Legal WatchPersonal InjuryFebruary 2014

Issue 005

02

Claimants’ solicitors must always take care to ensure that an

effective method is used for serving proceedings, particularly

where the defendant may be outside the jurisdiction. This is

illustrated in Murrills v Berlanda and another (2014) EWCA

Civ 6.

The first respondent/defendant was a cosmetic surgeon

who worked a few days per month at the clinic of the second

respondent/defendant company in London. He was an

Italian national and lived in Italy. The claimant claimed that

her treatment by the first defendant was negligent, and that

the second defendant was vicariously liable for his actions.

By the time the claim was brought, the first defendant was

no longer working for the second defendant but had his own

clinic in Italy, which was listed on a website. The claimant’s

solicitors wrote to him at the second defendant’s address,

and he responded with details of his Italian insurers and

offered to see the claimant at a different clinic (Re-Shape)

in the United Kingdom. Shortly before the expiry of the

limitation period, the claimant served the claim form on the

first defendant at Re-Shape. The claim form was returned

by Re-Shape with a note stating that the first defendant

did not work there and they had no forwarding address for

him. The claimant subsequently served the first defendant

by email several months later. The claim against the first

defendant was struck out on the basis that it had not been

validly served, as Re-Shape had never been his residential

address and the claimant should have used CPR 6.41 to

serve him in Italy.

Dismissing the claimant’s appeal, the Court of Appeal held

that if her claim form was to be served in the jurisdiction,

CPR 6.9 applied since the first defendant had not given

an address for service. (CPR 6.9 provides a schedule of

Events

Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months:

MBIG Seminar 22.05.2014 - Wellcome Collection,

London, NW1

In This Issue:

• Civil Procedure/Service

• Civil Procedure/Contempt of Court

• Costs

• Watch this space

• Mesothelioma

Civil Procedure/Service

03

how various types of defendant may effectively be served

with a claim form). The first question under that rule was

whether he was an individual to be served at his usual or

last known residence, or “an individual being sued in the

name of a business”, in which case he could be served at

his usual or last known residence or his last known place of

business. A person practising medicine could be carrying

on a business within the meaning of CPR 6.9, but not if he

was an employee working in someone else’s business. An

individual was sued in the name of a business when he was

sued in the name of a business which was not his personal

name. The first defendant was not sued in the name of a

business; he was sued as an individual.

“The claim against the first defendant was struck out on the basis that it had not been validly served...”The claimant had no residential address for the first

defendant in the jurisdiction. It was obvious that his

residential address was in Italy, he had responded from

Italy, he had a place of business in Italy and he had Italian

insurers. It would not have been difficult to ascertain his

residential address from his professional Italian address,

but no attempt was made to discover it. The claimant knew

that he was no longer carrying on business at Re-Shape.

Accordingly, her solicitors should have proceeded under

CPR 6.41 (CPR 6.41 relates to proceedings to be served

outside of the jurisdiction using the Service Regulations).

It followed that the judge was correct to find that there had

been no valid service of the claim form. The claimant’s

solicitors had delayed in commencing proceedings and

in pursuing them. They failed to take the steps obviously

required to serve the first defendant in Italy within the period

for service of a claim form out of the jurisdiction, and there

was no justification for an extension of time.

Murrills v Berlanda and another (2014) EWCA Civ 6

04

Civil Procedure/Contempt of CourtIn Mitsui Sumitomo Underwriting at Lords v Khan and

others [Lawtel 5/02/2014] the applicant insurer applied for

committal of the respondents for an attempted fraud.

In 2008, the first respondent had sustained head injuries

following a road traffic accident in which a lorry had

knocked him off of his bicycle. He made a full recovery

from his injuries and was therefore entitled to modest

damages. However, with the help of his wife and the third

respondent, who subsequently acted as his litigation

friend, the first respondent tried to take advantage of the

situation for financial gain. He concocted an elaborate fraud

exaggerating the effect of his injuries, which resulted in

four doctors’ reports concluding that he had permanently

impaired cognitive function. In his particulars of claim the

first respondent alleged that he needed 24-hour professional

care and that he required certain equipment as result

of his injuries and that his house required modification.

