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Legal Watch Personal Injury February 2014 Issue 008


Civil Procedure/Compliance with directions We bring you this week’s inevitable post Mitchell/Jackson case.

In This Issue:

In Chartwell Estate Agents Ltd v Fergies Properties SA and

• Civil Procedure/Compliance with directions

another [Lawtel 21/02/2014] the claimant/appellant applied for an extension of time to serve its witness statements in its claim against the respondent/defendant for commission

• Vicarious liability • Jurisdiction

owed following the sale of a property. The claimant had made repeated requests to the defendant, stating that it would apply for specific discovery if it did not provide full disclosure, without which it was impossible to complete its witness statements. The defendant refused those requests, disagreeing with the documents’ relevance and their effect on the preparation of witness statements. The claimant informed the defendant that it was not going to be ready to exchange witness statements simultaneously on the relevant date and the exchange did not take place. The defendant stated that although it would have been ready to exchange, it had not finalised its own statements because of the claimant’s stated position. The claimant did not make an application for specific discovery. The defendant later offered disclosure without seeking to determine the issue of the documents’ relevance, but refused to consent to an extension of time for serving the witness statements, contending that that was a matter for the court to consider. Several weeks after the ordered exchange date, the claimant issued the instant application for the court’s permission, as required by CPR 32.10, to serve the witness statements out of time. It submitted that (1) an extension of time should be granted as the breach was trivial and there had been a good reason for the breach, given the defendant’s failure to provide the disclosure earlier and the defendant’s own failure to

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serve its witness statements; (2) the relief from sanctions

(Obiter) There was clear authority that CPR 3.10 constituted

provision under CPR 3.9 did not apply to an application for

a sanction. It was arguable that, when seeking an extension

an extension of time under CPR 31.10, so that the court

of time before the trial had started, CPR 3.9 did not apply

was only required to decide whether to grant permission to

because the sanction had not yet taken effect. If that was

adduce the statements.

true, then relief from sanctions would not be required and

‘..it was an important factor that there was nothing to prevent the trial window being maintained’

the court would just be required to consider, applying the overriding objective, whether to extend time. It was also possible that the actual sanction under CPR 32.10 was that permission would be needed to adduce the witness statement. The contrary view was that when the time limit for exchanging witness statements expired, CPR 32.10 debarred a party from calling a witness unless the court gave permission, so that the debarring ran from the expiry

Allowing the application, the High Court judge held that

of the deadline until the point at which permission was

notwithstanding the purported complexity of the case’s

granted, when relief from the sanction would be required.

issues, it was an important factor that there was nothing to

If the court was wrong that CPR 3.9 had applied, it had still

prevent the trial window being maintained. Both parties had

been appropriate to extend time.

been at fault. The ongoing disclosure dispute should have been addressed at an earlier case management conference. Having taken issue with the defendant’s disclosure, the claimant’s failure to apply for specific discovery and for an extension of time for serving the witness statements was not trivial. Even in the absence of full disclosure, the claimant could have served its witness statements and then applied to serve supplemental statements if that became necessary upon full disclosure. There was no justification for its failure to seek an extension of time before the exchange date. However, the claimant’s default could not be seen in isolation as the defendant’s eventual offer of disclosure could have been made much earlier. Most importantly, the instant case concerned a simultaneous exchange of statements, rather than sequential service. The defendant had not been ready to exchange on time. There was therefore default on both sides. The trial date remained and both parties could exchange witness statements almost immediately. Refusing relief through a robust application of CPR 3.9 as amended would have effectively ended the claimant’s claim. That was too severe a consequence and an unjust result when considered against the history of the case. As the court would not increase the costs budgets any additional expenditure incurred would be a direct consequence of the parties’ defaults. 03

Chartwell Estate Agents Ltd v Fergies Properties SA and another [Lawtel 21/02/2014]


Vicarious liability In last week’s edition of this publication we featured the

salient features of the employment relationship, including

case of Mohamud v Wm Morrison Supermarkets Plc as an

the fact that the prisoner was compensated for his kitchen

example of a court limiting an employer’s vicarious liability

work, an imposition of vicarious liability was not justified.

