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motoring news welcome to our new look motoring news bulletin which has been rebranded as `headlight in this edition we cover case summaries kevin michael abbott v david long ca [2011 beggs v jenkins [2011 waldermar belka v joseph lawrence prosperini [2011 connery v phs group ltd qbd [2011 o connor v stuttard [2011 trevor michael fox v foundation piling ltd [2011 owners and/or bareboat charterers and/or sub bareboat charterers of the ship samco europe v owners of the ship msc prestige [2011 1 katie thompson 2 sophie thompson by their father and litigation friend christopher thompson and maureen williams administrators of the estate of trace ann williams deceased v susan bruce [2011 ben woodham v jm turner t/a turners of great barton [2011 zurich insurance co v colin hayward [2011 articles construction of part 36 offers it s all in the context summer 2011 edition how interesting headlight

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motoring news kevin michael abbott v david long ca [2011 the claimant appealed against a decision making no order as to costs after the trial of his action following a road traffic accident the judge held that the claimant was entitled to damages but there should be a 75 reduction for contributory negligence and the claimant s claim for credit hire was reduced from £48,000 to £8,600 the judge finding that the claimant had pursued a claim driven by the credit hire company which was grossly exaggerated it was on that basis that the judge made no order as to costs conduct the judge was entitled to reduce costs on the basis of her finding that the claimant had failed to mitigate her loss beggs v jenkins [2011 the defendant appealed against a decision that a road traffic accident in which he hit the claimant was avoidable the claimant then a child and his mother had been on the south side of a road and crossed to the north side to get a bus after crossing the claimant s mother realised they were on the wrong side and purported to cross back over a stationary bus was beside them and as the claimant and his mother stepped out the defendant tried to overtake the stationary bus and hit them the accident was witnessed by a bus driver and a bystander the bystander initially said that the claimant and his mother had been walking when they crossed back over the road but later said that he could not remember whether they were walking or running the defendant maintained that they had run into the road the court of appeal held that the starting point was cpr r.44.31 and r.44.32 the claimant had to show that the judge had erred in principle and her decision was perverse the claimant s claim was severely reduced in relation to the costs of the credit hire that was the only basis for deviating from the general rule the claimant argued that there was neither dishonesty nor a at trial the judge was assisted by expert concocted claim just an administrative error evidence he concluded that the claimant the judge had found however that a hirer a and his mother were walking briskly the serial litigant should have in place a system claimant s mother would not launch herself to make sure claims were carefully into the road with the ccaimant in tow the conducted the claimant s conduct was defendant had not seen them long enough to blameworthy and was well outside normal assess whether or not they were running www.dolmans.co.uk 1

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motoring news from a public house where on the evidence the defendant was defensive and he had consumed 4 pints of beer the unsatisfactory had the defendant been claimant and his friend were in the process of travelling at a safe speed the collision would negotiating a bypass they had crossed the have been avoided first two lanes and had reached the `refuge on appeal it was held that the judge was half way across it the claimant then unimpressed with the defendant s evidence proceeded to cross the next section of the in contrast there was the evidence of an bypass at which point he was hit by the independent bystander who had seen the defendant taxi driver whole sequence of events although his second statement said he was unsure whether they had been running or walking this was hardly surprising given the passage of time when the second statement was made the judge had exercised much care and had even recalled the defendant in relation to whether the claimant and his mother had it was held by the judge at first instance that been walking or running he had made a whilst the defendant should have seen the number of calculations based on both running two men on the refuge at least by the time and walking and had in mind the distinction that he was 30 metres away from the same between walking and running speed he had the claimant had taken a risk setting off to have in mind brisk walking when making when unless the driver took some avoiding those calculations had the defendant been action an accident was likely travelling between 15 to 20 miles per hour consequently it was held that the claimant the collision would not have happened was two thirds to blame and the defendant appeal dismissed one third to blame the claimant appealed it was held on appeal that the conduct of the claimant namely deliberately running across the road and into the path of the defendant contributed more to the accident than anything the defendant did or failed to do the appeal was therefore dismissed waldermar belka v joseph lawrence prosperini [2011 the claimant pedestrian was walking home in the early hours of the morning with a friend connery v phs group ltd [2011 the court had to determine following a road www.dolmans.co.uk 2

