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PI Practitioner, October 2015

26/10/15. Each issue a particular topic is highlighted, citing some of the useful cases and other materials in that area. You can also receive these for free by registering for our PI Brief Update newsletter. Just select "Free Newsletter" from the menu at the top of this page and fill in your email address.

Applications for relief from sanctions, one year on from Denton

In Michael Wilson & Partners Ltd v Thomas Sinclair & Others [2015] EWCA Civ 774, the Court of Appeal considered the application of the decision in Denton v TH White Ltd to orders made on the basis of the guidance in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537.

The Court of Appeal's judgment is a useful demonstration of the role of the third stage of Denton in considering whether to grant relief from sanction. The Court, while maintaining the view that Denton constituted a 'restatement' of the guidance in Mitchell, held that the 'restatement' was a sufficient change in circumstances to justify a court in revoking an order where a judge had refused to reconsider striking out an appeal, prior to the decision in Denton.

The Applicant company claimed that the Second Respondent had been engaged in making payments to a director of the Applicant company for his own benefit. The Applicant had issued proceedings against the Second Respondent and pursued the director through arbitration, which resulted in the arbitrator largely finding against the Applicant. The Applicant's claim was struck out as an abuse of process, and following appeal it was ordered that the appeal would be stayed unless the Applicant made a payment into court by a specified date. The Applicant failed to do so and made an application to lift the stay. The judge considered the application to one for relief from sanctions under C.P.R. 3.9, and concluded that the claim should be struck out. In December 2013, prior to the decision in Denton, the judge found that the company's breach was not trivial and was without a good reason, and so, following the guidance in Mitchell, he refused to reconsider the strike-out.

The Court found that the judge's approach, based understandably on the language of Mitchell, was to treat the factors mentioned in r.3.9(1) of the CPR of the need to conduct litigation efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions and orders as paramount considerations rather than having regard to all the circumstances of the case as required by Denton. While applying the first two stages of Denton did not lead to any material difference, the third stage of considering all the circumstances of the case meant that the judge's approach had been too narrow. Relief from sanction was therefore granted.

Elizabeth Gallagher & Ellen Robertson
Temple Garden Chambers

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Scottish Costs Reforms: Fundamental Changes in Costs of Scottish Litigation (Update From North of the Border) - David Stihler, Brodies LLP

23/10/15. One of the recommendations in Lord Gill’s review of the Scottish Civil Courts, as commented upon in the last update from North of the Border, was for a review of the costs of litigation in Scotland to be undertaken. Sheriff Principal Taylor completed that review, producing a report making 85 recommendations concerning costs management in the Scottish Jurisdiction.

Inevitably there are comparisons with the Jackson reforms although Sheriff Principal Taylor has highlighted that there is a different culture of litigation in Scotland where there are, proportionately, far fewer injury claims than in England. On that basis he has adopted a somewhat different approach.

Following the Taylor review, Scottish Ministers are currently consulting on plans to create “a more accessible, affordable and equitable civil justice system for Scotland”. They are developing proposals aimed at increasing access to justice by: making the costs of court actions more predictable; increasing the funding options for claimants in civil actions; and introducing a greater level of equality to the funding relationship between claimants and defenders in personal injury actions.

It is anticipated that key changes in the funding of civil litigation in Scotland will include:

  • Referral fees – It is anticipated that the ban on referral fees in Scotland will be reversed.

  • Referral fee regulation - Providing that referral fees are allowed, all bodies entitled to charge for referrals will be regulated. Solicitors will be under an obligation to their clients to explain the referral process and the financial arrangements involved.

  • Damages based agreements - For the first time in Scotland solicitors would be able to enter into damages based agreements where they receive a percentage of the damages received on a sliding scale; with the percentage of the fee reducing as the award increases.

  • Qualified one way cost shifting (QOCS) – QOCS are expected to be introduced in personal injury cases. Subject to limited exceptions, including the reasonableness of a claimant's behaviour, claimants would not have to meet a defender's expenses even if the claim is unsuccessful.

  • Expenses management - A system of expenses management operated by the court, including a summary assessment of expenses of the action from the outset, is expected to be implemented in commercial actions. The aim is to "...enable a commercial litigant to assess the benefits of proceeding with litigation in the full knowledge of what the expenses might be should the litigation be won or lost".

