Steven Gibson v Menzies Aviation (2015)
In one of the first decisions issued by the All Scotland Personal Injury Court, Sheriff McGowan imposed significant penalties on a pursuer whose agents failed to disclose medical evidence which denied a defender the opportunity to settle a claim.
Liability was admitted pre-litigation. The terms of the Scottish Voluntary Pre Action Protocol were not agreed, nor was there a refusal to agree it. The insurer requested sight of medical evidence on several occasions. The pursuer's agent had the medical reports, however refused to disclose them.
Proceedings were raised in the Court of Session, without prior warning to the insurer. That action was then dropped (most likely due to the change in the privative jurisdiction of the Court of Session) and a further action raised in the PI Court. Even then pursuer's agents refused to disclose medical evidence until they had vouching for the loss of earnings claim, which the insurer/insured held.
A tender was lodged and subsequently accepted by the pursuer who sought expenses on the judicial scale. The defenders opposed this, seeking to modify the pursuer's expenses to nil on the grounds that the litigation was premature and unnecessary and the pursuer's agent's conduct unreasonable.
The defenders argued that they had been put to unnecessary expense in defending the action. They were keen to resolve the case. The admission of liability was early and there was an offer of rehabilitation. Despite this, the pursuer's solicitor refused to engage in meaningful discussions. The refusal to disclose medical evidence until loss of earnings information had been provided was disproportionate; the loss of earnings claim amounted to 4% of the agreed settlement figure. There was no issue of limitation and the litigation was entirely unnecessary. In refusing to disclose medical evidence despite repeated requests from the defender's solicitor the pursuer's agents had acted unreasonably pre and post litigation. It was the defenders position that the aforementioned factors justified the exercise of the courts discretion against the pursuer and the modification of expenses to nil.
It was the pursuer's position that some of what had been said on behalf of the defender was misleading. They stated that requests for post-accident loss of earnings information had gone unanswered. Accordingly, litigation as necessary as a specification of documents required to be served on the defender.
The defenders lodged 7 emails which had been sent to the pursuer's agents over the course of 7 months. There was no response from the pursuer's agent. At no point did the pursuer's solicitor indicate that litigation was imminent. In their submissions to the court, the pursuer's agent advised that the insurer had failed to respond to one email. The Sheriff observed that this is indicative of the pursuer's solicitor applying one standard to themselves and another to the insurers. In any event, the insurer had not refused to provide the requested information; they had simply failed to do so. In the circumstances, it was held that the commencement of court proceedings without further warning was unreasonable.
In order to consider the question of expenses, the Sheriff had to consider whether the failure to disclose the medical reports can be said to have caused or contributed to the action being raised.
In considering this issue, Sheriff McGowan opined:-
"there is no sound reason for the pursuer's solicitor to withhold medical evidence…………….the failure to disclose the medical evidence was unreasonable and deprived the insurers of a genuine opportunity to settle the clam pre-litigation."
The Sheriff allowed the pursuer's motion, however reduced the pursuer's expenses by two-thirds. Whilst satisfied that the pursuer's solicitor's conduct was such that the Court should mark its disproval of it, it could not be said that failure to disclose the pursuer's medical evidence was the sole cause of the litigation.
We see this happening all too often. Pursuer's agents frequently proceed to litigation without having disclosed evidence which would allow insurers to settle case pre-litigation. The decision is encouraging for insurers and it is reassuring to see the new Court taking a hard line when actions are raised prematurely and unnecessarily.