The last quarter has seen two Supreme Court decisions

in personal injury cases (Baker and Sienkiewicz) and one

in a professional negligence case of great importance to

personal injury practitioners, namely Jones which

considered whether an expert witness has immunity from

suit in negligence. In addition, there have been two Court

of Appeal decisions on when a building occupier will have

sufficient “control” over work to trigger obligations under

health and safety statutory duties. On costs and

procedure, as well, the courts have been active and the

difficulty has been deciding which cases to omit. Things

have been quieter in the international arena and in

decisions of principle on quantum issues, and given the

large number of other decisions we had to include, there

are no international or quantum sections in this issue.

As always, we welcome your feedback which can be

sent to us at the dedicated email address

pinewsletter@39essex.com.

Liability – Emily Formby, Judith Ayling,Bernard Doherty

Experts no longer immune from suit In Jones v Kaney,1

the Supreme Court considered whether or not an expert

witness enjoyed immunity from suit. The precise question

was whether there was immunity in the preparation of a

joint statement, as the Court of Appeal held to exist in

Stanton v Callaghan.2 Inevitably, however, the Supreme

Court considered more broadly whether public policy

justified immunity for an expert witness from liability in

negligence in relation to the performance of his duties in

that capacity.

For the appeal, the facts were taken to be as follows.

The claimant and appellant, Paul Jones, suffered injury in

a road traffic accident on 14 March 2001. He was knocked

from his motorbike by a Mr Bennett who was driving while

uninsured and disqualified. He suffered physical injuries

and also claimed to have suffered serious psychological

injuries. The defendant and respondent, Dr Sue Kaney,

was a clinical psychologist instructed by the claimant’s

solicitors in his personal injury claim. She reported that Mr

Jones was suffering from post-traumatic stress disorder. In

a second report, she found the full diagnosis of post-

traumatic stress disorder no longer made out, but that the

claimant was suffering some of the symptoms as well as

depression. Dr El-Assra, a psychiatrist instructed by

solicitors for Mr Bennett, found that Mr Jones was

exaggerating. The subsequent joint report contained an

agreement between the experts that Mr Jones’

psychological reaction to the accident was no more than

an adjustment reaction. Further, Dr Kaney said that he

was deceptive and deceitful in his reporting. The experts

agreed that his behaviour was suggestive of “conscious

mechanisms” which raised doubts as to his veracity.

When questioned by the claimant’s solicitors about the

discrepancy between her report and the joint report, Dr

Kaney said she had not seen the reports of Dr El-Assra at

the time of the joint discussion, the joint report was drafted

by the defendant’s expert and, while it did not reflect her

view, she felt pressured into signing it. Her view was more

in line with her reports: there was PTSD which had now

resolved and the claimant was not deceptive – more

evasive. On application, the court would not allow the

claimant to change psychiatric expert. Accordingly, Mr

Jones said that he was forced to settle his claim for

significantly less than its real value and the loss was due

to the respondent signing the joint statement in the terms

that she did.

By a majority decision of five to two (the majority

consisting of Lord Phillips, Lord Brown, Lord Collins, Lord

Kerr and Lord Dyson) the Supreme Court held that experts

have no immunity from claims in tort or contract for

matters connected with their participation in legal1 [2011] UKSC 13, on appeal from [2010] EWHC 61(QB).2 [1998] QB 75.

Contents

Liability – Emily Formby,

Judith Ayling, Bernard Doherty ............ 1

Procedure – Rebecca Drake,

Alexis Hearnden .................................. 4

Costs – Judith Ayling .......................... 6

Contributors ...................................... 8

JUNE 2011 Domestic & International Personal Injury News

2 www.39essex.com

proceedings. Thus experts have been brought into line

with advocates, whose immunity was removed by the

House of Lords in Hall v Simons.3 The court held that a

duty of care is owed by the expert witness to the clients

and to the court. The duty is to act with a reasonable level

of probity and competence.

The decision does not affect the position of witnesses

of fact. A significant distinction between an expert witness

and a witness of fact is that the expert has chosen to

provide services and has chosen to undertake duties for

his client usually for reward under contract. Whether or not

that contractual relationship is direct with the lay client or

with the solicitor he instructs is not significant. There is a

marked difference between holding the expert witness

immune from liability for breach of the duty that he has

undertaken to the claimant and granting immunity to a

witness of fact where the witness of fact may not have

volunteered to give evidence and where he owes no duty

to the claimant.