  • Alternative sources of funding - Provisions are expected to encourage alternative sources of funding such as third party funding and the establishment of a Contingent Legal Aid Fund to fund outlays in cases of clinical negligence. Additionally, the Taylor review proposes greater transparency of the funding of litigated claims, suggesting that all parties to any action should be entitled to know how the litigation is being funded.

We are at the formative stages of the Scottish costs reform and the proposals are not without controversy. QOCS is a particularly divisive issue. Some practitioners are arguing that QOCS should be implemented in any action where there is an asymmetric relationship between the claimant and the defender while others claim that alternative funding arrangements would sufficiently address any imbalance and that QOCS will encourage claimants to pursue highly speculative claims.

There is no doubt that voices will be raised both for and against the costs reforms and over the short term their extent will be in flux. However, significant changes to the expenses regime in Scotland is on its way, with increased judicial involvement, greater transparency, more closely regulated fee agreements and referrals.

David Stihler
Associate Brodies LLP

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The Rise in Injury Litigation: Dodgy Claims Managers? - Thomas Crockett, 1 Chancery Lane

22/10/15. An article in the Sunday Times a few weeks ago caught my eye. This revealed the aggressive tactics employed by predatory claims farmers to ensure that as many people as possible who have been involved in accidents bring claims for damages for personal injuries. Their tactics were reported as including appealing to base greed (such as the oft-encountered line: “the money is just waiting in an account for you”) to emotional blackmail (the other driver could have killed your children. Don’t let him/her get away with it”). The article suggested that the individual salesmen are paid a low base salary but were able to obtain commissions of over £50,000. For those readers with access, the article can be read online at

In the last few months, I have been involved in cases whilst acting for insurers where these issues have very much come to the fore.

In one, the claimant was observed via online investigation work to have undertaken an ‘Iron Woman’ challenge just three days after allegedly suffering a back injury at work, thereafter a marathon and thereafter the ‘Three Peaks Challenge’ all within about six weeks. Her medical report suggested she was effectively crippled for a month before making a slow recovery. This was pointed out to her, accompanied by an application to amend the Defence to plead fraud, whereupon her solicitors applied to come off the record. This was resisted by the defendant, whom I was instructed to represent on the grounds that there was a clear public interest in trying cases of such a nature. The matter concluded via a settlement whereby the Claimant (whom had hastily instructed direct access counsel) consented to the Striking Out of her claim on the grounds of it being an abuse of process and herself personally undertaking to meet the defendant’s not-inconsiderable costs. She made it clear in open court that she had been pressured into making a personal injury claim when she did not really want to.

In another, the claimant in a road traffic accident claim, seemingly had a pang of conscience or otherwise felt unwilling to have to personally speak for his own case from the witness box. He himself wrote to the defendant’s solicitors in terms expressing remorse for his “terrible mistake in bringing this claim”. He blamed his solicitors for “pushing” him into making “a claim which I always said was untrue”. His solicitors also came off the record and when the claimant failed to appear at trial the court acceded to the application to Strike Out on the grounds that the claim was abusive and that the claimant’s conduct was obstructive of the just disposal of proceedings. Qualified One-Way Costs Shifting was dis-applied and the defendant’s costs awarded in full. In addition, the court considered the Claimant’s emails constituted clear evidence of fundamental dishonesty and such a finding recorded in the order.

In a third, and possibly the most curious case, the claimant unexpectedly had an attack of honestly mid-way through my cross-examination of her in a Highways Act 1980 claim. She sought to distance herself from her medical report almost entirely. She averred she was injured, but recovered after a week and not the 14 months suggested by the report. She had no idea where much of the information in the report came from, but blamed her solicitors whom she candidly alleged encouraged her to place a negative spin on her injuries when seeing the reporting doctor in the brief appointment she had with him. Despite her personally sighing the Particulars of Claim, Schedule of Loss and her Witness Statement, all of which made reference to the medical report as (at least impliedly) accurate, she made it clear to the judge – and this was accepted as a fact – that she always maintained that the conclusions of the medical expert were incorrect and exaggerated her injury. The judge held that she could place no reliance upon the report and awarded purely nominal damages in respect of the Claimant’s injury. There was no order as to costs.

