Scottish Court of Session Decisions

You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Van Klaveren v Servisair (UK) Ltd [2008] ScotCS CSOH_136 (12 September 2008)
URL: http://www.bailii.org/scot/cases/ScotCS/2008/CSOH_136.html
Cite as: [2008] CSOH 136, 2008 GWD 32-477, [2008] ScotCS CSOH_136, 2008 SLT 982

[New search] [Help]

OUTER HOUSE, COURT OF SESSION

[2008] CSOH 136

PD1519/07

OPINION OF LADY CLARK OF CALTON

in the cause

JEROEN VAN KLAVEREN

Pursuer;

against

SERVISAIR (UK) LIMITED

Defenders:

________________

Pursuer: Di Rollo, Q.C.; Lefevre Litigation

Defenders: Comiskey; Simpson & Marwick

12 September 2008

Summary

[1] In this case the pursuer sues the defenders for the sum of two hundred thousand pounds (£200,000) in respect of an accident on 12 August 2004 when the pursuer was working in the course of his employment as a baggage handler with the defenders at Aberdeen Airport. Founding on correspondence between the agents and insurers of the parties in relation to an averred acceptance of liability, counsel for the pursuer sought summary decree in terms of Rule of Court 21.2 and a restriction of the proof to quantum.

Pleadings
[2] The parties averments about acceptance of liability are to be found in statement and answer 5. In statement 5 the pursuer avers:

"By letter dated 23^rd March 2006 addressed to the pursuer's representatives Quantum Claims, Aberdeen, Zurich Insurance Company, the Insurers acting on behalf of the defenders in connection with the pursuer's claim, admitted liability for the pursuer's accident in the following terms:

'We accept that our Insured is liable for the purposes of this claim and will pay damages, to be assessed when we receive details of the claim. We will also be paying costs in accordance with the Civil Procedure Rules.'

The said letter is produced and its terms held as incorporated herein brevitatis causa. The said letter constituted a binding obligation on behalf of the defenders. The defenders are liable to the pursuer for the consequences of the accident. He is entitled to damage for his loss, injury and damage. Further and in any event, in reliance of the said letter to the pursuer's representatives did not undertake any further investigation into the circumstances of the pursuer's accident. Prior to lodging of Defences in this action in which liability for the pursuer's accident is denied, the pursuer and his representatives were given no notice and had no reason to anticipate that the defenders were seeking to deny liability for the pursuer's accident. The pursuer and his representatives are now likely to be prejudiced in investigating the circumstances of the accident."

[3 ] In Answer 5, the defenders aver:

"The letter of 23 March 2006 is referred to for its whole terms. Quoad ultra denied. Explained and averred that the letter was for the purposes of extra judicial discussions only and was provided to the Pursuer's representatives at a stage before detailed investigation had been carried out. That detailed investigation has now taken place and liability is denied for the reasons explained in detail in Answer 4. In any event, the letter was written by reference to the Civil Procedures rules applicable to England. Those Rules would in any event allow a subsequent withdrawal of any acceptance of liability now the Defenders' position."

Procedure

[4 ] The case first came before me for hearing of the motion for summary decree on 1 February 2008. I allowed a continuation to enable the defenders' counsel to make more detailed submissions. The defenders' counsel produced a written outline of submissions at the continued hearing on 20 March 2008. At that hearing, after further consideration of the submissions and discussion about the possible assistance of affidavit evidence, I pronounced an interlocutor ordaining both parties to provide affidavits from all individuals party to the correspondence from which the disputed point arises by 5 May 2008. The continued hearing took place on 21 May 2008. At that hearing the defenders' counsel was not in a position to lodge any affidavits. A copy affidavit of Dawn Kitchingham was available and had been made available to the pursuer's counsel on 20 May 2008. The defenders were given an opportunity to explain the failure to comply with the terms of the interlocutor after a short continuation to provide further information. I was not satisfied with the explanation given for the delay and for the failure to comply. Nevertheless, with the consent of the pursuer's counsel, I decided to proceed with the hearing on the basis of the one late copy affidavit provided by the defenders on the basis. I advised that the failure to comply with the interlocutor of 20 March 2008 would be further considered when I dealt with expenses. An affidavit from George Alexander Clark had been lodged at an earlier date on behalf of the pursuer. The submissions were concluded at a further continued hearing on 22 May 2008.