So what had the purposes of the immunity been? In

essence, the court held that they were to prevent the

“chilling effect” that might ensue if a risk of claims in legal

proceedings against experts arose. Would an expert

witness be reluctant to provide his service at all or refuse

to give evidence that was contrary to his client’s interest if

there was a risk his client might sue him? To provide an

effective shield against such reluctance, the immunity

would have to cover expression of views before the trial as

well as in the witness box. This was particularly so given

that most cases settled before getting to court and so the

immunity acted to preclude the client from suing for breach

of duty where the expert’s negligence was alleged to have

adversely affected the decision to settle, as in the present

case.

Expert witnesses already had no immunity from wasted

costs orders,4 nor from facing disciplinary proceedings

before professional tribunals where fitness to practise was

in issue.5 These already existing sanctions had not had a

chilling effect on the expert cohort, so the argument for

retaining immunity from suit for this purpose was

weakened. All who provide professional services which

involve a duty of care are at risk of being sued for that

breach of duty. Insurance against such a risk was

customary. There is no justification to assume that if expert

witnesses were liable to be sued for breach of duty they

would be discouraged from providing services at all within

the litigation context since this was not the case in other

professional contexts in which they operated. Removal of

immunity from suit for advocates had not had a chilling

effect on the conduct of litigation.

The two dissenting voices of Lord Hope and Lady Hale

posed the question the other way round – “did the reasons

which justified immunity for witnesses generally not apply

to expert witnesses?” They thought that changes to the

rule would have potentially far reaching effect and that any

alteration should be for Parliament.

Safety and reasonable practicability In Baker v

Quantum Clothing Group6 the appellant employers in the

knitting industry appealed against a holding that they were

liable for hearing loss sustained before the entry into force

of the Noise at Work Regulations 1989 on 1 January 1990.

The central issue was whether liability existed at common

law and/or under section 29(1) of the Factories Act 1961

(making and keeping the workplace safe) towards an

employee who could establish noise-induced hearing loss

resulting from exposure to noise levels between 85 and

90dB(A)lepd before that date.

This long and detailed judgment will by now already

have been required reading for anyone practising in the

area of industrial deafness, and the Factories Act is long

repealed. Nonetheless, it is worth drawing out the more

general findings which confirm that safety is to be judged

by standards of the time of the noise exposure or other

hazard, and is not an immutable standard.

At first instance HHJ Inglis had decided seven test

cases brought against four companies, Taymil Ltd (whose

successor was Quantum Ltd), Meridian Ltd, Pretty Polly

Ltd and Guy Warwick Ltd. The Court of Appeal had

overturned some of the judge’s findings and allowed the

appeal of Mrs Baker. Given the common ground between

Lord Mance, Lord Dyson and Lord Saville the appeal was

allowed, restoring the judge’s decision that Meridian and

Pretty Polly were in breach of duty in not having

implemented measures from 1 January 1985, given their

consideration of and reaction to the known risks, whereas

Quantum and other similar employers were not in breach

of their common law duty or their duty under section 29(1)

in not taking measures to protect their employees from

exposure under 90dB(A)lepd before 1 January 1990.

The claimants submitted that the requirements of

safety in section 29(1) were objective, unchanging, and

independent of any foresight of injury, so that the only

qualification on an employer’s liability for an unsafe

workplace was if the employer could show that it was not

reasonably practicable to reduce or avoid the exposure,

the burden of so proving and pleading lying on the

employer.7 This was in line with the decision of the Court

of Appeal. That contention was rejected by the majority

(Lords Mance, Dyson and Saville) and the appeals were

3 [2002] 1 AC 615.4 Phillips v Symes (No 2) [2004] EWHC 2330 (Ch), [2005]

1 WLR 2043.5 Meadow v General Medical Council [2006] EWCA Civ 1390,

[2007] QB 462.

6 [2011] UKSC 17, on appeal from [2009] EWCA Civ 499.7 See Nimmo v Alexander Cowan & Sons Ltd [1968] AC 107.