The lesson from these cases if they were anything other than a-typical is for defendant parties to consider the potential for such fraud or exaggeration at every point up to and including trial in cases where the same is proper to be put to claimant parties. In the above cases this paid off for the defendant, but caution must be afforded to opportunistic allegations or those for which there is insufficient evidential (let alone professional) basis.

Thomas Crockett
1 Chancery Lane

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Summary of Recent Cases, October 2015

21/10/15. Here is a summary of the recent notable court cases over the past month. You can also receive these for free by registering for our PI Brief Update newsletter. Just select "Free Newsletter" from the menu at the top of this page and fill in your email address..

Summary of Recent Cases - Substantive Law

David Lee Barrett v Sandwell & West Birmingham Hospitals NHS Trust [2015] EWHC 2627 (QB)

A claim for personal injuries for loss of eyesight suffered as a result of alleged clinical negligence of hospital staff failed. The Court found that it was reasonable for a consultant ophthalmic surgeon to treat C's intraocular pressure medically rather than operating. C, who suffered from diabetes-related eye disease, had also failed to show that the delay in operating on his left eye had contributed to the loss of vision in his right eye.

The Court held that the surgeon's decision to pursue medical treatment was not negligent, and although the surgeon accepted he had not offered C surgery as an alternative option, C's evidence was that he would have followed medical advice. As the medical advice would have been to proceed with the medical treatment given, C had not established that the breach of duty in failing to advise him of the option of surgery had caused any loss or damage.

Sydney Gordon John Glasgow (By his Litigation Friend, Joan Diana Glasgow) v Hillingdon Hospitals NHS Foundation Trust, QBD (Master Roberts) 05/05/2015

An interim payment of £200,000 was ordered to be made to a Claimant who had sustained brain damage due to clinical negligence by the Defendant NHS Trust. Interim payments totalling £875,000 had previously been made, but the Claimant had suffered significant physical and cognitive impairments. A conservative assessment of the likely award was £1,193,916.

Judgment on liability had previously been entered in C's favour. C sought a further award of £220,000 to cover the costs of adaptations to a new house and ongoing therapy and case management. The Defendant NHS Trust submitted that an order for an interim payment in excess of £70,000 would be unreasonable.

The Court held that the correct approach was to conservative estimate the likely award at a final hearing and, in the event that an interim award was appropriate, order an interim payment of no more than a reasonable proportion of that final amount. The Court considered that a total award of at least £1,193,916 was likely, and considered that it was reasonable to order 90% of that amount on an interim basis.

Summary of Recent Cases - Costs

Mandy Wall (Personal Representative of the Estate of Stephen Wall, Deceased) v British Canoe Union, CC (Birmingham) 30/07/2015

Qualified One-Way Costs Shifting protection did not apply where an action was struck out when a claimant had shown no reasonable grounds for bringing the proceedings.

The court struck out a claim in negligence brought against the publisher of a canoeing guidebook by the widow of a canoeist who had drowned while crossing a weir. The guidebook stated that the weir could be crossed safely and did not contain any warning. C maintained that D was liable in negligence because her husband had relied upon the guidebook and sought damages on behalf of the estate under the Law Reform (Miscellaneous Provisions) Act 1934 and for herself and their daughter under the Fatal Accidents Act 1976. D applied for the claim to be struck out. The Court found that there was no relationship of proximity between the deceased and D and so there was no duty of care. C's statement of case therefore disclosed no reasonable grounds for bringing the claim and so would be struck out pursuant to CPR r.3.4(2). CPR r.44.13(1) provided that qualified one-way costs shifting applied to claims under the 1934 and 1976 Acts. However, CPR r.44.15 provided that orders made against a claimant could be enforced fully where the proceedings were struck out because the claimant disclosed no reasonable grounds for bringing the proceedings. The rule therefore allowed full enforcement of any costs orders made in D's favour in the proceedings, notwithstanding that C would not have been awarded any damages.

