How to approach setting aside of a Notice of Discontinuance pursuant to CPR 38.4 and the interpretation of the phrase “likely to obstruct the just disposal of the proceedings”, in CPR 3.4(2)(b) and 44.15(c).
Power to strike out a statement of case
3.4 – (2) The court may strike out a statement of case if it appears to the court –
- that the statement of case discloses no reasonable grounds for bringing or defending the claim;
- that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings; or
- that there has been a failure to comply with a rule, practice direction or court order….
Right to discontinue claim
38.2 – (1) A claimant may discontinue all or part of a claim at any time.
- a claimant must obtain the permission of the court if he wishes
to discontinue all or part of a claim in relation to which—
- the court has granted an interim injunction; or
- any party has given an undertaking to the court;
- where the claimant has received an interim payment in relation
to a claim (whether voluntarily or pursuant to an order under Part
25), he may discontinue that claim only if—
- the defendant who made the interim payment consents in writing; or
- the court gives permission; …
Right to apply to have notice of discontinuance set aside
38.4 – (1) Where the claimant discontinues under rule 38.2 (1) the defendant may apply to have the notice of discontinuance set aside.
(2) The defendant may not make an application under this rule more than 28 days after the date when the notice of discontinuance was served on him.
Liability for costs
38.6 – (1) Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom he discontinues incurred on or before the date on which notice of discontinuance was served on him….
Effect of qualified one-way costs shifting
44.14 (1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of the claimant.
Exceptions to qualified one-way costs shifting where permission not required:
44.15 – (1) Orders for costs made against the claimant may be enforced to the full extent of such orders without the permission of the court where the proceedings have been struck out on the grounds that –
- the claimant has disclosed no reasonable grounds for bringing the proceedings;
- the proceedings are an abuse of the court's process; or
- the conduct of –
- the claimant; or
- a person acting on the claimant's behalf and with the claimant's knowledge of such conduct,
is likely to obstruct the just disposal of the proceedings.
The claimant brought a personal injury claim against his employer, alleging that he was climbing a ladder at work when it slipped.
At the outset of a remote trial the judge noted that there were inconsistencies in the claimant's description of the accident across his pleaded case, witness statement and medical records. The judge briefly adjourned the hearing to allow him to consider his position. Shortly thereafter the claimant served Notices of Discontinuance.
The defendant applied to set the Notices aside pursuant to CPR 38.4 and strike out the proceedings under CPR 3.4(2)(b) arguing that his conduct has obstructed “the just disposal of the proceedings” and consequently should not be entitled to QOCS protection per CPR 44.15(c).
The district judge at first instance granted the defendant's application. She did not specifically address the question of whether the Notices were set aside but proceeded on the basis they would be, focusing on whether QOCS protection should be removed. The judge noted that the claimant dropped his claim at the “eleventh hour and fifty ninth minute” causing a significant waste of costs and court time.
HHJ Freedman allowed the claimant's appeal. The first question should have been whether the Notices should be set aside, which depends on whether there was anything “about the conduct of the Appellant which was so out of the ordinary as to warrant the unusual, if not exceptional, course”. There was nothing of the kind in this case, and accordingly the judge below had no legitimate basis to go on to consider the QOCS exceptions under CPR 44.15. Even if the Judge had decided to set aside the Notices, the only basis for dismissing the claim was by way of summary judgment, thereby preserving QOCS protection.
Court of Appeal
Bench: LLJ Peter Jackson, Nicola Davies, William Davis
Judgment: 17th January 2023
Lady Justice Nicola Davies gave the unanimous judgment, dismissing the appeal.
Setting aside a Notice of Discontinuance
There need to be “powerful reasons” why a Notice of Discontinuance should be set aside; “evidence of abuse of the court's process or egregious conduct of a similar nature is required on an application which has the effect of depriving a claimant of his right to discontinue”.
The approach to CPR 38.4 should not be different in personal injury claims than other claims. To do so would defeat the purpose of the QOCS regime.
“Likely to obstruct the just disposal of the proceedings”
Considering the authorities, LJ Davies formulated and answered the relevant question:
“I would formulate the question thus: is the litigant's conduct of such a nature and degree as to corrupt the trial process so as to put the fairness of the trial in jeopardy? In my judgment, the claimant's conduct did not begin to meet the degree of seriousness which is envisaged in this formulation.
What this claimant did was to give a different account in his witness statement from that which was contained in the Statement of Case. It was a material inconsistency and one which had the potential to undermine not only his credibility but also the viability of his claim. What it did not do was to demonstrate a determination by the claimant to pursue proceedings with the object of preventing a fair trial. If this claimant's conduct is to be regarded as obstructing the just disposal of the proceedings, the same could be said of the conduct of many litigants who present claims for personal injuries.”
