Legal WatchPersonal InjuryFebruary 2014

Issue 006

02

With costs budgeting proving to be the current ‘hot potato’,

it is not helpful that two versions of a similar court form

are in circulation, leading to further confusion. This issue

was dealt with in Porbanderwalla v Daybridge Ltd [Lawtel

11/02/2014].

The claimant, supported by the defendant, appealed

against a decision that the parties’ recoverable costs should

be limited to the court fees incurred because they had failed

to submit costs budgets.

The claimant’s claim was for damages consisting mostly

of credit hire charges. Service was acknowledged and a

defence filed. Both parties were represented by solicitors.

It was admitted that an accident had occurred but liability

and quantum were in issue. A notice of proposed allocation

to the multi-track was sent to both parties in form N149C

pursuant to CPR PD 26 – 2.1. There was no reference on

that form to any requirement to file a costs budget. Both

parties filed directions questionnaires but not costs budgets.

The claimant sent a covering letter with the questionnaire

stating that a Precedent H costs budget form would be

filed in advance of the case management hearing. The

district judge considered the statements of case and the

questionnaires and made an order allocating the claim to

the multi-track and limiting the recoverable costs for each

party to the court fees because they had failed to submit

costs budgets in form H.

The claimant submitted that CPR 3.13 requiring parties to

file and exchange budgets in a multi-track case did not

apply until the case had been allocated to the multi-track by

the judge’s order; no date was specified in the form N149C

served under CPR 26.3(1) for the filing of costs budgets,

and there had been no case management hearing, so that

Events

Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months:

MBIG Seminar 22.05.2014 - Wellcome Collection,

London, NW1

In This Issue:

• Civil Procedure/Costs budgeting

• Civil Procedure/Expert evidence

• Costs/Mental capacity

• Costs/Calderbank offers

• Police/Immunity from suit

Civil Procedure/Costs budgeting

03

the requirement to file a budget was never triggered.

Allowing the appeal, the County Court judge held that CPR

3.13 expressly provided that a budget should be served

and filed by the date specified in the notice served under

CPR 26.3(1) or, if no such date was specified, seven days

before the first case management conference. That would

be before allocation. That was the specific rule governing

the procedure at that point, and its terms were clear. To

apply the clear terms of CPR 3.13 did not deprive CPR

3.12 of meaning or effect, for it was only if the case was

subsequently allocated to the multi-track, that the provisions

of CPR 3.14 and following had effect. In that sense that

section of the rules applied to multi-track cases. But CPR

3.13 operated prior to that allocation.

“There appeared to be two versions of form N149C in circulation: one providing for a costs budget to be filed by a particular date, and the other not” CPR 26.3(1)(b)(i) required the notice of proposed allocation

to specify any matter to be complied with by the date

specified in the notice. The link between that rule and CPR

3.13 was plain, and they should be read together. The notice

envisaged by CPR 3.13 was a notice which would specify

any matter to be complied with by the date specified in

the notice. Rule 3.13 adopted the date in the notice as a

trigger in that context on the basis that the notice would

specify when that matter was to be complied with. Rule 3.13

referred to a CPR 26.3(1) notice which specified a date by

which the costs budget was to be filed. In the absence of a

requirement for the exchange and filing of a budget in the

notice, or a case management conference, the requirement

was not triggered.

(Per curiam) There appeared to be two versions of form

N149C in circulation: one providing for a costs budget to be

filed by a particular date, and the other not.

Porbanderwalla v Daybridge Ltd [Lawtel 11/02/2014]

04

The case of Neile v University Hospitals NHS Trust [Lawtel

11/02/2014] is a helpful illustration of the courts’ current

approach to controlling expert evidence. It also confirms

how important it is to select carefully the expert witness

instructed.

The claimant had been left totally blind, partially deaf and

with balance problems and facial paralysis following illness.

She had presented symptoms to her GP which she alleged

should have alerted a reasonably competent doctor to the

strong possibility that she was suffering from meningitis

and that she should have immediately been treated with

penicillin and transferred to hospital. In order to succeed

in her claim she had to establish that the doctor ought

to have diagnosed meningitis, treated it, and that the

treatment would have made a difference to the outcome.

One of the Trust’s experts produced a report which said

that the claimant’s injuries might not have been caused by

meningitis. The claimant submitted that she should be able

to meet like-with-like by allowing her expert to prepare an

additional report which would directly answer the questions

raised by the Trust’s expert. With regard to a separate and

additional expert’s report, the claimant submitted that since

she had instructed an ophthalmologist rather than a neuro-

ophthalmologist, as the Trust had, the experts were not

matched and she should be able to instruct somebody else.

“There was no good reason for permitting a change in expert when the one instructed was perfectly able to deal with the issue”The Trust contended that the claimant was expert-shopping.

