1. Williams v. Bermuda Hospitals Board [2016] UKPC4
Decision of Privy Council on question of when a material contribution occurs, and the issue of causation.
In Bailey v MOD in the Court of Appeal had indicated that ‘material contribution’ occurred where there were multiple causes of injury which occurred simultaneously. The case of Williams acknowledges material contribution, where the events are sequential.
The Plaintiff attended hospital with abdominal pains and suffering from acute appendicitis. An appendectomy was performed later in the day, but after some degree of delay. During surgery it was noted that there was widespread pus throughout the pelvic region. The accumulation of this pus resulted in myocardial ishchaemia. During surgery the Plaintiff suffered a myocardial ischaemic event, leading to lung complications, which required life support in the intensive care. Ultimately the Plaintiff made a good recovery.
It was held that the sepsis from the ruptured appendix caused injury to his heart and lungs. The question was whether there was further injury as a result of the delay performing the appendectomy.
The trial judge held that the complications might have been avoided but not to the extent to say that they “probably” would have been avoided. It was held that the Plaintiff had not proved that the delay caused the complications.
The Court of Appeal in Bermuda reversed that decision, holding that “causal or causative links between the inordinate delays coupled with the defective system which together contributed to [the Claimant’s] injury were clearly established”.
The case then proceeded to the Privy Council who upheld the Court of Appeal findings and held that the delay had materially contributed to the Claimant’s complications after surgery and that as a matter of principle, successive events are capable of each making a material contribution to the subsequent outcome.
The Privy Council indicated that it is not sufficient to show that the defendant’s negligence added to the list of risk factors but here the injury to the heart and lungs was caused by the sepsis from the ruptured appendix. The development and effect was a continuous process. It was held that “the hospital board’s negligence materially contributed to the process, and therefore materially contributed to the injury to the heart and lungs”.
Comment
This decision could have major implications on clinical negligence claims.
For example on obstetric claims where brain damage is suffered by babies during the late stages of labour/first minutes after delivery, this could be due to a period of hypoxia and ischaemia. The duration of hypoxia and ischaemia is key relation to outcome. If a negligent delay during the labour contributes to the process of deprivation of oxygen and blood flow then it could be held to have made a material contribution.
The Privy Council did not perform a full and comprehensive analysis of the law of material contribution (and Bailey v MOD remains good law), but did detail that there is no distinction between simultaneous and consecutive cumulative causative factors, i.e. where the damage/injury is non-divisible.
The law is likely to develop further and require a Supreme Court judgement to fully clarify issues eventually but at the moment whilst the Claimant still has to discharge the burden of proof on such claims, the possible impact of material contribution cases is widened by this case in extending to sequential causes.
2. Crooks v Hendricks Lovell Limited [2016] EWCA Civ 8
Court of Appeal looked at Part 36 offers in the context of recovery and CRU benefits. The courts will look at defendant’s Part 36 offers on the basis of what the claimant actually receives rather than the sum that the defendant pays out.
This was a personal injury claim on which the defendant made an offer to settle – “£18,500 net of CRU and inclusive of interim payments in the sum of £18,500”.
At trial the claimant recovered £29,550. Deductible benefits then stood at £16,267.76. The Recorder adjourned consideration of costs to await the outcome of a review of the CRU.
The CRU Certificate was reviewed and the deductible benefits reduced to £9,502.65.
Following the review of CRU it was held that the Claimant had failed to beat the Defendant’s Part 36 offer and made an order that the Defendant pay the Claimant’s costs up to 21 days after the offer and the Claimant pay the Defendant’s costs from that date.
The case proceeded to the Court of Appeal on the following issues –
• Whether the Recorder had misconstrued the Defendant’s offer and the “net of CRU” wording.
• Whether under Part 36 the Recorder had to order costs on the date of judgment rather than awaiting the CRU review.
• Whether it was wrong to award costs to the Defendant after the expiry of the offer.
