England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand London WC2A 2LL
		8 November 2010

1. MR JUSTICE MADDISON: The case of IB, who sues by her mother and litigation friend, MB, and the defendant, CB, is listed before me today so that I can consider whether or not it is appropriate to approve the settlement of the claim in the terms set out in a draft consent order. Although a copy of a document was sent to me described as a consent order, it has become clear during the course of this morning's proceedings that to call it a consent order, and I emphasise that word "consent", is something of a misnomer because amongst the four points that I have been asked to rule upon three relate to the terms of the order itself.
2. The first point does not directly concern the terms of the order but does raise a point of principle. I am asked to rule upon it without having had any skeleton arguments addressing the point of principle, and without having had any authority directly on the point cited to me; but nevertheless I am prepared, having made clear those limitations, to express a view on the point concerned. The point is this: as a result of negotiations between the parties two different bases of offer were made by the defendant. One was for the payment of a single lump sum in full and final settlement of the claim. The second was for the settlement of the claim by means of a smaller, though nevertheless very substantial, lump sum together with periodical payments for the duration of the claimant's life. There is, that I can see, no reason why I should not indicate that for the purposes of considering which of those two options would be preferable from the claimant's point of view, if indeed either would have clear advantages over the other, the claimant obtained two reports from Mr Richard Cropper a financial adviser dated 10 September and 3 November 2010. Those reports are referred to in the first paragraph of the recital of what for present purposes I will call the proposed consent order.
3. There was, as is usually the case, sent to me in anticipation of today's hearing counsel's opinion, in this case from Mr Paul Rose QC, explaining the considerations that had been taken into account in deciding, first of all, whether to accept either of the offers and, secondly, in deciding to accept the version of the offer which referred to a combination of a lump sum and periodical payments. Accompanying that opinion were sent to me the two reports from Mr Cropper to which I have referred. It is submitted by Mr Watt-Pringle in those circumstances that any privilege that may have attached to the reports of Mr Cropper was waived once they were sent to me and that I should order that copies of the reports be supplied to the defendants. I have to say that I have struggled to identify any practical advantage that would accrue to the defendants by the service of such reports, but if there were a clear obligation to supply them on the part of the claimant, then the lack of any clearly identifiable practical advantage to the defendants would, it seems to me, not matter.
4. I therefore turn to consider whether in fact by sending these documents to me, on what I am quite sure was intended as a confidential basis, in fact privilege in respect of those documents was waived. The matter may be of some general importance because I have to say that I have known other cases, and Mr Rose indeed has also in the course of his practice known other cases, in which, for example, medical reports are sent to the judge on a confidential basis which do not wholly support a claimant's case but which explain why it is that those legally advising the claimant have decided to accept an offer which at first blush may not appear to be overly generous. It seems to me that if Mr Watt-Pringle is right in relation to his application so far as the financial adviser's reports in this case is concerned, then any report of any description sent to a judge for the judge's assistance in deciding whether or not to approve a settlement would lose its privileged status. Mr Watt-Pringle accepts that if the report of the expert concerned were not sent to the judge but were merely cited from in counsel's opinion, then a question of waiver of privilege would not arise.
5. On the basis of the arguments placed before me it is my view that an expert's report sent to a judge for the purposes to which I have referred retains its privilege. It is to the benefit of a court to know exactly why those legally advising the claimant have decided to recommend the acceptance of a particular offer. And it is, it seems to me, consistently with that, appropriate that the court should be fully advised and that those representing a particular claimant should not feel inhibited by presenting all relevant materials to the judge, or arguments to the judge, or considerations to the judge, by a fear that if they overstep the mark and actually send a material report to the judge then it loses its privileged status. Moreover, it seems to me that there is something remarkable and indeed, in my judgment, unacceptable about the proposition that it would be perfectly all right (if I may logically extend the arguments that I have heard) for counsel to set out in quotation marks absolutely verbatim and in full a particular report in counsel's opinion, thus preserving the privilege of the report, whereas that privilege would be sacrificed by the submission of the report itself.
6. I repeat that I am expressing this conclusion without any prior skeleton arguments, and without any authority being cited to me at all, though it does seem to me that the lack, even though counsel have had only very limited opportunity for research, of any authority on the point cited to me to support the proposition advanced by Mr Watt-Pringle is in itself significant. If, therefore, I were dealing with this application for disclosure of the reports solely on the basis of privilege, then I would refuse it.
7. There is, however, a second string to the application. The second string relies upon paragraph 6(c) of an order made by Master Leslie on 15 January 2010 in these proceedings. It is appropriate, I think, for me to read out all of paragraph 6 of that order. It reads as follows:

"a) The Claimant do serve on the Defendant a Schedule of Loss and Damage together with supporting documentation including any updating factual witness statements by 22 June 2010. The evidence in relation to the claim for Court of Protection costs shall be served with the Schedule along with any final outstanding disclosure.

