pnBlawg

the professional negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Getting your hands on an undisclosed expert report

When the other side wants to change expert are you entitled to their original expert’s reports and other documentation containing the substance of the expert’s opinion? This was the question considered in the case Allen Tod Architecture v Capita Property and Infrastructure Ltd ([2016] EWHC 2171) - a professional negligence claim by an architect against a structural engineer in the TCC. Unsurprisingly the claimant in that case resisted disclosure on the grounds that the documents and reports sought were privileged. The claimant had grown exasperated by his expert’s delays and shortcomings and so turned to an alternative expert. At paragraph 32 of his judgment the judge set out the authorities and principles to be applied when considering whether to grant permission to a party to change expert:  (1) The court has a wide and general power to exercise its discretion whether to impose terms when granting permission to a party to adduce expert opinion evidence (2) In exercising that power or discretion, the court may give permission for a party to rely on a second replacement expert, but such power or discretion is usually exercised on condition that the report of the first expert is disclosed (and privilege waived - see Vasiliou v Hajigeorgiou [2005] 1 WLR 2195) (3)  Once the parties have engaged in a relevant pre-action protocol process, and an expert has prepared a report in the context of such process, that expert then owes a duty to the Court irrespective of his instruction by one of the parties, and accordingly there was no justification for not disclosing that report as a condition for changing expert (see  Edwards-Tubb v JD Wetherspoon plc [2011] 1 W.L.R. 1373)  (4) The court's power to exercise its discretion whether to impose terms when giving permission to a party to adduce expert opinion evidence arises irrespective of the occurrence of any ‘expert shopping’. It is a power to be exercised reasonably on a case-by-case basis, in each case having regard to all the circumstances of that particular case.  (5) The court will require strong evidence of ‘expert shopping’ before imposing a term that a party discloses other forms of document than the report of expert A (such as attendance notes and memoranda made by a party's solicitor of his or her discussions with expert A) as a condition of giving permission to rely on expert B (see (BMG (Mansfield) Ltd v Galliford Try Construction Ltd  [2013] EWHC 3183)  In the case of Allen Tod itself the judge found that there was no real reason for making a distinction between the expert’s final report, draft or provisional reports or other documents setting out his opinion: neither would have been discloseable if the expert had remained the claimant’s expert. He ordered disclosure of the original expert’s notes and preliminary report as a condition of permitting the claimant to rely on the new expert and he also ordered disclosure of any document in which the original expert had provided his opinion. To the extent any other material was contained in any such document, it was to be redacted before disclosure.

Caught out by the court fee: a forewarning on issuing claims protectively

Facts The case of Richard Lewis & Others v Ward Hadaway [2015] EWHC 3503 (Ch) concerned 31 professional negligence claims brought against a firm of solicitors relating to conveyancing transactions. In the pre-action correspondence, the individual claims were each valued in the hundreds of thousands with a collective worth of £9 million. However, when the Claimants’ solicitors filled in the claim forms, the anticipated value for each case was considerably understated. Each claim form was then amended prior to service to reflect its true worth and the balance of the appropriate fee was paid. All the claims were sent to the court very near to the end of the limitation period, eleven of which being delivered to the court before, but not issued by the court until after, the expiry of the limitation period.  The Defendant’s alleged that this system was an abuse of process and sought to strike out the claims. In the alternative, the Defendants sought summary judgment on the eleven claims issued after expiry of limitation alleging that they were statute barred.  On 21 December 2015 Mr John Male QC, sitting as Deputy High Court Judge in the case, delivered judgment. Judgment With regards to the strike out application, Judge Male opined that intentionally issuing a claim form lower than its true value amounted to an abuse of process. He added that such practices materially affect the court system’s cash-flow and that it would not be in the public interest to condone such behaviour. His reasoning was supported by the fact that the Claimants’ solicitors had previously been critiqued in several other cases for employing such a scheme.  Interestingly, he did not go on to strike out the claims. Following Zahoor v Masood [2009] EWCA Civ 650 he held that allowing the Claimants to continue with their claims in light of the abuse of process would not be “an affront to the court”, paragraph [84]. His decision was based on the following findings: the prejudice that would result to the Claimants was substantial, the abuse of process did not go to the root of the claim, the potential worth of the claims was high and the Defendant would still able to argue limitation in some of the cases. He then went on to consider the application for summary judgment in respect of eleven of the claims. After considering the relevant CPR, statutory provisions and case-law he concluded that the claims were statute barred. His reasoning was that for a claim to be brought for the purposes of the Limitation Act 1980, the Claimant must have done “all that was in their power to do to set the wheels of justice in motion”, Aly v Aly (1984), paragraph [105]. He held that this had not been done for the eleven claims as the Claimants could have paid the appropriate issue fee.   Comment Whilst it is important to appreciate that Lewis v Hadaway is a High Court decision and is subject to review by the appellate courts, the potential ramifications of this judgment are far reaching. The decision is likely to result in a flurry of interlocutory applications brought by Defendants to extinguish claims where the claim form is issued and the court fee is increased after issue. In turn, this is likely to generate satellite litigation against solicitors, particularly in the professional negligence sphere where there is no recourse for claimants to a discretionary extension of the limitation period. The ruling also raises pertinent questions about access to justice. Last year court fees were significantly increased with a 5% levy on all claims over £10, 000. It is questionable where the dual effect of this judgment and the increases leave a Claimant who is impecunious but the potential recipient of a high-value claim. Judge Man alluded to this situation and held that for “a financially strapped litigant…[i]t may well be that, in that sort of case, there would be no abuse of process”, however, he went on to say that this would only be the case where there was “complete transparency” between the parties as to the undervaluing of the claim forms, paragraph [58]. It is difficult to see why the Defendant’s solicitors would permit such course of action when they can simply have the claim struck out. Some consolation comes from the court fee remission system which is open to Claimants who have a small amount of savings and receive certain benefits or are on a low income. However, whilst this may assist those at the lowest end of the spectrum it fails to address the plethora of Claimants who do not fulfil this criterion. The judicial reasoning is also worthy of analysis. Judge Male’s s ruling on summary judgment was a technical one; if the issue fee is not correctly paid and the claim form is issued by the court outside the limitation period then the action will be statute barred. It is interesting to compare this to an identical scenario but where the claim form is issued by the court before expiry, the only difference being when the court issues the claim form. Given that the intention of the parties is the same and that the issuing of the claim form by the court is down to administrative chance, is there really any difference between these two cases? Either the Claimants in both scenarios did everything in their power to set the wheels of justice in motion, or, if it is deemed they did not because the correct fee was not paid then surely both claims should be summarily dismissed? A strict application of Judge Male’s ratio will cause arbitrary distinctions between cases and one is left wondering whether focusing on abuse of the process would have been a more pragmatic approach.

