liabilities of the Corporation. Bacon VC held that the Plaintiffs could amend their bill and make the District parties pursuant to the provisions of what was then Order XVI rule 13. The Court of Appeal allowed an appeal holding that such an amendment could not be made after final decree, and that the decree could only be enforced against the District by an action. In argument Jessel MR stated that it was never intended to allow an amendment of the pleadings to introduce fresh parties after final judgment and he also noted that the wording of the rule referred to the "the proceedings in the action shall be carried on" which could only refer to an existing action. The issue of what was meant by "final judgment" was addressed in Kirby v Telegraph.
In Kirby v Telegraph the Claimant in a libel action who was waiting for the jury's decision on liability was put on notice that he might lose his job. This was unexpected and the Claimant had not made a claim for special damages. The jury came back with a favourable award on liability, and made substantial awards of general damages for others complaining about the same article. The parties agreed a figure for general damages for which judgment was given with a caveat to the effect that if the Claimant did lose his job he would bring a claim, and a further caveat to the effect that the Defendant would contend that the Court did not have jurisdiction to make the award. The Claimant lost his job and sought to amend his pleadings to claim special damages. The application was refused on the basis that there had been a "final judgment" and the Court had no jurisdiction to make the award. In the judgment reference was made to Attorney General v Corporation of Birmingham. The Court of Appeal confirmed that when a final judgment had been given the Court had no jurisdiction to make any further orders. It was common ground that a final judgment "is a judgment which determines all issues of which the court is seised, as opposed to an interlocutory or interim judgment which leaves the court seised of some issues that it has not yet determined", see page 315 and 316. It was on this basis that other cases, including Midland Bank Trust Company Ltd v Green and others (No.2) [1979] 1 WLR 460, were distinguished. In those other cases there had not been a final judgment, or any final judgment which had been obtained had been set aside.
In this case the judgment which was obtained by the Claimants was a judgment in default of defence. It did not determine all the issues between the parties, and made express provision for issues of remedy to be determined. The issue of remedy would include questions of damages and injunction. In these circumstances there was no "final judgment". This means that the Court does have jurisdiction to amend the Claim Form because the amendment is being made before there is a final judgment. There is also a difference between adding in a new party who has had nothing to do with the litigation, and identifying the actual name of a party who has participated by making applications, albeit under a different name.
In these circumstances in my judgment it would be in accordance with the overriding objective to amend the claim form and identify Ms Linton as the Defendant also known as Patricia Carpenter in place of "Persons Unknown (Patricia Carpenter/[email protected]") if the evidence shows that Patricia Carpenter was Ms Linton and that there is no triable issue relating to that fact.
The procedure to be adopted when deciding whether Ms Linton is Patricia Carpenter
There does not appear to be any direct authority on the approach to be taken in a case such as this where the Claimants contend that the amendment or substitution should take place because a person (Ms Linton) is in fact the person unknown who has purported to be someone else (Patricia Carpenter). In my judgment in order to have regard to the overriding objective in CPR Part 1 "to deal with cases justly and at proportionate cost" I should adopt the following approach: (1) to permit the amendment to be made if the evidence shows that Ms Linton is Patricia Carpenter, and there is no triable issue in relation to that point; (2) if there is a triable issue about whether Ms Linton is Patricia Carpenter I should add Ms Linton as a Second Defendant and give directions for the trial of the issue of whether Ms Linton is Patricia Carpenter; and (3) if there is no evidence capable of showing that Ms Linton is Patricia Carpenter I should dismiss the application.
When deciding whether there is a triable issue in my judgment I should have regard, by way of analogy, with the principles governing the grant of summary judgment in CPR Part 24. In this respect I should be careful of conducting a mini trial. I should accept assertions in witness evidence unless there is an inherent improbability in what is being asserted or there is other extraneous evidence which demonstrates the falsity of what is asserted, see generally Swain v Hillman [2001] 1 All ER 91. The fact that allegations of bad faith are made is not by itself a compelling reason for trial if the allegations can be properly determined on a summary basis.
Ms Linton is Patricia Carpenter and no triable issue
In my judgment the evidence before me establishes that: Ms Linton is Patricia Carpenter; that there is no triable issue in relation to that because Ms Linton has no real prospect of showing that she is not Patricia Carpenter; and that there is no other reason why that issue should be tried in circumstances where Ms Linton has had every reasonable opportunity to show whether that issue is disputable. I make these findings because: (1) Patricia Carpenter referred to matters which would be known only to Ms Linton or her family; (2) Ms Linton and Christopher Ramsay had available to them an email which could only have come from Patricia Carpenter's email account; (3) Ms Linton's husband Christopher Ramsay has failed to provide disclosure as ordered by HHJ Parkes QC and it is proper to draw some limited inferences from that failure; (4) the disclosure from Change.org and Google proves that Patricia Carpenter was not in Zimbabwe and the evidence as a whole shows that there is no Patricia Carpenter based in Zimbabwe running the Petition website; (5) Patricia Carpenter knew about information which must have come from Ms Linton and her family; and (6) both Ms Linton and Patricia Carpenter in their documents refer to "correspondences" as opposed to "correspondence", which is an unusual spelling and which on its own would prove nothing but which together with the other material, enables me to be satisfied that it is Ms Linton, and not other members of her family, who is Patricia Carpenter.
It is necessary to set out a bit of background to the proceedings which were being brought by and against Ms Linton and the school at the time of the publication of the petition. The evidence establishes that in July 2011 there were unpaid fees owing from Ms Linton and Christopher Ramsay in respect of their daughter which were required to be paid before 6 September 2011. It was hoped that monies could be found for the fees. The school had suggested that Ms Linton and Christopher Ramsay provide provisional notice for the next term to the school, to cover the situation in the event that the monies were not available and it was necessary to withdraw their daughter. On 8 September 2011 Ms Linton sent a letter complaining about a teacher and the treatment of her daughter. On 3 October 2011 the school brought proceedings against Ms Linton and Christopher Ramsay for outstanding fees.
On 17 January 2012 the daughter of Ms Linton and Christopher Ramsay, with Ms Linton acting as a litigation friend, brought County Court proceedings alleging discrimination on racial grounds against the school. On 3 September 2012 Ms Linton and Christopher Ramsay made a partial admission that some fees were due to the school, although I should record that Ms Linton said in submissions that the admission that fees were due had been made in error because there were deposits which had been paid. In any event on 14 January 2013 an interim charging order was made against Ms Linton and Christopher Ramsay's house.
Patricia Carpenter referred to matters known only to Ms Linton and her family
The petition was first published on about 30 May 2013. Evidence obtained from Change.org shows that the petition was created on 30 May 2013 and that the email address [email protected] was associated with the petition. This email address has been used for communications with the Court.
At the start it was said to be a petition by "Patricia Carpenter United Kingdom" before that changed to "Patricia Carpenter, London, United Kingdom" before becoming "Patricia Carpenter, Henderson, Zimbabwe". The evidence showed that Henderson in Zimbabwe is a rural area some distance from Harare.
In the petition it was stated that "Mrs Tardios and one of her teachers are currently facing court action for breach of duty of care and race discrimination. The court action relates to the treatment of a nine year old pupil. The pupil involved is no longer at the school". The evidence shows that Mrs Tardios and the school were not facing any other claims of race discrimination. Mrs Tardios and the school rely on this fact as showing that Patricia Carpenter knew about matters known only to Ms Linton and her immediate family, or the Defendants in the claim. Ms Linton noted that the age for her daughter was wrong, but in circumstances where there are no other Court proceedings for discrimination it seems that this must have been an oblique reference to the proceedings in which Ms Linton was acting as litigation friend. Apart from the Defendants to the claim (the school and Mrs Tardios) this information was known only to Ms Linton and her family.
The school emailed via the Change.org website to complain about the petition. Patricia Carpenter replied by email dated 10 June 2013 from the email address [email protected]. In that email Patricia Carpenter referred to a letter said to have been written to the school in December 2012 (although the evidence shows no such letter was written) asking whether the school "had any objections to the sharing of his findings of the ongoing race discrimination proceedings", with "his" being a reference to a Mr Bailey. The email referred to what was said to be serious bullying "of a child named Hugo". The email went on to state "I have in my possession copies of transcripts relating to three court hearings" giving County Court details and the name of a District Judge and a comment about the teacher against whom the discrimination claim had been made. This again shows knowledge by Patricia Carpenter of the exact proceedings in which Ms Linton was a litigation friend. Later on in the email is a reference to correspondence with a black pupil in which Mrs Tardios had written the statement "in this country". In fact Mrs Tardios had written to Christopher Ramsay and Ms Linton by letter dated 27 May 2011 reporting unacceptable attendance levels by the daughter of Christopher Ramsay and Ms Linton and saying "you may not be aware that there is a legal requirement for all children in this country to attend school regularly". I can understand the feeling by Ms Linton and Christopher Ramsay that the use of the phrase "in this country" in the letter was not necessary. However the fact that Patricia Carpenter picked up the reference in her email dated 10 June 2013, and put it in the context of a letter written to parents of a black pupil part proves the relationship between Patricia Carpenter and Ms Linton. The final point to note from the email is the phrase "in a correspondence to parents" showing a confusion of the plural with the singular.
Ms Linton and Christopher Ramsay had available to them an email which could only have come from Patricia Carpenter's email account and Christopher Ramsay failed to comply with an order for disclosure
The email was exhibited to a witness statement made by Christopher Ramsay in support of Ms Linton's application for permission to appeal. Christopher Ramsay and Ms Linton are husband and wife and appeared together before me making common cause, as they had done before HHJ Parkes QC. Christopher Ramsay relied on this as proof of communications between Patricia Carpenter and the Claimants in relation to a child called Hugo which he said he had received and which he referred to at paragraph 24 of his witness statement.
Mrs Tardios and the school were particularly interested in the fact that Christopher Ramsay appeared to have an email from Patricia Carpenter's email account which did not appear to have been forwarded to him, and asked him how he had come to have it. This issue was pursued to the disclosure hearing before HHJ Parkes QC. Christopher Ramsay dealt with this matter at the hearing before HHJ Parkes QC and said that he had received the email from Francis Zhakata who had been in communication with Patricia Carpenter. He said it had not proved possible to forward the email to him for various reasons but it had then been faxed to him by Francis Zhakata. It was clarified that the email had been received by fax (page 51 of the transcript before HHJ Parkes QC) and HHJ Parkes QC ordered Christopher Ramsay to give disclosure of the fax header.
In the event there was no disclosure of the fax. Ms Linton said, in her closing submissions in reply, that this was because of concerns about the security of persons associated with the person who provided the fax. Mr Rushbrooke noted that Christopher Ramsay was in breach of the order, and that this explanation had not been provided in evidence, and had only been suggested in submissions at the hearing.
In my judgment the fact that Christopher Ramsay, Ms Linton's husband, had possession of an email from the account of Patricia Carpenter which had not been emailed to him and which showed no evidence of having been faxed to him, proves (together with the other information) that the Patricia Carpenter email account was being operated by the household of Ms Linton and Christopher Ramsay. Although Ms Linton and Christopher Ramsay had suggested that the document had been faxed to them, no documents showing that had been provided, and this was notwithstanding the order of HHJ Parkes QC.
Patricia Carpenter is not in Zimbabwe
On 22 July 2013 an acknowledgment of service was lodged by Patricia Carpenter. This challenged jurisdiction on the basis that Patricia Carpenter was domiciled in Zimbabwe and challenged service on the basis that the proceedings had been served outside the jurisdiction without permission. However Norwich Pharmacal evidence showed that the petition was administered from Grays Inn Road on 22 July 2013, proving that Patricia Carpenter was not in Zimbabwe on 22 July 2013. Further evidence proving this is the fact that Patricia Carpenter purported to send the Court fee of £80 for the application by way of postal order, which had been purchased in the United Kingdom, and which the last witness statement from Lawrence Northmore-Ball showed had been obtained from a post office in Lancaster Road in Enfield. Ms Linton's home is in London, and close to Lancaster Road in Enfield. As Ms Linton submitted, this would only show Patricia Carpenter was not in Zimbabwe, but it could not prove (without more) that Ms Linton was Patricia Carpenter.
There was a considerable volume of material from Zimbabwe showing that Patricia Carpenter was not at a named address given for her in Zimbabwe. There was evidence adduced on behalf of Ms Linton, particularly from Francis Zhakata, which purported to contradict that evidence. However the evidence before me proved that Patricia Carpenter could not have been in Zimbabwe as claimed by Francis Zhakata. This is because of the computer evidence obtained under Norwich Pharmacal orders showing that the petition, under the control of Patricia Carpenter, was being accessed from London at times when Patricia Carpenter was in Zimbabwe.
It is extraordinary that if Patricia Carpenter does exist as the person that she purports to be, now domiciled in Zimbabwe, there is nothing concrete to show of her existence particularly given the time that has expired since this issue was raised and the permission that has been given for further evidence. In the final event there is no triable issue about her existence. The Patricia Carpenter of Zimbabwe has no real existence.
Information known to Patricia Carpenter which must have come from Ms Linton and her family
On 21 August 2013 Master Eastman made an order. It was in two parts. The first part was dated 21 August 2013 and recorded in typing "no defence having been filed, it is ordered that the defendants must pay the claimants an amount which the court will decide, and costs" before it continued in typing "Master Eastman orders that:" with in handwriting "see attached order". The second part of the order was on the next page and was dated 12 September 2013. It repeated in paragraph 1 the provision for the Defendants to pay an amount to be decided and costs, and provided for a case management conference on 22 November 2013. This judgment was served by email on Patricia Carpenter on 25 September 2013.
On 30 September 2013 Patricia Carpenter emailed Mr Pitts of Breeze & Wyles Solicitors LLP, who was acting for the school in the debt and discrimination claims and who was, at this time, acting in the defamation proceedings. The email asserted the truth of the contents of the petition.
At some time before 1 October 2013 Mrs Tardios or member of her family instructed Greg Evans of Hi-Tech Crimes Solutions Corp which operates a website called Hackers for Hire. They are based in the United States (where Change.org was registered) to carry out inquiries. Greg Evans said that he had a person called Don Evans carrying out inquiries for him, but Ms Linton doubted that there was another person, and noted that Greg Evans had criminal convictions arising out of his activities as a hacker. The evidence shows that Greg Evans does have such convictions, and it is therefore important to consider very carefully any evidence from this source. However the main evidence on which reliance was placed was the telephone call referred to below, which was recorded and transcribed and there is no dispute about the contents of the conversation.
In the telephone conversation a person who purported to call himself Don Evans called Ms Linton's number. He spoke to a person who identified himself as Joseph Ramsay, Ms Linton's brother in law. The person calling himself Don Evans said he was from Change.org. That person then pretended that change.org had been served with a Court order to remove the petition and that the Court order was directed at Pamela, and not Patricia Carpenter. Joseph Ramsay asked if Don Evans wanted him to get Ms Linton's solicitors to call. Joseph Ramsay suggested that the petition was being taken seriously by a number of groups including government officials and police and also said "a lot of people have actually been talking to Patricia" and that "Patricia has spoken to a local MP …". This suggests knowledge of Patricia Carpenter by Ms Linton's brother in law Joseph Ramsay, although towards the end of the telephone call Joseph Ramsay did say that Patricia Carpenter was "not involved with us".
The evidence shows that Don Evans (if that was his name) was not calling on behalf of Change.org, and so he lied about his background. The evidence also shows that he lied about having a Court order. Mr Rushbrooke submitted that this was "blagging" which it was, but this does not make the behaviour of "Don Evans" any more acceptable. The exchange did lead on to further email exchanges which are relevant.
By an email dated 1 October 2013 at 9.04 pm "Ben" purported to send an email from "Change.org" to Patricia Carpenter saying that a Court order had been sent from the UK requiring the petition to be taken down unless Patricia Carpenter said that she wanted to appeal. Patricia Carpenter emailed stating that she wanted to appeal. Patricia Carpenter then emailed Change.org on 2 October 2013 asking them to verify the attached email message. Patricia Carpenter explained the reason for the request as being "some of my supporters have been receiving messages from a "Dan" (telephone 678 243 0152 he was claiming to be from Charge.org office in Atlanta GA. I've traced the number to the www.hackerforhire.com website". This email therefore proves that Patricia Carpenter had identified Joseph Ramsay, who had taken a call intended for Ms Linton, as a supporter. More relevantly it showed that Patricia Carpenter knew of matters which had occurred to Ms Linton and Joseph Ramsay within a very short period of time.
It was after this time that Ms Linton started to make applications to the High Court and County Court on the basis that a Court order had been forged. The Court order used was an adaptation of Master Eastman's order, but with different provisions. Mr Rushbrooke relied on Ms Linton's use of these forged Court orders as showing that she must have received the genuine order sent to Patricia Carpenter, adapted it, and then attempted to use it for her own ends. Ms Linton denied any wrongdoing and said that she had been sent or delivered the forged Court orders. Master Eastman referred this issue to the Judge in charge of the jury list for him to consider taking appropriate proceedings for contempt of court. In circumstances where the evidence has shown that Ms Linton and her husband Christopher Ramsay have had access to Patricia Carpenter's email by reason of the matters set out above, it is not necessary for me to make any findings about this matter and it is not appropriate for me to do so in circumstances where the matter has been referred for consideration of further proceedings.
Use of the word "correspondences"
Finally there is evidence that Ms Linton used the word "correspondences" in a number of communications, which is a word also used by Patricia Carpenter. Although Ms Linton handed me in a computer search suggesting that "correspondences" was a permissible plural of "correspondence", the use of the word "correspondences" is sufficiently unusual to be noted. Most importantly it allows me to identify that in circumstances where: Patricia Carpenter has no independent existence; and there is access to Patricia Carpenter's email from the household of Christopher Ramsay and Ms Linton; that it is Ms Linton (and not Christopher Ramsay) who is Patricia Carpenter.
No revoking order of Master Eastman, no striking out claim and appeal dismissed
For all the reasons given above I do not revoke Master Eastman's order and I do not strike out the claim as requested by Ms Linton. There was no need for the application made by Ms Linton. Ms Linton had appealed against the order of Master Eastman and the points made by Ms Linton in support of her application to revoke were always going to be evaluated in the context of the appeal. Ms Linton has had a full opportunity to adduce evidence that she wanted. I dismiss Ms Linton's appeal.
Conclusion
Master Eastman did have jurisdiction to add Ms Linton as a Defendant in place of the Defendant "Person(s) Unknown (Patricia Carpenter…)". For the detailed reasons given above the evidence shows that Ms Linton is Patricia Carpenter and there is no disputable issue about whether Ms Linton is Patricia Carpenter. Master Eastman was therefore right to make the order that he did and I dismiss the appeal. |
H.H. Judge Keyser Q.C.:
Introduction
The claimant, University of Wales ("the University"), was established by Royal Charter in 1893 and is responsible for validating undergraduate and postgraduate degrees of the University of Wales for students in the UK and overseas.
The defendant ("LCB") is a limited company, which at the times material to this case carried on the business of a college with a view to profit. Between 2008 and 2012 the qualifications that it offered were validated by the University pursuant to a series of agreements and latterly a validation agreement dated 1 February 2012 ("the Validation Agreement"). Students enrolled on one of LCB's validated courses would receive, upon the successful completion of the courses, undergraduate or postgraduate degrees or other qualifications from the University. The Validation Agreement provided that LCB would pay to the University specified annual fees in respect of the validation services provided by the University.
In these proceedings, which were commenced in October 2013, the University claims £42,900 in respect of payment due under the Validation Agreement, pursuant to four invoices rendered in 2012. By a letter dated 20 December 2012 the University purported to terminate the Validation Agreement on account of LCB's failure to pay the moneys due under the invoices.
LCB denies that the invoices were properly rendered under the Validation Agreement and asserts that the University's purported termination of the Validation Agreement was ineffective and was itself a breach of contract. It also asserts that the University acted in breach of its obligations under the Validation Agreement by twice suspending enrolments at LCB during 2012. LCB asserts that these actions have destroyed its business and purports to have accepted, by letter dated 30 October 2014, the University's repudiation of the Validation Agreement. LCB counterclaims for damages arising from the University's alleged breaches of contract; it values its claim at around £25m.
At the pre-trial review on 16 December 2014 I ordered that this trial should be confined to the issues of (i) liability and quantum on the claim and (ii) liability on the counterclaim, including breach of contract or other duty but excluding causation and quantification of damage.
I am grateful to Mr Ascroft, counsel for the University, and to Mr Simms, legal director of LCB, for their helpful submissions. Mr Simms' so-called skeleton argument, which ran to 54 pages and included long passages setting out the facts of decided cases, was on that account less helpful than it might have been, for all the industry and learning that is displayed.
I shall proceed by first setting out the terms of the Validation Agreement insofar as they are relevant to the issues in these proceedings. Then I shall summarise the facts; it will not be necessary to recite all of the matters appearing from the witness and documentary evidence, although I have regard to them all. Then I shall summarise the issues arising on the claim and on the counterclaim. Finally I shall discuss the issues and state my conclusions and the reasons for them.
The Validation Agreement
The Validation Agreement contained the following material provisions.
"2. TERM
2.1 This Agreement shall come into force on the Commencement Date and, subject to earlier termination in accordance with its terms, shall remain in force for the Minimum Term and thereafter from year to year until terminated pursuant to Clause 10.2.
2.2 The Institution shall promote and organise the Course to commence on the Course Start Date in each year of the Term."
The Commencement Date was 9 August 2011: clause 1.1 and Schedule 1. The Minimum Term was the three-year period commencing on the Commencement Date, that is, the period from 9 August 2011 to 8 August 2014 inclusive; and the Term was the period during which the Validation Agreement should remain in force: clause 1.1. The Course was the programme or programmes of academic study within the Subject intended as preparation for obtaining the Qualification (clause 1.1); the Subjects and Qualifications were set out in Schedule 1, as were the Course Start Dates for the respective Courses.
"3 . ENTRY REQUIREMENTS
3.1 … the Institution undertakes in each year of the Term to:
3.1.1 advertise and seek candidates for the Course; and
3.1.2 enrol by the Course Commencement Date no fewer than the Minimum Number of candidates and no more than the Maximum Number of candidates to participate and receive tuition in the Course.
If by the Course Commencement Date in any year insufficient candidates have enrolled on the Course, the University shall be entitled in its discretion to terminate this Agreement forthwith by giving 30 days notice in writing to the Institution."
Schedule 1 set out, in respect of each Course, the Minimum Number and the Maximum Number of candidates to be enrolled. Schedule 2 set out the minimum qualifications required of candidates for each Course.
"3.2 The minimum qualifications for candidates to apply for enrolment on the Course are set out in Schedule 2 and the Institution shall prior to the Course Commencement Date provide the University with written evidence satisfactory to the University that students enrolled by the Institution on the Course have achieved minimum qualifications.
3.3 Without prejudice to Clause 3.4, the University shall notify the Institution no later than 6 weeks prior to the Course Commencement Date of the Registration Information required in respect of each student. The Institution shall provide the Registration Information to the University no later than 1 week after the Course Commencement Date. The University is not required to enrol on the Course a student in respect of which it has not received all of the Registration Information required.
3.4 The Institution shall provide the University with the full name and details of each student enrolled on the Course as specified in the Guidelines on the Transfer of Data from time to time and shall forthwith notify the University if these details change or if a student withdraws or wishes to be admitted late to the Course. The University shall be entitled in its discretion to refuse to enrol on the Course any student admitted late by the Institution."
Clause 1.1.1 defined "Registration Information" as "the information and returns required by the University in respect of each student as a condition of enrolment of that student on the Course".
"4. AWARD OF QUALIFICATION
4.1 Subject to the Institution having duly performed its obligations under this Agreement, the University agrees to award the Qualification to those students enrolled on the Course who complete the Course successfully in compliance with the University's requirements (as notified to the Institution from time to time)."
The Qualifications were set out in Schedule 1. For the most part they were Bachelors' and Masters' degrees, though there was also a Foundational Certificate and a Master's Entry Diploma.
"5. FEES
5.1 The Institution shall pay to the University the Fees and all other sums payable under this Agreement in sterling and in accordance with the provisions of Schedule 2. Save as may be expressly set out in this Agreement, the Institution is wholly responsible for the cost and expenses of complying with its obligations under this Agreement. Payment shall be made without deduction, set-off or counterclaim."
In fact, the Fees were set out in Schedule 3.
"6. CONDUCT OF ASSESSMENTS
…
6.4 The Institution shall permit the Examination Board to visit the Institution on the dates specified in Schedule 1 for the purpose of finalising marks awarded to candidates by the Internal Examiners and to determine the awarding of the Qualification to assessed candidates. …
6.5 The University shall have absolute discretion in those instances that it deems appropriate to delay the procedure set out in Clause 6.4 in order to ensure the conduct of any investigation which may be deemed necessary by the University in its absolute discretion into any alleged instances of unfair practice or other irregularity at the Institution. …"
"7. QUALITY ASSURANCE
7.1 The University will hold the ultimate responsibility for the academic standard of the scheme.
7.2 The Institution agrees to implement fully the quality assurance procedures made known to it annually by the University. This includes (but is not limited to) compliance with:
7.2.1 the appropriate Regulations and Standing Orders of the University governing the Course;
7.2.2 appropriate administrative procedures relating to the registration of students and the conduct of examinations;
7.2.3 appropriate administrative procedures relating to the registration of students and the conduct of examinations;
7.2.4 Clause 6.9 (annual meeting of the Joint Board of Studies).
7.3 The University from time to time conducts reviews of its validated courses. The Institution agrees to participate fully in any University review of the Course in accordance with the written instructions of the University.
7.4 The Institution agrees to participate fully in all quality assurance and review exercises carried out by any person (including without limitation the UK's Quality Assurance Agency) who is entitled to or required to carry out such exercise whether by operation of law or otherwise.
7.5 Where review by the University or by any person pursuant to Clauses 7.3 and 7.4 indicates the existence of, or the university becomes aware of, any actual or potential issue which in the University's opinion (acting reasonably):
7.5.1 impairs or may impair the Institution's academic quality and standards;
7.5.2 might adversely affect the reputation and integrity of the University and/or the Qualifications awarded by it
then (at the University's discretion)
7.5.3 the University may require the Institution to take appropriate action at the Institution's own cost to resolve any problem or issue within such timescale as the University may impose and in the event of the Institution failing to take action or implement changes to the satisfaction of the University, the University shall be entitled to terminate this Agreement forthwith; or
7.5.4 the University shall be entitled to terminate this Agreement forthwith by notice in writing."
"10. TERMINATION
10.1 The University shall be entitled to terminate this Agreement forthwith by notice in writing:
10.1.1 if the Institution fails to make any payment due under this Agreement (including without limitation any payment of the Fees or any part of them) on the due date for payment;
10.1.2 if the Institution becomes insolvent or unable to pay its due debts …
10.1.3 if diplomatic relations between the United Kingdom and the country or state in which the Institution is located are for any reason severed …
10.1.4 if the Institution is in material or persistent breach of the terms of this Agreement and, where the breach is capable of remedy, the Institution has not remedied the same within 28 days of the date of service of any notice pointing out the breach and requiring its remedy;
10.1.5 if unfair practice is established by the University …
10.1.6 if the University … is not satisfied … that … the Institution has sufficient resources …; and
10.1.7 pursuant to Clauses 7.5, 12.4 and 13.3.
10.2 Either party shall be entitled to terminate this Agreement for any reason by giving the other 12 months notice in writing to expire no earlier than the end of the Minimum Term or on any subsequent anniversary of the Commencement Date.
10.3 Termination of this Agreement for any reason shall not affect any rights or liabilities which have accrued prior to the date of termination.
10.4 This Clause 10.4 shall survive the termination of this Agreement as shall any other provision so required to survive either by express provision or by necessary implication."
"11. CONSEQUENCES OF TERMINATION
11.1 Upon termination of this Agreement, the University and the Institution shall co-operate in good faith (without creating a binding obligation) to seek and find ways in which students enrolled on the Course may be permitted to participate in an appropriate alternative programme of study at another higher education institution recognised by the Academic Board of the University from time to time.
11.2 Upon termination of this Agreement the Institution shall continue to meet all its outstanding obligations under this Agreement and further shall transfer all records information data and documentation relating to the Course or any student enrolled on the Course as requested by the University and do all such acts as reasonably requested by the University to enable the University to perform its non-binding obligations under Clause 11.1.
11.3 Termination of this Agreement shall be without prejudice to all other rights and remedies of the parties."
"17. LIABILITY
…
17.3 Neither party shall be liable to the other under this Agreement to the extent that it is prevented from complying with its obligations because of any negligence, failure or default on the part of the other. Neither party shall have any liability whatsoever to the other whether in contract tort or otherwise for any losses or damages:
17.3.1 which were not reasonably foreseeable by the parties or either of them at the date of this Agreement; or
17.3.2 to the extent to which they are attributable to any intervening act, omission or event; or
17.3.3 which represent loss of any anticipated or future business, revenue, goodwill or profit."
"18. ENTIRE AGREEMENT
18.1 This Agreement constitutes the entire agreement and understanding of the parties and supersedes any previous agreement between the parties relating to the subject matters of this Agreement."
"21. WAIVER
21.1 The failure to exercise or delay in exercising a right or remedy provided by this Agreement or by law does not constitute a waiver of the right or remedy or a waiver of other rights or remedies.
21.2 A waiver of a breach of any of the terms of this Agreement or a default under this Agreement does not constitute a waiver of any other breach or default and shall not affect the other terms of this Agreement.
21.3 A waiver of a breach of any of the terms of this Agreement or of a default under this Agreement will not prevent a party from subsequently requiring compliance with the waived obligation.
21.4 The rights and remedies provided by this Agreement are cumulative and (subject as otherwise provided by this Agreement) are not exclusive of any rights or remedies provided by law or in equity."
Finally, it is necessary to refer to some of the provisions of Schedule 3 to the Validation Agreement, which made provision in respect of Fees.
"Part 1
1. For the first three years of the Term, and subject to paragraph 2 below, the Fees for each year shall be the greater of:
i. £15,000 per annum (per cohort of students enrolled on all years of the Course) and
ii. a sum which is set out in clause 1 iii of this Part of Schedule 3 multiplied by the total number of candidates enrolled on and who have commenced the Course (for all cohorts i.e. if there are 15 students in the first year, 15 in the second and 10 in the third, this will give a total of 40).
iii. Foundation Certificate - £350 in total
Master's Entry Diploma - £360 in total
BA (Hons) in Business Administration (including all pathways) - £300 per annum
Master of Business Administration (including all pathways) & Master of Business Administration (on-line) - £660 in total.
…
Part 2
1. The Institution shall provide the University within 30 days of the commencement of each intake of each Course with a transfer showing all candidates commencing or remaining on each Course. The University shall be entitled to invoice the Institution for the Fees at any time following receipt of this transfer. …
2. The Institution shall pay to the University the Fees due in accordance with the University's invoice within 30 days of the date of the invoice. The University shall be entitled to terminate this Agreement forthwith by notice in writing to the Institution if the Institution breaches the provisions of this Clause 2."
The relevant facts
The University had for many years been engaged in the validation of degrees in respect of programmes of study delivered to students in the UK and abroad by institutions or centres that had been approved for the purpose by the University. One such institution was LCB, which had been incorporated in 2005 and operated at locations in Barking and elsewhere. The business relationship between the University and LCB commenced in 2008, after the University had carried out a thorough vetting procedure to satisfy itself, among other things, as to the quality of the education offered by LCB and as to its good financial standing. The first validation agreement between the parties was made in January 2008, and after the range of courses offered by LCB had been increased a further validation agreement was made in June 2010. The agreements made in 2008 and 2010 were in materially identical terms to the Validation Agreement, save for differences in respect of courses, campuses and fees in the schedules to the various agreements. Subject to such variable matters, the agreements were in the terms of the standard specimen that the University included in its pack for prospective client institutions.
On 18 March 2009 UK Border Agency ("UKBA") granted LCB a Tier 4 Sponsor Licence (Grade A). On 19 November 2010 UKBA granted LCB Highly Trusted Sponsor status.
In May 2011 the University undertook a validation exercise for additional courses that LCB proposed to offer. Those additional courses were approved by the University on 9 August 2011, which was to become the commencement date of the term of a revised agreement. On 26 January 2012 the University sent the draft of that agreement to LCB for execution.
While the discussions for extending the relationship between the parties were ongoing, the University was revising its policy regarding the validation of courses provided by third parties. In October 2011 it developed a strategy whereby, over the course of several years, it would bring to an end its validated service activities. And on 24 January 2012, just two days before the University sent the copy of the new Validation Agreement to LCB for execution, its Vice-Chancellor had written to LCB confirming its decision to bring to an end all of its current validation programmes and formally giving notice that the 2010 Validation Agreement would not be extended after the minimum three-year term ended on 31 May 2013.
Nonetheless, both LCB and the University executed the new Validation Agreement, dated February 2012, which is agreed to have had effect in accordance with its terms as from 9 August 2011. No doubt, as suggested by the University's witnesses in evidence, the University felt honour-bound to stand by the approval it had given to LCB's new courses at that earlier date, which was before it decided to bring to an end its validation activities. For LCB, Mr Simms invited me to view the Vice-Chancellor's letter of 24 January 2012 as a mark of systemic incompetence on the part of the University, but I am unable to see that it has any such significance.
On 2 February 2012 the University issued invoice No. 508333, in the sum of £46,860.
On 12 March the University issued invoice No. 508509, in the sum of £26,400.
On 21 March LCB made an electronic payment to the University of £6860. The payment was not accompanied by any instructions or request regarding the allocation of the moneys.
On 27 March 2012 Sky News contacted the University in connection with a story that it was intending to broadcast that day. (In fact the story was not broadcast until 29 March 2012.) Precisely what information Sky News provided to the University is unclear. However, it is clear that it told the University that its story would include the allegation that students at LCB were being sold dissertations for use towards their degrees. The University appears also to have been told of a distinct allegation to the effect that LCB was assisting overseas students to obtain visas by selling them the necessary qualifications, thereby contravening the immigration system.
Internal emails on 27 March 2012 suggest that the initial reaction of the University's senior management was to suspend intakes at LCB with immediate effect. However, I accept the evidence of Mr John McInally, who at the time was the Director of the Academic Registry of the University, that though the possible need for suspension was recognised from the outset no immediate decision to suspend was made. It was arranged that an officer of the University, Dr Neil Strevett, would attend at Barking on 28 March to carry out a preliminary investigation. The results of that investigation, which was carried out before the story was broadcast, were reported orally to senior management of the University on 29 March and were subsequently circulated in a written report of the same date, which included the following passages.
1. … The substance of the [Sky News] allegations were (sic) that staff at the college had sold diplomas and English proficiency certificates to individuals they knew had not studied at the college and that staff at the college had been recorded by Sky News as saying that professionally written dissertations had been submitted to the University for marking by staff at the college. …
2. [Dr Strevett] held a meeting with staff at the college. Present were Dr Ana-Maria Pascal, Acting College Principal and MBA Programme Director, Dr Basha, college owner and Student Welfare Officer, … Dr Javed Ahktar (sic), Marketing Consultant …
4. LCB confirmed that the identity of the person who had been interviewed by Sky News as (sic) that of Dr Javed Ahktar. LCB clarified the position of Dr Ahktar in relation to the college and confirmed that he was not an employee of the college nor did he have any academic role with any students enrolled at the college. …
6. It was confirmed that Dr Ahktar worked for a number of local colleges in a similar recruiting role and none of these colleges had a connection with the University of Wales. …
16. LCB was asked to comment on recent contact with either the QAA or UKBA. It was reported that LCB had undergone a QAA Review of Educational Oversight and had received a draft copy of the report with confidence expressed in all areas. As such, and assuming the outcomes did not change, they were expecting to retain their licence for highly trusted sponsor (HTS) status and were waiting to hear from the Home Office on the number of visas they would be allocated.
17. LCB failed to report that they had been subject to a visit from the UKBA on Monday 26 March or what those outcomes were. Further discussions with LCB on the 29 March revealed that UKBA had informed LCB that their licence for HTS status had been withdrawn.
Conclusions:
The remit of the visit to LCB was determined by the initial details contained within the email sent to the University by Sky News on the 27 March. On the basis of the discussions held with staff at the college and a review of the paperwork held for LCB by the University the following initial conclusions can be drawn:
1. There appears (sic) to be no obvious grounds for suspecting that students registered for BTEC programmes at LCB have been sold these qualifications and are using them to gain entry onto UW validated programmes. Moreover, LCB have never offered any English language provision or been recognised as an English language teaching centre.
2. Both the procedures for submitting and internally marking dissertations and detecting unfair practice more generally appear to be robust and operating effectively and in accordance with University requirements. There is no indication in any external examiner or moderator reports that there is suspected fraud at LCB in terms of purchasing and submitting dissertations. The one recorded example of this happening was detected and dealt with through the Unfair Practice procedures at the college.
3. However, one area of risk to the University appears to be the very large number of students presenting qualifications gained at other colleges and seeking entry onto the MBA programme with advanced standing and determining precisely the role and extent of recruitment consultants and recruitment agents in this process. ["Advanced standing" is where students, having studied comparable modules on another programme, which may be at another institution, are credited with that study and are therefore exempted from the requirement to undertake all of the course modules.]
The University has requested that LCB provide a complete list of all students admitted to the MBA with advance standing, the list of colleges these students studied at and also a list of the colleges Dr Ahktar has acted in a recruitment capacity. Though the list is yet to be received, a follow-up conversation with the College Registrar has indicated that at least one college, London Canada College, and referred to in the subsequent Sky News broadcast on the 29 March in connection with alleged fraudulent activities will appear in the complete list.
Recommendation:
Therefore, it is recommended that the University of Wales should suspend LCB with immediate effect and constitute a broader enquiry into recruitment practices onto University of Wales' programmes at LCB in general and the role of recruitment agents in recruiting students onto the MBA programme with advanced standing."
As Dr Strevett's report indicated, the Sky News story had been broadcast between his visit to the college and the production of his report; in fact, it was initially broadcast on the morning of 29 March 2012. Some extracts from the Sky News webpage give a sufficient indication of the allegations that were being made:
"Staff at a college ranked as 'highly trusted' by the UK Border Agency are helping foreign students cheat the immigration system, a Sky News investigation has found. The investigation discovered that diploma certificates and dissertations were for sale inside the London College of Business in Barking.
As 'highly trusted' by the UK Border Agency, the college can sponsor visa applications for foreign students and help them towards post-study work visas if they get their applications in by April 6.
But we found foreign students desperate to obtain visas can buy themselves the necessary qualifications without attending any classes.
It should take nine months to get a postgraduate diploma from the college but its marketing consultant [named in the story as Dr Javed Akhtar] has been secretly filmed by Sky News telling students they can have one in a week if they pay £1,000.
…
Master's degree dissertations are also for sale. A student working for us was told by Dr Javed if he wanted the qualifications quickly he could pay someone at the college £500 to provide his coursework. That dissertation is then sent to be externally marked at the University of Wales."
The story reported that a government minister had confirmed that UK Border Agency was carrying out an ongoing investigation into LCB; this part of the initial broadcast was deleted from later broadcasts after complaints by LCB. The story also reported that the University had said it had launched an investigation into the matter, and that LCB had denied that Dr Akhtar was its employee or acting with its authority. When the story was broadcast, LCB issued a statement denying any involvement in improper practices.
On 29 March Dr Strevett gave an oral report to Professor Palastanga, who was the Head of the University's Validation Unit and Chair of the University's Taught Degrees Board. The oral report was probably in effect and substance much the same as the subsequent written report, which appears to have been circulated on 2 April. Professor Palastanga in turn reported to a meeting of the senior management of the University, which also took place on 29 March. Mr McInally, who was present at the meeting, recorded its outcome in an internal email that he sent at 3.47 p.m. that afternoon. It confirmed that Professor Medwin Hughes, the Vice-Chancellor, in his capacity as Chair of the Academic Board, had given approval to a recommendation by the Taught Degrees Board that there be an urgent Interim Review of LCB "in line with the protocol in place in the Quality Handbook (Appendix 59)" and that no further intakes at LCB would be permitted pending the outcome of the review. Professor Linden Peach was appointed to chair the Interim Review Panel.
In his witness statement Mr McInally said that it had been noted at the meeting that the University was entitled to terminate the Validation Agreement immediately pursuant to clause 7.5, but that it was considered instead that LCB should be given an opportunity to respond to the allegations and that an Interim Review should be carried out and new student intakes suspended pending the completion of the review. "We felt that the suspension was necessary to limit the University's exposure until the Interim Review could be completed. LCB had to be considered to be in good standing if we were to be confident that it would deliver appropriate learning experiences to students. It would be impossible for us to permit registration of further cohorts until we were satisfied of this." In his oral evidence, Mr McInally relied on the University's Charter as giving a general power to suspend an institution from validation, in circumstances where there was a risk to quality and standards of the University's qualifications. (The contents of the Charter may be material to the corporate powers of the University, but they were not relied on at trial as establishing any contractual basis for the suspension.) Mr McInally said that the University had been unable to run the risk of its academic qualifications being undermined. In the light of those concerns, the withdrawal by UKBA of the college's Highly Trusted status and the decision by QAA to delay publication of its anticipated report (see Dr Strevett's report), LCB was, said Mr McInally, treated very leniently by being subjected to no more than a moratorium on the registration of new students.
Appendix 59 of the University's Validation Unit Quality Handbook: Policies and Procedures 2011/12 was headed "Interim Reviews". It made provision generally in that regard, with terms regarding such matters as the composition of the panel that would carry out a review. The following passages deal with the nature and scope of interim reviews:
"Where the student learning experience is perceived to be at risk, under the terms of its Agreement with Collaborative centres, the Taught Degrees Board has the authority to hold an Interim Review (IR). This decision may be made on the basis of concerns raised in external examiner/moderator reports, or as a result of the annual monitoring process, student/staff complaints or other relevant evidence received by the University.
…
The panel's focus will be on the current and potential risks associated with operation of the validated programme(s), particularly those identified as the rationale for the IR; the collaborative centre will be informed of the key areas for consideration in advance of the visit.
The IR event will take place at the Institution and will normally involve private meetings with key groups: senior management, teaching staff and students.
The outcome of the Interim Review may range from continuation of validation (perhaps with conditions/recommendations which will be developmental in their nature and focus) through to withdrawal of validation. The review panel shall submit a detailed report to the Taught Degrees Board for approval."
By email on the evening of 29 March Mr McInally gave informal notice to Dr Ana-Maria Pascal of the decision to instigate an Interim Review and, pending completion of the review, to suspend registration of further intakes of students. Dr Pascal replied by email the following morning: "Thank you for your message. We have taken notice and are waiting for further details regarding the Interim Review."
Formal notification of the decision to carry out "an Interim Review of students' learning experiences at the Centre" and to suspend any further intake of students at LCB until the outcome of the review was given by Professor Hughes by letter dated 29 March 2012. The letter, which was sent by email on 30 March, said that the review would take place in accordance with the University's own procedures for such investigations and that arrangements would be made for the review visit, which it was hoped would be conducted "in the next few weeks."
Two further events happened on 29 March 2012. First, UKBA wrote to LCB, suspending its Tier 4 Sponsor Licence and Highly Trusted Sponsor status; these steps were not taken in response to the Sky News story; they related to alleged failures of LCB to comply with UKBA's sponsorship guidelines. Second, the University issued invoice No. 508553, in the sum of £9,240.
