End of the Party? Samuel David Harris (a Minor & a Patient suing by his mother and litigation friend Janet Harris) v (1) Timothy Perry (2) Catherine Perry (3) David Harris [2008] EWHC 990 (QB)

The Claimant, Samuel Harris, suffered a brain injury on a bouncy castle at a birthday party organised by Mr and Mrs Perry, the First and Second Defendants. It was found that Mr and Mrs Perry were both negligent on the basis that there was inadequate supervision of the children using the bouncy castle which was causative of the accident.

Mr and Mrs Perry are husband and wife, and parents to triplets. They had organised a party to celebrate the triplets’ 10th birthdays, which included the hire of a bouncy castle and a “bungee run”. The bouncy castle was located at the back of Mr and Mrs Perry’s house, on a playing field that was accessible to the public. Nearby, on the same playing field, Samuel’s father had organised a football training session which Samuel participated in. When the training finished, Samuel asked Mrs Perry’s permission to use the bouncy castle. Samuel, who was aged 11 at the time, was playing on the bouncy castle when a boy who was a few years older than him performed a somersault, and struck Samuel’s forehead, resulting in brain damage.

The main issue of fact to be determined was whether or not Mrs Perry had given permission for Samuel to use the bouncy castle. Mr Justice Steel found that it was probable that Mrs Perry did give permission because: (1) other children who were not at the private party had been given permission to play on the bouncy castle (2) there was no repetition of any refusal of permission (if made) by Mrs Perry and (3) there was convincing oral evidence from Samuel’s friend who stated that Mrs Perry had not refused permission when they had asked her. Having established that Mrs Perry probably did give permission, Samuel argued that Mr and Mrs Perry had (1) failed to maintain continuous supervision of the children using the castle (2) failed to forbid children using the bouncy castle from doing somersaults and (3) failed to ensure that only children of a similar size and weight played on the bouncy castle at the same time.

Support for the Samuel’s case on breach of duty was found in the hire contract for the bouncy castle, on the hire company’s website and in the standard terms and conditions of hire provided by the British Inflatable Hirers Alliance. There was emphasis in these documents that the equipment should be “supervised at all times” and there should be “no mix of children of different sizes”. Mrs Perry was supervising both the bouncy castle and the “bungee run”, and therefore could not keep a continuous watch on either. With breach of duty established Mr Justice Steel found that the shortfall in supervision was causative of the accident.

Samuel’s father, David Harris was added as the Third Defendant by Mr and Mrs Perry who argued that he was in part to blame for the accident, given the continuing duty of care of a parent for a child. They argued that Mr Harris failed to exercise proper control over Samuel, and had not provided him with suitable instructions or supervision for safe use of the bouncy castle. They also alleged that Mr Harris should have realised that Samuel was less disposed to acknowledge instructions as he suffered from Asperger’s Syndrome. These arguments failed. Mr Justice Steel found that Mr Harris was reasonable in his perception of the party being properly supervised, and found that the allegations regarding Asperger’s Syndrome added no weight to the argument, as Samuel required no extra supervision at school.

Comment

The Judge found that the shortfall in supervision was causative of the accident. Though most peoples’ experiences of children’s parties are that they are chaotic affairs that are impossible to manage with military precision, this case is a chilling warning that party organisers are potentially liable to expensive claims unless there is highly vigilant supervision. Permission to appeal has been granted. Mr and Mrs Perry were fortunate to be covered by legal expenses insurance and organisers of NHS fundraising or similar functions attended by the public would be well advised to check insurance cover as part of public liability or any hire agreement. Private individuals may or may not be covered by home contents insurance and any parent with a garden slide or trampoline at home could also fall foul of this ruling if visitors come to play!

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More advantageous - Part 36 rules? Lisa Carver v BAA Plc [2008] EWCA Civ 412

The Claimant, Miss Carver, was an air hostess who suffered a ligament injury to her ankle after entering a defective lift on BAA Plc (“BAA”) premises on 31 March 2003. BAA admitted liability on 24 July 2003 and made various offers to settle, which were not accepted prior to trial. At trial Miss Carver was awarded a greater sum than BAA’s Part 36 payment in to court. Despite Miss Carver’s apparent victory His Honour Judge Knight QC ordered Miss Carver to pay BAA’s costs from the date of expiry of the time to accept BAA’s payment into court to trial. She was also deprived of some of her own costs. Miss Carver appealed this decision.

This case hinges on the interpretation of CPR Part 36 and recent amendments to the wording with effect from 6 April 2007. The main effect of the amendments to Part 36 is that there is now no distinction between Part 36 payments into court and Part 36 offers to settle (a concession already won for NHS Trusts by a series of NHSLA cases). CPR Part 36.14(1) (a) states that when a claimant fails to obtain a judgment more advantageous than a defendant’s Part 36 offer, the defendant is entitled to his costs with interest from the expiration of the offer, unless the court considers it unjust to do so. Under the previous rules, a payment into court was “beaten” if exceeded by as little as £1 and the cost consequences usually followed unless it was “unjust” or there was some derogation from the usual rule arising from conduct.

Miss Carver’s solicitors served a schedule of loss with proceedings claiming £2,170. BAA made a Part 36 offer of £4,006 (including an interim payment) on 17 November 2005 before the commencement of proceedings. Miss Carver obtained further expert evidence which led her to increase her claim for damages to in excess of £5,000 but less than £15,000. In response, BAA made a Part 36 payment into court on 6 June 2006 totalling £4,520 (including the interim payment). This offer was rejected by Miss Carver, and a further schedule of loss was served claiming over £19,000. The parties’ experts agreed that Miss Carver had suffered no more than a mild ankle sprain before an updated schedule of loss was served, reducing Miss Carver’s claim to approximately £2,700. She made a Part 36 offer of £12,500 to settle the claim, which was not accepted by BAA, and later made an offer to accept £20,000 prior to trial.

