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The price of justice

14 July 08

Latest civil cases, including inordinate delay; third party notice; new defender; and three decisions on aspects of expenses

by Lindsay Foulis

Inordinate delay

In Hepburn v Royal Alexandria Hospital [2008] CSOH 81; 2008 GWD 18-310, Lady Dorrian was moved to dispose of an action for damages due to undue delay. The action had been raised in 1998, close to the expiry of the triennium. It was sisted shortly after it was raised. The original agents withdrew from acting in September 2004 and new agents took over in November of that year. Her Ladyship was clear that virtually nothing had been done for six years, although once the new agents became involved, progress was made and they could not be criticised. The issue was whether the intervening six year period amounted to inordinate and inexcusable delay.

Lady Dorrian concluded that there had been such delay. The period of delay was at a critical stage in an action for reparation based on alleged medical negligence. The action was raised almost three years after the actions complained of. Whilst the present agents had carried out considerable work, their efforts had resulted in the defenders requiring to investigate matters materially different from what had initially been the subject of complaint. The case against one defender was now totally different. It was 12 years after this defender’s last involvement in events. Another person whose actions were the subject of complaint had died. Whilst this might have been a problem anyway, if the original agents had diligently investigated matters it was quite possible that this person might still have been alive and accordingly able to have some input. The action was dismissed.

Third party notice

In CSC Braehead Leisure Ltd v Laing O’Rourke Scotland Ltd [2008] CSOH 93, Lord Menzies was required to consider whether to grant a motion for a third party notice in an action proceeding under the rules for commercial actions in the Court of Session. In deciding to grant the motion, Lord Menzies accepted that the pursuer in such an action would regularly wish to keep the dispute in as short compass as possible and avoid the introduction of additional parties. This would likely produce a swifter conclusion. On the other hand the defender, if prevented from introducing other parties, might be out of pocket for a considerable period.

He came to the conclusion that it was in the interests of justice to grant the motion for a number of reasons. First, to refuse the motion would inevitably result in further litigation between the defender and third parties. This would involve a repetition of much of the evidence. The defender would face delay in receiving relief. There was a risk that different tribunals would reach differing results. The third parties had an interest in both liability and quantum in the present proceedings. Accordingly it was fair that they be represented. Further, there had been little delay in the defender applying for a third party notice and the reasons for seeking such a notice were clearly set out. It would also be easier to achieve a settlement if all the parties were involved in the one litigation. In addition, although Lord Menzies recognised the potential for, and indeed inevitability of delay if the motion was granted, he observed that active case management available under the commercial cause rules should reduce such delay.

As an aside, this might be one achievable goal of the present civil justice review. Whilst some of the ideas floated might be considered unlikely to develop further, on the grounds of cost apart from anything else, active case management, even under the present procedures, should be able to have a desirable effect on countering the potential for delay.

Amendment: new defender

In Sinclair v Private Rental Housing Panel 2008 GWD 20-331 the pursuers sought to substitute one defender for another in a summary application, and thereafter obtain a fresh warrant to cite the substitute defender with the action being dismissed against the original defender. It was argued that rule 2.31 of the summary application rules was wide enough to allow amendment. Sheriff Napier determined that that rule was directed at controlling the progress of a summary application and was not wide enough to permit what the pursuers proposed. Further, the sheriff considered that the amendment should be refused as it effectively constituted the commencement of the application of new against another defender in circumstances in which the time for appeal had expired.

Expenses: proper scale

Hylands v Glasgow City Council [2008] CSOH 69; 2008 GWD 17-298 was an action for damages raised in the Court of Session but settled for a sum well within the privative jurisdiction of the sheriff court. The defenders sought that expenses should be awarded on the basis of the summary cause scale with no sanction for junior counsel.

Lord Drummond Young reviewed authority and noted that the value of the award was not conclusive, although the lower the sum when compared to the privative limit, the more compelling the case for modification. However, it might not be clear when the action was raised or progressed that the realistic value of the claim was in such a figure. The procedures available to litigants in the different courts were another factor to be considered. Further, the reasons for settlement were relevant – was the action settled at that figure to resolve delay or uncertainty, or did further information come to hand after the action was raised?

Whilst refusing for a particular reason to modify the expenses in this action, Lord Drummond Young observed that the specific rules available under summary cause procedure were very significant. At the preliminary hearing the issues required to be identified and attempts made to resolve actions. Further, in actions for damages for personal injury, medical reports and valuation required to be lodged with the summons. Thus there was little difference between that procedure and Chapter 43 procedure in the Court of Session. In short a simple and expeditious procedure was now available in the sheriff court for claims up to £5,000. The increase in the privative jurisdiction to £5,000 was a clear indication that such actions were unsuitable for trial by jury.

Expenses: discharged proof

In Mitchell v Hass Tek Services Ltd, Dumfries Sheriff Court, 25 April 2008, a cautionary tale is told about what an award of expenses can cover. A five day proof was discharged and the defenders were found liable for the expenses of the discharged diet. These were taxed in the sum of £58,993.63 inclusive of outlays by the auditor of court. A note of objections was lodged. Whilst the actual decision is, of course, very much particular to that case, observations made by Sheriff Ross are of some interest. The sheriff, referring to Macphail, Sheriff Court Practice, noted that the decision of an auditor would not be interfered with unless some question of principle was involved, the auditor had misdirected himself as to considerations regulating his discretion, he had no or insufficient material before him, he had misunderstood or mistaken such material, or had reached a decision which was unreasonable.

Sheriff Ross further observed that it was appropriate that preparation for a proof properly formed part of the expenses of that proof, that preparation was rightly considered to begin with the assignation of the diet, and such early preparation was to be encouraged if court programmes and litigants’ hopes were not to be disrupted by such failure to prepare early. Early preparation should be commended, not criticised. The fact that such preparation might still be used for a subsequent proof should be in the minds of parties when agreeing the extent of expenses being awarded when such a proof was discharged.

On that basis Sheriff Ross did not interfere with the auditor’s decision to allow all expenses for preparation. Apart from anything else it might be difficult to distinguish work done for the cause generally and that done to prepare for a particular diet of proof. To overcome such a problem, Sheriff Ross suggested that when a proof was discharged, any question of expenses relating to preparation for the proof should be reserved, with liability only being determined as to expenses occasioned by attendance at the discharged diet.

With respect to my colleague, whilst I can see why he made that suggestion, I do not know if it achieves the solution sought. An award in such terms, if it was intimated that a motion to discharge was going to be made a week or two prior to the proof, might amount to little or nothing. However, the party not seeking the discharge might be well prepared for the proof and, if it went ahead, in a strong position. If the proof is discharged, either consensually or after argument, why should that party not be compensated for the loss of that strong tactical position? Yes, the preparations may not be redundant, but the grant of the discharge to the other side may have substantially weakened a tactical advantage previously held.

Expenses: basis of taxation

In the recent decision from the Inner House in Trunature Ltd v Scotnet (1974) Ltd [2008] CSIH 33, the Second Division noted that if an account of expenses was directed to be taxed on an agent-client basis, this meant that it was a client paying basis as opposed to a third party paying basis. Further, even if such a direction was made, an award of an additional fee was still competent. However an award of expenses had the purpose of indemnifying the party in whose favour it had been made in respect of that party’s liability for their legal adviser’s fees. A party was not entitled to recover more than would be paid to the legal adviser.

The usual caveat applies.