Far from too remote: Armstead v Royal & Sun Alliance [2024] UKSC 6 - Amy Lanham Coles, Temple Garden Chambers

18/03/24. The Claimant was involved in an accident, whilst she was driving a vehicle she had hired on credit from Helphire. The driver of the other vehicle, who was insured by the Defendant insurer, admitted liability for the accident.

The credit hire car needed to be repaired and the credit hire agreement stipulated at Clause 16 that the Claimant was liable to pay the daily (credit hire) rental rate for loss of use of the car for each day the vehicle was unavailable during the repairs. The issue was whether the Claimant could recover that full credit hire sum from the Defendant insurer, or whether, by virtue of its being a contractual obligation between the Claimant and credit hire company, it was simply pure economic loss and/or too remote.

Arguments in the Courts Below

The Defendant had pleaded that Clause 16 was unenforceable and further that the Claimant ought to have mitigated her losses by refusing to pay the Clause 16 sum to Helphire. These arguments were not pursued in the higher courts. Further, the Defendant quickly conceded that the Claimant was entitled to recover compensation for diminution in value as the bailee in possession of the credit hire vehicle. The Claimant conceded that she could only recover the Clause 16 sum as damages if the sums claimed represented a genuine and reasonable attempt to assess the likely losses to be incurred by Helphire.

The Defendant succeeded in the Court of Appeal. The court considered Clause 16 formed part of an internal arrangement between the bailor and bailee and could not be recovered from a third party – being a form of irrecoverable pure economic loss. Further, Clause 16 did not represent a genuine and reasonable attempt to assess the likely losses and was therefore not reasonably foreseeable and accordingly too remote.

Judgment

The Supreme Court disagreed with the Court of Appeal and all of the courts below.

Returning to first principles Lord Leggatt and Lord Burrows reminded themselves that...

Image ©iStockphoto.com/hire-car

Read more (PIBULJ subscribers only)...

Court of Appeal assesses the scope of solicitors’ duty of care to prospective clients during an initial call to their helpline - Nancy Kelehar, Temple Garden Chambers

24/02/24. Miller v Irwin Mitchell LLP [2024] EWCA Civ 53

Date of Judgment: 01/02/2024

Background

Whilst on holiday in Turkey in May 2014, the Claimant slipped and fell down some stairs in the hotel in which she was staying. She broke her leg and underwent surgery in Turkey. Upon returning to England, she developed an infection and, 18 months post-accident, she required an amputation of her lower leg.

The Claimant had an initial call with the Legal Helpline at Irwin Mitchell (IM) on 19 May 2014, just six days after the accident. During this telephone call, she was provided with preliminary advice which included that personal injury claims were subject to a three-year limitation period. At the end of the call, the Claimant was informed that the matter would be referred to IM’s International Travel Litigation Group (ITLG).

The next day, ITLG followed up by way of (unanswered) telephone call and a letter seeking further information and documents. Those documents were not supplied by the Claimant until around 11 months later in April 2015.

In January 2016, IM were ready to proceed with her claim and provided a CFA. A letter of claim was sent to the package holiday provider, ‘Lowcostholidays’ (LCH), in February 2016. When LCH sent this to their insurers, HCC, they declined cover on the basis that LCH had failed to comply with the notification provisions of the policy. LCH went into administration in July 2016. As a result, the Claimant had no prospect of receiving payment even if she were to succeed with her claim for damages.

Proceedings against IM

The Claimant brought proceedings against IM on the basis that during the initial telephone call of 19 May 2014:

• She had entered into an express or implied retainer with IM; and/or
• IM had assumed a common law responsibility; and as such
• IM should have advised her to notify LCH of the accident immediately or taken steps to notify LCH themselves.

The Claimant’s case was that if IM had done so, LCH would have notified their insurers timeously and the policy would have responded to the claim.

At first instance, HHJ Cadwallader held that [8]:

• No express or implied retainer was created during the initial call; the Claimant was only a potential client of IM until January 2016.
• No duty of care equivalent to that arising under a contractual retainer was owed to her until that point.
• There was no duty on IM to advise the Claimant to notify LCH of the accident or to remind LCH to notify its insurer at any time prior to the letter of claim.

The Appeal

On appeal, the refined position advanced on behalf of the Claimant was that by advising her about the limitation period of her claim, IM had assumed a duty to advise the Claimant to take reasonable steps to protect her position [39] and they had breached this duty by giving incomplete advice [47].

The Court of Appeal had ‘no difficulty’ accepting the submission that as IM would expect callers to rely on what they were told, IM had assumed a duty to take reasonable care in giving the advice [41-42]. However, the voluntary assumption of responsibility of IM was for the limited task undertaken: providing preliminary legal advice of a limited and general ‘high level’ nature. Detailed advice would only follow upon review by the specialist legal team [43-44].

