A Court of Appeal judgment is eagerly awaited in a unique test case being managed by Kennedys, which could see claims being brought by third parties who have “bought” a cause of action. The Court of Appeal is to consider in what cases, if any, it is right that someone can assign a right to a personal injury claim and whether it would be in the public interest to allow this.
The original Claimant (Mr Catchpole) underwent surgical removal of a penile prosthesis in June 2006 due to infection. He was discharged the following day but was readmitted four days later due to a fever. MRSA was diagnosed and antibiotics were commenced. Mr Catchpole made a full recovery and decided not to pursue a claim himself. However, he “assigned” his “cause of action” to Mrs Simpson who paid £1 to take over his role as “Claimant”.
Mrs Simpson is said to be interested in using the claim of Mr Catchpole to highlight issues relating to MRSA. Her deceased husband was also diagnosed with MRSA whilst being treated for cancer at the same hospital.
Mrs Simpson has since stated that her motive is not financial. This is against a background of having settled the claim of her husband for £2,000. Following that settlement the Claimant's solicitors sent a bill of legal costs to the NHS in excess of £80,000. Once the case was assigned, the level of damages claimed was also increased from £5,000 to £15,000.
An application to strike out the assignment of the claim was successful on 1 September 2009 and Mrs Simpson was ordered to pay the Defendant’s costs. Mrs Simpson appealed this decision and the matter was heard 2 November 2009 and the appeal was dismissed. Mrs Simpson then applied to the Court of Appeal requesting permission to appeal to them. This was granted on 28 September 2010 by Lord Justices Rix and Aikens who stated that they considered the chances of Mrs Simpson’s appeal succeeding were “very slim indeed”.
However, their lordships were satisfied that the right to assign a right to a personal injury claim and whether it would be in the public interest to allow this was a new point of law, which the Court of Appeal may wish to consider.
The appeal hearing took place on 23 March 2011 before Lord Justice Maurice Kay, Lord Justice Moore-Bick and Lady Justice Smith.
Mrs Simpson denied that there is any principle of law which prevents alleged victims of negligence assigning their right to bring proceedings to third parties. Even if there were such a principle, she argued it is “anachronistic” in light of the Human Rights Act 1998 and modern attitudes to access to justice, as demonstrated by the approach to conditional fee agreements (CFAs). It was argued that such a move was “likely to assist rather than obstruct, public justice” - there would be real merits in a system which relieves injured people of the risks and anxieties involved in pursuing their cases themselves.
The Trust argued strongly that it was against public policy for Mrs Simpson to be able to step into Mr Catchpole’s shoes and pursue his damages for herself. The Trust advised the Court that if the arrangement between Mr Catchpole and Mrs Simpson was upheld there would be nothing to prevent solicitors and claims farmers “simply buying causes of action from injured people and running the cases for themselves”.
The feeling was that the Court was with the Defendant in relation to the risks of allowing personal injury claims to be assigned to others and the risks of companies being created to buy claims for profit. However, Lady Justice Smith did indicate that she could see circumstances in which this would be beneficial. She gave the example of a claimant who had a potential claim worth £100,000 but who desperately wanted the money and the certainty now. In selling the claim for, say, £50,000, the claimant would avoid the risks of proceeding and not being awarded any money. However, against this it can be argued that the claimant would still need to be significantly involved in providing witness statements, attending examinations and possibly giving evidence at trial. Vulnerable claimants would also be at risk of being taken advantage of.
The facts of this case provide numerous reasons why the public would not be well served by adopting such a policy:
- Costs - the legal costs would be significant and most probably disproportionate to the amount of damages at stake. As well as the costs of having to go through a third party to access the claimant for fulfilment of case management obligations (medical examinations etc), there would be no (current) obligation on a claimant to continue to assist once they have sold their claim.
- Increased claims – based not on the pursuit of damages (for which court proceedings are designed), but rather for personal/political motivation.
- Satellite litigation – including in relation to the quality of advice given surrounding the sale of a claim (which would again lead to increased costs).
- Recoverability – the successful party would not be able to recover its costs from an assignee that does not have the means to satisfy an adverse costs order, despite the assignor havin sufficient funds (as appeared to be the case in this instance).
- Stress - the assignor would not be relieved of the responsibilities and potential anxiety in relation to the claim and would still need to give evidence (including potentially at trial).
Overall, there cannot be any benefit in entertaining such a development. As well as public policy arguments, the practical implications of allowing such a process in a current system which is not equipped for it are untenable. Delay, frustration and unnecessary cost would ensue.
Further, given the Government’s intention to abolish the recoverability of success fees under CFAs in an attempt to take a proper hold of litigation costs, the arguments about assigning claims being tied to a modern approach to access to justice are surely misconstrued. We, therefore, hope that the Court of Appeal will take a sensible and pragmatic view in its judgment; which we await with interest and will report upon further.