At trial, HHJ Knight QC awarded Miss Carver £4,686.26 inclusive of interest, beating BAA’s Part 36 payment into court by only £51 (after adjustments for interest). He agreed with BAA that it should not be made to pay Miss Carver’s costs from November 2005 to June 2006 and Miss Carver should pay BAAs costs from the expiry of its Part 36 payment on 27 June 2006 to the trial date on the grounds of (amended) CPR Part 36. He also relied on conduct under Part 44 and highlighted Miss Carver’s lack of response to the Part 36 offer saying that her conduct of her case had been “highly regrettable”.

Miss Carver appealed on the basis that if CPR 36.14(1)(a) was given its ordinary meaning, a claimant does not fail to obtain a more advantageous judgment if it beats the defendant’s Part 36 offer by a penny, albeit that the advantage was a slim one. By contrast BAA argued that the amendments to Part 36 signal a change in the Court’s approach to costs and extend a Judge’s discretion on costs beyond a strict financial comparison. Miss Carver’s appeal was dismissed. Lord Justice Ward held that the words “more advantageous” now permit “a more wide ranging review of all the facts and circumstances of the case” as in non-money claims. While Miss Carver had beaten BAA’s payment into court, this was not deemed to be more advantageous on the facts taking into account the modern approach to litigation and whether the fruit of the litigation was worth the fight. The policy of promoting settlement (“compromise is better than contest”) runs through this judgment and it was held that no reasonable litigant would have carried on litigating for only an extra £51.

Comment

On the face of it this case is good news for Defendants. Sensible Part 36 offers made by Defendants will need careful consideration to avoid painful costs sanctions and the risk to Claimants will be greater still when the offer is made early. As a matter of interest, the Claimant’s costs claim would have been £80,000 (the Judge said that to incur such high costs in a claim that is worth less than £5,000 “fills one with despair”). However, the judgment might equally be seized upon by a Claimant only narrowly failing to beat a Part 36 offer and the there are a lot of “sympathetic” first instance judges who might be more willing than HHJ Knight to exercise this wide discretion in favour of the Claimant.

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Payable on Death?
Melanie Jane Arnup v M W White Limited [2008] EWCA Civ 447

Should benefits received on death be deducted when assessing damages under the Fatal Accidents Act 1976 (“the FAA”)? Mrs Arnup, the Claimant, is the widow of Mr Kevin Arnup who was killed whilst working at M W White Ltd (“MW”). She appealed against a decision that a payment of £129,000 received from a death-in-service benefit scheme should be deducted from damages awarded under the FAA. Additionally, MW cross appealed a decision not to deduct a payment of £100,000 to Mrs Arnup from MW’s Employee Benefit Trust.

His Honour Judge Seymour QC considered whether the payments made to Mrs Arnup should be deducted. The payment of £129,600 was in respect of MW’s death-in-service benefit scheme, a lump sum to be paid in the event of a death at work of a member. It was payable to the employer as trustee, who could pay this either to the estate of the deceased or any surviving dependants. The second payment was for £100,000 from MW’s Employee Benefit Trust.

Section 3 of the FAA states that ‘such damages may be awarded as are proportioned to the injury resulting from the death to the dependants…’. Section 4 of the FAA is concerned with disregarding benefits. It states, “in assessing the damages in respect of a person’s death in an action under this Act, benefits which have accrued or will or may accrue to any person from his estate or otherwise as a result of death shall be disregarded”. His Honour Judge Seymour QC held that neither payment had accrued to Mrs Arnup on account of her husband’s death, but on account of independent decisions by MW and the Employee Benefit Trust. It followed that these two discretionary payments should not be disregarded when assessing damages. HHJ Seymour QC did not find a direct causative link between the deaths and the payments. The independent decisions had broken the chain of causation between the death and accrual of the payments. The common law exceptions to deductibility were also considered, and it was held that the £100,000 payment from MW’s Employee Benefit Trust fell within the “benevolence” exception, and was therefore to be disregarded when assessing damages under the FAA. The death-in-service benefit of £129,000 did not fall within the exception and must be deducted from Mrs Arnup’s loss of dependency claim.

On appeal Mrs Arnup submitted that to hold that the payments had not accrued as a result of her spouse’s death was highly artificial. If the judge was correct and the payments had not accrued as a result of the death; the payments were then completely irrelevant to the assessment of damages under the FAA. MW argued that the principles of section 3 of the FAA require any payment made by a defendant subsequent to death to be taken into account in reducing the claim, as is the case with ex gratia payments by a defendant, which are deducted from damages in personal injury claims.

Lady Justice Smith allowed the appeal and dismissed the cross appeal. She took a purposive approach to the legislation, finding that Parliament had intended to continue and complete the trend toward ensuring that all benefits coming to a dependant as a result of the death were to be left out of account.

She also concluded that if HHJ Seymour QC was correct on causation, he could not hold that either of the payments fell to be deducted from the loss of dependency anyway. She found that where such payments do not result from death, section 4 of the FAA would be irrelevant. The common law position is that such benefits should be disregarded when calculating damages. Even if there is a causative link, the expression "or otherwise as a result of his death" in section 4 of the Act is wide enough to cover benefits in kind which accrue as a result of death.

Comment

MW had argued that there are powerful public policy reasons to encourage payments made by a defendant to a claimant to be deducted from the claimant’s loss of dependency award. This has not been the case in this instance, to the detriment of the defendant.

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