Submissions on behalf of the Pursuer
[5 ] In making his submissions, counsel for the pursuer made reference to correspondence, 6/6-6/20 of process. The initial letter (6/6 of process) from the pursuer's solicitors, Quantum Claims was sent to the defenders setting out a brief account of the circumstances as described to them and asking the defenders to pass the matter to their insurer. The insurer, Zurich, replied in a letter dated 11 August 2005 (6/7 of process) giving thanks for the letter of claim and advising "that we are currently completing our enquiries and will endeavour to convey our decision on liability at the earliest opportunity". The letter also requested certain formal information which was provided by letter dated 17 August 2005 (6/8 of process). Zurich in a letter dated 14 November 2005 (6/9 of process) stated inter alia "Our enquiries into the circumstances of this accident have been completed. However, in order that we can detail our views and liability response, we should appreciate full allegations of negligence alleged against our insured, not supplied previously". Quantum Claims responded by letter 6/10 of process dated 22 November 2005 (6/10 of process) setting out the circumstances of events as described to them. The letter concluded "No doubt you will wish to investigate matters further with your insured and look forward to hearing from you in due course". A reminder letter, (6/11 of process) was sent from Quantum Claims to Zurich on 12 January 2006. A similar letter (6/12 of process) was sent on 21 February 2006. This prompted a response by letter from Zurich (6/13 of process) dated 23 February 2006 stating inter alia that "our enquiries into the circumstances of this accident are continuing". Quantum Claims responded in a letter dated 7 March 2006 (6/14 of process). This letter stated:

"At this point in time, we are prepared to bear with you a little longer, however if we cannot make progress within the next four weeks, then we really cannot see any alternative but to raise proceedings in order to progress our client's claim"

Counsel for the pursuer submitted that the next part of the correspondence is critical. This is a letter (6/15 of process) from Zurich to Quantum Claims dated 23 March 2006. It states inter alia:

"We accept that our Insured is liable for the purposes of this claim, and will pay damages, to be assessed when we received details of the claim. We will also be paying your costs in accordance with the Civil Procedure Rules."

The letter gives details of Zurich's preferred suppliers of medical evidence. It states

"In the event that either a report is not disclosed, or we do not accept the conclusions we reserve the right to obtain our own"

The letter records that Zurich requested details of the pursuer's earnings. The letter concludes "Please do not simply acknowledge receipt of this letter, as we will not consider your costs". By letter dated 5 April 2006 (6/16 of process) Quantum Claims acknowledge the letter dated 23 March 2006 and confirm that the letter will not be considered in costs. Quantum Claims set out information about further problems with the symptoms suffered by the pursuer and explain that further reports from a GP and a psychiatrist are being requested. In a letter from Zurich to Quantum Claims dated 6 April 2006 (6/17 of process) there is further correspondence about expert reports. That correspondence is continued in a letter from Quantum Claims to Zurich dated 13 April 2006 (6/18 of process). The last of this correspondence are letters 6/19 and 6/20 of process. These are concerned only with reports and medical evidence. These letters are dated respectively 15 January 2007 and 25 January 2007.

[6 ] Counsel for the pursuer explained that in order to protect the pursuer's position in relation to the limitation period, a summons was signetted on 7 August 2007 and an action was raised against the defenders. The defenders in their pleadings in Answer 4 dispute liability. The position of the defenders was confirmed in a letter from Simpson & Marwick to Lefevre Litigation acting on behalf of the pursuer by letter dated 2 November 2007 (6/21 of process). That letter stated:

"We have your letter of 31 October with the copy letter of 23 March from Zurich. That letter was written under the mistaken belief that early compliance with Woolf protocol procedures was needed and without the benefit of the fuller investigation we have now carried out. The defence on liability is to be maintained."

