the professional negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Professionals, allegations of fraud, and witness credibility

The headline outcome from Mansion Estates Ltd v Hayre & Co (A Firm) (2016) is HHJ Saffmann considering that it is no less “inherently improbable” that a solicitor would set out to mislead the court than any other person, and going on to find that the Defendant’s documents were “materially compromised”. This was not a case where the judge could find one party had “misremembered” or made an innocent error: he had to decide which witness to prefer, with the corollary that, essentially, the other witness was dishonest.   The judgment sets out a very helpful summary of the ways in which a judge may decide who to believe, and the factors that are likely to be important:-   a) Inherent probability, while extremely important, should not be considered in a vacuum: it would be quite wrong to assume in all cases that serious conduct is unlikely to have occurred Re B (Children) [2008] UKHL 35.   b) The judge referred to the tests summarised, extra-judicially, by Lord Bingham, namely:- The consistency of the witness’s evidence with what is agreed or clearly shown by other evidence, to have occurred; The internal consistency of the witness’s evidence; Consistency with what the witness has said or deposed on other occasions; The credit of the witness in relation to matters not germane to the litigation; The demeanour of the witness.  c) The considerations noted by Gillen J in factors Thornton v NIHE [2010] NIQB 4: The inherent probability or improbability of representations of fact; The presence of independent evidence tending to corroborate or undermine any given statement of fact; The presence of contemporaneous records; The demeanour of witnesses; The frailty of the population at large in accurately recollecting and describing events in the distant past; Does the witness take refuge in wild speculation or uncorroborated allegations of fabrication? Does the witness have a motive for misleading the court?  d) Following Mumtaz Properties v Ahmed [2011] EWCA 610, over and above “demeanour” the judge should consider what other independent evidence was available to support the witness. Contemporaneous written documentation was of the greatest importance in assessing credibility and could be significant not only where it was present and oral evidence could be checked against it, but also where it might be conspicuous by its absence and inferences drawn.

Relief From Sanctions - The Pendulum Swings

    Two decisions delivered shortly before Easter suggest a change in the direction of the Mitchell pendulum. Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWCA Civ 506 is a "must read" decision of the Court of Appeal. It concerns the failure to exchange witness statements. Both parties had failed to serve witness statements whilst a squabble about disclosure rumbled on. The judge found that the breach was not trivial and there was no "good reason" for the failure. But the trial date was not imperilled and the claim would be doomed if relief was not granted. Even though the Mitchell criteria were not satisfied the judge granted relief. The Court of Appeal upheld the decision, emphasising that the default of the defendants was a factor that took the case outside of the Mitchell "expectation" that relief would be refused. Kaneria v Kaneria [2014] EWHC 1165 is a decision of Nugee J. The judge held that Robert v Momentum Services Ltd [2003] EWCA Civ 299 remains good law and Mitchell does not apply to applications for extensions of time made before the expiry of the relevant deadline. Such an application still has to be judged against the post-Jackson overriding objective but the concern to enforce compliance with rules, practise directions and orders does not have a paramount status.      

Failure to serve Witness Statements on time – better late than never?

Mitchell is still providing a rich source of material for articles, and concern for those worried about being the subject of the next big professional negligence action…   Following on from Andrew’s post last week, I recently encountered the scenario where one party sought to vary a Court timetable of directions but it was not agreed.  Clearly, if the directions themselves contained an express sanction then it would have been a simple matter of a ‘new’ CPR 3.9 Application for relief from the sanction.  However, the direction was a standard one that merely stated that compliance should have been by a certain time.    This raises the question of if a party is in default should it make a 3.9 Application or a 3.1 Application?  3.1 expressly refers to the possibility of an application being made after the date for compliance.  Nevertheless, it is probable that in reality the 3.1 Application would entail consideration of the ‘new’ 3.9 in any event, given the specific amendments to the overriding objective (as to complying with rules and orders) and hence be little different to Mitchell.  Further, there is the question of what exactly would be the effect of failing to comply?  There have been many applications for striking out but the starting point is merely a refusal to allow the party in breach permission to rely upon the subject matter of the direction: such as witness evidence in my case.  It is to be noted that there is a specific built-in sanction already for failing to serve witness evidence on time: CPR 3.10.   It seems the Courts are tending nowadays to view any breach of any direction without good cause as one which requires an early Application.  The Applications are usually brought still under 3.1 if within time but if the Application is made after the date for compliance it is tempting to apply in the alternative under 3.9.  The new overriding objective does not alter the need for the Courts to make its assessment of how to do justice to the parties.  Often, it seems an exceedingly short extension of time is considered the correct approach if there is good reason for the delay, backed up by an Unless Order: viz. Fons v Corporal (2013) EWHC 1278.  That was the result in my case.  Many courts have effectively disregarded the old prejudice to the other party test.  It is unclear if anything other than a strict approach will ever will be taken otherwise, as the Court of Appeal has pointed out, the Jackson Reforms will have no teeth.   What has become abundantly clear though, is that failing to comply with any Court order is more serious than a year ago and if you can pre-empt any breach with an Application (with good evidence in support!), then you will be in a much better position.  Opponents are less likely to agree variations/extensions nowadays since they don’t want to miss a trick and moreover don’t want to be criticised by the Court themselves.  In a sense, Jackson and Mitchell have curtailed some of the spirit of cooperation engendered by the Woolf Reforms, albeit by focusing upon proportionality and delay.  Time will tell if that is a good thing. 

