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Legal Watch: Personal Injury 15th May 2014 Issue: 018

Part 36 The case of Saigol v Thorney Ltd (2014) EWCA Civ 556 confirms that a court should not consider an offer to have the status of a Part 36 offer unless it is intended to be made under

In This Issue:

that rule and is fully compliant.

• Part 36

The defendant/respondent specialised in tuning cars and

• Civil Procedure/Hearsay Evidence

preparing them for races. The claimant/appellant took his vehicle to the defendant to have it converted to a car fit for

• Employers’ Liability

racing. The defendant, having completed the work, refused to return the vehicle unless the claimant paid a sum in excess of what had been agreed. The claimant did not pay and the defendant advertised the car for sale. The claimant brought proceedings claiming the return of the car and damages for breach of contract. The defendant counterclaimed for payment of the sum that it claimed was still due. At 1.48 pm on 8 March 2012, following an unsuccessful mediation, the defendant made an offer to settle for £2,000. The offer was to remain open until 12.00 noon on 9 March following which “it will lapse without further notice”. The offer was not accepted and lapsed; the case proceeded to trial. The judge found for the claimant for £745 on his claim and for the defendant for £375 on its counterclaim: the defendant would therefore pay a balance of £370 to the claimant. At the costs hearing, the judge noted that the outcome was substantially a draw. He noted that as the claimant had refused the defendant’s offer, the “normal consequence” was that the claimant should pay the defendant’s reasonable costs from the offer date. The claimant appealed and submitted that the judge had wrongly understood the defendant’s offer to be a Part 36 offer. Allowing the appeal, the Court of Appeal held that it was clear that the judge had misunderstood the nature of the offer. It was not apparent from the transcript that he had read the offer in detail or to any extent at all. On being told of the offer, he had promptly informed the claimant of the “normal consequence” of failure to accept. In the closing exchange with the defendant, the judge had asked whether the claimant

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should pay the costs from 14 or 21 days after the offer. The defendant’s counsel stated that with a Part 36 offer it was “usually 21 days” before going on to say that “although [the defendant’s] offer -”, at which point the judge cut him off. The inference to be made from the exchange was that the judge regarded the offer as a Part 36 offer.

‘ was clear that the judge had misunderstood the nature of the offer’ If he had been aware that it was not, he would have known that the omission to accept the offer carried no “normal consequence” and that there was no usual period of days after which costs fell to be paid. In such circumstances, he would have known that the making of the offer, and the claimant’s omission to accept it, was merely a factor to take into account in deciding the fair order as to costs. Nothing that the judge said in the course of the relevant exchange indicated that he understood that. In considering that the offer was a Part 36 offer, his decision as to costs was materially flawed. Paragraph 4 of the costs order was made in error and was set aside. The court substituted a new paragraph 4 which provided that “save as provided for in paragraph 3 there is no order as to costs”.

Civil Procedure/Hearsay Evidence National Crime Agency v Azam and others [Lawtel 9/05/2014]

The applicant National Crime Agency (NCA) had brought

is an unusual case looking at the working of Civil Evidence

civil recovery proceedings against the respondents. The first

Act (‘hearsay’) notices.

respondent wished to rely on the evidence of a number of

Relevant extracts from CPR 33 are as follows: 33.2

witnesses, who were overseas, and he had served hearsay notices in respect of the same. The NCA submitted that under CPR 33.4 the court should

(1) Where a party intends to rely on hearsay evidence at trial

order that if the first respondent wished to rely on that

and either –

evidence, the witnesses would have to be called and make

(a) that evidence is to be given by a witness giving oral

themselves available for cross-examination. It argued

evidence; or

under CPR 32.1 (the power of the court to control witness

(b) that evidence is contained in a witness statement of a person who is not being called to give oral evidence; that party complies with section 2(1)(a) of the Civil Evidence Act 19951 serving a witness statement on the other parties in accordance with the court’s order. (2) Where paragraph (1)(b) applies, the party intending to rely on the hearsay evidence must, when he serves the witness statement – (a) inform the other parties that the witness is not being called to give oral evidence; and (b) give the reason why the witness will not be called. 33.4 (1) Where a party – (a) proposes to rely on hearsay evidence; and (b) does not propose to call the person who made the original statement to give oral evidence, the court may, on the application of any other party, permit

evidence), it was an exceptional case where justice required the witnesses to attend or else the evidence should be excluded, because it concerned alleged criminal conduct, was contradictory and needed to be properly tested.