[7 ] Counsel for the pursuer submitted that the defenders' insurers entered into a binding obligation with the pursuer's agent which binds both the pursuer and the defenders. Liability has been accepted, with an obligation to pay damages assessed and an obligation to pay costs. The obligation having been created, the defenders cannot now withdraw from it. There was consideration. Counsel for the pursuer sought to distinguish the case of Gordon v East Kilbride Development Corporation 1995 SLT62. He submitted that the circumstances considered by Lord Caplan in that case included negotiations between the parties expressed in terms "without prejudice". That was the background and the parties envisaged continuing inquiry into the merits as possible in the future. In contrast in the present case, it was plain that the insurers as agent for the defenders and the pursuer's agents entered a binding obligation and the defenders were bound by the admission of liability. He submitted that parties should be bound by the clear terms of the correspondence and should be held to the plain meaning of what they said in correspondence. There were no circumstances averred on record or raised in submission on behalf of the defenders which would entitle the pursuer to lead oral evidence. Oral evidence was unnecessary and irrelevant in the context of this case. Counsel for the pursuer submitted that this was plainly not a case involving a hypothetical admission or, an admission predicted upon negotiation for the purposes of securing a settlement. That was plain from the correspondence.

[8 ] In response to the submission by counsel for the defenders in relation to the CPR Part 14 admissions and withdrawal therefrom, counsel for the pursuer submitted that the law in England still recognised binding compromise agreements between parties. He referred to Burden v Harrods Ltd [2005] EWHC 410 (QB). Counsel for the pursuer did not dispute that, if on proper analysis, the Court concluded that this was not a binding agreement, the pursuer would not be entitled to summary decree. In that event further consideration would require to be given to the status and effect of the extra judicial admission in the circumstances of the case. He accepted that was not an issue to be determined in the context of the summary decree motion.

Submissions by counsel for the defenders

[9 ] Counsel for the defenders submitted that in considering the motion for summary decree, I was not limited to a consideration of documents or the matters averred in the Record. She referred to the summary decree rules. This was not a Procedure Roll debate. She did not dispute that the correspondence 6/6-6/21 was correspondence which was exchanged in the terms set out in the various letters by the various persons referred to therein.

[10 ] The primary submission by counsel for the defenders was that the submission in the correspondence does not constitute a binding contract on liability. It was plain from the affidavit that the writer of the letter 6/15 of process did not intend to conclude a binding contract on liability. There is no consensus between the parties to the correspondence to form a binding contract on liability. She made reference to various passages in McBride, The Law of Contract in Scotland (3^rd edition), paragraphs 6-08 to 6-11; 8-01 to 8-27. She quoted with approval paragraph 6-11 in which the author states that consensus is tested objectively under reference to Muirhead and Turnbull v Dickson (1905) 7 F 686.

[11 ] Counsel for the defenders referred to the English pre-action protocol for personal injury claims dated April 2007 (7/3 of process). This is a protocol developed in England following the Access to Justice Report of July 1996. The aims of pre-action protocols include more pre-action contact between parties, better pre-action investigation by both sides and putting the parties in a position where they may be able to settle cases fairly and early without litigation. In terms of paragraph 2.3 of the protocol, it is primarily designed for cases which include an element of personal injury with a value of less than £15,000. Such cases are likely to be allocated to the "fast track". In paragraph 2.4 the protocol states that the spirit, if not the letter of the protocol should still be followed for multi-track type claims. The pre-action protocol sets out a list of matters recommended for parties to follow pre-litigation. Counsel for the pursuer referred also to the Civil Procedure Rules 1998/3132 which were in force in England from April 1999 to April 2007. She submitted that Rule 44 states that the court in England in determining costs payable by one party to another should have regard to all the circumstances including the conduct of the parties which includes the extent to which the parties followed any relevant pre-action protocol. She also pointed out that the court in England had power to make awards for costs incurred before proceedings had begun. As I understood the submission on behalf of the pursuer, the pre-action protocol is not mandatory or enforceable in England, even in fast track cases. Failure to follow the protocol and presumably the spirit of the pre-accident protocol is a matter to which the court in England must have regard in exercising its discretion as to costs. There were certain parts of the pre-action protocol which counsel submitted were particularly important in the context of the present case. She referred to 2.12; 3.1-3.8.

