UK: (Re)Insurance Weekly Update 17 - 2015

Last Updated: 19 May 2015
Article by Nigel Brook

Welcome to the seventeenth edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2015.

Chinnock v Wasbrough

Court of Appeal considers "knowledge" under the Limitation Act 1980

In 2001, the claimant was advised that she did not have a viable claim against the NHS. After receiving different advice in 2009 she commenced proceedings against her former solicitors for negligence in 2010. At first instance, the judge held that her claim was time-barred and she appealed against that finding.

Section 14A of the Limitation Act 1980 provides for a special time limit where the facts relevant to a cause of action are not known at the date of accrual. A claimant will have 3 years from the date he/she has the knowledge required to bring an action for damages which in turn means knowledge both (a) of material facts about the damage and (b) of the other facts relevant to the action (including that the damage was attributable in whole or in part to the act which is alleged to constitute negligence). However, the claimant need not know that the acts/omissions did or did not, as a matter of law involve negligence (section 14A(9)).

The Court of Appeal unanimously agreed that the claim was time-barred but for differing reasons.

Jackson LJ and Longmore LJ held that the negligence referred to in section 14A(9) was that of the defendant and not a third party (here, the NHS). Accordingly, time started to run as soon as she knew, or ought to have known, that she had lost a viable cause of action (even if she did not at that point know whether her solicitors' advice was negligent). Accordingly she had constructive, but not actual, knowledge in 2001 (ie knowledge which she might reasonably be expected to have acquired from the facts observable by her (with the help of appropriate expert advice if necessary)): "[The claimant] was deeply unhappy with the legal advice which she received in 2001... She therefore had a choice. She could either consult other lawyers or she could let matters rest. ... I do not think that it was open to [the claimant] to abstain from further inquiries for more than six years (in this case eight years) and then to seek legal advice".

However, Roth J agreed with the judge at first instance that the claimant had had actual knowledge in 2001 (although he also accepted that there was constructive knowledge at that time too), even if she hadn't known then that the NHS Trust was negligent: "In my view, that further knowledge...has to be disregarded by reason of section 14A(9). The words of that subsection refer to "any acts or omissions", and I do not see that they can be confined to acts or omissions of the defendants".

Cashman v Mid Essex Hospital Services

Whether claimant entitled to additional percentage on damages under Part 36 on a detailed assessment of costs

For Part 36 offers made on or after 1 April 2013, CPR r36.14(3)(d) introduced an additional 10% uplift on all damages where a defendant rejects a claimant's offer and then fails to equal or beat it (subject to a cap of Ł75,000).

In this case, the claimant had made a Part 36 offer as to costs after the case settled, which had been rejected and he had gone on to beat the offer. A costs master refused to order the additional amount on a detailed assessment of costs, holding that costs have to be treated slightly differently from the damages when considering CPR r36.14(3)(d).

The appeal from that finding has now been allowed. It was held that the starting point should be that a claimant is entitled to the extra amount under CPR r36.14(3)(d) unless that would be unjust. In this case the Master had said it would be unjust to order that extra amount because there had been a significant reduction to the Claimant's bill of costs. That approach was said to penalise the claimant for making what turned out to be a reasonable Part 36 offer: "It is the terms of the Part 36 offer not the level of the sums claimed in the bill of costs which are to be considered under CPR r36.14(4). Whilst all the relevant circumstances are to be considered in deciding whether it would be unjust to make an award under any of the paragraphs of CPR 36.14(3), it was not suggested that there was any particular feature or consequence of the bill of costs other than its size which would render the making of an order under CPR r36.14(3)(d) unjust".

The judge also cautioned against the "temptation" to refuse the extra amount under CPRr36.14(3)(d) "not because he considered the making of such an award unjust but because he thought it unjust to make an award of the required amount, 10% of the assessed costs".

COMMENT: After an apparent initial reluctance to order the 10% uplift, the courts now seem increasingly prepared to do so. This case is noteworthy in that it makes clear that the court must consider any additional amount under CPR r36.14(3)(d) unjust in order to refuse the uplift - it will not be sufficient to consider the percentage alone unjust.

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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