The review meeting was originally scheduled for 12 April 2012. On 5 April Jenna Williams, a Validation Officer providing support to the panel, sent an email to Dr Pascal asking for specified documentation (the UKBA report, the QAA report, the internal mark sheet for dissertations, and LCB's internal admission policies) to be emailed to her. On 10 April Dr Pascal replied: "Thanks for this, we'll have all documentation ready."
On 11 April Professor Peach contacted Dr Pascal to postpone the review meeting. The ostensible reason for the postponement was the indisposition through illness of Jenna Williams. However, I accept that the members of the panel also wished to take further time to obtain and review significant additional documentation before the meeting could take place. That documentation, including the email and letter correspondence between LCB and Sky, UKBA and the QAA regarding the allegations, as well as documentation relating to recruitment/marketing consultants, was requested by emails on 12 April.
On 12 April, in the course of making arrangements for the new date, Dr Pascal enquired by email of Jenna Williams:
"[C]ould you let me know how long do you think it will take for the University to confirm the result of the review, once the review takes place? I'm asking this because we have a number of potential online students for our May intake and I was wondering if we'll be able to still enrol them (given the current suspension, pending review)."
Ms Williams replied:
"We are unable to confirm when the result of the review will be confirmed, but we will conclude the process as swiftly as possible. The majority of the work relating to the review is in the collation of the documentation, so we do hope that the result will be confirmed shortly after the review."
On 13 April the review meeting was rearranged for 9 May.
On 16 April LCB provided to the University its relevant correspondence with the QAA and said that, because of issues of confidentiality and prospective litigation between LCB and Sky and UKBA, Dr Basha would personally decide what to do about the other documentation. A substantial amount of the documentation requested by the University was provided by email on and shortly after 16 April. On 27 April Jenna Williams requested documentation that had not been supplied; it was provided by LCB on 1 May.
On 16 April, the University's Validation Department sent an email to LCB, demanding immediate payment of £40,000 in respect of invoice no. 508333.
On 9 May Jenna Williams notified Dr Pascal by email that the review meeting would take place on 23 May. She attached to her email the panel's Terms of Reference for the interim review, which showed that it would concern the following matters:
"1. Recruitment practices onto University of Wales programmes at LCB
Initial screening process for students
2. The role of recruitment agents in recruiting students onto the MBA programme
How LCB recruits and appraises recruitment agents
3. English Language admissions policies
4. Policies for dealing with Unfair Practice
How students are informed of these policies and to what extent do LCB minimise opportunities for unfair practice in assessment
Induction processes for students
5. Procedures relating to dissertation supervision and assessment
6. The organisation and implementation of pastoral care".
Professor Peach gave evidence concerning the Terms of Reference. He said that the panel had considered that the Vice-Chancellor's initial instructions, referring to "the students' learning experience", needed to be refined with much closer reference to the Sky allegations. It was important not only to identify any problem that might exist but to investigate what pressures or failures (for example, relating to the tutor-student relationship or to the adequacy of training in research methodology) might have caused those problems to arise.
On 14 May the Validation Unit wrote to LCB by email, requiring immediate payment of £41,200 in respect of invoices nos. 508333 and 508456.
On 15 May LCB's accounts department responded to the University's latest request for payment. LCB places considerable reliance on the response, which I shall set out at length.
"[A]gainst the stated invoices a sum of £6860 has been paid on 21 March 2012 towards fee due for the following list of students. Hence this payment may please be accordingly adjusted as detailed below.
- Invoice no. 508456 for £1200 paid in full – in respect of 4 students in the list
- Invoice no. 508508 for £300 paid in full – in respect of 1 student in the list
- Invoice no. 508509 for £26,400 – out of which an amount of £1320 in respect of following 2 students in the list
[Two students were then identified; £660 was marked against each.]
- Invoice no. 508333 for £46,860 – out of which an amount of £3300 in respect of following student in the list
[Five students were then identified; £660 was marked against each.]
Thus the total payment to be adjusted for all of the above is £6120, which leaves an excess payment of £740 (£6860 paid less £6120 adjusted). This excess payment amount may further be adjusted against future invoices.
In regard to the remaining students fee payment, based on the advise (sic) of our University Moderator and subsequent events in the college, we have been advised to suspend/withdraw enrolment of many students. This fact has already been informed to Caroline Walker (Caz), Institution Officer, as well. In view of this, we are revising the list of students that need to be finally enrolled. The revised student list is expected to be sent out to you in the next couple of days.
We therefore request you to condone this undue delay and would request you to credit/cancel the invoice numbers 508509, 508553 and 508333.
Based on the revised list of students to be enrolled, which we will be sending over to yourselves and Caroline, we hope you will raise an updated invoice, to enable us to make the payments due.
Thanks for your understanding and cooperation."
By email on 16 May the Validation Office enquired of LCB's Moderator as to the exact nature of the advice he had given to LCB regarding the suspension and withdrawal of enrolment of students. He replied that day:
"After the Sky story broke I suggested that they urgently review all students introduced by that agent specifically [that is, Dr Akhtar] and any other locally based agent they had used.
I have also rejected a number of students through the APEL and Work Experience process and this may be what they are thinking of."
On 23 May LCB sent to Caroline Walker and Jenna Williams an email with a list of students attached. The email said: "Please find the list for those registered in Jan[uary 2012]. Those highlighted in red are being terminated so there is no need to matriculate them—those in black are still with us." Caroline Walker forwarded the email to a superior, Stuart Evans; she wrote: "Shall I go ahead and withdraw the ones in red on our system? I still will wait for a definitely go ahead (sic) from you/Jenna with regards to processing the black ones or any in the Jan intake batch that are not mentioned as being withdrawn." Stuart Evans replied: "Please hold onto this and do not process until you hear back from the interim review panel."
The University did not respond to LCB in respect of its emails of 15 May and 23 May and did not give any indication of having paid any attention to them. Thus on 30 May it sent a request for payment of £77,140 in respect of "all invoices which now exceed the due date of settlement, as specified in the University's terms of credit"; these were listed as invoices nos. 508333 (£40,000), 508456 (£1200), 508508 (£300), 508509 (£26,400) and 508553 (£9240). A further demand to the same effect was sent on 18 June 2012. For its part, LCB did not follow the matter up or send any further communication regarding invoices, whether in response to further requests by the University for payment or otherwise, before the University purported to terminate the Validation Agreement for non-payment by letter dated 20 December 2012.
Meanwhile, the review meeting was held on 23 May 2012. Thereafter the panel had to produce its report. Professor Peach, a thoughtful and plainly truthful witness, gave evidence that as the review progressed it proved more complex and less amenable to a quick resolution than he had initially anticipated. The review of the documentation before the meeting had raised issues and set alarm bells ringing. Then the meeting itself gave rise to additional concerns; by way of example, the information provided by LCB's management did not at all points agree with the information provided by LCB's teaching staff in respect of such matters as the number of dissertations that any one tutor would have to supervise. The panel felt that the problems so raised were capable of resolution, but they were nonetheless complex to resolve. Further, the panel was anxious to be thorough, because it did not know whether Sky had any additional information up its sleeve, so to speak, and was afraid that serious damage would be caused to the University's reputation if the review failed to identify matters that subsequently came to form the basis of further allegations. Accordingly, after Jenna Williams had produced a draft report for the panel's consideration on 30 May there was a further process of deliberation and revision. The final report was produced some three weeks after the meeting on 23 May, that is, in mid June 2012, though it was not published at that stage.
It is unclear to me whether the version of the report that appears in the trial bundle is the final version or an earlier draft. On balance it seems more likely to be the former; anyway, it has not been suggested that the final report differed in fundamental respects from the text that I have seen. The report summarised the relationship between the parties, the circumstances giving rise to the review, the procedure adopted by the panel and the contents of the review meetings with senior management, teaching staff and students. It then set out the conclusion of the panel:
"The Panel felt more positive hearing some of the comments and noted that students spoke warmly of LCB. The Panel commended the detailed plagiarism and administrative processes carried out by the MBA Programme Administrator.
However, the Panel retained some concerns about the quality and the security of the provision of the programmes at LCB and wished to make the following recommendations:
The College must revise, clarify and formalise its relationships with 'recruiting agents', both in the UK and overseas, to protect itself, the University of Wales and past, present and potential future students from the sort of allegations which surfaced in the media earlier this year. The College should submit documentation on the revised arrangements for approval by the University of Wales. The agents used to find academic supervisors for the online MBA need to be considered.
The recent rapid growth of the 'top up' version of the MBA and the proposed growth of the online programmes do not seem to have been accompanied by the provision of adequate resources to ensure a secure and quality programme for the students. The College should draw up costed resource development programme for both the 'top up' MBA and the online programmes and a detailed operational model for the online programmes and submit them to the University of Wales for approval. The Panel recommend a Top Up admissions regulatory document.
The dissertations are a concern. On the one hand the supervision responsibilities … seem daunting and must militate against detailed and quality supervision for all students. On the other hand, the submission of all dissertations for 'administrative inspection' and testing with plagiarism software before they are sent to the two internal markers suggests the College seemingly see plagiarised dissertations as the norm. The College must take steps to reduce dissertation supervision loads to more manageable proportions …, it should give more thought to vetting proposed supervisors to ensure that they have the necessary experience and it should monitor the number and the nature of the student supervision experience more closely. The Panel would like a review of dissertation arrangements and procedures, and how these will be managed.
The Panel noted that there are issues surrounding Advanced Standing and how the moderator approved credit transfer students. The Panel noted that the credit transfer / advanced standing processes should be internally reviewed and made clearer to moderators. The Panel noted that LCB need to have more regulated CT processes as there is a risk with Top Up students, so their previous experience should be researched.
The Panel noted that LCB need to formalise many of their processes, e.g. student support[,] so that they have clear audit trails.
The Panel noted that there needs to be more sharing of information across the admissions and administrative teams, as currently the administrative staff are not involved in or consulted in admissions.
The Panel noted that the research training for advanced standing students needs strengthening and [to be] made compulsory."
Before the report could be published, it had, in accordance with the University's protocol, to be approved by the Taught Degrees Board. As the Taught Degrees Board was not due to meet for several weeks, this occasioned a significant delay.
Meanwhile, on 5 July 2012 Mr Ian Nisbet, the newly appointed Principal of LCB, wrote to Professor Peach, making representations in support of a request that the suspension be lifted. His detailed letter summarised the steps taken by LCB to address perceived matters of concern; it said that the suspension had prevented it enrolling many students who had applied for its MBA course and that its financial situation was critical and its survival would be jeopardised by a continuation of the suspension for the September intake; and it asked that LCB be permitted to recruit new students for all its course programmes.
On 10 July LCB's Moderator, Dr Jason Williams of Cardiff Metropolitan University, wrote to the University in support of Mr Nisbet's request to renew enrolments.
Professor Peach was sympathetic to LCB's request that the suspension be lifted, but he lacked the authority to make that decision and his evidence was to the effect that the senior management of the University were desirous of following due process and correct internal procedures. The University's Taught Degrees Board met on 17 July. It endorsed the panel's report and decided to refer its conclusions and recommendations to the University's Academic Board, which was due to meet on 25 July.
By email on 18 July 2012 the University forwarded the panel's report to Mr Nisbet. It informed him that it would be put before the Academic Board on 25 July and invited LCB to make an initial response for consideration by the Academic Board. The email also advised Mr Nisbet that the likely deadline for compliance with the requirements of the panel's report was the end of September 2012. Mr Nisbet provided an initial response to the report by a letter dated 23 July 2012 (sent by email), to which were attached supporting documents.
The meeting of the Academic Board had been due to take place on 25 July but was postponed. This occasioned a delay in implementing the recommendations of the review panel and the Taught Degrees Board.
By email on 30 July Professor Peach informed Mr Nisbet that, though the Interim Review panel was impressed by LCB's efforts to meet its conditions, it was not convinced that all the conditions had been fully met. Professor Peach followed up that email with a longer one on 8 August, which provided the panel's assessment of LCB's response to the report. Seven specific areas were identified in which the panel considered that more was required to be done to meet the conditions of the Interim Review. It is unnecessary to set those areas out here. On 3 September Mr Nisbet sent further information to Professor Peach and expressed the view that LCB had fully responded to the panel's ongoing concerns. He asked that LCB be permitted to have a new intake of students in September. The email also noted that UKBA had restored LCB's Highly Trusted status. On 7 September Professor Peach confirmed to Mr Nisbet that the panel was of the opinion that LCB had met the conditions set down in the interim review: "As Chair of the Taught Degree Board I have taken Chair's action and have recommended to the Vice Chancellor as Chair of Academic Board that the suspension now be lifted and normal business is resumed." However, the Vice-Chancellor declined to take Chair's action and insisted that the matter go to the full Academic Board.
On 10 September the University rendered yet another account to LCB, claiming the same amount as in the previous accounts.
The Academic Board met on 27 September 2012 and approved the recommendation that the suspension of enrolment of new students by LCB be lifted.
The decision was notified to Mr Nisbet by email on 5 October. However, "formal confirmation of the outcome had to await the approval of the minutes of the meeting of the Academic Board, which occurred on 16 November 2012" (Professor Peach's witness statement, paragraph 28). Accordingly that appears to be the date on which the suspension imposed on 29 March was lifted.
Meanwhile, on 7 November the University's Accounts Department had sent another request for payment of £77,140 in respect of the same invoices as were mentioned on its earlier statements of account. And on 15 November the University issued a further invoice, no. 509156, for £5940.
Almost no sooner had the suspension on new enrolment been lifted than a question arose as to the possible provision of false certificates by three students at LCB. On learning of the possibility that false certificates had been presented, Mr Nisbet asked the ostensible provider of the certificates, Education for Business Managers and Administrators ("EBMA") to verify the certificates. On 28 November 2012 EBMA wrote to Mr Nisbet in respect of the three named students as follows.
"Following your request for verification the following discrepancies were found. Certificate copies were provided for three students. … These candidates have previously been issued with certificates, however, all three certificates provided were found to contain false information. The dates of issue were incorrect; the EBMA reference numbers were incorrect; the font used to display results was incorrect and EBMA's logo is displayed incorrectly.
As a result of this and the information received from your centre and in accordance with EBMA's 'Suspected malpractice and Maladministration Policy and Procedure' we have determined that the certificates have been tampered with leading to a reasonable suspicion of fraud. As a result of this Malpractice all three students' qualifications and certificates will be revoked with immediate effect and the students named are barred from entry to EBMA for the period of one year.
…
I would also ask that you inform the students that they have the right to appeal this decision."
On the basis of the matter dealt with in EBMA's letter (of which the University probably had a copy), on 29 November 2012 the Vice-Chancellor of the University sent the following letter by email and hard copy:
"I write to advise you that the University of Wales has reasonable grounds to believe that irregularities may have occurred with respect to the certification process at the London College of Business ('LCB').
As a result, we are hereby formally suspending the Validation Agreement between our institutions, (dated 1st February 2012) regarding the registration of new students with immediate effect until such time as we are able to satisfy ourselves through an investigation that the academic and administrative processes of LCB are sound.
Colleagues from the University will be in touch to make arrangements for the review to take place; it is our intention that this will commence within the next five business days."
On 2 December Mr McInally wrote to Mr Nisbet to confirm that the review panel, led by the Associate Pro Vice-Chancellor, would visit LCB "to conduct an investigation into various academic and administrative processes linked to certification irregularities." He enclosed a framework document that identified a long list of the kinds of evidence that might be relevant for the review.
Mr McInally's evidence at trial was that the review itself was not particular to LCB; all of the institutions whose courses in the United Kingdom were validated by the University were subject to the same review. However, only LCB was suspended from further enrolment pending the outcome of the review, because no allegations had been received in respect of those other institutions. He said, "The Vice-Chancellor considered it necessary to instigate a review." Whether or not the review did indeed extend to other institutions—as to which I make no finding—there is nothing in the evidence to suggest any other conclusion than the obvious one, namely that it was a response specifically to the concerns over the three students at LCB. Mr McInally insisted that the allegations in respect of those students were extremely serious, because "we did not know whether the certificates were genuine" and the apparently false qualifications would have been used by the students towards their courses at LCB and might in due course have been counted towards an MBA awarded by the University. "We had to be satisfied that there were no students other than the three." He was adamant that the power in clause 6.5 of the Validation Agreement would not have been sufficiently "robust" to meet the case.
An initial review meeting took place on or about 5 December 2012, but thereafter the review process was overtaken by events.
By a letter of 20 December 2012, sent by recorded delivery and marked as received on 27 December 2012, the University's solicitors wrote to LCB giving notice of the termination of the Validation Agreement (and, indeed, of the 2010 agreement) with immediate effect, on the ground of failure to pay invoices nos. 508333, 508456, 508508, 508509, 508553 and 509156 within thirty days of each respective invoice. The total amount said to be due under all of the invoices was £83,080.
On 9 January 2013 EBMA wrote to LCB, advising that two of the three students implicated in the allegations concerning forgery of certificates had appealed and that an investigation had concluded that those students had not been guilty of malpractice. LCB promptly informed the University of the contents of the letter.
On 21 February 2013 LCB's solicitors wrote to the University's solicitors in response to the letter of 20 December 2012. The response said that LCB had repeatedly contacted the University in respect of errors in the invoices and was "more than happy the required amount within 30 days of receiving the accurate invoices." It contained a detailed analysis of the invoices, and its conclusion set out what has since been a major part of its case:
"The College has been liaising with the University's staff throughout the last year in respect of the above mentioned students and invoices.
It has been common practice for the University's staff to liaise with the College regarding the students which have been submitted for enrolment by the University. Often the College would submit a list of students which were expected to enrol. The College would then withdraw some of these students based on the discussions and admission approval processes from the university moderator prior to the University undertaking the matriculation process. Throughout its relationship with the College under the Validation Agreements the University has agreed to withdraw these students and amended any invoices accordingly so that no fees were payable in respect of non-enrolled-non-matriculated students.
It has also been common practice since the commencement of both Validation Agreements (and indeed since the College began dealing with the University in 2007) for the College to discuss and amend the University's invoices to reflect only students which the University has matriculated. This process has often taken longer than the 30 day payment period as stated in the Validation Agreements. It was therefore implied that payment after the 30 day period was acceptable to the University irrespective of the terms of the Validation Agreements.
…
The College therefore requests (in accordance with the conduct of the University since 2010) that the University render updated invoices and appropriate receipts to the College reflecting the correct balances due and the payments which have been made.
The termination of the Validation Agreements has caused significant hardship to the College and hindered its ability to recruit students. In light of the above, we trust that the College's Validation Agreements will be reinstated. There has not been breach of the Validation Agreements (given the amended terms implied by the University) as alleged in your 20 December 2012 letter."
For the purposes of this judgment it is unnecessary to refer in detail to the further communications passing between the solicitors and between the University and LCB. On 25 April 2013 the University generated credit notes to reflect payments made and necessary adjustments to the invoices. In August 2013 the University's solicitors stated that, if payment of the outstanding balance were not received promptly, they would seek instructions to commence proceedings. LCB's solicitors responded, denying that credit notes had been received in April and proposing immediate payment of outstanding fees upon reinstatement of the Validation Agreement. Thereafter, as no payment had been made, the University commenced proceedings in October 2013 and LCB made a counterclaim. In the course of those proceedings, on 30 October 2014 Dr Basha on behalf of LCB wrote to Professor Medwin Hughes on behalf of the University; the letter read in part:
"We have no doubt that the suspension of the Validation Agreement in March 2012 for over 6 months, the subsequent further suspension on 29th November 2012 and the purported termination of the Validation Agreement by letter dated 20 December 2012 were unlawful and amounted to a breach of the conditions of the Agreement. As the purported termination was wholly unjustified it effectively extinguished the business of the London College of Business as then constituted as the University of Wales was our sole University collaborative partner. We regard the purported termination as a repudiation of the Validation Agreement and we now accept that repudiation without prejudice to our rights to claim damages for such repudiation and breach of the Validation Agreement.
It appears that the attempt to terminate was designed to enable the University to avoid its continuing obligations to validate our courses in order to make it free to speed up the merger with Trinity St David and to compete with our courses in the London market."
The issues
It is common ground that the value of the services provided by the University under the Validation Agreement and for which payment has not been made is £42,900. The substantive issues arise on the counterclaim.
The amended defence and counterclaim asserts (paragraph 13) that there were implied terms of the Validation Agreement as follows:
(a) that neither party would cause or procure the default of the other party under the Validation Agreement;
(b) that, except as expressly provided for in the Validation Agreement, neither party would interfere with the other party's enjoyment of its rights under the Validation Agreement;
(c) that the University would, in the performance of the Validation Agreement, exercise the care and skill reasonably to be expected of a competent university in the business of validating degrees for other institutions.
Paragraph 15 of the amended defence and counterclaim alleges that the defendant was in breach of those implied terms (there is also a reference to negligence, but that seems to me to be inappropriate and anyway it adds nothing). The twelve allegations of breach of contract come down to these:
(a) From 29 March 2012 and again from 29 November 2012 (save only for an intake of students in September 2012), the University wrongfully refused to validate LCB's courses or to register its students.
(b) In respect of the September 2012 intake, the University failed to notify LCB that the intake was validated until October 2012, thereby preventing LCB from marketing the course, and then failed to process the registrations of the 7 students who sought admission to the September 2012 course until 20 November 2012.
(c) The University wrongfully purported to terminate the Validation Agreement for non-payment of the invoices, in circumstances where the invoices did not comply with the requirements of the Validation Agreement and no sums were properly yet due and payable under the Validation Agreement.
The parties' agreed list of issues identifies another question, namely "whether the University was required to and did conduct the review with reasonable expedition". Although the pleading of this issue was at best opaque (cf. paragraph 7E of the amended defence and counterclaim) it was fully argued in front of me.
Another matter arising on the statements of case is the scope and efficacy of exclusion or limitation clauses in the Validation Agreement. Although this matter does not fall strictly within the scope of the issue of liability, I made clear at trial that I considered it suitable for determination at this preliminary stage (disclosure had been given and witness statements exchanged on the basis that the trial would cover all issues), and it was subject of full argument.
The central questions are therefore the following:
(1) Did the University have a contractual power to suspend enrolment?
(2) If the University had no such contractual power, is LCB precluded from taking the point on account of waiver, estoppel or some other factor relating to its own conduct?
(3) If the University did have a contractual power to suspend enrolment: (a) was its exercise of that power a breach of contract as being unreasonable on either the first or the second occasion? and (b) did it conduct the first review with reasonable expedition?
(4) Was the University entitled to terminate the Validation Agreement for non-payment of invoices?
(5) If the University was not entitled to terminate the Validation Agreement, was LCB's purported termination of the Validation Agreement in October 2014 effective?
(6) If the University was not entitled to suspend enrolment, is LCB's right to damages limited by clause 17.3 of the Validation Agreement?
Discussion
(1) Was there a power to suspend?
Mr Ascroft submitted that the University had a contractual power to suspend enrolment. His primary submission was that this power existed as a matter of the correct construction of the Validation Agreement, and in particular clause 7, in its commercial context. Alternatively, he submitted that the power was necessarily implied to give business efficacy to the contract.
These submissions seem to me, in the circumstances of this case, to be different ways of putting the same point. The principles of the construction of commercial contracts are clear. The aim is to determine what the parties meant by the language that they used. The court is not concerned with the subjective intentions of the parties but with the meaning that the language used would have conveyed to a reasonable person who had all the background knowledge that would reasonably have been available to all of the parties to the contract; the relevant background information does not include the pre-contractual negotiations. If the language of the contract, when read against the relevant background, leads clearly to the conclusion that one particular construction is the correct one, the court must give effect to it. But if there is more than one possible construction, the court is entitled to prefer the construction that best accords with commercial common sense, even though another construction would not produce an absurd or irrational result. See Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 912F-913G, Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101, paras 21-26, Pink Floyd Music Ltd v EMI Records Ltd [2011] 1 WLR 770, paras 16 – 23, and Rainy Sky S.A. v Kookmin Bank [2011] UKSC 50, paras 15 - 30. As for the implication of terms, I refer to Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10, [2009] 1 WLR 1988, per Lord Hoffmann at para 21:
"[I]n every case in which it is said that some provision ought to be implied in an instrument, the question for the court is whether such a provision would spell out in express words what the instrument, read against the relevant background, would reasonably be understood to mean. It will be noticed from Lord Pearson's speech [in Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 1WLR 601] that this question can be reformulated in various ways which a court may find helpful in providing an answer—the implied term must "go without saying", it must be "necessary to give business efficacy to the contract" and so on—but these are not in the Board's opinion to be treated as different or additional tests. There is only one question: is that what the instrument, read as a whole against the relevant background, would reasonably be understood to mean?"
The argument for the University was, in short summary, as follows. The University is a venerable and highly regarded academic institution; the integrity of its academic standards is of paramount importance, and clause 7.1 gives it the ultimate responsibility for the academic standards of the scheme. LCB was obliged to implement fully the University's quality assurance procedures (clause 7.2) and to participate fully in reviews of its validated courses carried out by the University (clause 7.3) or any other relevant body (clause 7.4). Further, clause 7.5 entitled the University to require LCB to take specified action to resolve problems or issues that might impair its academic quality and standards or might adversely affect the reputation and integrity of the University or its qualifications, and the same clause even conferred a power of summary termination. The terms of the reviews carried out by the University, in which LCB was obliged to participate fully, included suspension during the course of the review. Moreover, suspension was necessary, because if LCB were able to continue enrolling students during the course of the review, there was a risk that serious damage would be caused to the reputation and integrity of the University and its academic qualifications by the time the review was completed; therefore suspension was justified either under clause 7.5.3 (as being action required to be carried out) or under clause 7.5.4 (on the basis that the greater power of summary termination implied the lesser power of suspension).
I reject the University's argument on this point. In my judgment the University had no power under the Validation Agreement to suspend enrolment of students pending the completion of a review.
It is helpful to be clear what a power to suspend enrolment might involve. The Validation Agreement is not altogether clear in its use of the language of enrolment, and the point was not dealt with in any detail in argument. For the most part, enrolment is something that the Institution, rather than the University, does: see for example clauses 3.1.2 and 3.2. However, the word is also used of the action of the University: see clauses 3.3 and 3.4. To put the matter colloquially, the basic idea seems to be that each party was required to put the relevant students on its books; LCB would register students on its validated courses and the University, upon receipt of the Registration Information (clause 1.1.1) would register the students on its books also. So far as I can see, the University did not spell out precisely what was meant by the suspension of enrolment or intake of new students. But the point was clear enough: the University was saying that it would not enrol students during the period of suspension, and it was impliedly instructing LCB not to enrol students during that period and stating that, if LCB did enrol students, the University would not enrol them on its books.
There is no express power of suspension in the Validation Agreement. Clause 7.2 is clearly inapt to confer a power of suspension; it relates, as it says, to compliance with quality assurance procedures published annually. Similarly, clause 7.3 simply obliged LCB to participate fully in any review of a validated course carried out by the University. The words "in accordance with the written instructions of the University" relate to participation in the review; for example, participation might involve meetings with the review committee or disclosure of documents, and the review instituted in March 2012 involved both of these components. But a suspension of enrolment pending the completion of the review is quite a different thing from an instruction as to participation in the review.
Clause 7.5 concerns the position where, as the result of a review or in any other way, the University learns of an actual or potential issue that might have the specified adverse effects. In those circumstances, the University has a choice. It can specify steps that are to be taken to address the issue, and if those steps are not taken it can then terminate the Agreement. Alternatively, it can simply proceed to terminate the Validation Agreement, without giving any opportunity to the Institution to take remedial steps. The first option does not involve a power of suspension pending review. It involves the power to stipulate action by the Institution to remedy the problems that have been identified (for example, inadequate teaching methods, cheating in examinations, or lack of pastoral care for students). Suspension of enrolment, by contrast, is not directed to the correction of a problem but to the interruption of the Institution's rights and obligations under the Validation Agreement until a decision has been made as to what problems exist and what is to be done about them. The second option under clause 7.5—immediate termination of the Validation Agreement—does not imply the lesser power of suspension. The decision to terminate requires the University to have the courage of its convictions in accordance with the opening lines of the clause. It also has the effect of releasing the Institution from its continuing obligations under the Validation Agreement. That is quite different from a suspension, which on the University's case both permits it to put matters on hold while it makes up its mind as to what problems exist and what is to be done about them and leaves the Institution bound by the Validation Agreement in the meantime.
There is no need at all to imply into the Validation Agreement a unilateral power of suspension on the part of the University in order to give it proper commercial sense. I return to the simple point made above: the Validation Agreement does not provide for a power of suspension. At para 17 of his opinion in the Attorney General of Belize case Lord Hoffmann said: "The question of implication arises when the instrument does not expressly provide for what is to happen when some event occurs. The most usual inference in such a case is that nothing is to happen. If the parties had intended something to happen, the instrument would have said so." It would have been easy to provide for a power of suspension, but the parties did not do so. The Validation Agreement works perfectly well without such a power. If the University learns of matters that, in its view, threaten its academic reputation, standards and integrity, the courses open to it are clear. It may immediately require that steps be taken to address the problems; if they are not taken, it may terminate the Agreement. Or it may investigate further and then require that steps be taken, on pain of termination if those steps are not taken. Or it may simply terminate the Agreement. This last course might be attractive if it is thought that the matters in question are beyond remedy or that any delay might be ruinous to the University's reputation.
I would go further. It seems to me that the suggested implied term is contradictory of the express terms of the Validation Agreement. They provide that for the term of the Agreement certain courses are approved, certain numbers of students with the requisite qualifications must be enrolled on those courses, and the Agreement can be terminated in certain circumstances; if it is terminated, provision is made for taking care of students who have been enrolled; cf. clause 11. The practical effect of what the University sought to achieve is a hybrid, which involves the partial de-validation of courses without regard to the scheme of the Validation Agreement.
(2) Waiver, estoppel etc
In paragraph 7C(4) of the amended reply and defence to counterclaim, the University advances the alternative case that, if the suspension of enrolment was a breach of the Validation Agreement, "the defendant consented to the suspension pending the outcome of the claimant's review and thereby waived any such breach." That is as far as the pleading goes. In paragraph 40 of his skeleton argument Mr Ascroft submitted that by its conduct LCB "is to be taken as having waived … any claim for damages. Alternatively, the defendant's conduct gave rise to an equitable forbearance rendering the defendant's enforcement of any right to claim damages as inequitable." In his oral submissions, he said that during the course of the suspension LCB had not complained that the suspension was a breach of contract, and he suggested that, if both parties operated on the assumption that there was a power to suspend enrolment, there might be an estoppel by convention.
I reject the University's contentions on this matter. In doing so I observe that the absence of anything more than a cursory pleading meant that the facts and matters relied on were never clearly articulated and was no doubt a significant reason why Mr Simms did not address this aspect of the case in his otherwise detailed submissions.
As regards "waiver":
78.1 The context in which the point falls to be considered is the import of suspension in the light of the dual nature of enrolment; see paragraph 71 above. Enrolment was not simply something for LCB; the University had its part to play. Although the University was in effect telling LCB not to take further students, it was also making it clear that it would not accept further students as being on validated courses under the Validation Agreement. This fact immediately makes the simple meaning of "consent" untenable. So one is indeed concerned with waiver of a breach.
78.2 The question under consideration is not whether LCB waived a right to treat the suspension as a repudiatory breach that justified it in terminating the Validation Agreement. Rather, it is whether LCB waived the breach itself, in the sense of something that entitled it to damages (what is sometimes referred to as "total waiver"). See Chitty on Contracts (31st edition), paragraph 22-047, which, in my view correctly, treats total waiver as an instance of waiver by estoppel.
78.3 Unlike waiver of the right to terminate, total waiver does not necessarily involve an irrevocable and irreversible election. However, it does require both (1) a clear and unequivocal representation that strict contractual rights will not be relied on and (2) some relevant conduct on the part of the other party that would make it inequitable for the representor to resile from its representation: see Chitty, op. cit. at paragraphs 24-007 to 24-009; Benjamin's Sale of Goods (9th edition) at paragraphs 12-036 to 12-038. Both of these matters would require to be pleaded and proved. I do not think that either is sufficiently pleaded; regardless of pleading points, neither is proved. A representation can, it is true, be inferred from conduct; yet it must be clear and unequivocal. I shall not attempt to remedy the deficiency of the pleading, but as it seems to me the furthest that the case on the first point goes is that LCB did not allege breach of contract and made efforts to satisfy the University with a view to having the suspension lifted. That may well have been politic and sensible. I cannot consider it enough to carry the clear implication that there was a waiver of legal rights. As regards matters that might make it inequitable to insist on legal rights, the suggestion must be that the University would have acted differently if LCB had asserted rights at the time. That is neither pleaded nor proved on the evidence and, in view of the attitude of the senior staff at the University, it seems to me to be highly improbable.
Although estoppel by convention is a distinct legal doctrine, the foregoing remarks concerning waiver are sufficient to show that it can have no application in this case. An estoppel by convention arises when the parties have proceeded on the basis of a shared understanding or assumption (or an understanding or assumption held by one party and acquiesced in by the other party) in circumstances where it would be inequitable to permit either of them to go back on it. "It seems, however, that the assumption resembles the representation required to give rise to other forms of estoppel to the extent that it must be 'unambiguous and unequivocal'; and this common feature can make it hard to distinguish between these two forms of estoppel" (Chitty, op. cit. at paragraph 3-107, citing Smithkline Beecham plc v Apotex Europe Ltd [2006] EWCA Civ 658, [2007] Ch 71, at [102]). If LCB's conduct does not amount to an unambiguous and unequivocal representation of waiver of its rights, it is hard on the facts of this case to see how it could unequivocally and unambiguously signify acceptance of or acquiescence in the legitimacy of the University's conduct. Further, for reasons already indicated, the University has not established matters that would make it inequitable for LCB to assert the true contractual position.
(3) The exercise of the power to suspend
In view of my decision on the first two issues, this third issue, which relates to the exercise of the power to suspend, does not fall for determination. I shall therefore deal with it only briefly.
LCB makes two arguments. First, if as a matter of the true construction of or necessary implication in the Validation Agreement the University had a power of suspension, it was entitled to exercise that power only on reasonable grounds—cf. paragraph 62(c) above—but in fact exercised it unreasonably. Second, any such power of suspension pending review was subject to an implied obligation to carry out the review with reasonable expedition—cf. paragraph 64 above—but in fact failed to carry out the first review with reasonable expedition. Neither point was pleaded very clearly, to say the least, but the matter was dealt with in argument by both parties.
If I had considered that the University had a power of suspension, I should have held that such a power could only be exercised on reasonable grounds. Without such an implied limitation, the power would permit arbitrary conduct capable of undermining the parties' agreement. (By way of analogy, see the case of employment contracts, where suspension is capable of constituting a breach of the employer's implied obligation not without reasonable and proper cause to act in a way which seriously damages the relationship of confidence and trust between the parties: Gogay v Hertfordshire County Council [2000] EWCA Civ 228, [2000] IRLR 703, at [52-9].) I should also have taken the view that there were no reasonable grounds for either suspension. As to the first suspension, Dr Strevett's preliminary investigation found no evidence of fraudulent sale of qualifications, which was the gravamen of the initial story on Sky News. It did express concern over the procedures relating to the qualifications of students with advanced standing and, somewhat casually, recommended immediate suspension of LCB. However, I find it difficult to see that suspension of new registrations achieved anything other than a public relations statement for the University; see Mr McInally's reference to limiting the University's exposure (paragraph 22 above). If students who had already been enrolled were shown not to have the qualifications they claimed to have, they could be dealt with on a case by case basis; suspension of new enrolments would do nothing for such cases. If newly registered students in the April and September intakes were shown on investigation to lack their claimed qualifications, they too could be dealt with; the fact that they had been enrolled did not mean that they were entitled to remain on the courses and graduate if they were shown to have achieved their places on false grounds. Suspension was not necessary for the purposes of investigation. If LCB were shown to be complicit in bad behaviour, or to have jeopardised the integrity of the University's academic qualifications by lax procedures, the University had ample powers to deal with the matter under clause 7.5. So far as I can see, the only positive reason for suspension was to distance the University from unwelcome publicity. Against this must be set the numerous factors relied on by Mr Simms, among which are that the preliminary investigation had found no evidence of wrongdoing, that LCB was subject of a positive QAA assessment, which the University had seen in draft before deciding to suspend, that the parties had a longstanding and productive relationship, that suspension was not required for the conduct of the review, and that suspension of enrolment had the effect of preventing LCB from taking on new business. As to the second suspension, similar observations apply. The information available to the University related to three students; they had the right of appeal and the University had the right to carry out any necessary review and investigation. Any problem was capable of being investigated promptly. The University had very recently conducted a full review of LCB's admissions procedures. Mr McInally's evidence (paragraph 55 above) explains why the University was concerned to ensure that students had the necessary qualifications but does not provide a reasonable justification for suspending further intake.
I should also have held that the University was in breach of an implied obligation to conduct the first review within a reasonable time (or, which amounts to the same thing for practical purposes, to maintain the suspension only for a reasonable period).
1) Mr Ascroft accepted that the University was under an implied obligation to carry out any review with reasonable expedition. He referred to Lewison, The Interpretation of Contracts (5th edition), para 6.16: "Where a contract does not expressly, or by necessary implication, fix any time for the performance of a contractual obligation, the law usually implies that it shall be performed within a reasonable time." I have some doubt whether that proposition is directly in point; it relates to contractual obligations, whereas the University had not an obligation but only a power to review and (on the assumption now being made for the sake of argument) to suspend. However, there cannot be any doubt but that, if the University had power to suspend enrolment pending the outcome of a review, it was necessarily implied that the review should be completed within, and the suspension maintained only for, a reasonable time.
2) The question what is a reasonable time must be answered with regard to all the circumstances of the case, including not only facts known when the contract was made but any relevant later matter concerning or affecting the performance of the contract; cf. Peregrine Systems Ltd v Steria Ltd [2005] EWCA Civ 239, per Maurice Kay LJ at [15].
3) The fact of suspension must itself be material to the question what is reasonable, at least if the suspension is maintained pending the determination of the review. The fact that a leisurely approach to a review might be perfectly reasonable if the review process has no adverse implications for the counter-party does not mean that it will be equally reasonable if the process is having the effect of preventing the counter-party from carrying on its business in some material respect. As Mr Simms said, what was important was the duration of the suspension, not the length of the review itself; if there had been no suspension, urgency would not have been an issue.
4) I do not think that the review was conducted and the suspension lifted with reasonable expedition. Although it is possible to criticise the delay of nearly two months before the review meeting was held, the real problem relates not to the conduct of Professor Peach and the review panel but to the University's processes for dealing with and responding to the report of the review panel. The report was finalised in mid June 2012 (paragraph 39 above), though it was not provided to LCB for another month (paragraph 45 above) and the suspension was not lifted until either 5 October or 16 November 2012, depending on how one identifies the University's formal decision (paragraph 50 above). I regard that as unacceptable. Although some of the time may be referable to the issues raised by Professor Peach on 8 August, LCB was able to address those issues within a few weeks and in my view would probably have been able to do so within a similar time-scale if they had been raised earlier; and, though the matters (which I have not thought it necessary to set out) were entirely proper to raise, it is difficult to see that they required a delay in lifting the suspension. After the issues had been addressed to the satisfaction of the panel, it took a further four weeks before the University was able to make a decision and a further six weeks before it was able to publish that decision formally. This presents a striking contrast to the speed with which the University was able to implement the suspension; it showed itself perfectly capable of making quick decisions when it wants to. In my judgment, if the University had had proper regard to the effect of the suspension and had chosen to institute decision-making procedures that could and should have been in place, it would reasonably have published the review report and approved both the report and the response to it and lifted the suspension in good time to enable LCB to recruit students for the September 2012 intake.
5) I regret to say that the University's approach to the question of suspension seems to me to be deeply unattractive. This was exemplified in the evidence of Mr McInally, who appeared to take the view that all else was as naught when set against the University's academic reputation. So far as I can see, with the honourable exception of Professor Peach, those involved at the University seem to have had no concern for the effects that suspension of enrolment might have on the business of LCB.
(4) Did the University validly terminate the Validation Agreement?
Clause 5.1 of the Validation Agreement provided for the payment of the Fees in accordance with the relevant schedule "without deduction, set-off or counterclaim". Part 2 of Schedule 3 entitled the University to invoice LCB for the Fees at any time after the receipt of the information there required from LCB, and it provided that LCB should "pay to the University the Fees due in accordance with the University's invoice within 30 days of the date of the invoice." Clause 10.1.1 entitled the University to terminate the Validation Agreement forthwith by notice in writing if LCB "fail[ed] to make any payment due under this Agreement (including without limitation any payment of the Fees or any part of them) on the due date for payment". These are the provisions on which the University relies as establishing its right to terminate the Validation Agreement by the letter of 20 December 2012.
Mr Simms submitted that this purported termination was ineffective, for three alternative reasons: (1) it was a condition precedent to the obligation to pay the Fees that the University had delivered an invoice in the correct amount, and it had not done so; (2) time for payment was not of the essence of the contract; (3) the provision for payment without set-off or deduction was an unreasonable limitation clause for the purposes of the Unfair Contract Terms Act 1977. I shall consider these reasons in turn and then say something about one further possible reason, which was mooted rather unclearly at the trial.
With respect to the first reason (condition precedent), Mr Simms submitted that, where incorrect invoices were submitted, the obligation to pay did not arise until corrected invoices charging the correct amount of the fees were rendered. "An obligation to pay Fees due in accordance with the University's invoice must be construed as an obligation to pay an invoice in respect of which the Fees claimed were correct." In fact, he submitted orally that the payment obligation arose in 2013, before the commencement of proceedings, when the University rendered credit notes in respect of the previous invoices.
As a matter of construction, I reject the contention that the payment obligation arose only when an invoice in the correct amount was rendered. That interpretation of the payment obligation in Part 2 of Schedule 3 to the Validation Agreement is not required by even the most literal invocation of the words "in accordance with the University's invoice" and is contrary to commercial commonsense. The invoice is rendered after the provision of the "transfer" showing the candidates on the course. It is the rendering of the invoice that triggers the payment obligation. If for some reason the invoice misstates the amount properly due, the institution has an obligation to pay what is due and will not be liable for non-payment of what is not due. LCB was perfectly able to identify what was due and owing; there is no question of it having been unable, without a corrected invoice, to ascertain the correct amount of the fees. But it apparently decided that it would not pay what was due until an invoice in that amount was rendered.
Although that is sufficient to dispose of the first reason for disputing the termination of the Validation Agreement, I add that the first reason lacks a sound basis in fact. The claim is based on the following invoices:
Date Number Amount Balance Owing
02/02/2012 508333 £46,860 £31,020
12/03/2012 508509 £26,400 £ 4,620
29/03/2012 508553 £ 9,240 £ 2,640
15/11/2012 509156 £ 5,940 £ 4,620
£42,900
Among the points that emerge from the evidence, two might be mentioned.
1) The invoices were correctly issued by the University on the basis of the information provided to them. They later required adjustment; that is a different matter. The evidence of Mr Mark Rainey, the University's Head of Finance and Resources, explained how the invoices were prepared from the files uploaded by LCB to the University's registration system. Indeed, in his skeleton argument, Mr Simms wrote: "The invoices originated from batch information uploaded by LCB to the University, which then generated an invoice. However, the details uploaded were rarely totally correct because of students who did not take up their courses, were found in some way ineligible to pursue their courses and because of double counting and other administrative errors." How such errors in the information uploaded by LCB to the University's system could prevent its payment obligation arising in respect of fees properly due, when the University had prepared invoices in accordance with that information, was not explained.
2) In its email of 15 May 2012 (paragraph 35 above), which asked for revision of previous invoices and payment allocations, LCB specifically asked that a payment be allocated in part to invoices 508333 and 508509.
