When is it dishonest to exaggerate?

Hall & Ors v Stone - Court of Appeal 28 November 2007

The 3 Claimants (a mother and her children) were involved in a RTA and sought damages of £3,000, £1,250 and £2,750. The Defendant maintained that the impact was so slow that it was impossible that any physical injuries could have occurred (she claimed that her car had just “rolled forward” a few feet). Nevertheless at a very early stage not long after the accident offers to settle were made to the 3 Claimants for £750, £350 and £700 respectively. They were not Part 36 or Calderbank offers; there was no reference to the time for acceptance or consequences of not doing so. The offers were not accepted by the Claimants and were later withdrawn.

The claim was transferred to the multi track (rather than the fast track as would have been normal without an allegation of dishonesty, or the small claims track for claims worth £1,000 or less – either of these tracks would have resulted in a limitation on costs). At trial, the Judge accepted that the impact took place at no more than 5-6 miles per hour equivalent to the force of a car ‘stalling’ and that no visible damage was done to the car. Nevertheless the Judge found that this minor impact was sufficient to cause some “transitory and ephemeral” symptoms to all 3 Claimants who were awarded damages of £1,000, £400 and £600 respectively. The judge exercised his discretion on costs to take account some exaggeration in the claim and ordered the Defendant to pay only 60% of the Claimants’ costs swayed by the fact that the Claimants had not recovered the majority of the sums claimed.

The Claimants appealed the costs decision. Before the Court of Appeal they argued that they should be entitled to 100% of their costs because they had all been awarded money judgements and had been acquitted of dishonestly making up their injuries. By a 2:1 majority the Court of Appeal (Lord Justice Waller dissenting) found that the Judge had erred in his approach to costs. He had taken into account conduct but had not specified what conduct he had in mind or what effect this conduct had on the proceedings. The Claimants were the successful parties and costs should not be cut down just because a successful party has “not done quite as well as he had hoped”. The Defendant was ordered to pay all the Claimants’ costs (up to £80,000 according to Waller LJ).

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Comment

It is unusual for the Court of Appeal to interfere with a trial judge’s discretion on costs and from the Defendant’s point of view it would have been disappointing that only LJ Waller was prepared to disapprove of the “exaggerated and opportunistic claims” in a meaningful way.

Order 44.3 (2) requires the court to consider whether a party has succeeded in part of his or her case on one or more of the issues, even where they have not been wholly successful. In this case the majority found the Defendant had not won on any of the issues but had merely succeeded in keeping the award of damages down which, by itself, was not enough. A Defendant who alleges dishonesty and takes a “not a penny stance” does so at his or her own risk. However, it is at least arguable as LJ Waller found that the Defendant ‘won on exaggeration’ albeit he ‘lost on dishonesty’ and the third Claimant, at least, had failed to better the offer made. The Defendants’ offers were in April 2003 and withdrawn before the Claimants had medico-legal advice or medical evidence. Lady Justice Smith speculated that it might otherwise have been different and the case is a useful reminder of the value of complying with the CPR when making offers to settle. However, the majority might have taken account of the fact that even a small abatement in the Claimants costs of up to £80,000 would have wiped out the Claimants gains and another question they might have asked is how the solicitors incurred £80,000 on a £2,000 case?

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No “second bite of the cherry” – Reversing decisions to instruct joint experts
Kay v West Midlands Strategic Health Authority

The claim arose out of the Claimant’s neonatal care shortly after birth. Liability was conceded at an early stage and the parties adopted a co-operative approach to the investigation of quantum with agreement of joint experts in most of the usual quantum disciplines, including Assistive Technology in which Mr Colin Clayton was instructed.

Mr Clayton’s report was received in March 2006. Over a year later the Claimant’s solicitors indicated that their client was dissatisfied with the report and sought the Court’s permission to rely on a separate expert. Without first obtaining permission, the Claimant had obtained a further report from a Mr Beale. The package recommended by Mr Beale (when compared with Mr Clayton’s proposals) had the potential to add a further £600,000 to the damages claim. The Claimant’s application came before HHJ MacDuff QC in the High Court (Birmingham).

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The Claimant’s Application

The Claimant’s application to rely on Mr Beale’s report placed reliance on the Court of Appeal decision of Daniels v Walker and argued that the issue was conclusively determined in that case alone. In Daniels Lord Woolf had said:-

“In a substantial case, the correct approach is to regard the instruction of an expert jointly as the first step in obtaining evidence on a particular issue. It is to be hoped that, in the majority of cases it will not only be the first step but the last step. If having obtained a joint expert’s report, a party, for reasons which are not fanciful wishes to obtain further information before making a decision as to whether or not there is a particular part (or indeed the whole) of the expert’s report which he or she may wish to challenge, then they should, subject to the discretion of the court, be permitted to obtain such evidence” (per Lord Woolf MR at page 1387D).

The Claimant argued that his application fell squarely into that territory and that in the context of a high value claim he should be entitled to fully explore his claim.