On the same date that the claim was issued, the insurer

offered to settle for £75,000; the first respondent refused.

In a preliminary schedule of loss he claimed over £1M. The

second and third respondents made false oral statements

to the first respondent’s solicitors asserting that they had

given him constant care since the accident.

The insurer arranged for surveillance to be carried out and

discovered that by October 2010 the first respondent was

functioning normally and was capable of full-time work.

The surveillance footage was disclosed and the fraud later

admitted. The insurer made a renewed offer to settle which

was eventually accepted. The respondents were all of

previous good character and had accepted their guilt at an

early stage. The second respondent was 29 and the third

respondent 61.

The deputy High Court judge held that the respondents’

actions had undermined the system of compensating

accident victims which caused loss to the insurance

companies behind the defendant sued and to those who

advise those bringing such claims and drove up insurance

rates. It also imposed on those liable the burden of

separating out the justifiable from the unjustifiable claims.

While a legitimate exercise, for those who made genuine

claims that practice could often be upsetting and obtrusive.

Further, the respondents’ behaviour struck at the principle

of law that made the initial assumption that one who asserts

something is assumed to be telling the truth.

“The deputy High Court judge held that the respondents’ actions had undermined the system of compensating accident victims...”All three were co-conspirators and therefore the starting

point had to be that they had all played an equal role. Prior

to the accident, the first respondent had been a hard-

working member of society. It was also necessary to take

into account the three years and three months that had

passed since the deception, the serious injuries that he had

sustained and that he would not now receive the damages

that he was legitimately entitled to, and his acceptance of

guilt at an early stage. Accordingly, he was sentenced to an

immediate term of nine months’ imprisonment.

The third respondent had been a leading player in the fraud

and therefore there was no need to distinguish him from the

first respondent; he had been the first respondent’s litigation

friend. Accordingly, he was also sentenced to an immediate

term of nine months’ imprisonment.

The second respondent, the wife, who was 29, was also

of good character and had accepted her guilt at an early

stage. She had not played a prime role in the conspiracy;

she had played a lesser part in that she had given a written

05

statement supporting the first respondent’s evidence.

She had a 15-month-old daughter and accordingly was

sentenced to seven months’ imprisonment suspended for

two years.

Although Her Majesty’s Solicitor General v Dodd and

another [Lawtel 4/02/2014] is a commercial case, the judge,

sentencing two men for contempt of court, made reference

to personal injury claims when looking at the test for whether

or not a custodial sentence was appropriate.

The Solicitor General applied to commit the first and

second respondents for contempt of court arising from

admitted false statements in a claim for passing off. The

first respondent had been the CEO of a tableware company

and the second respondent had been the sales director.

The company had launched a new beer glass, the design of

which had been registered. A distributor informed the first

respondent that the design had been copied by a competitor

company. It refused to give undertakings, and in addition to

a claim for design infringement, the respondents brought a

claim for passing off. In relation to the latter, they changed

the dates of emails solicited from distributors to support the

claim. The first respondent provided a witness statement

which stated that the emails had been unsolicited and that

the dates were true. The competitor company’s skeleton

argument warned very clearly of the consequences of

telling lies with regard to the emails but the respondents

maintained that they were unsolicited; reliance was placed

on them and their company was awarded an interim

injunction. When the matter came before the court again,

the first respondent repeated the false statements but the

competitor company called evidence that the emails had

to be false as its beer mug was not out on the market when

they were sent. The respondents then ceased to rely on the

emails but still maintained that they were genuine, and that

they would go ahead with injunctive relief on the basis of an

allegation of design infringement. The competitor company

opposed an injunction as the respondents were not coming

to court with ‘clean hands’ and continued to question the

emails. The respondents eventually admitted that they had

asked the distributors to send the emails, indicated what

they wanted them to say, and that they had changed the

emails’ dates. From that date, full and frank disclosure was

given and the respondents did not try to justify their actions,

simply explaining them on the basis that they were angry

that the competitor had not admitted that it had copied the

design.