CPR 44.15(c) does not create a new principle or independent basis for striking out a claim, rather it prescribes what happens to QOCS protection when a case has been struck out.
LJ Davies noted that the defendant had not alleged that the claimant was or might be fundamentally dishonest. This observation is significant. Had the defendant made, or expressed an intention to make, such an allegation, the case may very well have been decided differently. The argument in that scenario might be: the claimant realistically only discontinued because he realised ‘the game was up' and he was likely to be found fundamentally dishonest; the defendant wanted to pursue a fundamental dishonesty finding; such a finding is realistically far less likely to be secured without oral evidence; disposing of a case justly means allowing both sides a fair opportunity to achieve the result they want; the claimant prevented the defendant from achieving their desired result by discontinuing; thus his conduct was likely to, indeed it did, obstruct the just disposal of the proceedings.
Rabot v Hassam and Briggs v Laditan  EWCA Civ 19
The conundrum of so-called ‘mixed claims'.
Davies LJ described it in this way: “An important question as to the construction of section 3 of the Civil Liability Act 2018 (“the 2018 Act”)…. how is the court to assess damages for PSLA where the claimant suffers a whiplash injury which comes within the scope of the 2018 Act and attracts a tariff award stipulated by the Whiplash Injury Regulations 2021, but also suffers additional injury which falls outside the scope of the 2018 Act and does not attract a tariff award?”
Section 3 of the Civil Liability Act 2018 explains that where a person suffers whiplash injury because of driver negligence, and the duration of the injury does not – or is not likely to – exceed two years, the PSLA damages shall be an amount specified by regulations made by the Lord Chancellor (i.e. the Whiplash Injury Regulations 2021). The awards stipulated in these Regulations are considerably lower than those made by the courts employing a common law assessment based on the Judicial College Guidelines. For example, an injury of 3 months or less without accompanying psychological injury receives only £240, and the highest stipulated award – for an 18 to 24 month whiplash injury with minor psychological injury – is £4,345.
Section 3(8) of the Act does recognise that there will be cases where the claimant suffers both tariff and non-tariff injuries i.e. ‘mixed injury' cases. The Act and Regulations however are unhelpfully silent on how a court should perform the assessment of damages in these cases.
It is possible for a court to award a higher amount however this is subject to a test of exceptionality and the consequent tariff uplift is limited to 20% in any event.
As to the common law approach to quantifying PSLA, the starting point is to return the claimant to the position they would have enjoyed absent the wrong; “reasonable solace for his misfortune” (per the Canadian Supreme Court in Andrews v Grand & Toy Alberta Ltd  2 SCR 229).
There has also been some difficulty in valuing claims involving multiple injuries, because a simple aggregation of the individual injuries will normally represent overcompensation. The approach (“the stand back approach”) in these cases was identified in Pitchford LJ in Sadler v Filipiak  EWCA Civ 1728 at :
“It is in my judgment always necessary to stand back from the compilation of individual figures, whether assistance has been derived from comparable cases or from the JSB guideline advice, to consider whether the award for pain, suffering and loss of amenity should be greater than the sum of the parts in order properly to reflect the combined effect of all the injuries upon the injured person's recovering quality of life or, on the contrary, should be smaller than the sum of the parts in order to remove an element of double counting. In some cases, no doubt a minority, no adjustment will be necessary because the total will properly reflect the overall pain, suffering and loss of amenity endured. In others, and probably the majority, an adjustment and occasionally a significant adjustment may be necessary.”
In Rabot the claimant suffered whiplash injuries, soft tissue injuries to the cervical spine and lumbo-sacral area (tariff injuries) together with soft tissue injuries to both knees (non-tariff injuries), and issued a claim in July 2021.
At the quantum only hearing before District Judge Hennessy the tariff award was assessed to be £1,390 and the non-tariff award to be £2,500, an overall figure of £3,890. Following the guidance of Pitchford LJ in Sadler, the judge added the two figures and then “stepped back” in order to reach a final figure by making an appropriate deduction. The judge identified the clear overlap between the injuries based upon the medical evidence and noted that in terms of loss of amenity there was nothing that could be attributed to the knee injuries alone. The ‘overall award' was assessed to be £3,100.
In Briggs the claimant suffered soft tissue injuries to the neck, upper and lower back (tariff injuries) and to the left elbow, knee and the hips (non-tariff injuries). The same judge (DJ Hennessy) used the same approach as in Rabot namely:
- determine what each injury is;
- value each injury in accordance with whatever scheme/regime is appropriate;
- add them and then step back exercising the type of judicial discretion that judges have been doing over many years;
- reach a final figure by making an appropriate deduction (if any).
