Scottish Sheriff Court Decisions

ALL SCOTLAND SHERIFF COURT AT EDINBURGH

[2016] SC EDIN 5

PN134/15

NOTE BY SHERIFF KENNETH J MCGOWAN

In the cause

STEVEN GIBSON

Pursuer;

Against

MENZIES AVIATION (UK) LTD

Defender:

Edinburgh, 16 December 2015

The Sheriff, having resumed consideration of the cause, grants decree against the defender for payment to the pursuer of the sum of TWELVE THOUSAND POUNDS Sterling (£12,000) net of the defenders’ liabilities under  Section 6 of the Social Security (Recovery of Benefits) Act 1997; finds the defender liable to the pursuer in the expenses of process as taxed modified by two thirds; certifies Mr Robert Clayson, Consultant Orthopaedic Surgeon and Mr Fraser Morrison, Consultant Clinical Psychologist as skilled persons who prepared reports; allows an account of expenses to be given in and remits same, when lodged, to the Auditor of Court to tax and report; finds no expenses due to or by either party in respect of the motion roll hearing on 3 December 2015.

NOTE
Introduction

[1]        This is an action of damages for personal injuries.

[2]        The matter came before me on the pursuer’s opposed motion for decree in terms of a minute of tender and acceptance.

Submissions for defender

[3]        The pursuer’s motion for expenses should be refused and these should be modified to nil. The litigation had been premature and unnecessary and the pursuer’s agents’ conduct unreasonable.

[4]        As at 25 August 2015, the pursuer’s agents had both a medical report dated 5 June 2015 and a psychological report dated 7 August 2015: Productions 5/1 and 5/2. These had not been disclosed. There was no prior correspondence and no disclosure of the medical evidence before the Court of Session action was raised.

[5]        The defender’s insurers had been put to the expense of framing defences.

[6]        The insurers had always been keen to resolve the case. Liability had been admitted early. The insurers were signatories to the Protocol and the pursuer’s agents knew that. The initial letter of claim had referred to the Protocol. It was accepted that the insurers had not specifically referred to it but the pursuer’s agents acknowledged that liability was admitted.

[7]        The insurers had sought disclosure of medical evidence and offered rehabilitation. Despite this, there had been no meaningful discussions and the medical evidence had been withheld.

[8]        The raising of an action in the Court of Session was not indicative of a reasonable approach. There had been no meaningful response about the disclosure of medical evidence until the First Inventory of Productions was intimated.

[9]        Even after the Court of Session action had been raised there was a refusal to disclose the medical evidence. The pursuer’s agents’ position was that they could not see the point of disclosing the medical report without earnings information having been made available as no proper valuation of the claim was possible without the latter.

[10]      It should be noted that even in terms of the pursuer’s agents’ own valuation of the claim solatium represented 90% of it. The pursuer’s agents concentrated on what they called the “missing earnings information”. In terms of the final settlement, loss of earnings represented only 4% of the settlement figure.

[11]      In light of this unreasonable conduct, the pursuer’s expenses should be modified to nil.

[12]      There was no issue about impending limitation. The Court of Session action was raised without the disclosure of medical information. The pursuer’s agents then raised the present action. That again was unnecessary.

[13]      In the face of requests from the defender’s agents or disclosure of the medical information, the pursuer’s agents had acted unreasonably pre-litigation and post litigation.

[14]      The case of Brown v Sabre was distinguishable. In that case, there had been a refusal to follow the protocol.

[15]      In the present case, the insurers were prepared to follow the protocol. In Brown at paragraph 19 it was observed that medical evidence should not be withheld.

[16]      The pursuer’s agents’ conduct had resulted in delay in settlement of the claim and had involved the defender’s insurers in unnecessary expense.

[17]      The pursuer’s recoverable expenses under the Protocol were estimated at £2742 including VAT. Nevertheless, it would be a dangerous precedent to allow even protocol expenses in this case. The factors mentioned justified the exercise of the Court’s discretion against the pursuer and the modification of expenses to nil.

