Any Part 36 with your doner kebab?

Sonmez v Kebabery Wholesale Ltd (2009)

S suffered serious injuries whilst cleaning a large mixing bowl with rotating blades whilst the blades were still moving. S made a Part 36 to his employer, K to settle the issue of liability at 100% in his favour. He contended that K condoned this method of cleaning the mixing bowl.  K disputed this and argued that S had been contributorily negligent.  On this basis K made a Part 36 offer to settle on a two-thirds/one-third basis in S’s favour.  This offer was rejected. K then made a further offer to settle on a 75%/25% basis. That offer was refused as well and the matter went to trial. S continued to assert that K was 100% liable but the judge found S was contributorily negligent for his own injuries to the order of 20%. 

So in view of all the offers and counter-offers who had been the real winner or loser (apart from anyone who ate the kebabs that night…) and what order should the Court make on costs?  The judge held that as S had not conceded any contributory negligence K had succeeded on that discrete issue because he had found against S on that issue. As K had succeeded at trial, the judge said S should pay the costs of the trial including K’s costs, notwithstanding his 80% success looked at it the other way around.  S appealed against the costs order.

The appeal was allowed by the Court of Appeal made up of LJ Ward, LJ Wilson and Sir Paul Kennedy. In the Judgment dated 22 October 2009 it was found that S had succeeded to the extent of 80% in a fully contested trial on liability; the issue of contributory negligence was part of that trial of liability as a whole and could not be regarded as a separate issue. Accordingly, the judge had been in error in ordering S to pay the costs of the trial. The Court of Appeal was entitled to exercise its discretion afresh and having found that it was not unreasonable for S to stand by his conviction that K was wholly to blame substituted a decision that K would pay the costs of the trial instead. A slightly tough outcome on K you might feel?

Comment

Conduct is not the only factor the Court is obliged to look at when making an order for costs.  The general rule of costs is that costs ‘follow the event’ but the following factors should also be taken into account under Part 44.3:

• the conduct of all the parties;
• whether a party has succeeded on part of his case, even if he has not been wholly successful; and
• any payment into court or admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.

The meaning of ‘conduct’ is defined at CPR Part 44.3(5) including whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue, the manner in which a party has pursued or defended his case or a particular allegation or issue and any element exaggeration (this is before and during any proceedings). However conduct is not the only issue and arguably ignores the mixed outcome of this case. K had made two good offers to settle on the basis of a minority contribution for contributory negligence from S, one of which was only 5% away from the eventual finding and this was arguably the reason for the matter proceeding to trial.  What it worth all the costs of going to trial for the additional 5%? S had never compromised on 100% at all.  The Court had a discretion to order K to pay only:

• a proportion of S’s costs, for instance 80%;
• costs from or until a certain date, for instance until K’s last offer when a counter-offer could have resolved things;
• costs incurred before proceedings have begun;
• costs relating to particular steps taken in the proceedings; or
• costs relating only to a distinct part of the proceedings.

A different outcome could have been reached and although not on the same facts we refer to our June 2008 edition of Claim on line covering the helpful Judgment in Carver v BAA Plc.  In our view, the Court would have better promoted its message of “compromise is better than contest” and reflected the true outcome by reducing S’s costs in the order of 20% and/or ordering S to pay K’s costs of distinct parts of the trial dealing with the issue of contributory negligence only.  Like S’s kebabs, the finding that K should also pay S’s costs of failing to resist any finding of contributory negligence at all probably looks late viewed late at night after a good night out!  Perhaps the moral of the story for defendants is that if you are going to make a percentage offer on a case like this don’t cut it too fine; had the offer of 75%/25% been a bit higher S would probably not have had an appeal against the original order.

Chewing over  provisional damages

Chewings v Williams and Abertawe Bro Morgannwg University NHS Trust (21 August 2009)
 
Mr Chewings suffered serious injuries to his right lower leg in a road traffic accident. He commenced proceedings against Mr Williams who had been responsible for the accident, and against the NHS Trust where he had been treated claiming that the surgical treatment carried out after the accident had also been negligent.  Damages were agreed in the sum of £160,000. The only issue was whether that sum should be a final award or whether it should be paid as provisional damages to take account of the possibility that Mr Chewings might undergo a fusion operation on his ankle which could lead to a below knee amputation. In other words, so that the settlement could be re-opened in the event of amputation being required.