The Judge stated that the reduction has to be from the non-tariff amount given that the tariff valuation is fixed. She assessed the tariff award to be £840, the non-tariff award to be £3,000 and reduced the latter figure by £1,040 to recognise the “clear overlap on the basis of the medical evidence”. She made a total award of £2,800.
Court of Appeal
Bench: Masters of the Rolls, LLJ Nicola Davies, Stuart-Smith
Judgment date: 20th January 2023
The two test cases were leapfrogged from Birkenhead County Court.
LJ Davies gave the majority judgment, with a dissenting judgment from the MR.
The claimants' primary case on appeal was that the tariff and non-tariff injuries should be aggregated without any discount applied. Alternatively their secondary case was to use the approach taken by the district judge, although the discounts applied were too big.
The defendants' approach was that both the tariff and non-tariff injuries is to be treated as fully compensated for by the tariff award. Thus only a further small amount would be appropriate for any additional PSLA, if any can be exclusively attributed to the other injuries as being solely caused by them.
The approach of the interveners was that pursuant to section 3(8) when the court is making an assessment of the non-scheme injury, it must make an award of PSLA which “reflects the combined effect” of the tariff and non-tariff injuries. The non-tariff award should reflect and include the totality of any overlap between the PSLA, common both to the whiplash and non-whiplash injuries.
Court of Appeal's decision (majority)
There is nothing in the wording of the statute or in the extra Parliamentary material which suggests, let alone demonstrates, an intention to alter the common law process of assessment for, or the value of, non-tariff injuries. The legislation was directed to and confined exclusively to whiplash injuries. Parliament is presumed not to have altered the common law further than was necessary to remedy the mischief which was the focus of the 2018 Act and the whiplash reform programme i.e. reducing damages for minor whiplash injuries with the aim of discouraging false or exaggerated claims, and reducing associated costs through a bespoke portal process.
Neither section 3(8), nor any other provision of the 2018 Act, either expressly or by necessary implication provides that non-tariff injuries should be assessed by reference to anything other than common law principles. The words in section 3(8) that “Nothing in this section prevents….” indicate that it is open to the court, in a case where the claimant suffers injuries additional to those assessed pursuant to section 3 of the 2018 Act, to make an award that “reflects the combined effect of the person's injuries”. These words are critical to the court's assessment upon common law principles in respect of any award pursuant to section 3(8). This is particularly so when the tariff award cannot be said to reflect full compensation for the person's injuries assessed on common law principles.
The approach of the court to an assessment of damages in respect of a tariff and non-tariff award where concurrently caused PSLA is present is that the court should:
- assess the tariff award by reference to the Regulations;
- assess the award for non-tariff injuries on common law principles; and
- “step back” in order to carry out the Sadler adjustment, recognising that the sum included in the tariff award for the whiplash component is unknown but is smaller than it would be if damages for the whiplash component had been assessed applying common law principles.
There is one caveat, namely that the final award cannot be less than would be awarded for the non-tariff injuries if they had been the only injuries suffered by the claimant.
The defendants' approach would result in the claimant's right to common law compensation for PSLA caused by the non-tariff injury where the whiplash injury is a concurrent cause being effectively extinguished, which is contrary to the stated purpose of the legislation. Among other problems it could lead to a position where a claimant would not pursue a whiplash injury claim in a mixed-injury case because it would have the effect of reducing the overall award.
This position is untenable and the appeals should be dismissed.
In terms of the claimants' cross-appeals, the deduction in Rabot was not wrong in principle or unreasonable. In Briggs the Judge's adjustment resulted in a total figure which was lower than the assessment for the non-tariff injury, which was too great.
The MR concluded that only the tariff damages should be allowed:
“…. the wording of section 3 of the 2018 Act leads inexorably to the conclusion that the first solution is the correct one as a matter of statutory construction. The effect of this conclusion is that Parliament has legislated for the reduction of general damages for non-whiplash personal injuries in cases where whiplash injuries have been sustained, even though the statute does not appear specifically to be directed at non-whiplash cases.”
Ultimately the limits in the Regulations are only respected if the defendants' solution is adopted. There will of course be cases where, despite the concurrent causes, a higher than tariff award for loss of amenity will be required. That would, for example, be the case where the non-tariff injury persisted longer than the whiplash injury, which was not the case here. The solution adopted by the district judge, and favoured by the majority, is not adequately scientific. The tariffs laid down by Parliament “cannot be topped up by using the device of claiming also in respect of other injuries”.
There will be satellite litigation; this is not the end of the story. Until greater clarity is achieved (enter stage right: the Supreme Court?), litigants and courts will have to muddle on using the ‘stand back' approach. There may in time be a working consensus reached, whereby lawyers and judges reach a general sense for how to apply the ‘stand back' discount, but until then judges will struggle to make assessments with reliable and predictable consistency.
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.