Welcome to the twentieth edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2013.
These updates are aimed at keeping you up to speed and informed of the latest developments in caselaw relevant to your practice.
This week's caselaw
- Wilson v Ministry of Defence
Court considers the meaning of "the trial has started" in CPR r36. - Venulum Property v Space Architecture &
Ors
An application to extend time demonstrates the new approach of the courts post-Jackson. - Rogers & Anor v Hoyle
A Clyde & Co case on whether an independent accident report is admissible as evidence. - Mauritius Commercial Bank v Hestia Holdings &
Anor
A case on whether the parties can change the governing law of a jurisdiction agreement. - Cruz City 1 v Unitech
Court decides whether an arbitration claim form could be served on the defendant's solicitors and disclosure of assets for enforcement.
Wilson v Ministry of Defence
The meaning of "the trial has started" in CPR r36
A Part 36 offer can be accepted at any time before it is withdrawn. However, the permission of the court is needed to accept a Part 36 offer if (inter alia) "the trial has started" (see CPR r36.9(3)(d)). This case concerned the meaning of those words.
The claimant suffered personal injury as a result of her exposure to asbestos while laundering her husband's clothes (which were contaminated with asbestos dust as a result of his employment). The defendant employer admitted liability for her injury but its primary defence was that the claim was time-barred. If the claim was not time-barred, it also disputed the nature and extent of the claimant's injuries. The judge ordered a separate trial of the issue of limitation (pursuant to his case management power under CPR r3.1(2)(i)). At the conclusion of that trial (with judgment given in favour of the claimant) and two days before the start of the final assessment hearing, the defendant purported to accept the claimant's earlier Part 36 offer. The claimant argued that the court's permission was required because trial had already started. The defendant countered that it was entitled to accept a Part 36 offer without the court's permission in the period between the two separate trials.
Iain Hughes QC HHJ (on appeal from the district judge's decision that the court's permission was required) held that CPR r36.9(3(d) "takes effect at the start of the first (or only) contested trial. Thereafter, and without interruption, the requirement to obtain permission continues until the conclusion of the action as a whole". Accordingly, the court's permission had been required for the defendant to accept the Part 36 offer.
The judge held that Part 36 should not be construed without regard to the rest of the CPR. For example, a definition of trial had been set out in CPR r45 and the fact that that definition was not repeated in CPR r36 was significant. Nothing in the wording of the Part 36 rule suggested that "the trial has started" meant the start of each separate contested hearing. Furthermore, Part 36 is designed to encourage early settlement. The interpretation which the judge was giving to the words in question would not make it harder to settle: "the court is most unlikely to refuse to permit the parties to settle on the basis of a Part 36 offer, but is likely to impose terms that prevent the offeror being disadvantaged by the fact that an early Part 36 offer was only accepted after the start of the trial, or the start of the trial of the contested issue".
Venulum Property v Space Architecture & Ors
Application to extend time and the new approach of the courts
http://www.bailii.org/ew/cases/EWHC/TCC/2013/1242.html
CPR r7.4(1) provides that particulars of claim must be served on a defendant within 14 days of service of the claim form. However, CPR r7.4(2) provides that "particulars of claim must be served on the defendant no later than the latest time for serving a claim form". In this case, the claim form was served on the last day for service (ie 4 months after the issue of the claim form) and right at the end of the relevant limitation period. The claimant's solicitors mistakenly believed that they could serve the particulars 14 days later, whereas, here, the particulars should have been served with the claim form. The claimant therefore sought an extension of time for service of the particulars of claim in accordance with CPR r3.1 (which allows the court to extend time for compliance with a rule) and CPR r3.9 (relief from sanctions).
As has been previously reported, CPR r3.9 has been radically amended with the replacement of the nine factors which the court had to take into account with just two factors (the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with the rules).
The transitional provisions provide that the change to CPR r3.9 does not apply to applications for relief from sanctions made before 1 April 2013. The application here was made before that date, but the parties agreed that, since the application was made under CPR r3.1, the amendments to CPR r3.9 were relevant. Counsel for the defendant conceded that the nine factors deleted from CPR r3.9 could not now be ignored, even though they no longer had to be taken into account. Edwards-Stuart J found that the factors were fairly evenly balanced in this case. The absence of a good reason for non-compliance with the time limit was an important factor, but on the other hand, the claim would be lost if the application failed.
Although the judge felt it might ordinarily be proportionate to allow the application, three factors militated against that conclusion:
- The claimant had delayed for over 5 years before instructing solicitors;
- The claim against the defendant in question was not a strong one and there was reason to believe that the claimant would be able to recover in full from the other defendants (who, the judge noted, appeared to be covered by suitable insurance); and
- The claimant was seeking to advance a bad faith claim that was vaguely worded.