3www.39essex.com

allowed. The minority (Lords Kerr and Clarke) would have

dismissed the appeals.

The chief difference between the majority and minority

was as to whether the concept of a workplace being “safe”

involved consideration of foreseeability of risk. Lord Mance

held that safety is not “an eternal absolute independent of

any judgment based on current standards and attitudes”

and safety must be judged according to the general

knowledge and standards of the times, the onus being on

the employee to show that the workplace was unsafe in

this basic sense.8 Lord Dyson agreed that the concept of

what is safe is not absolute and the concept of reasonable

foreseeability must be imported into it, with the

qualification that what is “safe” is an objective question in

the sense that safety must be judged by reference to what

might reasonably be foreseen by a reasonable and

prudent employer.9 Lord Saville agreed with Lords Mance

and Dyson.

Lords Kerr and Clarke disagreed with the majority as to

the time at which the question of safety should be judged.

If subsequent knowledge showed a state of affairs to have

been unsafe then it was unsafe even if not recognised as

such at the time. According to the minority, it was only at

the stage of considering the “reasonable practicability”

defence that the state of knowledge at the time of the

accident or injury should be considered.

In considering the reasonable practicability defence,

the majority appeared to incline to the view that it was

similar in content to the common law duty to take all

reasonable steps rather than imposing a higher duty as is

suggested in some cases.

Causation in mesothelioma cases In Sienkiewicz v Greif

(UK) Ltd and Knowsley Metropolitan Borough Council v

Willmore10 the Supreme Court considered the causation of

mesothelioma in light of the special rule governing the

attribution of causation to those responsible for exposing

victims to asbestos dust.

The special rule as at the time of the appeals was that

when a victim contracts mesothelioma, each person who

has, in breach of duty, been responsible for exposing the

victim to a significant quantity of asbestos dust and thus

creating a “material increase in risk” of the victim

contracting the disease will be held to be jointly and

severally liable for causing the disease. This rule was

advanced for the first time in Fairchild v Glenhaven

Funeral Services Ltd,11 developed in Barker v Corus

Ltd 12 and varied when Parliament intervened by passing

section 3 of the Compensation Act 2006. It will have a

draconian consequence for an employer who has been

responsible for only a small proportion of the overall

exposure of a claimant to asbestos dust.

The judgments merit close reading both for their

analysis of the state of knowledge about mesothelioma

and also for an analysis of the difficult cases on causation

in personal injury law. Both appeals involved cases where

the defendant was the sole known source of exposure to

asbestos dust (other than the background exposure to

which everyone is subject) and in each case the Court of

Appeal, applying the special rule, had held the defendant

liable for causing mesothelioma. In each case the extent of

the exposure found was very small.

In Knowsley the deceased had been exposed to a

small number of asbestos fibres whilst a pupil at the

defendant’s school. The defendant contended that the trial

judge erred in finding that it had exposed Mrs Willmore to

sufficient asbestos dust to cause a material increase in

risk, but the Supreme Court found that, although the

judge’s findings of fact had been “heroic”, there was no

issue of principle and the appeal was dismissed.

In Sienkiewicz the defendant appellant contended that

since it had only increased by 18% the deceased’s

exposure to asbestos over the background environmental

exposure, her occupational exposure being characterised

as “very light”,13 the claimant had failed to prove that the

additional exposure had caused the mesothelioma. To do

that, said the defendant, she would have had to prove that

the exposure for which it was responsible was higher than

the environmental exposure. Otherwise, on the balance of

probabilities, it was not the occupational exposure which

had caused the disease. Thus the question was: does the

special rule leave any room for applying a test of balance

of probabilities to causation. The appeal also raised the

question as to the applicability of the “doubles the risk”

test, i.e. liability being established by proof that the guilty

conduct more than doubled the risk of the adverse event

occurring.

At first instance the judge had applied the “double the

risk” test and found that the employer was not liable,

adopting an approach which had in turn been adopted by

agreement between the parties in Jones v Metal Box

Limited.14 His decision was overturned by the Court of

Appeal.15

8 Paragraph 76.9 Paragraph 111.10 [2011] UKSC 10, on appeal from [2009] EWCA Civ 1159 and 1211.11 [2002] UKHL 22, [2003] 1 AC 32.12 [2006] UKHL 20, [2006] 2 AC 572.