The Court of Appeal concluded that the offer was a valid Part 36 offer. The crucial point was not the gross amount of compensation when the offer was made but the meaning of the expression “net of CRU”. It was concluded that the offer could not sensibly be read in any other way than “as remaining after all necessary deductions of benefit”.
Interpreting the offer as £18,500 net of CRU, plus a payment of £16,262.76 to the CRU, was incorrect. The offer made was of £18,500, leaving aside any liability in respect of recoverable benefits once such a liability had crystallized. It followed that for the Claimant’s purposes the offer meant that the £18,500 already paid to him by the Defendant (by way of interim payments) would not be reduced by the Defendant’s liability for recoverable benefits, whatever that figure might be after the review.
The Court of Appeal rejected the argument that pursuant to CPR 36.14 (1) (a) [as it then was] the Judge should have made his determination on costs on the day of judgment as opposed to awaiting the outcome of the review of CRU. As the final amount to be paid to the CRU was still to be determined it would have been wrong for him to proceed on the basis of a CRU figure that was not settled/confirmed. The Judge had been right to adjourn consideration of costs.
The Defendant submitted that the Claimant had failed to beat its’ Part 36 offer either when judgment was given or following the review of the certificate by the CRU.
The Defendant argued that as of the date of the judgment the Claimant would have been entitled to damages of £13,287.24, which represented the judgment sum of £29,500 less the amount on the certificate of recoverable benefits (issued on the 14th August 2013) of £16,262.76, which meant that the Claimant had failed to beat the Defendant’s offer by £5,212.76.
The Defendant argued that the effect of the CRU review was that the Defendant was required to pay the Claimant the additional sum of £9,502.65 from the money returned by the DWP. After the review the offer therefore amounted to £18,500 in interim payments, £6,760.11 in deductible benefits and £9,502.65 out of the proceeds of the CRU appeal/review, which amounted to £34,762.76 and exceeded the judgment sum of £29,500 by £5,212.76.
The Judge accepted that prior to the review the offer effectively amounted to £18,500 plus a payment of £16,262.76 to the CRU whereas after the review it amounted to £18,500 plus a payment to the CRU of £6,760.11 and another payment to the Claimant of £9,502.65 representing the balance of the proceeds of the CRU appeal.
It was noted that the amount of CRU was not included in the offer and the final certificate issued by the CRU did not therefore vary the terms of the offer. The real measure of whether the Claimant had bettered the offer was whether the payment the Claimant would actually receive as a result of the judgment was more or less than the amount offered.
The judgment sum of £29,550 contained, as the relevant deductible amount, the sum of £6,760.11 (payable to the CRU), leaving the figure of £22,789.89 as the amount that was net of recoverable benefit.
It was that figure which ought to have been compared to the figure of £18,500 “net of CRU” contained in the Defendant’s offer and as that figure was £4,289.89 more than the sum offered by the Defendant the Claimant had beaten the offer.
The Court of Appeal held that the approach taken by the Judge was wrong and the appeal was allowed with an order that the Defendant do pay the Claimant’s costs of the proceedings, to be subject to detailed assessment if not agreed.
Comment
The case shows the importance making clear whether offers are being made in gross or net terms, and the impact of CRU reviews on the sums to be paid. Had the Defendant increased the gross amount of its’ offer to include the CRU at the time then the Claimant would have failed to beat the offer having secured judgment for £29,550 as against the £32,195.83 offered (which would have been the final sum paid by the Defendant to the DWP and Claimant once the CRU review had been completed).
It is clear that had the Claimant accepted the Part 36 offer that the Defendant did make then the Defendant would still have been required to discharge the sum of £32,195.83 (£18,500 to the Claimant and £13,695.83 to the CRU), subject to a review/appeal of the certificate of recoverable benefits, the outcome of which would have been far from certain.
3. AH v Lewisham Hospital NHS Trust (2016)
Case relating to success fee and ATE premium where case transferred from Legal Aid funding to CFA.
This was a clinical negligence claim, initially funded by Legal Aid, and on which the Claimant’s solicitors were Irwin Mitchell.