Allowing the application in part, the deputy High Court

judge held that the decision to permit additional evidence

was a case management decision; there had to be good

reason for doing so, the overriding objective was to deal

with the cases justly and expeditiously, and each application

was fact sensitive and case specific. The later the request,

the less willing a court should be to grant it. In the instant

case, the trial was listed for late March 2014. There was

force in the claimant’s argument that the Trust, through

their expert, had raised for the first time in the expert’s

report, that the injuries had not been caused by meningitis.

That argument had not been raised in the Trust’s defence.

Further, the claimant’s expert was already on board and was

able to assist the judge. Allowing additional evidence was

proportionate in circumstances where there was no bad

faith on the claimant’s part. The claimant’s expert was able

to meet the issues raised by the Trust’s expert and it was in

the interests of justice to allow a new report.

With regard to the instruction of a new expert, the claimant’s

current expert had dealt with causation and damage to

the optic nerve. He appeared to have no difficulty coming

to a perfectly proper opinion and named neuro-optics as

one of his areas of expertise. There was no good reason

for permitting a change in expert when the one instructed

was perfectly able to deal with the issues. The fact that

one expert had more experience than another was not

uncommon.

Neile v University Hospitals NHS Trust [Lawtel

11/02/2014]

Civil Procedure/Expert evidence

05

Costs/Mental capacityThe case of Blankley (Protected Party) v Central Manchester

& Manchester Children’s University Hospital NHS Trust

(2014) EWHC 168 (QB) looks at the impact of a change in

mental capacity on the validity of a CFA.

The claimant/appellant had undergone surgery at a hospital

run by the defendant/respondent Trust. She was left with

brain damage and instructed a firm of solicitors to begin

a clinical negligence action. Because she did not have

capacity, she acted through a litigation friend. In February

2005, liability was agreed with damages to be assessed. By

May 2005, the claimant had regained capacity and entered

into a conditional fee agreement (CFA) with her solicitors. In

February 2007, she lost capacity again. The CFA covered

all work up to February 26, 2007. Thereafter, the claimant

acted through a litigation friend, who was subsequently

appointed to act as her receiver. The proceedings were

settled three years later. The claimant’s solicitor submitted

a bill of costs claiming payment on the basis of the CFA.

Part of the bill related to costs incurred after March

2007, when the claimant was acting through her litigation

friend. The Trust argued that no costs were recoverable in

relation to that period, because the CFA had automatically

terminated on the claimant’s loss of capacity in February

2007, leaving the solicitors without any retainer. The costs

judge agreed. He held that the litigation friend had neither

adopted the CFA nor entered into a new one. The central

issues in the claimant’s appeal were (i) whether supervening

incapacity terminated a solicitor’s retainer; (ii) if the CFA had

been frustrated, whether the litigation friend had adopted

it upon his appointment; (iii) whether S7 Mental Capacity

Act 2005 entitled the solicitors to payment for the supply

of “necessary” services; (iv) whether the defendant was

estopped by convention from denying that the solicitors had

authority to act for the claimant.

Allowing the claimant’s appeal, the High Court judges held

that it was common ground that the supervening mental

incapacity of a principal terminated the actual authority of

his agent. However, the termination of a solicitor’s authority

by reason of mental incapacity did not ordinarily and of itself

frustrate the underlying contract of retainer. In particular, a

retainer such as that in the instant case, entered into with

a person known to have fluctuating capacity, was not

frustrated by any loss of capacity. The supervening inability

of an individual to continue to instruct his solicitor personally,

with the likelihood that a deputy would be appointed, did not

significantly change the nature of the contract of retainer. In

the CFA, the obligation to provide instructions was express,

and would be implied in any event. It followed that an

inability to provide instructions was not something that was

not dealt with by the contract. Supervening incapacity might

cause a delay in performance of the obligation to provide

instructions, but that would be a matter for the enforcement

of the contract terms. Even if the delay was not within

the scope of the contract terms, it would only amount to

a frustrating event if it fell outside what the parties could

reasonably contemplate at the time of contracting. In the

instant case, the possibility that the claimant might lose

capacity had been within the reasonable contemplation of

the parties. To treat the retainer as terminated by what might

be a fleeting episode of incapacity would be unjust and

unreasonable; the doctrine of frustration was to be confined

within narrow limits and was not lightly to be invoked.

“..the termination of a solicitor’s authority by reason of mental incapacity did not ordinarily and of itself frustrate the underlying contract of retainer”

06

If, contrary to the foregoing, the CFA had been frustrated,

the question arose as to the basis on which the solicitors

had acted following the appointment of the litigation friend.