13 Paragraph 60.14 Unreported, 11 January 2007, HHJ Hickinbottom, Cardiff

County Court.15 It had been applied in other contexts, see XYZ v Schering Health

Care Ltd (2002) 70 BMLR 88, and Novartis Grimsby Ltd v Cookson[2007] EWCA Civ 1261.

4 www.39essex.com

The Supreme Court held that there was no

requirement for a claimant to prove that the defendant’s

breach of duty doubled the risk of developing

mesothelioma. Liability for mesothelioma fell on anyone

who had materially increased the risk of the victim

contracting the disease. Given the present state of

knowledge about mesothelioma, the only circumstances in

which the court could conclude that wrongful exposure to

asbestos dust did not materially increase the risk of the

victim contracting the disease was where that exposure

was insignificant compared to exposure from other

sources, or where the mesothelioma developed within five

years of the exposure, since medical science suggests

that is the minimum period between exposure and

development of the disease.

Section 3(1) of the Compensation Act did not state that

the responsible person would be liable in tort if he had

materially increased the risk of a victim of mesothelioma.

The section applied where the responsible person was

liable in tort for materially increasing that risk. Section 3

did not preclude the common law from identifying

exceptions to the “material increase in risk” test, nor from

holding, as more was learned about mesothelioma, that

the material increase of risk test no longer applied, so that

the law could revert to the conventional approach of the

balance of probabilities.

Do building occupiers have control of work carried on

at the building? Two appeals heard within a few days of

each other considered the circumstances in which a

defendant other than the employer of a worker would have

the requisite degree of control over the work or the

workplace to owe statutory duties to the worker.

In Lynch v CEVA Logistics Ltd,16 the claimant was an

electrician working at the first defendant’s warehouse,

though not employed by the first defendant. He was

injured when struck by a reach truck. The first defendant

was found liable by the judge under the Workplace

(Health, Safety and Welfare) Regulations 1992 (“the 1992

regulations”) for failing to implement a system to allow

pedestrians and vehicles to circulate in a safe manner.

The first defendant appealed on the basis that it owed the

claimant no duty under the 1992 regulations. Regulation

4(2) in essence obliges every person who has, to any

extent, control of a workplace to ensure that it complies

with the requirements of the 1992 regulations which relate

to matters within his control. The argument of the first

defendant was that, since it did not control the way the

claimant carried out his work as an electrician, the work

was not within its control and thus no duty under the 1992

regulations existed. The Court of Appeal rejected the

argument. Jackson LJ said:17

“Regulation 4(2)(c) of the 1992 regulations limits the

responsibility of the workplace owner or occupier to

matters in respect of which it is, or should be, able and

competent to give instructions to visiting contractors

and their employees.”

That would not include such matters as how the

electrician dealt with the wiring, but clearly extended to the

question of how people and reach trucks moved around its

warehouse.

Kmiecic v Isaacs18 was a claim under the Construction

(Health, Safety and Welfare) Regulations 1996 (“the 1996

regulations”) and secondly the Work at Height Regulations

2005 (“the 2005 regulations”). The claimant was engaged

to mend a garage roof at a domestic property. He wanted

to get access to the roof through a window in the house.

The defendant householder refused permission, so the

claimant found an unsuitable ladder in the garage and

used that. He fell from the ladder and suffered injury. The

employer of the claimant was uninsured so the claimant

sued the householder, alleging that she owed him duties

under both the 1996 and 2005 regulations. The trial judge

dismissed the claim on the basis that a householder did

not have or assume the necessary control to owe duties

under either set of regulations. In the Court of Appeal, the

argument focussed chiefly on whether it was necessary in

order to comply with European law to extend duties under

the regulations to a householder who controls the access

to her property. The Court of Appeal rejected the

contention and dismissed the appeal. Moses LJ said:19

“In short community legislation does not undermine the

essential principle of common law that the occupier of

premises exercising the right to control access to and

from her premises does not thereby incur any

obligations to ensure the safety of workmen there

under the 1996 or 2005 regulations.”