Pursuer’s submissions

[18]      Some of what had been said on behalf of the defender was misleading. The documents which were requested included post-accident earnings information. Without that information, the pursuer’s claim could not be properly valued.

[19]      There had been disclosure of pre-accident earnings but there had been no voluntary disclosure of post-accident earnings.

[20]      The pursuer had been off work until April 2015.

[21]      A request was made by letter dated 25 August 2015 for disclosure of earnings information. It was accepted that at that stage, the medical report was available, but even if that had been disclosed it would not have been possible to value the claim and to give the pursuer advice on it in the absence of earnings information.

[22]      Earnings information was not voluntarily produced and in order to obtain it a specification of documents had to be served.

[23]      After it had become apparent that the Court of Session action had been raised against the wrong defender, there was a choice between amending the designation of the defender (and doing a specification of documents) or raising a new action in the Sheriff Court against the correct defender. Because the defender’s agents had commented on the inappropriateness of the Court of Session as the forum for the proceedings, the decision was taken to litigate in the Sheriff Court.

[24]      The short point is that litigation was always going to be necessary.

Grounds of decision

[25]      In addition to the submissions summarised above, I have considered the timelines provided by each side and the relevant productions and authorities.

Timeline

[26]      There are certain key dates which must be considered (all dates are in 2015 unless otherwise stated):

1. November 2014 – initial claim including request for earnings information: Production 6.1.13;
2. 2 February – earnings information disclosed;
3. 5 June – orthopaedic report prepared: Production 5/1;
4. 7 August – psychological report prepared: Production 5/2;
5. 25 August – pursuer’s agents send an email to the insurers confirming that they have earnings information “up to and including December 2014”; confirming that pursuer had returned to work in early May 2015; and seeking earnings information “from December 2014 until June 2015” so that loss can be calculated;
6. 16 September – Court of Session summons signetted;
7. 22September – Court of Session summons served;
8. 2 and 9 October – the insurer’s agents write to pursuer’s agents concerning inter alia the non-disclosure of the medical evidence;
9. 12 October – pursuer’s agents reply explaining the problem as they see it in connection with the absence of earnings information; defenders’ agents reply indicating their willingness to try and obtain such documentation as might be required from the defender;
10. 13 October – further correspondence between agents culminating in defenders’ agents inviting service of the specification of documents;
11. 20 October – initial writ presented for warranting, along with specification of documents relating inter alia to earnings information for the pursuer and an inventory of productions containing inter alia the two medical reports mentioned above.
12. 23 October – copy writ and specification intimated to defenders’ agents; relevant earnings information, recovery of which was sought by commission and diligence disclosed by pursuer’s agents;
13. 30 October – pursuer’s agents intimate an inventory containing the medical reportsand their valuation;
14. 13 November – tender for £12,000 intimated;
15. 18 November – tender accepted.

Discussion

[27]      In the early phase of communications, it is clear that the insurers made numerous efforts to obtain information from the pursuer’s agents. Indeed, there was a series of seven emails from insurers to the pursuer’s agents between January and July which produced no response whatsoever. In my opinion, that, taken with the earlier admission of liability, should have made it apparent to the pursuer’s agents that the insurers were looking to value the claim and negotiate a resolution of it.

[28]      Before me, there appeared to be some dispute as to what earnings information was disclosed and when. The defenders’ agent’s premise was that that pre- and post-accident earnings information had been disclosed as early as February. The pursuer’s agent said that only the former was disclosed at that stage. The matter was not definitively resolved before me. But by definition, information about the pursuer’s earnings for March onwards could not have been produced in February: Production 6.1.5/2. Accordingly, I have concluded that only the earnings information up to December 2014 was disclosed at that stage: Production 6.1.5/1. I observe that that did include some post-accident earnings information, though not for the whole period of the pursuer’s absence since he was, I am told, still off work at that stage.