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motoring news traffic accident whether the accident had caused the claimant to suffer from complex regional pain syndrome liability was admitted but the defendant disputed causation and quantum contending that the claimant was exaggerating her claim the defendant s medical experts formed the view that the claimant was malingering and was significantly less disabled than she claimed that appeared to be supported by video surveillance evidence after viewing the video evidence the claimant s medical experts alerted their views on the prognosis of the claimant s recovery from poor to good the court held that the claimant did suffer from some disability but she perceived herself to be more disabled than she was she clearly had significantly more function than she had led the consultants to believe but she had not deliberately attempted to mislead the court for financial gain crps was the proper diagnosis the claimant s expert medical evidence was generally preferred to that of the defendant there was sufficient temporal and physiological connection between the claimant s disability and the accident it was highly likely that it had been caused by the trauma of the accident and highly unlikely that had arisen spontaneously at that time on balance the claimant was likely to see a significant improvement in her level functioning after the forthcoming treatment and after the stress of the instant proceedings had ended the claimant was entitled to her loss of earnings to the date of trial and as her prognosis was good it was probable that she would return to work after 12 months although parttime there was too much uncertainty about her prospects of promotion to adopt a multiplier/multiplicand approach taking into account the uncertainties £50,000 for loss of promotion was awarded she was awarded damages for one hour of personal and domestic assistance per day from the date of the accident to trial for 12 months thereafter o connor v stuttard [2011 the claimant appealed against the first instance decision to dismiss his claim the claimant who was 9 years old at the material time was playing a ball game with his friends on a quiet street the defendant had driven onto the street with which he was familiar and knew that children tended to play there the judge at first instance found as a fact that the defendant was probably driving at around 10 miles per hour saw the group of children playing to his right and therefore pulled his car into the left but abnormally close to the left hand kerb as he was doing so the claimant was said to have run in front of the defendant s vehicle chasing a ball the claimant then remained www.dolmans.co.uk 3

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motoring news on the pavement to the defendant s left kicking the ball against the wall with his back to the road the claimant then moved backwards to the extent that his left foot overhung the kerb the defendant moved his vehicle slowly forward still very close to the kerb and in doing so struck the back of the claimant s foot causing him injury the judge at first instance dismissing the claim held that there was a risk that a child who had crossed the road once may well cross it again and that the defendant had assessed that the claimant was not going to do that it was therefore reasonable for the defendant to continue at a slow pace as he had done there was no need for the defendant to have sounded his horn as the possibility of the claimant stepping off the pavement was remote on appeal it was held that the judge was wrong to conclude that the possibility of the claimant stepping off the pavement was remote and consequently the finding that the defendant had taken all reasonable care must be set aside it was further held that the defendant knew the street well knew it was used as a playground by children and the duty on him was therefore high the appeal judge found that on the facts of the case the defendant was negligent the claimant was a child playing with a ball with his back to the defendant the defendant should have ensured that the claimant was aware of his presence before proceeding the appeal was allowed and judgment was awarded to the claimant without the need for a retrial trevor michael fox v foundation piling ltd [2011 the appellant had issued proceedings against the respondent in april 2006 claiming damages in excess of £280,000 for compensation for personal injuries liability was agreed but quantum remained in dispute the respondent argued that the appellant had exaggerated his claim being in possession of appropriate video surveillance evidence and that the medical evidence suggested that the accident had merely accelerated preexisting degenerative changes in october 2008 the respondent offered to settle the claim in the sum of £23,550.79 this offer was rejected and the said offer was www.dolmans.co.uk 4

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motoring news in this case it was held on appeal that there withdrawn in november 2009 the respondent making a new offer of was no justification for departing from £31,702.53 this offer was accepted and the the normal rule ie cpr rule 44.32 and the court held that the respondent had been the appellant was entitled to all his costs to be successful party in respect of the period after assessed on the standard basis october 2008 the appellant was therefore ordered to pay the respondent s costs in in starting from the erroneous assumption respect of the said period that the respondent was the successful party it was held that the judge had exercised his discretion wrongly and it therefore fell to be the judge at first instance held that even if he reexercised by the court of appeal the was wrong about the successful party the central issue in terms of conduct was the appellant s conduct warranted him paying the appellant s alleged exaggeration of his claim respondent s costs from october 2008 however the judge had expressly declined to make any finding that the appellant was by the time the appellant s appeal was heard guilty of any misrepresentation and the court both parties had agreed that he should be regarded as the successful party the only of appeal could not therefore substitute such a finding issue was whether the appellant s conduct had been such to justify a departure from the in the context of personal injury litigation general rule under cpr rule 44.32 that the where the claimant had a strong case on losing party should pay the entire costs of the liability but quantum was inflated it was action held that the defendant s remedy was to make a modest part 36 offer if the on appeal it was held that parties were entitled to make calderbank offers outside defendant failed to make a sufficient offer at the first opportunity he could not expect the framework of part 36 of the cpr and that costs protection although different the court s discretion on costs was wider considerations might apply where the where a party had made such an offer and claimant had been proved to have been subsequently achieved a more advantageous dishonest the appeal was allowed result in a personal injury action the court of appeal held that the fact that the claimant had won on some issues but lost on others was not normally a reason for depriving him of part of his costs moreover even the fact that the claimant had deliberately exaggerated his claim might not in certain circumstances be a reason for depriving him of his costs www.dolmans.co.uk 5