With respect to the second reason (time of the essence), Mr Simms relied on the decision of Kitchin J in Dominion Corporate Trustees Ltd and others v Debenhams Properties Ltd [2010] EWHC 1193 (Ch). Under the terms of the contract in that case, the claimant was obliged to pay £425,000 on 2 March 2009. It did not do so, and on 3 March 2009 the defendant served notice of termination of the contract pursuant to a clause that gave an entitlement to terminate "[i]f either party shall in any respect fail or neglect to observe or perform any of the provisions of this Agreement". In line with earlier authority, including Antaios Compania S.A. v Salen A.B. [1988] 1 AC 191, Kitchin J held that when the contract was construed in accordance with business commonsense, the termination clause did not mean that a party could terminate on account of any breach, however trivial; it meant that any repudiatory breach would give rise to a right to terminate. He also held that, in the case before him, the contract did not make time of payment of the essence, so that a failure to pay on time was not ipso facto a repudiatory breach.
I do not consider that the Dominion Corporate Trustees case assists LCB. The main point in the case was that, where the literal reading of a contract would provide an entitlement to terminate for any breach, however trivial, in circumstances where the contract and its performance would involve the potential for many and varied kinds of breach of differing significance, commercial commonsense requires the contract to be understood as giving a right to terminate only for a serious breach. That is not this case. I have set out enough of the provisions of the Validation Agreement to show the limited grounds on which summary termination was justified. Breach of contract other than payment of moneys is dealt with specifically in clause 10.1.4; the mere fact of a breach does not give rise to a right to terminate. However, payment is dealt with separately under clause 10.1.1 in quite different terms. That provision is in my judgment clear on its face and impatient of any reasonable interpretation other than that, if payment is not made on the due date, the University is entitled to terminate; in other words, that time of payment is of the essence of the contract. Therefore I reject the second reason advanced by LCB.
The third reason advanced by LCB why the University's purported termination of the Validation Agreement was ineffective (unreasonable limitation clause) raises questions under the Unfair Contract Terms Act 1977, which contains the following material provisions:
"Section 3: Liability arising in contract
(1) This section applies as between contracting parties where one of them deals … on the other's written standard terms of business.
(2) As against that party, the other cannot by reference to any contract term—
(a) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach …
except in so far as … the contract term satisfies the requirement of reasonableness."
"Section 9: Effect of breach
(1) Where for reliance upon it a contract term has to satisfy the requirement of reasonableness, it may be found to do so and be given effect accordingly notwithstanding that the contract has been terminated either by breach or by a party electing to treat it as repudiated.
(2) Where on a breach the contract is nevertheless affirmed by a party entitled to treat it as repudiated, this does not of itself exclude the requirement of reasonableness in relation to any contract term."
"Section 11: The 'reasonableness' test
(1) In relation to a contract term, the requirement of reasonableness for the purposes of this Part of this Act … is that the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.
…
(5) It is for those claiming that a contract term … satisfies the requirement of reasonableness to show that it does."
"Section 13: Varieties of exemption clause
(1) To the extent that this Part of this Act prevents the exclusion or restriction of any liability it also prevents—
(a) making the liability or its enforcement subject to restrictive or onerous conditions;
(b) excluding or restricting any right or remedy in respect of the liability, or subjecting a person to any prejudice in consequence of his pursuing any such right or remedy;
(c) excluding or restricting rules of evidence or procedure;
…"
The first question is whether, in entering the Validation Agreement, LCB dealt on the University's written standard terms of business for the purposes of section 3. This question was subject of only limited consideration by the parties at trial. Paragraph 8 of the amended defence relied on section 3 of the Act, as well as on section 2 (which relates to negligence and has in my view no relevance to the issues that properly arise in this case). Paragraph 8 of the amended reply admitted that section 2 applied to clause 17.3 but denied that section 3 applied on the ground that neither party was acting as a consumer. However, the relevant question was whether LCB was dealing on the University's written standard terms of business, and this was not addressed in the pleadings or in much detail in the witness evidence.
On this question, Chitty on Contracts (31st edition), paragraph 14-072, provides a starting-point:
"The expression 'deals on the other's written standard terms of business' is not defined or explained by the Act … Since, in any event, no two contracts are likely to be completely identical, but will at least differ as to subject matter and price, the question arises whether variations or omissions from or additions to standard terms thereby render them 'non-standard' and, if they do not, whether all the terms then become standard terms. Where negotiations have taken place around standard terms before the contract is made, and amendments agreed, it is a question of fact whether one party can be said to have dealt on those standard terms. If it is alleged that an ostensibly 'one-off' contract is in fact the other's written standard terms of business, extensive disclosure may be involved to determine the terms on which contracts have been concluded with others. The burden of proving that he dealt on the other's written standard terms of business appears to rest on the party who alleges that s. 3 applies."
In St. Albans City and District Council v International Computers Ltd [1996] 4 All ER 481, 490-1, Nourse LJ rejected the submission that one cannot be said to deal on another's standard terms of business if one negotiates with him over those terms before entering the contract: "Thus it is clear that in order that one of the contracting parties may deal on the other's written standard terms of business within s. 3(1) it is only necessary for him to enter into a contract on those terms." He agreed with the trial judge that, as the defendant's general conditions "remained effectively untouched in the negotiations", the plaintiff dealt on those terms for the purposes of section 3(1). In Hadley Design Associates Ltd v The Lord Mayor and Citizens of the City of Westminster [2003] EWHC 1617 (TCC), H.H. Judge Seymour Q.C. said at [78]:
"The concept underlying the provisions of Unfair Contract Terms Act 1977, s.3, in my judgment, is that there should exist a stock of written, no doubt usually at any rate printed, contract conditions which was simply drawn from as a matter of routine and intended to be adopted or imposed without consideration or negotiation specific to the individual case in which they were to be used. That seems to me to be the force of the words 'written' and 'standard' in the expression 'written standard terms of business'. In other words, it is not enough to bring a case within Unfair Contract Terms Act 1977, s.3, that a party has established terms of business which it prefers to adopt, as for example a form of draft contract maintained on a computer, or established requirements as to what contracts into which it entered should contain, as for example provision for arbitration in the event of disputes. Something more is needed, and on principle that something more, in my judgment, is that the relevant terms should exist in written form prior to the possibility of the making of the relevant agreement arising, thus being 'written', and they should be intended to be adopted more or less automatically in all transactions of a particular type without any significant opportunity for negotiation, thus being 'standard'."
Although Judge Seymour's approach seems to me to be broadly helpful, I do not consider that the retention of a stock of forms is necessary; a set of terms may be both written and standard even if it is held on the computer and printed as and when necessary. Negotiation or even minor modification does not necessarily preclude the application of section 3; if it did, the effect of the section could be easily avoided. It is a matter of fact and degree whether the section applies. Professor Guest's summary in Chitty on Contracts captures this point.
In the present case there was limited evidence. Mr McInally's witness statement said:
"The terms under which the University was prepared to validate a programme delivered by another institution are set out in a formal (written) Validation Agreement between the University and the institution. … The Validation Agreement is in a standard form and was drafted by the University's solicitors."
In cross-examination Mr McInally said that all potential collaborators were given a standard-form agreement so that they would know the University's expectations, but he insisted that not all validation agreements were precisely the same and that special arrangements could be made about matters other than merely fees. No documentary evidence was adduced by way of example of variations to the standard form. For LCB, Dr Basha stated in his witness statement dated 21 November 2014:
"[T]he University prepared through their solicitors a Validation Agreement which was sent to the College in January 2008 (the '2008 Validation Agreement'). We were told by the University that the Validation Agreement was in their standard form prepared by their solicitors for use for all colleges and that the college must sign and return the agreement if we wanted to proceed. We did not consider that we had any negotiating position with the University as it was really a take it or leave it situation."
"The College was sent the [2010 Validation Agreement] for signature and return on the basis that it was the standard form of the University drafted by their lawyers and no changes were allowed except to the schedules which related to the courses, qualifications and to the minimum and maximum number of students on the various courses. The 2010 agreement was the same as the earlier 2008 Validation Agreement except in so far as [concerned provision for the courses, the student numbers and the identification of the campuses]."
"The University Validation Department sent us the new validation Agreement on 26th January 2012 and asked the college to print off two copies, sign and return two signed copies to the University. … Here again, we had no opportunity to negotiate the substance of the Agreement but were required to sign as suggested. Again the only discussion was on the courses and degrees to be covered by the new Agreement. … The body of the agreement was the same as the previous agreements."
In cross-examination, Dr Basha said that he was not involved directly in the discussions that led to the 2008 and 2010 Agreements; his knowledge of the University's stance came from what he was told by LCB's staff. In 2008 he was told that the University was saying, "Take it or leave it." His instructions were to the effect that LCB had to start somewhere and so they would "take it". In 2010 and particularly in 2012 it appeared that the business arrangement was working well and Dr Basha saw no reason to be concerned over the terms of the Validation Agreement.
I find that the position was as follows. The University presented its form of validation agreement as a standard form that was required to be accepted by the relevant institution, subject of course to inclusion of the specific matters regarding fees and courses; and it was the University's intention to require acceptance of the standard form, not merely to use it as a discussion document or negotiating stance. It may perhaps be that occasionally an institution would request and be granted some modification of the terms; I do not think it likely that any such modification was ever substantial. If such a modification were agreed, a question might arise as to whether or not there were a dealing within section 3. However, in the present case the Validation Agreements were simply made, without negotiations, on the University's standard form of contract. In my judgment that form constituted the University's written standard terms of business and LCB dealt on those terms. Therefore section 3 is engaged.
The "no set-off" provision in clause 5.1 falls within the scope of section 3 as extended by section 13: see Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] 1 QB 600 and Axa Sun Life Services Plc v Campbell Martin Ltd and others [2011] EWCA Civ 133 at [52]. Accordingly the provision is effective only insofar as it satisfies the requirement of reasonableness.
The University did not in terms plead in support of the contention that the "no set-off provision" was reasonable. That omission is explained by the fact that the amended reply and defence to counterclaim simply denied that section 2 and section 3 of the Act applied to clause 5.1. The denial was correct in the case of section 2, but it was wrong in the case of section 3; the mistake occurred because it was overlooked that section 3 applied not only where a party deals as a consumer but also where it deals on the other's standard written terms of business. However, at the trial before me Mr Ascroft made submissions in accordance with the matters relied on in his skeleton argument and Mr Simms dealt with the point without taking a pleading objection. Further, so far as evidence was concerned, the question of the reasonableness of clause 5.1 raised no matter that was not also raised by the pleaded issue concerning the reasonableness of clause 17.3, which is discussed below. It is clearly right, in these circumstances, to deal with the point. The matters particularly relied on by Mr Ascroft were the following: (1) there was not a significant imbalance in the parties' bargaining positions; (2) LCB could have sought modification or exclusion of clause 5.1; (3) LCB could have sought validation services from another provider; (4) the same provision had been included in all three validation agreements, so LCB could and should have been well aware of it; (5) clause 5.1 is clear and simple in its terms and effect.
In my judgment, in the context of this particular contract, the "no set-off" provision satisfies the requirement of reasonableness.
98.1 The parties are both commercial entities, carrying on business for profit. The fact that they are both educational establishments does not detract from this fact. Education can be big business. LCB can be presumed to have read the terms of the validation agreements before it signed up to them, and it is generally to be supposed that it was capable of entering into contracts that it judged to be in its own interests. (I make clear that it does not follow, and I do not accept, that LCB was of equal bargaining power with the University. I mention this below in the context of clause 17.3.)
98.2 Clause 5.1 was not ambiguous, unclear or complicated.
98.3 "No set-off" provisions are very common in business contracts. They do not affect the substance of the parties' obligations; they only affect the question of who has to take the initiative of bringing proceedings in the event of a dispute. (Cf. the dicta of Rix LJ in the Axa Sun Life Services case, at [108].) Put another way, they are about cash flow.
98.4 Although it is literally true that the provision is not mutual, that fact has to be understood in the context of the Validation Agreement as a whole. The University did not have payment obligations; only LCB had to pay money. This is not a case where one party was entitled to exercise rights of set-off but the other was not. Indeed, although LCB was required to do various things to satisfy the University's standards, the fundamental thing that it provided to the University under the Validation Agreement was payment of money. The corresponding thing that the University provided to LCB was its validation service. The "no set-off" provision had the effect that LCB was required to provide its fundamental benefit to the University during the term of the Validation Agreement. I have already held that the University had no power to suspend its corresponding obligations.
98.5 It is relevant to consider what sort of thing might be deducted against or set-off against the fees payable by LCB. Of course, there are various possibilities. But in view of the lack of mutuality of payment obligations the most likely kind of contra would be an unliquidated claim for damages. If such a claim could be set off against the fees payable, the result would be that, in the event of a disputed claim for damages, the University would have the choice of either purporting to terminate the Validation Agreement under clause 5.1 (in which case it would be at risk of a finding that it had repudiated the contract) or continuing to provide services without payment pending determination of LCB's claim (in which case there would not be mutuality of provision of the fundamental benefits during the subsistence of the contract). Clause 5.1 makes a clear and certain provision for the ongoing performance of the Validation Agreement. I do not think that it can be said to provide an arbitrary and unilateral benefit, as some "no set-off" provisions might be thought to do.
A further possible reason for disputing the validity of the termination of the Validation Agreement made a somewhat shadowy appearance at the trial. In his closing submissions, after Mr Ascroft had made his submissions, Mr Simms said that, by its course of conduct, the University had "always waived strict compliance" with the payment provisions in the Validation Agreement, impliedly indicating that payment was not required until problems and queries concerning the invoices had been resolved. He referred to a schedule of invoices and payments, apparently showing that during the course of the three validation agreements payments had regularly been made considerably later than the strict date for payment. He said that, having by its conduct led LCB to believe that strict compliance with the contract was not required, the University could not simply "change the goalposts" without prior warning. This way of putting the case was not pleaded and was not raised by Mr Simms in his skeleton argument or his oral opening submission; the closest he came was in paragraph 18.3 of his skeleton argument, which said that the contractual provisions "must be read in the context of the way that payment had been dealt with in the previous five years in the dealings between the parties", and in a similar observation in his opening submission, apparently in support of his contention that the University had never made time of the essence. Any attempt at this late stage to rely on this form of waiver, which is essentially waiver by estoppel, would in my view necessarily fail, because it has the potential to give rise to significant evidential questions. Further, in my judgment the matters relied on would be incapable of amounting to a waiver by conduct. They establish no more than that the University had not previously elected to terminate the contract on the ground of late payment. Unless that conduct amounted to a clear and unequivocal representation that late payment would not in future be treated as a ground for terminating the contract, it could not amount to a waiver. It seems to me that, by itself, the University's previous willingness to treat the contract as afoot despite late payment could not imply any assurance that it would be willing to do so in the future. It may also be that clause 21 is sufficient to preclude reliance on the doctrine of waiver by estoppel in any event, though I do not need to decide that question.
For completeness, I should mention that Mr Simms did suggest, without conviction, that the University's conduct after the purported termination was inconsistent with a belief that the Validation Agreement had indeed been terminated. The position, however, is that an election to terminate is final and is not reversed by subsequent conduct that would imply the continuation of the contract.
In my judgment, accordingly, the University was entitled to terminate the Validation Agreement when it purported to do so. Although questions might have arisen regarding reliance on earlier invoices, in circumstances where the University had treated the contract as being afoot after the time for payment had passed, it was clearly entitled to rely on the invoice dated 15 November and rendered on 16 November 2012.
(5) Did LCB validly terminate the Validation Agreement?
It follows from my decision on issue (4) that LCB's purported termination of the Validation Agreement was invalid and ineffective. The Validation Agreement had already been terminated.
(6) Limitation of liability: clause 17.3
The damages that LCB proposes to seek include damages referable to loss of revenue and profits. Are such damages precluded by clause 17.3?
This question requires consideration of the construction of clause 17.3 and of the application of the Unfair Contract Terms Act 1977.
The normal principles of contractual construction apply to exclusion and limitation clauses as they apply to other contractual terms. "However, in cases where there is uncertainty about the parties' intention, and therefore about the meaning of the clause, such uncertainty will be resolved against the person relying on the clause and the more significant the departure is said to be from what are accepted to be the obligations ordinary assumed under a contract of the kind in question, the more difficult it will be to persuade the court that the parties intended that result": Whitecap Leisure Ltd v John H. Rundle Ltd [2008] EWCA Civ 429, [2008] 2 Lloyd's Rep. 216, per Moore-Bick LJ at [20]. A clause limiting liability may be construed in a less restrictive manner than a clause excluding liability altogether, though as Moore-Bick LJ observed many of the cases dealing with strict construction were decided when the approach to construction was more literal than is now the case. The contra proferentem rule of construction comes into play only if "the words used are found to be equally capable of bearing two different meanings, and are therefore ambiguous": ibid at [22]. However, if the application of the normal principles of construction provides a clear meaning, the court must give effect to it and is not entitled to strain the construction to avoid the result.
Mr Simms made two submissions about the way clause 17.3 works: first, that the second sentence in clause 17.3 was qualified by the first sentence; second, that clause 17.3.1 "has precedence over" clause 17.3.3. I reject both submissions. As to the first submission, I agree with Mr Ascroft that the first sentence and the second sentence are independent. It is the second sentence that engages the three particular cases mentioned in clauses 17.3.1, 17.3.2 and 17.3.3. As to the second submission, I understood it to mean that future loss of profits etc (17.3.3) were not recoverable insofar as they were not reasonably foreseeable (17.3.1) or not caused by the party in breach (17.3.2). However, without doing violence to the clause it cannot be made to say that. The sub-clauses state three different, though not necessarily mutually exclusive, cases. Clause 17.3.1 is in effect a restatement of the remoteness rules in contract. Clause 17.3.2 restates general causation rules. Attention has focused on clause 17.3.3, which purports to exclude liability for a particular kind of loss.
For the University, Mr Ascroft submitted that clause 17.3.3 was clear and unambiguous and that it simply excluded liability for loss of revenue and profits. Specifically, it excluded any claim by LCB to recover profits lost that would have been made by reason of the performance of the Validation Agreement but that were lost by reason of breaches of contract such as a wrongful suspension or a wrongful purported termination of the Validation Agreement. LCB proposes to claim damages for losses sustained during the period of the first suspension and during the period from the purported termination in December 2012 until the contractual expiry date of the Validation Agreement. Mr Ascroft submits that such losses are excluded by clause 17.3.3.
I do not agree with that submission. In my judgment, clause 17.3.3, when construed in accordance with the principles already mentioned, relates to business losses outside the Validation Agreement. This was a construction advanced orally by Mr Simms.
108.1 If construed in the manner contended for by Mr Ascroft, the sub-clause would have a remarkable effect. The parties are businesses; whatever their other philanthropic motives may have been, each of them entered into the Validation Agreement for the purpose of making money. The University was to make money by providing services for a fee. LCB was to make money by recruiting paying students on the basis of the services it received under the Validation Agreement. If the University's construction is correct, the primary commercial benefit for each party could simply be negated by a breach of contract by the other. That is not quite to say with Mr Simms that practically no liability could remain; it is possible to think of cases, such as property damage or exposure of the other party to expenditure or to third-party liability, that would not be excluded by the University's construction of clause 17.3.3. But liability for the deprivation of the primary commercial benefit under the Validation Agreement would be excluded, other than in cases of fraud (clause 17.2).
108.2 The very striking effect of clause 17.3.3 as construed by the University is in marked contrast to the anodyne effect of the rest of clause 17.3. The first sentence merely excludes liability for breaches caused by the other party. The second sentence, up to this point, has merely stated familiar rules of remoteness and causation. In that context would be surprising, though not impossible, if clause 17.3.3 had the effect contended for by University, whereby a party would have no recourse for being wrongfully deprived of the very business it had bargained for in the Validation Agreement.
108.3 The context of the sub-clause within the wider clause helps in ascertaining its meaning. Three kinds of loss are identified. The first two are those which are not reasonably foreseeable at the date of the Validation Agreement and those which are caused by some one or some thing else. The third kind of loss belongs in that company, if it relates to the loss of business that might have been done with others, outside the Validation Agreement.
108.4 That is also suggested by the words "anticipated or future". Those words could literally apply to the business etc that was anticipated under the Validation Agreement. But all business, revenue and profit for the loss of which a party might be liable would almost certainly be future; it is hard to see how one could lose past business, revenue or profit. (The case of goodwill may be conceptually harder. But a claim for loss of goodwill is in substance a claim for the loss of future business.) The inclusion of the words indicates, in my view, that what is in mind is business future to, or anticipated outside of, the Validation Agreement.
108.5 This provides what is in my judgment the clear commercial construction of clause 17.3.3. It has nothing to do with excluding liability for the loss of business under the Validation Agreement. It is concerned with the business harm that a party might suffer more generally as a result of the counter-party's breach. Thus LCB cannot say: "Not only has your non-performance lost us £x under the Validation Agreement. If you had performed, we would have gone from strength to strength; other validating institutions would have done business with us; we claim damages for the lost business from those sources." Equally, the University cannot say: "Not only has your breach lost us the profit from the fee income under the Validation Agreement. It has tarnished our reputation and no one is any longer interested in having courses validated by us; we claim damages for the loss of our ongoing business."
Accordingly, clause 17.3.3 does not prevent a party from claiming damages in respect of the loss of profits it would have made under the Validation Agreement if the other party had performed its obligations.
I have already set out the relevant provisions of the Unfair Contract Terms Act 1977 and held that section 3 applies. It is therefore necessary to determine whether clause 17.3 satisfies the requirement of reasonableness.
No issue arises as to the first sentence of clause 17.3. Nor, with respect to the second sentence, has any issue been raised as to clauses 17.3.1 and 17.3.2. I have previously described them as a re-statement of general rules of remoteness (17.3.1) and causation (17.3.2). It is right to say clause 17.3.1 is couched in terms of reasonable foreseeability rather than remoteness and that those concepts are not identical. But any loss excluded as being not reasonably foreseeable would almost certainly fail the stricter remoteness test of the reasonable contemplation of the parties. As regards clause 17.3.2, that should in my judgment be construed in accordance with general common law principles regarding the break of the chain of causation, so that the mere fact that a loss resulted from the decision of a third party would not bring it within clause 17.3.2 if the contracting party's breach was causative for the purposes of the common law.
The issue concerns clause 17.3.3. In paragraph 8 of the amended reply and in oral submissions, the University relies on four matters as showing that clause 17.3.3 was reasonable: (a) it is a commonly found provision and is not onerous or excessive; (b) it applies to both parties equally, not just to LCB; (c) the parties had equal bargaining position, because LCB could have sought to negotiate the terms or to do business with another validating institution; (d) it was open to LCB "to cover any liability [presumably loss is meant] under the second sentence of clause 17.3 by insurance."
In respect of clause 17.3.3:
113.1 The only business losses that can fall within clause 17.3.3 are those that would otherwise be recoverable on normal principles of remoteness and causation. These could include losses of specific business or general harm to business. Apart from losses under the Validation Agreement, the former would be unlikely and are not claimed; the latter is more likely to be in issue.
113.2 On what I have held to be its true construction, clause 17.3.3 is in my view entirely reasonable. Mr Simms did not submit to the contrary. There is nothing in the evidence to suggest that the University knew of any particular business opportunity or contract outside the Validation Agreement that might be harmed by non-performance; indeed, there is nothing to show that LCB knew of any such specific matter either. Therefore the theoretical applicability of clause 17.3.3 to losses in respect of specific contracts or business opportunities does not indicate that it is unreasonable. More generally, the provision applies equally to both parties, not merely to the losses of LCB. Accordingly LCB was equally protected against claims by the University on the basis that the University's business as a respected validator of courses had been harmed by LCB's breaches of contract. Further, losses in respect of general harm to business might be open-ended and difficult to predict, and the clause protects parties against indeterminate liabilities. Such losses, and even losses said to arise from specific contracts, might also give rise to difficult issues of quantification, even after they have arisen.
113.3 However, if (contrary to my view) clause 17.3.3 purports to exclude even liability for loss of profits that would be achieved under the Validation Agreement, I should consider the clause to be unreasonable, for the following reasons.
a) The parties were not really in equal bargaining positions. LCB was an institution of recent origin, seeking to establish itself in the UK degree-courses market. The University was a venerable, well-established and highly respected university. It is strongly probable that the University put the matter to LCB on the "take it or leave it" basis that Dr Basha understood to be its position, even if as a matter of fact it might possibly have considered a concrete counter-proposal. There is a lack of evidence to support the contention that LCB could have contracted on different terms with other validating institutions.
b) On the University's construction, clause 17.3.3 is extremely restrictive, because it would mean that one party could deprive the other of the commercial benefit of the transaction (its profit) without being liable for the loss. Expectation damages under the contract would be eliminated. Contrary to the University's contention, I see no reason to think that a clause with such an effect is a matter of standard or common practice.
c) The University's contention that the losses in question could be covered by insurance is unsupported by evidence and cannot be accepted without evidence.
d) Given the context of clause 17.3.3 and the way it is worded, the meaning contended for by the University, even if the "correct" construction, is hardly obvious. For the sake of the argument, it must be supposed that the clause is sufficiently clear to render that meaning when the principles of construction are applied to it. But the law reports are full of cases in which different judges have applied the principles of construction with differing results. Businessmen are presumably no different from judges in that regard. A clause that would have the effect of depriving a party of its right to recover as damages its lost profits under the contract itself should be expressed clearly, so that the party knows what it is signing up to.
Conclusion
There will be judgment for the University on the claim for £42,900. Unless the parties can agree what interest should be awarded on the judgment sum, I shall adjourn that question for further consideration.
Because the University's judgment is in respect of moneys that were payable without set-off, it would be wrong to stay execution of the judgment in the absence of a strong reason to do so. The existence of a counterclaim that is likely to succeed is not such a reason; to hold the contrary would be to undermine the parties' contract; see Credit Suisse International v Ramot Plana OOD [2010] EWHC 2759 (Comm). Other than the existence of a counterclaim, no reason for a stay of execution has been advanced in this case. Therefore the request for a stay of execution is refused.
In respect of the counterclaim, I hold as follows:
116.1 The University was in breach of contract in suspending registration of new students on two occasions in 2012.
116.2 Therefore LCB is entitled to judgment on the counterclaim for damages in an amount to be determined by the Court.
116.3 The Validation Agreement was terminated by the University by its solicitors' letter dated 20 December 2012, pursuant to clause 10.1.
116.4 LCB's damages are subject to the limitation in clause 17.3 of the Validation Agreement, which is to be construed in accordance with paragraphs 108 and 109 above. The application of that clause to specific heads of damage will be a matter for consideration in the course of the determination of the amount of damages.
This judgment is handed down in the absence of the parties, to whom it was circulated in draft. As they have not agreed the terms of the order as regards outstanding matters, I shall give judgments for the Claimant and for the Defendant in accordance with paragraphs 114 and 116.2 respectively and adjourn the outstanding issues for consideration at a later hearing. However, I received from the Defendant written submissions in support of an application for permission to appeal. I am able conveniently to deal with that application on the papers, and I refuse permission to appeal, for reasons that I shall set out in the order.
______________________ |
Mr Justice William Davis:
Introduction
The Claimant, Spencer Vaughan, is aged 27. When he was 21 he enlisted in the Royal Marines. After completion of his basic training in July 2009 he was awarded his green beret and posted to 45 Commando in Arbroath. On 18th January 2010 he and five other Royal Marines from his company flew to Gran Canaria in order to take part in a week's Adventure Training Exercise. The purpose of the exercise was to provide Mne Vaughan and his colleagues with the opportunity to crew a yacht in the course of off-shore sailing around the Canaries. The yacht was skippered by a very experienced Royal Marine sailing instructor, Corporal Justin Sanders, assisted by a Lance Corporal Quirk who was being trained to take on the role of a skipper. Corporal Sanders had sailed the boat in October and November 2009 from the UK to the Canaries and had engaged in weekly exercises with different groups of Marines after his arrival in the Canaries. The weekly exercises were due to continue until about April 2010. This scheme was something he had overseen and supervised bi-annually for about 10 years prior to 2009
The exercise involving Marine Vaughan proceeded without incident until the 23rd January 2010. That was the last day of the trip for Marine Vaughan and his colleagues. The day before there had been a full day's sailing from Tenerife. The day had ended with the boat reaching Puerto de Mogan in Gran Canaria, a substantial holiday resort with a large marina. On the 23rd January the boat had only about 6 miles to sail in order to return to the point at which the Marines were to be dropped off and the next group was to join the boat. Because there was little or no wind on the morning of the 23rd January, Corporal Sanders decided to postpone the departure from Puerto de Mogan. The plan was to wait until lunchtime in the hope that the wind would pick up. Apparently it is the common weather pattern in that part of the Canaries for the wind to gather strength later in the day. Corporal Sanders told the Marines that they were free to do what they wanted until about 1.30 p.m.
What Marine Vaughan and his five colleagues did was to go the beach area at Puerto de Mogan. The beach was a normal tourist pleasure beach with a boom across the bay around which the beach ran, the purpose of the boom being to keep out any boats, jetskis or other craft. The beach was manned by lifeguards. It was being used by holidaymakers including families. Whilst they were there, Marine Vaughan went into the sea from the beach. When he was about waist deep in the water he executed a shallow dive into the sea. In doing so he struck his head on something below the surface of the water. As a result he sustained a fracture of his cervical spine which has resulted in incomplete tetraplegia.
Marine Vaughan's case is that his injury was caused by the breach of duty of the Defendant, the Defendant having the same duty to him as would be owed to an employee by virtue of Section 2 of the Crown Proceedings Act 1947. I am required only to determine the issue of liability. That involves consideration of the following issues:
• How it was that Marine Vaughan sustained his injury.
• The duty owed to Marine Vaughan in the particular circumstances of the accident.
• Whether there was a breach of such duty as was owed by the Defendant to Marine Vaughan.
• In the event of a breach of duty by the Defendant being causative of the accident, the extent to which (if at all) Marine Vaughan was contributorily negligent.
The accident
Marine Vaughan was required to give an account of what happened at various points following the accident. In September 2010 he was interviewed by an officer of the Defendant as a result of a claim for injury under the relevant Royal Navy compensation scheme. His account of what happened was very brief. He said "we were swimming and I did a shallow dive unaware that there was a sandbank just below the surface". The following September a substantial medical assessment took place and Marine Vaughan gave a large amount of information in the course of the assessment. However, the account of the accident itself was not lengthy. He said "I walked into the sea to cool off. When I got to about waist height in the water I surfaced dived into the sea. Unfortunately there was a sand bar that I had not seen I hit the top of my head on". In his witness statement for these proceedings Marine Vaughan said this:
"On arriving at the beach I entered the water with 3 other colleagues and after walking out until the water was level with my thighs I then dived into the sea. I made sure that the dive I executed was a shallow one because the water was only about 3 feet deep. I went under the water and struck something with my head and immediately lost consciousness."
In the course of his evidence Marine Vaughan said that there were three Marines who had entered the water before him. They had run into the sea and, in doing so, had run through the middle of a family group – mother, father and young child. He had not run because of the presence of this group. Mr Vaughan also explained that, whilst he could be sure that he had not struck his head on a rock or some other hard object because he had not suffered any kind of cut or laceration, he could not say what it was that he had struck. When in earlier accounts he had referred striking a sand bar or sand bank, this was an assumption he had made. His evidence to me was that he simply did not know whether he had hit a raised area of sand or whether he had struck sand at the same level as the surrounding sea bed due to a misjudgement on his part as he executed his dive.
Four of the other Marines gave evidence. None said what it was that Mne Vaughan had struck. Two Marines were on the beach when the accident happened. One of them, Marine Keenan, said that someone – he believed that it was Marine Bye – had said that Marine Vaughan had hit a sand bar. In other circumstances this hearsay evidence might have been of some weight. In fact Marine Bye gave evidence. He made no mention in his evidence of making the remark ascribed to him and he did not say that he had observed any sand bar. His evidence was that Marine Barnett was the person who first had assisted Marine Vaughan. Marine Barnett said nothing in his evidence about seeing a sand bar or of a sand bar being relevant to Marine Vaughan's predicament. Once the other Marines realised something was wrong they were concerned only with getting him back to the beach and giving him such assistance as they could. No-one looked around the relevant part of the sea bed. All of that is wholly understandable. Marine Vaughan's colleagues were solely concerned with the apparently serious injury which had been caused to their friend. The last thing on their minds was to investigate the sea bed. But it follows that there is no assistance at all to be gained from any eye witness as to the presence (or otherwise) of a sand bar.
I have no other evidence – direct or indirect - to suggest that there was a sand bar or sand bars at the point at which Marine Vaughan dived. There was no evidence of the beach being particularly prone to sand bars developing. The photograph with which I was provided showed the beach to be around a sheltered bay. Although the beach apparently is man made rather than natural in the sense that the sand was imported, there is nothing in the topography of the beach which indicates any increased likelihood of sand bars. In relation to the artificiality of the beach Corporal Quirk had some recollection of Corporal Sanders mentioning that this meant that the beach was rocky beneath the imported layer of sand. However, this was not referred to or repeated by Corporal Sanders in his evidence and Marine Vaughan's accident was nothing to do with any rocky area under the sand.
Mr Rawlinson Q.C. invited me to draw the inference that Marine Vaughan struck his head on a sand bar. This invitation was extended notwithstanding the terms of his pleaded case, namely "The Claimant, misjudging the depth immediately in front of him, dived and struck his head/neck on the sea floor…." He relied in part on the hearsay evidence given by Marine Keenan. For the reasons already given I consider that there is no assistance to be gained from that hearsay evidence. He relied also on the fact that Marine Vaughan was not apparently acting recklessly and he certainly was not intoxicated. That made it unlikely that he simply would have misjudged the distance from the surface of the water to the sea bed. In my judgment the misjudgement required would have been very modest. Natural movement of the sea very easily could have exaggerated the effect of any minor misjudgement. The lack of any recklessness or intoxication on the part of Marine Vaughan does not provide a sound basis for an inference that he struck a sand bar.
In consequence I cannot be satisfied on a balance of probabilities that Marine Vaughan struck a sand bar. Equally I cannot be so satisfied that he did not. This difficulty in reaching any conclusion about the state of the sea bed is not fatal to Marine Vaughan's claim. It may be of some significance when I come to consider what the Ministry of Defence could and should have done to discharge any duty which it had in relation to Marine Vaughan at the point of his accident.
There is an issue about the way in which Marine Vaughan entered the sea and how he was moving when he executed his dive. As I have already observed, Marine Vaughan's account has been consistent throughout, namely that he walked into the sea before executing his dive. Marine Bye provided a brief handwritten account very shortly after the accident in which he said that "I watched Marine Vaughan run from the beach towards the sea and dive towards (the other Marines in the sea)". In his evidence at trial Marine Bye said that this account was incomplete and that Marine Vaughan had slowed in order to walk around a family in the sea. He also said that he had not seen the dive itself. Rather, he had seen Marine Vaughan bobbing in the water i.e. after Marine Vaughan had struck his head. Marine Barnett's account given within days of the accident was that "I was in the sea when Marine Vaughan ran and dived in to join myself and Marine Speck". In his witness statement he said "Spence (i.e. Marine Vaughan) started to run towards the sea to dive in "Baywatch style" to join us….I think Spence was in about waist deep water when he dived in". The witness statement was drafted by a solicitor acting on behalf of the Defendant following a telephone conversation with Marine Barnett. It then was sent to Marine Barnett for signature. This process had to be adopted because Marine Barnett was deployed out of the jurisdiction for a significant period. He was cross-examined to the effect that this process led to words being put into his mouth. He agreed that the wording of the statement was not his; the language was chosen by the solicitor. However, he also agreed that the quoted passage was a "more or less accurate" account of the relevant events. I do not find that the use of the term "Baywatch style" was meant to indicate any element of recklessness. It was merely an attempt to describe a plunge dive from a standing position whilst upright in the sea. The effect of Marine Barnett's evidence was that Marine Vaughan ran into the sea in the manner which might be seen countless times on any pleasure beach on any day of the week anywhere in the world. Marines Murphy and Keenan were on the beach when Marine Vaughan went into the sea. Marine Murphy's initial account was that "Marine Speck, Marine Barnett and Marine Vaughan started to run towards the sea to dive in. I watched Marine Vaughan dive in". In evidence he said that he had seen Marine Vaughan running towards the sea and that he presumed that he had dived in. "If he didn't, he didn't" was his final position. Marine Keenan did not give an eye witness account of Marine Vaughan's entry into the water and his subsequent dive. What he said in his witness statement was the result of what others told him.
I am satisfied on the evidence that Marine Vaughan did run through the shallow water near to the beach as he made his way away from the beach. I make that finding partly because Marine Vaughan was a fit young man and he was doing what is commonplace for anyone of reasonable fitness in that situation and partly in the light of the evidence as outlined above. As the water became deeper and he was submerged up to his thighs, he plainly was not able to run. He may also have slowed because of the presence of other people in the sea. Even without other people around, his progress would have been slowed by the effect of being thigh deep in water. That is a phenomenon that can be observed regularly on any beach anywhere in the world. Thus, by the time Marine Vaughan executed his dive, he had slowed to walking pace. That was the reason he made the dive when he did.
Marine Vaughan's evidence was that he made what he called "a dynamic assessment" of the position around him just before he dived "as anyone who's diving into the sea would" and that his judgment was that it was safe to do what he did. He said that a dive of this kind was something that he had done many times before as had his friends and family. He explained that his assessment consisted of judging how deep in the water he was and diving accordingly. I am satisfied that Marine Vaughan did what he said that he did. His "dynamic risk assessment" (the term used by Mr Rawlinson Q.C. in the course of re-examination) was not a detailed assessment of the sea bed. It was the kind of judgment of the conditions that might be expected of a sensible adult such as Marine Vaughan when entering the sea from a pleasure beach.
The duty owed to Marine Vaughan by the Defendant
Marine Vaughan's case is that, subject to combat immunity (which is not relevant to this case), the Ministry of Defence owed to him a duty of care qua employer by virtue of Section 2 of the Crown Proceedings Act 1947. There is no doubt that this proposition is correct. However, the duty cannot be greater than the duty that would be owed by an employer i.e. the duty covers the performance of the "work" done by Marine Vaughan and anything reasonably incidental to that "work". If his activity was outside the course of his "employment" the Defendant owed no duty qua employer. It is not necessary to rehearse the many authorities dealing with this issue in its various manifestations. There is no dispute as to the general principles. The question for me is whether the accident occurred when Marine Vaughan was engaged in something reasonably incidental to his "work". Marine Vaughan argues that he was at the beach in order to undertake physical exercise and that this was something expected of him as a Royal Marine because of the ethos in the service of personal fitness. In those circumstances he was engaged in something that was at least reasonably incidental to his "work". I should say that there was some suggestion in the witness statements that Marine Vaughan had to go into the sea in order to wash, the facilities for showering on the boat being either non-existent or very limited, and that this was a relevant consideration when assessing any breach of duty on the part of the Defendant. This proposition transpired to be based on a misunderstanding of the extent of the available showering facilities and I need to say no more about it in the context of Marine Vaughan's argued case.
Marine Vaughan's argument will require consideration of the circumstances in which he and his colleagues came to be on the beach on the morning of the 23rd January 2010. However, I first shall consider the question of whether the Marines were on duty at the time of Marine Vaughan's accident. If they were on duty, that would be clearly indicative of a continuing duty qua employer owed by the Defendant albeit that a finding that they were not on duty would not be determinative against Marine Vaughan's case. The training activity for which they had travelled to the Canaries was off shore sailing. Clearly being on the beach was not a direct part of that activity. Nor was it anything to do with the boat on which the sailing activity was to take place. But Marine Vaughan said that he considered himself to be on duty for the whole time that he was deployed on the training exercise i.e. from the moment he left to travel to the Canaries until the point of his return. He took that view because he had been ordered to go on the training exercise. Marine Barnett was of the same view for what amounted to the same reason. His rationale was that, because Corporal Sanders could have exercised control over him on the morning of the 23rd January had he wanted to, he was on duty. Marine Keenan also said that he was on duty for the whole of the period of the training exercise. He commented that a Royal Marine represents the service at all times whether in or out of uniform. Corporal Quirk was of the view that the issue was a grey area. He said that, had he gone to the beach and told the Marines to go back to the boat, they would have had to do so. To that extent they were on duty. Equally, the Marines at the relevant time were free to do whatever they wanted.
I have been provided with extracts from two Joint Services Publications in relation to adventure training expeditions. The first (JSP 419) post dated the accident so that its content was of limited assistance. The second (JSP 765) was an annex to the Armed Forces Compensation Scheme. It was in force in January 2010. Insofar as is relevant to this case it defined "on duty" for the purposes of adventure training expeditions as "participating in an activity recognised under the (adventure training scheme) and required to meet the aims of the expedition". "Off duty" was defined as "participating in other activities not required to meet the aims of the expedition such as social events". Corporal Sanders did not consider the concepts of on-duty and off-duty in the course of his evidence. So far as he was concerned, on the morning of the 23rd January 2010 the Marines were free to go where they wanted. They were in their own time given that there was no work to do on the boat. He had mobile telephone contact numbers for them which he had taken from them right at the start of the expedition. He had done that so that he could get hold of them if he needed to do so for any reason.
The clear conclusion to be drawn from all of that evidence is that the Marines were not on duty vis-à-vis the training expedition at the time of Marine Vaughan's accident and the training expedition was the extent of their duty at that point. The person in charge of the expedition, Corporal Sanders, gave no instruction at all as to what Marine Vaughan and his colleagues should or should not do in their free time. As became apparent in the course of the evidence, he was not sure where the Marines had gone; let alone what they were doing. Marine Vaughan and the other Marines were still to some extent subject to military discipline at the time of the accident. As Marine Keenan put it, "our actions always have consequences". But that is not the same as being on duty.
Mr Dolan, a retired Army officer with considerable experience of physical training activities whilst in the Army, gave evidence as an expert on behalf of Marine Vaughan. In the course of his evidence he said that, because the Marines believed that they were on duty, there was an obligation on the Defendant to instruct them as to how to spend their time. He said that the Marines should not have been given any free time of the kind afforded to them by Corporal Sanders. I had difficulty in following this evidence. The proposition that the Defendant should have treated the Marines as being on duty because the Marines thought they were on duty is not sustainable; not least because the Defendant – whether via Corporal Sanders or otherwise - had no reason for believing that this was what the Marines thought. The conclusion put forward by Mr Dolan was not presaged in his written report. It was unsupported by any document or protocol or by reference to any identified military practice. This was but one example of the very unsatisfactory nature of Mr Dolan's evidence. I shall have to return to his evidence more than once hereafter.
However, the conclusion in relation to "on duty" does not determine the issue of whether Marine Vaughan was acting in the course of his "employment". His case is that he was undertaking physical exercise and that this was something required of him as a Royal Marine because of the ethos of the service. The current version of the Royal Marines Fitness Tests Policy Statement was produced in the course of the evidence. The introductory paragraph reads as follows:
"Physical fitness is a fundamental requirement for every member of the Royal Marines in order to ensure combat effectiveness, job performance, and general health are maintained. Furthermore, physical fitness is an indispensable aspect of leadership that is essential to the day to day effectiveness and combat readiness of the Royal Marines. The degree of self-discipline required to gain and retain high levels of physical fitness is inherent in the Royal Marines way of life and must be part of the character of every member of the Royal Marines. Royal Marines who are unfit reduce the effectiveness of their Units and detract from the overall performance and public image of the Royal Marines." (The emphasis is as it appears in the policy statement.)