Procedure – Rebecca Drake, Alexis Hearnden

Conditions on permission to rely on fresh expert

In Edwards-Tubb v JD Wetherspoon plc,20 the following

question arose on appeal: if the claimant has obtained a

medical report from expert A, but chooses not to rely on it,

and the leave he seeks is to rely on the evidence of expert

B in the same field, ought he to be put on terms that,

before he can rely on B, he must disclose what A has

said? It was held that under CPR r.35.4 the courts had a

discretionary power to impose a condition of disclosure of

an earlier expert report when a change of expert occurred

16 [2011] EWCA Civ 188.17 Paragraph 47.

18 [2011] EWCA Civ 451.19 Paragraph 30.20 [2011] EWCA Civ 136.

5www.39essex.com

before the issue of proceedings as well as when it

occurred after the issue of proceedings. The court

indicated that this discretionary power should usually be

exercised where the change came after the parties had

embarked upon the pre-action protocol and had therefore

started progressing the claim. Of course, such a report will

be privileged in the hands of the claimant and the court

cannot compel waiver of privilege. It can, however, put the

claimant to an election, either to waive privilege in A’s

report and thus get permission for a report from B, or

alternatively not to waive the privilege but to have

permission to rely on a report from expert B denied.

Restricted publication of claimant’s name A Child v

Cambridge University Hospitals NHS Foundation Trust 21

raised the question of what order the court should make to

restrict publication of the claimant’s name in

circumstances where the court is asked to approve a

compromise by or on behalf of a child claimant. The case

concerned a claimant aged seven at the date of judgment

who was awarded a very large settlement as a result of

clinical negligence at her birth. In the course of the hearing

Tugendhat J made an order under section 39 of the

Children and Young Person’s Act 1933 (as amended) that:

“(i) no newspaper report of the proceedings shall reveal

the name, address, or school, or include any particulars

calculated to lead to the identification of the claimant as

being the person by whom the proceedings are taken and

(ii) that no picture shall be published in any newspaper as

being or including a picture of the claimant in the

proceedings.” The judge considered that the decision as to

whether such an order should be made would depend on

the facts of the individual case, stating:22 “Judgments

explaining why orders derogating from open justice are

made cannot, in the nature of things, set out in any great

detail the particular facts which give rise to the need for

the order.” Nevertheless, he considered one of the

purposes of an infant settlement approval to be to ensure

that the money recovered on behalf of the protected party

was “properly looked after and wisely applied”. A section

39 order was necessary in his opinion to ensure that this

objective was not defeated: when, in 11 years, the

Claimant became an adult, the judge considered that she

would be at risk of losing her settlement money to

“inappropriate friends, fortune hunters or even thieves”,

should the very large sum of money she had received be

published in detail;23 information technology would allow

this detail to be available on the internet in 11 years’ time

as readily as if it were published today. This is the fourth

recent consideration by Tugendhat J of the circumstances

in which a party or the terms of a settlement should be

anonymised, and the principles are now becoming clear.24

Late application for admission of DVD surveillance In

Douglas v O’Neill,25 the defendant applied six weeks

before an eight day trial to adduce DVD surveillance

evidence which had only recently been disclosed by the

defendant to the claimant. The claim concerned a road

traffic accident where the claimant had sustained multiple

injuries including long term brain damage. There were

disputes about the severity of the claimant’s brain

damage. The surveillance footage was taken after the date

for service of the claimant’s witness statement and was

not served until after the witness statements had been

served (over 15 months late). The footage showed the

claimant driving a conventional car, dealing with a cashier

in a bank, taking cash from an ATM, shopping in a

supermarket and refuelling his car, and were incompatible

with the disabilities which the claimant had presented

during his medical assessments. The court held that the

defendant had been entitled not to disclose the footage

until the claimant produced a signed witness statement,

notwithstanding the claimant’s delays in doing so.

Although the footage had not been disclosed until the trial

was imminent, it had been disclosed at the first reasonable

opportunity and the defendant had not intended to

“ambush” the claimant.