He had full authority to conduct the proceedings on the

claimant’s behalf. Given that he had either given instructions

to the solicitors or, at the very least, ratified the steps that

they had taken, it could not be disputed that the solicitors’

conduct of the proceedings had been authorised by the

claimant’s duly empowered representative. The defendant

therefore bore the burden of proving that the claimant

was not liable for her solicitors’ fees. Had the CFA been

frustrated, it would have ceased to exist and the litigation

friend could not have adopted it. Had it been necessary

to decide the point, the court would have found that the

litigation friend had not implicitly entered a new CFA with

the solicitors.

The claimant’s solicitors’ pursuit of the proceedings fell

within the definition of “necessary services” in S7(2) of the

2005 Act. The appointment of a receiver or deputy did not

mean that S7 could no longer be relied upon. In any event,

since the solicitors had been instructed by the litigation

friend, S7 had no application.

The claimant’s solicitors had been acting with the claimant’s

authority whether or not the CFA remained in force, and

it was not necessary to rely on any estoppel to establish

that. However, had they been acting without authority,

the defendant could not have been estopped from so

contending. Solicitors warranted that they had the authority

of the party they purported to represent, and the opposing

party’s reliance on that warranty could not give rise to any

form of estoppel if it subsequently proved to have been

misplaced.

Blankley (Protected Party) v Central Manchester &

Manchester Children’s University Hospital NHS Trust

(2014) EWHC 168 (QB)

07

Costs/Calderbank offersAlthough Walker Construction (UK) Ltd v Quayside Homes

Ltd and another (2014) EWCA Civ 93 is a commercial

case it is of wider interest when considering how courts

now approach the awarding of costs and the impact of

Calderbank offers.

“The judge…had failed adequately to consider whether the claimant’s Calderbank offer was reasonable”The appellant/claimant had entered into a contract to

carry out drainage and highway works at the respondent/

defendant’s building site. It brought proceedings to

recover sums which had been retained by the defendant.

Proceedings were staying pending adjudication and the

adjudicator awarded the claimant approximately £23,400.

That sum included £8,941 in respect of remedial works

to defects the claimant alleged had been caused by the

defendant’s building operations. That sum had not been

certified by the defendant’s project manager.

The defendant paid the award but maintained that the

claimant’s works had been defective and counterclaimed

for over £169,000. The claimant made a Calderbank

offer to pay the defendant £30,000 including costs. The

defendant made a Part 36 offer in May 2011 to settle its

counterclaim for £100 (one hundred pounds) plus costs.

By that date its costs were approximately £55,000. At trial

the defendant was awarded a net sum of £10,885 on its

counterclaim. Its further counterclaim to recover the £8,941

that it had already paid in respect of the remedial works

was dismissed. The judge concluded that the defendant

had not pleaded a breach of contract in relation to that

sum and there was no case for recovery in restitution. The

claimant was ordered to pay the defendant’s costs on the

standard basis from after adjudication to the expiry of the

defendant’s Part 36 offer and, for the period after that,

on the indemnity basis. The costs were over £345,000.

The claimant appealed arguing that the judge’s approach

to costs had produced a result that was completely

disproportionate to the defendant’s actual recovery on its

counterclaim. The defendant cross-appealed and submitted

that the judge was wrong to have rejected the claim for

£8,941 as the claimant had not proved its entitlement to

that sum.

Allowing the appeal and dismissing the cross-appeal, the

Court of Appeal held that the defendant’s counterclaim

was effectively a claim to set off damages in respect of

allegedly defective works, therefore the burden of proof at

trial was on the defendant. The claimant was not seeking

to recover any sum in respect of those works at trial, as

it had already been paid pursuant to the adjudication. The

defendant had not called any evidence at trial in support

of its contention that the claimant’s drainage works were in

breach of contract as defective. Accordingly, the judge had

no basis on which he could reach a final determination in

relation to the defendant’s claim for damages for breach of

contract. It was not entitled simply to point to the absence

of a certificate to support its assertion that it was entitled to

repayment because the adjudicator was wrong. The mere

absence of a certificate from the project manager did not

prevent the claimant from having a contractual entitlement

to payment. The adjudicator’s award was therefore bound

to stand.