The fact that a Royal Marine is required to be physically fit and that retaining physical fitness requires regular exercise cannot mean that whenever a Royal Marine undertakes exercise he is acting in the course of his "employment". This issue was investigated with Mr Dolan. He advanced the concept that the ethos of fitness applied at all times so the duty on the Defendant to take all reasonable steps to ensure a Marine's safety when taking physical exercise also applied at all times. He accepted that the logical extension of his view was that the Defendant would have to take such steps by way of a proper risk assessment even if the exercise was being undertaken when the Marine was on holiday. He said that this "would be to an extreme extent". I am quite satisfied that Mr Dolan's view is wholly misconceived. As before it was not supported by any other evidence. The fundamental unreality of his view was essentially acknowledged by Mr Dolan himself when he referred back to the belief of the Marines that they were on duty as being the trigger to the duty on the Defendant to undertake a risk assessment.
It follows that determination of whether Marine Vaughan was acting in the course of his "employment" will depend upon the facts in relation to his presence and activity on the beach as I find them to be. In Smith v Stages [1989] 1 A.C. 928 the House of Lords considered a conventional employers' liability case concerned with travelling to and from work (although the circumstances were more refined than that). The issue was whether the employers' driver (who negligently drove the car in which he and his co-worker were travelling home from working away) was acting in the course of his employment. The detailed facts of Smith are of no relevance to this case. Rather, it is the dictum of Lord Goff of Chieveley at 937D which is apposite: "But how do we distinguish the cases in this category [i.e. travelling from work cases] in which a man is acting in the course of his employment from those in which he is not? The answer is, I fear, that everything depends on the circumstances." Mr Rawlinson Q.C. accepted that every case must be decided on its own facts applying the general principle that something reasonably incidental to the work will fall within the scope of the employment.
Corporal Sanders was not able to recall if he had been told by any of the Marines that they were going to the beach. Had he been told that, it would not have been of any concern or interest to him since the men were free to do what they wanted. In any event he was not told specifically that any of them intended to go swimming. It follows that he was unaware that any particular form of physical exercise was in the contemplation of Marine Vaughan or any of his colleagues. It was put to him that it would not have surprised him had he learnt that Marine Vaughan was intending to engage in physical exercise on the beach. Corporal Sanders did not accept that proposition. He said that, had anyone told him that they were going to the beach to go swimming, he would have thought that this would have been for purely recreational purposes.
Marine Vaughan's evidence was that he and his colleagues took the opportunity to go for a swim. He said that he and his colleagues had not swum out to a particular point. They had swum just around the area of the beach for about 20 minutes. "I wouldn't say that we took a vigorous approach to maintaining fitness at that particular time but….we went with the intent of doing some training" was how he put it. That did not apply to Marine Murphy. He went to chill out at the beach. He lay and sunbathed. Marine Keenan did likewise. Both men did go into the sea but only briefly and not in any sense as part of some physical training regime. Mr Rawlinson Q.C. argued that the fact that two men did not partake of physical exercise was of no consequence to the issue of the Defendant's liability for the injuries suffered by Marine Vaughan. I accept that it is not determinative of the claim made by Marine Vaughan. If he were able to demonstrate that he was undertaking an activity required of him by the Defendant as part of his "employment", what others were doing would be of no consequence. Equally, it is of evidential significance that two of his colleagues were sunbathing and not engaged in anything remotely resembling physical exercise. It is some indication of the true nature of the group's visit to the beach. It tends to indicate a genuinely recreational visit. Even Marine Vaughan's own evidence is equivocal as to the nature and extent of the physical exercise i.e. not a "vigorous approach".
Marine Bye's evidence was that the group had agreed to go to the beach in order to do some "phys" as he put it. His belief was that everyone in the group apart from Marine Keenan swam out to the boom protecting the beach and around the whole length of the boom with periods of treading water interspersed with the swimming. Marine Barnett did not agree with the proposition that there had been some kind of plan to go to the beach for fitness training. He said that it was just something that they did. When cross-examined he said that he and his colleagues had spent a considerable period of time swimming. He said that this was as a means of taking exercise and as part of being a Marine. Equally he accepted when re-examined that his witness statement was accurate when it said that "to start with we were all just lying on the beach sunbathing and then a few of us decided to cool off in the sea."
I conclude from all of the evidence that Marine Vaughan and his colleagues did not go to the beach with the intention of engaging in physical exercise as part of their requirement as Royal Marines to keep fit. I rely inter alia on the following matters in reaching that conclusion. First, they did not say they were going to do this to Corporal Sanders who was the senior Marine on the boat. It is very likely that they would have done so had any kind of focused physical training been in train. Corporal Sanders's evidence about what he would have thought had he been told that the Marines intended to swim is of significance in this regard. Second, two of their number did not partake of physical exercise of the kind which might have been regarded as physical training. Third, the evidence of those who did go in the sea is inconsistent and contradictory. For instance, Marine Bye's evidence is not consistent with the witness statement adopted by Marine Barnett. I consider that Marine Vaughan and his colleagues went to the beach in order to relax and enjoy their free time. Whilst some of them swam, they did so because they were fit young men who enjoyed physical exercise. It did not constitute part of their "employment".
In any event I consider that there are serious problems of definition inherent in the proposition put forward on behalf of Marine Vaughan. I already have noted the consequences of the view offered initially by Mr Dolan in respect of the extent of the Defendant's supposed duty. The difficulties go beyond that. At what point would taking exercise become physical training intended to meet the ethos of the Royal Marines? Would all physical exercise fall into that category? If so, the scope for the Defendant's duty would be almost limitless. If the extent of the duty is to be restricted, how and by whom is it to be defined? I do not consider that a duty can be imposed on the Defendant when the factual extent of the duty is so problematic. Moreover, at the point of Marine Vaughan's accident, was the physical training still in progress? If Marine Bye is correct, he and others (including Marine Vaughan) had undertaken a substantial swim and he and Marine Vaughan had gone back to the beach. It may be that all of the swimmers had gone back to the beach. In any event Marine Vaughan sustained his injury when he went back into the sea. By that stage the only sensible inference is that this was not part of the physical training; rather it was a recreational dip in the sea.
One answer to the definitional problem was suggested by Mr Dolan. He said that there should not have been any ad hoc or unorganised physical training undertaken by the Marines. Corporal Sanders or someone to whom he delegated the task should have supervised it. That proposition would meet the uncertainty point. The Defendant's duty would exist whenever there was supervised training. Unfortunately, whatever the theoretical merits of the proposition it does not deal with the facts of this case or the way in which the claim is put on behalf of Marine Vaughan.
The fact that the Defendant did not owe Marine Vaughan a duty of care qua employer in relation to the circumstances of his accident is not the end of the matter. Corporal Sanders said that he was under a general duty as the senior member of the crew to take reasonable care for the safety of those on the boat. He put it in his witness statement thus: "a duty of care to ensure that they are okay and safe". That was in the context of having taken the details of the mobile telephone numbers of the Marines. I am satisfied that he was not required to "ensure" the safety of the crew. Rather he was required to take reasonable care to guard the crew of the boat against foreseeable risks of injury. I shall come on to consider what was reasonable to expect of a skipper in that situation shortly.
To a limited extent this case is comparable to Ministry of Defence v Radclyffe [2009] EWCA Civ 635 where a serving soldier suffered injury in the course of off duty swimming in the intervals between organised adventure training. However, the facts of that case were far removed from this one. Lieutenant Radclyffe was pressured by his senior officer to jump 65 feet from a bridge into a lake. On the findings of fact in that case this pressure was what caused Lieutenant Radclyffe to repeat the exercise the following day with catastrophic results. Even though the protagonists were off duty, the senior officer owed a duty of care to his subordinate. What the senior officer pressured the subordinate into doing was obviously dangerous. The senior officer was present when Lieutenant Radclyffe made his first jump. Subject to a deduction for contributory negligence Lieutenant Radclyffe succeeded in his claim based on the breach of duty of the senior officer. Paragraph 21 of the judgment of the then President of the Queen's Bench Division is as follows:
The key to the legal analysis is to be found in the answer to the question whether Captain Jones owed Mr Radclyffe and the soldiers a duty of care when they were at the lake on 8th August. In my judgment, he did. He was the officer in charge of them in Germany and, in the context of the swimming party, it was fair, just and reasonable to ascribe to him a duty to take reasonable care to guard his subordinates against the foreseeable risk of injury, if they jumped from the bridge into the lake. By his own presence there in the circumstances that pertained and by reason of his rank, he assumed responsibility to prevent them from taking undue risks of which he was or ought to have been aware. They asked him if they might jump. The very fact that they asked predicates reliance sufficient for a duty of care and their assumption that he had authority to order them not to jump. That authority derived from his rank and the fact of his and their military employment. His authority was no doubt more circumscribed than if they had all been on duty. The fact that they were off duty did not mean that the military relationship became irrelevant.
In this case Corporal Sanders was not present at the beach. Even if he had been there, I am sure that the Marines would not have asked his permission to go into the sea or to execute a shallow surface dive as they were going into the sea. Corporal Sanders in fact did not know where the Marines were or what they were doing. Moreover, the activity which caused Marine Vaughan's injury was far removed from the kind of jump involved in Radclyffe. That case demonstrates that a duty of care can arise in a military setting even when the activity involved is not part of the serviceman's duty or part of any adventure training. Otherwise it is of no direct assistance to Marine Vaughan's case. The nature and extent of any duty will vary from case to case. It is to be noted that Mr Radclyffe's accident was pleaded as relevant to the factual circumstances of the accident which befell Marine Vaughan and the alleged negligence of the Defendant in this case. I consider that this pleading was misconceived.
Was there any breach of the duty owed to Marine Vaughan?
In the context of the claim as put on behalf of Marine Vaughan there was significant criticism of the risk assessment of the training exercise on which he was engaged. This was on the basis that only the risks involved in off shore sailing were assessed in any formal manner. The risks in relation to on shore activities were not assessed. The argument was that this was far too narrow a view of the expedition. I do not consider that it is necessary to consider this issue at any length. Risk assessment could not conceivably form part of Corporal Sanders's duty of care in relation to the on shore activities of the Marines outside the course of their "employment". In any event the case as put in his closing submissions by Mr Rawlinson Q.C. was that a simple warning about the relevant risks would have been sufficient.
In the context of the alleged duty of care qua employer Mr Dolan said that Corporal Sanders (or someone to whom he had delegated the task) ought to have visited the beach before any Marine swam there. He should have looked at the sea to see if there were any obvious dangers such as rocks. He should have looked for any areas of lighter water (indicating that the water was shallow) or darker water (indicating deeper water). On the assumption that none was visible he then should have asked a lifeguard whether there were any dangers prevalent in the area that were not visible. I consider that this would have been to impose a requirement far in excess of that required of Corporal Sanders even if this had been an "employment" situation. Whether the issue was within Mr Dolan's expertise is open to question. Further, there is no evidence that these steps would have made any difference at all to the outcome. As I observed when concluding that I could not make a finding as to the presence of a sand bank or sand bar, the lack of any observable hazard could be of relevance to whether a supposed breach of duty was of any causative relevance. In any event no such steps of the kind put forward by Mr Dolan were required of Corporal Sanders in the light of the duty in fact owed by him.
On behalf of Marine Vaughan reliance is placed on the fact that Corporal Sanders did tell the Marines that they were not to swim in the marina. It is argued that this shows that he appreciated the need to warn against risks other than those connected with the boat or off shore sailing. Thus, he should have warned against the risks of diving in shallow water off the beach. However, it emerged in the course of the evidence of Corporal Sanders that, although swimming in the marina would have been dangerous both because of the passage of boats to and fro and because of pollution within the marina, the reason for his instruction to the Marines was because of a local byelaw prohibiting swimming in the marina. The expedition being undertaken by Marine Vaughan was one of many during the winter and early spring months. Corporal Sanders was aware that breach of the byelaws by those on the boat he skippered would lead to the boat losing its right to moor in the marina. Were that to happen, future expeditions would be put in jeopardy. It follows that no assistance can be gleaned from the "no swimming in the marina" warning.
Was it then necessary for Corporal Sanders to issue any warning? He did not know that the Marines were going to go to the beach or that they intended to go into the sea. Equally, I am satisfied that it was reasonably foreseeable that the Marines, having been given the morning off on a pleasant day, would go to the beach and would go into the sea. What was reasonably required of Corporal Sanders in those circumstances? I pose that question conscious of the fact that the pleaded case always has been that Marine Vaughan was acting in the course of his "employment" and that the Defendant has argued that, in the event of a finding that he was not, the claim must fail. In my judgment it is necessary and appropriate to consider Corporal Sander's duty as he acknowledged it to be albeit that he did not define it in legal terms.
The proper parallel to be drawn is that of an occupier owing the common duty of care pursuant to the Occupiers Liability Act 1957. That means that the decision of the House of Lords in Tomlinson v Congleton Borough Council [2004] 1 AC 46 is highly relevant. In Radclyffe (supra) the then President of the Queen's Bench Division observed that Tomlinson did not apply to the situation under consideration in that case. The position here is very different and I am satisfied that the principles in Tomlinson (supra) are applicable. It is not necessary to rehearse the facts in that case in any detail. It is sufficient to say that they involved an 18 year old youth going into a lake occupied by the local authority and diving from a standing position into shallow water as a result of which he struck his head on the sandy bottom and broke his neck. There are clear factual similarities to Marine Vaughan's accident. The House of Lords decided the case on the basis that the young man was in the lake as a lawful visitor of the local authority as occupier.
The finding of the judge at first instance in Tomlinson was that there was an obvious risk of injury from diving into a lake where the water was shallow. In this case Marine Vaughan himself said in the course of his evidence that he knew at the time of his accident that there was a risk of injury if one dived into shallow water. That must lead to a similar finding in this case. Although the unchallenged evidence called by the Defendant was that there had been no recorded incident of any injury caused to any Royal Navy personnel by shallow water diving in a five year period from 2008 to 2013, I am satisfied that Corporal Sanders, had he applied his mind it, would have acknowledged such a risk.
Was there a duty on Corporal Sanders to warn Marine Vaughan against the danger? At first blush it might seem that, even if there were such a duty, a warning would have had no effect. Marine Vaughan knew of the risk himself. He still undertook the dive in shallow water. In evidence he said that, had Corporal Sanders warned him of the risk of diving in shallow water, he "would probably have thought twice about what I was doing". He also said that he "probably would have proceeded into the water further". Even on the basis that I were to accept that evidence, I consider that it barely establishes that a warning by Corporal Sanders would have had any effect on Marine Vaughan's behaviour. Marine Vaughan already knew about that which Corporal Sanders supposedly should have warned. On the 23rd January 2010 he did what he had done and what friends and family had done many times before. I suspect that he would have done the same irrespective of anything said by Corporal Sanders.
However, it is not necessary to reach a concluded view on this issue. I am quite satisfied that there was no duty on Corporal Sanders to warn Marine Vaughan of the risks involved in diving from a standing position in shallow water. The position in circumstances such as these was summarised by Lord Hoffman at page 85D in Tomlinson (supra).
I find it difficult to express with appropriate moderation my disagreement with the proposition of Sedley LJ (at para. 45) that it is "only where the risk is so obvious that the occupier can safely assume that nobody will take it that there will be no liability". A duty to protect against obvious risks or self-inflicted harm exists only in cases in which there is no genuine and informed choice, or in the case of employees, or some lack of capacity, such as the inability of children to recognise danger (British Railways Board v Herrington [1972] AC 877) or the despair of prisoners which may lead them to inflict injury on themselves (Reeves v Commissioner of Police http://www.bailii.org/uk/cases/UKHL/1999/35.html[2000] 1 AC 360).
Applying that principle to the facts of this case leads inevitably to the result that there was no breach of duty on the part of Corporal Sanders. Marine Vaughan had a genuine and informed choice as to how he entered the sea. He was not acting in the course of his "employment". He was not subject to any lack of capacity. He assessed whether it was safe to do what he did before he went headfirst into the sea. He misjudged the position with catastrophic results. It is a tragedy that a young man of such promise has suffered such a serious injury. Unfortunately I cannot ameliorate the position in which he now finds himself with a finding of liability on the part of the Defendant unless there is a proper legal basis for doing so. I am satisfied that there is none.
Contributory negligence
In view of my conclusions thus far, the issue of contributory negligence does not arise. Marine Keenan in his witness statement described the accident as "just one of those things" i.e. a pure accident with no fault involved. I consider that this is a reasonable description of the event. Marine Vaughan did something that he had done many times before. I infer that other people did the same on the beach in question on the 23rd January 2010. Marine Vaughan made what was a momentary and minor misjudgement. It would be harsh to say that in doing so he was careless of his own safety.
Conclusion
For all of the reasons I have given I am satisfied that Marine Vaughan's injury was not caused by any breach of duty owed to him by the Defendant. His claim must fail. |
Mrs Justice McGowan:
On 23 April 2007 in the Crown Court sitting in Northampton HHJ Bray sentenced the Claimant imprisonment for public protection with a minimum term of 3 years and 6 months for assault causing grievous bodily harm and affray. That sentence was varied on 25 April 2007 as neither offence was a serious specified offence punishable with a sentence of 10 years or more. HHJ Bray instead substituted extended sentences which were purportedly set to run for consecutive custodial terms of 3 years and 6 months followed by concurrent extension periods of 5 years.
On 14 January 2013 his appeal against those sentences was allowed and the original sentence was quashed and a total determinate sentence of 3 years and 6 months was imposed ([2013] EWCA Crim 70). The original sentences were held to be unlawful, in that the part that related to the charge of affray exceeded the maximum term permitted for that offence. Further to that, under s.227 (5) of the Criminal Justice Act 2003 (herein "CJA 2003"), since repealed, the sentencing Court had no power to take a different approach to the custodial and extension components of the two sentences when deciding whether they should run consecutively or concurrently. His immediate release was ordered; he had by then served almost 6 years.
He now brings a claim for damages under s.6(1) and s.7(1)(a) of the Human Rights Act 1998 (herein "HRA") and Art. 5(1)(a) of the European Convention on Human Rights ("the Convention"). This trial is to determine liability only. He has no claim in tort.
Issues
There is no issue that the sentence was unlawful. The broad issue to be determined is whether the Claimant's detention under the flawed order was incompatible with his Convention rights.
The claim form named the "Secretary of State for Justice" as the Defendant. It is accepted that this claim should have been brought against the Lord Chancellor, as it is brought on the basis of a judicial act and not against the Secretary of State for Justice in his capacity as Minister for prisons. However, it has been agreed that it can proceed.
The Defendant argues that to succeed the Claimant has to show not simply that the sentence was wrong in law, which is accepted. He has to demonstrate that it was so flawed as to be in excess of the jurisdiction of the Crown Court.
a) On the substantial issue, can the Claimant establish at least one of the following four failings?
i) That the Court did not have jurisdiction over the case itself,
ii) That it sentenced in a procedural manner which involved a gross and obvious irregularity,
iii) That it made an order that had no proper foundation in law because it failed to observe a statutory condition precedent,
iv) That it acted in a way that was arbitrary by virtue of bad faith or a failure to attempt to apply the law.
b) Given that the claim is out of time, can the Defendant rely on a limitation defence? If so, should time be extended under s.7(5)(b) HRA?
The Claimant maintains that the sentence is unlawful and therefore any detention, at least from the point established by the Court of Appeal as the end of the determinate term, is unlawful and in breach of Art. 5.
Legal framework
HRA s.6(1):
"It is unlawful for a public authority to act in a way which is incompatible with a Convention right"
For these purposes, "public authority" includes "a court or tribunal" (s.6 (3) (a)) and "an act" includes "a failure to act" (s.6(6)).
HRA, s.7(1)-(2):
"(1) A person who claims that a public authority has acted (or proposes to act) in a way which is made unlawful by section 6(1) may-
(a) bring proceedings against the authority under this Act in the appropriate court or tribunal, or
(b) rely on the Convention right or rights concerned in any legal proceedings, but only if he is (or would be) a victim of the unlawful act.
(2) In subsection (1)(a) "appropriate court or tribunal" means such court or tribunal as may be determined in accordance with rules; and proceedings against an authority include a counterclaim or similar proceeding."
In cases falling within HRA, s.7(1), a court or tribunal which finds that a public authority has acted or proposes to act unlawfully contrary to HRA, s.6(1) "may grant such relief or remedy, or make such order, within its powers as it considers just and appropriate" s.8(1) and (6).
Damages for the unlawful act of a public authority may be awarded "only by a court which has power to award damages, or to order the payment of compensation, in civil proceedings" s.8(2) and (6) and only where "the court is satisfied that the award is necessary to afford just satisfaction to the person in whose favour it is made" s.8(3) and (6).
HRA, s.9 deals with judicial acts.
"(1) Proceedings under section 7(1)(a) in respect of a judicial act may be brought only —
(a) by exercising a right of appeal;
(b) on an application (in Scotland a petition) for judicial review; or
(c) in such other forum as may be prescribed by rules.
(2) That does not affect any rule of law which prevents a court from being the subject of judicial review.
(3) In proceedings under this Act in respect of a judicial act done in good faith, damages may not be awarded otherwise than to compensate a person to the extent required by Article 5(5) of the Convention.
(4) An award of damages permitted by subsection (3) is to be made against the Crown; but no award may be made unless the appropriate person, if not a party to the proceedings, is joined.
(5) In this section—
"appropriate person" means the Minister responsible for the court concerned, or a person or government department nominated by him;
"court" includes a tribunal;
"judge" includes a member of a tribunal, a justice of the peace (or, in Northern Ireland, a lay magistrate) and a clerk or other officer entitled to exercise the jurisdiction of a court;
"judicial act" means a judicial act of a court and includes an act done on the instructions, or on behalf, of a judge; and
"rules" has the same meaning as in section 7(9)."
Accordingly, a claimant wishing to claim that a judicial act is or was incompatible with his or her Convention rights contrary to HRA, s.6(1) may do so by bringing proceedings under HRA, s.7(1)(a):
i) in the exercise of a right of appeal;
ii) on an application for judicial review;
iii) in such other forum as may be prescribed by rules.
Therefore damages in respect of a judicial act may only be recovered under HRA, s.8 if:
i) the relevant court has power to award damages in civil proceedings;
ii) the "just satisfaction" test is met, s.8(3) and (6);
iii) in cases where the decision was made in good faith:
(a) an award of damages is required of the Convention, Art. 5(5);
(b) the appropriate person (in this case the Lord Chancellor) is a party or is joined to the proceedings.
The Convention Article 5.
"Right to liberty and security
1. Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law:
(a) the lawful detention of a person after conviction by a competent court;
(b) the lawful arrest or detention of a person for non-compliance with the lawful order of a court or in order to secure the fulfilment of any obligation prescribed by law...
...
5. Everyone who has been the victim of arrest or detention in contravention of the provisions of this Article shall have an enforceable right to compensation."
In R (Bayliss) v. Parole Board [2014] EWCA Civ 1631 the Court of Appeal Civil Division revisited the basic principles of the lawfulness of detention outside the rules of the sentencing regime. In that case the Court of Appeal Criminal Division had quashed an indeterminate sentence imposed under s.225(3) of the CJA 2003 on an appeal brought long out of time on the ground that there had been no proper basis for the original finding that the Applicant posed a significant risk of serious harm to the public by the commission of further specified offences. Sir Brian Leveson, President, reviewed the authorities;
"29. In R v Cain [1985] AC 46, the House of Lords considered jurisdiction to appeal a criminal bankruptcy order where it was contended that the Crown Court had exceeded the power conferred by Parliament. Lord Scarman (with whom the other members of the House agreed) set out the approach (at 55C):
"The terms used to formulate the law by the judges of the Court of Appeal (which include myself in Wehner's case) have not been happy. They have spoken of orders being void or null for lack of jurisdiction in the court to make them. But you cannot describe as a nullity an order made by a superior court of record, which is what the Crown Court is: section 4(1) of the Courts Act 1971. Nor is the question really one of jurisdiction: it is a question whether the court has exceeded its power. An order of the Crown Court, once made, may be in excess of its statutory power or otherwise irregular. But it is not a nullity. And it would undermine the authority of the criminal law if orders made by the highest court of trial in criminal matters could be disregarded as nullities. The order of the Crown Court stands unless and until set aside by the court itself upon application or, if appeal lies, by the appellate tribunal to which the appeal is taken."
30. This reasoning was applied in R v Reynolds and ors [2008] 1 WLR 1075 in which the Crown Court had passed an extended sentence when the legislation mandated a (more severe) sentence of imprisonment for public protection. Being unable to increase the sentence, Latham LJ put the matter in this way (at para.23):
"If the sentence in question had not been appealed, the sentence would have been a perfectly valid and effective sentence. As Lord Scarman explained in R v Cain [1985] 1 AC 46, at page 55, a sentence of a Crown Court cannot be a nullity. It remains an effective order unless and until varied or quashed. An extended sentence, for example, passed when there should have been an indeterminate sentence, therefore remains a perfectly valid and effective sentence. … Further… an extended sentence is within the powers of the court. In that sense, also, it is not an 'unlawful' sentence."
31. Finally, following the same line, in R (Modhej and anr) v Secretary of State for Justice [2012] EWCA Civ 957, sentences of imprisonment for public protection passed prior to changes to the 2003 Act were replaced in the Court of Appeal by extended sentences after the change in the law which mandated automatic release after half the custodial term. It was argued that the release provisions in place at the time of the hearing in the Court of Appeal applied. In this court, it was held that the effect of s.11(3)(b) of the 1968 Act was that the sentences of the Court of Appeal effectively replaced those of the lower court: this did not render the original sentences void ab initio. Lord Judge CJ observed (at para.14):
"The question for decision is whether the claimants were 'sentenced' under the dangerous offender provisions in the 2003 Act when the amendments were brought into force. The short answer is that they were. They continued in force and governed the detention of the appellants until the moment when they were substituted by the sentence ordered in the Court of Appeal. The appeals against sentence, although successful on the grounds that the sentence was excessive, did not nullify the sentences imposed in the Crown Court. They simply replaced them. Accordingly the provisions in the 2008 Act were 'of no effect' in the relation to them."
32. In the light of this analysis, I have no doubt that the appellant remained subject to imprisonment for public protection until the Court of Appeal allowed his appeal and reduced the sentence to the determinate term. Furthermore, the other domestic authorities cited in support of the proposition that a quashed sentence is unlawful and rendered of no effect do not support the contrary proposition.
…
35. Benham also makes it clear that detention following sentence by a magistrates' court is capable of being unlawful although error will not necessarily retrospectively affect the lawfulness of detention. Thus, although detention following an order which has no foundation in law because of a failure to observe a statutory condition precedent is in excess of jurisdiction, acts of a magistrates' court which were within its jurisdiction were valid and effective unless or until they were overturned by a superior court: see para. 43. This decision is not inconsistent with the decision in Cain and, for the reasons set out above, does not assist the appellant.
36. More on point is Krzycki v Germany [1978] 13 DR 57 in which the Commission was concerned with compensation for preventative detention after a successful appeal against revocation of provisional release from detention. Although factually different from the present case, the principles were expressed in these terms (at page 11):
"This Commission is of the opinion that the situation is comparable to that of a person who has been imprisoned after having been convicted and sentenced and whose conviction is later quashed following an appeal or a request for a retrial.
"Art. 5(1)(a) does not require a 'lawful conviction' but only speaks of 'lawful detention'. This detention must be ordered 'in accordance with a procedure prescribed by law' as Art. 5(1) lays down. Consequently the Commission has always refused to consider applications of prisoners who have been convicted and sentenced in accordance with a procedure prescribed by law and who complain that their conviction was based on error of law or fact (Decisions on the admissibility of Applications Nos 45859, Yearbook 3, pp. 222, 232; 1140/61, Coll. of Dec. 8, pp. 57, 62).
"The Commission has also held that a national court's decision setting aside a conviction did not retroactively affect the 'lawfulness' of the detention following that conviction (Decision on the admissibility of Application No. 3245/67, Yearbook 12, pp 208, 236; cf. also Decisions on the admissibility of Applications Nos. 367/58 and 2932/66, Coll. of Dec. 31, pp. 8, 14)."
37. Thus, an appeal decision quashing a sentence does not render detention pursuant to that sentence unlawful within Article 5(1). "
The basic principles as applied within the Strasbourg jurisprudence were laid down in Benham v UK (1996) 22 EHRR 293. In that case committal to custody was quashed as the required terms for the making of the order had not been met. No breach of Art. 5(1) was found to have occurred in that instance.
"42. A period of detention will in principle be lawful if it is carried out pursuant to a court order. A subsequent finding that the court erred under domestic law in making the order will not necessarily retrospectively affect the validity of the intervening period of detention. For this reason, the Strasbourg organs have consistently refused to uphold applications from persons convicted of criminal offences who complain that their convictions or sentences were found by the appellate courts to have been based on errors of fact or law (see the Bozano v. France judgment of 18 December 1986, Series A no. 111, p. 23, para.55, and the report of the Commission of 9 March 1978 on application no. 7629/76, Krzycki v. Germany, Decisions and Reports 13, pp. 60-61)."
In distinguishing between a decision to impose custody which is within jurisdiction and those in excess of jurisdiction the ECtHR went back to Re McC (A Minor) [1985] AC 528 and held that a court acts in excess of jurisdiction "in three circumstances only,"
(1) if it acted without having jurisdiction over the cause,
(2) if it exercised its powers in a procedural manner that involved a gross and obvious irregularity, or
(3) if it made an order that had no proper foundation in law because of a failure to observe a statutory condition precedent.
The Court in Mooren v Germany (2010) 50 EHRR 23 dealt with the lawfulness of a detention order and reviewed the European jurisprudence, it provides a useful guide to the relevant cases,
"72. Where the "lawfulness" of detention is in issue, including the question whether "a procedure prescribed by law" has been followed, the Convention refers essentially to national law and lays down the obligation to conform to the substantive and procedural rules thereof. Compliance with national law is not, however, sufficient: Article 5 § 1 requires in addition that any deprivation of liberty should be in keeping with the purpose of protecting the individual from arbitrariness (see, inter alia, Erkalo v. the Netherlands, Steel and Others v. the UK, and Saadi v. the UK.. The Court must further ascertain in this connection whether domestic law itself is in conformity with the Convention, including the general principles expressed or implied therein, notably the principle of legal certainty…
73. Although it is in the first place for the national authorities, notably the courts, to interpret and apply domestic law, under Article 5 § 1 failure to comply with domestic law entails a breach of the Convention and the Court can and should therefore review whether this law has been complied with (see, inter alia, Benham v. UK).
74. However, the Court has clarified, particularly in its more recent case-law, that not every fault discovered in a detention order renders the underlying detention as such unlawful for the purposes of Article 5 § 1. A period of detention is, in principle, "lawful" if it is based on a court order. A subsequent finding of a superior domestic court that a lower court erred under domestic law in making the order will not necessarily retrospectively affect the validity of the intervening period of detention (see, inter alia, Benham).
75. In its more recent case-law, the Court, referring to a comparable distinction made under English law (compare Benham, and Lloyd and Others v.UK, …further specified the circumstances under which the detention remained lawful in the said underlying period for the purposes of Article 5 § 1: For the assessment of compliance with Article 5 § 1 of the Convention a basic distinction has to be made between ex facie invalid detention orders – for example, given by a court in excess of jurisdiction (see Marturana v. Italy or where the interested party did not have proper notice of the hearing (see Khudoyorov and Liu v. Russia,) – and detention orders which are prima facie valid and effective unless and until they have been overturned by a higher court (ibid.). A detention order must be considered as ex facie invalid if the flaw in the order amounted to a "gross and obvious irregularity" in the exceptional sense indicated by the Court's case-law (compare Liu, Garabayev v. Russia and Marturana). Accordingly, unless they constitute a gross and obvious irregularity, defects in a detention order may be remedied by the domestic appeal courts in the course of judicial review proceedings.
76. The Court must moreover ascertain whether domestic law itself is in conformity with the Convention, including the general principles expressed or implied therein. On this last point, the Court stresses that, where deprivation of liberty is concerned, it is particularly important that the general principle of legal certainty be satisfied (see Baranowski Jecius and Khudoyorov. In laying down that any deprivation of liberty must be "lawful" and be effected "in accordance with a procedure prescribed by law", Article 5 § 1 does not merely refer back to domestic law; like the expressions "in accordance with the law" and "prescribed by law" in the second paragraphs of Articles 8 to 11, it also relates to the "quality of the law", requiring it to be compatible with the rule of law, a concept inherent in all the Articles of the Convention. "Quality of the law" in this sense implies that where a national law authorises deprivation of liberty it must be sufficiently accessible, precise and foreseeable in its application, in order to avoid all risk of arbitrariness (see Amuur v. France, and Nasrulloyev).
77. No detention which is arbitrary can be compatible with Article 5 § 1, the notion of "arbitrariness" in this context extending beyond the lack of conformity with national law. As a consequence, a deprivation of liberty which is lawful under domestic law can still be arbitrary and thus contrary to the Convention. While the Court has not previously formulated a global definition as to what types of conduct on the part of the authorities might constitute "arbitrariness" for the purposes of Article 5 § 1, key principles have been developed on a case-by-case basis. It is moreover clear from the case-law that the notion of arbitrariness in the context of Article 5 varies to a certain extent depending on the type of detention involved (see Saadi).
78. One general principle established in the case-law is that detention will be "arbitrary" where, despite complying with the letter of national law, there has been an element of bad faith or deception on the part of the authorities (compare Bozano v. France and Saadi,) or where the domestic authorities neglected to attempt to apply the relevant legislation correctly (see Benham, Liu and Marturana).
79. Furthermore, in the context of sub-paragraph (c) of Article 5 § 1, the reasoning of the decision ordering detention is a relevant factor in determining whether a person's detention must be considered as arbitrary. The Court has considered the absence of any grounds given by the judicial authorities in their decisions authorising detention for a prolonged period of time to be incompatible with the principle of the protection from arbitrariness enshrined in Article 5 § 1 (see Stašaitis v. Lithuania, Nakhmanovich v. Russia, Belevitskiy v. Russia). Conversely, it has found that an applicant's detention could not be said to have been arbitrary if the domestic court gave certain grounds justifying the continued detention on remand (compare Khudoyorov,), unless the reasons given are extremely laconic and without reference to any legal provision which would have permitted the applicant's detention (compare Khudoyorov)."
Discussion
In considering the test as identified by the Defendant, namely that the Claimant has to establish one of the four requirements;
a) That the court had no jurisdiction over the case,
b) That there was a gross and obvious error in the exceptional sense required by the authorities,
c) That the court failed to observe a statutory condition precedent or
d) That the court acted in an arbitrary manner by virtue of bad faith or failing to attempt to apply the law correctly.
The arguments can be summarised as follows.
The Claimant contends;
a) That the four part test identified by the Defendant is not the correct approach. That the fact that the sentence was outside the statute is proof, not only of its unlawfulness but of the alleged violation of the Claimant's Convention rights under Article 5,
b) That the fact that the sentence was unlawful means that the case was not within the Court's jurisdiction,
c) That the failure to comply with the terms of the statute, s225 CJA 2003, means that it is not in accordance with the law,
d) Alternatively passing an unlawful sentence was a gross and exceptional error in the sense required,
e) That the detention was arbitrary, by virtue of the fact that the sentence was impermissible and
f) Even if the detention is lawful the arbitrariness is in violation of Art. 5.
The Defendant contends;
a) That the Court clearly had jurisdiction to hear and pass sentence in this case,
b) That the error in this case was not so gross and obvious as to meet the test required,
c) That any statutory requirements that were required to be met before passing sentence were met and
d) That there is no basis upon which to claim that the act of passing the sentence was arbitrary.
Jurisdiction
There can be no doubt that the Crown Court had the jurisdiction to hear this case and to pass sentence, including an extended sentence under the CJA 2003. The fact that the sentence passed was outside the terms of the statute cannot deprive the Court of its jurisdiction. Particularly as, even on that argument, that jurisdiction must exist until the point at which an unlawful sentence is passed. The weakness in that submission is demonstrated by the fact that the Claimant's contention means that an immediate appreciation and correction of the mistake would take the case back within the jurisdiction.
Gross and obvious error
The passing of a sentence of imprisonment as a criminal penalty will justify detention unless and until that sentence is varied by the Court or quashed by the Court of Appeal. Such a quashing or variation does not, generally, even in the case of "unlawful" sentences retrospectively render them invalid. That principle is redefined in Bayliss v Parole Board. There may be decisions imposing custody which are based on such egregious flaws that the detention would be in breach of Article 5. A sentence passed in bad faith might be an example of that. All the jurisprudence, domestic and European, points directly to the proposition that a sentence passed in good faith, even if in error, does not, without more, amount to such a gross and obvious an error to meet the high threshold required. The distinction between an unlawful sentence, in the sense of outside the terms of the statute and one which is quashed because a judicial discretion was exercised in an unreasonable, and therefore unlawful, manner is not one enough to meet the requirements of being "gross and obvious".
The principle is clear but the practical consequences are equally obvious. As the President observed in was unlawful at [42]
"Further, the implications of the submission are striking for I can see no basis for distinguishing this case from any other in which the Court of Appeal (Criminal Division) reduces a custodial sentence below that which the prisoner has then served: that is a greater risk when appeals are mounted out of time. If ....... is right, in every such case, a claim for damages for unlawful detention could arise. Such an outcome would be surprising and unsatisfactory."
A sentence passed in excess of a statutory maximum term, without more, creates no greater liability under Art 5 than one passed in an unreasonable exercise of discretion. The right of appeal against an unlawful sentence is the remedy. The failure to identify the availability of such a right cannot be cured by a claim under the Convention, in these circumstances.
Arbitrary
It is not enough to support an allegation that the Court has acted in an arbitrary fashion or that the detention imposed was arbitrary simply to identify the fact that the Court was in error. The Court in Benham looked at the detention to see if it was arbitrary; the test they applied was to see if the Magistrates had acted in bad faith or with no attempt to apply the law correctly. Again the fact that the Judge got the sentence wrong does not alone make the sentencing process or the consequent detention arbitrary.
Statutory condition precedent
There was no required statutory condition precedent to the imposition of a custodial sentence in this case. The Claimant was an adult, properly committed to the Crown Court and no other mandatory statutory requirement has been identified as having been omitted or breached in the original sentencing exercise.
Limitation
HRA, s.7 (5) provides as follows:
"(5) Proceedings under subsection (1)(a) must be brought before the end of —
(a) the period of one year beginning with the date on which the act complained of took place; or
(b) such longer period as the court....considers equitable having regard to all the circumstances…"
The imposition of the sentence in this case was either 23 April 2007 or 25 April 2007. Either the date of the original exercise or the subsequent variation. Given that these proceedings were not brought for six years, the precise date may not matter. The original claim was brought in the West London County Court on 23 December 2013. That was struck out. Given this is an action arising out of a claim against a judicial act it should have been brought in the High Court. That was done and this claim was issued on 6 March 2014.
The Claimant quite correctly observes that this court has a wide discretion in extending time. Time should be extended if it is equitable to do so.
The Claimant argues;
a) That it would be equitable in this case because the Claimant did not know of the unlawfulness of his sentence until so advised some time late in 2012,
b) That his detention continued until 14 January 2013,
c) That there would be no prejudice to the Defendant and there would be substantial prejudice to the Claimant,
d) That there is no culpable delay on the part of the Claimant's solicitors and
e) That, in any event, the Defendant is estopped from relying on a limitation defence by virtue of a letter written by the Treasury Solicitor dated 5 March 2014 which said,
"Provided any re-issued claim relating to the same matter as Claim No. 3WL01374 is commenced within two weeks of the date of the consent order, [D] agrees limitation will not be raised as a defence to such re-issued claim"
The Claimant in this case was represented by solicitors and counsel at the time of the original sentencing exercise. The appropriate remedy of an appeal to the Court of Appeal Criminal Division was available to him and should have been pursued within 28 days of the imposition of the original sentence. Even out of time, that court would have entertained and allowed the appeal, as it did on 14 January 2013. The mistake could have been remedied before the unlawful detention even began or at any point afterwards.
Those representing him should have been aware of the extent to which the sentence imposed was outside the statutory power of the Crown Court.
In any event this claim was initially brought in the wrong court and against the wrong Defendant.
The letter relied upon by the Claimant to raise the issue of estoppel has been misconstrued or misunderstood by the Claimant. It is clearly dealing with the position in relation to the "re-issued claim". In other words no point will be taken on the delay occasioned by the re-starting of proceedings in the proper forum.
It follows that there would be prejudice to the Defendant in allowing this claim to proceed outside the limitation period. Had there been merit in the claim then that prejudice would not have outweighed the equity in allowing the claim to proceed so far out of time.
Conclusion
The sentence passed in this case was unlawful. The remedy lay in an appeal to the Court of Appeal Criminal Division within time, or in any event during the period of the sentence which the Claimant was bound to serve. The sentence was passed by a competent court, acting within its jurisdiction, within due procedure and without arbitrariness. The claim could not succeed.
In any event the claim is met by a defence under the limitation period. The claim fails. |
Mr. Justice Holgate:
The Second Defendants are the Trustees for the Walford Maritime Limited Pension and Life Assurance Plan ("the Trustees"). They are, and for many years have been, the freehold owners of the Vauxhall Cross Island site ("the site") lying to the South East side of the Wandsworth Road, London, SW8. Their ownership is registered under title TGL 18067.
The site has the benefit of a planning permission granted on appeal by the Secretary of State for Communities and Local Government in August 2012. The permission is for a mixed use development of over 600,000 sq ft in the form of two towers, one with 39 floors and the other with 30 floors above ground level. The value of the undeveloped site with the benefit of this permission is said to exceed £100 million.
The First Claimant, Mr. Ariel Zeckler, is a Solicitor who has had over 20 years experience in commercial property law. He specialises in creating opportunities for property investors by operating as a partner in commercial ventures (see paragraph 5 of Particulars of Claim). The Second Claimant Mr. James Barrymore is an experienced property developer (see paragraph 6 of Particulars of Claim).
The Particulars of Claim set out the background over a very long period and contain detail which it is unnecessary for me to recite in this judgment. The matters to which I refer are not in dispute.
By 2009 previous deals for the sale of the site had fallen through. The First Claimant suggested to Mr. Andrew Hurst, one of the Trustees, and acting throughout on behalf of the Trustees, that he had identified and would be able to introduce a suitable purchaser of the site. That turned out to be the First Defendant, Kylun Limited ("Kylun"). By August 2009 Mr. Zeckler had been in touch with other potential participants, Mr. Kunal Tulsiani and Mr. Amin Ali, the fifth and sixth Defendants, as well as Mr Barrymore.
In summary, the intention was for the four participants to purchase the site from the Trustees and to sell on to a sub-purchaser within a relatively short period after exchanging contracts with the Trustees in order to realise an immediate profit.
The four participants agreed to use companies registered in the Turks and Caicos Islands as the vehicles for entering into various legal agreements. The First Claimant Mr. Zeckler used Tempest Limited ("Tempest") as his vehicle. He accepts that he is and was at all material times the sole beneficiary of all the shares in the company.
The vehicle used by the Second Claimant and the Fifth and Sixth Defendants was Kylun Limited (see para 51 of the Particulars of Claim).