On 1 April 2013 new rules were due to come into force stopping a Claimant’s entitlement to recover CFA success fees and ATE premiums.
On this case shortly before new rules came into force, and after the Trust had made a partial admission of breach of duty and causation and an offer, the Claimant discharged the legal aid certificate and entered into a CFA with a success fee of up to 100%.
Following settlement of the claim, an 80% success fee was claimed together with the insurance premium.
At costs hearing the Judge found that when advising their client about the possible change in funding rules the solicitors had not mentioned the case of Simmons v Castle, where the Court of Appeal had ruled that unless a CFA was entered into prior to 1 April 2013 the Claimant would be entitled to a 10% increase in general damages (here that would have been around £17,500).
The Irwin Mitchell fee earner stated that she had not been aware of Simmons v Castle. The Judge concluded that this was key because the failure to explain the Simmons v Castle consequences “a very significant component was missing” from the advice. Accordingly the Judge decided that the Trust had no liability to pay the success fees and ATE premium. It was noted that, in any event, Irwin Mitchell’s claim for an 80% success fee was excessive and if the same had been recoverable would have been reduced to 40% with Counsel’s success fee reduced to 30%.
Comment
This is an important precedent for Defendants. There are a number of cases currently proceeding towards trial/settlement on which Claimants have transferred from Legal Aid Funding to a CFA just prior to 1 April 2013. That decision and the advice given to the Claimant will be crucial as to whether the success fee and ATE premium will be recoverable or should be disallowed.
4. Bulk conversion cases – Arianna Ramos v Oxford University Hospitals NHS Foundation Trust and Oliver Davis v Wiltshire Primary Care Trust
Challenging the bulk transfer of public funding to CFA.
Master Leonard sitting as a Costs Judge in the Senior Courts Costs Office, heard the above cases, which involved Claimant’s solicitors transferring funding from LSC public funding to CFA/ATE funding.
He held that the decision to abandon public funding was not reasonable and nor were the advices provided to both Claimants by their respective solicitors. He ruled that the success fee and ATE premium were irrecoverable as a consequence against the Defendant.
In Arianna Ramos v Oxford University Hospitals NHS Foundation Trust, the Claimant changed her funding from LSC funding to a CFA/ATE arrangement in February 2013.
Master Leonard detailed:
“A decision to choose a CFA/ATE arrangement rather than LSC funding (where available) must have been a reasonable decision. If it was, then the additional cost attendant on that choice will (insofar as reasonable in amount) be recoverable from the paying party. If not, then CPR 44.4 will preclude recovery of the additional costs unreasonably incurred.”
In this case the Claimant’s solicitor failed to carry out a full and adequate analysis of the relative advantages and disadvantages of changing funding arrangements. The final decision was clearly arranged in haste, noting the deadline for entering into the agreement to take advantage of a 100% uplift on fees.
There was also a lack of advice given by the Claimant’s solicitor to his client about the effects of entering into a CFA/ATE insurance arrangement and not receiving the benefit of a Simmons v Castle uplift of 10% on general damages.
The Master decided that the decision in February 2013 to abandon LSC funding was not made on the basis of adequate advice, and that it was not made on a fully informed basis. Overall it was more to the Claimant’s disadvantage than to her advantage and it was not a reasonable decision.
In Oliver Davis v Wiltshire Primary Care Trust, the Claimant changed funding in 2009. The Master concluded that the switch from public funding to a CFA backed by ATE insurance was not a reasonable decision, and was not to the Claimant’s advantage. He disallowed the success fee and the ATE premium in full.
The reasoning was that there was no convincing evidence that the Claimant needed an interim payment to the extent that justified the change to a CFA/ATE arrangement and at no stage was the Claimant advised of the potential risk of having to bear any shortfall on the costs of the ATE premium if it was successfully challenged in whole or part.
Comment
These cases raise the same issues as AH v Lewisham. All these decisions again highlight the need for Defendants to challenge transfers of funding from public funding to CFA/ATE insurance. In such cases it is important to ensure that the Claimant’s firm are placed on notice that the transfer in funding will be challenged.