Facebook evidence Mr Andrew Edis QC, sitting as a

judge of the high court, was provided with 8 lever arch files

in Locke v (1) James Stuart, (2) Axa Corporate Solutions

Services Limited 26 – a claim for modest damages

following an alleged road traffic accident. The defendants

alleged that the accident was deliberately contrived so that

a claim for damages for personal injury could be made

against the defendant driver. Evidence submitted by the

defendants, which relied heavily on Facebook friendships,

was said to show a series of connections between people

involved in nine accidents. On the particular facts of the

case, the court found that the claim was fraudulent. The

judge observed that far too much documentation had been

placed before the court. He suggested that it should be

possible to prepare a document, in Scott Schedule form,

which accurately and fairly summarised the contents of six

lever arch files (which related primarily to Facebook

searches). It appeared that much of the court’s time had

been taken up in a debate about the strengths and

weaknesses of Facebook evidence. Until courts become

au fait with Facebook material, it will remain important to

explain clearly and concisely how entries on Facebook are

24 The other three decisions were discussed in the February 2011edition of this newsletter, and are Gray v UVW [2010] EWHC 2367(QB), JIH v News Group Newspapers Ltd [2010] EWHC 2818 (QB), and JXF (a child) v York Hospitals NHS Foundation Trust[2010] EWHC 2800 (QB).

25 [2011] EWHC 601 (QB).26 [2011] EWHC 399 (QB).

21 [2011] EWHC 454 (QB).22 Paragraph 18.23 Paragraph 17.

6 www.39essex.com

made and the inferences which may safely be drawn from

them.

Contempt of Court The MIB made an application that

four respondents be committed to prison for contempt of

court in MIB v (1) James Shikell (2) Robert George Shikell

(3) Diane Glancy (4) Simon Fennell.27 The first

respondent had brought a personal injury claim arising out

of a road traffic accident. Liability was admitted at an early

stage with a modest deduction for contributory negligence

(the passengers were not wearing their seat belts). In

response to an application for an interim payment, the MIB

instructed investigators who filmed the first respondent

playing a full 90 minute game of competitive and vigorous

football. This was starkly at odds with his witness evidence

and statements made at interviews with medico-legal

experts. The first respondent and his father, the second

respondent, were held in contempt of court for giving

evidence that the first respondent was no longer able to

play competitive football. The third and fourth respondents

were witnesses who supported the claimant’s case. The

court’s findings in respect of the fourth respondent are a

warning to lazy witnesses and to solicitors to ensure that

witnesses read what they sign. The fourth respondent

admitted that he did not read his statement properly before

signing it. The judge held that he acted without fraudulent

intent but since he did not have an honest belief in the

truth of what he signed he was guilty of contempt, as

envisaged by CPR 32.14.

Withdrawing an admission of liability The claimant in

Woodland v (1) Stopford (2) Maxwell (3) The Swimming

Teachers Association 28 suffered a hypoxic brain injury

when, aged 10, she ran into difficulties in a swimming

lesson. The lessons were organised by the first defendant

and conducted by the second defendant. The first

defendant was a member of the third defendant

association. Solicitors for the claimant became involved in

early 2001 (the accident having been in July 2000) but

little appeared to have happened until 2007. Liability was

conceded in correspondence in November 2007 on behalf

of the third defendant. In July 2009 the third defendant’s

(new) solicitors purported to retract the admission in its

entirety. Judge Holman, applying the test in CPR 14.1A,

allowed the defendants to resile. He took account of the

passage of time but accepted that the delay up until 2007

was not the fault of the defendant. The fact that the Health

and Safety Executive’s file had been destroyed was an

important feature but he considered that this was not a late

application given the early stage the proceedings had

reached. The fact that the withdrawal was based not on

new evidence but on a reappraisal of the existing evidence

was a factor capable of telling against permitting

withdrawal but was not in this case a critical factor. Issues

about vicarious liability, causation and medical evidence

would no doubt arise in any event. It was not in the

interests of justice to hold the defendants to an admission

when it could not be said there was no viable defence. The

Court of Appeal upheld his decision.

Costs – Judith Ayling

Kenneth Clarke, Minister for Justice, announced on 29

March 2011 that following responses to the government

consultation paper Proposals for reform of civil litigation

funding and costs in England and Wales there will be

major changes to the present system of civil litigation, and

in particular to the funding regime. Parties will no longer be

able to recover success fees and ATE premiums from the

losing opponent. Damages-based agreements will be

made legal. Qualified one-way costs shifting will be

introduced. A new proportionality test will be introduced.

No precise timetable for legislation/rule change has yet

been announced. In the meantime costs continue to

occupy the courts.