The "new approach" to applications for extensions of time to appeal

A recent judgment of the Court of Appeal has extended the spectre of the robustness of the 'Jackson Reforms' yet further. Although the approach courts now take is somewhat softer following the Court of Appeal's judgment in Denton, there is no doubting that the earlier decision in Mitchell has changed the landscape of litigation, at least in cases where concession or relief is sought and where default is a factor.   Much like the aforementioned cases, known by the name of the most easily-remembered party, the conjoined appeals of Regina (Hysai) v Secretary of State for the Home Department / Fatollohipour v Alibadibenisi / May v Robinson (2015) The Times Law Reports 22/1/15, are likely to be most easily referred to (for obvious reasons) by the names of the parties to the final appeal.   Here, Moore-Bick LJ giving the concurred-with judgment of the court (Tomlinson LJ and King J), held that retrospective applications for extensions of time for filing a notice of appeal should be treated in the same way as an application for relief from sanctions and that the court should take a similarly rigorous approach to the same. This notwithstanding, the Court was particularly at pains to point out that such a robust approach should not encourage parties to act unreasonably and refusing to cooperate in the hope that this will provide  a litigation advantage. The court proffered the following guidance relevant to appeals in civil cases:     shortage of funds was not a good reason for a delay;   the fact a person was a litigant in person was of no significance when the court assessed the seriousness and significance of a failure to comply with rules and directions of the court. The more important question was whether it amounted to a good reason for the failure which occurred. This will depend on the specific facts of a case, however the mere fact of being a litigant in person did not afford good reason for default; and   the court should usually decline to hear argument as to the underlying merits of the appeal, other than in cases where the merits were patently either very strong or very weak, as to do so routinely would unreasonably use up unnecessary court time and drive up costs.