[12 ] Counsel for the pursuer also drew attention to the Civil Procedure Rules part 14. It was submitted that these rules applied in England. Rule 14.1 A provides that a person may, by giving notice in writing, admit the truth of the whole or any part of another parties case before commencement of proceedings (a "pre-action admission"). Paragraph 14.1A (4) provides inter alia that after commencement of proceedings the party who made the pre-action admission may apply to withdraw it. As the submission was developed over the continued days of the hearing, it became clear that the interaction between the protocol and the English procedure rules was not so simple. The final position of counsel for the pursuer, as I understood it, was that the date of the letter of 23 March 2006 (6/5 of process) and the explanation given in the copy affidavit of Dawn Kitchingham indicates that the pursuer's claim, when properly analysed, is a multi-track claim and was being dealt with by her according to the spirit of the English protocol. Thus counsel submitted it fell into a class of cases which had caused some concern from personal injury practitioners in England. That concern arose because it appeared to be the law in England, as at March 2006, that defendants were free to withdraw pre-action admissions in multi-track claims and could not be prevented from doing that at will. Counsel for the defenders prayed in aid Zucherman, Civil Procedure, Principles of Practice at p.231 to explain the law in England in 2006. She referred to Sowerby v Charlton [2006] 1 WLR 568 CA and Walley v Stoke on Trent City Council [2007] WLR 352. This result in England appears to have arisen because the English courts concluded that the civil procedure rule 14 applied only to admissions made in the course of proceedings and not to pre-action admissions. In 2006 counsel submitted that it was therefore open to a defendant to withdraw at will a pre-action admission. The English courts did not have power, under the Civil Procedure Rules to prevent that. It was accepted however that the English courts had the power under a different part of the Civil Procedure Rules, to strike out a defence either as an abuse of process or as being otherwise likely to obstruct the just disposal of the case. To demonstrate that the withdrawal of an admission would amount to an abuse of the process, it would be necessary to prove that the defendant had acted in bad faith or that the withdrawal of the pre-action admission was likely to obstruct the just disposal of the case. For that, it was necessary for the claimant to prove that he would suffer some prejudice which would affect the fairness of the trial. Counsel for the pursuer submitted that subsequently the Civil Procedure Rules were amended and the law in England was changed but not retrospectively.

[13] Having given this explanation, counsel for the defenders submitted that at the time of the letter of 23 March 2006 from the defenders' insurers to the pursuer's agents, the writer of the letter, Dawn Kitchingham thought she was operating under the English legal regime in which she could make an admission which she was legally entitled to withdraw at will. Counsel for the pursuer submitted that it was in this context and against that background that the affidavit of Dawn Kitchingham was to be understood. Turning to the affidavit paragraph 2 counsel stated that Dawn Kitchingham "became solely responsible for handling the case just prior to the admission of liability and afterwards". At paragraph 4 Dawn Kitchingham states:

"So far as the admission of liability was made I considered myself to be complying with the pre-action protocol applicable to personal injury claims and proposed court actions in England and Wales in which there is a three month time scale, following which either admission of liability or a denial of liability is made. I knew Servisair Ltd to be an English registered company and subject to the jurisdiction of the Courts of England and Wales. I did not consider the prospect of court action in Scotland and the claimants solicitors had not suggested this. I was aware that at this point we were out with the three month time limit. Usually at the three month point an application is made for pre-action disclosure. I made the admission of liability in order to prevent the pursuer's agents from making an application for a pre-action disclosure. Had the Pursuer's agents made this application further costs would have been incurred.

