Scottish Court of Session Decisions

Counsel for the defender suggested that the correct approach to the application of Section 19A was that taken by the Court in Clark v McLean 1994 S.C. 410. In that case Lord Maclean at page 413E said this:

Counsel also referred to the Stair Encyclopaedia on the Laws of Scotland volume 16, paragraphs 2178 and 2179 and the case of Forsyth v A F Stoddard Co Ltd 1985 S.L.T. 51. In that case the Lord Justice Clerk Wheatley said this:

In McCabe v McLellan 1994 S.L.T. 346 Lord Prosser at page 350b-c said this:

In that case it could be shown that the pursuer had done nothing within the 3 year period of the triennium when it was clearly within her power to do so. That said counsel for the defender was similar to the present case and a similar approach should be adopted.

[4] Counsel for the defender then went on to consider in detail what it was in the present case that the pursuer was offering to prove in relation to the claim that the court's discretion should be exercised in his favour in terms of Section 19A(1). It was conceded that the summer of 1993 was the last date for the cut off period under Section 17. The pursuer had all the necessary information at that time to raise an action. Nothing was said about what had occurred at any time between 1993 and October 1996 which was over 3 years on any proper reading of the pleadings. In October 1996 after the triennium had expired the pursuer had a discussion with a colleague. The pursuer's actions thereafter hardly displayed any degree of expediency in commencing proceedings. He did little from October until December 1996 when he consulted his present solicitors. Nothing happened thereafter until February 1997 when consent was given for the union to proceed with a claim. Again, nothing happened until April 1997 when the solicitors intimated a claim to the defender. That was 6 years after the pursuer had ceased his employment with the defender. An action was not raised until July 1997. Counsel for the defender submitted that these facts disclosed that nothing at all had been done during the 3 years of the triennium and that no reason for such inaction had been suggested. Furthermore, even after the pursuer became aware that he might have a claim, there was no expediency in the prosecution of such a claim and indeed, at least 9 months passed before any significant action was taken. In the course of all that time, there was no suggestion that anything had been done by the defender to prevent any action being raised.

[5] Against that background, counsel for the defender suggested that the pursuer only really made two averments in support of his claim that the court's discretion in terms of Section 19A(1) should be exercised in his favour. The first was that if the present action was dismissed the pursuer would have no remedy against anyone other than the defender. The second averment was to the effect that the delay in bringing this present action timeously has not impaired the defender's ability to investigate the pursuer's claim. As regards the first of these averments, counsel for the defender pointed out that if the action was allowed to proceed, the defender would lose his cast iron right of prescription. (Lord President in McCabe v McLellan). He submitted that that loss balanced out any prejudice to the pursuer in this regard, especially since no steps had been taken by the pursuer in 3 years and no reason was given for that omission and that there had been no delaying tactics by the defender. As regards the second averment, namely whether the delay in bringing the action had not impaired the defender's ability to investigate, counsel for the defender questioned how the pursuer sought to prove that. All that he had was an averment to that effect. That was not enough. He must go on to say how he intended to prove that averment. In this context, counsel for the defender referred to the averment at page 13F to this effect:

Counsel for the defender submitted that these averments were not relevant and therefore could not play a part in the balance of equity under Section 19A(1). These were averments regarding discussions which had taken place in relation to settlement of this litigation. It had long been acknowledged that such averments were inadmissible. This was a matter of public policy. Parties should be free to settle litigation without fear of having it turned against them. The words "without prejudice" need not be expressed in such negotiations. At this point counsel for the pursuer accepted that these averments related to discussions on the effect of settlement generally and that they were inadmissible in so far as to go to establish any admission of liability. However, he suggested that they could be looked at for the purpose that such correspondence had in fact taken place. Counsel for the defender however suggested that these averments did not go to establish that the defender was in fact able and did properly investigate the claim. They were inadequate as a basis for the averment at page 14F. Any recommendation by a solicitor to an insurer in no way touched on the question whether or not the claim had been investigated or how difficult it would be to investigate or necessarily what the results of such an investigation would be. There may indeed be a number of reasons to recommend settlement. Furthermore, any estimation by the solicitor of any claim for solatium says nothing about possible prejudice to the investigation. It related purely to a claim for solatium. Any solicitor can assess likely solatium by for example looking up the relevant text books. That averment says nothing about the difficulty of investigating liability. In any event the phrase "not too far out" indicated there was still a potential dispute. Reference was made to the judgment of Lord McCluskey in Bell v Lothiansure Ltd 1990 S.L.T. 58. In light of that authority, counsel for the defender submitted that in the absence of any clear admission by the defender, what was said in a negotiation process could not be used against them for any purposes. Reference was also made to the case of Daks Simpson Group Plc v Kuiper 1994 S.L.T. 689. Counsel for the defender submitted that the present averments were not a clear admission of anything. As a matter of law those averments were irrelevant in terms of his first plea-in-law. The final sentence in Article 7 also falls to be excluded from probation in terms of that plea-in-law. Secondly, even if such averments may relevantly be referred to, they were irrelevant in terms of specification in so far as they do not vouch the conclusion sought to be drawn from them. Furthermore, in terms of counsel's second plea-in-law, neither factor, that is to say, the factor of no alternative remedy and the factor of no prejudice to the defender weighed sufficiently in favour of the pursuer taken along with the other factors to tip the balance under Section 19A. Counsel submitted that even at their highest, these averments did not warrant the exercise of the discretion by the court in terms of Section 19A(1) and therefore that the action ought to be dismissed. He invited the court to sustain his first and second pleas-in-law and dismiss the action.

