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SECOND DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Justice Clerk
Lord Macfadyen
Lord Johnston
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[2006] CSIH 3
A1560/02
OPINION OF THE COURT
delivered by LORD JOHNSTON
in
RECLAIMING MOTION
in the cause
DALE McFARLANE
Pursuer and Respondent;
against
BARRY THAIN
First Defender;
and
JAMES CAMPBELL
Second Defender and
Reclaimer;
and
THE MOTOR INSURERS BUREAU
Minuters and Respondents:
_______
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Act: Clancy, Q.C.,
Gardner; Drummond
Miller, W.S. (Pursuer and Respondent)
Alt: Hanretty, Q.C.; HMB Sayers (Second
Defender and Reclaimer): R.W.
Dunlop; Simpson & Marwick (Minuters
and Respondents)
24 January 2006
[1] In
this action the pursuer claims damages consequent upon injuries he received in
a road accident when he was travelling as a pillion passenger on a motor cycle
being driven by the first defender, which came into collision with a car being
driven by the second defender. The first
defender was not insured and has not entered the process. However, the Motor Insurers Bureau (MIB) entered
the process by a minute of sist and are now represented, as minuters and
respondents, in the present appeal which is brought by the second defender as
reclaimer against a decision of the Lord Ordinary ordering a proof before
answer in fact split between liability and quantum and refusing a motion still
being insisted in, in this reclaiming motion, by the second defender to allow
issues. That represents the question
that was argued before us.
[2] The
parties pleadings need not be considered in any detail save to emphasise that
the MIB have invoked the exception in their agreement with the Government in
order to deny indemnity in respect of the actings of the first defender by
reason of the conduct of the pursuer, as specifically averred, having regard to
the terms of clause 6(1)(e) of the agreement.
[3] That
clause is in the following terms:
"The MIB
shall not incur any liability under clause 2 of this Agreement in a case where:
... (e) at the time of the use which gave rise to the liability the
person suffering death or bodily injury ... was allowing himself to be carried in
or upon the vehicle and either before the commencement of his journey in the
vehicle or after such commencement if he could reasonably be expected to have
alighted from the vehicle he ...
(ii) knew or ought
to have know that the vehicle was being used without there being in force in
relation to its use such a contract of insurance as would comply with Part VI
of the Road Traffic Act 1972".
[4] The
Opinion of the Lord Ordinary is in the following terms:
"[44] In my view, the involvement of the MIB in
these proceedings makes the action unsuitable for a jury trial, for several
reasons.
[45] First, in the particular circumstances of
this case, it will be impossible to avoid bringing up the question of insurance
in the jury's presence. I do not accept
that the authority Stewart v Duncan (1921 S.C. 482), no longer has force. The current well-established practice
prohibits mention or discussion of a party's indemnity insurance in the
presence of the jury. That factor alone
makes the case unsuitable for jury trial.
[46] Secondly, one contentious issue is whether
the exception in clause 6(1)(e)(ii) of the MIB
Agreement applies. That question
involves the proper construction and application of the concept whether the
pursuer 'knew or ought to have known' that the first defender was
uninsured. The decision of the House of
Lords in White v White [2001] 1 WLR 481 demonstrates not only that the concept
may not be easy to define, but also that a final definition may yet be
awaited: cf Lord Nichols at paragraph
24. Whether viewed as a possible source
of confusion for the jury, or as a difficult question of mixed fact and law, I
consider that the question of any exception from liability arising from clause
6(1)(e)(ii) cannot safely go to a jury.
[47] Thirdly, while I accept that a reparation
action involving several parties would not necessarily result in such
complexity and difficulty as to make the case unsuitable for a jury, the fact
that one of the parties is the MIB, together with the combination of
difficulties outlined by counsel in paragraphs [10] to [11] (factors (i) to
(v)), and [19] above, persuaded me that this particular case is too complex for
a jury.
[48] In all the circumstances I am of the view
that the above factors, taken individually or cumulatively, constitute special
cause such that issues should not be allowed.
It is unnecessary that I consider the arguments presented in respect of
difficulties in quantifying loss. Obiter, I did not consider
quantification to present insuperable difficulties for a jury.
[49] In relation to the MIB's motion for a
divided proof, I agree that it would be appropriate to make an order in terms
of rule 36.1, for all the reasons advanced by counsel for the MIB."
[5] As
has already been recorded, in paragraph [51] of her Opinion, the Lord Ordinary
in terms of Rule 36.1 ordered a proof on liability to be heard separately from
and prior to proof on quantum, and that the proof on liability should include
questions of contributory negligence, apportionment of liability, the
involvement of the MIB and the relevance and applicability of clause 6(1)(e).
[6] Counsel
for the reclaimer submitted that the Lord Ordinary had misdirected herself on three separate issues.
[7] First
of all he submitted that the Lord Ordinary had misunderstood the long-standing
case of Stewart v Duncan op. cit. in the respect that she
regarded it as establishing a practice that prohibited mention or discussion of
a party's indemnity insurance in the presence of a jury. That, she said, was sufficient to render the
case unsuitable for jury. Counsel
submitted that properly understood that case was aimed at avoiding attempts by
counsel to influence a jury by irrelevant or prejudicial material and was not
in fact a blanket prohibition as regards mentioning or referring to insurance.
[8] Secondly,
counsel submitted that the Lord Ordinary had misdirected herself in considering
there was any difficulty about the phrase "knew or ought to have known" in
clause 6(1)(e)(ii) of the Agreement. She considered that that, in itself, was
sufficient to render the case unsuitable for jury.
