Jersey Unreported Judgments

Hearing (Civil) - reasons re: various directions.

[2022]JRC015

Royal Court

(Samedi)

24 January 2022

Before     :

Advocate Matthew John Thompson, Master of the Royal Court.

 

Advocate J. N. Heywood for the Plaintiff.

Advocate D. M. Cadin for the Defendant

contents

		Paras
1.	Introduction	1
2.	Background	2-5
3.	Budgets	6-8
4.	Witnesses of fact	9-10
5.	Expert evidence on liability	11-13
6.	The plaintiff's employment expert	14-16
7.	Expert Investment advice	17-21
8.	Fixing of trial dates	22-24
9.	Undisclosed CICB documents	25-30
10.	Costs	31-32

judgment

the master:

Introduction

1.        This judgment contains my written reasons in relation to various directions I issued following a contested directions hearing. 

Background

2.        The background to this dispute is set out in my previous decision in this matter dated 8^th February 2021 reported at A v Minister for Social Services [2021] JRC 036.  I adopt paragraphs 2 and 3 of that judgment for ease of reference. 

3.        Notwithstanding the stay granted by that judgment, the matter has not settled as a result of which a further directions hearing became necessary.  The possibility of this was foreshadowed in my previous judgment at paragraph 26 where I stated as follows: -

"Following discovery, in this case because of the complexities I have referred to, I considered it appropriate for the plaintiff to disclose its expert evidence only in relation to quantum, followed by a schedule of loss.  I then ordered a stay for the parties to explore settlement.  I made it clear however, if the matter did not settle during the period of the stay, that the matter would return before me for further directions where directions would be issued in relation to exchange of witness statements of fact, any expert evidence relevant to issues of liability, production of the defendant's expert reports on quantum and meetings of experts and the fixing of trial dates.  I therefore stressed that, once the defendant was aware of the amount being claimed by the plaintiff, then, absent settlement, active case management required the case to progress to a trial which I hoped would take place in the course of 2022.  I regarded this approach, given the unusual nature of this case, as striking the appropriate balance between the plaintiff's concerns, and wishing to progress this matter to trial and the defendant's concerns of wishing to understand what was at stake."

4.        The particular issues I had to resolve at the latest directions hearing are as follows: -

(i)        Whether costs budgets should be exchanged;

(ii)       Whether directions are needed for the exchange of witness statements of fact;

(iii)      What approach should be taken to expert evidence on liability from a social worker and whether this should be exchanged sequentially or simultaneously;

(iv)      Whether the expert evidence of the plaintiff's employment expert should be excluded;

(v)       Whether the defendant should be permitted to adduce evidence from an investment adviser on the rate of return achievable by a plaintiff;

(vi)      Whether the plaintiff may claim for investment charges;

(vii)     How long the trial might take and whether the trial dates should be fixed.

5.        I will deal with each of these issues in turn.

Budgets

6.        In relation to budgets, Advocate Cadin argued that these were necessary for the court to engage in active case management.  The court should therefore be aware of what costs had been and were likely to be incurred and should issue directions accordingly.  Advocate Heywood in response argued that he had provided details of his costs incurred to date on a without prejudice basis.  What was more important was for directions to be issued to progress this matter to trial.  The defendants, based on the plaintiff's estimated length of trial, would be able to ascertain the likely costs to be incurred and could then make an assessment of whether they wished to contest matters or settle matters.

7.        The view I reached was that budgets were not necessary in this case for further directions to be given.  Budgets are required by Rule 26A of the Royal Court Rules 2004, as amended, and the related Practice Direction RC17/06, for claims worth less than £500,000 although the court can order budgets in other cases as a matter of discretion.  The requirement for an exchange of budgets is so the parties at an early stage are aware of the likely costs that might be incurred in progressing a claim of a lower value.  The other benefit of budgets is that at a first directions hearing the court can determine what are the most proportionate steps to be taken to give the parties an opportunity to settle for lower value claims.  This approach was in effect taken in this case as set out in the previous judgment where the plaintiff was required to produce its expert evidence on quantum, and a schedule of loss following discovery and then the parties were given an opportunity to settle.  As the case has not settled directions are now needed to progress the case to trial.  What therefore is required is what steps are necessary in order to produce the relevant evidence.  Whether trial dates are to be fixed is however a separate question and one which cannot be determined from costs budgets; rather the issue should be approached by reference to how far evidence is in dispute between the parties and whether a realistic trial estimate can be formulated at this stage.  I address this issue later in this judgment. 