On 18 September 2009 Tempest and Kylun entered into a profit-sharing agreement. It was envisaged (see recitals (1) to (4)) that Kylun would enter into a contract to buy the site for £22.5 million conditional upon planning permission being obtained by no later than 1 October 2011, that Kylun would provide the deposit monies under that contract (£0.75 million), legal fees and the finance to complete the planning application (£150,000) and that both parties would thereafter manage the project, including the pursuit of the application for planning permission. The body of the agreement provided for the sharing of profits arising in two alternative scenarios, first where a sub-sale took place within 10 weeks of exchange of contracts with the Trustees and second where Kylun had to complete the purchase of the site before selling on. In either case, it was agreed that Tempest, not the First Claimant Mr. Zeckler, would obtain a substantial share of the profits.
Also on 18 September 2009 Kylun entered into a conditional contract to purchase the site from the Trustees. The contract and the supplemental deeds of variation are not before the Court. But the essential provisions and their consequences have been set out in the Defence of the Second Defendants and are not disputed by the Claimants. The original agreement required a defined planning application to be submitted to Lambeth LBC by no later than 1 March 2010. Completion of the purchase was conditional upon (inter alia) the obtaining of a defined planning permission, but subject to a longstop date of 1 October 2011. The longstop date was also specified as a "termination date" so that if the contract did not become unconditional by that date, then the contract was treated as terminated with immediate effect (clause 12.2). Clause 12.3 also provided that the contract was to terminate on 1 October 2011 regardless of the planning position and regardless of any other provision.
Finally, on 18 September 2009 a written agreement was made between the Trustees and Tempest whereby in the event of all the conditions of the contract of the same date for the sale of the site being fully satisfied, the Trustees would pay Tempest a fee of £500,000. This has been referred to as a finder's fee, or an introduction fee. It was agreed that the fee would only be paid once certain conditions had been "met in full" including:-
"1. All conditions of "The Agreement" have been met in full and the Contract has completed with the Conveyance of the Site and full payment of the consideration within the agreed timescales set out in "The Agreement".
2. The Trustees or Trustees Solicitors have received cleared funds of £22.5m (including any deposits paid)."
"The Agreement" was defined so as to refer to the contract dated 18 September 2009 between the Trustees and Kylun for the sale of the Vauxhall Cross Island Site.
During the hearing it was common ground that the relevant planning application was not submitted by 1 March 2010 and that an "event of default" arose under the 2009 sale agreement entitling the Trustees to rescind that agreement (at that stage the sale agreement dated 18 September 2009 had been varied by a First Supplemental Agreement dated 23 October 2009 but nothing turns on that). That position was discussed at a meeting between the relevant parties on 6 March 2010 and a re-negotiation took place resulting in the Second Supplemental Agreement between Kylun and the Trustees dated 21 May 2010. Mr. Zeckler signed this agreement on behalf of Kylun.
The new agreement converted the original conditional contract into an unconditional contract, under which Kylun was to complete the purchase of the site on 1 March 2011 in consideration of a payment of £22.5million. Paragraph 86 of the Trustees' defence states that no new introduction fee agreement was offered by the Trustees, or sought by Mr. Zeckler, or agreed between these parties, in the event of the purchase being completed in accordance with the second supplemental agreement. The Claimant's Particulars of Claim do not suggest otherwise.
By 1 March 2011 planning permission had not been obtained and Kylun decided not to complete the purchase of the site under the Second Supplemental Agreement. Accordingly, that sale and purchase agreement lapsed.
The Second Defendants have explained that various discussions then took place for the sale of the site involving Kylun and other separate parties. Subsequently on 11 January 2012 a Deed of Release was entered into formally terminating the Second Supplemental Contract. On the same date Wendover Investments Limited (a company in which certain of the Trustees are involved) entered into a collaboration and profit sharing agreement with Kylun.
On 14 February 2012 the Trustees entered into a charge by way of legal mortgage of the site with Kylun in order to secure loan facilities made available by Kylun to Wendover.
On 8 March 2012 the Trustees granted an option to Vauxhall Properties Limited ("Vauxhall"), the Third Defendant, for the purchase of the site. It is said by the Claimants that Vauxhall is beneficially owned by the Sixth Defendant or by his father.
The present proceedings were commenced by a Claim Form issued on behalf of both Claimants on 26 February 2015. Paragraph 10 asserts that the First, Second, Fifth and Sixth Defendants entered into the 2012 agreements for the sole purpose of denying Mr. Zeckler his fee of £0.5 million and denying both Claimants their respective shares of profits in accordance with the Profit Share Agreement dated 18 September 2009. Paragraphs 11 and 12 seek a declaration that the Claimants are entitled to shares in the profits to be made by the First, Third, Fifth and Sixth Defendants. Paragraph 14 seeks damages for breach of fiduciary duties as against the same Defendants. The Claimants also seek damages for breach of the 2009 profit share agreement from the Fifth and Sixth Defendants. The only specific money claim brought against the Trustees is for the introduction fee of £0.5 million said to be due to the First Claimant.
At paragraph 15 both the First and Second Claimants ask for a legal charge to be registered over the site.
The Claim Form did not indicate any legal basis upon which the Claimants could be entitled to a legal charge over the site.
At paragraph 16 both of the Claimants ask for entry 7 on the Charges Register of Title TGL 18067 relating to the site, which entry concerns the option granted to Vauxhall dated 8 March 2012, to be varied so that the option would operate in favour of both Claimants and Vauxhall jointly.
Particulars of Claim were served on 1 April 2015, with statements of truth signed by each of the Claimants.
The Introduction Agreement made on 18 September 2009 was dealt with in paragraphs 56 to 57, 96 and 106 of the Particulars of Claim. Paragraph 57 pleads that the agreement was for the fee of £0.5 million to be paid if the 2009 contract for sale to Kylun was completed. Originally a letter setting out the arrangement provided for the payment to be made to Mr. Zeckler personally. But he specifically asked for the letter to be replaced by a second version setting out the agreement as being made with, and consequently the fee being payable to, Tempest. Paragraph 96 of the Particulars of Claim has to be read in the light of paragraph 57.
Paragraph 96 also alleges that it was an implied term of the agreement "that the Second Defendant would not act in a manner that was contrary to or had the effect of frustrating the performance of conditions contained within the said agreement, such conditions being precedent to the Claimant's entitlement to an introduction fee."
During the hearing Mr. Zeckler confirmed that the words "said agreement" referred to the Introduction Agreement. In other words, the allegation is that the Trustees were obliged not to prevent satisfaction of the conditions contained in the Introduction Agreement between Tempest and the Trustees.
In paragraph 106 of the Particulars of Claim the First Claimant contends that if the Trustees had not signed the January 2012 Deed of Release then it is highly likely that Kylun would have completed its purchase of this site. Thus, the entering into of the Deed of Release by the Trustees caused Mr. Zeckler to lose the opportunity to receive the introduction fee of £0.5 million.
The Particulars of Claim also allege various breaches of the 2009 profit sharing agreement and of fiduciary duties. At the hearing Mr. Zeckler confirmed that none of these further matters involve a claim against the Trustees. The only money claim against the Trustees pleaded in the Particulars of Claim is the claim for the introduction fee of £0.5 million. In the same vein paragraph 81 of the Particulars of Claim alleges that it suited the Trustees to enter into the "re-structuring" which substituted Vauxhall for Kylun in order to avoid their obligation to pay the introduction fee of £0.5 million.
It should be noted, however, that the claim in respect of the introduction fee depends upon the continuing subsistence of the purchase agreement to which the 2009 Introduction Fee Agreement related.
In the section of the Particulars of Claim dealing with the relief sought, both the First and Second Claimants continue to seek a charge over the site in order to "protect the Claimants interest pending sale of the property". However, Mr. Zeckler accepted that the Particulars do not set out any basis for advancing that claim.
Although the Claim Form was issued on 26 February 2015, it was not served on the Trustees until 18 March 2015. There was no pre-action letter beforehand. In the meantime on 2 March 2015 a UN1 application was made on behalf of the First Claimant by his brother, Jonathan Zeckler, a solicitor in the firm Ezran Law to enter a unilateral notice on the Trustees' title TGL 18067. The application was accompanied by the Claim Form in the High Court. Mr. Jonathan Zeckler certified that his brother had an interest in the Trustees' property, namely a pending land action based solely upon paragraph 15 of the Claim Form, namely the claim to have a legal charge placed upon the Trustees' property. Plainly it was unsatisfactory for that certificate to be given in circumstances where the Claim Form did not explain how any entitlement to a legal charge arose. The application for the unilateral notice was received by the Land Registry on 4 March 2015. The notice is now shown on the Trustees' title in order to protect the alleged pending land action in respect of their property.
There are two applications by the Trustees before the Court, both issued on 28 April 2015. The first seeks an order pursuant to paragraph 2 of Schedule 4 of the Land Registration Act 2002 and/or the Court's inherent jurisdiction to cancel and vacate the unilateral notice, on the grounds that the First Claimant does not have an interest in the site which could be protected by such a notice.
The second application is made under CPR 3.4(2)(a) to strike out the Claim Form and Particulars of Claim in so far as they advance a claim against the Second Defendants, alternatively a claim to a legal charge over the Second Defendants' site. The Trustees submit that the claims made are an abuse of process and/or vexatious.
Despite some initial ambiguity as to the return dates stamped on the application forms, Mr. Zeckler soon ascertained that the applications were listed to be heard on 12 May 2015. He then made an urgent application on 7 May 2015 before Green J in the Interim Applications Court to vacate the hearing. In his skeleton argument he said that he only became aware of the applications on 2 May and did not receive the bundles for the hearing until 6 May. He said that the three working days remaining before the hearing would allow insufficient time to prepare, that he wished to call evidence from 9 witnesses, and that the time estimate would need to be increased from 5 hours to 5 days.
Mr. Zeckler also relied upon the unfortunate ill health of the Second Claimant, who is said to be in the middle of a course of chemotherapy, and the latter's inability to prepare for the hearing on 12 May. That point was repeated in Mr. Zeckler's skeleton for yesterday's hearing. I should say straight away that it is a bad point which should never have been taken. At the hearing Mr. Zeckler accepted that Mr. Barrymore has no interest in the claim for the introduction fee or the supposed pending land action based upon that claim. He confirmed that there is no pleaded money claim by Mr. Barrymore against the Trustees. But Mr. Barrymore has joined in making the non-specific claims in paragraphs 15 and 16 of the Claim Form (see paragraphs 19 and 21 above).
Green J ordered that the hearings listed for 12 May be turned into a directions hearing with a 2 hour time estimate.
However, on 8 May the Trustees appeared by Counsel, Mr. Tanney, before Green J asking that his order made on the previous day be set aside. That application was supported by a skeleton argument and the fourth witness statement of Mr. Alan Ashley, the Solicitor acting for the Trustees. The Trustees submitted that the claims made against them were unfounded in law, that no live evidence would be needed and that the Claimants were simply seeking to re-run arguments which had previously been made by Tempest in earlier proceedings struck out on 27 February 2015.
On that occasion Mr. Zeckler also appeared before the Judge, who approved an order signed by both parties so that:-
i) The hearing on 12 May 2012 would be listed for one day; and
ii) It would be a matter for the judge hearing the matter to decide whether to hear the applications or any parts thereof or instead to give directions for the future conduct of the applications.
Thus, it was plain to Mr. Zeckler that the applications might be fully effective on 12 May 2015 and that he should be prepared to deal with them on that basis. In effect he has taken the lead role in this litigation.
Mr. Zeckler provided a skeleton argument and a bundle of documents on the morning of the hearing on 12 May. He did not suggest that he needed an adjournment in order to deal with the first application concerned with the unilateral notice. Instead, he put forward an alternative proposal for consideration at the hearing. As for the second application dealing with the strike out, Mr. Zeckler asked for it to be dismissed and, if not dismissed, adjourned with directions for disclosure of specific documents and an exchange of witness statements.
In relation to the second application leading Counsel for the Trustees, Ms. Janet Bignell QC, submitted that the issue of strike out could and should be dealt with as a matter of legal submission. On the material before the Court I agreed with that submission, but indicated that the Court would keep the matter of an adjournment under review in case anything was raised during the hearing which would cause a different view to be taken. However, nothing was said during the hearing which, in my judgment, could have justified an adjournment.
Before I deal with the two applications, it is necessary to summarise the proceedings brought by Tempest.
As I have mentioned already, Mr. Zeckler accepted during the hearing that the present proceedings against the Trustees involve substantially the same claims and supporting material as those previously made by Tempest against the Trustees in HQ14X03951. Likewise in the earlier proceedings essentially the same claims were made against the other Defendants as are put forward in the present pleadings.
There is no real dispute about what took place in the Tempest proceedings. The Claim was issued on 26 September 2014 and the Particulars of Claim served on 7 October 2014. They were subsequently amended. The Particulars of Claim were supported by a Statement of Truth signed by Mr. Zeckler. Tempest was represented not only by Mischon de Reya, but also by leading and junior counsel. Their instructions came from Mr. Zeckler.
There was some ambiguity in the pleadings as to the extent of the claim against the Trustees, a matter which had to be clarified. Thus, the amended Particulars settled by leading counsel made it plain that as against the Trustees, Tempest was seeking to recover simply for the loss of the introduction fee.
The Trustees served a defence to Tempest's claim involving substantially the same arguments as are set out in their defence in the present proceedings.
It is to be noted that although the earlier proceedings raised essentially the same issues, Tempest did not go so far as to seek to have a legal charge placed upon the site or to claim that it was entitled to rely upon the 2012 option.
On 23 December 2014 the Trustees made an application for security for costs against Tempest. The other Defendants did likewise. Tempest did not serve any witness statement in reply.
By a consent order dated 6 February 2015 Tempest was ordered to pay security for the Trustees' costs in the sum of £150,000 to be paid into Court by 27 February 2015. The claim was stayed in the meantime and was to be struck out without further order if the security was not provided. Security for costs was also ordered in favour of the other Defendants. Tempest failed to provide the security ordered and also to pay the costs ordered. The Claim was struck out on 27 February 2015.
Before that point was reached Mr. Jonathan Zeckler of Ezran Law certified two applications made by Tempest for unilateral notices. The first application was made on 5 January 2015 and related to undertakings given by the other Defendants, not the Trustees, not to transfer out of the jurisdiction £14 million of their receipts from any sale of the site. Not surprisingly the Land Registry rejected the application. It was misconceived.
Undaunted, a second application for a unilateral notice was made on 13 January 2015. On this occasion it was said that Tempest was interested in the Trustees' site because of its ongoing High Court proceedings. The Land Registry sought information as to the basis of the application. Tempest did not reply. Instead, the Trustees' Solicitors provided the Land Registry with the pleadings. Having seen that the claim against the Trustees was simply a money claim, the Land Registry decided that there was no entitlement to register a pending land action and rejected the application.
I deal first with the application to cancel the unilateral notice. Having regard to the analysis of the authorities contained in the skeleton of Ms Bignell QC dated 4 May 2015, Mr. Zeckler agreed that the Court has jurisdiction to make the order sought. Likewise there was no dispute as to the principles which should be applied.
In Nugent v Nugent [2014] 3 WLR 59 Morgan J reviewed the case law on the extent of the Court's inherent jurisdiction to vacate a caution prior to the enactment of the Land Registration Act 2002 (paragraphs 31 to 41). He concluded that that jurisdiction had not been removed by the enactment of the 2002 statute and continues to apply to the registration of unilateral notices (paragraphs 42 to 49). He held that a distinction is to be drawn between two categories of case (see paragraph 49). Firstly, there are cases in which the claim upon which the notice is based is unsustainable. In that situation there is no justification for the notice and the Court may order its cancellation. Secondly, in cases where the claim is "well arguable", the Court approaches the matter as if the party entering the notice had sought an interim injunction pending trial. The Court has to balance the interests of the parties. On the one hand, there may be injustice to the landowner through being unable to deal with his land if ultimately the basis for the notice is rejected and on the other, there may be prejudice to the beneficiary of the notice if ultimately he succeeds in his claim but in the meantime the notice has been cancelled. In most cases in the second category the practice is to require the beneficiary to give an undertaking in damages as a condition of the court allowing the notice to remain in place. That in turn may require an assessment of the undertaking, for example the financial ability of the beneficiary to compensate the landowner if the loss should turn out to be substantial.
In this case I have reached the clear conclusion that the circumstances fall within the first category in Nugent, that the basis of the notice is "unsustainable" and therefore the notice must be cancelled. It is improperly inhibiting the ability of the Trustees to deal with their property and immediate relief is fully justified. The basis for the notice is unsustainable for a number of separate reasons.
First, it was conceded by Mr. Zeckler during the hearing that the only claim in the present proceedings against the Trustees upon which the unilateral notice is based is a money claim, namely for the introduction fee. Such a claim is not a proprietary claim. Although paragraph 15 of the Claim Form seeks a legal charge over the site, Mr Zeckler accepted that the written fee agreement dated 18 September 2009 did not contain or create any such right and that the Particulars of Claim did not explain how any such right could have arisen. He did not remedy that defect during his oral submissions.
A "pending land action" means "any action or proceeding pending in court relating to land or any interest in or charge on land" (section 17(1) of the Land Charges Act 1972 and section 87(1) of the Land Registration Act 2002).
It is now accepted by Mr. Zeckler in Court, and in my judgment rightly, that the money claim in the present proceedings is not a pending land action. There is no scope for arguing the contrary. Accordingly, it must follow inexorably that the registration of the notice on that sole basis is unsustainable and the notice must be vacated. The First Claimant was not entitled to have the notice registered. That is a sufficient ground upon which the Court should accede to the Trustees' first application (see also Albany Construction Company Ltd v Cunningham [2004] EWHC 3392 (Ch); Haslemere Estates Ltd v Baker [1982] 1 WLR 1109). But there are additional grounds.
The second reason is that any money claim against the Trustees for the introduction fee could only be a claim by Tempest and not by Mr. Zeckler. In paragraph 14 of the Particulars of Claim in the Tempest proceedings Mr. Zeckler, who signed the statement of truth, said that the agreement was for the fee to be paid to Tempest and that the agreement was made "with Mr. Zeckler on behalf of [Tempest]". The pleading relied upon the same letter dated 18 September 2009 as is now relied upon in paragraph 96 of the Particulars of Claim in the present proceedings. Mr. Zeckler accepts that the express terms of the agreement were entirely contained within the letter.
Mr. Zeckler's sole response to this fundamental difficulty is that he is the sole beneficial owner of the shares of the company and that he should be allowed to pierce the veil of incorporation. But he had to accept that the written agreement was redrafted at his request so as to be a contract with Tempest rather than with himself personally (see paragraph 57 of the Particulars of Claim in the present case). There may have been a number of reasons for this, but from Mr. Zeckler's perspective there was at least a tax advantage in structuring the arrangement so that payments would be made to his off-shore company. Similarly, the 2009 profit sharing agreement was made with Tempest, not Mr. Zeckler. Mr. Zeckler advanced no case, and referred to no authority, which would enable him to pierce the corporate veil.
Third, it is accepted by Mr. Zeckler that the introduction fee would only be payable if the conditions contained in the letter of 18 September 2009 were fully satisfied. The letter referred to the original sale agreement between the Trustees and Kylun in 2009. The Trustees have pleaded that the fee agreement was not amended so as to cover the subsequent agreements, in particular the 2010 agreement. There is no suggestion by the Claimants that the Trustees and Kylun were not entitled to vary the 2009 agreement. There is no suggestion by Mr. Zeckler that the fee agreement was amended so as to apply in the event of completion taking place under subsequent agreements. Kylun did not purchase the site pursuant to the 2009 purchase agreement. In particular, they did not purchase the site before the longstop date of 1 October 2011. Thus, there is no entitlement to be paid the fee in relation to completion of the purchase under the 2009 agreement in its original form.
Fourth, even if the 2009 fee agreement was varied so as to cover the subsequent purchase agreements by Kylun, or is to be interpreted so as to have that effect, the 21 May 2010 agreement was unconditional and terminated in the event of completion not taking place by 1 March 2011. As a matter of fact completion did not take place by that date and so the Trustees say that the Kylun purchase agreement, whether in its original form or as varied in 2010, fell away. Mr. Zeckler has not disputed that analysis. I agree with it and therefore the claim to the introduction fee based upon completion under the 2010 supplemental agreement is unsustainable.
For completeness, I mention the implied term pleaded in paragraph 96 of the Particulars of Claim. Even assuming for the sake of argument that the implication of that term is justifiable, it does not assist the First Claimant in the case he puts forward. The implied term would only have obliged the Trustees not to frustrate the conditions contained in the 2009 fee agreement. It is not suggested that the Trustees breached that requirement. Indeed, the contrary would be unarguable. Put simply, Kylun failed to complete the purchase in accordance with the agreement referred to in those conditions.
At the hearing Mr. Zeckler raised an entirely new basis in an attempt to sustain the unilateral notice. It appears that this argument appeared for the first time the day before the hearing in a letter dated 11 May 2015 sent by Mr. Zeckler to the Land Registry. He relies upon paragraph 16 of the Claim Form in which both Claimants seek to vary entry 7 in the Charges Register of Title TGL 18067 so that the rights under the option granted by the Trustees on 8 March 2012 to Vauxhall would be held jointly also with the Claimants. The short answer to that argument is that the unilateral notice was not based upon paragraph 16 of the Claim Form at all. It was based solely upon paragraph 15 of that Claim seeking a legal charge over the site. The purpose of the application to the Land Registry was simply to secure payment of the introduction fee.
I also accept the submission by Ms Bignell QC that paragraph 16 of the Claim Form is not a claim against the Trustees. It is a claim against the Third Defendant. The agreement dated 8 March 2012 was not a conditional contract for the sale of the site, in other words a sale potentially enforceable by the Trustees. Instead, it was an option granting rights to the Third Defendant. Mr. Zeckler's complaint is that there is an overlap between the persons controlling Vauxhall and certain of the investors, namely the 5th and 6th Defendants, controlling Kylun, and that those persons have entered into this arrangement in breach of fiduciary duties owed to the Claimants. No such claim is made against the Trustees. Indeed, Mr. Zeckler accepted at the hearing that the Trustees had been entitled to enter into the 2012 Deed of Release, subject only to his allegation that that should not deprive him of his introduction fee, and that they had been entitled to enter into the 2012 option agreement. I would also add that the fiduciary obligations relied upon by Mr. Zeckler stem from the 2009 profit sharing agreement entered into between Tempest and Kylun. So far as he is concerned, the fiduciary obligations relied upon were owed, as the Particulars of Claim in the Tempest proceedings made clear, to Tempest.
For these independent reasons it is plain that the basis for the unilateral notice was and remains unsustainable. Strictly speaking, therefore, it is unnecessary for me to deal with the Court's jurisdiction under the second heading in Nugent, namely cases where a beneficiary's claim is found to be arguable. However, if it had been necessary for me to do so, I would have decided that the balance of convenience lies firmly in favour of the Trustees. First, I accept the substance of the evidence in Mr. Ashley's witness statements that the unilateral notice is an impediment to the contracts for sale now due to be exchanged in mid-June. Second, the property remains on the market exposed to competitive bids. The notice continues to inhibit the proper marketing of the site. Third, the planning permission is due to expire in August 2015 unless implemented beforehand. The works needed to achieve implementation are said to be significant and will have to be carried out by the Trustees. The notice creates considerable uncertainty for the Trustees as regards the sale of their site. Fourth, Mr. Zeckler is unable to provide an undertaking in damages. Fifth, the alternative undertaking suggested yesterday at paragraph 14 of Mr. Zeckler's skeleton has not been shown to be effective in order to protect the position of the Trustees. It is a last minute suggestion. It is not clear to me why, if the terms suggested were to be imposed, the unilateral notice would even be necessary. Sixth, Mr. Zeckler's claim is simply a money claim and there is no reason to think that enforcement would be problematic against a UK-based pension fund.
I conclude that the first application must succeed and the unilateral notice must be cancelled.
In the light of the reasoning already set out above, I can deal with the second application, the application to strike out, more briefly. In my judgment the Trustees are entitled to have the claim against them struck out under CPR 3.4(2)(a). The money claim simply relates to the introduction fee of £500,000. As I have explained already, there are several reasons as to why that claim is wholly unarguable which I need not repeat.
In paragraph 15 of the Claim Form Mr. Zeckler and Mr. Barrymore ask the Court to impose a charge upon the property. But, as I have mentioned, Mr. Zeckler accepts that the fee agreement did not create any right to a charge and he has been unable to explain how any such right could subsequently have arisen. So far as both Claimants are concerned, neither the Claim Form nor the Particulars of Claim explain how they are entitled to any charge over the Trustees' property.
Yesterday Mr. Zeckler sought to rely upon paragraph 16 of the Claim Form. But he was unable to explain, despite the several opportunities given to him by the Court to do so, how any such claim can be pursued by the First and Second Claimants against the Trustees or how that claim would entitle the Claimants to a charge over the site.
For completeness I should record that the Claim does not seek to raise any tortious claim against the Trustees. Mr. Zeckler confirmed at the hearing that that is the Claimants' position.
I am also satisfied that the claim by Mr. Zeckler against the Trustees should be struck out on the further basis that it is an abuse of the process of court. Mr. Zeckler accepts that the money claim is the same as that which was previously brought by Tempest and was struck on 27 February 2015. The present claim was begun at the moment when the Tempest claim was about to be struck out. Mr. Zeckler has not explained why, so far as his claim is concerned, it should be seen as anything other than an attempt to circumvent the striking out of the proceedings brought by Tempest against the Trustees. Of course I say nothing about the position of Mr. Barrymore or the other Defendants in this respect. |
HHJ WAKSMAN QC:
Introduction
The claimant in this action, All Property Claims Limited (APC), is a claims management company specialising in property damage insurance claims. It claims £5,056.80 from the defendant, Mr Pang Tang. The money is due pursuant to a written agreement made on 15th November 2010.
The full service provided by APC to clients like Mr Tang is:
(1) The notification to the relevant insurer of a claim made by the client, for example, for household water damage.
(2) The negotiation with the insurer for a settlement for the claimant.
(3) Carrying out the necessary repairs using the settlement monies.
Provided that APC carried out the repairs, there is no fee as might have been charged by a loss adjuster hired by the client for their notification and/or negotiation services. The client therefore gets those services free of charge but if either before or after APC has reached a settlement with the insurer the client dispenses with their services and chooses someone else to do the repairs, he becomes liable for the work done by APC at a time charge rate of £140 plus VAT per hour.
In this case APC negotiated a settlement of £14,256.04 with Mr Tang's insurers, Zurich Insurance PLC, Zurich, in respect of his water damage insurance claim. On the day that this was confirmed Mr Tang terminated the agreement with APC and collected the settlement monies from Zurich himself and later instructed other contractors to do the works. In those circumstances APC say that their fee for the work done on the basis of £140 per hour plus VAT fell due, being the £5,056.80 claimed.
The issues
Mr Tang has defended the claim. That defence is been funded by Zurich, which has also agreed to indemnify him against any adverse costs order. It has funded and agreed similarly to indemnify him in respect of a part 20 claim he has brought against ITC Compliance Limited (ITC). For the purposes of section 39 of the Financial Services and Markets Act 2000 APC was at the material time an appointed representative of ITC, which itself carries on business as a network of insurance intermediaries. Mr Tang contends the following by way of defence:
(4) the agreement is governed inter alia by the Cancellation of Contracts made in a Consumer's Home or Place of Work etc Regulations 2008 and no written explanation was given to Mr Tang as to his rights to cancel the agreement, contrary to regulation 7(6) thereof; accordingly the agreement is unenforceable as against him;
(5) there were elements of APC's website, the printed terms of the agreement and the accompanying mandate in respect of claims against the insurers and APC's own explanation of its service to Mr Tang which were unfair, unclear and misleading; this amounted to a breach of rules of 2.2.2 and/or 4.3.1 of the Insurance Conduct of Business sourcebook (ICOBS). While those rules only bound ITC directly and not APC, it is said that it was an implied term of the agreement that APC would comply with the ICOBS rules and accordingly APC was in breach thereof. Mr Tang then claims damages in the form of an amount which would reduce or extinguish the sum claimed by APC if it fell due at all and/or
(6) the term of the agreement pursuant to which APC makes its claim, clause 2, is unenforceable as being in breach of regulation 5 of the Unfair Terms in Consumer Contract Regulations 1999 (the Unfair Terms Regulations) as is clause 5 and/or
(7) the assignment of the claim to APC provided for by the agreement and/or the mandate attached to it was ineffective in particular because of the prior breaches of the Unfair Terms Regulations and/or Cancellation Regulations or a breach of the Client Asset Rules (CASS).
A yet further ground of defence is that clauses 2 and/or 5 and/or the assignment provided for by the agreement were in breach of the Consumer Protection from Unfair Trading Regulations 2008 via paragraph 14(a) thereof, which itself derives from the Consumer Protection Amendment Regulations 2014. These apply only to contracts entered into or payments made on or after 1st October 2014. Neither of those conditions are satisfied in this case and accordingly the Consumer Protection Regulations of 2008 and 2014 are irrelevant. I reject the invitation to consider them in any event and to consider declaratory relief to assist in future cases. That would be hypothetical and an entirely disproportionate and unnecessary exercise here, especially given the plethora of actual defences put forward.
In addition Mr Tang brings claims against ITC for breach of ICOBS and/or CASS contending that the damages should be equal to an indemnity against any sum found to be due by Mr Tang to APC.
Given the sum claimed, this action would normally have been dealt with as a small claim, although I accept it was not actually allocated to that track here; but it was transferred into this court by order of HHJ Mackie QC on 2nd October 2010 on the basis that Zurich, the funder behind Mr Tang, wanted certain issues of principle in relation to the defences referred to above to be decided as they could affect similar claims by APC or other claims management companies. That said, the recital to that order limited the costs of all parties to those which would be recovered in the county court.
ITC defends the claim made against it.
The evidence
For APC I heard from Andrew Davis, a leak detection specialist; Mr Moez Kara APC's Claims Surveyor; Mrs Roshan Kara, one of APC's property insurance claims managers; and Matthew Bright, another of APC's property insurance claims managers. For Mr Tang I heard from him alone. ITC did not call any evidence. In addition there is a substantial body of contemporaneous documents, principally emails, which have been of considerable assistance. I deal with the witnesses' evidence in detail below but in general I have found all of APC's witnesses reliable but I found Mr Tang has been an unsatisfactory witness, whose evidence was unreliable in certain key respects.
The facts
APC's website contains the following sections: in bold and quite large type it says:
"Get an insurance quote, agree your claim and complete all repairs in one amazing free service."
Depending on which version one has, there is then under it in quite small print the words, "Subject to terms and conditions," and in the colour version that I have there is the same rubric at the top but then there is an asterisk and then one side underneath it says, "Subject to terms of business available on request." Underneath that there is a section that says:
"AllPropertyClaims will survey the damage draw up a specification repairs, prepare a quote for insures, negotiate and agree repairs with your insurers or their loss adjusters, carry out all building works and get your property back to the way it was in record time. Our service is second to none and is completely free."
Another page then sets out the stages of work which APC do under the heading "What we do," and that includes starting the work three days after the costs are approved and when the work is finished, "We send the bill to insurers -you pay nothing." Another section under, "Why use us?" says:
"As a result of our dealings with loss adjusters and insurers we have developed good working relationships based on trust, respect and professionalism. It is these relationships which allow us to get the best result from the claim and deliver the high level of service which property owners have a right to expect."
Later on the same page they say they are proactive with insurers:
"Typically our average time from notification to settlement of a claim is 3-4 weeks. We start drying / restoration cleaning and or reinstatement within 48 hours of settlement and will typically take 2-4 weeks to complete works depending on the scope."
A final section includes the words:
"It's your right to have a suitably qualified company to handle your insurance claim -the service we provide and our FCA registration allows you to appoint us."
It is common ground that the terms and conditions referred to were not available directly from the website. It is also common ground that no potential client could contract with APC online. They had to sign a hard copy written agreement, which would be done at home when Mr Kara or another surveyor would call to take details of the claim and obtain instructions to proceed.
In this case Mr Davies, whose company is called UK Leak Detection Limited, visited Mr Tang on 13th November 2013 to ascertain the cause of the water damage to the floor in his apartment because Mr Tang could not find the source. Mr Davis found it: a "hot leak" in the water system and which had by then caused considerable water damage requiring works of repair and reinstatement after a period of drying out. He charged and was paid for the written leak report he made and recommended APC as a company which could handle the claim for Mr Tang as well as doing the work. Having looked at APC's website, Mr Tang contacted APC, which led to an email from Mrs Kara. She states, "All Property Claims specialise in dealing with property insurance claims," and that the service was completely free, "if All Property Claims carries out all building and drying works at the property." She refers to them coming to the property to survey the damage and then to propose a list of itemised costs and then settle and negotiate claims directly with the insurers and their adjusters. Once they are authorised they would carry out the works with the tradesmen and invoice the insurer direct. "We don't charge the client for this service but instead ask our contractors to give up part of the margin on the works which we regularly pass to them and this provides a convenient cost free solution to the property owner," and there is later reference to the website. This led to a visit to Mr Tang's apartment on 15th November 2013 by Mr Kara. There is no dispute that in the course of that visit Mr Kara took photographs and noted down details of the damage, nor is there any dispute that Mr Tang signed the various contractual documents proffered to him.
What is very much in dispute is what Mr Kara told him about the contract that he entered into, what Mr Tang himself read either then or later and what in any event he understood was the position, in particular with regard to any fees payable to APC. Before dealing with those matters I refer to the contractual documents themselves. The first page is not actually a page of the contract. It is an instruction to the insurer to be sent to the insurer by APC on behalf of the client and headed "Mandate" and then there is a section which says:
"We appoint and authorise APC irrevocably to act on our behalf in relation to the claim and instruct the insurer to deal with solely with APC on our behalf in relation to the claim for APC to:
To discuss the details of the claim.
To negotiate the claim with the insurer until a settlement is reached.
To receive payment of all monies in relation to the claims, the money to be payable to APC.
To instruct contractors of APC's choice to undertake the reinstatement works.
To make all appropriate payments to the contractors."
That is then signed by the client as a policyholder or an interested party and that is dated but underneath that there is a separate section which says:
"We hereby give you notice that in accordance with the contract of today's date we irrevocably assign all our rights under the policy of insurance to APC. Such assignment enables APC to proceed directly for the recovery of any sums under the policy. These sums may be a final settlement of any monies due from us to APC. The assignment shall remain in force until APC has received all monies due to it or until APC provided us with written notice of our rights under the policy be reassigned to us. The assignment shall be made in force notwithstanding termination of contract."
One then turns to the contract itself and it is a one-page document. It is headed "Terms of Business". Clause one refers to APC as being an authorised representative of ITC, regulated by the FCA. "Termination, however arising, does not terminate the provisions of the mandate." The services are then set out, which start from attending the premises, going through conducting negotiations following settlement, appointing contractors to carry out the works and project managing the reinstatement. Then it says:
"If you instruct us in the performance of all of these aspects of this claim, which you do by signing these terms of business, we will waive the fee for our services. However, you will be liable to pay our fees in the following circumstances:
(a) In the event the insurer offers a settlement of the cost of reinstatement and you decide not to carry out the works.
(b) If you contract your own contractors to carry out said works or to carry out works yourself.
(c) You request or accept in cash the cost of reinstatement works directly from the insurer.
In the event (a), (b) (c) occurs we can elect to terminate the agreement, you agree to pay our fees (our fees are charged at an hourly rate of £140 per hour plus VAT) prior to an offer made to the insurers towards the cost of the reinstatement work settlement. After settlement our fees are charged as our loss of profit from works we have been unable to carry out, cost of any work carried out and aborted costs following our issuance of purchase orders to our contractors. We may terminate the contract on seven days written notice and you will be liable for fees if any of the following events occur:
You cancel the contract.
You request the insurers not to negotiate with us and the insurer is willing to negotiate.
You object to our settling the claim on the basis of the scope of work we consider acting reasonably to be fair, given our assessment of insurers' liability.
You fail to provide information to enable us to arrive at a settlement.
You prevent, obstruct or interfere or delay unreasonably from the starting, progressing or completing of the works or refuse to allow solicitors to release in advance final payment to us."
And certain other matters are dealt with. As to the quality of the service and the client is told of their right to apply first of all to APC, and the, if it is dissatisfied to the Financial Ombudsman Service. Clause 4 says that APC is regulated by the Financial Services Compensation Scheme. Clause 5 refers to an assignment. It says:
"The contract and the mandate to be provided act as an effective irrevocable assignment of your rights under this policy of insurance in relation to the claims and we may pursue the insurer for recovery of money under the policy which are due from the claims without further reference to you. You agree the assignment will remain in force until they have received the monies and in settlement of the claim. If the contract is terminated we may pursue the insurers for claims under the policy in an amount which would equal the sums due to us from you under this contract and this does not affect their right to pursue the client under clause two and the assignment will remain in force until all the sums are recovered and this clause remains in force notwithstanding termination of the agreement."
There is then reference to personal information, jurisdiction and severance and then underneath all the numbered clauses and underlined there is a section which says:
"I understand that in signing this contract I accept the terms and conditions herein, I may be liable to pay fees pursuant to the terms in paragraph 2 above. I understand I shall be liable to pay VAT on invoices sent to insurers if I am VAT registered and insurers have deducted VAT from the settlement. I agree to pay APC the excess deducted by insurance on the settlement prior to the start of the building works."
Immediately under that to the left-hand side there is a line for signature by the client, then the name in capitals and then the date. Then across the page there is a section saying: "Notice of your right to cancel this contract." The contract date is given. It says:
"You have entered into a contract with APC. You may cancel the contract with us at any time during the next seven calendar days following the contract date written above by completing and returning the below cancellation form or by giving us notice you wish to cancel in writing. If you cancel after seven days you will be liable to pay our fees. The cancellation form may be sent."
Then it gives a postal address and then there is part of a form which would be filled in the event that cancellation was effected.
Mr Kara's evidence is that when he arrived at Mr Tang's apartment he first went through the agreement with him while they were both sitting down. He read aloud to Mr Tang all three pages referred to above, save that he did not read out the second part of clause 2 from the words "after settlement". He said that if (a), (b) and (c) did not apply, Mr Tang would not pay a fee and that if Mr Tang wanted to use another builder he should not sign because he would be liable for APC's fees at £140 per hour. He said that in practice APC's clients rarely had to pay their fees because they did instruct them to do the work. He read the later clauses and in particular he read the words in bold. He also read in full page three. He then asked Mr Tang to sign the two sets of documents, two copies thereof, which he did. One set he put in his briefcase and the other went in a presentation folder which was intended to be left with Mr Tang. I will deal later with what happened to the folder but I next deal with Mr Tang's version of events.
Mr Tang has a bachelor's degree in business studies and a master's degree in marketing and management from Middlesex University. He first worked for the Insurance Legal and General for seven years on the financial and management accounting side and then worked in the City on market information and analysis for another insurance company, Gerling. He was then a management accountant at Clifford Chance for two years before taking his present job at the insurance broker Marsh as a market information analyst. He is clearly intelligent and obviously has a knowledge of the insurance industry. He is also well capable of reading and understanding documents and if presented with a contract I have no doubt he would not sign unless he understood it fully first. He made a number of detailed enquiries to APC before 15th November 2013 and asked Mr Davis a number of questions about any claim arising out of the water damage and referred to the fact that loss adjustors normally charge fees. His evidence as to what happened on 15th November in relation to the making of the agreement was inconsistent and implausible, in my view. In particular:
(1) He said he knew that if they did the work then there would be no fee payable by him and they would get a cut from the building works. He then said that he had "no idea" what would happen if they did not do the works.
(2) He said that he read "3" and then he changed it to "2" on the bullet points at the top part of the mandate section and then stopped reciting the bullet points further in terms of what he said he read and he said he read nothing else on that page. To stop at that point makes no sense. I think he stopped reading out the parts that he said he had read, fully aware that if he did he would be going on to say he was going to be instructing them to receive the monies and to do the work and he stopped there to avoid admitting that.
(3) He then said that he "flicked through" snippets of the following page which contains all the terms and had no idea what it was that he read. I find that implausible but, in any event, if he cannot now recall what he read, he cannot say what he did not read, in particular the particular parts in the clauses and the bold sections.
(4) In paragraph 16 of his witness statement he refers to "densely typed parts and small print" but first of all it is not that small. Secondly, he is experienced in reading documents. Thirdly, it does not address what he understood of the underlined section immediately before signatures. That section is simply not addressed at all in paragraphs 14 to 17 of his witness statement.
(5) He accepted broadly that Mr Kara read to him page one and as far as page two was concerned he said that Mr Kara read page two but not the section on the fees payable if the work was not done. That is extremely unlikely, in my view, and I do not accept Mr Kara would have missed them out or that Mr Tang did not hear him at that point. It would no sense for Mr Kara to say, as Mr Tang accepts he did, there would be no fee if they did the work but not to go on and say what would happen if they did not do the work. Mr Tang refused to accept that the final section above the space for signature had been put in bold and underlined in order to bring it particularly to his attention and make it obvious. That refusal was absurd since clearly this was the purpose of the section. Mr Tang later said that he just signed without reading in depth because he "trusted them", even though (a) he had never dealt with APC before, and (b) according to paragraph 8 of his witness statement he thought that Mr Kara was "cold" when he first arrived. In addition to this unsatisfactory evidence of the day in question, Mr Tang's evidence on other matters was unsatisfactory and further reflects adversely upon his general credibility as a witness. I deal with those further matters below but take his lack of credibility there into account here.
As against all that I found Mr Kara's account of what happened to be straightforward and reliable. Accordingly, I find that Mr Kara did say and read out what he said he did, which would include the terms as to what would happen if APC did not do the work and in particular the charge of £140 per hour and that he read out the bold and underlined section. I also find that Mr Tang heard all of that and understood it and moreover that he read the key parts of the contract itself, including the bold and underlined section, before he signed. He therefore knew that if he did not instruct APC to do the work he would then have to pay a fee of £140 per hour for their time and finally that he confirmed to Mr Kara that he understood the terms of the contract. I am also quite sure that when he did eventually receive his own hard copy of the contract documents he would have read them again, though he denies this. Once Mr Tang's copy of the signed contractual documents was put into the presentation folder, Mr Kara's intention was to leave them with Mr Tang obviously. He said that he proffered the folder towards Mr Tang who did not take it and so it was left on the table. Unfortunately Mr Kara subsequently picked it up and used it like a clipboard on which he put his notes when going around the property. On finishing that task Mr Kara then put the folder back in his briefcase by mistake instead of leaving it with Mr Tang. Although in his witness statement at paragraph nine Mr Tang said that APC had "claimed" that Mr Kara took the documents away accidentally, thus hinting that APC took them away deliberately, in evidence he accepted it was a genuine mistake, as do I. Later that same day an email was sent from Mrs Kara to Mr Tang saying:
"Our surveyor has just called to advise us he accidentally picked up your copy of the forms which were signed on site. As soon as he returns to office we will send these to you by post and also mail you a scanned copy."
Mr Tang replies: "No problem and many thanks." In fact they were not emailed on that day because on Monday the 18th Mr Tang emailed Mrs Kara to say: "Could you email a copy of the scanned forms for my reference." She replies: "Please see attached as requested," on the same day, "You should also have received the originals by now as they were posted out on Friday by first class post."
By 19th November 2015 APC's extensive and detailed schedule of works had been prepared (see pages 141 to 155) and it was sent to Zurich the same day along with the mandate.
On 25th November 2015 Mr Bright learnt that Zurich had not appointed a loss adjuster to deal with and agree the claim but rather a company called BCS who could look at the schedule of works and inspect the property but then had to report back to Zurich who would have to agree the claim itself as this was not delegated to BCS. APC had had some experience of BCS's involvement and the delays caused thereby and Mrs Kara advised Mr Tang about this by telephone on 26th November. A BCS representative came to the property on 28th November. Having arrived late he did not bring a moisture meter. The need for Mr Tang to have alternative accommodation was stated and Mr Chowdry, the representative, said he would report back to Zurich.
