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:
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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.
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