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Shaw v. Russell & Anor [2004] ScotCS 209 (29 June 2004)

OUTER HOUSE, COURT OF SESSION

A5289/01

OPINION OF LORD CARLOWAY

in the cause

ELAINE SHAW

Pursuer

against

ANDREW RUSSELL and ANOTHER

Defenders

________________

Pursuer: Heaney; McKay Norwell WS

First Defender: Duguid QC; The Anderson Partnership

Second Defender: LJ Milligan; HBM Sayers

29 June 2004

Facts

On 16 July 2000, the pursuer was the pillion passenger on a motorcycle driven by the second defender. As the motorcycle travelled northwards through Glencoe, it collided with a minibus, driven by the first defender, which was turning right into the Glencoe Café. The pursuer suffered serious injuries, ultimately resulting in the partial amputation of her left arm but with continuing intermittent pain. The case proceeded to jury trial on 4 May 2004. During that trial, the pursuer's patrimonial loss was agreed at £440,000. On 10 May, the jury returned a verdict stating that solatium of £300,000 was reasonable with one half of that sum attributable to the past, thus producing an additional £26,000 of interest from the date of the accident. The jury's verdict on liability was that blame should be apportioned between the defenders, with the first defender being 95% to blame and the second defender only 5% to blame.

[2]

When the case called on the pursuer's motion for the application of the jury's verdict, I awarded the pursuer her expenses against both defenders. The second defender had originally been introduced by the first defender as a third party. The pursuer had then adopted the first defender's case against him, albeit purely on an esto basis. The pursuer had succeeded against both defenders and was entitled to her expenses against them. It is true that the portion attributable to the second defender was low in percentage terms but it still amounted to a fairly large sum, i.e. £38,300. The second defender then moved :

"that the first defender should be relieved of any liability for any award of expenses which may be made against him and (sic) favour of the pursuer et separatim to find the first defender liable to the second defender in the expenses of process from 20 April 2004 until (sic) date".

The relevance of the date was that it was then that the second defender's agents had written to the first defender's agents in the following terms :

"My clients are prepared to contribute £100,000.00 in total to the settlement. The figure of £100,000.00 is to be applied to whatever sums are agreed by way of principal sum and judicial expenses. For the avoidance of doubt my clients would be making no further payment towards, for example, expenses. If this offer is acceptable to your clients my clients would draw a cheque in your favour in the sum of £100,000.00 at the present time and thereafter leave your clients to resolve the pursuer's claim...

This letter is written without prejudice to my clients' whole rights and pleas and is not to be referred to or founded upon in any current or subsequent court proceedings."

Submissions

[3]

The second defender moved the motion enrolled. The letter of 20 April had been one, if not the only, legitimate way in which he could attempt to extract himself from the action. It could be taken into account in determining liability for expenses (Macphail : Sheriff Court Practice (2^nd ed) para 14.68 under reference to Pearce & Co v Owners of SS Hans Maersk 1935 SC 703; Calder v Rush 1970 SLT (Sh Ct) 51). The "without prejudice" references in the offer related to the merits of the case and did not preclude the letter being referred to on a question of expenses (O'Donnell v AM & G Robertson 1965 SLT 155). If the second defender's offer had been accepted, then the second defender would not have required to be represented at the jury trial and the first defender would have secured more by way of a contribution from the second defender than was ultimately awarded.

[4]

The first defender did not oppose the first defender being liable for 95% of the expenses but did resist the extra 5% both before and after the offer letter. He accepted that the Court was entitled to take into account the letter and that the "without prejudice" element did not preclude this on a question of expenses. However, the second defender's offer had been an extra-judicial one in circumstances where he could have made a proper judicial tender relative to apportionment. The first defender had done this, albeit unsuccessfully. Furthermore, the letter was only part of continued negotiations which remained ongoing up until the empanelling of the jury.

Decision

[5]

The first defender chose to bring the second defender into the action. Having done so, he was partially successful in his claim but only to the extent of reducing his liability to the pursuer by 5%. The second defender was substantially successful in resisting the first defender's position but not totally so. As noted above, although small in percentage terms, the actual sum of money involved was substantial. Much of the process and most of the jury trial was effectively a contest between the two defenders on liability, the balance of the trial ultimately relating to quantum of solatium. Neither defender lodged a successful judicial tender offering to admit liability to the pursuer, or to pay a certain sum to her, on the basis of each being liable for a particular proportion of the damages (see e.g. Williamson v McPherson 1951 SC 438; Houston v British Road Services 1967 SLT 329. Although the apportionment of liability was 95% to 5%, it does not follow that the first defenders should pay 95% of the total expenses in the cause, especially relative to the second defender against whom he did achieve some, albeit limited, success. Put another way, his action in introducing the third party can be seen as justified, to a degree. On the other hand, having regard to the ultimate outcome of the case, the second defender's extra-judicial offer of £100,000 (inclusive of expenses) made shortly before the jury trial can be seen as a more than reasonable one and account must be taken of this in the ultimate award of expenses.

[6]

Having regard to all the circumstances, the equities favour awarding the second defender his expenses against the first defender but modifying them by 5%. They also favour granting the second defender relief in relation to his liability to pay the pursuer's expenses but again modifying that relief by 5%. This will apply generally and I will refrain from making different awards relative to the periods before and after the offer letter. This is so albeit that, in selecting the overall award, and notably the modifications, I have had regard to the fact that had the first defender accepted the offer, the second defender would not have required to have been represented at the trial since the first defender could simply have admitted liability upon accepting the offer and the pursuer would not then have required to pursue the second defender further.