[6] Counsel for the pursuer submitted that I should allow a preliminary proof on time bar on the basis that the pursuer's averments were relevant to permit the exercise of a discretion even if those averments specifically challenged were excluded. He submitted that I could not dismiss the action unless the action was bound to fail because no Lord Ordinary could ever exercise his discretion in favour of the pursuer. There was material before the court to entitle the court to exercise its discretion. There was a dispute on the facts which must therefore be admitted or proved. Counsel for the pursuer accepted the test as laid down in Clark v McLean but suggested that in the present case as there was no admission of the fact, the question became one of relevancy. The test was since the material facts were not admitted or proved on the hypothesis that they are proved, can it be said that no Lord Ordinary exercising his discretion properly could ever find in favour of the pursuer? If there were relevant averments in those terms, then the court should proceed to allow a proof on those averments before exercising its discretion.

[7] Counsel for the pursuer submitted that things had moved on and that a different view of the propriety of exercising the discretion was now being taken in England in relation to the corresponding legislation. In that respect, he referred to a passage in Limitation of Actions (Outen and Others) 1998 p.314-319. He accepted that loss of a defence was a relevant factor but submitted that the corresponding loss to the pursuer of being able to pursue his action was a counterbalancing factor. He did not submit that this was a "windfall benefit" case. Reference was made to Hartley v Birmingham City District Council 1992 2 All E.R. 213, Ward v Foss. The Times 29 November 1993 and Kidd v Grampian Health Board 1994 S.L.T. 267. Counsel submitted that the action should be allowed to proceed if the delay had not seriously affected the evidence available for the defender. He further submitted that he did not need an averment to that effect. The onus shifted to the defender to show that the evidence had been affected. In this case there was no averment by the defender that their evidence had been damaged. In the absence of such an averment the Court was entitled to exercise its discretion in favour of the pursuer. Looking at the averments as a whole the pursuer was entitled to a proof as to why he had not raised his action within the prescriptive period and as to why he was not to blame for any delay. Counsel accepted in this context that any admissions by parties in the course of abortive negotiations for settlement were in general not admissible, but submitted that he was not founding on any such admission but merely suggesting that in the whole context it could be said that any delay did not cause difficulties to the defender. (Daks Simpson Group Plc v Kuiper 1994 S.L.T. 689). It was his submission that any such conversation as to settlement would not have taken place if the defender had experienced any difficulty in investigating the case. That was a reasonable inference and a reasonable inference was enough.

[8] I agree with counsel that the matter falls to be decided as one of relevancy, that is to say whether the pursuer has relevantly averred circumstances in which the Court could properly exercise its discretion under Section 19(A), (Lord MacLean in Clark v McLean). I also agree with Lord Wheatley (Forsyth v A F Stoddard Co Ltd) that the test is whether the pursuer can be said to have made averments upon which the Court could decide that it was equitable to grant release from the otherwise mandatory provisions of Section 17. On that basis I agree with the submissions of Counsel for the defender. It is conceded that the summer of 1993 was the last date for the cut off period under Section 17. By then the pursuer had all the necessary information to raise an action. Nothing is pled by the pursuer to explain or attempt to excuse what occurred between then and October 1996. Even thereafter it is not properly suggested that the pursuer displayed any expedition in trying to pursue his claim. The action was not in fact raised until July 1997. In all that time, there was no suggestion that anything had been done by the defender to prevent an action being raised. Against that background, the pursuer only really makes two averments in support of his claim that the Court's discretion in terms of Section 19A should be exercised in his favour. The first is that if the present action were to be dismissed the pursuer would have no remedy against anyone other than the defender. In all the circumstances of the present case, that averment in any opinion is irrelevant in the sense that no Lord Ordinary could possibly excuse the pursuer's failure on that ground. It simply amounts to an acceptance that the delay was the fault of the pursuer himself and cannot be excused on the ground that he had done his bit in getting his claim started but others had been to blame. In any event it falls to be considered against the fact that if an action were allowed to proceed in such circumstances the defender would lose the right to rely on Section 17 of the Act. That in my view would be to distort the overall purpose of the legislation . Secondly, the pursuer avers by way of excuse or explanation that any delay on his part had not impaired the defender's ability to investigate the case. In support of that contention the pursuer referred to the negotiations for settlement. Considerations of public policy aside, in my opinion, these averments are irrelevant. Any estimations as to quantum of damage, which is all these averments amount to, cannot be taken so as to infer that the defender has been able either to investigate any case on liability or to verify any allegations as to injury. Such an estimation can only be said to take the pursuer's averments on quantum pro veritate and cannot be said to imply any acceptance of their accuracy. They certainly cannot bear the inference that the defender has not been prejudiced in any proper investigation of the claim. These are the only two reasons advanced as to why the Court should exercise its discretion in the pursuer's favour. In my opinion, no reasonable Lord Ordinary could decide in favour of the pursuer on that basis. The matter being a question of relevancy there is, in my view, no dispute as to fact and therefore no reason to hold a proof. In my opinion, the pursuer has failed to aver relevant reasons for the exercise of any discretion under Section 19A. On his own concession therefore, Section 17 applies to this case to the effect that the action is time-barred and falls to be dismissed. I accordingly sustain the first and second pleas-in-law for the defender and dismiss the action.