8.        Advocate Cadin also suggested that budgets were necessary because the plaintiff was legally aided and was obtaining the benefit of public funds.  It was therefore appropriate for me to be satisfied that costs being incurred by the plaintiff were being incurred in a proportionate manner.  Advocate Heywood confirmed that the plaintiff was in receipt of a legal aid certificate which his firm was discharging, and that the plaintiff had received the benefit of payment of disbursements out of the legal aid vote by application to the Judicial Greffier.  I was not however persuaded by Advocate Cadin's argument.  The matter of whether or not legal aid is maintained and whether payments for expert evidence are made out of the legal aid vote is a matter for the discretion of the Judicial Greffier.  The exercise of that discretion is entirely a separate matter from the discharge of case management functions by the Master.  The Master's focus should therefore be actively on managing the case so it progresses to a conclusion either by agreement or by progressing to trial and the Master should not be concerned with the operation of the legal aid scheme or the legal aid vote in actively managing cases.   

Witnesses of fact

9.        Advocate Cadin suggested that an order for directions in respect of witness statements of fact was not necessary at this stage and should await the provision of various reports ordered and crystallisation of the issues.  He contended that it was not inconceivable that the court could proceed on the basis of the defendant's records speaking for themselves and that the plaintiff's evidence might be accepted in relation to liability.  

10.      However, this is a case where liability is denied both as a matter of legal principle and on the facts not withstanding large number of admissions of factual events by the defendant.  Witness statements will therefore allow both parties to make their position clear on what assertions are disputed and decide which parts of the other side's evidence they accept and which aspects they wish to challenge.  As matters stand witness statements are inevitably required for trial.  At present I also anticipate significant cross-examination of any witnesses called by the defendant to ascertain why they acted or did not act at various times in relation to the plaintiff and the risks the plaintiff appeared to face. I therefore ordered exchange of witness statements of fact. To proceed without such statements in the way suggested ran the very serious risk a lack of clarity on what each party was saying occurred factually and the reasons why.  Such statements also permit the experts on liability to give their professional opinion based on explanations given by factual witnesses for the decisions they took, in particular those of the defendant.

Expert Evidence on liability

11.      The issue between the parties was whether the expert evidence on liability from experts in social work should be exchanged sequentially or simultaneously.  I explored this in my previous judgment in this matter at paragraph 19 citing the case of Aukland v The Minister for Health and Social Services [2017] JRC136 where I stated the following: -

"15. Where there is a dispute on liability, I therefore consider that in the ordinary course simultaneous exchange should take place.  I accept there may be circumstances where, as a matter of discretion, the Court might elect to make a different order.  However, there would have to be special justification for that order which does not arise in the present case."

12.      At paragraph 16 I added: -

"I further consider that the importance of simultaneous exchange for issues that go to the heart of a dispute outweighs the possible saving in costs that might occur by sequential exchange."

13.      The argument advanced by the defendant was that once the plaintiff had its report it would be more efficient for that report to be disclosed with the defendant then filing a report in response.  The conclusion I reached was that this practical suggestion by the defendant did not meet  the threshold in Aukland to displace the ordinary presumption that simultaneous exchange should occur on issues of liability  The fact that sequential exchange might lead to a saving of cost, as noted at paragraph 16 of Aukland, does not outweigh the importance of simultaneous exchange for an issue that goes to the heart of a dispute, which the expert Social Worker's evidence in this case clearly does.  I therefore rejected this part of the defendant's argument.

The plaintiff's employment expert

14.      The defendant sought to exclude the current report produced by the plaintiff's employment expert in its entirety.  This was because the schedule of loss produced by the plaintiff went further than its expert and in part did not accept some of the plaintiff's employment expert's assumptions.  It is relevant to this application to note that the defendant wished to call its own employment expert even though the Minister wished to prevent the plaintiff from doing so.

15.      What Advocate Heywood explained was that the plaintiff did not agree with certain assumptions made by the employment expert as to how her career might have developed which had been reflected in the schedule of loss.  I indicated that the way to deal with the difference between the plaintiff and the plaintiff's employment expert was for the plaintiff in her witness evidence to set out how she thought her career would have developed but for what occurred, and for the plaintiff's employment expert to then provide a supplemental report updating his analysis in light of the plaintiff's actual evidence.  I further directed that the plaintiff's schedule of loss should be updated to reflect the employment expert's updated report.

16.      The conclusion I therefore reached was that the defendant's application was not the way to address the difficulties identified by the defendant.  At this stage it was too significant a step to strike out evidence which was not perfect, but which was in the round relevant to the plaintiff's claim.  In addition, any remaining differences between the plaintiff's evidence and the expert evidence of the plaintiff following the directions I required could be explored in any meetings between the experts and ultimately in cross-examination.