for the actions of an employee. In Cox v Ministry of Justice

In particular, he referenced the fact that employment was

(2014) EWCA Civ 132 the decision went the other way and,

a voluntary, mutual relationship, unlike prisoners’ work, the

as in the case of Various Claimants v Institute of Brothers of

prisoner’s work had not furthered the defendant’s business

the Christian Schools cited in the judgment, the concept of

undertaking, and although there was a relationship of

‘employment’ was extended to establish liability.

control, it arose from common sense and the fact that

‘..the fact that the prisoner was bound to the defendant by an imprisonment sentence…rendered the relationship between him and the defendant, if anything, closer to that of an employer and its employees’

duties were owed by the ministry to its prisoners. The judge also concluded that the defendant was not in breach of its direct personal duty to the claimant because it was not the prisoner’s lack of training in manual handling operations that had caused the accident but his disregard for the claimant’s instructions and the obvious risk of injury. The claimant appealed. Allowing the appeal, the Court of Appeal held that adopting a principled, coherent and incremental approach, it was necessary to apply the features of the traditional relationship giving rise to vicarious liability, and to ask whether the features of the instant case fell within them so that it was fair and just to impose vicarious liability on the defendant. That involved asking whether the relationship between the prisoner and the defendant was one akin to employment. When one carried out that task and applied the relevant features identified in Various Claimants v Institute of Brothers of the Christian Schools (2012), it was clear that those features distinctly applied in the instant

The claimant/appellant appealed against a decision

case. In particular, the features which applied were the

dismissing her personal injury claim against the defendant/

ability to compensate the prisoner for his work, the fact that

respondent. She had worked as the catering manager at a

his employment by the defendant had created the risk of

prison. When unloading a consignment of food under her

the injury being caused to the claimant, and the fact that the

supervision, a prisoner had dropped a sack causing a food

prisoner would have been under the defendant’s control.

spillage. The claimant instructed all of the prisoners to stop

The work carried out by the prisoner and the other kitchen

working until the spillage had been cleared but, negligently

workers was essential to the functioning of the prison and

and contrary to her instructions, another prisoner continued

was different in nature from the activities of those prisoners

working and dropped a sack onto the claimant’s back

engaged in education, training or on offending behaviour

while she was kneeling on the floor clearing the spillage.

programmes. The work carried out by the prisoner relieved

The judge concluded that, although the defendant’s

the defendant from engaging employees at market rates and

relationship with the relevant prisoner exhibited some 04


with all the concomitants of an employment relationship, and it was clearly done on the defendant’s behalf and for its benefit. There was no reason that the defendant should not take on the burden of the prisoner’s work as well as the benefit. As in Various Claimants v Institute of Brothers of the Christian Schools, the differences between the prisoner’s relationship with the defendant and the normal employment relationship, including the fact that the prisoner was bound to the defendant by an imprisonment sentence and not a contract, and the fact that his wages were nominal, rendered the relationship between him and the defendant, if anything, closer to that of an employer and its employees: far from there being mutuality or consent, there was an element of compulsion in engaging in the activity directed by the ministry as the quasi-employer. The defendant was accordingly vicariously liable for the claimant’s injury. The judge’s findings as to the likely content of any training and as to the consequences if such training had been provided were unassailable on both duty and causation. The judge was not obliged to draw any inferences against the defendant. He was entitled to conclude that the provision of training would not have caused the prisoner not to ignore both the obvious risk of injury and the claimant’s express instructions. (Per Beatson, L.J.) It was understandable that considering whether a relationship was akin to employment could lead to a focus on whether the relationship was voluntary, but that focus could mislead if it was taken as a bar to vicarious liability rather than simply a factor to be taken into account. While the existence of control was important, vicarious liability did not depend solely on it: what one was looking for was whether the person who had committed the negligent act was so much part of the work, business or organisation of the person or entity who it was said should be vicariously liable that it was just to make the latter answer for the negligence of the former. In Cox v Ministry of Justice (2014) EWCA Civ 132

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Jurisdiction The case of Brownlie v Four Seasons Holdings Inc (2014)

permission when given, to try the merits of the claim; yet

EWHC 273 (QB) is the latest in a series in which the courts

the master had made findings of fact on issues that would

have shown a readiness to seise jurisdiction for an English

have to be determined at any trial. Moreover, his findings as

national.