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motoring news owners and/or bareboat charterers and/or sub bareboat charterers of the ship samco europe v owners of the ship msc prestige [2011 in relation to proceedings relating to a collision at sea the claimants made an offer to settle liability 60:40 in their favour the offer was described as being made in accordance with cpr part 61.410 12 and or part 36 17 months after the offer had been made and 2 months before trial the claimants withdrew their offer at trial liability was apportioned 60:40 in the claimants favour the court was required to determine the incidence of costs the court held that a line of authority starting before the cpr but continuing after it indicated that where an offer had been withdrawn which should have been accepted it would not be unjust to award the offeror all its costs because had the offer been accepted no further costs would have been incurred thereafter stokes pension fund trustees v western power distribution south west plc [2005 ewca civ 854 1 wlr 3595 the mere fact that an offer had been withdrawn did not necessarily deprive the offer of effect on the question of costs in such a case the defendant should have accepted the offer when it was available and having failed to do so should have appreciated the costs risk and taken protective steps by making a realistic part 36 offer however depending upon the circumstances of the case the withdrawal of an offer might have a real effect on the appropriate order as to costs the key question was what had caused the costs to be incurred after the expiry of 21 days from the offer the claimants offer should have been accepted within 21 days the fact that it was withdrawn 2 months before trial did not make it unjust to order that the claimants should get all of their costs from 21 days after the offer was made 1 katie thompson 2 sophie thompson by their father and litigation friend christopher thompson and maureen williams administrators of the estate of trace ann williams deceased v susan bruce [2011 the claimants were minors who brought proceedings under cpr part 8 to determine www.dolmans.co.uk 6

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motoring news their entitlement to costs following acceptance of a preaction offer of damages the defendant took 14 months to respond to the claimants preaction letter of claim but on the same date made a part 36 offer which was stated to be open for acceptance until 18 june 2010 the claimants solicitor stated that he could not advise his clients on quantum because evidence was needed the offer was eventually accepted on 21 october 2010 the defendant asserted that it was for the court to determine whether the offer could be accepted out of time and that the claimants were responsible for paying her costs after 18 june 2010 the essential question for determination was whether cpr part 361 r.36.10 was intended to apply where both offer and acceptance occurred preissue and if so whether the discretion under r.36.105 should be exercised in the claimants favour the court held that the word proceedings in cpr part 361 r.36.10 was to be given a wide meaning so as to include steps taken prior to the issue of proceedings proceedings in r.36.10 had a different meaning to that which it bore in r.36.3 it was appropriate for discretion to be exercised so as to award the claimants their reasonable costs up to and including approval of acceptance of the part 36 offer given that court approval of damages was necessary that the claim had not been fully valued when the part 36 offer was made and that breach of duty and causation needed to be considered with experts it would have been difficult if not impossible for the claimants to decide within 21 days whether to accept the offer the defendant would have known that it could not be argued that the claimants should have fully valued their claim before serving the letter of claim that was not required by the preaction protocol ben woodham v jm turner t/a turners of great barton [2011 the defendant coach company was involved in a collision with a motorcyclist the coach driver had reached a t junction and intended to turn right at the same there was a line of slow moving traffic on the main road onto which the coach driver intended to turn right a tractor pulling a trailer on that main road left a gap in the line of traffic in order to give way to the coach driver the coach driver therefore commenced her right hand turn onto the opposite side of the main road at about the same time the motorcyclist was overtaking the line of slow moving traffic the motorcyclist struck the front offside of the coach and sustained serious injuries it was held that whilst the coach driver www.dolmans.co.uk 7