The respondents accepted that the emails interfered

with the administration of justice but submitted that their

contempt was of a different character from the usual case,

as in any event they had been successful in obtaining a

permanent injunction against the competitor, which had not

been prejudiced by anything they had done, and the case

should be distinguished from, for example, a false personal

injury claim brought for financial gain.

“The underlying rationale for committal applied equally whether it was a claim for passing off or a false personal injury claim and the administration of justice was affected to the same degree in both”The High Court judge held that there was no doubt that the

remorse the respondents had shown had been genuine.

They were men of exemplary character who were spoken

of very highly by others and were bitterly ashamed of what

they had done. That said, it was very serious to put false

evidence before the court. Justice depended on openness,

transparency and honesty. If the respondents had not made

the mistake about timing, they might have gotten away

with it. The seriousness was compounded by the number

of times the lie was repeated. The custody threshold had

been passed. The underlying rationale for committal applied

equally whether it was a claim for passing off or a false

personal injury claim and the administration of justice was

06

affected to the same degree in both. The most that could be

said was that the level of seriousness was lower in the instant

case such that any custodial sentence should be reduced.

Further, proportionality was an important consideration

and the longer that the respondents were incarcerated, the

harder it would be for their blameless colleagues to continue

business. It was important to take into account their full

and frank confession and full cooperation with the Solicitor

General. The first respondent’s conduct was more to blame;

he was the chief instigator and a sentence of six months’

imprisonment was appropriate. The second respondent had

only one false affidavit but was a party to the concoction of

emails and he was sentenced to two months’ imprisonment.

It was appropriate in the interests of privacy to make an order

pursuant to CPR 31 that evidence relating to the personal

matters of the respondents could only be accessed by a

non-party upon application to the court.

Mitsui Sumitomo Underwriting at Lords v Khan and

others [Lawtel 5/02/2014]

Her Majesty’s Solicitor General v Dodd and another

[Lawtel 4/02/2014]

07

The case of Knowles v Goldborn [Lawtel 30/01/2014] is a

reminder to claimants’ solicitors in particular that they may

not commence costs only proceedings without first making

a reasonable attempt to agree costs.

The claimant had instructed solicitors to pursue a personal

injury action against the defendant. The claim was settled

before proceedings were issued with the defendant agreeing

to pay the claimant damages plus his reasonable costs.

The claimant’s costs draftsman sent the defendant’s costs

consultants a bill of costs which stated that fee earners at

grades A, B and D had handled the case. The defendant’s

costs consultants, while indicating that the defendant

intended to make an offer as to costs, asked for the names,

qualification and experience of the fee earners claimed so

that they could be verified. The claimant’s costs draftsman

responded by saying that the point raised did not justify any

failure to make an offer, and stated that proceedings would

be commenced unless an offer was made. The defendant

subsequently made an offer based on the case having been

handled by a grade D fee earner only. The claimant did not

respond to that, but issued proceedings, three weeks after

service of the bill of costs. The defendant applied to strike

out the proceedings on the basis that, as the claimant had

not attempted to agree the amount of costs, the condition

to the issue of proceedings in CPR 46.14(1), that the parties

must have failed to agree the amount of costs, had not been

satisfied. The district judge refused the application and the

defendant appealed.

“...the courts had repeatedly stated that parties should seek to negotiate settlement and not rush to litigation”

CostsAllowing the appeal, the County Court judge held that the

courts had repeatedly stated that parties should seek to

negotiate settlement and not rush to litigation. The rules

made quite plain that costs-only litigation was to be pursued

where agreement had not been reached. That implied that

there would be an attempt to reach an agreement, which

would be a bona fide attempt, so as to avoid litigation.