Disclosure of insurance cover

A common concern for many claimants and their lawyers in litigation is whether the defendants have effective insurance cover and can thus satisfy any judgment obtained them. When a claimant discovers that he only has a “paper” judgment, he often looks to blame his solicitor. This is what happened in the recent case of Dowling v Bennett Griffin (a firm) [2013] EWHC 1995 (Ch) in which Mr Dowling (“D”) failed to establish negligence by Bennett Griffin (“the Solicitors”) in the original litigation. As part of the earlier litigation, D had brought a counterclaim against P, who was later substituted for P’s limited company, APAL. The service of D’s counterclaim unfortunately led to the other parties’ insurance cover being avoided and the subsequent judgment in favour of D being of little value.   One argument that the judge, Kevin Prosser QC, considered in some detail was whether the solicitors ought to have obtained disclosure of the other parties’ insurance cover during the course of the proceedings. D criticised Bennett Griffin (“the Solicitors”) for failing to insist on disclosure of the insurance as a condition of APAL’s substitution for P as defendants to the counterclaim. The Judge rejected this argument because he considered that the court had no jurisdiction under the CPR or Third Parties (Rights against Insurers) Act 1930 to make this order. He noted that his conclusion was consistent with West London Pipeline & Storage Ltd v Total UL Ltd [2008] UKHC 1296) and previous authorities such as Bekhor v Bilton [1981] QB 923 and Cox v Bankside Members’ Agency [1995] CLY 4122. This case provides a timely reminder of the principle that insurance details are unlikely to be discoverable so long as the insured remains solvent.  

An expert too far .....

The Commercial Court gave short shrift to parties calling insurance experts to opine on meaning of a widely used construction insurance policy. The case of Aspen Insurance UK Limited v Adana Construction Limited [2013] EWHC 1568 (Comm) concerned cross claims for declarations as to whether the claimant insurer was contractually bound to cover the defendant contractor under the terms of a combined liability insurance policy. The defendant was joined in proceedings for damages for personal injury sustained by a crane driver following the collapse of some foundation piles. One issue of note in this case was the way the trial judge treated the issue of insurance experts. The Claimant was given permission at the CMC to call expert evidence from an Insurance expert with wide experience of the combined contractors' liability insurance policy placed in the Lloyd's Market and of the market in which such insurance is placed. The expert was to address the contention that there was a conventional understanding as to the division between public liability and product liability, with the latter cover 'kicking in' exclusively once the Defendant's works had been handed over. According to the Claimant such conventional understanding formed part of the factual matrix of the policy and it was said that that understanding was of assistance in construing the terms of the contract. The judge at the CMC gave permission but left the issue of the admissibility of the expert evidence to the trial judge. At the start of the trial the judge expressed reservations about the relevance and admissibility of the expert evidence but agreed to hear it. The Claimant duly called their expert. The Defendant called evidence in rebuttal. In his judgement Mackie J did not mince his words when expressing his views on the use of such experts: "I expressed reservations about the relevance and admissibility of this evidence at the outset but agreed to hear it. In one sense the Claimant got what it deserved, first responsive evidence from the Defendant even more inadmissible than its own and secondly emergence of a recent example of the Claimant having acted inconsistently with its alleged market understanding .... [the experts'] evidence was irrelevant". The experts had given evidence that included admitting that it was from their interpretation of the contract that they drew their views. On issues of contractual interpretation parties would be well advised before attempting to call expert evidence as to industry use or practice relating to those terms, to conduct a proper analysis of the reason that evidence is necessary. If the evidence simply corroborates one party's understanding of the interpretation then the evidence is likely to be inadmissible or irrelevant. However if a party could demonstrate that industry knowledge and practice informed the contractual intentions of both parties in relation to the disputed provisions then it may be appropriate to request permission for such experts.