to the ownership and/or management of the hotel and as

The claimant and her late husband, who were British and resident in the United Kingdom, had been staying in Egypt at a hotel which formed part of the hotel group carrying the defendant’s name. During a sightseeing tour, the car in which they were travelling crashed, injuring the claimant and killing her husband and his daughter. The claimant had booked the tour by telephoning the hotel’s concierge before they left the UK, having referred to a brochure she had picked up on a previous stay at the hotel. She claimed that the defendant was liable for her personal injuries and under the Fatal Accidents Act 1976; she also claimed under the Law Reform (Miscellaneous Provisions) Act 1934 as the executrix of her late husband’s estate. In a letter before action to the defendant she sought pre-action disclosure of documents relating to the tour booking. The defendant passed the request to the hotel in Egypt. Egyptian lawyers responded, asserting that the accident was caused by the car company and the driver only, and that the driver was never employed by the hotel, whose role had been merely to relay the claimant’s request for a tour to the car company. The claimant failed in her further attempts to obtain clarification from the defendant as to what corporate entity or entities were involved. She issued proceedings and obtained permission to serve the defendant in Canada. The defendant applied successfully for that to be set aside and for a declaration that the court had no jurisdiction to try the claim. The master decided that it was clear that the defendant did not own or operate hotels and in particular did not own the hotel in Egypt, and that the claimant had contracted with the hotel not the defendant for the tour.

to the party with whom the claimant contracted for the tour were based on defective witness statements and/or were unsupported by evidence. There was no evidence that any company had been established in Egypt for the purpose of managing the hotel. Contrary to the master’s findings, the claimant had a strongly arguable case that the other party to the contract for the tour was most probably an entity with whom the proprietor of the land and buildings had entered into agreements; agreements which were likely to have provided for a licence to use intellectual property including the defendant’s logo and its name and for management and advisory services.

‘…the claimant heard (the) acceptance in England, so the contract was made in England’ As to whether a contract was made by the claimant with the defendant, the brochure was the most important evidence, because it alone purported to identify the concierge’s principal. It would lead a reasonable person to understand, as the claimant did, that she was contracting with an international company known to trade under the defendant’s name and logo. No specific company fitting that description was or could have been known to the claimant at the time, because those responsible for the hotel chain chose not to tell their guests who or which company was responsible for the management of the hotels, including, in

Allowing the claimant’s appeal, the High Court judge held

particular, the guests’ safety. However, the defendant fitted

that it was not appropriate for the court, on an application

that description. The claimant had a strongly arguable case

for permission to serve out of the jurisdiction or to set aside

that the defendant was the other contracting party. No other

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company had been identified as a possible defendant. The

statements pursuant to the underused power in paragraph

defendant could have no complaint if the court did not take

25.1.

into account points it might make or evidence it might call at any trial, but which it chose not to mention at this stage. Contrary to the master’s view, the most probable analysis of the evidence regarding the claimant’s conversation with the concierge was that, after some discussion about the details of the tour she wanted, she told him that she wished to make a firm booking, which comprised her offer, he then accepted the booking, and therefore the claimant heard that acceptance in England, so the contract was made in England. However, it was hard to say that either party had much the better of the argument. Although in light of the preceding findings it was unnecessary to decide, given the finding that the claimant had a good arguable case that the defendant was the party to the contract, the applicable law pursuant to Article 4(1)(b) Regulation 593/2008 (Rome I) was not that of England. The claimant had a good arguable case that her claims in tort disclosed a serious issue to be tried and on which she had a real prospect of success. As the most likely live issue at any trial was the amount of special damages, and because people with knowledge of the claimant’s late husband’s professional practice and his health were likely to be in England, it was clearly the most appropriate jurisdiction. Two witness statements made by solicitors in support of the defendant’s application were plainly not compliant with PD 32. They failed to say either that they were speaking from their own knowledge or what the source of their information or belief was; and the substance of one was drafted as a submission rather than a statement of fact. It was unacceptable that solicitors should breach the rules in that way. If their instructions did not enable them to make a compliant witness statement, then it was their duty to the court to ask for permission under paragraph 25.2 of the Practice Direction to file a defective witness statement, or not to file a statement at all. In the instant case, it might have been better if the court had simply refused to admit the

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Brownlie v Four Seasons Holdings Inc (2014) EWHC 273 (QB)


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Legal Watch - Personal Injury - Issue 8