[9] Thirdly,
she listed a number of factors which, if not separately at least cumulatively,
caused complications on the evidence that was likely to be led such as would
cause the jury to become confused or at least surrounded by difficulties.
[10] Counsel submitted that each of these approaches by the Lord
Ordinary was erroneous and the matter should be allowed to go to jury trial.
[11] Counsel for the second defender sought to support the position
taken up by the Lord Ordinary but submitted it was necessary for this court to
consider whether or not in fact, given the involvement of the MIB and the
question of the exception applying in this case, the case should be properly
regarded as an enumerated cause within the meaning of section 11 of the Court
of Session (Scotland) Act 1988 (the 1988 Act) which gives rise to a statutory
right to jury trial. While not
necessarily rejecting this point counsel went on to argue that the approach of
the Lord Ordinary in each of the respects which has been discussed was correct
or at least on one of them, which would be sufficient to support her position.
[12] Counsel for the minuters adopted the position taken up by
counsel for the second defender but placed much more emphasis on the issue of
whether or not this case was properly regarded as an enumerated cause since
although it involved personal injuries it contained the additional element of
MIB involvement. Basically he submitted that
the case was a hybrid and therefore outwith the scope of the statutory
right. In any event he submitted that,
particularly the issue of the phrase "knew or ought to have known" in the
Agreement, raised difficulties in regard to the likely directions a judge would
have to give to the jury consequent upon discussion of the matter in White v White 2001 1 WLR 481. That
alone was sufficient, he submitted, to render the case unsuitable for jury
trial.
[13] However, counsel went further in as much that he produced a
schedule of potential results in this case which, in summary, he submitted
would have, on any view, a result of only one defender being ultimately liable
as between the second defender and the minuters. This was because, if the second defender was
involved at all in liability, under the terms of the arrangements with MIB his
insurer would have to cover the whole amount of damages awarded. On the other hand if he was not found liable
at all, the minuters would have equally to carry the whole amount of damages
and expenses. He therefore supported the
position taken up by the Lord Ordinary as to the splitting of the proof, which
was incompetent if the matter was going to a jury, upon the basis that at least
one defender, though it was not necessary to identify which one, would not be
required, if the proof was split, to consider any question of quantum. To require both to consider questions of
quantum at one unitary hearing would involve additional time and expense which
was unnecessary and avoidable if the issue was split between liability and
quantum.
[14] Both counsel for the second defender and counsel for the
minuters emphasised that the decision of the Lord Ordinary as to whether or not
a proof or jury trial should be allowed was a discretionary one for her and
should only be interfered with by this court in the event of her having made a
radical error, such as to render her own position nullified. She, it was submitted, had not made such an
error.
[15] Counsel for the second defender was allowed to respond to the
question of whether or not the action was properly an enumerated cause. He submitted that it was because it was still
essentially an action of personal injuries but, in any event, referred us to
some old authority, Fletcher v Lord Advocate 1923 S.C. 27, which
revealed that the court had a power in its discretion to order a jury trial
outwith the scope of section 11 of the 1988 Act, which gave an automatic right in
the enumerated causes unless special cause, under section 9(b), was
established.
[16] We consider that the decision of the Lord Ordinary in the
result was sound, although we differ somewhat in our reasoning from hers.
[17] In the first place we do not consider that Stewart v Duncan does establish a general
prohibition against mention or discussion of a party's indemnity
insurance. It may be irrelevant, but it
only becomes germane to any issue if it is introduced by a party in order
unduly to influence the jury. This can
apply to any material intended to achieve that aim. Accordingly, in our opinion, a mere reference
to insurance which does not fall within that general scope is not in itself
prohibitory of allowing a jury trial or necessarily prejudicial in itself
before a jury.
[18] We are, however, persuaded that there is a difficulty over the
construction of the phrase "ought to have known" in relation to the MIB
Agreement which was focused by counsel for the minuters in respect of how a
jury would be charged. On the basis of
what is said in White by the House of
Lords there is at least a question as to whether "ought to have known"
encompasses something more than negligence and indeed excludes mere negligence and
amounts virtually to recklessness. This
controversy in itself is sufficient, to our mind, to render the case unsuitable
for jury trial not least because of difficulties in giving appropriate
directions and therefore we would follow the Lord Ordinary's reasoning in this
respect.
[19] We are not persuaded intrinsically that the various
complicating factors that she founds on, on a cumulative basis, to suggest a
further reason for avoiding a jury trial are necessarily so difficult as to
preclude such in itself. We are not
therefore persuaded that this line would in itself warrant avoidance of a jury
trial.
[20] We are, however, persuaded that the argument advanced by
counsel for the minuters with regard to the inevitably non-involvement of one
of either the second defender or the minuters in the question of quantification
is a valid and sound one which makes it desirable, if not necessary, that the
hearing should be split between liability and quantum. This is not possible in terms of the rules as
regards a jury trial and this, in our view, is a further reason why this case
is not suitable for jury trial, this factor amounting to special cause in the particular
circumstances of this case.
[21] Finally, with regard to the issue of whether this is an
enumerated cause which is not necessary for our decision, we would favour the
view that this is a hybrid action, going beyond the issue of personal injuries,
and is not therefore an enumerated cause in terms of section 11 of the 1988
Act.
[22] For these reasons we will refuse the reclaiming motion and
adhere to the Lord Ordinary's interlocutor which will have the result of
ordering a proof split between liability and quantum as she enumerates in
paragraph [51] of her judgment.
[23] The reclaiming motion is therefore refused.