The cases show the shortcomings in the advice provided by Claimant’s solicitors to their clients, such as to render the transfer of funding unreasonable.
5. Fixed costs
Recent LJ Jackson speech (available here), expressing the view that Fixed Costs should be brought in for all litigation where damages are £250,000 or less.
Lord Justice Jackson delivered a speech on 28 January 2016 calling – again – for the introduction of a regime of fixed recoverable legal costs. He detailed the view that these should be for all claims were damages are up to a value of £250,000. He set out a matrix of figures based on claim value.
The view expressed is that “The time has now come to take stock and to develop a scheme for fixed costs in the lower reaches of the multi-track.”
The figures proposed by would cover claims up to £250,000, in broad value bands. The sums would allow discrete amounts for key procedural steps and actions. Disbursements would be outside the matrix.
The speech noted that the argument for fixed costs is steadily gaining ground, as “evidenced by recent speeches or reports by the Lord Chief Justice, the Master of the Rolls, Flaux J (then the Judge in Charge of the Commercial Court) and Lord Faulks (Minister for Civil Justice).”
There is clearly close liaison at a senior level among the judiciary and the MoJ on the probable extension of fixed recoverable costs. In terms of the reaction to LJ Jackson’s speech the obvious conclusion is that the Government supports moving forward with this project and a consultation should be expected in the short to medium term on a set of proposals for fixed recoverable costs, with the principles unlikely to be up for discussion.
The drive for changes of this type is not new, and some twenty years ago Lord Woolf’s final report also recommended that there should be a regime of fixed recoverable costs for fast track cases.
Matrix for multi-track costs proposed by Jackson LJ on 28 January 2016:
|
Value band Procedural element |
25000 – 50000 | 50001 – 100000 | 100001 – 175000 | 175001 – 250000 |
| Pre-action | 3250 | 5250 | 8750 | 12000 |
| Issue/statements of case(+25% if counterclaim) | 1400 | 2250 | 3750 | 5750 |
| Case Management Conference | 950 | 1500 | 1500 | 1750 |
| Disclosure | 1875 | 3000 | 3500 | 5000 |
| Witness statements(+10% per witness approved by the court over 3) | 1875 | 3000 | 5000 | 7500 |
| Expert reports(+10% per expert approved by the court over 2) | 1400 | 2250 | 3750 | 5500 |
| Pre-Trial Review | 950 | 1500 | 1500 | 1750 |
| Trial preparation(+5% for each day over 5) | 1900 | 3000 | 5000 | 7500 |
| Trial(+5% for each day over 5) | 3750 | 6000 | 11000 | 18000 |
| Negotiations/ADR | 1400 | 2250 | 3750 | 5500 |
| Totals | 18750 | 30000 | 47500 | 70250 |
6. Quantum cases
GC v BSL (2015)
PSLA of £40,000 (out of Court) for 43yr old male who suffered a comminuted fracture to his os calcis, and would not be able to work as a scaffolder or manual labourer in the future. He suffered a comminuted fracture to his os calcis, together with some minor bruising and a strained wrist.
CLAMP v K (2015)
PSLA of £60,000 (out of Court) for dental injuries and resulting symptoms she suffered following dental treatment provided between November 2009 and March 2011. She underwent additional treatment and suffered symptoms including prolonged pain and difficulty eating and speaking for four-and-a-half years, numbness of her lips, sinusitis and an adjustment disorder.
Liability was denied on this case, with settlement negotiated out of Court.
In November 2009 the Claimant had attended an appointment with the Defendant Dentist. Various treatment options were discussed and the Claimant chose to undergo extraction of some teeth, root canal treatment and placement of 10 dental implants with provision of upper and lower fixed bridgework. This took place in February 2010 and post-operatively the Claimant experienced significant pain and swelling. She also noted numbness, particularly on the lower left lip and chin area which the Defendant advised was likely to be permanent. Further surgery took place in 2010 and through to February 2013.