Is the past a foreign country? Similar fact evidence in professional negligence claims

Is a claimant entitled to disclosure of previous claims or complaints against a professional on the basis evidence of past transactions show a propensity to negligence? The House of Lords set out the test for admissability of “similar fact” evidence in civil proceedings in O’Brien v Chief Constable of South Wales Police [2005] 2 WLR 1038. In that case, the claimant alleged the police had used oppressive, dishonest and unprofessional methods to extract a confession from him. The claimant sought to support these contentions by adducing evidence to show that the officers concerned had used similar methods in earlier cases.   The House of Lords set out a two-fold test:- a)      Whether the evidence in question was relevant, i.e. potentially probative of an issue in the action; and, if so, b)      Whether the evidence should be admitted in accordance with the overriding objective, including weighing the significance of the evidence against its probative value; the risk of prejudice; and proportionality. Documents that go solely to credit are outside the scope of standard disclosure (Favor Easy Management Ltd v Wu [2011] 1 WLR 1603 applying Thorpe v Chief Constable of Manchester [1989] 1 WLR 665). Is such evidence relevant? It is quite common for professionals to be the subject of complaints or indeed claims, relating to a range of matters from delay to inadequate professional service. Does the fact that a complaint or claim has been made against a professional really make it more likely that he was negligent on a specific occasion? It could even be argued that a previous claim would make the professional more careful in future.   The Court of Appeal (admittedly obiter) actually considered this point in Thorpe. Dillon LJ (with whose judgment Mustill LJ agreed) stated in terms that such evidence would not be relevant:-   But in an action for damages for professional negligence against a solicitor evidence of other claims for negligence made or established against the defendant by other clients in respect of other matters would be irrelevant and inadmissible and discovery in respect of such matters would be oppressive; a plaintiff charging a solicitor with negligence in one matter could not investigate other areas of his practice in an endeavour to establish that he had a propensity to be careless. (at 669G)   Given this, it seems to the author that, to be admissible, such evidence would have to go far beyond evidence allegedly showing a “propensity to be careless” and really be evidence of very similar conduct to that complained of in the action concerned, closer to the sort of evidence that has been allowed in police cases (see above). Further, in a given case evidence of previous claims or complaints was held to be relevant, there may well be grounds for excluding such evidence under the second limb of the test. Widening the scope of the trial to include other unrelated transactions is likely to add significant expense and time to the proceedings and there would certainly be arguments that incurring costs dealing with these transactions would be disproportionate.

Conflicting medical evidence: solicitors' duties in CICA claims

In Boyle v Thompsons Solicitors [2012] EWHC 36 (QB) Mr Justice Coulson considered the scope of a solicitor’s duty in resolving conflicts of expert medical evidence. The claimant (“Mrs B”) claimed damages from the defendant solicitors (“the Solicitors”) for their allegedly negligent conduct of her compensation claim to the Criminal Injuries Compensation Authority (“CICA”).   The CICA claim related to injuries sustained as a result of an assault on Mrs B by her former partner in November 2001. Mrs B applied to the CICA for compensation and in 2003 it made a final award of £5,150. This figure proved to be unacceptable to Mrs B and she instructed the Solicitors to lodge an appeal on her behalf. By the time of the appeal hearing in 2006, Mrs B had taken early retirement on medical grounds. The principal issues in the appeal became the extent to which her PTSD was permanent (which meant she could never work again) and whether the PTSD was solely due to the November 2001 assault.   The appeal was not straightforward because the medical evidence was contradictory. There was evidence from Dr T, Mrs B’s treating psychiatrist, to the effect that the PTSD was permanent and was solely caused by the November 2001 assault. However there was also evidence from an independent psychologist, M suggesting that the PTSD was not permanent and could not be solely attributed to the assault. Furthermore Mrs B had been the victim of a number of assaults, of which only the November 2001 passed the CICA threshold test and thus qualified for compensation. In addition Mrs B had a history of depression.   The CICA Panel rejected Mrs B’s appeal, deciding (amongst other matters) that the cause of Mrs B’s PTSD was multi-factorial, that the PTSD was not permanent and that it was not the cause of her retirement.     Mrs B sued the Solicitors. Notwithstanding that the Solicitors had asked M, the psychologist, to reconsider her opinions in the light of Dr T’s views, Mrs B argued in effect that they should have made further approaches to M, the psychologist, in an attempt to “beef up” her evidence in relation to the permanent nature of the PTSD and its causation.   In finding that the solicitors were not negligent, Mr Justice Coulson noted an important feature of the CICA scheme, namely that applicants were required to disclose all medical reports obtained. He considered that the solicitors had acted appropriately in asking M to reconsider her views in the light of Dr T’s evidence. It was an unrealistic criticism of the solicitors that they should have done something more about the difference in views between M and Dr T. It was not for the solicitors to “manipulate the evidence of the independent expert, particularly in a CICA claim..” where all reports had to be disclosed to the Panel. In the circumstances the solicitors did all that they reasonably could and Mrs B’s claim was dismissed.   As a postscript, the judgment also contains an useful analysis of quantum, where the underlying action concerns a CICA claim.