In light of the stricter approach to be taken by the courts where there has been a failure to comply with the rules, the judge concluded that the application should be refused.
Rogers & Anor v Hoyle
Whether an independent accident report is admissible as evidence
Clyde & Co (David Willcox and Andrew Krausz) for defendant
The issue in this case was whether a report produced by the accident investigation branch of the Department of Transport was admissible as evidence. Leggatt J held as follows:
- The report contained a mix of statements of fact and statements of opinion. The factual evidence was admissible since it was relevant and the fact that it is hearsay was not a ground for its exclusion (in light of the Civil Evidence Act 1995).
- The statements of opinion would be admissible if made by qualified experts on subjects involving special expertise. However, the defendant sought to rely on prior caselaw which had found that the findings of tribunals and inquiries are not admissible in subsequent proceedings. The judge held that the rationale for this is that it is the duty of the court to form its own opinion on the evidence put before it and the court should not be influenced by the opinion of someone else, however reliable that opinion might be.
- However, the judge found that a distinction needed to be drawn between judicial findings and expert opinions. Here, he decided that the report contained findings by an expert investigator and not a judge. Nor had the investigator acted as a judge. Instead, it was held that the report was similar to an expert report commissioned by the parties to litigation (although it did not fall within CPR r35). Accordingly, the report was admissible as evidence.
- The judge also refused to exercise his discretion under CPR r32 to exclude the report in whole or in part. Instead, it was for a trial judge to assess how much weight should be given to findings in the report which had not been attributed to any named individual (and was based on an exercise in evaluating and discarding evidence which had not been disclosed).
Mauritius Commercial Bank v Hestia Holdings & Anor
Whether parties can change the governing law of a jurisdiction agreement
http://www.bailii.org/ew/cases/EWHC/Comm/2013/1328.html
The parties entered into an agreement which was governed by the law of Mauritius and provided that the courts of Mauritius would have exclusive jurisdiction. Thereafter, the parties entered into an Amendment and Restatement Agreement which provided that the agreement would be governed by English law and that the English courts would have exclusive jurisdiction. Following a dispute, the claimant began proceedings here and the defendant sought a stay on the ground that the English court did not have jurisdiction.
Article 3.2 of the Rome 1 Regulation permits the parties to change the governing law of their agreement at any time but Article 1(2)(e) excludes jurisdiction agreements from the scope of the Regulation. The issue of whether the parties in this case had changed the governing law of the jurisdiction clause in their agreement therefore fell to be governed by the English rules of private international law.
Popplewell J held that it is possible under those rules for the parties to agree a prospective change to the law governing their jurisdiction agreement (although he left open the question of whether the parties could also agree a retrospective change - something which does have some prior judicial support).
He held that there was a strong policy for allowing this on the ground of contractual autonomy. There might be a variety of good commercial reasons why the parties might want to change the governing law of their agreement, and hence a desire to also change an agreement on jurisdiction so that the courts of the newly chosen jurisdiction could apply their own system of law.
In any event, the claimant had established English jurisdiction in this case by serving on the defendant's designated agent in accordance with a clause in the contract (and pursuant to CPR r6.11(1) - service of the claim form by a contractually agreed method).
Cruz City 1 v Unitech
Whether arbitration claim form could be served on defendant's solicitors/disclosure of assets for enforcement
Cooke J permitted service of an arbitration claim form by an alternative method under CPR r6.15 - namely service on the defendants' solicitors who had not been authorised to accept service. The defendants argued that there were no exceptional circumstances to justify such an order here. That argument was rejected by Field J. He noted that it was the "invariable practice" of the Commercial Court in relation to arbitration applications relating to arbitrations seated within the jurisdiction, to allow service on a party's solicitor who has acted for that party in the arbitration (provided that that solicitor does not appear to have been disinstructed and absent any other special circumstances). He held that that practice should apply in this case.
The claimant sought an order under section 37 of the Senior Courts Act 1981 to compel the defendants to provide disclosure, verified by the affidavit of a proper officer, of all their assets worldwide (in order to aid enforcement of an award in its favour). The defendants sought to rely on the House of Lords decision in Masri v Consolidated Contractors (see Weekly Update 30/09) to argue that the court had no power to compel their manager (who is resident and domiciled in Greece) to attend court and give information about their assets. That argument was also rejected by Field J. Although Masri held that CPR r71 does not have extra-territorial effect, that does not meant that a post-judgment order made under section 37 of the SCA 1981, against a party who is subject to English jurisdiction, is no longer valid. Here, the order was not addressed to a non-party outside the jurisdiction, but instead was an order against the defendants who are subject to the court's jurisdiction.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