The court would not lightly interfere with a trial judge’s exercise

of discretion as to costs, but the judge was plainly wrong in

the instant case for the following reasons: (a) he had failed

adequately to take into account the factors in CPR 44.3; (b)

the defendant had delayed for two years in putting forward

its amended defence and counterclaim for over £169,000,

before amending it shortly before trial to approximately

08

£84,000; (c) the defendant made a net recovery at trial of

only 5.93% of its original claim, and 11.92% of its amended

claim; (d) against that background it was impossible that a

proportionate result in costs terms could be that the claimant

should pay the defendant’s costs of over £345,000; (e) the

judge paid no regard to the defendant’s conduct in pursuing

an inflated claim or its delay in formulating its claim; there

were strong grounds for disallowing a substantial proportion

of the defendant’s costs relating to the abandoned or

unsuccessful elements of its counterclaim; (f) consideration

should have been given to whether an issue-based or

partial costs order was appropriate; (g) the judge had failed

to give appropriate weight to the fact that the claimant

could not have made a Part 36 offer because acceptance

of it would have entitled the defendant to all of its costs;

(h) he failed adequately to consider whether the claimant’s

Calderbank offer was reasonable; (i) that offer had been a

reasonable and proportionate one; (j) the conclusion that

the claimant should have accepted the defendant’s Part 36

offer was flawed. The court therefore ordered the claimant

to pay 50% of the defendant’s costs on the standard basis

from after the adjudication to the date by which it should

have responded to the claimant’s Calderbank offer. The

defendant was ordered to pay the claimant’s costs from that

date to judgment.

Walker Construction (UK) Ltd v Quayside Homes Ltd

and another (2014) EWCA Civ 93

09

Police/Immunity from suitThe case of Robinson v Chief Constable of West Yorkshire

(2014) EWCA Civ 15 looks at the circumstances in which

police officers could be liable for injury caused to an

innocent third party, caught up in the arrest of a criminal.

“It would not be fair, just and reasonable to impose a duty on police officers doing their best to get a drug dealer off the street safely”While walking down a busy high street, the claimant/

appellant became caught up in the arrest of a drug dealer.

She was knocked to the ground and injured. The judge found

that there had been negligence, although not outrageous

negligence, on the part of the police officers involved in the

arrest, but that the immunity from suit for officers engaged in

the apprehension of criminals applied. Accordingly, despite

the finding of negligence, the claim was dismissed.

The claimant appealed and argued that the judge was wrong

in law to apply the three-stage test in Caparo (1990) and that

where the case involved direct physical harm, public policy

considerations did not arise and there was no need for the

court to ask itself whether it was fair, just and reasonable

for the action to proceed. Further, that he was wrong in

law to apply a blanket immunity and to find that it required

“outrageous negligence” to defeat the principle established

in Hill (1989).

Dismissing the appeal, the Court of Appeal held that the

basic principle was that where there was a wrong there

should be a remedy. However, there were cases where it

would not be fair, just and reasonable to impose a duty of

care and the interests of the public at large could outweigh

the interests of the individual allegedly wronged. The Caparo

test applied to all claims in the modern law of negligence,

and was reflected in all the most recent appellate decisions

which addressed in turn, whatever the nature of the harm,

the issues of foreseeability, proximity and whether it was

just and reasonable to impose a duty. The Hill principle

was designed to prevent defensive policing and better

protect the public. It would fundamentally undermine that

objective to make the police liable for direct acts but not

indirect acts, and would encourage the police to avoid

positive action for fear of being sued. The general principle

was that most claims against the police in negligence for

their acts or omissions in the course of investigating and

suppressing crime and apprehending offenders would fail

the third stage of the Caparo test. It would not be fair, just

and reasonable to impose a duty where the courts had

concluded that the interests of the public would not be

best served by imposing a duty to individuals. However,

the Hill principle did not impose a blanket immunity. While

there was no definitive list of possible exceptions, there

were exceptional cases in which the police did owe a duty

of care even when suppressing and investigating crime. In

principle, although there was sense in exempting cases

of outrageous negligence on the basis no one wished to

encourage grossly reckless police operations, such claims

would be on the margins. A careful analysis of the case law

would provide a sufficient degee of certainty. Accordingly,

the Caparo test did apply to the instant case. It would not be

fair, just and reasonable to impose a duty on police officers

doing their best to get a drug dealer off the street safely. The

judge recognised that there were a number of exceptions to

the Hill principle and only considered whether outrageous

negligence was present because the parties had addressed

him on it. He did not find that a finding of outrageous

negligence was the only way in which the principle could

be defeated. The Hill principle did not apply in general to

The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.

www.plexuslaw.co.ukwww.greenwoods-solicitors.co.uk

Contact UsFor more information please contact:

Geoff Owen Learning & Development Consultant

T: 01908 298 216

E: gro@greenwoods-solicitors.com

Other PublicationsIf you would like to receive any of the below, please

email indicating which you would like to receive.

Monthly:

• Legal Watch: Property Risk & Coverage

Bi Monthly:

• Legal Watch: Employment Writes

Quarterly:

• Legal Watch: Counter Fraud

• Legal Watch: Health & Safety

• Legal Watch: Marine

• Legal Watch: Professional Indemnity

• Legal Watch: Disease

the law of negligence and to the facts of the instant case.

The findings that a duty existed and that there was a breach

were unsustainable.

Robinson v Chief Constable of West Yorkshire (2014)

EWCA Civ 15