UK: (Re)Insurance Weekly Update 03-14

Last Updated: 13 March 2014
Article by Nigel Brook

Haxton v Philips Electronics

Court of Appeal decides whether a widow could recover full loss of dependency in proceedings brought in her own name – of possible interest to employers' liability insurers

The first instance decision in this case was reported in Weekly Update 26/13. Mrs Haxton contracted mesothelioma during the course of her husband's employment with the defendant because she used to wash his work clothes, which were covered with asbestos dust. She brought two claims against the defendant: (1) a claim as executrix of her late husband's estate; and (2) a claim in her own name for her own mesothelioma. In the first claim, she claimed her loss of future dependency under the Fatal Accidents Act 1976. However, it is well-established that the amount of such a claim will depend on the life expectancy of the dependant and in this case, that had been reduced due to the admitted negligence of the defendant.

Mrs Haxton therefore sought to recover in the second claim the full loss of future dependency which she would have recovered, had she not developed mesothelioma. She argued that the compensatory nature of damages in personal injury claims should put her into the position which she would have been in had the wrong not occurred. That claim was rejected by the judge and she appealed. The Court of Appeal has now allowed her appeal.

It held that there were no policy reasons why the diminution in the value of her right to recover for loss of dependency could not be recovered as a head of loss in the claimant's personal action. Nor was the loss too remote: "It is reasonably foreseeable that a curtailment of life may lead to a diminution in the value of a litigation claim and if a claimant has such a claim, the wrongdoer must take the victim as he finds him. I would be inclined to think that this would be the case even if Mrs Haxton's tortfeasor had not been the same as her husband's. But the remoteness argument is, in my judgment, even harder to sustain in circumstances where the same tortfeasor is responsible for injuries to both husband and wife".

Dinsdale Moorland v Evans & Ors

Complying with an unless order for disclosure

An unless order was made against the three defendants on the basis that their disclosure had been inadequate (specifically, that one composite list had been served, rather than three separate lists). Three lists were subsequently served on the claimant but the claimant alleged that the unless order had been breached and so sought a declaration that the defences had been struck out.

Behrens J, applying Realkredit v York Montagu [2013], held that as lists had been provided following the unless order, it would have to be shown that there had been a lack of good faith by the defendants, or that the lists were "illusory" in order to justify the declaration being sought (i.e., in the words of Toulson LJ, "it was obvious from patent deficiencies in the list that it had been prepared in apparent but not real compliance with the obligation to give discovery".

It was held that this test had not been satisfied here. Although reasons for redactions had not been stated in the lists, and some documents had been inadvertently omitted, those grounds did not amount to a lack of compliance with the unless order. Nor did it matter that an application for specific disclosure would, or might, elicit further documents.

The judge also referred to the recent Court of Appeal decisions of Mitchell (Weekly Update 43/13) and Durrant (Weekly Update 46/13), and said that if he had found that the unless order had been breached, it would have been most unlikely that he would have been able to grant relief from sanctions (although he would not have awarded the claimant all its costs because it had failed to set out its concerns regarding the lists, despite being asked to do so by the defendants).

Webb Resolutions v E-Surv

Application to extend time to seek permission to appeal/application of Mitchell where no sanction specified

An order refusing permission to appeal (on paper) was made in July 2013 but the defendant did not receive that order until 10 October 2013. The defendant subsequently served an application for an extension of time within which to seek an oral renewal of its application for permission. Blair J then made an order both extending time and giving permission to appeal. The claimant sought to set aside that order (relying on CPR r23.11(2) which allows a party which did not attend a hearing (as was the case with the claimant here) to have the application re-listed).

Turner J noted that the power to re-list an application should be used sparingly. He went on to find that Blair J had mistakenly taken into account the delay in sending the order to the defendant. Instead, CPR r52.3(5) provides that a request to renew an application for permission to appeal "must be filed within 7 days after the service of the notice that permission has been refused". There was no causal connection here between the delay in receiving the notice and the defendant's failure to comply with that 7 day deadline.

The Mitchell decision was handed down on the same day as the hearing before Blair J and the judge reached his decision without reading that judgment. However, Turner J held that the case had been of central relevance here. He said that although CPR r52.3(5) does not provide for a specific sanction if the application is served out of time (and so, strictly speaking CPR r3.9 did not apply), "I am satisfied, however, that it is appropriate for the court to apply the same approach to such an application as falls to be examined in this case as did the Court of Appeal to the breach relating to the costs budgeting in Mitchell". That was because CPR r52.3(5) was unequivocally expressed in mandatory terms, the 7 day deadline was deliberately short and there was a clear and compelling priority for there to be an end to litigation here.

Therefore, applying the Mitchell test, he found that the delay here had not been trivial and that there had been no good reason for it. Indeed, the defendant's solicitors' excuse that instructions had not been received from their client until after the 7 day deadline had expired was said to be a "thoroughly bad" reason.

Accordingly, Blair J's order was set aside.

COMMENT: Since no sanction was specified in the rules for a breach of the relevant provision in this case, the parties here could have agreed to extend time but since the claimant was obviously not prepared to do so, a contested application had to be brought. Although Mitchell was decided in the context of an application for relief from sanctions, this case makes it clear that the principles laid down in that case will be applied by the courts in relation to applications to extend time too, since such applications will still be governed by the new overriding objective which places an emphasis on enforcing compliance with rules, practice directions and orders.

M A Lloyd v PPC International

Failure to serve witness statement in time/whether witness cannot be called to give evidence on other witness statements

The claimant was ordered to serve its witness statements regarding a certain issue by 24 October 2013 and the defendant was ordered to serve its witness statements in reply by 29 November. The claimant failed to serve a witness statement (subsequently arguing that it could not do so before the defendant had disclosed certain documents to it) and the defendant applied for an extension of time to file its own witness statements.

Turner J criticised the claimant's solicitors for failing to attend the hearing and instead emailing the defendant's solicitors with a proposed consent order. Although the court has a power under CPR r23.11 to re-list an application where one of the parties is absent, that power is to be exercised sparingly. Furthermore, a party cannot assume that it can absent itself in the assumption that if it is unhappy with the order made it can then rely on CPR r23.11: "Absence in these circumstances may very well turn out to be a false economy".

CPR r32.10 provides that the consequence of failing to serve a witness statement in time is that "the witness may not be called to give oral evidence unless the court gives permission". Turner J queried whether, where the statement of a witness was intended to relate to a distinct issue, a defaulting party will also be precluded from relying on that witness's evidence contained in other witness statements (which were served in time). Although not required to decide the point, he suggested that this would not be the case, although he did raise the possibility that deployment of the witness's oral evidence on such other matters might be dependent on obtaining the permission of the court.

Applying the Mitchell decision, the judge declined to grant relief from sanctions. It did not help that the clamant had volunteered a proposed consent order – the parties cannot agree to extend time where the rules provide a sanction for non-compliance: "This court is under a duty...not simply to adjudicate passively upon the applications of the parties or to rubber stamp their reciprocal procedural indulgencies but actively to manage cases. To this end the court has power under CPR r3.3 to make orders of its own initiative".

Finally, the judge said that the defendant here had been "unduly timid". It should have applied to court in respect of the claimant's default in complying with the order. Nor could it be said that the defendant was in default. The obligations imposed by the order on the defendant were to be "in response" to compliance by the claimant with its own obligations. Since the defendant had nothing to respond to, it could not be in default.

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.

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Nigel Brook
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