‘There was no authority that CPR 33.4 provided for an order that a party should call the maker of a statement where there was no reason to believe that that party could produce the witness concerned’

that party to call the maker of the statement to be cross-

Refusing the application, the High Court judge held that CPR

examined on the contents of the statement.

33.4 contemplated that there might be a party that wished

(2) An application for permission to cross-examine under this

to cross-examine the maker of a statement proposed to be

rule must be made not more than 14 days after the day on which a notice of intention to rely on the hearsay evidence was served on the applicant.

relied upon as hearsay evidence. That was different from the instant order sought, which was designed to ensure that if the terms of the order were not met the first respondent would

be prevented from relying on the witnesses’ evidence. The NCA’s understanding of “call the maker of the statement” under the rule was different from the ordinary usage of that expression. Ordinarily it described a party producing a witness who was then called to the witness box, or called to give evidence via video link; the NCA suggested that the party relying on the hearsay would be expected to assist in producing the witnesses. There was no authority that CPR 33.4 provided for an order that a party should call the maker of a statement where there was no reason to believe that that party could produce the witness concerned. An exclusionary order under CPR 32.2 should only be made exceptionally, if justice required it. The issues to which the evidence was relevant were important. However, the circumstances did not come near to making it the sort of evidence that could be excluded when it was otherwise admissible. The trial judge would be able to form a view as to the appropriate weight to be given to the evidence. The NCA’s application was ill-founded and based upon a misunderstanding of the CPR.

Employers’ Liability There are two cases under this heading.

there being some sort of inner floor-to-ceiling barrier.

The case of McGregor v Genco (FC) Ltd (2014) EWHC 1376

Although the claimant’s asbestos exposure was modest, in

(QB) related to a claim by a retail assistant for mesothelioma

that it was for a period of no more than several months during

contracted during the course of her employment in the

1976, the likelihood was that it had caused her mesothelioma.

defendant’s shop.

While she had a family history of mesothelioma, that did

In the mid-1970s, old escalators around 10 feet from the shoe department where she worked were removed and replaced. It was the claimant’s case that that work had lasted from four to six weeks, if not longer, and had been carried out while the department store was still open to the public. She estimated that she had cleaned a fine white dust from the shoes on display three to four times a day. The workmen replacing the escalators had worn protective dust masks, some sort of inner floor-to-ceiling barrier had been used and a joint expert statement agreed that it was likely that asbestos insulating boards had been used in the construction of both the old and new escalators. On the evidence, a question arose as to whether the claimant might have been exposed to asbestos dust through her father’s work clothes. Her family also had a history of mesothelioma.

not invalidate the conclusion that the relevant exposure materially increased her risk of developing the disease.

‘...the question was whether the carrying out of the escalator works should have alerted the defendant to the fact that the claimant might be at risk of injury...’

Subject to liability, damages had been agreed. The issues were (i) whether the claimant was exposed to asbestos

On the issue of causation, the question was whether the

dust through her father or during her employment with

carrying out of the escalator works should have alerted the

the defendant and the extent of any exposure; (ii) whether

defendant to the fact that the claimant might be at risk of

that exposure caused her mesothelioma; (iii) whether the

injury when she worked for them in 1976. On the balance

exposure was negligent.

of probabilities, there had been a floor-to-ceiling enclosure

Dismissing the claim, the High Court judge held that on the balance of probabilities, the claimant had had no exposure to asbestos dust in her family home through her father. She had, however, been subjected to exposure of asbestos dust during her employment with the defendant at the department store in 1976; her evidence and that of her witnesses, was consistent with the use of asbestos insulation board during the course of the works. There was no evidence to establish that that activity occurred every day but it was clear that a regular dust nuisance had been created and maintained for most of the time that the works were taking place despite