It was the Claimant’s case there was a chance that he would need to have a fusion operation and if he had such an operation that there was a serious risk of complications developing, some of which could lead to the need for amputation.  It was the Defendant’s case that Mr Chewings had first to establish that he would probably undergo the fusion operation which could lead to substantial deterioration in his condition. In view of the risk factors associated with the fusion surgery the Defendant claimed that it was unlikely that Mr Chewings would be advised by an orthopaedic surgeon to undergo this operation. Even if further surgery was offered it was the Defendant’s case that it was unlikely that Mr Chewings would go ahead given the fear of losing his lower leg, and the risk this posed to his survival. Even if he agreed to go ahead with a fusion operation although there was an appreciable risk of complications, amputation was still an extremely remote possibility.

The Law

Section 32A of the Supreme Courts Act 1981 s.32A provides that for an award on a provisional damages basis to be made, four grounds have to be satisfied: -

(1) The Claimant has suffered personal injuries; and
(2) He faces a chance or risk of;
(3) Developing a serious disease or a deterioration in his condition; and
(4) Discretion should be exercised

The key issue was whether (following the decision in Wilson v Ministry of Defence 1991) the chance of an amputation occurring was “measurable” and not merely “fanciful”.

The Judgement

Mr Justice Slade considered that this was a suitable case in which to award provisional damages. There was a real chance that the Claimant’s ankle would deteriorate and if it did, the severe pain he was already experiencing would increase, leading him to decide to undergo a fusion operation.

Although the decision to operate would be a difficult one there was a real and not a fanciful chance that the Claimant would have fusion surgery in the future and if he did, there was a significant risk that he would develop complications such as of infection leading to the need for an amputation. It was difficult to ascribe a precise percentage to the risk, but if forced to do so Mrs Justice Slade considered this to be about two per cent. The award would be provisional for a period of three years only.

Comment

It is clear that in this case the absolute risk of amputation was very small. There was only a chance that the Claimant would need the fusion operation and there was then assessed to be only a 2% chance of amputation being necessary.

In deciding whether or not to award provisional damages it is clear that the court will consider more than just the percentage chance of the trigger event happening alone.  It is not enough to have a ‘rule of thumb’ above or below which the prospect of provisional damages can be assessed. The degree of risk interacts with the seriousness of the disease / deterioration and an important factor in the decision was that the risk in question in this case was one of a very serious event - amputation.   However, in many cases the risk reduces or disappears entirely if it has not materialised already and it is important not to leave provisional damages awards open-ended; here a period of three years was specified.

Although there is nothing “new” in this decision, the case serves as a useful reminder. In the earlier decision in Patterson v Ministry of Defence (1986) a 5 per cent risk of further pleural thickening in an asbestos case was considered a risk that was insufficiently serious to trigger a provisional damages award. By contrast in Cronin v Redbridge BC (1987) the Court of Appeal considered that a 1 in a 1,000 chance of sympathetic opthalmia which if it occurred led to a 70% chance of complete blindness was suitable for an award.

No Late Substitute…

Lockheed Martin Group v Willis Group Limited [2009] EWHC 1436 (QB)

The Applicants, G and L, applied to set aside an order which substituted them for the original Defendant after limitation had expired.  The original Defendant, H, was the holding company of a foreign broking group of which G and L were English companies.  When the Claimant attempted to serve on the original Defendant they became aware that the Defendant insurance company was not actually in existence on the dates referred to in the Claim Form and that the correct Defendants were G and L.  By then, the limitation period had expired.  The Claimant applied without notice and obtained an order pursuant to CPR Rule 19.5(3)(a) substituting the original Defendant for G and L.  Rule 19.5(3) provides that a Court can add or substitute a party after the end of a relevant limitation period where the original party in the Claim Form was named in mistake for the new party.  The substituted Defendants argued that insufficient thought had been given by the Claimant about who to name in the Claim Form before it was issued.  The Claimant submitted that the mistake had not misled the Defendants.

The appeal was successful and the substitution was not allowed because it was clear that there was no intention to sue G and L when the Claim Form was issued and because the mistake had mislead G and L.  It caused reasonable doubt as to the identity of the party who was intended to be sued.  The true identity of the person intended to be sued was not apparent.  An overriding factor was that G was unaware of the Claimant until after the expiry of the limitation period and the Court was predisposed in such circumstances not to permit substitution. 

Often in clinical negligence cases, Claimants instruct solicitors on the eve of limitation.  Whilst most of the time solicitors still have enough time to obtain copies of the medical records, occasionally a Claimant will issue a protective Claim Form without the medical records.  Courts will take a dim view where a Claimant seeks to substitute a Defendant in cases where the substituted Defendant was unaware of the claim until after expiry of the limitation period.  The Court will also look closely at why a Claimant took no action during the limitation period.