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motoring news advanced cautiously looking to her left and right she knew that her view to the right was obscured by the tractor and trailer this zurich insurance co v colin hayward meant that even if the coach driver advanced [2011 very slowly she would be advancing blindly into the path of an overtaking motorcyclist a collision would not depend upon the speed of the defendant had brought a personal injury the vehicles but their positioning it was claim claiming £420,000 in relation to a held therefore that a collision was spinal injury against his employers a reasonably foreseeable even if the company who was insured by the claimant motorcyclist was overtaking at very low the defence alleged fraud on the basis of speed video surveillance evidence which suggested that the injury was not as bad as alleged by the claimant however a settlement was reached for a figure of just under £135,000 which was embodied in a tomlin order subsequently new evidence showed that the defendant had made a complete recovery a in terms of whether the claimant took year before the settlement had been agreed reasonable care for his own safety the court the claimant standing in the shoes of its held that he knew or ought to have known insured sought to recover £72,000 from the that the tractor had left a gap and that there defendant on the basis that due to the was a real possibility that a vehicle could defendant s fraud they had settled his claim emerge into his path despite this the for a sum that was £72,000 more than his claimant failed to wait behind the tractor or claim was actually worth and they sought to adjust his speed he was travelling at about set aside the tomlin order 20 miles per hour at the material time the court held that the coach driver should bear the greater share of responsibility for the accident as she was emerging from a side road and was therefore obliged to give way to vehicles travelling from both directions on the main road that said the claimant did not heed the provisions of the highway code and the claim was struck out on the basis that the risk of a vehicle emerging the consent order created an estoppel and the issue of fraud was compromised by the consequently the defendant was held 70 settlement as the claimant had put fraud in liable for the collision and the claimant 30 issue in the defence of the first action and so www.dolmans.co.uk 8

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motoring news the claimant had voluntarily compromised all the issues of bad faith the court of appeal allowed the insurance company s appeal for a consent order tomlin order to create an estoppel there had to be congruity between the allegation of fraud which was compromised in the first action and the allegation of fraud made in the second the allegation of a disability being exaggerated for gain amounted to fraud and was similar to that alleged in the first action however it was not clear exactly what was compromised in the first action and so it could not be said to be the same allegation further the second action was not an abuse of process as the public interest in the administration of justice and the private interests of the claimant in its allegations of fraud far outweighed the public interest in the finality of litigation and there was nothing harassing in the claimant s conduct in bringing the second action articles construction of part 36 offers it s all in the context in the spring 2011 edition of motoring news we reported on the high court judgment of mr justice warren in c v d and d2 [2010 ewhc 2940 ch that a purported part 36 offer stated to be open for 21 days from the date of this letter was a time limited offer the case has since been before the court of appeal which handed down an unanimous judgment on 27 may 2011 reversing the first instance decision background the case involved an action for breach of contract in relation to the sale of land the claimant had made an offer to settle the action by letter dated 10 december 2009 the case was listed for trial on 29 november www.dolmans.co.uk 9

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motoring news 2010 on 5 november 2010 the defendant purported to accept the offer contained in the letter dated 10 december 2009 the claimant applied for a declaration that the offer was no longer open for acceptance and therefore there was no binding settlement and the case should proceed to trial the offer the offer letter was headed offer to settle under cpr part 36 there were many references to part 36 in the letter the letter stated the offer will be open for 21 days from the date of this letter the `relevant pe riod whilst the letter stated that the offer was intended to have the consequences set out in part 36 there was no mention of the possibility of the offer being accepted after 21 days and what the consequences would be in such circumstances the letter did however state that if the offer was not accepted and the claimant obtained a judgment which was equal to or more advantageous than the offer the claimant would rely on cpr 36.14 to seek indemnity costs and enhanced interest on costs from the expiry of the relevant period the court of appeal s decision the court of appeal had to consider 3 issues 1 can a part 36 offer be a time limited offer 2 as a matter of construction what did open for 21 days mean in context 3 did the terms of the offer itself or the subsequent emails between the parties amount to a withdrawal of the offer on the first issue the court of appeal upheld warren j finding that a part 36 offer cannot be a time limited offer although part 36 does not contain an express exclusion of a time limited offer the essence of a part 36 offer is that it lies on the table until formally withdrawn in light of the finding on the first issue it was necessary for the offer to be construed in the context of the part 36 scheme which does not permit an offer within the scheme to be time limited the question was how a reasonable solicitor would have understood the offer in that context both parties accepted that the offer was intended to be made and understood as a part 36 offer the claimant submitted that in that context open for 21 days meant that the offer lapsed at the end of 21 days the defendant submitted it meant that the offer was open for 21 days as an expression of the relevant period the relevant period being the period stated in cpr 36.2 2 c which requires that a part 36 offer must specify a period of not less than 21 days within which the defendant will be liable for the claimant s costs in accordance with rule 36.10 if the offer is accepted but that after those 21 days it may be withdrawn the claimant s counsel s position changed in oral argument before the court of appeal as he www.dolmans.co.uk 10