APC then had to chase Zurich for a response to the schedule which it had provided on 19th November and there were quite unacceptable delays by Zurich, who by now acted through Mr Robert Hansford in their investigations department. It was and remains wholly unclear why Zurich acted in this way given that not imputation of wrongdoing was made by Zurich as against APC and in the end Zurich was forced to apologise to Mr Tang and pay compensation. Finally on 20th December Zurich, having transferred the case from Mr Hansford (who was rarely available) to Karen Dalunde-Robinson, Zurich made an offer of £7,000 on 20th December and sent BCS's schedule of works. There were many other things missing and other discrepancies in that scope of works. Mr Bright sent a detailed email on this subject after the Christmas break on 2nd January (see pages 119 to 192).
This was referred back to BCS and on 17 January Zurich made an increased offer of £10,180.14. On the same day Mr Bright sent a long email pointing out all of the discrepancies and omissions which remained. This referred to the claim for alternative accommodation and it ended by saying:
"Due to the large number of omissions still remaining on this claim and the lack of any reasoning/commentary for their continued omission… … we are losing faith in the competency of your representatives at BCS. Given that 16 days have passed since my email highlighting the omissions and the receipt of the (inadequate) response with little progress, may I suggest a proper loss adjuster is appointed to provide a fair and acceptable scope of works. Failing this our client will have no choice but to appoint an independent RICS surveyor and charge insurers for the cost of this independent view on the matter."
A further response came from BCS via Zurich on 24th January and Mr Bright wrote back yet again to point out further deficiencies on 27th January. In that email however he also proposed a lower sum to Zurich on the basis that the scope of works could be reduced by doing repair and not replacement, however and importantly he made it clear in that email if by doing this, items became unavoidably damaged then there would be claimed for additional sums by way of variations (see pages 244 to 245). The revised figure put forward by Mr Bright was £11,202.61 including VAT to which would have to be added certain further itemised costs and dry costs. Then on 28th January Mr Bright wrote as follows:
"It is two months since we visited the property. Not only are there still omissions, we have not received confirmation of the costs. I propose revised costs of £11,202.61. I am not willing to spend another five days waiting for a response on these items and neither is the policyholder. I therefore propose a total cost for reinstatement of £11,500. In addition to this the drying costs need to be agreed. I suggest we the example of two previous complaint cases…"
He sets out what that figure is and therefore arrived at a total proposed cost of £14,256.04 including VAT. This led to a telephone conversation between Mr Bright and Miss Robinson when she said that Zurich agreed that sum, at 11.35 am. She sent a confirmatory email authorising the repairs and the associated costs at that figure.
Before going further with the chronology I should refer to what Mr Tang said he had been doing over this period. In paragraph 28 of his witness statement Mr Tang said he had decided to deal with Zurich himself prior to 28 January but in truth he did none of the negotiations at all. This was all left to APC. In evidence he said however that he had helped to "progress the claim". That was not true either. It is true that on 18th December he wrote an email saying:
"Hi Karen. Could you also send me schedule of cost broken down so I can understand how they arrived at their figure. I understand the settlement fee does not include drying costs."
That had come after an earlier one where he said:
"I would like to deal directly with you to ensure the matter is dealt with smoothly and as quickly as possible. The survey conducted by BCS took place on 28th November. I have decided to intervene as opposed to hear from APC. I have not yet seen the breakdown of the quote."
And then he set out various matters that needed to be done which were already on the schedule. What is clear by that email is that he, like APC, wanted to ensure the works would include all that had to be done including drying costs, for example. In reality these emails did no more than repeat what APC had intimated in writing some time before. Thereafter he got no speedy response from Zurich and while he was clearly frustrated, so was APC. It is quite plain from the email correspondence that the only party responsible for the delay in reaching a settlement was Zurich, as it recognised when it apologised and compensated Mr Tang.
To the extent that it is relevant I acquit APC of any culpable delay in dealing claim. I also acquit APC of somehow over-scoping the claim, i.e. knowingly exaggerating what had to be done, which Mr Tang later alleged on 4th February when he also said that he understood that APC regularly over-scoped. There was no evidence put forward for that belief and Mr McMeel rightly did not put that allegation to APC at the trial. Of course there was a significant difference between the sum put forward under APC's scope of works, the £24,000, and the settlement figure of £14,000. However there is usually some element of negotiation when claims like this are made and secondly, APC's revised figures contained the caveats about the possible application for further sums referred to above. What happened here was normal as far as I can see and not redolent of some form of attempt to misstate the true works required and the costs thereof. Of course even if an insurer agrees the scope of works required, it can drive down the price by applying a different schedule of rates. At the end of the day it is for the insurer to agree a figure or not.
To complete the picture I should refer to emails sent by Mr Tang to APC. On 28th January he wrote to say that he would take back the full responsibility of pursuing the claim, saying that he had lost trust in using the firm but he then said that could not imagine how long the work was going to take and then he said, "I would therefore request you to invoice me for the work you have done." On 4th February he complained about the delay, although as I have found those delays lie squarely with Zurich and not with APC. He then complained about APC's unfair terms and said he was not made aware of what would happen if the client had no option but to cancel the contract. He also said that APC even took away the mandate once it was signed so he had no time to read the terms and conditions in the contract (points I have rejected above) He then said APC should no longer carry out any further work and said:
"I am prepared to pay APC a reasonable sum of money for the time spent and I am fully prepared to go to court to settle the case in full if the invoice total is unreasonable."
As to all of that there are two points: first, I do not accept that these offers to pay APC for the work done were merely goodwill gestures on the part of Mr Tang as against a belief on his part that he was obliged to pay for them. I think he knew perfectly well he would have to pay their fees for settlement of the claim, although I accept he did not expect there would be a bill for over £5,000 but that was not the fault of APC (as dealt with above). No one could have predicted how protracted this claim could and did become. Mr Tang's offers therefore are further evidence that he was aware of his obligations under the agreement.
Secondly, I reject the notion that there was some kind of binding promise that the claim and work should all be completed by December 2013. APC was not in control of the claims process and it acted as speedily as it did in the circumstances and indeed warned Mr Tang when it became apparent that BCS were involved and the matter could take further time. The other points raised by Mr Tang in these emails I have dealt with above.
The above are my key findings. In so far as I need to deal with further findings of fact I shall do so in the context of my discussion of the various legal issues raised to which I now turn.
The Cancellation Regulations
It is accepted that the Cancellation Regulations applied to the making of the agreements here which took place at Mr Tang's home. Regulation 7(2) says:
"The trader must give the consumer a written notice of his right to cancel the contract and such notice must be given at the time the contract is made except in the case of a contract to which regulation 5(1)(c) applies in which case the notice must be given at the time the offer is made by the consumer."
Regulation 7(6) says:
"A contract to which these Regulations apply shall not be enforceable against the consumer unless the trader has given the consumer a notice of the right to cancel and the information required in accordance with this regulation."
There was a written notice of cancellation here and it formed the third page of the document signed by Mr Tang, however I cannot see how on any sensible reading of the word "give" it was given to him on the occasion when the agreement was signed on 15th November because he never took it and after a brief period in fact it was removed from his home, albeit entirely accidentally. That fact of that genuine mistake and the fact that he received it by email the following Monday cannot cure the defect, neither, regrettably in my view, can the fact that, as to which I have no doubt at all, Mr Tang was fully aware of his right to cancel since it was explained to him at the time and indeed in evidence he said he knew of his cancellation right. It is therefore on the facts of this case a wholly unmeritorious technical defence but one which must succeed if regulation 7(6) applies and the agreement as a whole is "irredeemably unenforceable" to adopt the words of Lord Hoffman in Dimond v Lovell [2002] 1 AC 384. Also as made clear in the judgment of Moore-Bick LJ in Salat v Barutis [2013] EWCA Civ 1499 at paragraph 20, there is no power in the court to order enforcement nonetheless as a matter of discretion. Had there been I would have unhesitatingly have ordered enforcement. As it is I regret that I cannot.
There can be no room for any waiver or estoppel arguments here to assist APC because any act or statement by Mr Tang that he was nonetheless willing to be bound by the agreement would require knowledge by him that the contract was legally unenforceable against him because of the lack of the cancellation notice. Such knowledge is not alleged nor made out here (see paragraph 22 of the judgment of the Court of Appeal in Salat v Barutis). Nor is there any room for an alternative claim for unjust enrichment on the part of APC since this would run against the policy underlying the Regulations in the analogous case of improperly executed consumer credited agreements the House of Lords so held in Dimond v Lovell (see the section of the speech of by Lord Hoffman headed "Unjust enrichment").
That short point on Cancellation Regulations in fact disposes of the claim against Mr Tang but in the light of the other points raised and because my findings there may have a real impact on costs and because this case is in this court because of a number of legal points. I deal with them briefly below.
Breach of ICOBS
Section 19 of the act provides as follows:
"No person may carry on a regulated activity unless he is an authorised person or an exempt person."
This prohibition referred to is "the general prohibition"
One such regulated activity is set out in paragraph 39(a) of The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 headed, "..assisting in the administration performance of a contract of insurance as a specified kind of activity." ITC is an authorised person for these purposes. Section 19 of the Act and its amendments encompasses various insurance related activities, including assistance in the administration and performance of an insurance contract ("assistance").
If APC was engaged in that particular regulated activity it would be unlawful unless it too was authorised or it was an exempt person. It was such an exempt person because it was an authorised representative of ITC pursuant to a written agreement between them. If it engaged in the regulated activities of assistance then ICOBS would apply to such activities. However the person who responsible for ensuring that ICOBS was complied with was not APC but rather ITC (see paragraph 1.1.1 of ICOBS). Accordingly, if ICOBS applied and there was a breach by APC, the statutory right to claim damages (now under section 138(d) of the Act) would lie against ITC and not APC.
Mr Tang contends that there was an implied term in the agreement to the effect that if APC carried on assistance activities such that ICOBS applied to them, albeit only actionable against ITC, then the ICOBS should apply to APC directly. The modern approach here of course is that set out by Lord Hoffman in Belize v Belize Telecom [2009] 1 WLR 1988:
"The question for the court is whether such a provision would spell out in express works what the instrument, read against the relevant background, would reasonably be understood to mean."
I cannot see how the proposed implication here meets that test. Leaving aside the ICOBS regime, there is no warrant for implying terms on the same content of the ICOBS rules. That may be considered desirable and/or reasonable but that is not sufficient, nor does the mere existence of the ICOBS regime and its application to ITC make any difference. Indeed, it could be said that if it had been thought necessary to include authorised representatives as being bound directly, that would have been done. There is a very clear established regime of regulation here established by the act and associated secondary legislation which identifies a clear line of direct responsibility which here goes to ITC. I see no reason why this system should be extended further by use of adopting the implied terms.
If there is a breach of ICOBS then Mr Tang had a clear right of redress against the firm, ITC, which can be supposed as likely to be more, not less substantial than the representatives it has appointed. Although not exhaustive or determinative, the old "tests" as implied are still relevant as guidelines and in that context it cannot be said that the proposed implication was necessary whether by reason of business efficacy or otherwise or that it is obvious.
Accordingly, Mr Tang has a claim against ITC and ITC alone if there were breach of the ICOBS and that would be a claim in damages. However Mr McMeel accepted that such a claim would only operate by way of some form of reduction or elimination of any sums found due to APC under the agreement. In the event because of the operation of the Cancellation Regulations there is no such claim and accordingly a damages a claim by Mr Tang against ITC falls away. Nevertheless, as these matters have been argued at some length I deal below with APC's position on the footing that either there was still a damages claim against ITC alone or if I was wrong as to the implied term, against APC also for breach of ICOBS.
Accordingly, the next question is whether the activities of APC constitute assistance within the meaning of paragraph 39(a) of the order. APC's services typically include:
(1) assisting the insured in notifying a claim, but even if not provided;
(2) providing evidence to support the claim negotiating a settlement with insurers, and then;
(3) receiving the settlement monies from the insurers to do the relevant works.
In this particular case APC undertook stage (2). The fact that it was deprived of stage (3) because of the instructions of Mr Tang does not matter since I am considering what its usual and regular activities are. Some help is given here by the Perimeter Guidance Manual, which provides guidance on, among other things, what particular activities would fall within article 39(a). 5.7.1 says:
"The regulated activity of assisting in the administration and performance of a contract of insurance relates, in broad terms, to activities carried on by intermediaries after the conclusion of contract of insurance and for or on behalf of policyholders, in particular in the event of a claim. Loss assessors acting on behalf of policyholders in the event of a claim are, therefore, likely in many cases to be carrying on this regulated activity. By contrast, claims management on behalf of certain insurers is not a regulated activity."
In 5.7.4 it says:
"More generally, an example of an activity that, in the FCA's view, is likely to amount to assisting a policyholder in both the administration and the performance of a contract of insurance is notifying a claim under a policy and then providing evidence in support of the claim, or helping negotiate its settlement on the policyholder's behalf. Notifying an insurance undertaking of a claim assists the policyholder in discharging his contractual obligation to do so (assisting in the performance); providing evidence in support of the claim or negotiating its settlement assists management of the claim (assisting in the administration)."
Then 5.7.6:
"Where a person receives funds on behalf of a policyholder in settlement of a claim, in the FCA's view, the act of receipt is likely to amount to assisting in the performance of a contract. By giving valid receipt, the person assists the insurance undertaking to discharge its contractual obligation to provide compensation to the policyholder. He may also be assisting the policyholder to discharge any obligations he may have under the contract to provide valid receipt of funds, upon settlement of a claim. Where a person provides valid receipt for funds received on behalf of the policyholder, he is also likely to be assisting in the administration of a contract of insurance (for example, making prior arrangements relating to transmission and receipt of payment)."
This guidance therefore clearly points, in my view, to the activities of a claims management company such as APC falling within paragraph 39(a) and for the reasons given in that guidance I consider that they do. Indeed, if they did not, it is unclear to me why their activities would require them to be an authorised representative of ITC unless an exempt person or why they would need, as they have done more recently, to apply successfully for authorisation in their own right with the FCA regulatory regime.
Accordingly, it is necessary now to see whether there has been any breach of the ICOBS rules. The relevant rules are as follows: 2.2.2:
"When a firm communicates information, including financial promotion, to a customer or other policyholder, it must take reasonable steps to communicate it in a way that is clear, fair and not misleading."
And under 4.3.3:
"(1) A firm must provide its customer with details of the amount of any fees other than premium monies for an insurance mediation activity.
(2) The details must be given before the customer incurs liability to pay the fee, or before conclusion of the contract, whichever is earlier.
(3) To the extent that an actual fee cannot be given, a firm must give the basis for calculation."
The website
The contention here is that the following statements on the website were in breach of either or both of those ICOBS rules because of the statements, "Our amazing free service," or, "Our service is second to none and is completely free." The point is that such services were free but only if the client instructs APC to do the remedial works. The website does not, in my view, sufficiently make clear this qualification. It is true that it can be said to be implicit since their entire services include the remedial works and if that is all completely free, it is also true that there is some attempt to qualify the statements by reference to the words in very small print, "Subject to the terms and conditions," however those terms and conditions are not present on the website. It is true also, as appears below, that the free services and their limitation are expressed perfectly clearly in the contract document and also that one cannot contract online, so the website is for advertising purposes only.
Nonetheless, in order to be sufficiently clear (a) the terms and conditions must be available to view on the website in easily readable form and (b) the words "Subject to Terms and Conditions" which appear under the words in larger writing (..One Amazing Free Service) should themselves at least be the same size as the section which follows headed "AllPropertyClaims will survey…" At the moment they appear to me to be somewhat smaller. Those words should then contain a direct link to that part of the website that contains the terms and conditions or at least some other reference to where they would be found on the website.
If that is done then I see nothing misleading or unclear in the opening two-line statement in larger type above because, as I have said, if the whole service is provided, it is free and there is an explanation and then there is a clear reference to the terms which are available and which will set out what the qualification is. I take Mrs Kara's point that when being considered for their application for authorisation, the only point taken by the FCA about the website in the FCA's email on 7th November was whether APC ever did business without the client signing a copy of the terms as said to be available to be request on the website and when Mrs Kara said they did not, the point was taken no further. Nonetheless I have to look at the matter myself and I do consider that there was a limited lack of clarity on the website, which would constitute a breach of 2.2.2 on the basis that the website should display the terms and conditions and the reference to them should be set out as I have said above, otherwise the contract is only made subsequently and face-to-face. I do not consider there is any other breach of 2.2.2 or any breach of 4.3.1.
Mr Kara's representations on 15th November.
It is alleged that Mr Kara misrepresented the free nature of the service at the meeting because essentially he did not qualify it. I have already rejected this on the evidence.
The mandate
It is said that there is a further breach of 2.2.2 because of the wording on the mandate headed, "Instructions to my/or insurer." I cannot see how. This was a document which Mr Tang had to sign to enable APC to deal with his insurers. It is not part of the agreement but rather a document consequential on clause 5 of the agreement and indeed a general instruction to APC to pursue the claim on his behalf. It was suggested that the later wording which refers to an assignment of "our rights under the policy" suggested wrongly an assignment of the entire contract of insurance but that is not so. Plainly the rights under the policy assigned are those and only those relating to this particular claim. Read as a whole no insurer could be left in any doubt about that. There is one part of the mandate which could be said to be misleading in one sense, which is the suggestion to the insurer that APC's irrevocable authorisation extends to instructing them to do the building works If by that it meant that even if the underlying agreement had been terminated, APC could carry on remedial works against the will of and without the cooperation of the insured, as it were.
However:
(1) that is not part of the agreement with the insured of which the ICOBS must be principally directly; and
(2) it would not seriously operate on the mind of any rational insurer. Indeed, here Zurich willingly agreed to provide the settlement monies direct to Mr Tang as soon as it was asked.
(3) the important provisions as far as Mr Tang or any client were concerned are those in the agreement itself, to which I now turn.
The agreement
It is said that clause 2 of the agreement is in breach of clauses 2.2.2 and/or 4.3.2 because the reference to a waiver of fees is in bold whereas the circumstances in which the fee becomes payable are not. There is nothing in this point. First, the bold section ends, "However, you will be liable to pay our fees in the following circumstances." Second, the following words are perfectly legible. Thirdly, this argument entirely ignores the final bold underlined section immediately above the place for signature. It is then said that the fee structure where applicable was not sufficiently explained or detailed. I disagree. The key point is that the time charge is stated at £140 per hour. It is not possible to say how many hours would be likely to be involved since it all depends on the nature of the claim and the attitude and response of the insurer and also perhaps the conduct of the insured. It is true that there is no breakdown in the loss of profit head of claim here but it is difficult to see what more could usefully be said. The main point is the claim is particularised as loss of profit and any sensible reader would know it could only be based on the profit that would be derived from doing the remedial works or a part of it. That in my judgment is a sufficient basis for calculation of any later claim for loss of profits. Accordingly, clause 2 of the agreement is not in breach of ICOBS. (Inaudible) that clause 5 is in breach of clause 2.2.2. This goes back to the alleged ambiguity of the assignment, in other words whether it was after the claim or the policy as a whole. I have already rejected that argument.
Conclusions on breach of ICOBS
Accordingly, I find no breach of ICOBS by APC save in the very limited respect concerning the website referred to above. The ICOBS claim is academic in any event because of my finding that the agreement was unenforceable and had damages been a live issue, which they are not, in the circumstances of this case I would award only a nominal amount as against ITC or if there had been a direct claim against APC, as against APC.
Unfair terms
Introduction
Article 5 of the 1999 regulations provides that:
"A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer."
Article 6 says:
"(1) Without prejudice to regulation 12, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.
(2) In so far as it is in plain intelligible language, the assessment of the fairness of a term shall not relate –
(a) to the definition of the main subject matter of the contract, or
(b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange."
Article 7(1) says:
"A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language."
Article 8(1) says:
"An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer."
Accordingly, a term which would otherwise not be the subject of review under article 5(1) because it dealt with price or the definition of the main subject matter of the agreement becomes so subject if it is not in plain and intelligible language.
Clause 2
Paragraphs 98 to 100 of Mr Tang's closing submissions says that clause 2 is not in plain and intelligible language and so becomes subject to article 5. However for all the reasons given above I do not consider that clause 2 is not written in plain or intelligible language. The key points are perfectly clear, in my judgment, and the basis of the fee structure is sufficiently explained. I say that with regard not simply to Mr Tang in particular but to the average consumer (see Chitty paragraphs 15-145 to 146). Accordingly, article 5 is not engaged and that is the end of the matter. However, even if it were there would be no breach. I cannot see how there is a significant imbalance in the rights and obligations of the parties where the simple deal is that provided APC are instructed to deal with the claim all the way through, they will do so at no cost to the insured, whereas if, contrary to the general expectation of the parties, they do not, they should be reimbursed for the work done up to the settlement and for a loss of profit in relation to the building works.
In his opening and closing submissions Mr McMeel made generalised references to Director General of Fair Trading v First National Bank plc [2001] UKHL 52, Abbey National plc v Office of Fair Trading [2010] 1 AC 696 and Office of Fair Trading v Ashbourne Management Services [2011] EWHC 1237. He did not identify any particular principle or conclusion which he said would be pertinent to this case and I do not consider those cases take the analysis here any further.
Nor do I consider that clause 2 and the sums involved could be regarded as a disproportionately high sum in comparison, if a consumer fails to fulfil an obligation or that APC could dissolve the contract on a discretionary basis whereas Mr Tang could not, that the consumer was bound with no real opportunity to be acquainted with the terms cf paragraphs 1(e), (f) and (i) of Schedule 2 to the Unfair Terms Regulations.
The mandate
The mandate is not a contractual term, in my view, so I fail to see how the Unfair Terms Regulations can apply at all. Even if they did I do not consider that it is not in plain or unintelligible language because of supposed ambiguity over whether it is the claim only or the policy as a whole that is being assigned (see above). Even if it were and even if, (which I do not accept), the purported assignment was somehow unfair, I do not see where that allegation goes since what is being claimed here are the fees pursuant to clause 2, not the right to deal with Zurich (which Mr Tang was very happy for APC to do) and where there is no claim by APC as assignee for the benefit of the monies paid over to Mr Tang.
Clause 5
There is a very limited and general allegation that clause 5 is not in plain or intelligible language and again a generalised reference to Ashbourne. That is not a proper or sufficient indication of the regulations and, in any event, it is irrelevant because the claim is made under clause 2, not clause 5.
Accordingly, there is nothing in any of the unfair terms points.
Conclusions on unfair terms
Clients asset rules
Next it is argued that APC was in breach of certain provisions of the FCA's Client Assets Sourcebook (CASS). Paragraph 52 of Mr Tang's defence as against APC and paragraph 43 of the addition claim plead that:
"In purporting to take assignments of policyholders' interests under policies and receiving and handling monies due to policyholders or demanding insurers such as Zurich pay monies properly due to policyholders such as Mr Tang, APC was acting in breach of CASS, the Client assets rules. Neither ITC nor APC is authorised by the FCA to handle client monies or client assets."
In fact, as Mr Tang has accepted in his closing submissions, APC was not directly subject to CASS in any event but even as against ITC this is a curious plea since in this case APC never received the settlement monies in any event. Accordingly, it is impossible to see how even if applicable, the particular CASS rules, for example in relation to holding such monies on trust or segregating them or paying them over to the client (see paragraphs 5.3.2, 5.5.3 to 5.5.5) have any relevance here. Once one leaves the facts of this case, the question of the extent to which these rules apply to APC's activities and other such activities might involve a breach thereof are entirely hypothetical and it is neither necessary nor appropriate for me to investigate those issues here further. All that I would add is that on the assumption that the assignment of the claim itself is valid, and for the reasons given above my principal conclusion is that it was, I cannot see how monies would cover the qua "debt" from an insurance company for the purpose of undertaking building works by APC pursuant to the assignment can be viewed as client monies anyway. Accordingly, I find no breach of any applicable CASS rules on the part of ITC.
Assignment
Some further generalised points are raised in paragraphs 123 to 127 of Mr Tang's closing submissions as to the validity of the assignment but:
(1) I have already stated that it is being confined to the claim, which Mr Tang through Mr McNeil accepts is capable of assignment, not the policy; and
(2) the point does not assist here since the claim is made pursuant to clause 2.
Quantum of the claim
Although issue was taken with the reasonableness or otherwise of some of the hours claimed by APC within its fees of £5,056.80, in particular where time seems to have been incurred either before the agreement was made or after it had been terminated, there were in Mr Tang's closing submissions no particular points taken on quantum by reference, for example, to what APC should be entitled to if not the whole sum. Because of that and because the fees claimed here have in fact failed I say no more about the issue of quantum.
Conclusions
Accordingly, APC's claim fails on one very narrow and technical ground, otherwise both on the underlying facts of the case and in relation to virtually all of the multiplicity of other arguments raised it has succeeded. Unfortunately, however, that does not avail APC in relation to the recovery of its fees.
I think it is worth stating that in my view Mr and Mrs Kara have behaved very properly and reasonably throughout this entire episode. As against that Mr Tang appears to have embarked on this very lengthy and involved defence of the claim at the behest of Zurich. Were it not for Zurich I cannot imagine this case would not or should not have settled at an early stage.
Accordingly, the claim made by APC against Mr Tang must be dismissed. The counterclaim brought by Mr Tang against APC must similarly be dismissed. Mr Tang's part 20 claim against ITC succeeds on the very limited extent of the breach of ICOBS rules referred to above but no damages are to be awarded since they do not arise given the dismissal of the claim.
I am grateful to the parties in this case for their assistance. I would like to record that the litigants in person here, being both APC and ITC, have at all times conducted themselves courteously and with not inconsiderable skill, I am obliged to the parties for their detailed opening and closing written submissions, all of which I have taken into account. |
MR JUSTICE GLOBE:
Anonymity
On 3 February 2015, although the trial was held in public, the following anonymity order was made.
"No party or non-party shall report or disclose the name, address or any other information which might tend to lead to the identification of any person who was a child or young person at the time of the events which form the subject matter of this claim and who was alleged to have been sexually abused by Peter Stewart without first applying to the judge to vary this order."
The order was made to protect the interests of those concerned in view of the nature of the allegations that were being made in the case. The order is continued pursuant to CPR 39.2(4). The judgment accordingly has been anonymised. The order will cease to apply in relation to anyone who notifies the court in writing that they are content for their names to be identified. In addition, there will be liberty to apply to enable any interested party to challenge the order for anonymity, on notice to the parties' solicitors, so that they can notify those whose rights may be affected by any disclosure of their identity.
Introduction
The claimant, who is now 29 years of age, claims damages for personal injury and loss arising out of being sexually assaulted by Peter Stewart, now deceased, between 1989 and 1994, when she was between about the ages of 4 and 9. Quantum has been agreed subject to liability.
The first defendants are the over-arching body of the second and third defendants. It is common ground that, if the second and/or third defendants are liable, then the first defendants will satisfy the judgment on behalf of the other defendants. The Blackbrook and Southwood Jehovah's Witness Congregations are the direct or indirect successors of the congregation that was originally known as the Loughborough Limehurst Jehovah's Witness Congregation, then split into two congregations known as the Limehurst Jehovah's Witness Congregation and the Garendon Park Jehovah's Witness Congregation, which congregations are central to the factual matrix of the case.
The claimant's case has been presented in two ways.
First, it is claimed that the defendants are vicariously liable for the sexual assaults committed by Peter Stewart when he was or had been a Jehovah's Witness ministerial servant ("the assault claim"). The primary limitation period expired on 4 September 2006 (i.e. three years after the claimant attained the age of 18). The action was commenced in March 2013. The claimant seeks an order for the disapplication of the limitation period under section 33 of the Limitation Act 1980 ("the Act").
Secondly, it is claimed that the defendants are vicariously liable for the actions of the Limehurst Elders who, in 1990, negligently failed to take reasonable steps to protect the claimant from Peter Stewart once they knew he had sexually assaulted AM, another child in the congregation ("the safeguarding claim"). The claimant contends that the "the safeguarding claim" has been brought within the primary limitation period pursuant to sections 11 and 14 of the Act on the basis that the claimant did not have the requisite knowledge to bring "the safeguarding claim" until the defendants' witness statements were received in March 2014. Alternatively, the claimant seeks an order for the disapplication of the limitation period under section 33 of the Act.
In accordance with the guidance given in B v Nugent Care Society [2009] EWCA Civ 827, [2010] 1 WLR 516, it was agreed between the parties that the correct approach was for the evidence to be heard before making decisions as to disapplication of the limitation period under s.33 of the Act. Having heard the evidence, I bear in mind the additional guidance (at paragraph 21 of the judgment of the court) that, in circumstances where I am determining a section 33 application along with the substantive issues in the case, I should take care not to determine the substantive issues, such as liability, before determining the issue of limitation and, in particular, the effect of delay on the cogency of the evidence. To do otherwise would be "to put the cart before the horse".
The issues to be determined and the order in which they are to be determined are therefore as follows:
Limitation – section 14 "knowledge"
Limitation – section 33 "disapplication"
Vicarious liability – "the assault claim"
Vicarious liability – "the safeguarding claim"
Before dealing with the issues, it is necessary to set out the factual matrix of the case in relation to the general structure and governance of Jehovah's Witnesses and the relevant history of what happened to the claimant. Save where specifically stated, the facts are agreed or not disputed.
The Structure and Governance of Jehovah's Witnesses
The organisational structure of Jehovah's Witnesses is modelled on first century Christianity as described in the bible. Jehovah's Witnesses rely on passages from the bible to set their policy and religious practices. This distinguishes them from other religious denominations who use the bible to shape thinking, guide behaviour and teach lessons, but do not use it directly to set policy and religious practices. As a result, written documents, including worldwide monthly Jehovah's Witness publications such as Watchtower and Awake!, that describe the policy and religious practices of Jehovah's Witnesses, often quote biblical references.
Worldwide Jehovah's Witnesses now comprise about 8 million people who live in many different countries. There is a hierarchical organisational structure. A Governing Body coordinates organisational arrangements and doctrinal matters (Acts 15). The Governing Body supervises over 100 branch offices worldwide, each of which is supervised by a branch committee. One of the branch offices is the United Kingdom office based in London. The branch office has a branch committee. The committee oversees districts within the branch and assigns a district overseer to oversee each district. Within each district, there are about 12 circuits. A circuit overseer is assigned to oversee each circuit. Within each circuit, there are about 20 congregations. Within each congregation, there are elders, ministerial servants and members of the congregation.
Notwithstanding its hierarchical organisational structure, in accordance with the model of the early Christian communities as described in the bible, there is no hierarchical structure of setting apart a clergy class from the laity. All members are expected to teach and can lead bible study. Congregational responsibilities are split between "overseers and ministerial servants" (Philippians 1:1). Overseers are also referred to as elders. Generally, there are a number of elders and ministerial servants in each congregation. Members of the congregation are called "publishers" and call each other "brother" and "sister" (Matthew 23:8-12).
Elders are selected for appointment based on scriptural qualifications and will be mature spiritual men who have been baptised for many years, will be viewed as good examples in Christian living and previously will have served as ministerial servants (1 Timothy 3:1-7 and Titus 1:5-9). However, elders are not considered to be closer to God or superior persons (Job 32:21,22). They do not adopt an elevating title, such as Father, Reverend or Pastor, or take a superior position with reference to other members because there is only one leader who is Christ (Matthew 23:8-11). As such, they are not required to make any particular pledge or promise of obedience or loyalty to others within the governing structure of the organisation and there is therefore no relationship between an elder and a circuit overseer in the way that there is, for example, between a pastor and a bishop. They are not to be viewed as masters over others, but as fellow workers (Romans 12:8; 1 Corinthians 3:5; 4:1-2) who are appointed to shepherd the congregation of God (Acts 20:28). They therefore have no unique or advanced academic background and are volunteers of the congregation who are appointed to do the work of shepherding and overseeing spiritual matters (Watchtower 1 October 1977). Their primary role is to guide and protect the congregation spiritually, including taking the lead in evangelising and presiding over all types of congregational meetings.
Ministerial servants are members of the congregation who are also selected for appointment based on scriptural qualifications which require them to be serious individuals who hold the secret of the faith with a clean conscience (Timothy 3:8-12; 12:13). They provide voluntary practical assistance to the elders and service to the congregation. They care for organisational and physical tasks that must be handled in the congregation. Tasks include keeping the Kingdom Hall clean and tidy, arranging the platform and microphones as circumstances require, manning and controlling the sound system and microphones for the use of the congregation, organising and making available literature for the congregation, serving as attendants at meetings, assisting in emptying collections boxes, keeping accounting records for the money, managing records to help to co-ordinate field service and any other tasks to which the elders may assign them from time to time (The Organised Book: Organised to Accomplish Our Ministry, chapter 6 p.55-59).
There is evidence in the case that ministerial servants are not supposed to have any independent pastoral or shepherding role. The evidence comes from a number of past and present elders, particularly from Paul Gillies, who is a trustee of the First Defendants, a member of the British branch committee and an overseer. It also comes from Dr Monica Applewhite who has written a report about the structure and governance of Jehovah's Witnesses. She is an American expert in clinical social work whose previous experience and expertise in relation to Jehovah's Witnesses is limited to being requested by the Watchtower Society to review three separate Jehovah's Witness civil liability cases. Whether or not a ministerial servant is supposed to have any independent pastoral or shepherding role is an issue in the case. Specifically, it is an issue whether Peter Stewart was acting in any such role towards the claimant and her family at the material time. In so far as reliance is placed by the defendants upon The Organised Book: Organised to Accomplish Our Ministry chapter 6 p.55-59, it is worthy of note that at p.56 it states "their work within the congregation generally involves non teaching responsibilities" (my emphasis) and at p.58-59 it states that, "if there are not enough elders to conduct the congregational book studies, some of the more qualified ministerial servants are used as study conductors to care for assigned groups. They may be assigned to handle parts in the service meeting and the theocratic ministry school and to deliver public talks in the local congregation. Other privileges may be extended to some of the ministerial servants where there is particular need and they meet the requirements for the assignment".
Jehovah's Witness meetings are generally held in a place of worship called "Kingdom Hall". They are open to the public. Meetings are held twice each week, once on a weeknight and once on a Saturday or Sunday. On a weeknight, the programme consists of the congregational bible study, the theocratic ministry school and the field service meeting. In the 1980s and early 1990s, the congregational bible study was called the congregational book study and normally occurred in small groups, either at Kingdom Hall or in members' private homes. The format for that activity was a one hour question and answer discussion of a bible topic using a printed publication of Jehovah's Witnesses. The theocratic ministry school includes talks from the elders with contributions from members about various bible readings. The field service meeting relates to house to house activities. At a weekend, the programme consists of the public meeting and the Watchtower study. The Watchtower study is a one hour question and answer discussion of a bible subject using an article in the Watchtower magazine. Generally, an elder takes the lead in teaching at congregational meetings. Members have the opportunity to give comments and to speak for a few minutes during the meetings. Families remain together. There are no separate arrangements for children. Parents are primarily responsible for their own children's secular and spiritual education (1Timothy 5:8; Deuteronomy 6:6-7). There is no bar, though, on parents seeking additional help from others.
Bible study is conducted in a variety of ways, including group bible study, family bible study, individual study and the door to door ministry of field service. Regular door to door ministry is expected to be the life of all Jehovah's Witnesses (Acts 20:20). It is not limited to religious leaders or a chosen few, but should be carried out by all (Acts 5:42). Members are instructed to go and make disciples of all people (Matthew 28:18-20). It is performed voluntarily and without pay (Matthew 10:7-10).
Jehovah's Witnesses strive to live by a strict code of moral conduct based on the scriptures. However, when a member of the congregation is accused of committing a sin, the body of elders will assign two elders to investigate if there is evidence that the sin was committed. If there is, the body of elders will appoint a judicial committee of three or more elders to provide spiritual assistance to the person who committed the sin. If they find the individual genuinely repentant they will provide spiritual counsel and reproof to help avoid recurrence of the sin and may restrict the individual from full participation in meetings (Acts 26:20; Watchtower 1976, 1 December 1981, 15 September 1994, 15 July 2007). There may be an announcement to the congregation during a regular scheduled meeting that the individual has been "reproved", but the sin itself should not be mentioned (Shepherd the Flock of God p.98; Watchtower 1 December 1976). If the reproved individual is an elder or ministerial servant, he will be "deleted", that is removed, from that position and an announcement of the deletion should also be made to the congregation at a meeting (Shepherd the Flock of God p.42; Watchtower 1 December 1976). If the judicial committee finds an individual is not repentant, he or she may be "disfellowshipped", that is excommunicated, from the congregation. In that case, an announcement should be made to the congregation that the individual is no longer one of the Jehovah's Witnesses, but again the sin itself would not be mentioned (Shepherd for The Flock of God p.101). The information received by and the deliberations of a judicial committee are supposed to remain confidential (Proverbs 25:9). Those who are disfellowshipped should be "shunned" by all those who wish to have a good relationship with Jehovah (Pay Attention to Youselves and to All The Flock 1991 p.103).
The Facts
The claimant's mother married the claimant's father in 1967. They were baptised as Jehovah's Witnesses in the early 1970s, at which time they joined the Limehurst Congregation in Loughborough. They had four children, two boys born in 1968 and 1970 and two girls born in 1977 and 1985. At the time the claimant was born in 1985, her brothers were teenagers and her sister was 8 years old. Soon afterwards, the claimant's older brother left home.
During the 1980s, there were matrimonial difficulties. The claimant's father was disfellowshipped because of his behaviour towards the claimant's mother. The matrimonial difficulties ultimately led to him leaving the matrimonial home in East Leake in 1989. At around the same time, the claimant's younger brother left home. The claimant's mother continued living at the matrimonial home with her two daughters who, in 1989 were 12 and 4 years of age.
According to the claimant, she was subjected to sexual abuse by Peter Stewart from 1989 when she was 3 or 4 until 1994 when she was 9. The abuse occurred at least once a week. Throughout the five years, she was in Peter Stewart's company up to four or five times a week in relation to various activities at Kingdom Hall, at field service, at other people's homes, at her own home, at Peter Stewart's home and once at the Don Valley Athletic Stadium in Sheffield. The claimant recollects Peter Stewart being with her at Kingdom Hall with her on Tuesdays, Thursdays, Saturdays and Sundays at meetings, at other times when preparations were being made for meetings, at book study groups and at times when the hall required cleaning. Additionally, she recollects Peter Stewart regularly carrying out field service with her, most particularly on Tuesdays and Saturdays, taking her with him and remaining in her company when her mother was doing extra auxiliary field service, leading group bible study sessions at other people's homes mainly on Tuesdays, being in her own home on many occasions during the week leading family bible study sessions, personal bible study sessions and Watchtower study sessions in place of her absent father and by way of assistance to her mother, leading family bible study sessions at his own home normally after field service and being present at the Don Valley Stadium where there was a convention for Jehovah's Witnesses taking place.
The abuse consisted of sexual touching of the claimant's nipples and vagina on top of and underneath her clothing. There were frequent occasions of digital penetration of her vagina and other occasions of oral sex upon her and making her perform oral sex upon him. Once, he rubbed his erect penis against her naked vagina and attempted to penetrate her vagina. Throughout, he told the claimant it was their secret and that she should say nothing about what was happening. He told her that she would be damned as a sinner if she said anything to anyone.
It is accepted by the defendants that Peter Stewart sexually abused the claimant and there is no dispute about the nature of the acts. The issue is where and when it happened and what activities were occurring at the time it happened. There is no dispute about the account given by the claimant in her first statement, wherein she describes the abuse taking place either at her own home or Peter Stewart's home. There is an issue as to the accuracy of her second statement, wherein she expands upon the abuse and includes the additional information already summarised. The defence submission is that there is no reference to such details in her earlier statement. They are not backed up by independent documentation or any other evidence, cannot be relied upon and should not be accepted. The submission made on behalf of the claimant is that the contents of her statement have been supported by her oral testimony and that her evidence can be relied upon and accepted. Her mother provides support in so far as Peter Stewart had opportunity by participating in all the activities referred to by the claimant. Her statements and evidence confirm that, save for a few weeks in 1990 when Peter Stewart was not allowed to take bible studies and field study, he was as actively involved in leading and participating in the activities of Jehovah's Witnesses as alleged by the claimant.
The abuse stopped in 1994 when Peter Stewart was arrested and later convicted of and imprisoned for sexually abusing a young female relative and a young boy in the congregation. The claimant continued to keep her silence at that time. Ignorant of the full facts, the claimant's mother remained supportive of Peter Stewart and wrote a character reference on his behalf to the court at the time he was sentenced.
Shortly before Peter Stewart's release from his prison sentence, the claimant found out about his imminent release. It affected her badly and eventually she told her mother what had happened. In May 2000, her mother wrote to Peter Stewart telling him that she knew he had sexually abused the claimant. On 7 June 2000, he replied. In his letter, he admitted the abuse and apologised for the hurt and damage he had caused to the claimant. Upon receipt of the letter, the claimant's mother contacted an elder of the congregation. When nothing was done, she went to the police. In May 2001, the police interviewed the claimant. When the police thereafter went to see Peter Stewart about the allegation, they discovered his recent death.
Limitation – s.14 "knowledge" in relation to the "safeguarding claim"
The "safeguarding claim" is based upon the proposition that the Limehurst Elders failed to take reasonable steps to protect the claimant from Peter Stewart after they became aware in 1990 that he had sexually assaulted AM, another child in the congregation. It is the claimant's case that she only had the requisite knowledge to bring the claim when she read what had happened in 1990 in the defendants' witness statements that were served in March 2014.
There were thirteen statements served by the defendants in March 2014. They were all from past and/or present elders and ministerial servants. A number referred to the fact that Peter Stewart had been reproved, deleted and/or had resigned as a ministerial servant in 1990. Two elders, Robert Berry and Alan Orton, referred to the details of what happened in 1990.
Robert Berry stated he had been approached in 1990 by a member of the congregation who had told him that Peter Stewart had interfered with his daughter, AM, by touching her through her underwear. Robert Berry reported the allegation to the presiding elder, Anthony Hodgkinson, who asked him to go with another elder to see Peter Stewart. Robert Berry went with another elder, whose identity he can no longer remember, to see Peter Stewart and put the allegation to him. Peter Stewart admitted the allegation. Robert Berry reported back what had been said to other elders and then took no further part in what happened because he went on holiday. Upon his return from holiday, he learned that Peter Stewart had been removed as a ministerial servant. He added that, afterwards, all parents of the congregation were given warnings about the inadvisability of allowing their children to be on their own with a man who was not a family member. He stated that he was asked to visit a mother in the congregation to give that advice. He could not recall who it was that he warned.
Alan Orton referred to the same issue, although he stated that the report to the elders had been from AM's grandmother, rather than from her father. He stated that she informed the body of elders that AM, who was about six years of age, had told her that Peter Stewart had performed acts of a sexual nature upon her. After investigation by two elders, in the course of which Peter Stewart had admitted the allegation, a judicial committee of three elders was formed, of which he was a member. In total, there were about 5 or 6 elders attached to the Limehurst congregation. The other two members of the judicial committee may have been Laurie Hunter and Robert Brown, both of whom have since died. At the hearing of the judicial committee, Peter Stewart admitted the abuse. He was asked if he had ever touched any other child and he said he had not done so. He said he was very sorry and it would not happen again. The judicial committee decided that, because he was remorseful and genuinely repentant, he should not be disfellowshipped. Instead, he was given scriptural reproof and counsel admonishing him that he should never be alone with children in any circumstances and was removed as a ministerial servant. The result, but not all the details, was reported back to the body of elders. AM's grandmother was informed of what had happened and was asked if she wanted to report the matter to the police. She said she did not want to report it.