I considered that in order to comply with the protocol we were at that time required to either admit or deny liability. The Pursuer appeared to have suffered symptoms which he had reported immediately to his superior. Given the fact that his superior had ordered him to continue working it seemed possible that there may have been a breach of regulation. As a consequence it did not seem appropriate to deny liability and given that some sort of action was by now required in terms of either an admission or a denial, the best course of action seemed to be an admission of liability. My admission was solely made to adhere with what I considered to be the requirements of the pre-action protocol. Our systems oblige us to respond to the England and Wales protocol which covers approximately 95% of our case load.

However, I did not consider that this admission was in any way misleading or binding to either party. All admissions of liability are subject to causation and as no medical evidence had been produced in support of the pursuer's claim at this time the entire admission was dependant upon causation. Every claim is subject to causation and I considered that if causation were not shown it would then be open to us to withdraw the admission made in my letter."

In the circumstances it was submitted by counsel for the defenders that Zurich's employee in admitting liability was plainly not agreeing to be bound. Counsel described the circumstances described in said affidavit as indicating a lack of consent. She also submitted that the affidavit of Dawn Kitchingham disclosed that there was no intention on the part of Zurich's employee to enter into contractual arrangements as Dawn Kitchingham had been acting in terms of or in the spirit of the protocol.

[14 ] If I did not accept the primary submission for the defenders, counsel submitted that properly construed, the correspondence discloses merely an extra judicial admission, not a binding contract. Reference was made to Liquid Gas Tankers v Forth Ports Authority 1974 SLT 35. Reference was also made to Walker and Walker, The Law of Evidence in Scotland pages 117-119 and Dickson, Law of Evidence in Scotland, volume 1, paragraphs 297, 310.

[15 ] Counsel for the defenders prayed in aid the approach adopted by Lord Caplan in Gordon v East Kilbride Development Corporation 1995 SLT 62, 64 F-64 J. She submitted that was the proper approach in the present case both in relation to interpretation and waiver. She prayed in aid McBride, The Law of Contract in Scotland (3^rd edition) page 23, paragraphs 25-15 to 20. Counsel for the defenders submitted that properly analysed, the correspondence disclosed no more than an extra judicial admission in the context of the negotiations. This was not binding on the parties.

[16 ] Finally counsel for the defenders submitted that even if the Court was satisfied that a contractual liability does exist between the parties a proof is still necessary to establish the terms and extent of the contract. The matter should not be disposed of by way of summary decree.

Discussion

[17 ] The relevant Rule of Court is 21.2. It was not disputed that I was entitled to consider documents which were not agreed and issues not referred to in the pleadings. I have summarised the submission made by counsel for the defenders in some detail as the defenders' pleadings are very sparse.

[18 ] It should be noted that there are no averments in the case that English law governs any relationship between the parties. Counsel for the defenders accepted in discussion that Scots law applied to this case. For the purposes of considering the motion, I am prepared to accept as correct the explanation of the history and development of English law and procedure given by counsel for the defenders. I have summarised that in paragraphs 11 to 13. I do that only in order to consider whether there is an issue to try. If the application and effect of English law and procedure are at the heart of this case, I consider that it would be necessary to have expert evidence about English law in order to reach a determination. In this Opinion, I am not expressing any view in favour of the interpretation of English law and procedure put forward on behalf of the defenders.

[19 ] The obvious starting point for consideration of whether there is a binding contract on liability is the correspondence summarised in paragraph 5. On consideration of that correspondence, there is no reference on behalf of the defenders or the insurers to the acceptance of liability being made in the context of some particular protocol in England. I consider that is a serious difficulty for the defenders. When I analyse this correspondence objectively I can only conclude that the parties through their correspondence, have reached a position whereby it is accepted by the insurers that the defender is liable for the purposes of this claim. In this case the acceptance of liability in the terms given on behalf of the defenders was accepted by the pursuer's agents. Thereafter the parties conducted their negotiations on the basis that liability was not an issue. That was so until the attempt by the defenders' solicitors, after much time had passed, to defend the case as if liability had not been agreed. The interpretation exercise is made easier in this case because there was no submission or averments that there had been any verbal communications between the parties which might throw a different light on the written correspondence. Similarly there were no averments or submissions that prior communings or history between the parties in some way altered the sense of the written words. In my opinion, if one considers the written correspondence objectively, any reasonable interpretation could only conclude that there was an acceptance of liability binding the defenders for the purposes of this claim.