"b) The Defendant do serve on the Claimant a Counter-Schedule of Loss and Damage together with supporting documentation including factual witness statements by 22 July 2010.

"c) The Court considering that the claim herein for future losses may most appropriately be satisfied by an order for periodical payments, the parties are to obtain appropriate financial advice and [serve] such evidence with the schedule of loss and counter-schedule."

The order as drawn up in fact uses the word "service" rather than the word "serve", but to understand the order and to render it grammatical it is necessary, I think, to read the first of those two words as if it had been intended to be the second.

8. Relying on that provision, Mr Watt-Pringle submits that even if by the application of normal principles the documents would remain privileged, nevertheless it became the duty of the claimant to serve the documents that have been sent to me at the time that they served their schedule of loss and damage, which, although I have not specifically raised the point, I am going to assume was served at or shortly after the date of 22 June 2010 referred to in the order. In my judgment, that argument also is not properly founded. It seems to me that paragraph 6(c) of the order must be read as directing that the parties serve such evidence as they intended to rely upon. I cannot believe that the order was intended effectively to remove from either party the right to claim privilege in respect of a particular document or a particular piece of evidence upon which they did not intend to rely. Indeed again, although I have not had any skeleton arguments or any authority on the point, it would surprise me if a court were, by making a procedural order of this kind, able to remove the right of either party to claim privilege in respect of a document and therefore it seems to me that paragraph 6(c) must be interpreted in the way to which I have referred.
9. In any event I would add that the two documents that have been sent to me were quite clearly sent to me in a context far removed from paragraph 6(c) of the order. So far as I am aware, no documents were served by either side by way of evidence in support of the schedule and the cross schedule that were in fact served. What has happened here is that long after those documents were served and when an offer was made by the defendants it was made on the alternative bases to which I have referred and it was specifically to consider those two alternative bases that the two reports of Mr Cropper were obtained, both of them dated, as I have said, long after the date on which the schedule was ordered by Master Leslie to be served, and indeed no documents of this kind were available to the claimant at the time that the schedule was ordered to be served or indeed was served. Accordingly, given that paragraph 6(c) refers to the service of evidence with the schedule, it seems to me that on any reasonable interpretation it cannot have been intended to apply to Mr Cropper's two documents. Accordingly the defendant's first application fails.
10. I think that the defendant is on stronger grounds in relation to their other applications, all three of which relate to the form of the consent order. I deal with them in turn. On page 5 of the order paragraph 4 in the form proposed by the claimant ends after six lines with a sentence ending in the word "claimant". To that it is proposed by the defendant that there should be an addition in these terms:

"If such [repayment] is not made within 56 days of [the claimant's] death, her estate shall be liable to pay interest to the Defendant's insurer [thereon] at the Judgment Act rate from the 56th day."