In a second statement dated November 2014, Alan Orton stated that, after the judicial committee had made its decision, the body of elders met to discuss how they could continue to safeguard children in the congregation. They decided to make a public announcement at a meeting and also to speak privately to parents of the congregation. In relation to the public announcement, his recollection is that the congregation were informed that Peter Stewart had been removed as a ministerial servant. He was unsure whether the announcement also indicated that he had been reproved, but it was likely that it did. It was also possible that a talk was given to the entire congregation warning them about the need for parents to supervise their children. If such a talk was given, it would not have named Peter Stewart, but would have outlined bible principles for parents to consider. In relation to speaking privately to parents, pairs of elders visited parents and warned them of the need to protect their children. Alan Orton said he went with another elder, who may have been Laurie Hunter, to visit the claimant's mother. He stated that he warned her about Peter Stewart, telling her that under no circumstances should she allow her children to be alone with Peter Stewart.
In evidence, Alan Orton confirmed the contents of his statements. In relation to the public meeting, he added that the congregation would have been told about Peter Stewart having been removed as a ministerial servant and then warned separately about the need to supervise their children. They would not have been told specifically that Peter Stewart had sexually assaulted a child, but it was intended that the conjunction of the two announcements should cause the congregation to understand that Peter Stewart was a sex abuser of young children. In relation to speaking privately to the claimant's mother, he said he could not remember the exact words he used, but it would have been to the effect that Peter Stewart was a very dangerous man and under no circumstances should she allow him to be alone with her children. He may well have told her why he was considered dangerous in that he had sexually interfered with a child, but the child would not have been named.
Anthony Hodgkinson stated he could not remember what happened in 1990, but referred to a Watchtower document dated 31 August 1990 which recorded that Peter Stewart had been judicially reproved and deleted as a ministerial servant.
In the claimant's mother's statement of February 2014, she recollected that there was a time around 1990 when, without understanding why, Peter Stewart was stopped from taking any study groups or field service. There had been rumours about him concerning sexual abuse of AM. However, she stated that no one was informed about what he had done and, after about three or four weeks, he returned and carried on as if nothing had ever happened. As a result, despite the rumours, everyone assumed nothing had happened. In her statement of November 2014 and in her evidence, the claimant's mother denied that Alan Orton or any other elder had spoken to her at any time to warn her to keep her daughters away from Peter Stewart because he was a danger to them or that he had admitted sexually assaulting a young girl in the congregation.
Having considered all of the evidence about what happened in 1990, I am mindful and take into account that I have not received any evidence from the elder who Alan Orton says went with him, who may have been Laurie Hunter, who has since died. In relation to the events of 1990, I prefer the evidence of the claimant's mother to that of Alan Orton. Having heard the claimant's mother give evidence, I am satisfied that, if she had been given the warnings as alleged, she would not thereafter have allowed Peter Stewart any access to her children, even the more limited access about which there is no dispute. She would not have written the reference in 1995. She would not have argued with the claimant's father in the manner I am about to describe in about 2002. Having heard Alan Orton give evidence, I am satisfied that he presented himself as being completely honest. However, partly because he is now 77 years of age, partly because his memory is poor and partly because the events were a long time ago, he had difficulty in understanding some of the questions, periodically became confused and gave incorrect answers that he later changed when he realised what he had said was wrong. In relation to the Section 14 issue, I find his description of the steps taken in relation to warning the congregation publicly and privately to be illogical. The scriptures forbid revealing confidential matters. The inference therefore is that no member of the congregation, publicly or privately, should have been told of what Peter Stewart had done. If a public talk took place, such as that regarded as possible by him, arguably that alone would have breached confidentiality. Mentioning the specifics to the claimant's mother would certainly have done so. Notwithstanding his obvious honesty and the partial support for his evidence from Robert Berry, I am unable to accept the reliability of his account of what happened in 1990.
It is with these background facts in mind and the conclusion I have reached about what was, or rather was not, said to congregants and the claimant's mother in 1990 that I turn to consider the important issue of the claimant's knowledge. I have had to come to a conclusion in relation to that specific part of the evidence in order to consider the s.14 issue.
The claimant's evidence is that she knew nothing at all about any allegation of Peter Stewart having sexually abused a young girl before 2002. In about 2002, she overheard her parents talking about the fact that the elders had known that Peter Stewart had been accused of sexually abusing AM. Her mother believes that date may have been about three years later. Whichever date it was, according to the claimant, her father was saying that he believed the elders had known about the abuse whereas, consistent with the finding I have just made, her mother was saying that she did not believe it could be true and the elders could not have known. The claimant said that she did not want to hear any more about it and her parents eventually stopped talking in front of her about it. The claimant said that the next time she saw Alan Orton at her mother's house, which would have been soon afterwards, she asked him whether it was true that the elders had known that Peter Stewart had been accused of sexually abusing AM. Alan Orton said it was not true and added that, if the elders had known of something like that, Peter Stewart would have been dealt with. When he gave evidence, Alan Orton said that he had no memory of the question or the answer.
In August 2006, at a time when the claimant was still angry about what had happened to her, she met the circuit overseer, Paul Presland, at her mother's house. There is a Jehovah's Witnesses data record of the meeting having taken place, but there is no record of what was said at the meeting. The claimant states that she told Paul Presland that she had heard that the elders had known Peter Stewart had been accused of sexually abusing AM and, if they had done something about it at the time, then Peter Stewart would not have been able to have gone on to abuse her. In her statement, she stated that Paul Presland replied "the elders would never do that". In her evidence, she clarified what she meant. She explained he was saying that the elders would never have overlooked something like that if they had known about it. She understood him to be saying that, if they had known about it, Peter Stewart would have been disfellowshipped. She said that, after the meeting, she remained angry and had her own beliefs about what had happened but had nothing to back them up. After the discussions with Alan Orton and Paul Presland, she felt there was no way of ever finding out the truth of what had happened.
The claimant agreed in evidence that she continued to express her anger and belief that the elders had known that Peter Stewart had been accused of sexually abusing another child at a recorded meeting on 21 November 2013 with two elders, John Peel and Tony Penton. No admissions were made by the elders at that meeting to confirm her personal beliefs.
Mr Weitzman, for the defendants, submits that, for the purposes of s.14 of the Act, what a claimant must know is that an injury is attributable in whole or part to a defendant's act or omission and that attributable means that the injury is capable of being attributed to the act or omission, not that causation, a cause of action or all allegations that might be pleaded are available. He submits that the evidence of Alan Orton can be accepted and, from the rest of the claimant's evidence, she had sufficient knowledge for the purposes of s.14.
Mr Counsell, for the claimant, submits that the evidence of the claimant is to be preferred to that of Alan Orton. She had nothing to go on except for what she describes as her "belief", which in reality was unsubstantiated and amounted to no more than suspicion. Even then, such "belief" amounted to no more than that the elders had known of an allegation of sexual abuse, not that Peter Stewart had committed any sexual offence. Therefore, prior to the service of the witness statements, she lacked sufficient information to investigate a claim, let alone bring proceedings.
S.14(1) of the Limitation Act 1980 provides:
"…..in sections 11 and 12 of this Act references to a person's date of knowledge are references to the date on which he first had knowledge of the following facts-
(a) that the injury in question was significant; and
(b) that the injury was attributable in whole or part to the act or omission which is alleged to constitute negligence, nuisance or breach of duty; and
(c) ……
(d) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant;
and knowledge that any acts or omissions did or did not, as a matter of law, involve negligence, nuisance or breach of duty is irrelevant."
The claimant knew that she had been sexually abused and knew that she had suffered significant injury arising from the abuse. The issue is whether, in accordance with s.14(1)(b), she had knowledge that the injury was attributable in whole or part to the act or omissions, which are alleged to constitute the negligence of the defendants.
In AB and others v Ministry of Defence [2013] 1 AC 78, Lord Mance referred at paragraph 80 to the much-quoted sentence of Hoffman LJ in Broadley v Guy Clapham & Co [1994] 4 All ER 439, 448H-J
"S.14(1) requires that one should look at the way in which the plaintiff puts his case, distil what he is complaining about and ask whether he had, in broad terms, knowledge of the facts on which that complaint is based."
Lord Mance continued at paragraph 81 by referring to the approval of the House of Lords of the above passage in Haward v Fawcetts [2006] 1 WLR 682 citing extracts from the judgments of Lord Walker, Lord Scott and Lord Brown. Lord Walker referred to the court being concerned with the identification of the facts that are the "essence" or "essential thrust" of the case. Lord Scott referred the requisite knowledge being "knowledge of the facts constituting the essence of the complaint of negligence". Lord Brown referred to the claimant needing to know "the essence of the act or omission to which his damage is attributable".
The essence or essential thrust of the claimant's pleaded case in relation to the "safeguarding claim" is that defendants failed to protect children of members of the congregation from sexual assault by Peter Stewart after they became aware of his sexual offending in 1990. The crucial issue therefore is whether the claimant had sufficient knowledge of the fact that the defendants had become aware of Peter Stewart's sexual offending in 1990.
In the leading judgment in AB and others, Lord Wilson stated the test was as follows:
"11. ………Had I been offering a view of the meaning of knowledge in s.14(1) in circumstances in which I had been unassisted by authority, I think I might have ventured the phrase "reasoned belief" rather than "reasonable belief". The word "reasoned" might even better have conveyed the need for the belief not only to be held with a degree of confidence (rather than to be little more than a suspicion) but also to carry a degree of substance (rather than to be the product of caprice). But the distinction between the phrases is a matter of little more than nuance. In the resolution of marginal issues, and even at the level of this court, there is a lot to be said for maintaining consistency in the law. So I consider that this court should reiterate endorsement for Lord Donaldson MR's proposition that a claimant is likely to have acquired knowledge of the facts specified in s.14 when he first came reasonably to believe them. I certainly accept that the basis of his belief plays a part in the enquiry; and so, to that limited extent, I respectfully agree with paragraph 170 of Baroness Hale JSC's judgment. What I do not accept is that he lacks knowledge until he has the evidence with which to substantiate his belief in court. Indeed, we should not forget that, if the action is to continue, the court will not be directly interested in evidence about mere attributability; it will require proof of actual causation in the legally requisite case.
12. What then is the degree of confidence with which a belief should be so held, and of the substance of which it should carry, before it is to amount to knowledge for the purpose of the subsection? It was again Lord Donaldson MR in Halford v Brookes [1991] 1 WLR 428 who, in the passage quoted by Lord Phillips PSC in paragraph 115 below, offered guidance in this respect which Lord Nicholls in Haward v Fawcetts [2006] 1 WLR 682 was, at paragraph 9, to describe as valuable and upon which, at this level of generality, no judge has in my view yet managed to improve; it is that the belief must be held "with sufficient confidence to justify embarking on the preliminaries to the issue of a writ, such as submitting a claim to the proposed defendant, taking legal and other advice and collecting evidence."
For the reasons already stated in relation to the facts, the claimant had no information at all about what the elders might have known in 1990 until overhearing her parents speak about it some time between about 2002 and 2005. All that she then discovered was that there was an allegation that the elders had known about an allegation of Peter Stewart having sexually abused AM. Her efforts to discover what the elders actually knew were thwarted by what I am satisfied was the negative reaction of both Alan Orton and Paul Presland. Her anger and comments at the meeting on 21 November 2013 produced no confirmation upon which to act. In my judgment, her "belief" was not held with sufficient confidence to justify embarking on the preliminaries to the issue of a writ, such as submitting a claim to the proposed defendant, taking legal and other advice and collecting evidence. The "belief" she had was in reality no more than mere suspicion. In such circumstances, she did not thereby have sufficient knowledge within the meaning of s.14(1) until the statements were served in March 2014.
Limitation – s.33 "disapplication"
S.33 of the Limitation At 1980 provides:
"(1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which-
(a) the provisions of section 11 …… of this Act prejudice the plaintiff……..; and
(b) any decision of the court under this subsection would prejudice the defendant …..
the court may direct that those provisions shall not apply to the action or shall not apply to any specified cause of action to which the action relates.
(2) ……
(3) In acting under this section the court shall have regard to all the circumstances of the case and in particular to-
(a) the length of, and the reasons for, the delay on the part of the plaintiff;
(b) the extent to which, having regard to the delay, the evidence to be adduced or likely to be adduced by the plaintiff or the defendant is or is likely to be less cogent than if the action had been brought within the time allowed by section 11…..
(c) the conduct of the defendant after the cause of action arose, including the extent (if any) to which he responded to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were or might be relevant to the plaintiff's cause of action against the defendant."
(d) …….
(e) …….
(f) ……..
S.33 (1) gives the court discretion to allow an action to proceed outside the limitation period and requires the court to balance the prejudice to the claimant arising from the limitation period against the prejudice to the defendant in permitting an action to proceed outside that period. That requires a balancing exercise to be performed taking all the circumstances into account. S.33(3) does not place a fetter on the discretion given by s.33(1). This much is made plain by the opening words "the court shall have regard to all the circumstances of the case". S.33(3) focuses the attention of the court on matters which past experience has shown are likely to call for evaluation in the exercise of the discretion and which must be taken into consideration by the judge (Donovan v Gwentoys Ltd [1990]1 WLR 472 at 477H-478A).
In considering the delay to which particular regard should be given under s.33(3)(a) and (b), I bear in mind that, pursuant to McDonnell v Walker [2009] EWCA Civ 1257, it is the delay since the expiry of the limitation period that is relevant, although the overall delay is relevant as part of all the circumstances of the case.
Under s.33(3)(a), particular regard is to be had to "the length of, and reasons for, the delay". The two matters appear in the same sub-paragraph. There is relevance to the conjunction of the two issues.
The limitation period expired in September 2006, three years after the claimant's 18th birthday. The proceedings were commenced in March 2013, 6½ years later. It is noteworthy, though, that the facts relevant to the action date back to the period between 1989 and 1994. Even if the proceedings had been legitimately commenced within the limitation period in 2006 and heard, say, in 2008, this would still have been a historic sex abuse case with all the issues associated with trials of that nature. That said, it is not a case where everything is in issue. By reason of the judicial committee proceedings in 1990 and Peter Stewart's conviction in 1994, it is not disputed that the claimant was sexually abused by him and over a lengthy period. The issues in relation to the abuse are those identified above in paragraph 24.
In relation to the reasons for the delay, the case of A v Hoare [2008] 1 AC 844 at 863C-D requires a judge to give due weight to evidence that the claimant might have been disabled from commencing proceedings by any psychiatric injury that might have been suffered. Mr Weitzman concedes that the expert report of Dr Roychowdhury establishes that the Post Traumatic Stress Disorder suffered by the claimant justifiably explains why she was unable to focus upon the prospect of commencing proceedings until 2013.
Further, there is no issue as to s.33(3)(c). It is not suggested that the defendant's conduct has affected the claimant's ability to bring the action. S.33(3)(d)-(f) are also irrelevant in the context of the action.
The narrow focus, therefore, pursuant to s.33(3)(b) is on the extent to which the delay has affected the cogency of the evidence under the wider umbrella of the surrounding circumstances of the case.
Mr Weitzman refers to the death of witnesses and the difficulty about documentation and recollection so long after the events. He relies on the judgment in McDonnell, which contrasts the type of case where a defendant cannot show any forensic prejudice and for whom the limitation defence would be a complete windfall with one where prejudice is suffered because a defendant has not for many years been notified of a claim so as to enable investigation of it. He submits this is not a windfall case, but one where real prejudice has been suffered. He also refers to the observations of Lord Brown at paragraphs 85 and 86 of Hoare wherein he dealt with the real difficulties that could arise in having a fair trial in relation to historic sex abuse cases. In summary, he submits the defence evidence is substantially less cogent than it might have been and the prejudice is such that I should refuse to disallow the operation of s.11 of the Act.
Mr Counsell submits the cogency of the evidence has not been significantly adversely affected. Memories may have faded over the short time frame of delay since the expiry of the limitation period, but not substantially. Indeed, the defence have been able to call all of the witnesses they would have called if the action had been brought in time. No key witnesses have died during the 6½ years period. The two elders referred to in evidence who have died, Mr Hunter and Mr Brown, respectively died in 1999 and 1992. The defence have not identified any documents that have not been recovered as a result of delay outside the limitation period. Many records have been recovered. Any documents that may have assisted were destroyed many years ago. They include the police interview, although there is a detailed summary of it, as well as the report from the judicial committee in 1990, which Paul Gillies said would have been destroyed almost immediately after the hearing. He submits this is an appropriate application to be granted.
In relation to the circumstances of the case, I have regard to the balancing exercise I must perform between the prejudice on both sides. So far as the claimant is concerned, I take into account the fact that this is not a case where the claimant would have redress against any other prospective defendant. A refusal to disapply the limitation period will mean the end of the action for her. This is not a windfall case for the defendants. However, I do not regard any additional prejudice to the defendants arising either since the expiry of the limitation period or as a whole have so adversely prejudiced them that it should outweigh the prejudice to the claimant. In such circumstances, I am satisfied that a fair trial remains possible. At all times, I bear in mind the difficulties associated with the lack of evidence, particularly lack of documentation and witnesses, as well as poor recollection. In my judgment, the claimant has satisfied me that it is equitable to allow the action in relation to the "assault claim" to proceed and for me to direct that the provisions of s.11 should not apply to that part of the case. I am further satisfied that, even if (contrary to my earlier finding) the claimant were to be deemed to have had sufficient knowledge within the meaning of s.14 of the Act, it would be equitable to allow the action in relation to the "safeguarding claim" to proceed and for me to direct that the provisions of s.11 should also not apply to that part of the case.
Vicarious liability – "the assault claim"
As Lord Phillips put it in Various Claimants v Catholic Child Welfare Society [2012] UKSC 56; [2013] 2 AC 1, "the law of vicarious liability is on the move". It is no longer limited to employees of a defendant acting in the course of their employment. It has been extended to those who are not employees of the defendant but with whom the defendant has a relationship "akin to employment". In that case, a residential school's headmaster and teachers who were members and brothers of a lay Roman Catholic Order, but who were not employed by the order, sexually abused children at the school. The order was held to be vicariously liable for the abuse because it exercised a degree of control over the members by reason of the vows the members took and the hierarchical structure of the order. Lord Phillips at paragraph 21 referred to a two stage test for establishing vicarious liability.
"21 ……. The test requires a synthesis of two stages: (i) The first stage is to consider the relationship of D1 and D2 to see whether it is one that is capable of giving rise to vicarious liability. (ii) ……..What is critical at the second stage is the connection that links the relationship between D1 and D2 and the act or omission of D1."
First stage – the essential elements of the relationship
In relation to the first stage, in E v English Province of Our Lady of Charity and another [2013] QB 722 a priest appointed by a diocesan bishop to visit a children's home sexually abused a child at the home. At paragraph 73 of the judgment, Ward LJ stated that the time had come emphatically to announce that the law of vicarious liability had moved beyond the confines of a contract of service and described the test to be applied as follows:
"…..whether the relationship of the bishop and (the priest) is so close in character to one of employer/employee that it is just and fair to hold the employer vicariously liable."
Ward LJ then examined whether the relationship was so close in character by considering the four signposts of a "control" test, an "organisation" test, an "integration" test and an "entrepreneur" test. Having done so, he held it was just and fair to hold the bishop accountable, in that the priest owed him reverence and obedience and could be dismissed by him in the event of a gross breach of his duties. His activities in ministering to the souls of the faithful were central to the objectives of the organisation, the Roman Catholic Church. He was part and parcel of that organisation and was integrated in it. In his work, he behaved more as if he was an employee than someone in business on his own account.
Mr Weitzman submits that elders and ministerial servants are different to the priest in the case of E and the brothers in the case of Various Claimants. The priest and brothers were full time clergy. Elders and ministerial servants are not full time clergy. They have no stipend. There is no stipulation as to where they should live. They have a secular life as well as being members of the congregation. They share common beliefs with other members of the congregation, but the way they act is no different to other members of the congregation. They are not controlled by, fully integrated into or obedient to the organisation of Jehovah's Witnesses in the same way that a full-time clergyman is. Mr Weitzman's submissions need to be tested alongside the approaches adopted in the cases of E and Various Claimants.
In relation to control, it is apparent from the structure and governance of Jehovah's Witnesses as summarised above and from the evidence from numerous elders, particularly the lengthy evidence of Alan Orton, that being a Jehovah's Witness is a way of life for all members. It is not confined to the attendance at services. It affects every aspect of one's daily life. That is particularly so for those who become elders and ministerial servants. The strict code of moral conduct by which all members are expected to observe and apply to their day-to-day living is enforced by the existence of the judicial committee and its jurisdiction over all aspects of the life of a Jehovah's Witness.
In the case of Peter Stewart, he was brought before the judicial committee in relation to an extremely serious allegation about his sexual offending. However, in other cases, the transgression could be far less serious, in the sense of it being a spiritual sin rather than a criminal offence. The sanctions available to the Judicial Committee are wide ranging and include reproof, removal or deletion as an elder or ministerial servant and disfellowship. Specifically, in relation to ministerial servants, Mr Gillies gave evidence that if a ministerial servant fails to measure up to bible qualifications, the elders may express concern about him to the circuit overseer. If he fails to change and continues not to measure up to the scriptures, the circuit overseer can recommend deletion as a ministerial servant. If the matter is dealt with by a judicial committee, there is no appeal from such a decision.
The high level of control over all aspects of the life of a Jehovah's Witness is arguably a closer relationship than that to be found in an employer/employee relationship. It is at least akin to such a relationship. It is to be contrasted with rather less control that the bishop had over the priest in the case of E. There, the priest was appointed to his office subject to the oversight of his bishop and in a wide sense the priest was found to be accountable to his bishop, but responsibility for running the parish rested with the parish priest. He exercised his ministry in co-operation and collaboration with his bishop rather than one who was subject to the bishop's control.
In relation to organisation, the hierarchical organisational structure of Jehovah's Witnesses that has already been referred to has close similarities to the organisational structure of the Roman Catholic Church which was described by Ward LJ in E. The Roman Catholic Church was described as being highly organised with the Pope in the Head Office, with its "regional offices" with their appointed bishops and with "local branches" being the parishes with their appointed priests. Jehovah's Witnesses, too, are highly organised with a governing body, branch offices, districts with a district overseer, circuits with a circuit overseer and congregations with members made up of publishers, ministerial servants and elders. There is no hierarchical structure of setting apart the clergy. However, there is prescriptive guidance as to how a ministerial servant and an elder should serve, act and behave at all times. Members can work their way up from being a publisher to being a ministerial servant to being an elder. Down at local level within the congregations, there are organised meetings, study groups and field service principally supervised or led by Jehovah's Witnesses of differing seniority.
The Watch Tower Bible and Tract Society of Britain is a charity dealing with large sums of money. It is notable that, at local level, part of the responsibility of a ministerial servant is to take charge of congregational accounts that feed into the charity's resources. The Watch Tower's Memorandum of Association declares its objects are to advance the Christian religion as practised by Jehovah's Witnesses by preaching the gospel of God's Kingdom under Christ Jesus unto all nations as a witness to the name, word and supremacy of Almighty God, Jehovah; by producing and distributing bibles and other religious literature in any medium and educating the public in respect thereof; promoting religious worship, Christian missionary work; advancing religious education; and maintaining one or more religious orders or communities of special ministers of Jehovah's Witnesses. In order to do that, Jehovah's Witnesses function via its organisational structure.
By a simple substitution of words, the organisation of Jehovah's Witnesses is analogous to the way Ward LJ described the Roman Catholic Church at paragraph 77 of his judgment, namely:
"This looks like a business and operates like a business. Its objective is to spread the word of God. The priest has a central role in meeting that target. Ministering, as he does, to the souls of the faithful, can be seen to be the very life blood of the church, vital to its existence."
In relation to integration, a useful test, in accordance with Denning LJ's observations in Stevenson Jordan & Harrison Limited v McDonald & Evans [1952] 1 TLR 101, is whether the relevant person is "part and parcel of the organisation, not only accessory to it". A ministerial servant may not be very far up the ladder of the structure but his role is one of great importance. The routine tasks performed by him are necessary and important tasks without which many of the activities of Jehovah's Witnesses cannot be carried out. He deputises for an elder in the absence of an elder. I am satisfied that, in deputising, he assists the elders, not only with routine administrative tasks but also standing in on occasions with a teaching role, if necessary. One also cannot become an elder without first having been a ministerial servant. As such, a ministerial servant is part and parcel of the organisation and integral to it.
In relation to the entrepreneur test, the issue is whether the relevant person is more like an independent contractor than an employee. In other words, is he actually behaving like an entrepreneur, running his own business, taking the appropriate risks and enjoying the resulting profits? In the case of the priest in E, the priest was found not to be receiving a wage, but was required to reside in the parochial house close to his church. He therefore did not quite match a very facet of being an employee, but was regarded as being very close to it. The description of his activities certainly did not resonate with being an entrepreneur. Like the priest, a ministerial servant does not receive a wage. Unlike the priest, there was no requirement as to where he should live. However, it would be inaccurate to describe him as being more like an independent contractor than an employee. He is a fundamental part of the whole enterprise dedicating himself to the good of Jehovah's Witnesses. His duties are solely to serve the interests of the organisation. He is constantly working for the good of the organisation of Jehovah's Witnesses and not for himself.
Notwithstanding the matters raised by Mr Weitzman, by reason of the answers to the signposted tests applied by Ward LJ to the first stage, in my judgment the relationship between elders and ministerial servants and the Jehovah's Witnesses is sufficiently close in character to one of employer/employee that it is just and fair to impose vicarious liability.
In Various Claimants, Lord Phillips noted and did not disapprove of the application of the four signposts referred to by Ward LJ. However, he preferred a simpler analysis in concluding that the stage one test was satisfied. At paragraph 61, he held that:
"………Providing that a brother was acting for the common purpose of the brothers as an unincorporated association, the relationship between them would be sufficient to satisfy stage one, just as in the case of the action of a member of a partnership. Had one of the brothers injured a pedestrian when negligently driving a vehicle owned by the institute in order to collect groceries for the community, few would question that the institute was vicariously liable for his tort."
Ward LJ also used a road traffic example to test the conclusion he had arrived at by adopting the signposted tests. His example demonstrated vicarious liability being the appropriate outcome in circumstances where a priest may knock down a pedestrian at a zebra crossing when driving to give the last rites to a member of the parish. Mr Weitzman used that example in his final submissions to suggest that, if a Jehovah's Witness was driving to a location to carry out field service and knocked down a pedestrian, it would be nonsensical for vicarious liability to apply in those circumstances. Mr Counsell replied by stating that the better analogy is whether vicarious liability would be appropriate in circumstances where a ministerial servant was taking a publisher to field service and had an accident in the course of which the publisher was injured. In his submission, it would. I agree.
Whether one applies the reasoning of Lord Phillips or Ward LJ, in my judgment the answer to the stage one test remains yes.
Second stage – the connection between the relationship and the sexual abuse
In relation to the second stage, what needs to be considered is whether the acts of sexual abuse were connected to the relationship of the defendants and Peter Stewart in such a way as to give rise to vicarious liability.
In Lister and others v Hesley Hall Limited [2002] 1 AC 215, the issue was whether the owners and managers of a school were vicariously liable for sexual abuse of pupils by the warden of the school who was their employee. Lord Steyn (at paragraph 28) stated the question to be answered was "whether the warden's torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable". In answering the question yes and cautioning that it will always be a matter of degree, Lord Steyn said that, on the facts, the pupils had been entrusted into the care of the warden and the sexual abuse was "inextricably interwoven" with the carrying out of the warden's duties". That was to be distinguished, for example, from the situation of a groundsman, who was only employed to look after the gardens, even though his employment would have provided him with opportunity. Mere opportunity is not enough.
In Maga v Archbishop of Birmingham [2010] 1 WLR 1441, where, for the purposes of the case, it was accepted that a Catholic priest should be treated as an employee, the Archbishop was found to be vicariously liable for abuse by the priest outside religious services. The abused boy was not a member of the priest's congregation or diocese. They became acquainted when the priest ran youth discos. Maga is illustrative of vicarious liability being established in a religious setting where an individual uses a religious position of responsibility as a means to gain access to children and, at the time of such abuse, he was not performing his specific religious role.
Lord Neuberger at paragraph 45 found that a priest is "never off duty". At paragraph 46, he stated:
"…..(the priest's) functions …... included a duty to evangelise or "to bring the gospel to be known to other people….". Accordingly he was ostensibly performing his duty as a priest employed by the archdiocese by getting to know the claimant….."
Longmore LJ at paragraph 84 stated:
"….the progressive stage of intimacy were to my mind only possible because (the priest) had the priestly status and authority which meant that no one would question his being alone with the claimant. It is this that provides the close connection between the abuse and what (the priest) was authorised to do."
Smith LJ added at paragraph 94:
"…..there is no doubt that, on the evidence in the present case, the duty to evangelise was clearly established……. That duty was one of the factors or circumstances which provided (the priest) with the ostensible authority to befriend and become intimate with the claimant and boys like him. That duty and ostensible authority to befriend the claimant created the opportunity for the abuse and also increased the risk of abuse. But I do not think that, if a priest or pastor of a non-evangelical church had the ostensible authority to befriend and develop intimacy with a young person by reason of his pastoral duties and if he then abused the opportunities given by that ostensible authority, the position of that church would be any different from the position of the Roman Catholic Church in this case"
With these principles in mind, I return to the factual issues in the case in relation to the abuse perpetrated by Peter Stewart as summarised above in paragraph 24.
Making all due allowance for the absence of some documentation, the death of some witnesses and the poor recollection of others, I nonetheless accept the evidence of the claimant. Her evidence was not perfect. Given her youth at the time and the period of time that has elapsed since, one would not expect it to have been perfect. However, I am satisfied she was being truthful and, where her memory enabled her to recollect events, she was reliable and accurate. Where there is a conflict of fact between her evidence and that of the defence witnesses, I prefer her evidence. I give one specific example of when she could have given untruthful, exaggerated or unreliable evidence and did not do so. When pressed as to whether she had been raped, she did not reply positively, but stated that she did not know if there had been penetration at the time Peter Stewart pressed his erect penis against her naked vagina.
In accepting the claimant's evidence, I accept that the abuse started in 1989 and continued until Peter Stewart was arrested in 1994.
Further, in that I accept the claimant's evidence as a whole, it is implicit in that finding that I accept the evidence contained in her second statement. She was cross examined about specific details and about why the additional events in the statement were not in her first statement and why they appear to go further than what she told social workers and the police in 2001. Her replies were credible. In essence, she was saying that she has had difficulty in going into detail about what happened to herself, even with her solicitor, but that in any event she thought she had made it clear in her first statement that Peter Stewart would abuse her almost every time he saw her. What she had not done in her descriptions to Social Services, the police and in her first statement was to list each and every occasion she could think of when he had seen her. That had not been done until she had been asked to focus on those occasions and to list them, which is what happened at the time of making the second statement.
Notwithstanding evidence from the elders that it would not have been the norm, I also accept the evidence of the claimant and her mother that Peter Stewart did stand in for elders at book study meetings in other people's homes and that he took the opportunity whenever it arose to take the claimant with him on field study. It would have been apparent to all that he was doing these things and no one did anything about it. In the context of his deviance, that is unsurprising. It is obvious that he managed to gain access to AM in 1990 and was additionally able to gain access to his young female relative and the boy he abused that led to his sentence in 1994. It is not disputed that he managed to abuse the claimant in her own home and in his own home without the claimant's mother knowing he was abusing her. It is far from incredible that he should have continued to do so on other occasions when I am satisfied he was in her company.
I also accept the claimant's mother's evidence that Peter Stewart was not merely a friend who was assisting her in the absence of her husband. I am satisfied that she has been a devout Jehovah's Witness for many years and would have struggled to have maintained the obligations of teaching her two remaining children, her two young daughters, what was needed to be taught to bring them up as equally devout Jehovah's Witnesses. I am therefore satisfied that Peter Stewart's access to her and, through her, to her children, was as a direct result of Peter Stewart's known and established position as a ministerial servant, both before and after the events relating to the finding by the Judicial Committee in 1990. In the words of the claimant's mother, she was initially wary of Peter Stewart but came round to trusting him in that "he must be alright if he is allowed to come to East Leake." It is implicit in that comment that the claimant's mother only accepted him into her house on the understanding that he was there officially in his actual or ostensible capacity as a ministerial servant.
In this regard, I do not ignore the evidence of the elders that it is not normal practice for a man alone to visit a single woman. I accept the evidence that that is normal practice and is a matter of general principle, but I do not accept it never happened. First of all, even the elders accepted there were occasions when it could happen. Secondly, Anthony Hodgkinson knew, as must other elders, that Peter Stewart was visiting the claimant's mother on a regular basis because the claimant's father complained to him about that fact in 1992. The fact that the claimant's father chose to speak to Anthony Hodgkinson about Peter Stewart's visiting is consistent with his belief that the visits were associated with Jehovah's Witness activities. Thirdly, it will have been obvious that Peter Stewart was driving the claimant's mother and her children to and from field service meetings. Further, the evidence of the claimant and her mother establishes the elders knew he was conducting field service with the claimant alone. There is no evidence that any objection was raised to either of those events, each of which will have been contrary to normal practice and principles. The reason may be found in a confidential written communication sent to all bodies of elders by The Watchtower Bible and Tract Society of New York on 20 July 1998 which, in part, stated:
"Those who are appointed to privileges of service, such as elders and ministerial servants, are put in a position of trust. One who is extended privileges in the congregation is judged by others as being worthy of trust. This includes being more liberal in leaving children in their care and oversight. The congregation would be left unprotected if we prematurely appointed someone who was a child abuser as a ministerial servant or an elder."
The documentation in relation to what happened to Peter Stewart after the hearing of the judicial committee in 1990 is unclear. The documents establish the following:
1) Prior to 31 August 1990, Paul Gillies stated there are no filed documents in existence showing Peter Stewart had either being appointed or deleted as a ministerial servant at any congregation of Jehovah's Witnesses.
2) On 31 August 1990, there is a Watchtower S-52b written notification to the body of elders of the Limehurst congregation of the "deletion" of Peter Stewart. The entry has been typed. There is an undated handwritten addition stating "M.S. Judicial reproof".
3) On 10 August 1991, there is typed document with no heading on it on filed at the Watchtower offices in London that lists seven elders and four ministerial servants of the Limehurst congregation. Peter Stewart is not one of the listed ministerial servants.
4) On 1 September 1991, there is a Watchtower S-52b written notification to the body of elders of the Limehurst congregation of the appointment of one elder and the deletion of five elders and two ministerial servants all of whom moved that day to the newly formed Garendon Park congregation. Peter Stewart's name is not on the form.
5) On 1 September 1991, there is a Watchtower S-52b written notification to the body of elders of the Garendon Park congregation of the appointment of six elders (including the five from the Limehurst congregation) and three ministerial servants (including the two from the Limehurst congregation). Peter Stewart's name is not on the form.
6) On 7 January 1995, there is a Watchtower written notification that Peter Stewart had disassociated himself.
7) On 13 May 1995, There is a S-2 written document from Garendon Park congregation sent by the presiding overseer, Anthony Hodgkinson, recommending that Peter Stewart, whose present position was stated as being "MS", should be deleted from the appointed list of appointed elders and ministerial servants due to his "disassociation". It was date stamped by the Watchtower branch office on 16 May 1995. Mr Gillies suggested in evidence that the reference to Peter Stewart being a "MS" as at 13 May 1995 must have been a clerical error.
Piecing together all of that unsatisfactory evidence about Peter Stewart's status both before and after the judicial committee hearing, I am satisfied of the following. His "deletion" as a ministerial servant on 31 August 1990 confirms oral evidence that he was a ministerial servant prior to that date. If the document of 13 May 1995 is not a clerical error and he was reinstated at some time after the hearing, then he gained access to the claimant's home and children as a ministerial servant. If it was a clerical error and he was not reinstated, I am satisfied he continued to act as if he was still a ministerial servant and did so with the knowledge of those around him. That may well have been the reason for the error. He knew what to do and how to act. He had been a ministerial servant for an appreciable period of time. In circumstances where I am satisfied that the elders never told anyone in specific terms of his abuse of AM and no one knew about the abuse of his young female relative and the boy until his arrest in 1994, it is entirely feasible and I find that he continued to act, either very soon after the hearing in 1990 or within a reasonable period of the hearing, in like manner to previously when he had been a ministerial servant. I am satisfied that he was holding himself out to others as being a ministerial servant acting with ostensible authority to carry out his duties in the same manner as he had been carrying them out beforehand. That is consistent with the evidence of the claimant and her mother and the document dated 13 May 1995 and it is also consistent with the deviance inherent in the way he was behaving towards a number of children during the relevant period.
My conclusion in relation to the second stage is that, on the facts as I find them to be, the sexual abuse of the claimant by Peter Stewart was not as a result of the mere opportunity of his presence in the claimant's company for reasons outside any role he was playing as a Jehovah's Witness. Whether the abuse took place at or after book study at whoever's home, on field service, at Kingdom Hall or at the Convention, he was ostensibly performing his duties as a Jehovah's Witness ministerial servant. I am satisfied that the progressive acts of intimacy were only possible because he had the actual or ostensible status of a ministerial servant that meant no one who saw him questioned his being alone with the claimant. As in the cases of Lister and Maga, it is that that provides the close connection between the abuse and what he was authorised to do. In the words of Lord Steyn, they were "inextricably interwoven" with the carrying out of his duties. In such circumstances, in my judgment, it is fair and just to hold the defendants to be vicariously liable for his acts.
Vicarious liability – "the safeguarding claim"
In relation to the safeguarding claim, there are three issues to be considered. Did the elders owe a duty of care to the claimant? If they did, was there a breach of duty? If there was, are the defendants vicariously liable for the breach?
Duty of Care
The test as to whether a duty of care is owed comes from the opinion of Lord Bridge in Caparo Industries v Dickman [1990] 2 AC 605 at 617H-618A. In addition to the foreseeability of damage, the relationship between the parties must be one of proximity or neighbourhood and the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope on the one party for the benefit of the other. When these principles are applied to the facts of the case, that means the claimant needs to establish it was foreseeable that Peter Stewart would harm her by sexually abusing her; that there was a relationship of sufficient proximity between the elders and her; and that it would be fair, just and reasonable to impose a duty of care upon the elders to protect the claimant from such sexual abuse.
There have been wide ranging aspects of evidence and submissions about the roles and responsibilities of elders generally and whether or not they owe a duty of care to members in various situations. However, the focus of the case and the allegations that are made in the claimant's amended pleading surround what happened in 1990 after the elders became aware of Peter Stewart's sexual abuse of AM. It is that which is central to the decision I must make.
The circumstances that arose in 1990 and my finding of fact in relation to those circumstances have already been summarised in paragraphs 27-47 in relation to the s.14 limitation issue. It is in respect of those circumstances and finding of fact that the above principles must be applied.
By reason of Peter Stewart's admitted behaviour towards AM in 1990, it is not disputed that it was foreseeable that his continued presence within the congregation presented a risk of sexual abuse and consequential harm to other children in the congregation. Even if it had been expressly disputed, I would have found as a fact it was foreseeable. Notwithstanding the acceptance by the judicial committee of his repentance and statement that he would not re-offend, Alan Orton's evidence is to the effect that such a risk existed. It is correctly argued, though, that foreseeability of harm is insufficient by itself to found a duty of care. The law does not normally impose a positive duty on someone to protect another or to prevent another from being harmed by another.
What is in dispute is whether there was a sufficient relationship of proximity between the elders and the claimant such that it is fair just and reasonable to impose a duty of care upon them.
Before dealing with the way the case is presented on behalf of the claimant, it is illustrative to make further reference to the case of Maga. It has already been referred to in the context of vicarious liability in relation to the assault claim. Its relevance to the safeguarding claim comes from the fact that, in addition to the claimant relying on the sexual abuse by the priest, the claimant also relied upon the fact that, a year before the abuse, the father of another boy had complained to the church that the same priest had abused his son, but the complaint had not been fully investigated. At paragraph 74 of the judgment, Lord Neuberger said as follows:
"It is easy to envisage circumstances where an employer could owe, and be in breach of, a duty of care, without being vicariously liable, in respect of the sexual abuse committed by an employee. A school would not normally be vicariously liable for sexual abuse committed against a pupil by a gardener employed at the school, but, if the school had received previous allegations against the gardener of sexual abuse of pupils, failure to deal appropriately with those complaints so that he committed the abuse complained of would, at least on the face of it, give rise to a claim in negligence against the school."
The claimant's case is presented on the basis that, in dealing with Peter Stewart in 1990, the elders assumed responsibility to children of the congregation and to the claimant in particular.
Reliance is placed on the case of Mitchell v Glasgow City Council [2009] 1 AC 874. In that case, a tenant killed a co-tenant after the landlord, the City Council, had summoned him to a meeting to discuss complaints about his behaviour. The City Council were held not to be liable for failing to warn the deceased about the meeting. At paragraphs 22, 23 and 29 Lord Hope said as follows:
"22. Lord Bridge acknowledged in Caparo…..that the concepts of proximity and fairness amount in effect to little more than convenient labels to attach to the features of different specific situations which, on a detailed examination of all the circumstances, the law recognises pragmatically as giving rise to a duty of care of a given scope. He said that the law had moved in the direction of attaching greater significance to the more traditional categorisation of distinct and recognisable situations as guides to the existence, the scope and the limits of the various duties of care which the law imposes. These are cases where, as Lord Reed suggested in paragraph 97, the imposition of a duty of care is readily understandable.
23. It is possible to identify situations of that kind ……… Another, which is of particular significance in this case, is where the defendant has assumed a responsibility to the pursuer which lies within the scope of the duty that is alleged. …….
29. ……..The situation would have been different if there had been a basis for saying that the [City Council] had assumed a responsibility to advise the deceased of the steps that they were taking, or in some other way had induced the deceased to rely on them to do so. It would then have been possible to say not only that there was a relationship of proximity but that a duty to warn was within the scope of that relationship. But it is not suggested in this case that that ever happened …….. I would conclude therefore that it would not be fair, just or reasonable to hold that the [City Council] were under a duty to warn the deceased of the steps that they were taking and that the common law case that is made against them is irrelevant. I would also hold, as a general rule, that a duty to warn another person that he is at risk of loss, injury or damage as a result of the criminal act of a third party will arise only where the person who is said to be under that duty has by his words or conduct assumed responsibility for the safety of the person who is at risk."
The evidence in support of an assumption of responsibility comes from three sources.
The first source is the evidence of elders. Citations from the evidence of Alan Orton and Paul Gillies suffice.
In the course of exploring the purpose for which the judicial committee was constituted to examine the complaints made against Peter Stewart in 1990, Alan Orton said that it was because the body of elders had a responsibility to look after the congregation. In his words, he said "if there is anything unclean, the elders must remove it." He then confirmed that the elders had a responsibility to deal with sexual allegations, particularly child abuse, if such allegations came to the knowledge of the elders. There was a duty to do so owed to the victim, to members of the congregation, particularly the young and vulnerable and also to the perpetrator because a decision had to be taken as to what to do with him.
When Paul Gillies gave evidence, he said that, if someone had repented, that person should not be a future risk to others. However, because the person will have demonstrated a moral weakness, he would be expected to abide by certain restrictions to avoid any situation that would place him into temptation. In the words of Paul Gillies "so, one would say you should never ever be alone with a child who you are not related to."