Adding a new cause of action after expiry of limitation

It is well known that a court can permit a party to amend its case to plead a new cause of action even though, had it been starting such a claim in freestanding proceedings, it may have been statute-barred. CPR 17.2 provides that the court “may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings”.   What if the parties cannot agree as to whether the limitation period for the new claim has expired or not? Such a situation can arise where there is a dispute as to a claimant’s date of knowledge. In Chandra v Brooke North [2014] TCLR 1 Jackson LJ said (at paragraphs 65-67) that there are essentially two options. The court can treat it as a “conventional amendment application”. It will not descend into factual issues seriously in dispute, but rather will consider whether the defendant has a “reasonably arguable case on limitation”. If the court refuses permission to amend the claimant can issue fresh proceedings in respect of the new claim; the defendant can plead its limitation defence and the limitation issue can be determined at trial (often as a preliminary issue).   0 0 1 346 1973 1 Chancery Lane 16 4 2315 14.0 Normal 0 false false false EN-US JA X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:Cambria; mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Cambria; mso-hansi-theme-font:minor-latin; mso-ansi-language:EN-US;} On whom does the burden lie to prove or disprove the limitation defence? That was issue for the Court of Appeal in Mercer v Ballinger [2014] EWCA Civ 996. The Master of the Rolls decided that the burden was on the Claimant to prove that the Defendant did not have a reasonably arguable limitation defence. Thus he held (at paragraph 27): “The claimant is after all in effect inviting the court to make a summary determination that the defence of limitation is unavailable. If the availability of the defence of limitation depends upon the resolution of factual issues which are seriously in dispute, it cannot be determined summarily but must go to trial. Hence it can only be appropriate at the interlocutory stage to deprive a defendant of a prima facie defence of limitation if the claimant can demonstrate that the defence is not reasonably arguable.”

Mitchell re-visited:Court of Appeal hears three linked relief from sanctions appeals

On 16 and 17 June 2014 the Court of Appeal took the unusual decision to hear three appeals together which concerned relief from sanctions and the application of Mitchell principles. One of the appeals was from the decision in Utilise TDS Ltd v Davies [2014] EWHC 834 (Ch). Both the Law Society and Bar Council intervened arguing that the approach of the Court of Appeal in Mitchell had ‘spawned a new style of litigation’ where instead of actively working together to bring a case to trial, parties are focused on ‘catching each other out’. Appearing for the Bar Council, Mark Friston said the Bar has concerns about the way Mitchell is being applied. It has a ‘corrosive effect on cooperative conduct’ and has 'taken the civility out of civil litigation'. The Law Society argued that the test in Mitchell had been too narrowly drawn and that instead of 'trivial' breaches leading to relief being granted, the test should be whether the breach was 'immaterial', meaning that it had no detrimental effect on the course of the litigation. Judgment was reserved, however to see how the arguments unfolded take a look at the video on the Law Society Gazette website at http://www.lawgazette.co.uk/law/featured-broadcast-mitchell-sanctions-damaging-to-litigation-society/5041713.article.

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.      

Mitchell revised?

A little light relief for Friday afternoon. A decision of Males J started doing the rounds last week:  Vivek Rattan v UBS AG, London Branch [2014] EWHC 665 (Comm). It is well worth a read, not least because it is short. The case concerned misselling (or as the Claimant put in its skeleton argument “misspelling”) of investments. The Claimant took the point that the Defendant’s costs budget had been filed less than the required seven days before the relevant CMC. Applying Mitchell (which of course also involved late service of a costs budget) the Claimant contended the Defendant was only entitled to court fees. Males J described this argument as “manifest nonsense”. That might seem surprising. Is this the start of the tide turning against the harshness of the Mitchell regime? It is nothing of the kind. Reading the case itself dispels any such a notion. The Claimant’s solicitors had written to their opponents asking for confirmation that they would file their budget “on 28 February 2014”; the Defendant’s solicitors agreed that they would file it “by 28 February 2014”. They filed it on 28 February 2014. That was six, not seven, clear days before the CMC. What is the difference between this case and Mitchell? As Males J put it with heavy irony, “the unsophisticated reader might think that [the correspondence] was the clearest possible agreement that a costs budget exchanged on 28 February 2014 would be in time but [Counsel for the Claimant] submits that such a reader would have failed to grasp the true subtlety of this correspondence”. The judge rejected this submission holding: “It is clear that there was an agreement. Even if [the Claimant’s] strained construction of the correspondence had been justified, the Defendant’s solicitors understanding of the position was entirely reasonable. If relief from sanctions had been necessary, which in my judgment it was not, the case for such relief would have been overwhelming”. In this author’s view, Rattan does not signal a dilution of the Mitchell principles. Instead, it is an illustration of the difference between a genuine Mitchell point and one which is, in the words of Males J, merely “futile and time-wasting” and will be discouraged by the courts. As Leggatt J put it in Generali Romania Asigurare Reasigurare SA v Ardaf SA Insurance & Insurance Co [2014] EWHC 398 (Comm): “The decision ... in Mitchell ... has rightly been described as a “game changer” [...]. It is important for litigants to understand, however, how the rules of the game have changed and how they have not. The defendants in this case have sought to rely on Mitchell to turn to their tactical advantage a short delay by the claimants in providing security for costs which in itself had no material impact on the material impact on the efficient conduct of litigation. [...] The defendants’ stance disregarded the duty of parties and their representatives to cooperate with each other in the conduct of proceedings and the need for litigation to be conducted efficiently and at proportionate costs. It stood Mitchell on its head.”

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.