11. Mr Rose objects to the inclusion in the form of the order of that additional sentence. He points out, first, that this represents a departure from the model order governing cases of this kind, developed by Sir Christopher Holland, that it puts the defendants in an unfairly or unduly preferential position and that the addition of this particular sentence was not flagged up in the part 36 offer. However, subject to one reamendment, to which I will refer, it does seem to me that that is a clause that ought fairly to be incorporated in the order concerned. It does seem to me only fair to the defendants, it being accepted that they are entitled on a pro rata basis to repayment of that proportion of any annual payment that falls after the claimant's death within that year, that there should be provision both for the time within which that repayment should take place and indeed that there should be provision for the payment of interest if the repayment does take place. I should say for the purposes of clarification that these considerations arise in circumstances in which the periodical payments are to be made annually and in advance.
12. That said, although I think that as a matter of fairness the addition of the sentence proposed should be approved, nevertheless I do see force in Mr Paul Rose's point that 56 days is an unduly short period, given difficulties which may be confronted by the executor of the claimant's estate. The sentence which I am going to direct be added is in the form proposed save that the reference to 56 days should be a reference to six calendar months, which I think on any fair view would give the executor plenty of time to sort out relevant affairs, with a corresponding alteration on the final line so that instead of the reference to "from the 57th day after the claimant's death" (though I will leave if I may the final drafting of this to the parties) it would have to be along the lines of "from the day after the expiry of the six-month period already referred to" (but I trust that I can leave the final working out of that to the parties).
13. The second proposed alteration so far as the defendants are concerned arises on page 8 of the order in the form proposed by the claimant, at the top of which appears a paragraph numbered 10.2 and after which the defendants propose the addition of paragraphs 11 and 12. The full terms of the proposed paragraphs 11 and 12 can be ascertained by reading the form of the proposed counter order, if that properly expresses it, but in general terms paragraph 11 refers to the retention of specified documents on the court file. It is submitted by Mr Watt-Pringle, and indeed accepted by Mr Rose, that such forms of orders would usually arise if an award of provisional damages was to be part of the order concerned. Provisional damages do not arise in this particular case. Mr Rose relies not only on the absence of provisional damages as a consideration here, but points out also that in any event there is a liberty to apply in paragraph 11 of the order (I will say for the purposes of ease of reference) on page 13 of the proposed counter order or page 12 of the order proposed by the claimant.
14. On the other hand, Mr Watt-Pringle submits that this is an order the practical effect of which is quite likely to last over many years, indeed decades, and I am sure that everyone in court hopes that it will do and that the claimant will receive the continued benefits of this award for a very substantial period of time. Mr Watt-Pringle, also relying on the liberty to apply clause, says that, given the likely duration of the practical working out of this order, it is impossible to know what applications or changes may be the subject of a liberty to apply application made pursuant to paragraph 11. I see force in that point and, to be honest, cannot see how the retention by the court of these documents is going to present any sort of difficulty to the claimant. I can see practical advantage in the court's having all the documents if perhaps many, many years later it becomes appropriate either for the claimant or for the defendant to make an application pursuant to the liberty to apply incorporated in the order. Far better, it seems to me, that the court should be fully informed about the materials available at the time that the order was made than that everyone should be casting back for recollections perhaps going back certainly years or decades. I am told that similar provisions have been incorporated in other orders, for example, by Swift J in the case of Johnson v. Compton Cook. All I will say is that I can well see as a matter of good sense why such orders have been incorporated and accordingly I approve the inclusion of paragraph 11.
15. Paragraph 12 when I first read it was one that did seem to me to present difficulties. To be quite frank, I did not immediately understand why it was there and it did seem to me that it might result in the claimant's having to undergo medical examinations at unreasonable intervals. But having heard from Mr Watt-Pringle I am satisfied that the doubts that I initially harboured were not justified. I had not appreciated, but now do appreciate as a result of Mr Watt-Pringle's submissions, the significance in this regard of paragraph 6 on page 4 of the order, this being the consent order as part of which:

"It shall be a discharge of the Defence Insurer's obligations to pay periodical payments under this Order if it procures an undertaking by any annuity provider to satisfy the obligations imposed by this Order."

16. It does seem to me that the possibility of that clause being implemented is a remote one, but I do accept that in the unlikely event of the defendant's insurers wishing to find and finding an appropriate annuity provider, then the proposed annuity provider would wish to have an up to date medical picture of the claimant. I observe that paragraph 12(a) is inserted for the sole purpose of obtaining a medical examination in those circumstances. It does not permit the defendant's insurers willy-nilly to seek to make the claimant undergo a medical examination. It seems to me unlikely in practice that in fact any medical examination under 12(a) will ever occur, but I cannot rule out the remote possibility that it will and I think, given the inclusion of paragraph 6 on page 4, to which I referred, paragraph 12 is an appropriate corollary to that. I should add that in its terms it does not entitle the defendants to obtain medical reports for any other purpose. It incorporates a reasonable notice requirement. It limits the disclosure that can be made of any such report and it covers the costs of the claimant in respect of undergoing such medical examinations and, in my view, therefore, in the end I conclude that paragraph 12 is an appropriate addition to the order.

(Further submissions)

17. MR JUSTICE MADDISON: Having spent rather a long time giving judgment on what must have seemed, both to the claimant and her mother, to have been rather dry and dull legal points, but which nevertheless did need determining, it is now with considerable pleasure that I am able to approve the terms of the consent order, consisting, as they do, of both a reference to a substantial lump sum and also substantial annual payments to be made in advance for the duration of the claimant's life. I do not wish to say a great deal, simply because it is obvious from Mr Rose's opinion that the most careful consideration has been given both to the proper valuation of this claim and to the risks that are necessarily inherent in litigation arising out of what I described earlier of a deal of crystal ball gazing because one just does not know how the future is, if I can resort to the vernacular, going to pan out. But it does seem to me that highly skilled and extremely careful consideration has been given to this case (I am quite sure on both sides) and it does seem to me that the order which is proposed, first of all, reflects properly the value of the claim and, secondly, reflects properly the risks inherent in litigation of this kind.
18. I am quite sure that this has already been carefully explained to the claimant and to her mother, but if I can just perhaps put my own gloss on this. Given the uncertainties in trying to assess what is going to happen in the future, if this case were to be put before four different judges it is quite likely that, doing their job entirely conscientiously, they would come up with four different figures and it is this sort of range that has to be taken into account. I think that the claimant has been justly and fairly dealt with and I am happy to approve the terms of the order, the precise form of which will have to be adjusted by counsel and I would be grateful if, perhaps during the course of today, the final form of the order could be sent to me.