Steven Gibson v Menzies Aviation (UK) Ltd [2016] SC EDIN 5

Background

The Voluntary Pre-action Protocol is designed to provide structure to the pre-litigation process, but what happens when a claimant fails to abide by the Protocol, and instead, rushes headlong into litigation?

Scottish courts have grown more receptive to the argument that in such cases, a claimant’s expenses should be restricted. This case was the first in the new All Scotland Personal Injury Sheriff Court to deal with the issue.

The facts

A claim was intimated on behalf of Steven Gibson in November 2014. At the same time, Mr Gibson’s solicitors requested sight of earnings information, at least some of which was produced by February 2015. Liability was admitted early, and insurers of Menzies confirmed that they would deal with the claim in terms of the Voluntary Pre-Action Protocol.

In June and August 2015, Mr Gibson’s solicitors obtained medical reports, but did not disclose them. Instead, they wrote to insurers at the end of August saying they still required some further wages information.

When Mr Gibson’s solicitors received no response within four weeks, they raised an action in the Court of Session. Menzies’ solicitors indicated they felt this was premature: they were concerned that medical reports had not yet been disclosed. Mr Gibson’s solicitors indicated that they needed the wages information to properly value the claim.

As it turned out, the action had been raised against the wrong defenders, so a fresh action was raised in October in the new All Scotland Personal Injury Court. Only after this new action was raised were the medical reports lodged with the court.

Shortly thereafter, a tender was intimated, and accepted.

Menzies argued that the failure to disclose the medical reports, which were available before proceedings were raised, meant the case could not be settled pre-litigation when otherwise it likely would have been. The argument that the missing wages information meant proceedings were necessary was a smoke-screen; as it happened, loss of wages comprised only 4% of the level of the accepted tender. Had the medical reports been available, a sensible offer would have been made. They had disclosed the vast majority of wages information.

On that basis, any expenses awarded to Mr Gibson should be modified to nil.

Mr Gibson argued that, on the contrary, the missing wages information was needed to properly value his claim. Even if medical reports had been disclosed, the wages documents were required. Litigation was necessary, and was not premature.

The decision

Sheriff McGowan was unwilling to modify expenses awarded in Mr Gibson’s favour to nil, but did reduce them by two thirds.

It was clear this was a case in which Menzies’ insurers had been seeking to obtain information to try and resolve the claim. Wages information had been disclosed early by insurers, albeit there was some dispute about the extent of that information. Nevertheless, it was clear from what had been disclosed that by December 2014, Mr Gibson appeared only to be losing approximately £30 a month. In any event, Mr Gibson himself would clearly have been able to estimate his further wage loss between January and May 2015.

No warning had been given that proceedings would be raised if the remaining wages information was not produced. There was no issue of limitation, and therefore it was not reasonable to commence court proceedings without further warning.

Further, there was no sound reason for failing to disclose the medical evidence as soon as it was available. It should have been disclosed before the Court of Session action was raised. Thereafter, it certainly should have been disclosed before the action in the All Scotland Court. Sheriff McGowan said, “the failure to disclose it until some ten days after the [All Scotland Court] action was raised is inexcusable.”

The disclosure of the medical reports timeously would have allowed an offer to be made, and even if some wages information was outstanding, a view could have been taken on an overall valuation.

However, it was impossible to say for certain what the level of any pre-litigation offer would have been, and whether that would have been accepted. It could also not be said that the failure to disclose the reports was the sole reason for litigation.

Our View

This first decision on the issue of premature litigation from the All Scotland Personal Injury Court is a good one from a defender’s point of view. Where a claimant fails to abide by the Protocol and rushes to litigation it seems likely the Court will be inclined to penalise the claimant by way of modification of expenses, which should encourage disclosure of documents as per the Protocol and, importantly, discourage unnecessary litigation.