The evidence of Alan Orton and Paul Gillies is supported by paragraph 3 of the areas of agreement between the two experts in the case who have prepared reports in relation to the safeguarding issue, Ian Elliott, an independent safeguarding consultant from County Antrim, and Nicci Murphy, an independent Social Worker from Kent. Paragraph 3 states:
"3. The alleged steps taken by the elders to prevent children being harmed by Peter Stewart appear to have been motivated by their desire to protect members of the congregation."
The second source is the Jehovah's Witness literature that was available in 1990 in relation to child abuse.
Paul Gillies referred to the current Child Safeguarding Policy in existence for Jehovah's Witnesses. In summary, it refers to child abuse being a serious sin and a crime. The policy states it is designed to deal with allegations of child abuse so that "children in the congregation will be protected from avoidable harm". Paul Gillies gave evidence that the current policy is in harmony with longstanding and widely published religious principles of Jehovah's Witnesses. He said that, although the policy did not exist in its current form until 2013, many features of the policy were in existence by the late 1980s and early 1990s.
Two specific items published by the Watchtower will suffice by way of illustration. Alan Orton was asked about both items. Trevor Jenkins, another elder, was asked about one of them. Both of them confirmed the documents they were shown were operative at the relevant time.
The first is a 1981 publication called "Pay Attention to Yourselves and Your Flock ". After describing issues relating to a judicial committee in respect of serious wrongdoing, it states "in some cases elders may feel it is necessary to warn the congregation about the type of conduct that prevailed".
The second is a 1989 written communication to bodies of elders which refers to judicial committee procedures and makes specific reference to child abuse, including the following: "When elders receive reports of physical and sexual abuse of a child, they should contact the Society's legal department immediately. Victims of child abuse need to be protected from further danger: see 'If the Worst Should Happen' in Awake! 22 January 1985 page 8."
The third source is what actually happened. Put simply, the elders heard about the allegation, sent two elders to investigate it, formed a judicial committee to hear about it and then acted in order to help the perpetrator and to protect members.
Mr Weitzman submits correctly that the mere fact that a judicial committee was formed to investigate the allegation does not of itself mean the elders assumed a duty of care to the congregation. Given the low level transgressions that could have led to a Judicial Committee being formed, the elders may have considered it sufficient to limit their action to matters that concerned the perpetrator alone. Even if the transgressions were at a higher level and were criminal, the level of criminality may have been at the low level of pick-pocketing or common assault. Such behaviour may well not have imposed a duty of care upon the elders thereafter to assume a responsibility to protect members from further instances of theft or fighting. I agree. It is all a matter of fact and degree. None of the elders gave evidence to say that everything considered by a judicial committee would have caused them or the body of elders afterwards to take like action. The judicial committee on this occasion was formed to consider Peter Stewart's sexual abuse. It is that and that alone that must be the focus of what happened at the time of the meeting and consequent upon it.
The question therefore is whether the elders assumed responsibility following the meeting to take steps to protect members' children from the risk of Peter Stewart sexually assaulting them at some time in the future, particularly in circumstances where, by reason of what the elders found to be his true repentance, they concluded that they were unable to disfellowship him? In my judgment, the facts establish that, following the findings by the judicial committee, the body of elders did assume that responsibility. They did so because of the seriousness of what Peter Stewart had done in the past, their appreciation of risks in the future and their responsibility to members as elders in accordance with their understanding of the teaching of Jehovah's Witnesses and communications derived from Watchtower communications. In doing so, the facts establish a sufficient relationship of proximity between the elders and the children of members such that it would be fair, just and reasonable to impose a duty of care upon the elders to protect the children from sexual abuse by Peter Stewart.
The issue that next arises is the scope of the duty. There are a number of pleaded particulars from which the alleged scope can be ascertained. They can be summarised as a duty to have conducted a thorough judicial enquiry, to have disfellowshipped, to have ensured he could not longer have access to children, to have notified Social Services and the police and to have warned parents of the risk he posed to children.
In deciding the scope of the duty, it is necessary to consider it within the context of life as a Jehovah's Witness and in the circumstances that existed in 1990.
I keep in mind what has already been summarised in paragraph 17 above, namely, that Jehovah's Witnesses do not make special arrangements for children and that parents are primarily responsible for their own children's secular and spiritual education. The oral evidence confirms that Jehovah's Witnesses believe that parents have the primary responsibility for the protection and safety of their children. However, that does not mean that the elders in specific circumstances cannot and, in the context of the case, did not also assume responsibility to provide additional safeguarding protection.
Paragraph 5 to 7 of the areas of agreement between Ian Elliott and Nicci Murphy are as follows:
"5. The level of understanding of child sex abuse in 2015 is very different to the level of understanding in the late 1980s and early 1990s.
6. In the late 1980s and early 1990s there was an emerging awareness of child sexual abuse, which was a long way short of a developed understanding of the complexity of the issue.
7. The Jehovah's Witness organisation could be viewed as ahead of its time in terms of its educative publications addressing the issues of child sexual abuse."
I exercise caution in placing too much reliance on the evidence of Nicci Murphy. Mr Weitzman submits she lacks specific expertise in the area of safeguarding in relation to voluntary or religious groups and makes no comparison with voluntary religious groups at the relevant time. I find that to be a valid criticism. In so far as her report has relevance, I rely only upon facts about which there can be no dispute. In addition to the cited areas of agreement, she provides evidence of support for the emerging awareness of child sexual abuse in 1990 from high profile coverage of the Cleveland case in 1987 and media coverage of abuse in television drama productions such as Grange Hill and Brookside, as well as the creation of Childline in 1986 as part of Esther Ranzen's awareness campaign.
I note that in Maga, Lord Neuberger at paragraph 64 disapproved of the judge's finding in that case that there should have been an appreciation that the priest's sexual assault was so serious that it should have been reported to the police. In Maga, though, one was dealing with the historic standards of 1974. Peter Stewart's sexual abuse was in 1990, 16 years later on.
Mr Weitzman invites me to rely on the expert evidence of Ian Elliott. He has specific expertise as an independent safeguarding consultant with 40 years experience within the field of child safeguarding. His experience has been gained through working with both statutory and voluntary childcare agencies, Has worked for two years within the Northern Island Social Services Inspectorate and has worked within a church setting as the Chief Executive Officer for the National Board for Safeguarding in the Catholic Church in Ireland. I am satisfied he is well qualified to express an opinion about safeguarding issues.
Ian Elliott's conclusion is that safeguarding practice in society as a whole and within religious organisations in particular has changed very greatly in the intervening period between the late 1980s and early 1990s and today. He does not view the actions taken by the elders to have been behind what one would reasonably expect a voluntary organisation to have taken at the time. In relation to child abuse, they were ahead in their practice as can be seen by articles within their Watchtower and Awake publications. He expresses his opinion having regard to the particular principles within which Jehovah's Witnesses will have had to operate a judicial committee at the relevant time. He regards it as understandable that the judicial committee will have had very little appreciation of the manipulative behaviour that often characterises individuals who sexually abuse children and that the spiritual procedure adopted within the Judicial Committee was reasonable. He regards the claim not to inform Social Services or the police as reasonable because of Jehovah's Witness confidentiality issues. He regards the decision not to disfellowship from the congregation as reasonable by reason of Peter Stewart's repentance. Of particular importance to my conclusion, he regards the decision to warn the congregation and to have face-to-face alerts as good practice and reasonable.
The report and conclusions of Ian Elliott are helpful in defining the scope of the duty of care that I find to have existed. They are consistent with the written and oral evidence of all of the elders and ministerial servants who appeared before me. Further to the observations I have already made about Alan Orton, I found them all to be honest, upright, loyal and devout men for whom being a Jehovah's Witness is and has been for many years a way of life for them and their families. In that there were differences of recollection between them or hesitation in their answers, it was not borne out of any ulterior motive. All are horrified by the sexual abuse that occurred and are extremely remorseful that a Jehovah's Witness should have caused such harm to the claimant. I do not find the differences of recollection or hesitation in their answers to be of such significance that it creates a difficulty in deciding what the scope of the duty of care was.
In the end analysis, I do not find it necessary to resolve every issue raised in the case. For the reasons already identified, there are good arguments for limiting the scope of the duty of care. I find the opinion of Ian Elliott in particular impressive. In my judgment, at the very least, the elders assumed a responsibility to warn the congregation about Peter Stewart and to have face-to-face alerts to the same effect. The evidential considerations about confidentiality are of relevance to how they exercised the duty of care. However, I am in no doubt on the evidence that the scope of their duty was the assumption of a responsibility to warn the congregation and individual parents about the risks posed by Peter Stewart.
Breach of Duty
I have already explained in the course of resolving the s.14 issue what my finding of fact is in relation to warnings. Despite whatever may have been the good intentions of the elders, I am satisfied that the congregation as a whole, specifically the claimant's mother and her children, were either not warned at all or not adequately warned about Peter Stewart's sex abuse; nor, importantly, was the claimant's mother personally warned. Ian Elliott's evidence is that it would have been good practice and reasonable in 1990 for that to have been done. The evidence of Alan Orton is that was what was intended to happen and is what should have happened. His evidence is that it did happen. Probably because of issues surrounding a misunderstanding or over-reliance on confidentiality issues, I am satisfied that they either did not happen at all or were inadequate warnings. If the case had been heard earlier, I do not consider I would have received any better evidence as to the precise reason why there was such a failure. What I am in no doubt about from the evidence of both the claimant and her mother is that there was such a failure. As such, I find that there was a breach of the duty properly assumed by elders on the particular facts of Peter Stewart's case.
Vicarious liability
That leaves the issue of vicarious liability for the elders. As summarised earlier in paragraphs 10-18, the elders had additional responsibilities to those held by ministerial servants. They were even closer and more integrated with congregational issues than were ministerial servants. They had a spiritual role and partly exercised that role, via the judicial committee, and decisions of the body consequent upon decisions of the judicial committee. The decisions that emanated from the judicial committee and thereafter from the body of elders were a fundamental part of the role of the elders within the organisation. The second and third defendants are the trustees and successors of the Garendon Park and Limehurst Congregations. They are unincorporated associations who have taken over the responsibility of the congregations. In circumstances where, having applied the two-stage test, I have already found they are vicariously liable for the actions of Peter Stewart, I also find they are vicariously liable for the actions of the elders in relation to the above breach of duty arising from the findings of the judicial committee in 1990.
Decision
For all of these reasons, I am satisfied that the defendants should be held responsible for what Peter Stewart did between 1989 and 1994. The claim succeeds. Judgment should be entered for the claimant. An order will need to be drawn up to reflect the agreement as to quantum. |
Mr Justice Knowles :
Introduction
Last Friday 26 June the Chief Constable of the Bedfordshire Police sought interim injunctions under the Anti-Social Behaviour, Crime and Policing Act 2014 ("the 2014 Act") against the Leader and Deputy Leader of "Britain First" ("the Respondents").
"Britain First" is a registered political party, registered with the Electoral Commission since January 2014. It has contested European and national elections, albeit in very limited numbers. It holds anti-Muslim views, to which I will return.
I granted certain interim injunctions, and did so largely with the agreement of the Respondents through their Counsel, Mr Ian Glen QC. However I refused the first injunction sought by the Chief Constable, which was an injunction forbidding the Respondents from entering the town of Luton and its surrounding area ("injunction (a)").
All injunctions were sought for a one year period. However it was clear that the immediate reason for the application was in fact a proposed march by "Britain First" the next day, Saturday 27 June 2015 ("the March"). The day chosen for the March fell during the month of Ramadan. It was also the day scheduled for a community celebration known as "Luton in Harmony".
The interim injunctions that I did grant were granted until a full hearing at a future date. In practice they were final for the purposes of the March.
Having announced my decision at the end of the hearing on Friday, I reserved my reasons to be given in writing.
The 2014 Act
The 2014 Act has only recently come into force, on 23 March 2015. Leaving aside a number of detailed provisions that are not material in the present case the essential features of the 2014 Act may be summarised as follows.
By section 1 a court may grant an injunction against a person aged ten or over if two conditions are met. The first condition is that the court is satisfied, on the balance of probabilities, that the Respondent has engaged or threatens to engage in anti-social behaviour. The second condition is that the court considers it just and convenient to grant the injunction for the purpose of preventing the Respondent from engaging in anti-social behaviour. Section 21(7) permits the court, when deciding whether to grant an injunction under s 1, to take account of conduct occurring up the six months before the commencement date of the 2014 Act.
By section 5 the chief officer of police for a police area is one of those entitled to apply for an injunction. By s 7 of the 2014 Act where the court adjourns the hearing of an application (whether made with notice or without) for an injunction the court may grant an injunction lasting until the final hearing of the application or until further order (an "interim injunction") if the court thinks it just to do so.
"Anti-social behaviour" is defined in section 2 as including conduct that has caused, or is likely to cause, harassment, alarm or distress to any person, and conduct capable of causing nuisance or annoyance to a person in relation to that person's occupation of residential premises. By section 4 a court granting an injunction may attach a power of arrest to a prohibition or requirement of the injunction if the court thinks that the anti-social behaviour in which the respondent has engaged or threatens to engage consists of or includes the use or threatened use of violence against other persons, or there is a significant risk of harm to other persons from the respondent.
Interim injunctions granted
Ms Sonia Rai of Counsel appeared for the Chief Constable. It transpired that the injunctions had been sought without notice a week earlier on Friday 19 June (when Ms Rai was not Counsel instructed). The Court (Supperstone J) on that occasion, wholly understandably on the facts of this case, required that any application be considered on notice to the Respondents. The hearing on Friday 26 June was the result.
In advance of the hearing on Friday 26 June, notices had already been given by the Bedfordshire Police under sections 12 and 14 of the Public Order Act 1986 ("the 1986 Act") imposing conditions on any public procession and public assembly in support of "Britain First" to be held on 27 June in Luton. The conditions in respect of the procession required a moving procession, taking a prescribed route, and within stated hours.
The interim injunctions I did grant prohibited the Respondents from doing the following ("injunctions (b) (c) (d) and (e)"):
"(b) Entering any Mosque or Islamic Cultural Centre or its private grounds within England and Wales without prior written invitation.
(c) Publishing, distributing or displaying, or causing to be published, distributed or displayed, any words or images, whether electronically or otherwise, which having regard to all the circumstances are likely to stir up religious and/or racial hatred.
(d) Using threatening, abusive or insulting words or behaviour thereby causing harassment, alarm or distress to any person.
(e) Carrying or displaying in Luton on Saturday 27 June 2015 at or in connection with the march by "Britain First" any banner or sign with the words "No More Mosques" or similar words or words to like effect."
The evidence on behalf of the Chief Constable included witness statements of Tracy Hall (Legal Services Manager with Bedfordshire Police) dated 21 June 2015, Assistant Chief Constable Michael Colbourne dated 19 June 2015, Police Sergeant Perri (attached to the Community Cohesion Team) dated 17 June 2015, Detective Sergeant Greenacre dated 24 June 2015 and Nicola Perry (Head of Policy and Performance, Luton Borough Council: "the Council") dated 18 June 2015.
The evidence included evidence of conduct occurring more than the 6 months before the commencement date of the 2014 Act. Leaving that evidence out of account as required by the legislation, I took the view that, applying the statutory test, the remaining evidence was nonetheless sufficient to support interim injunctions (b), (c), (d) and (e). As indicated, and in fact to their credit, the Respondents agreed to interim injunctions (b) (c) and (d), pending a full hearing in due course. At the full hearing, one of the points the Respondents may take is whether injunctions (c) and (d) are appropriate given the criminal law that already covers conduct there prohibited.
Interim injunction (e) I added of my own motion when Mr Glen QC very properly ensured that I was told about a banner that was proposed to be carried at the March. I made interim injunction (e) rather than leave any uncertainty at the March whether a banner stating "No More Mosques" would be in breach of injunctions (c) and (d).
I attached a power of arrest to injunctions (b) to (e) having found that the conditions for this in the 2014 Act were satisfied. In order to allow time for the full hearing the power of arrest was ordered for a 3 month period unless amended or renewed in the meantime (see further sections 4(2) and 8(3) of the 2014 Act).
I do not propose in giving these reasons to go through all the evidence that I have taken into consideration and relied upon in reaching the conclusions I have to grant interim injunctions and attach a power of arrest. However I do in the following paragraphs draw attention to certain aspects of that evidence that concern events on 3 June 2015 because of the attention given by all parties to events on that date.
3 June 2015
Ms Rai, for the Chief Constable, made clear in her submissions that the application would not have been made but for an episode on 3 June 2015. This echoed a letter from Ms Hall on behalf of the Chief Constable dated 24 June 2105 to the Respondents' solicitors in which Ms Hall stated that the application for injunctions against the Respondents was "a direct result of their personal actions in the Town of Luton on the 3rd June 2015". Other evidence on behalf of the Chief Constable speaks of alarm and distress caused and tensions raised as a result of this visit to Luton.
Film of some of the events of 3 June 2015 was made into an edited video by "Britain First" that Ms Rai asked me to watch. In the interests of time I have done so out of Court; a transcript was available and referred to in open court. The episode includes provocative, threatening and offensive remarks or gestures levelled by the Respondents against members of the public, and by members of the public against the Respondents.
One of the Respondents uses the words "go back to your own country" (and "go back to the desert") as if England is not just as much the country of the member of the public to whom the Respondent is talking as any other member of the public. The phrase "Muslim extremists" is used by one of the Respondents. An object appears to have been thrown at a car in which the Respondents were travelling.
The evidence on behalf of the Chief Constable included evidence of "Britain First" undertaking "mosque invasions", involving provocative entry to mosques or Islamic cultural centres or their grounds without invitation. The Respondents' evidence, by witness statement, was that "Britain First" "did have a policy colourfully described as 'Mosque invasion' but that policy ceased in July 2014" and "will not be repeated". The evidence is challenged by the account given by Police Sergeant Perri which suggests (possibly on information rather than from first hand knowledge) that on 3 June (although the evidence could be clearer as to the date being described) the Respondents entered a mosque and acted in an unwelcome fashion.
However the video of events on 3 June is quite clear in showing a banner being displayed by the Respondents outside a mosque or Islamic cultural centre. The banner includes the words "No More Mosques". These words are absurd and offensive, just as, for example, "No More Churches", "No More Synagogues", "No More Temples" or even "No More Places of Worship" would be.
So how do the Respondents, as leaders of "Britain First", explain their speaking and behaving in this way?
On occasion "Britain First" says that its concerns are about extremism. Yet it directs those concerns to Muslims. There is nothing extremist about being a Muslim. There are extremists who claim to be of the Muslim faith, just as there are extremists who claim to be of other faiths or of no faith. However, and fundamentally and obviously, to be a person of Muslim faith does not mean to be an extremist. Those who think it does are fundamentally and obviously wrong.
The point was well put in an open letter dated 20 May 2015 signed by a number of leaders of churches in Luton, and exhibited in evidence:
"The Muslim community have for years now been working closely with the police and the council to deal with extremism, and as a church we have been totally supportive of them in that work. There are members of the Muslim community who break the law and do wrong, but we don't generalise that to blame the whole community nor their faith; just as we don't blame the whole Christian community and our faith when Christians do wrong."
In his witness statement the First Respondent gives evidence that "Britain First" is not opposed to all Muslims and does not brand all Muslims extremist. It is not easy to see that evidence borne out by the video.
On other occasions "Britain First" says that its concerns are instead over immigration. Yet it directs those concerns to Muslims, and to Muslims who are members of the community like everyone else. And it shows no analysis of the contribution that immigrants, from the world over, have made to the United Kingdom, and can and will make in the future.
Interim injunction refused
As noted above, interim injunction (a), which I refused, would have forbidden the Respondents from entering the town of Luton altogether.
The reasons I was not persuaded that interim injunction (a) was appropriate, either for 27 June 2015 (the day of the March) or for the longer period to a full hearing were as follows.
First, the March was already regulated by conditions imposed under the 1986 Act. Ms Rai confirmed to me that the route imposed by those conditions went close to one mosque or Islamic Cultural Centre but no others. Injunction (b) would prevent the Respondents entering that Mosque or Islamic Cultural Centre or its private grounds without prior written invitation.
Second, the Respondents are Leader and Deputy Leader of "Britain First". As regards the March specifically, the evidence and submissions on behalf of the Chief Constable contained no evaluation or analysis of the potential impact of their absence from the March on the proper conduct of the March.
More generally, to ban the leaders of a registered political party altogether from a town is a very considerable thing. The evidence and the submissions on behalf of the Chief Constable did not address the consequences for legitimate political activity by that party in a town. Nor did they address the potential for an injunction in one town to lead to calls for injunctions in other towns and cities with a Muslim population of appreciable size, and in turn how legitimate political activity might be conducted if those calls were heeded. The submission of Ms Rae that the Respondents do not "have any link to Luton and have no need to be in Luton" is not, with respect, correct where leaders of a registered political party are concerned.
Third, in addition to interim injunction (b) (referred to above), interim injunctions (c), (d) and (e) would be in operation, and they were directed to the actual conduct that was of concern to the police and the community.
Fourth, until 3 June 2015 no injunctions (additional to the powers under the 1986 Act) were thought necessary by the Chief Constable. Considered objectively, the events of 3 June 2015 do not justify removing the Respondents from the March or from Luton for all purposes.
Of course "Britain First" comes across as fundamentally and obviously wrong, and even extremist itself, when it focuses on Muslims. In these times, which are troubled times, that error is particularly damaging. The police have the hardest job in dealing with it, nationally and locally. And so does the Council, locally.
But in dealing with it, all must strive not to inhibit the freedom to express views, the freedom to demonstrate and the freedom to organise politically. Indeed it is sometimes through allowing views to be heard, that error in views can be exposed. And it is sometimes through allowing the opportunity for support to be shown, that lack of support can be exposed. |
Mr. Justice Edis :
This judgment concerns only costs. In it, without any disrespect, I shall refer to the parties as follows:-
The claimant and second defendant to the Part 20 claim. The passenger in the Saxo. "Davies"
The first defendant to an action brought by Davies and the defendant to an action brought by Partington, and second defendant to the Part 20 claim. The driver of the Vectra. "Forrett"
The Second Defendant to Davies' action and First Defendant to the Part 20 claim, and claimant in his own action against Forrett. The driver of the Saxo. "Partington"
The Third Defendant to Davies' action and Part 20 claimant. An insurance company which issued a policy in respect of the Saxo. "Southern Rock"
The Claim
The claim was brought on behalf of Davies by his father. He was grievously injured in a road traffic accident on 30th August 2011 when he was a passenger being driven to work by Partington in a Citroen Saxo. Forrett was driving his Red Vauxhall Vectra ahead of the Saxo along a single carriageway "A" road, the A550 just after a roundabout at Penyffordd in North Wales. There was one car between the Saxo and the Vectra and a further vehicle in front of the Vectra. Therefore, as the Saxo approached the scene of the accident, it had just left the roundabout and ahead of it were three vehicles. It appears to have accelerated very rapidly and decided to overtake all three at once. After it passed the first one and as it was about to overtake the Vectra and the car in front of the Vectra, the Vectra pulled out to overtake also. This caused the Saxo to brake sharply and to veer off the road into a tree. There was no collision between the Vectra and the Saxo. Forrett, in the Vectra, drove on to his place of work. Both Partington and Davies, in the Saxo, sustained serious injuries, those of Davies being particularly grave. Davies, of course, was entirely blameless.
Forrett was identified because a witness was able to say that the Vectra had a "54" plate and a small spoiler. These details are true of Forrett's Vectra. The police investigated and recovered CCTV which showed his Vectra very near the scene of the accident, very near the time of the accident. He arrived at work very soon afterwards and the accident occurred at a point consistent with it having involved his car on that journey. Despite this extremely strong evidence, he denied that it was his Vectra and suggested it was another red Vectra on a 54 plate, there apparently being another one in the area where he lives. He gave this evidence on oath at the Magistrates Court but was convicted of driving without due care and attention. It seems impossible that he could have been ignorant of the crash, if it was his vehicle, and he accepted as much when cross-examined at the trial. On that basis, if the Magistrates convicted him correctly, he was guilty of disgraceful behaviour. He had played a part in causing a very serious accident, driven away from it, and then lied on oath to avoid its consequences. Obviously if he continued to adopt that stance in any subsequent civil proceedings, such conduct might become relevant to costs. The Particulars of Claim were served on 10th May 2014 and relied upon the conviction.
On 18th August 2014 Forrett's insurers served his defence. It admitted the accident to the Saxo, and that he was the driver of his red Vectra on the road on the relevant day, but denied everything else. It alleged that the accident was entirely the fault of Partington. In relation to the conviction, the Defence contains the following time honoured but, here as in many cases, mystifying words:-
"The defendant admits the conviction referred to in the Particulars of Claim but denies its relevance to the civil proceedings."
The lawyers acting for Davies decided, on receipt of this document, to accord it more respect than, with hindsight, it deserved. They took it at face value. Believing that it may be possible that Forrett would succeed in establishing that the accident was in no way his fault (perhaps because it did not even involve his red Vectra) they decided to join Partington as second defendant. Partington was driving the Saxo as a named driver on an insurance policy which did not cover commuting to work. The Insurer which issued that policy to Partington's partner, Southern Rock, was therefore denying any contractual or statutory liability to indemnify him and could only have been liable under Article 75 of the Motor Insurers Bureau Articles of Association. That liability would not arise if Forrett were liable for the accident to any extent, because he was insured. Therefore, Southern Rock had an interest in establishing that Forrett was liable for the accident (whether or not Partington was also liable). Southern Rock also had an interest in establishing that its position on the policy interpretation and under section 151 of the Road Traffic Act 1988 was correct. The lawyers acting for Davies were aware of this position which had been extensively canvassed in correspondence, and were aware that attempts by Southern Rock's solicitors between 19th June 2012 and 1st May 2014 to get a straight answer from the solicitors acting for Forrett's insurers (Admiral) had failed. They had been trying to find out whether he was denying liability or not. That correspondence no doubt started in June 2012 because Forrett was convicted by the Magistrates on 11th May 2012. The defence served on behalf of Forrett, as I have indicated, perpetuated that lack of clarity. Thus, after that conviction, two years of correspondence and the issue of proceedings against him, Forrett continued to evade his responsibility for the accident.
Fearing, as it turned out wrongly, that there may be some rational explanation for Forrett's behaviour and that of his insurers (beyond a desire to escape the consequences of his wrongdoing) Davies' lawyers amended the claim to include Partington and Southern Rock as second and third defendants respectively. Their amended Particulars of Claim was served on 17th September 2014. Leave was given to join the additional defendants on 24th November 2014 and an action which Partington had issued for damages against Forrett was consolidated with Davies' claim. Lay witness evidence was ordered to be disclosed on 4th March 2015.
On 3rd December 2014, Horwich Farrelly finally wrote to Sothern Rock's solicitors with a substantive response on behalf of Forrett and his insurers (Admiral) to the question of whether they accepted that Southern Rock had no liability to indemnify Partington. They said they could not say one way or the other and asked for some disclosure. They were no doubt hoping that Southern Rock could be prevailed upon to indemnify Partington because they felt that liability was likely to be apportioned between the two drivers. There is no reason to believe that Partington has any substantial assets beyond the value of his claim for personal injuries against Forrett, and this was therefore the only way of reducing Admiral's liability. On 5th December Southern Rock served its Defence disputing liability on behalf of Partington and blaming Forrett. It asserted that because Forrett was insured and had some liability it was not therefore liable as Article 75 insurer. Partington served a Defence blaming Forrett, denying his own liability and declining to admit that Southern Rock was contractually entitled to refuse to indemnify him.
The Part 20 Action
The Part 20 claim form by Southern Rock was issued on 12th January 2015 seeking a declaration against Partington that it had no liability to him. Partington served a defence and counterclaim in these proceedings on 2nd February 2015 which said that Southern Rock had behaved unfairly and was in breach of implied terms on the insurance contract by so doing. This, according to an email dated 9th March 2015 from Partington's solicitors to Southern Rock's solicitors was drafted by Forrett's solicitors, who also drafted a request for Further Information under Part 18.
Southern Rock applied to join Forrett and Davies as second and third defendants to its Part 20 claim for a declaration. This was granted on 13th March 2015 in respect of Davies only, and Forrett never became a party to the Part 20 claim. He had opposed the joinder. The contentions set out in Partington's first defence were never, therefore advanced formally by the party which had drafted them. Davies and Partington both served defences to the amended Part 20 claim. Davies's said little of substance. His interest lay in securing, if he could, a valuable indemnity for Partington in case Forrett succeeded in avoiding all liability, as he was still trying to do. He was, in reality, unable to contribute very much to this argument and did not seek to take any false points. He disputed his alleged liability in costs asserting that the claim against him was unnecessary. Partington served a defence on 7th April 2015 which says that the Part 20 claim against him was also unnecessary, now that it had been properly formulated. It therefore did not adopt the approach taken in the earlier document drafted by Forrett's solicitors but served on behalf of Partington. On 18th May 2015 a consent order was made granting the declaration sought by Southern Rock that it had no liability under the policy or section 151 of the Road Traffic Act 1988. The only way in which liability could attach to Southern Rock therefore was if Forrett were entirely exonerated and Partington were held liable. The issue of the costs of the Part 20 claim was reserved for determination by the court at the end of the Main Action or such other time as may be appropriate.
The Claim continued
An application for a large interim payment was made on behalf of Davies. This was opposed by Forrett whose solicitor, Mr. Barrett, produced a witness statement accompanied by the necessary statement of truth dated 9th March 2015. Apparently in reliance on a carefully selected extract from an independent witness who had given evidence at the Magistrates Court and secured the conviction of Forrett he said this:-
"I accept that the claimant is blameless and liability will attach to either Mr. Partington or Mr. Forrett or both. There is, however, a serious and substantial issue whether Mr. Forrett's driving caused the claimant's injuries."
And, later, he said this:-
"…there is a serious and substantial issue whether Mr. Partington is insured in respect of the claimant's claim and whether he is a defendant whose liability will be met by the third defendant under section 151 of the Road Traffic Act 1988."
Shortly before the hearing of the interim payment application, witness statements were exchanged. This revealed that on 2nd March 2015 Mr. Forrett had signed a witness statement. He said that he was driving along the relevant road at about the relevant time, but that he had been unaware of any collision. He said how shocked he had been by his conviction. In other words, he said nothing of any real value.
The Interim Payment application succeeded because the District Judge held on 12th March 2015 that it was highly likely that on that state of the evidence Davies would succeed against Forrett. On the day after that, a summary judgment application was issued. On 21st May 2015 Forrett's lawyers served a skeleton argument disputing the application for summary judgment. This application was due for hearing by me on 17th June 2015 but on 11th June (3 months after the application had been issued) Forrett's solicitors wrote consenting to judgment and agreeing to pay the costs of the summary judgment application. This was just after the third anniversary of his conviction for an offence which, if correct, determined his civil liability.
As a consequence of that concession, Davies has a judgment which will be met by Admiral and no longer seeks to pursue his proceedings against Partington or Southern Rock. This is not because Partington is not liable, but because there is no advantage to Davies in suing him now. Davies has never contended that Southern Rock is liable to indemnify Partington and joined that company to the claim so that all issues which then appeared relevant could be determined in the one action.
Partington's claim against Forrett remains outstanding. I approach this costs exercise on the basis that it now seems inevitable that Partington will be entitled to judgment against Forrett, but that his damages may very well be reduced for contributory fault. Indeed, Mr. Plant has made an oral application for judgment against Forrett. I am not going to grant that application because there seems little point. I would dispense with the need for an application to be issued and supported by evidence if there were a clear benefit in doing so. It is accepted that there is a live issue to be tried as to apportionment of liability but contended that this can be done at the hearing when damages are assessed. That being so, there is no obvious benefit to entering judgment now and if Partington thinks otherwise, he can make an application in the usual way. The liability trial will be short and presumably will involve two witnesses, Partington and the independent witness Mr. Edwards. It seems unlikely that Mr. Forrett's evidence will advance the issue.
The costs arguments
It is agreed that Davies is entitled to summary judgment and an order that Forrett pay his costs of bringing the claim against him. Otherwise, there is no agreement at all except that it is agreed that I should not seek to assess any costs summarily because there are other extant orders for costs and there will have to be a detailed assessment of costs in any event.
Forrett submits that Davies should pay the costs of Partington and Southern Rock of the claim against them because he joined them and now seeks to discontinue the claim against them. Davies submits that Forrett should pay those costs because his behaviour and that of his lawyers necessitated their joinder. He failed to accept liability and sought to place all the blame on Partington for years after the accident which had the consequence that Davies reasonably joined Partington and Southern Rock who might, on that basis, be Article 75 insurers. Southern Rock therefore had an interest in the extent of Forrett and Partington's liability but were not contractually entitled to conduct litigation on behalf of Partington because they had denied any contractual liability to indemnify him.
Davies also seeks his costs of the Part 20 proceedings. These are very small because he was a party only for a short time and served a short Defence very shortly before the consent order brought them to an end.
Southern Rock seeks its costs of the Part 20 claim in which it succeeded against Davies and Partington. They both have assets from which a claim could ultimately be paid, because they both have valuable personal injury actions. However, Mr. Blakesley on behalf of Southern Rock would prefer to have his costs on an indemnity basis against Forrett either as a party or as a non-party under section 51 of the Senior Courts Act 1981. During the hearing he made an application to join Forrett to the Part 20 claim for the purposes of costs alone. Mr. Sephton QC fairly accepted that he was not prejudiced by this application which I therefore grant.
Mr. Plant on behalf of Partington raises the issue of his costs of defending the claim against him, which has been discontinued, and his costs of the Part 20 claim. Although a contention was at one stage advanced on behalf of Partington in those proceedings which failed, this was drafted by the solicitors for Forrett who did so for their own purposes entirely. They wanted to help him to recovery an indemnity from Southern Rock only because it would make the claim of Davies much cheaper for them. For this purpose they provided him with a pleading which he served which was later rapidly abandoned. Although he "lost" the Part 20 claim it would never have been necessary at all if Forrett had accepted his own liability and not meddled in the insurance arrangements of Partington in a way which did nobody any good because Southern Rock is not, was not, and never could have been, liable to meet Davies's claim in the circumstances.
Decisions
I find that the conduct of Forrett and his insurers, Admiral, between 11th May 2012 (when Forrett was convicted) and 11th June 2015 when he admitted liability was designed to secure an advantage to which they were not entitled. It did so at risk of causing substantially more work and thus cost to themselves and all other parties. This is redolent of an era which had begun to fade into history even before 26th April 1999 when the Civil Procedure Rules 1998 came into force. I have not set out above the detail of the lengthy correspondence between Sintons on behalf of Southern Rock and Horwich Farrelly on behalf of Forrett, although I have referred to the main dates. On one side the correspondence is appropriate throughout. Initially it is polite and constructive but becomes more insistent as time wears on. Almost every letter refers to the mounting costs caused by the refusal of Admiral on behalf of Forrett to accept his obvious fault. In particular, by letter of 22nd September 2014 Sintons pointed out the great advantage of dealing with apportionment between Partington and Forrett in Partington's claim against Forrett which was that Davies's costs of that issue would be avoided and they may involve a substantial success fee which would then attach to the quantum costs as well. No constructive answer was received. On 16th January 2015, Sintons said
"If you persist in funding/indemnifying the defence to the Part 20/additional claim (if that is indeed the position) ….we will ask the court to make an order against Admiral in accordance with section 51 of the Senior Courts Act 1981 and the guidance given by the Court of Appeal in Symphony Group plc v. Hodgson [1993] 4 All ER 143."
In response to this series of correspondence, Horwich Farrelly said very little of substance. One thing which they did say is worth quoting. In the letter of 3rd December 2014 (which I have referred to above as being entirely uninformative about its position on whether or not Southern Rock was liable to meet the claim against Partington) they said, of the proposed proceedings by Southern Rock for a declaration:-
"Such proceedings should be between [Southern Rock] and its insured and/or Mr. Partington. Of course, if such proceedings were to be commenced our client would have the right to be joined as a party to those proceedings on the basis that it has a significant financial interest in the outcome of the same.
"We can confirm that we are authorised to accept service of any declaratory proceedings. That in no way amounts to any admission of the validity of such proposed proceedings."
By a statement, supported by a Statement of Truth, Mr. Barrett on behalf of Forrett said, on 9th March 2015, that there was, after all, no basis at all why Admiral should be joined into any such proceedings. As I have recorded, it was this second approach which prevailed at least until I allowed Forrett to be joined in these proceedings for the purposes of costs only.
Moving from the correspondence to the steps taken in the proceedings, it appears to me that the same approach continued to govern the conduct of Forrett's case, despite CPR 1.3. This imposes a duty on the parties to help the court to further the overriding objective. This is a duty and not an exhortation. Breach of duty is a significant matter which is directly relevant to costs issues.
The Defence of Forrett failed to set out his position clearly. The witness statement of Mr. Barrett refers to a serious and substantial dispute as to liability and as to the existence of insurance cover of Partington as late as 9th March 2015. That is an unhelpful observation. Until the time of exchange of witness statements, Davies' lawyers had not known what the basis of the denial in the Defence was. Perhaps, for example, the insurers had identified another red Vectra with a 54 plate which was in the vicinity of the accident. Perhaps the independent witness had changed his opinion. On exchange of evidence, the position became clear. There was no "serious or substantial dispute" as to liability.
In contrast to the behaviour of Forrett, Davies and Southern Rock both conducted themselves sensibly, in my judgment.
Against the background I have described, I now move to my decisions.
i) Davies is entitled to an order against Forrett for the payment of his costs of suing Partington and Southern Rock. It was reasonable for Davies to amend his claim to add Partington and Southern Rock when Forrett served a defence placing the whole blame on Partington. If Partington were not indemnified and played no part in the proceedings, Southern Rock would inevitably seek to be joined to address the liability issue, rather for the reasons set out by Forrett's solicitors in their letter of 3rd December 2014 set out above. If he were indemnified, the joinder of his insurers would add little to the costs, but may save time. These steps were a reasonable response to the service of a false defence by Forrett which was false in that it failed to admit liability to Davies.
ii) There will be no order in respect of Partington's costs of the claim. Southern Rock and Partington were only joined by Davies because of Forrett's defence. But for that, they would not have been sued by Davies. This is not because Partington's position on liability has been vindicated at trial. On the contrary it seems likely to me that he will be found to have contributed to this accident by his own negligence in driving in quite a dangerous manner. He is not a "successful defendant" in the classic sense of that term used in Bullock v. London General Omnibus Co [1907] 1 KB 264, Sanderson v. Blyth Theatre Co [1903] 2 KB 533, Irvine v. Commissioner of Police of the Metropolis [2005] EWCA Civ 129, and Moon v. Garrett [2007] ICR 95. He served a defence denying primary liability which has yet to be tested and which is very likely to fail when the contributory negligence issue is tried in his own claim, and in contribution proceedings which may be brought by Forrett in respect of Davies' claim. In these circumstances it seems to me that I ought not to make an order that his costs of the claim are paid by Forrett. The simplest and fairest way of dealing with those costs is to make no order.
iii) Southern Rock's costs of defending the proceedings brought by Davies will be paid by Forrett. This is because they were only brought in as a party because of uncertainty about their liability to meet the judgment if Partington were found liable to any extent. That uncertainty was manufactured by or on behalf of Partington, and was connived at by Forrett. I base this finding on the correspondence generally, but specifically the letter of 3rd December 2014 referred to above and the fact that Horwich Farrelly drafted the pleading in which Partington advanced his doomed contentions on this issue. I also rely on Mr. Barrett's statement of 9th March which asserts that there was a serious and substantial issue relating to Partington's cover. I am aware that Southern Rock served a defence which, among other things, denied fault on behalf of Partington. This denial is unlikely to be vindicated. However, the purpose of Admiral's interest in Southern Rock was to secure payment from Southern Rock towards Davies's claim. That bid has failed comprehensively. Therefore I think it right to regard Southern Rock as a "successful defendant" and to make an order in the Sanderson form that its costs be paid by Forrett/Admiral.
iv) Forrett will pay Southern Rock's costs of the Part 20 claim. There will be no order as to the costs of the Claimant and Partington in respect of those proceedings.
a) Southern Rock is entitled to its costs of its Part 20 proceedings. The costs thrown away by the way in which the claim was first expressed have already been dealt with and my order does not interfere with any costs orders already made. Southern Rock was the successful party in those proceedings. This does not include the costs of joining Davies because I do not agree that that was necessary. A declaration against Partington alone would have sufficed. There will, therefore be no order of the costs of joining Davies to the Part 20 claim. Davies will not be ordered to pay the costs of those proceedings, but I will make no order also as to his costs of his involvement in them. At that time he had a contingent interest in Southern Rock's meeting his claim against Partington in case he failed altogether against Forrett. That is no doubt why he did not loudly declare that it was quite obvious that Southern Rock was under no contractual or statutory liability in that respect (as was the case). The inability to recover the costs of a defence which lacks that loud declaration is a modest cost sanction in that regard.
b) The remaining issue is whether Southern Rock's costs should be paid by Partington or Forrett or both. Forrett/Admiral have been described as the "puppet master" pulling the strings and setting the cover dispute running. I will deal first with the costs application in relation to Forrett.
c) Mr. Blakesley first submits that I should make an order because there is power under CPR Part 44 because although not a party to the Part 20 claim, Forrett was a party to the proceedings more generally defined. I reject this submission. I am dealing with the costs of the Part 20 action which is an additional claim which is to be treated as if it were a claim except in certain immaterial respects, see CPR 20.3(1). In this case there was an application to make Forrett a party to the Part 20 claim which was not pursued and I do not feel I can simply proceed as if it had succeeded, or as if it were unnecessary.
d) The application can therefore only be made under section 51 SCA 1981 against a non-party. In my judgment, the closeness of Forrett to the Part 20 claim is relevant to the exercise of this discretion. Although not a party to it technically, he inspired it, contributed to it by instructing his solicitors to provide pleadings to Partington so as to assist him, and did this for his own financial benefit. It was all nonsense. It goes alongside his conduct of the very closely associated proceedings to which he was a party, and which I have described above. I have regard to Symphony Group Plc v. Hodgson [1994] QB 179 as explained in Dymocks Franchise Systems (NSW) PTY Ltd v. Todd and others 21st July 2014, PC at paragraph 25. I give weight to the need for caution when making this exceptional form of order. Forrett, in the Part 20 action, was a funder to a limited extent providing some legal assistance as described. However, he was much more than that, and much less than that. He inspired the action for his own benefit and not to facilitate Partington's access to justice. He contributed to that access only to a limited degree. This is a fact specific jurisdiction in which the question ultimately is whether it is just to make the order. In reality, the cover dispute was sustained for the benefit of Forrett/Admiral and failed. It is just that an order to should be made against Forrett as a non-party.
e) I have noted that Mr. Blakesley does not seek an order for his costs of the Part 20 action against Partington. Southern Rock succeeded in securing a declaration against Partington in the Part 20 claim. I do not, therefore, make an order for costs against Partington. That disposes of that issue. I would not, in any event, have wished to make an order which imposed any liability on Partington in respect of these costs without full information from Forrett about the extent to which his solicitors became involved in the cover dispute. I do not have enough information to make a decision as between the puppet and the puppet master. In those circumstances I am content not to make any order against Partington because no application for any such order has been made.
I decline to order any costs to be paid on the indemnity basis in this case. The conduct issues relied upon have been material in deciding what orders for costs to make against Forrett and there would be element of double recovery in giving effect to those factors not only in deciding whether to make an order but also on what basis. |
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