Clutterbuck & Ors v HSBC PLC & Ors, Ch D (David Richards J), 02/10/2015

D was awarded costs on the indemnity basis where C had failed more than once to provide a satisfactory draft of its proposed amended particulars of claim which included allegations of fraud, and where C had issued a notice of discontinuance one day before D's application to strike out the claim was to be heard.
The Court held that allegations of fraud were serious, and if they failed at trial costs should be awarded on the indemnity basis. If a claimant served a notice of discontinuance in a claim where allegations of fraud had been made, it was appropriate for the court to adopt the same approach. Applying Jarvis PLC v PricewaterhouseCoopers [2001] B.C.C. 670, fraud allegations which had been discontinued would generally justify costs on the indemnity basis.

Summary of Recent Cases - Civil Procedure

Halfords Media (UK) Ltd & Ors v Ponomarjovs (2015) Ch D (Newey J) 02/10/2015

A without prejudice email sent by an employee to his former employer that threatened blackmail lost its protection and was admitted in evidence in committal proceedings.

C, D's former employer, applied for without prejudice communication to be admitted in committal proceedings. D had emailed C accusing the company of criminal conduct and stating that D would post C's conditional information on various sites if C did not cooperate. C submitted that the email should be admitted as D's conduct amounted to blackmail and/or other impropriety, relying on Unilever Plc v Procter & Gamble Co [2000] 1 W.L.R. 2436.

Hallows v Wilson Barca LLP, Ch D (John Jarvis QC) 10/09/2015

C's solicitor's failure to disclose to a local authority when seeking pre-planning advice that the pre-planning advice was being sought in the context of litigation meant that the solicitor had waived litigation privilege and accepted that the advice provided could come into the public domain through the operation of the Freedom of Information Act 2000.

The Court held that the advice was prima facie protected by litigation privilege, but where a solicitor sought advice from a local authority, the solicitor should bear in mind that local authorities had duties under the Act to provide information to the public. Although the Act provided for an exemption for information protected by legal professional privilege, the local authority had been given no indication that the advice was sought for the purposes of litigation and so the privilege had been waived.

Elizabeth Gallagher & Ellen Robertson
Temple Garden Chambers

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One Judge Can Summarily Assess The Costs Of Another Judge’s Costs Order - Nick McDonnell, Just Costs Solicitors

20/10/15. In Transformers And Rectifiers Ltd v Needs Ltd [2015] EWHC 1687 (TCC) (12 June 2015), Coulson J found that, in certain circumstances, a judge can summarily assess the costs arising out of a costs order made by a different judge.

Wasted costs orders were made by Edwards–Stuart J against a Defendant when it sought the adjournment of a trial. The Claimant argued the costs could be summarily assessed by another judge and the Defendant argued that they must be summarily assessed by the judge who made the orders.

Coulson J found that, the civil procedure rules as they stand now mean that there is no bar on a different judge summarily assessing costs. He found that the position may be different if the costs orders arose from a contested hearing and the assessment of costs depended on the views formed by a judge following submissions. But if orders are made following consideration of the papers for example (as was the case here) a different judge has precisely the same material available to him.

Coulson J emphasised the change to the CPR.r.44 PD 9.7 which now stated:

No summary assessment by a costs officer


The court awarding costs cannot make an order for a summary assessment of costs by a costs officer. If a summary assessment of costs is appropriate but the court awarding costs is unable to do so on the day, the court may give directions as to a further hearing before the same judge.”

The previous, pre-1 April 2013, corresponding PD (CPD 13.8) said “must” instead of “may.” With this, together with the addition of proportionality to the overriding objective, Coulson J found that, in certain circumstances, a judge should be capable of summarily assessing costs arising from orders made by a different judge.

The Defendant sought to rely on a Court of Appeal’s decision in Mahmood & Anr v Penrose & Others [2002] EWCA Civ 457. Coulson J distinguished that decision on the basis that case:-

1. Fell under the pre-1 April 2013 practice direction where the test was one of “must” instead of “may;”
2. Fell under the pre-1 April 2013 overriding objective that did not expressly require consideration of proportionality;
3. Followed a hearing;
4. Was one where the parties represented themselves and it was not clear if the Court had heard any argument;

Coulson J also found that it was unlikely that the Court of Appeal intended to lay down a principle to be followed in all subsequent cases.

Coulson J went on to summarily assess the costs arising from the orders made by Edwards-Stuart J.

Nick McDonnell is a Director, Northern Regional Manager and Costs Lawyer with Just Costs Solicitors.

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