which would have been considered as adequate protection at the time: the question then became whether there was any further duty to make enquiries as the works progressed. There was nothing that indicated that there should have been an understanding of the risk which was caused by the operations or anything to alert the defendant that the precautions that it adopted were inadequate and required alteration; the fact that some workmen wore masks was insufficient to put the defendant on notice. Accordingly, the court did not accept that during 1976 when the escalator work was being carried out the defendant should have

appreciated that the claimant was at risk of an asbestos-

not acting on behalf of the parent group. He was acting

related injury or that its failure to appreciate and take what

pursuant to his fiduciary duty owed to the subsidiary and

would now be regarded as appropriate precautions or to

pursuant to no other duty. It followed that the basis upon

make enquiries about the nature of the dust had been

which the judge determined that the defendant owed a


duty of care to the claimant was unsupportable. There was

In the second case under this heading we see an attempt to establish liability against a company for the acts or omissions of its subsidiary, using the approach adopted in Chandler v Cape(2012). In Thompson v Renwick Group Plc (2014) EWCA Civ 635. the claimant had been employed by two companies between 1969 and 1978. The companies were acquired by a subsidiary of the defendant in 1975. Shortly after that, a new director took over the running of the depot where the claimant worked. It was likely that the new director had been nominated by the defendant. The claimant’s work involved handling raw asbestos. He developed pleural

no evidence of any relationship between the new director and the defendant beyond his inferred nomination by it as director of the subsidiary.

‘The evidence fell far short of what was required for the imposition of a duty of care on the defendant.’

thickening as a result of his exposure to asbestos dust. His

A duty of care would only be imposed if the threefold test

employers did not have liability insurance and would not be

enunciated in Caparo Industries Plc v Dickman (1990) was

able to meet any award for damages. He therefore brought

satisfied, namely the test of foreseeability of damage and

proceedings against the defendant, their parent company.

proximity where it was fair, just and reasonable to impose

At first instance the judge held that the defendant, through

a duty of a given scope upon the one party for the benefit

the new director, had taken control of the daily operation of

of another.

the business to a sufficient extent to give rise to a duty of care to the claimant. The Court of Appeal was required to determine (i) whether a parent company assumed a duty of care to employees of its subsidiary in health and safety matters by virtue of appointing an individual as director of its subsidiary company with responsibility for health and safety matters; (ii) if not, whether the evidence was sufficient to justify the imposition of a duty of care on the parent company to protect the subsidiary company’s employees from the risk of injury arising out of exposure to asbestos at work.

In Chandler v Cape it was stressed that the critical question was “whether what the parent company did amounted to taking on a direct duty to the subsidiary’s employees”. The factors relied upon by the claimant were far removed from Chandler. Taken individually, the points did not withstand scrutiny. Coordination of operations between subsidiaries was just that, unless it was demonstrated that the group holding company assumed control in such a manner as to demonstrate an assumption of duty to the employees of the subsidiaries. There was no evidence that the defendant carried on any business apart from that of holding shares

The claimant submitted that after the defendant acquired

in other companies. The court was looking for a situation in

the subsidiary, paperwork and lorries bore the defendant’s

which the parent company was better placed, because of its

logo, and the subsidiaries shared resources with its other

superior knowledge or expertise, to protect the employees


of subsidiary companies against the risk of injury and,

Allowing the defendant’s appeal, the Court of Appeal held that the answer to the first question was no. In running the day-to-day operation of the subsidiary the new director was

moreover, where because of that feature it was fair to infer that the subsidiary would rely upon the parent deploying its superior knowledge in order to protect its employees. There was no basis upon which it could be asserted that the

defendant had, or should have had, any knowledge of the hazards of handling raw asbestos superior to that which the subsidiaries could be expected to have. The judge’s findings on the intermingling of the businesses, the interchangeable use of depots and the shared use of resources amounted to

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no more than a finding that the companies were operating


as a division of the group carrying on a single business. That

• Legal Watch: Personal Injury

did not mean that the legal personality of the subsidiaries separate from that of their ultimate parent was not retained


and respected. The evidence fell far short of what was

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required for the imposition of a duty of care on the defendant.


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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.

Legal Watch - Personal Injury - Issue 18  

Plexus Law / Greenwoods Newsletter

Legal Watch - Personal Injury - Issue 18  

Plexus Law / Greenwoods Newsletter