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motoring news conceded that both meanings were feasible thus the court had to consider which of the two possible meanings was the objectively correct one rix lj relied on the general principle of construction that a document which falls to be construed should be read as a whole and its separate parts should be so construed if that is possible as to bring rational sense and consistency to that whole given the finding that a part 36 offer could not be a time limited offer and the common ground that the offer was intended to be made pursuant to part 36 the court had to consider whether there was a reasonable construction of the offer letter which did not involve it being time limited the court of appeal considered there was in the context of part 36 it was entirely feasible and reasonable to read the words open for 21 days as meaning that it will not be withdrawn within those 21 days part 36 permits withdrawal within the 21 day relevant period but only with the permission of the court open for 21 days is an obvious way of saying that there will be no attempt to withdraw within those 21 days it is also a warning that after the expiry of those 21 days a withdrawal of the offer is on the cards the court was satisfied that that construction was also consistent with the principle of construction that words should be understood in such a way that the matter is effective rather than ineffective as to the third issue the court confirmed that an express time limit is not the equivalent of a part 36 withdrawal having considered the content of the emails none of them amounted to a withdrawal accordingly the court of appeal found that the defendant s acceptance of the offer was effective as the claimant made a part 36 offer which it had never withdrawn comment it is clear from the court of appeal s decision that if an offer is intended as a part 36 offer the courts will seek to interpret the offer as compliant even though there may be ambiguities in the wording of the offer which raise questions as to its compliance with the technical requirements of part 36 however in accordance with rimer lj s remarks this does not mean that come what may offers will be shoehorned into the confines of part 36 the issue in each case will be how a reasonable man would read the offer in the legal context of the part 36 www.dolmans.co.uk 11

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motoring news scheme this leads to an amount of uncertainty parties are at risk of an offer which does not appear on its face to comply with the technicalities of part 36 being interpreted as a valid part 36 offer the position will no doubt advance on a case by case basis what was emphasised however is that if a party wishes to avoid the risk of an offer being validly accepted it must be formally withdrawn in this case the claimant suggested that the defendant s acceptance was opportunistic as the claimant felt his case had improved since the offer was made the court confirmed that was irrelevant if an offeror wishes to bring his part 36 offer to an end so that it cannot be accepted he must serve a formal notice of withdrawal conducted under a cfa where it has been decided that interest does not run until the costs have been assessed and quantified how interesting all practitioners have known that interest on costs runs from the date of entitlement to costs whether that be by way of final judgment and/or compromise agreement however it now seems that practitioners have been wrong in relation to those matters www.dolmans.co.uk whilst this may seem surprising to those who are familiar with the sanctions imposed for late delivery of a bill of costs pursuant to cpr 47.8 ie disallowing interest there are now three authorities in support gray v toner was decided on 11 november 2010 by hhj stewart qc he found that as the claimant s solicitor had been instructed under a cfa interest on costs should be recoverable not from the date of entitlement but rather from the date of the detailed assessment hearing his reasoning was that under a cfa the claimant has not usually made any actual payments to which interest could attach whilst permission to appeal was granted the appeal is not proceeding hhj charles harris qc came to a similar decision on 22 february 2011 when giving judgment in briddle v ikhlas his decision was again based on the fact that the claimant under a cfa had made no actual payments to his solicitor that decision should not be surprising taking into account his decision in the credit hire case of corbett v gaskin [2008 where he declined to make an award of statutory or contractual interest when there was no evidence that the 12

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motoring news claimant had paid anything to the credit hire organisation it is understood that his current decision is being appealed more recently this approach has found favour with master hurst scco in the case of moto others v trafigura during which a number of preliminary issues have come before him he found that whilst generally interest runs from the date of entitlement he would exercise the power pursuant to cpr 40.8 to make an order that interest would run from a date other than judgment he was persuaded to do this because the claimants had acted under a cfa lite which protected them from having to pay anything towards their costs of the litigation indeed he went further and found that any interest would now belong to the solicitors in any event but instead to the claimants themselves as there was no contractual clause in the cfa providing otherwise this is of course a double blow to the conducting solicitors who had funded extensive litigation themselves and been out of pocket for a significant period clearly these decisions can have a very significant effect not only on the decision as to whether or not to make a payment on account of costs one may still wish to do so for tactical reasons but also where the claim for costs is significant such as in moto others v trafigura where the claim was approximately £104 million in light of the consequences of his decision it is not surprising that master hurst has given permission to appeal if there are any topics you would like us to examine or if you would like to comment on anything in this bulletin please email the editor simon evans at simone@dolmans.co.uk one kingsway cardiff cf10 3ds tel 029 2034 5531 fax 029 2039 8206 this update is for guidance only and should not be regarded as a substitute for taking legal advice © dolmans www.dolmans.co.uk 13

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