Insurance makes no difference In Sousa v London

Borough of Waltham Forest Council 29 the Court of Appeal

considered the question of whether the court, on an

assessment of costs, could have regard to the fact that a

party was insured, and had been fully indemnified, in

considering whether it was reasonable for that party

(and/or his insurer) to instruct solicitors on terms which

included a success fee. Where householders claim from

their insurers the cost of putting right tree-root damage,

insurers then seek to recoup their outlay from the local

authority and now often enter into CCFAs with their

solicitors. In Sousa the defendant council had been

ordered to pay a 100% success fee. The increasing costs

burden CCFA/CFAs in such claims imposed on local

authorities had been the subject of specific submissions to

Jackson LJ by affected local authorities. The starting point

for the Court of Appeal, however, was that Mr Sousa

himself would have been entitled, had he not been

insured, to recover a success fee from the local authority

as part of his costs, and since the doctrine of subrogation

meant that the insurer must be placed in the position of the

assured, a CFA was permissible. Further, the insurer

would itself have been entitled to enter into a CFA, and if

the key question was whether it was reasonable for the

insurer to enter into a conditional arrangement, it was. It

could not be unreasonable for a litigant to enter into a CFA

merely because it was a wealthy insurance company.

Before giving judgment the Court of Appeal called for

written submissions on the effect of the judgment of the

European Court of Human Rights in MGN Ltd v United

27 [2011] EWHC 527 (QB).28 [2011] EWCA Civ 266. 29 [2011] EWCA Civ 194.

7www.39essex.com

Kingdom,30 in which the European Court of Human Rights

held that it was a breach of Article 10 of the European

Convention (the right to freedom of expression) to require

MGN to pay substantial success fees in the case brought

against it by Naomi Campbell. The local authority in Sousa

submitted that although Article 10 was not engaged, the

domestic provisions about costs should be read

consistently with the MGN judgment, and the Court should

give effect to the intention of the UK legislation, namely

that there be access to justice to those otherwise excluded

for financial reasons. The Court of Appeal rejected this,

and held that it was bound by the decision of the House of

Lords in Campbell v MGN (No 2)31 that a success fee was

recoverable. The Court of Appeal in reaching its

conclusion endorsed the views of Jackson LJ as to the

flaws in the present CFA regime.

Reasonableness, Part 36 and offers to settle In Rolf v

De Guerin 32 the Court of Appeal considered the incidence

of costs following a dispute between a builder and a

homeowner, and in particular the question of the failure to

mediate, where litigation had been “wasteful and

destructive”. The homeowner offered to settle her claim for

£14,000, considerably less than the total claim. At trial,

however, she recovered only £2,500. The trial judge made

no order for costs until the homeowner’s part 36 offer and

thereafter ordered her to pay the builder’s costs. He held

against her that she had made a Part 36 offer which she

had not beaten, in a letter in which she had also offered to

mediate or attend a roundtable meeting. The Court of

Appeal held that this was wrong. The claimant had

recovered far less than she had offered to accept, but

there was nothing in the Part 36 procedure which states

that an offeror was to be prejudiced as to costs because

he had offered to accept less than his open position. The

Court of Appeal held that no order as to costs was the right

order. The claimant was the overall winner but only just,

having recovered £2,500 of a claim put at between

£44,000 and £92,000. On an issue-based approach, she

came out at less than evens; the essential ground on

which the defendant builder succeeded had not been

pleaded; and the claimant had been willing to settle, but

her attempts had been spurned by the defendant until it

was too late, and even his later offer was undermined by

his precarious financial position. The facts disclosed that

negotiation or mediation would have had reasonable

prospects of success, and the spurned offers to enter

into negotiation or mediation were unreasonable so as to

bear materially on the court’s discretion as to costs.

There is helpful consideration here of the line of

authorities on failure to negotiate/mediate, including

Dunnett v Railtrack 33 and Halsey v Milton Keynes General

NHS Trust.34

When is a hearing not a trial? In Amin and Hussain v

Mullings and Royal Sun Alliance35 it was confirmed that in

order to attract a success fee of 100% under the fixed

uplift provisions of CPR 45 it was necessary for there to

have been a contested hearing, and it was not enough

that settlement had been reached on the day the claim

was listed for trial. Nor was the fact that the counterclaim

had been concluded at trial enough to mean that the claim

had been concluded at trial too. It is to be hoped that this

manifestly sensible decision will put paid to arguments

about when a contested hearing has begun under any of

CPR 45 Parts III, IV or V.