Expert Investment Advice

17.      The defendant wished to adduce evidence from an investment adviser to contend that investing any lump sum any costs of investment will be included in the rate of return achievable by the plaintiff rather than in addition to such return.  The defendant therefore wished to contend that any such investment charges incurred should not be recoverable as a head of loss.  Advocate Heywood objected to this approach because it was contrary to the Damages (Jersey) Law 2019 which had set the discount rate.  After the hearing he provided me with a copy of the Damages Law and the Projet filed with the draft law. 

18.      Starting with the Projet, this document made it clear that the discount rate was designed to deal with both inflation on the costs of care and investment return.  The States therefore set a discount rate of 1.8% compared to the current UK rate of minus 0.25%.  The effect of this rate is that the multiplier applicable to any annual head of loss suffered by a plaintiff to calculate what lump sum should be paid for that loss is lower in Jersey than in the UK.  This means that as matters stand a plaintiff in Jersey has to make their money work harder to ensure that funds are invested appropriately to deal with the effects of price and wage inflation compared to an equivalent plaintiff in the UK.  As a consequence, any lump sum is likely to be invested with a greater degree of risk than might be applicable in the UK.  

19.      Whether this means that the cost of obtaining such investment advice is recoverable requires determination at trial.  However, the conclusion I reached was that expert evidence on the rate of return achievable is not required.  This was for the following reasons: -

(a)       The first argument that might be advanced to oppose the cost of investment advice being recovered is that the Damages (Jersey) Law 2019 precludes such advice from being recovered.  This is a question of construction and does not require expert evidence.

(b)       The second argument that might be advanced is that the need for investment advice does not arise as a result of any act of negligence which is therefore not causative of the need for investment advice.  Similar arguments were explored in Eagle v James (2) [2004] 1 WLR 3081.  In that case the Court of Appeal in England by a majority disallowed the plaintiff's claim for the cost of fees charged by the Court of Protection Panel Brokers for Advice on Investment and Management of the Fund.  The view of the majority can be summarised by this sentence at paragraph 95: -

"a claimant was entitled to use his money as he liked, but if he wished to increase the sum awarded, he had to set off the fees charged against the gains made and not recover them from the defendant."

            By contrast Buxton LJ summarised matters in this way: -

"in other words, when a tortfeasor renders his victim a patient, he not only, as in any case of serious injury, imposes on the claimant the wholly unreal world of a single lump sum to provide for the whole of the rest of his life, but also deprives the claimant of the normal power to decide how that lump sum should be managed."

(c)       The Royal Court is very familiar with how funds might be invested given its experience in blessing applications for trustees making momentous decisions and approving settlements on behalf of minors or those who lack capacity.  It does not need expert evidence to calculate the possible rate of return that might be achieved in order to determine the questions of principle I have referred to above.  The Royal Court has sufficient experience to proceed on the assumption that greater rates of return can be achieved by taking different levels of risk, e.g. moderate compared to low risk, without having to determine precisely what the rate of return might be in an individual case. 

(d)       The approach the defendant wished to adopt also runs the risk of in part undermining the approach intended by the Damages (Jersey) Law 2019 to avoid having significant expert evidence in personal injury cases and repeated on a case-by-case basis.  If the defendant's approach were adopted trials would be lengthened because reasonably complex evidence would be required about the precise rate of returns achievable.

20.      For all these reasons I therefore concluded that the application by the defendant should be refused.  

21.      This conclusion does not mean that expert evidence cannot be adduced on what is an appropriate fee for investment advice, if it is recoverable as a matter of principle.  I recognised in Zac v The Estate of A (Deceased) [2021] JRC 111 that it was arguable for the costs of investment advice to be claimed.  I therefore permitted expert evidence on this discrete question albeit observing that the rate claimed by the plaintiff is the same as the rate claimed by the plaintiff's guardian in Zac, namely 0.75%.  Obviously if this rate was agreed, notwithstanding the questions of principle I have referred to, the need for this limited expert evidence would fall away. 

Fixing Trial dates

22.      In relation to the fixing of trial dates, I reached the conclusion it was premature to fix trial dates at this stage until factual and expert evidence has been disclosed by the parties.  This was because the plaintiff thought it would take four weeks to hear the trial whereas the defendant was suggesting two weeks.  What is the right period may well depend to a significant degree on how much factual evidence the defendant chooses to adduce and the extent of any disagreement between experts.  At this stage trying to estimate the length of trial ran the risk of amounting to little more than guess work.  I did not regard it as appropriate to fix trial dates on such a basis. 