The defendant had plainly shown himself to be open to

negotiation: the substantive claim had been settled without

the issue of proceedings; further, his costs consultants had

responded to the bill of costs on the basis that they wished

to make an offer but sought further information before doing

so. With a more careful trawl through the correspondence,

they might have identified the fee earners, and it was not

mandatory for the identity of fee earners to be provided, but

it was not an unreasonable request to seek identity when

responding to a bill of costs. The defendant was entitled

to take reasonable steps to satisfy himself that somebody

claimed as a given grade fee earner had the appropriate

status to justify such a claim. The claimant’s costs draftsman

did not appear to have attempted to agree settlement. The

response to the request had been very short and unhelpful.

Identifying the individuals could have done the claimant

no harm. The defendant had subsequently made an offer,

and the claimant had commenced proceedings without any

response to that offer. The judge had stated that no offer

had been forthcoming from the defendant; he had made

no reference to the offer made, which was an extremely

important omission. Even so, simply to send a bill of costs

and then three weeks later to commence proceedings when

the claimant knew that the defendant wished to engage in

negotiations was to commence proceedings without making

any real attempt to reach agreement. That was a plain and

obvious conclusion to reach. The judge’s reasons were

inadequate and overlooked the true chronology. He should

have dismissed the proceedings as prematurely begun.

Knowles v Goldborn [Lawtel 30/01/2014]

08

Watch this spaceFollowing the introduction (eventually) of the Consumer

Insurance (Disclosure) Act 2012 (CIDA) the Draft Insurance

Contracts Bill has now been published for limited further

consultation.

At the heart of the draft legislation, which relates to non-

consumer contracts, is a ‘duty of fair presentation’ when

making a proposal for insurance. A fair presentation is

defined as one:

(a) which discloses every material circumstance which

the proposer knows or ought to know, or (taking the

information provided by the proposer in the round) gives the

insurer sufficient information, in relation to those material

circumstances, to put a prudent insurer on notice that it

needs to make further inquiries as to circumstances which

may prove material,

(b) which makes that disclosure in a manner which would

be reasonably clear and accessible to a prudent insurer, and

(c) in which every material representation as to something

the proposer knows or ought to know is substantially correct;

or, if as to something else (such as a matter of expectation

or belief), is made in good faith.

A circumstance is material if it would influence the judgement

of a prudent insurer. Examples are provided of ‘things

which may be material’ and a material representation is

substantially correct if a prudent insurer would not consider

the difference between what is represented and what is

actually correct to be material.

As with CIDA, the Bill provides for a variety of remedies

depending on whether or not a ‘qualifying breach’ was

deliberate or reckless.

There are other provisions relating to fraudulent claims and

the late payment of sums due in respect of claims.

The consultation is expressly limited to determining whether

the current wording meets the policy objectives as set out in

two earlier consultation papers.

The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.

www.plexuslaw.co.ukwww.greenwoods-solicitors.co.uk

Contact UsFor more information please contact:

Geoff Owen Learning & Development Consultant

T: 01908 298 216

E: gro@greenwoods-solicitors.com

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MesotheliomaWe will provide further detail about the Bill as it progresses.

Another piece of legislation that has now progressed to

the stage of Royal Assent (30/01/2014) is the Mesothelioma

Act 2014. The Act establishes a scheme called the Diffuse

Mesothelioma Payment Scheme for making payments

to eligible people with diffuse mesothelioma, and

eligible dependants of those who have died with diffuse

mesothelioma.

The scheme provides for payment to be made to claimants

first diagnosed with the disease on or after 25 July

2012, who were exposed to asbestos as a result of their

employer’s breach of duty but who have no redress against

the employer because it no longer exists and an insurer

cannot be identified. If the claimant dies without making the

claim, the right to claim passes to the eligible dependant(s).

The scheme will come into force on a date to be announced

by the Secretary of State and will be funded by a levy on

‘active insurers’. A good deal of the detail of the scheme

will only follow when regulations are made.