Success fees In Beal v Russell 36 the claimant had sought

damages in a case arising out of a road traffic accident in

which she had suffered a head injury. The Senior Costs

Judge held that the appropriate success fee where the

definition of “win” within the CFA had already been met by

the time it was entered into, in that liability had been

admitted, an interim payment had been made, and an offer

of £115,000 had been put forward, and where the solicitor

was entitled under the CFA to recover base costs but not

any success fee if a Part 36 offer was not beaten, was 5%.

See, though, Thornley v Ministry of Defence37 in which the

Court refused to award any success fee at all to

counsel.The claimant entered into a CFA with her solicitors

once BTE funding had been exhausted. It provided that

the success fee would be 50% if the case settled more

than 3 months before the trial date and 100% if it settled at

any time thereafter. By the time it was entered into liability

and causation had been conceded but there was no Part

36 offer. On appeal the solicitor’s success fee was

reduced from the 33.3% allowed at first instance to 15%

(there were complex Part 36 provisions in the CFA) and

counsel was entitled to no success fee at all where her

CFA was entered into after the admission of liability and

she was still entitled to basic charges if a Part 36 offer was

rejected on her advice and then not beaten, and overall

there were no circumstances in which she would not be

entitled to her basic charges.

Financial hardship Finally, see Legal Services

Commission v (F), (A) and (V) 38 for the circumstances in

which a party should recover its costs from the Legal

Services Commission, because otherwise he would suffer

financial hardship (this now being the test under the

Community Legal Service (Cost Protection) Regulations

2000, rather than “severe financial hardship”) unless an

order were made and it was just and equitable that

provision for costs be made out of public funds.

34 [2004] EWCA Civ 576, [2004] 1 WLR 3002.35 [2011] EWHC 278 (QB).36 SCCO 8 February 2011.37 [2010] EWHC 2584 (QB) (HHJ Behrens with DJ Hill and

Deputy DJ Miller).38 [2011] EWHC 899 (QB).

30 Application 39401/04.31 [2005] UKHL 65, [2005] 1 WLR 3394.32 [2011] EWCA Civ 78.33 [2002] EWCA Civ 303, [2002] 1 WLR 2434.

8 www.39essex.com

Bernard Doherty edits this newsletter. He undertakes all kinds of personal injury work,

and has for some years been recognised as a leader in the field in the main directories.

He has a particular speciality in international cases and is the lead author of the recently

published Accidents Abroad: International Personal Injury Claims (Sweet & Maxwell, 2009).

To view full CV click here.

Judith Ayling undertakes a wide range of personal injury work, and acts for both claimants

and defendants. She also has a substantial practice in the law of costs and often advises

and acts in cases which combine both areas of expertise. In addition she practises in clinical

negligence. She is a member of the Attorney-General’s B panel.

To view full CV click here.

Caroline Allen undertakes a wide variety of personal injury work, regularly providing

advice and representation in high value actions. Workplace claims form a significant

proportion of her practice, including stress, industrial deafness and work-related upper limb

injuries. She also appears at inquests and for claimants before the CICAP.

To view full CV click here.

Alexis Hearnden undertakes a wide range of personal injury work. She has a particular

interest in employers' liability cases and regularly acts for employers and employees.

Clinical negligence now represents a growing part of Alexis’ practice.

To view full CV click here.

Rebecca Drake was a pupil at Thirty Nine Essex Street from 2008-9, during which time

she was awarded a distinction in her LLM, in which she specialised in insurance law.

She joined Chambers as a tenant in October 2009 and now does personal injury cases for

claimants and defendants and already has experience of international litigation.

To view full CV click here.

CoNtRIBUtoRS

David Barnes Chief Executive and Director of Clerking Ben Sundborg Practice Manager

david.barnes@39essex.com ben.sundborg@39essex.com

Alastair Davidson Senior Clerk Graham Smith Assistant Practice Manager

alastair.davidson@39essex.com graham.smith@39essex.com

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