The Defendant argued that the Court should restrict the evidence in accordance with Part 35 and pointed to the Claimants failure to ask Mr Clayton questions and the delay in making the application. The Defendant relied on the subsequent Court of Appeal decision of Peet v Mid-Kent Healthcare (a case where this firm acted) where Lord Woolf had then said:-

“Where the parties agree that there should be a single joint expert, and a single joint expert produces a report, it is possible for the court still to permit a party to instruct his or her own expert and for that expert to be called at the hearing. However, there must be good reason for that course to be adopted. Normally, where the issue is of the sort that is covered by non-medical expert evidence, as in this case, the court should be slow to allow a second expert to be instructed.”

“..the fact that the sums at stake may be substantial does not justify the departure from the general approach in relations to single experts which I have just sought to indicate.”

The Decision

HHJ MacDuff rejected the Claimant’s submission that in view of the high value of the claim and the authority of Daniels the Claimant should have permission for a “second bite of the cherry”. He concluded:-

“I suggest that Daniels v Walker should no longer be read in isolation. It should go hand in hand with Peet v Mid-Kent Healthcare Trust. The Daniels v Walker principle holds good; but, insofar as it may suggest that the court should invariably grant a party the facility for its own report provided that the reason is not fanciful, that needs to be tempered by the comments made in Peet v Mid-Kent Healthcare Trust.”

The Judge went on to set out what he considered to be the principles established by Daniels, Peet and to a lesser extent the case of Cosgrove v Pattinson as follows:-

		“Where the real and major dispute(s) between the parties (for example the issue of care provision) require(s) expert evidence, the court should allow each party to have its own evidence from the outset, certainly in the larger cases.
		Where there are areas….which do not involve matters of principle, or fundamental dispute, the parties should agree to a joint report.
		These decisions should normally be made at an early case management hearing. At that time the parties will be well aware of what the case is really about, and where the real battlefield lies. Where, as the case progresses, and the need for expert evidence in a new field is marked up, the court will need to make a further case management order, at which the same principles should apply..
		Once a joint report has been agreed or ordered, the strong presumption is that the evidence will be restricted; the evidence will come from that jointly instructed expert and it will only be in exceptional circumstances that a departure from the norm will be justified.
		The mere fact that large sums may turn upon this part of the evidence is not in itself sufficient to justify a departure from the general rule.
		Even in the largest cases, the parties have a duty to keep costs in check, particularly where public funds are at stake. The courts have a similar duty and should exercise the power to restrict the garnering of such additional evidence where it is appropriate to do so, applying the principles set out in Peet v Mid-Kent Healthcare Trust. This is something to which the parties and the court should have careful regard at both stages (the initial CMC when the first decision is to be made, and at any later application for separate expert reports).
		However, the court may, in the exercise of its discretion, where justice demands it, allow each party to have its own expert, even where there is a joint report already in place. That is the principle established by Daniels v Walker.
		Where a party requests a departure from the norm and makes a Daniels v Walker application, all relevant circumstances are to be taken into account but, principally, the court must have its eye on the overall justice to the parties. The application will only succeed in circumstances which are seen to be exceptional and to justify such a departure from the norm”.

Applying those criteria to the case at hand the Judge concluded that it would be inherently unfair to the Defendant to allow the Claimant to instruct a second expert. Accordingly, the Claimant’s application was dismissed.

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Comment

HHJ MacDuff QC was an experienced practitioner in clinical negligence at the bar and has given a number of informed decisions in the field from the bench. This decision should provide clarification to practitioners operating in this area. Crucially the onus is on the parties to establish at an early stage which are the fundamental issues of principle in the case and which issues are merely peripheral. In areas of fundamental principle an expert on each side will be proportionate, especially liability issue or care. Where the issues are peripheral the Court should enforce a joint expert.

Daniels v Walker has been quoted too often as authority to allow a party a “second bite of the cherry” merely because a more favourable expert has been found, for instance one who is willing to cost the Claimant’s same needs at a markedly higher (or lower) figure than the joint expert. On this authority that will no longer be sufficient justification for jettisoning a joint report and this ought to discourage “expert shopping”. It is also reassuring to see that the Court was prepared specifically to take account of the additional costs that would be incurred in allowing a second expert where it is NHS (and LSC) public resources which are at stake.

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Increase to Bereavement Awards

Under the Fatal Accidents Act 1976 (amended by s.3 of the Administration of Justice Act 1982) surviving relatives who satisfy the qualifying criteria (usually surviving spouses and the parents of children under 18) have been able to claim a fixed award of damages from the party responsible for hastening a death provided the cause of action arose after 1 January 1983.

The original award was just £3,500 until it rose to £7,500 for all such causes of action from 1 April 1991. Bereavement damages were last increased on 1 April 2002 to £10,000 for causes of action accruing from this date. It can be difficult to explain the rationale for this fixed award to a bereaved relative, for whom no amount of money is adequate to compensate the loss, and the amount will often seem derisory.

In December 2007, the Parliamentary Under-Secretary for Justice announced that the level of bereavement damages would increase to £11,800 for all causes of action which accrue on or after 1 January 2008. Please have this increased figure in mind when placing financial reserves on claims within your Preliminary Analysis reports to the NHSLA. It is the government’s intention that in future it will regularly review the level of the award in line with the Retail Prices Index.