23.      In reaching this conclusion I also took into account the fact that, while a significant sum, the amount claimed by the plaintiff is less than other types of personal injury claims where very significant amounts in damages indeed have been sought and awarded.  In this case by contrast the plaintiff accepts that only part of her losses are claimable against the defendant because some of the abuse the plaintiff suffered predates any criticisms that can be made against the defendant.  The amount of any damages awarded will therefore have to be apportioned by the Royal Court at trial to reflect this situation. 

24.      I therefore concluded that before trial dates were fixed it was worthwhile allowing the parties one final opportunity to settle by granting a further stay.  I made it clear that, if the case did not settle, then the parties should immediately arrange a directions hearing before me for trial dates to be fixed.  I regarded this approach as best reflecting the principles of active case management rather than requiring parties to provide budgets.

Undisclosed CICB documents

25.      The defendant sought disclosure of the application made by the plaintiff to the Criminal Injuries Compensation Board ("CICB") for compensation and discovery of documents relating to that application.  Advocate Heywood in an email dated 3^rd December 2021 had stated: -

"that such documents had not been disclosed as they were not relevant to matters in issue between the parties and to the extent that certain documents might be relevant, they were privileged."

26.      The affidavit of discovery filed on behalf of the plaintiff did not either list any documents relating to an application to the CICB or make any claim to privilege in respect of the same.

27.      In his submissions Advocate Heywood argued that documents had been provided to the CICB on a confidential basis.  Insofar as documents were provided to the CICB by third parties such as the Police the plaintiff did not have possession, custody or power of those documents.  The CICB had made an interim award but there had been no public hearings.  Provision of certain medical reports to the CICB was therefore on a privileged basis. 

28.      Advocate Cadin criticised Advocate Heywood for not filing an affidavit setting out the claim to privilege. 

29.      The conclusion I have reached was that I agreed with Advocate Cadin that an affidavit setting out the claim for privilege was required.  The affidavit should also contain as much detail as possible having regard to the approach of Chief Master Marsh in Astex Therapeutics Limited v AstraZeneca AB [2016] EWHC 2759 (Ch). applied in Smith v SWM Limited [2017] JRC 026.

30.      In this case, such an affidavit was important because it then allowed the defendant to consider whether it wished to challenge the claim to privilege.  In this case possible arguments about waiver or the documents having been deployed in a public hearing might arise.  It was only appropriate to consider such possible arguments once an affidavit had been filed.  While I was provided with reasonably detailed skeleton arguments for the purposes of this directions hearing, they did not address the principles of whether privilege could be claimed on an application to the CICB or when that privilege might be lost.  The question therefore of any challenge to a claim to privilege once made was for another day.

Costs

31.      In respect of the costs of the directions hearing because the defendant was unsuccessful in respect of its submissions on witness statements of fact, exchange of expert evidence on liability, its application to exclude the plaintiff's employment expert and its application to introduce expert evidence all of which were refused, I ordered plaintiff's costs in the cause. 

32.      In respect of the plaintiff's withdrawn summons issued on 2^nd November 2021 because an application was made and withdrawn, I concluded that the defendant should be awarded its costs of the withdrawn application against the plaintiff.  However, assessment and enforcement of this order was stayed because this is a personal injury case where the provisions of Rule 12A/2 apply.  The bringing of the application and its withdrawal on further reflection was not a decision that justified allowing enforcement of a costs order made at this stage and the plaintiff is still entitled to the protection afforded by Rule 12A/2(1).  None of the thresholds where enforcement of a costs order may be permitted against a plaintiff in personal injury maters set out in Rule 12/A/3 were met in this case.  This decision means in practice that if the plaintiff is successful at trial the costs order I have made (after a detailed assessment on taxation or agreement on the amount of costs) can be set off against any costs order in the plaintiff's favour and/or any damages awarded in the plaintiff's favour but may not be enforced otherwise. 

Authorities

A v Minister for Social Services [2021] JRC 036. 

Royal Court Rules 2004. 

Aukland v The Minister for Health and Social Services [2017] JRC136. 

Damages (Jersey) Law 2019. 

Eagle v James (2) [2004] 1 WLR 3081

Zac v The Estate of A (Deceased) [2021] JRC 111. 

Astex Therapeutics Limited v AstraZeneca AB [2016] EWHC 2759 (Ch).  

Smith v SWM Limited [2017] JRC 026.