Claimant alleged that the Defendant he was negligent in inadequately planning and assessing the treatment, using poor surgical skills during the procedures and placing crowns and bridgework in C’s mouth which were of an unacceptable standard.
Claimant contended that as a result of the negligence, and for four-and-a-half years, she experienced pain and discomfort and difficulty eating and speaking. She had to modify her diet and as a result gained weight. She suffered nerve damage and consequently her upper right and lower left lips were numb. She also experienced sinusitis. She sustained the avoidable lost of five teeth and suffered an adjustment disorder, significant distress, impaired confidence, embarrassment, felt that she had to avoid certain social situations and she experienced feelings of betrayal and frustration.
The Claimant would need to undergo extensive treatment in the future and was also advised to undergo cognitive behavioural therapy.
Hunt v Nottingham University Hospitals NHS Trust (2016)
Case in the High Court before The Hon. Mrs Justice Patterson DBE. Judgment for the Claimant (with damages agreed between the parties at £750,000, less CRU and less £100,000 received from his employer) on a claim alleging clinical negligence on the part of the Defendant. Claimant developed incontinence and pain, had required repeated surgery, and now has a permanent stoma.
The Claimant was employed as a machine demolition operator and his job involved breaking up concrete inside a cramped room. The work involved considerable jilting to the base of his spine and coccyx whilst at work operating the machine.
In April 2008 the Claimant attended his GP due to severe back pain. He was prescribed antibiotics. Four days later he attended again, complaining again of low back pain. He was referred by his GP for an x-ray.
On 30 April 2008 the Claimant again attended on his GP and was then sent straight to the Queen’s Medical Centre in Nottingham where he was diagnosed with a large perianal abscess. The following day the claimant underwent an operation for drainage of the abscess and a seton was inserted. A fistula developed and he subsequently attended for sigmoidoscopy to be performed.
Arrangements were made for EUA and fistulotomy and a consent form signed. That surgery took place on 28 July 2008.
The Claimant alleged that the surgery carried performed was negligent in that it divided the entire internal anal sphincter or the upper part of the sphincter was already divided or destroyed and the operative procedure carried out was inappropriate in the circumstances.
Following the surgery the Claimant developed incontinence and pain, had required repeated surgery, and now has a permanent stoma. His case is that the division of the internal anal sphincter is the cause of his severe disability and the need for a permanent colostomy. He has been unable to work since 2008.
The Claimant brought a personal injury claim against his then employer in respect of the initial damage caused by his job. That claim was settled.
The Defendant’s expert evidence of Mr Hartley, Consultant Colorectal Surgeon, rested, to a significant degree, on the absence of, or inadequate evidence of, incontinence following the July operation. The Judge did not accept that was the case and did not accept the theory that the continuing perianal pain of the claimant was due to the sepsis present in April/May 2008 not being completely eradicated in the operations of 1 May, 19 May and 28 July 2008, rather than the operation of 28 July 2008, which later developed so as to cause the pain suffered and to cause the full division of the internal anal sphincter. The Claimant’s expert evidence of Carolynne Vaizey was preferred.
The Judge held that the surgeon did not divide the entirety of the Claimant’s anal sphincter in July 2008 but only divided the sphincter only below the dentate line. The upper part had been destroyed by infection or by the SHO at the prior operation but the surgeon was negligent in failing to appreciate that fact and proceed to a low fistulotomy.
On causation the Judge found that the Claimant became significantly faecally incontinent after 28 July 2008 procedure. Next, the Judge addressed whether incontinence, rather than persistent pain, lead the claimant to elect to undergo formation of a defunctioning colostomy in March 2010.
The Defendant contended that if is only if the incontinence alone caused the Claimant to have a colostomy that causation is made out, and contends that, in fact, the Claimant made the decision because he was suffering from intractable pain. The Judge did not accept that argument concluding that the Defendant had not established that, absent incontinence, the claimant would have had the colostomy in any event. Indeed the Judge noted that the colorectal surgeons had agreed that if the Court were to decide that the internal sphincter was fully divided along its length, as the Court did find, then a colostomy would have been unavoidable.