[29]      The letter of 25 August contained no time-limit or ultimatum nor any threat of proceedings.  Despite that, a Court of Session summons was then signetted and served. (In passing, I observe that after the Court of Session action was raised, the insurer’s solicitors said that their insurance clients could not trace any request for earnings information other than the one made in the initial letter of claim in November 2014: Production 6.1.13. The matter was not definitively resolved before me but since a copy of what bears to be the principal copy of the email of 25 August 2015 was produced by the defenders’ agents, I proceed on the basis that it was in fact sent to and received by the insurers: Production 6.1.7.)

[30]      Now, the question of any expenses arising from the Court of Session action is not a matter for me. But the fact and timing of that action being raised is a factor which I am entitled to look at as part of the whole circumstances.

[31]      Summarising the position at that stage

a.   liability was admitted;

b.   the insurers had sought – in vain – to obtain information about the valuation of the claim;

c.   the pursuer’s solicitors knew, or should have known, that the insurers were looking to resolve the matter without litigation;

d.   they had orthopaedic and psychological reports, neither of which had been disclosed to the insurers;

e.   there was no question of limitation and the letter of 25 August contained no ultimatum or time limit.

[32]      The justification for raising proceedings at that stage was based on the failure of the insurers to provide up-to-date earnings information, which was needed to enable an accurate valuation to be carried out and advice tendered. There are a number of points to be made about that.

[33]      First, it is true that the insurers had not responded to the email of 25 August 2015. But given the earlier correspondence to which the pursuer’s agents had not even bothered to reply, the commencement of proceedings without warning is indicative of applying one standard to themselves and another to the insurers. Second, although the insurers had failed to provide the earnings information, they had not refused to do so. In my view, to allow only a four week period to elapse between the request of 25 August and the commencement of proceedings on 22 September, against (i) a background of co-operation and (ii) the absence of any reminder, whether or not including a time limit, ultimatum or threat of proceedings, cannot properly be justified.

[34]      Third, a cursory glance at the earnings information which had been provided voluntarily already discloses that although absent from work, the pursuer had nevertheless received salary payments for November and December, both 2014, which in each case was less than the pre-accident average by about £30 per month (restricted to loss of bonus and overtime payments which he would otherwise have received, less any deductions for absences). That information plainly invited an enquiry by his agents of the pursuer himself as to whether he was contractually entitled to receive pay; if so, what he was to receive and for how long (presumably derived from a term of his contract); and whether he had in fact been receiving something close to his normal pay in the succeeding months.

[35]      I did ask the pursuer’s agent if he had made enquiries of the pursuer himself. His position was that he had, but that the pursuer was not very good at keeping records. I was unimpressed by this. The only records required to vouch the loss of earnings were the pursuer’s monthly payslips for January 2015 onwards. Even if he could not provide some or all of those, it seems to be very unlikely that he would have been in a position to confirm that he was being paid something and to say (even roughly) whether what he was being paid was close to his normal monthly pay. Even if he did not have payslips, presumably his salary was paid into his bank account.

[36]      If it was thought necessary to proceed with the court action at that stage to recover earnings information, it appears to me that it would have been appropriate to give a specific warning that if the information sought was not produced timeously, proceedings would ensue. In these circumstances, I do not consider that it was reasonable for the pursuer’s agents to commence court proceedings at that stage without further warning.

[37]      Turning to the phase leading up to the commencement of the present proceedings, the correspondence between the pursuer’s agents and the defender’s agents subsequent to the raising of the Court of Session action is instructive: Productions 6/1/13 – 6/1/16.

[38]      On 2 and 9 October the insurer’s agents wrote to the pursuer’s agents, the focus at that stage being on the non-disclosure of the medical evidence. By email dated 12 October, the pursuer’s agents explained the problem as they saw it in connection with the absence of earnings information. They still did not disclose the medical evidence. On the same day, the defenders’ agents indicated their willingness to try and obtain such documentation as might be required from the defender. That letter contained some pithy remarks about the pursuers’ agents’ conduct.