Undertaking a fact-sensitive enquiry as to the ambit of the duty [45], the Court of Appeal found that in respect of the call on 19 May 2014:

• The quintessential purpose of the call was for the Claimant to ascertain whether she had a legal basis for bringing a claim. The Claimant had no legal obligation to tell LCH about the accident and there were no other steps that the Claimant needed to take in May 2014 in order to preserve her right of action against LCH [49].
• IM took it upon itself to offer high-level preliminary advice and the advice given on those topics was accurate [67].
• Advice about notifying LCH could not be said to be ‘reasonably incidental’ to or ‘part and parcel of’ advice about the limitation period for bringing the claim [62; 76].

Interestingly, the Court of Appeal considered that the initial assessment of the value of the claim may have had a bearing on what IM’s adviser had in contemplation during the initial call. In May 2014, the injury appeared to be a broken leg of an unemployed middle-aged woman (a potential fast-track claim). Amputation was not anticipated.

In the Court’s view, a solicitor in IM’s position had no particular reason to expect the damages to be much more than LCH would be likely to have to pay from its own resources under its insurance policy [72]. Thus, the risk that the insurer might refuse to cover is not something which ought to have been a matter of great concern at that time, taking this issue even further outside of the scope of the preliminary high-level advice.

Image ©iStockphoto.com/BrianAJackson

A Vindication (and QOCS Protection) for Vindicatory Claims: Clark v Adams [2024] EWHC 62 (KB) - Amy Lanham Coles, Temple Garden Chambers

22/02/24. This claim raised a question about the application of QOCS where nominal damages of “£1 for vindicatory purposes” was sought. The claim was brought against Mr Gerry Adams (former President of Sinn Fein; First Defendant) and the Provisional Irish Republican Army (PIRA; Second Defendant) for injuries suffered following bombings at the Old Bailey, London Docklands and Arndale Centre Manchester in 1973 and 1996.

The claims were premised on the torts of assault and battery, which are actionable per se, without proof of damage. In early correspondence the Claimants had expressly disavowed claims for general and special damages as well as aggravated and exemplary damages, instead contending “we can confirm that no claim for damages for personal injury is sought beyond the vindicatory sum of £1”.

The Claim Form alleged that each of the Claimants had suffered assault/battery and injury as a result of the respective bombing incidents and thereby sought “nominal vindicatory damages for assault/battery in respect of loss and damage caused as a result of bomb attacks”. The Particulars of Claim alleged assault and battery causing personal injury and loss and damage, in each case providing particulars of injury and referencing pain suffering and loss of amenity.

Issue

The First Defendant raised the application of QOCS, inter alia, as a preliminary issue via an application. He argued that the claims did not enjoy QOCS protection because they did not “include a claim for damages […] for personal injuries” within the meaning of CPR 44.13(1)(a). He sought a declaration to that effect under CPR 3.1(2)(m).

Submissions

The First Defendant submitted that the early correspondence revealed this was a claim for declaratory relief in order to vindicate rights, to be distinguished from a compensatory claim. He also argued that QOCS protection was designed to guard against the mischief of inequality of arms, far removed from the present situation where the individual Defendant was uninsured. He did not contend that the claim was an abuse of process under CPR

44.15(a).

The Claimants submitted that the claims did fall within the ambit of CPR 44.13(1)(a), pointing to the pleadings which set out the injuries suffered by each of them. They argued this was equivalent to a claim in which the Claimant sought a fraction of the quantum to which they were entitled. The appropriate mechanism for dealing with disparity between the amount of the claim and the costs was to ensure the costs were proportionate, not to remove costs protection. They also argued that the Claim could also be amended – by either deleting the phrase “for vindicatory purposes” or increasing the sums claims. It was immaterial that the torts were actionable without proof of damage and QOCS was deliberately intended to capture all personal injury claims not just certain categories of personal injury claim. The only plausible exception here was that of abuse of process which the First Defendant had not pursued.

Judgment

It was noted the expression “damages…for personal injuries” should be given a broad interpretation, “avoiding undue technicality” (para 75 (iii)). The court placed emphasis on the pleaded case, with the early correspondence to be treated with caution (para 75 (i-ii)). The pleaded case expressly referred to injuries on which the claim was based, beyond the causes of action relied upon. Emphasis was accordingly placed on the claim and not the cause of action (para 75 (iv)). The motives of the Claimants and the funding position of the First Defendant were similarly red herrings (para 75 (v-vi)). Accordingly, it was held that “pleadings set out the necessary ingredients of a claim for damages for personal injury within the meaning of the rule; and contain no averments which are inconsistent with such a claim” (para 77). Accordingly, the claim for nominal damages for personal injury did indeed enjoy QOCS protection.

Image ©iStockphoto.com/DNY59