[20 ] In her submissions, counsel for the defenders placed much reliance on the affidavit by Dawn Kitchingham. It is plain from that affidavit that Dawn Kitchingham is describing her own personal motivation to comply with the English pre-action protocol in order to prevent the pursuer's agents from making an application for pre-action disclosure and to save costs for the insurers. She appears to accept that she did make an admission intentionally. She states that "every claim is subject to causation and I consider that if causation were not shown it would then be open to us to withdraw the admission made in my letter". It appears that even in her mind, there was an admission made intentionally and never withdrawn by her. It is plain from the affidavit that Dawn Kitchingham is describing what was in her mind and what was motivating her at the time she entered into the correspondence with the pursuer's agents. Interesting though that may be, I consider it irrelevant. In interpreting the correspondence an objective approach is appropriate. The interpretation is not tested and ruled by the subjective intention of one party not disclosed to the other party. It would have been open to Dawn Kitchingham or the defenders' insurers to make it plain in their documentation that any admission of liability was subject to English law and for any protocol which they wished to rely upon. If that had been done, I do consider it would be relevant to explore further the effect and implications of the correspondence in that context. But in my opinion the correspondence between the parties is not set in the context of some specific pre-English protocol. That is subjectively in the mind of one party only and not disclosed to the other party. I had some difficulty in following the submission of counsel for the defenders as she appears to accept in her submission, which I summarised in paragraph 10, that consensus is to be tested objectively. Applying that test to the correspondence, I am not persuaded by the submission by counsel for the defenders that there is an issue about liability to try.

[21 ] It was also submitted on behalf of the defenders that the correspondence discloses merely an ex-judicial admission and not a binding contract. In interpreting the correspondence, I have concluded that looked at objectively, the only reasonable interpretation is that the parties have concluded an agreement in which liability is accepted in the terms set out. I do not consider that the correspondence reveals a mere extra judicial admission. The case of Gordon v East Kilbride Development Corporation is very different. Lord Caplan was considering in detail the particular correspondence relevant to that case. Parties were writing to each other on a "without prejudice" basis up to the end of the correspondence (63H). The parties contemplated possible investigation about liability at some later date (63E). Lord Caplan found that at the time when the defenders made their admission, they were expecting no consideration in return. He did not consider it likely that the insurers intended to contract such an obligation but were merely representing the posture the pursuer might expect them to take with regard to his claim (64H-I). I consider the circumstances in the present case quite different. Both parties in this case moved on from the issue of liability to other issues in the case. Plainly both parties were minimising expense by not carrying on investigations into liability. It is also interesting to note that Dawn Kitchingham in her affidavit states in terms that "I made the admission of liability in order to prevent the pursuer's agents from making an application for a pre-action disclosure. Had the pursuer's agents made this application further costs would have been incurred". There is an obvious interest and advantage to insurers in minimising and reducing potentially expensive investigations into matters affecting liability at the earliest stage. I consider that the parties' agreements in this case had plain and intended advantages for the defenders and their insurers. Standing my opinion about the interpretation of the correspondence and its effect, I do not consider waiver is a relevant issue. I do not consider that the decision in Liquid Gas Tankers Limited supports the defenders' submission. It is plain from the decision in that case that unlike the present case, the pursuer submits that there was an agreement about liability and set out the correspondence in which the agreement is made.

[22 ] The contractual agreement of the parties in relation to an acceptance of liability on behalf of the defenders is contained in documents which are not disputed. I do not consider that a proof is necessary to establish the terms and extent of the contract in relation to liability.

[23 ] In all the circumstances, I am satisfied that summary decree in terms of the motion enrolled on 18 January 2008 in favour of the pursuer should be granted. The case will call By Order to deal with any outstanding matters.