[39]      Judging by the terms of the pursuer’s agents’ reply the following day, they were somewhat piqued by the defenders’ agents’ comments. In their turn, the pursuer’s agents made comments about the conduct of the defenders’ agents’ clients. That in turn provoked an email from the defenders’ agents in which they essentially invited the service of the specification of documents.

[40]      The initial writ in the present action was presented for warranting along with a specification of documents relating inter alia to earnings information for the pursuer and an inventory of productions containing inter alia the two medical reports mentioned above.

[41]      Other than that, the events unfolded as set out above in the timeline.

[42]      Against that background, it appears to me that there are two issues which require to be considered.

[43]      Firstly, whose conduct caused or contributed to the proceedings and the attendant expense? Secondly, should the court be otherwise marking its disapproval of the conduct of one or other party?

[44]      In my opinion, leaving aside the issue of the missing earnings information, there was no sound reason for the pursuer’s agents to fail to disclose the medical evidence as soon as it was available. It could and should have been disclosed before the Court of Session action was raised. It certainly should have been disclosed before the present action was raised. And the failure to disclose it until some 10 days after the present action was raised is inexcusable.

[45]      In turning to the question of expenses, it seems to me to be necessary to consider whether the failure to disclose the medical reports can be said to have caused or contributed to this action being raised. In considering that question, it is helpful, in my view, to consider the hypothesis: what would have happened had the medical reports been disclosed timeously?

[46]      It may be that in order to arrive at a precise valuation of the loss of earnings claim, the information being sought by the pursuer’s agents was necessary. (I remain doubtful about the proposition that that could only be done by recovery of documents from the defenders for the reasons set out above.) But the valuation of personal injuries claims is not an exact science and all the other heads of claim disclosed in the valuation eventually produced were, by their very nature, not ones to which a precise figure could be allocated. Therefore, if the medical evidence been disclosed at the correct time, the insurers would have had information which would have enabled them to value the main part of the claim. Even if the rest of the information was incomplete, given the heads of claim, it would have been possible to arrive at some kind of overall valuation of the claim by “taking a view”. If a pre-litigation offer had been put forward, the pursuer’s agents would have been bound to take instructions on it. As I have already noted, the pursuer presumably knew himself – even in broad terms – what salary he had received during his absence.

[47]      Thus even if the pursuer’s agents had not felt confident about recommending a hypothetical pre-litigation offer absent detailed earnings information, it may be that the pursuer himself would have had a sufficient grasp of the difference between what he might have earned during his absence and what he was paid during the same period.

[48]      Now, a scenario such as the foregoing cannot be pressed too far. Apart from the question of loss of earnings and missing earnings information, there are of course other imponderables. What would have been the level of any pre-litigation offer? Would it have been accepted? When might it have been made?

[49]      In addition, it is important to bear in mind that what is under consideration here is the raising of the present action in October. That being so, criticism of the pursuer’s agents must be balanced against (i) the fact that by October the earnings information called for on 25 August had still not been produced and (ii) the defenders’ agents had in effect issued an invitation to the pursuer’s agents to proceed with a specification of documents.

[50]      My conclusion is that the failure to disclose the medical reports before the present action was raised was unreasonable and deprived the insurers of a genuine opportunity to settle the claim pre-litigation; and that there was a reasonable chance that had disclosure been made, the claim would have been capable of settlement. However, although I am satisfied that the pursuer’s agents’ conduct was such that the court should mark its disapproval of it, given that (i) the chance of pre-litigation settlement cannot be quantified with any precision; (ii) it cannot be said that the failure to disclose the medical reports was the sole cause of the litigation and hence the attendant costs, I have concluded that the correct result is that the pursuer’s motion be granted but that the award of expenses be modified by two-thirds.