2014 Highlights

Denton: relief from sanctions

One of the significant developments for injury lawyers has been the judgment in the three appeals: Denton v THWhite Ltd; Decadent Vapours Ltd v Bevan; Utilise TDS Ltd v Davies, in which the Court of Appeal very helpfully set out a three-stage test to determine whether relief from sanctions under rule 3.9 of the Civil Procedure Rules should be granted for failure to comply with rules, practice directions and court orders.

Until then there had been a lot of confusion and often a very harsh approach to non-compliance following Mitchell v News Group Newspapers Ltd. The failure to file a costs budget in time effectively meant that Mr Mitchell's solicitors were undertaking complex, high profile and hotly-contested litigation without hope of remuneration.

As a consequence of this decisionmany parties (both claimants and defendants alike) found themselves with almost zero tolerance from the court for minor non-compliance which, before the-Jackson reforms, would have resulted in no more than some criticism and costs penalties. Many unnecessary applications were made and often one party took advantage of the other's inability to meet a deadline, even if only by a few hours.

In many respects, then, the Denton judgment was much needed and appears to have led to some calm within the civil litigation landscape.

Qualified one-way costs shifting (QOCS)

We have also seen the application of QOCS in two cases. The first was Gosling v Screwfix (unreported, Cambridge County Court, 29 March 2014). Until this case, there was no definition of what amounts to 'fundamentally dishonest', although it was envisaged that a fraudulent claim was likely to fall into this category. In this case, there was no dispute that an accident occurred and that the claimant had suffered injury, but the damages awarded were reduced by half when covert surveillance evidence showed the claimant had significantly exaggerated his symptoms. The judge on the defendants' application ordered the claimant to pay their costs on an indemnity basis, as he considered the claimant had been 'fundamentally dishonest' with the intent to deceive them and was no longer protected by the QOCS shield.

Another important case concerning costs and QOCS was Wagenaar v Weekend Travel Ltd t/a Ski Weekend. Practitioners were initially led to believe that QOCS protection would apply only to conditional fee cases that post-date the Jackson reforms. However, in this case the Court of Appeal confirmed that there is nothing in the rules to support this assumption. The courts have discretion to order retrospective application of QOCS as and when they see fit. The court also helpfully clarified that QOCS protection is only afforded to claimants. Therefore, if a defendant brings a Part 20 claim for indemnity or contribution, they do so at their peril. If the claimant loses, the defendant would be at risk of a double loss in terms of costs (as they will have to pay the costs of the part 20 defendant and will recover none from the claimant). It will be interesting to see what approach defendants take in the future.

Another case of significance is Dunhill v Burgin where the claimant who had compromised and settled her injury claim many years earlier was deemed not to have mental capacity to conduct proceedings at the time of settlement. The brain injury sustained had been profound and she was allowed to re-open her case.

Mesothelioma Act 2014

Another important development was Mesothelioma Act 2014, under which sufferers diagnosed on or after 25 July 2012 who cannot trace a former employer or insurer will be eligible for 80% of the value of their claim from a new scheme funded by the insurance industry. While a reduction of 20% of their compensation is unfair on those suffering the effects of the disease, it is at least seen as some progress in this longstanding battle.

 Key issues on the horizon for 2015

  1. The outcome of the appeal in Coventry v Lawrence is of little relevance to injury practitioners, as it will not change the law regarding the recoverability of additional liabilities.  However, the Supreme Court's comments about the pre-April 2013 costs regime being incompatible with the European Convention of Human Rights could potentially enable defendants who have paid or are required to pay solicitors' success fees or ATE premiums to sue the government.
  2. We can expect more challenges relating to further reforms on whiplash claims and expert evidence.
  3. A review of the discount rate - which has remained at 2.5% for 13 years, despite the significant changes in the financial markets and interest rates - should be completed, though it is unlikely that we will have the result until after the general election.
  4. The third reading of the Social Action, Responsibility and Heroism Bill in the House of Lords took place recently and is currently awaiting final approval by the House of Commons before obtaining royal assent. This pointless piece of legislation does not change the existing law.  It requires the Courts when determining liability to have regard to matters which they already have regard to (specifically whether the defendant was acting responsibly, heroically or for the good of society).
  5. There will inevitably be more developments on the mesothelioma scheme and further cases on QOCS and relief from sanctions.