Inadequate schedules of loss / application of Denton & Others v TH White Ltd
Robert Mackie v (1) Plastics in Construction Limited and (2) Lancer Scott Limited [2016]
The Claimant alleged that during the course of his employment with the First Defendant on 23 November 2012, he was participating in the construction of a canopy on a ‘click and collect’ pod at the Tesco supermarket in Leyland, when he fell from a stepladder, sustaining personal injury and loss. The Claimant was actually ‘self-employed’, but alleged that the First Defendant was his sole client. Dolmans were instructed on behalf of the Second Defendant lead contractor.
Proceedings were issued on 27 November 2016, limited to £50,000.00 and deemed served on 14 March 2016. The Schedule of Loss was dated 17 November 2015 and was verified by a Statement of Truth signed by the Claimant’s Solicitors. The Schedule of Loss served with the proceedings was the very first notice of the Claimant’s claim for Special Damages and it referred to particularised losses of £3,315.48 only. However, that Schedule of Loss was in significant respects blank because claims for past and future loss of earnings (and for past travelling costs and past miscellaneous) were marked "£TBC."
CPR Part 16.4(1)(e) provides that the Particulars of Claim must include such other matters as may be set out in a Practice Direction. Practice Direction 16, para. 4.2, provides that "[t]he Claimant must attach to his Particulars of Claim a schedule of details of any past and future expenses and losses which he claims."
The Second Defendant filed and served a Defence stating, among other things, that the Claimant’s Schedule of Loss was incomplete and that no reason had been given for the lack of particulars in respect of the past loss of earnings, notwithstanding that the documents on which the claim would be based would have been in the Claimant’s power, custody or control and that the basis for the claim for loss of earnings would have been known to the Claimant. The Directions Questionnaire filed and served on behalf of the Second Defendant continued in that theme and stated that the Claimant should not be given permission to serve an Updated Schedule of Loss. The Proposed Directions filed at Court deliberately did not provide for permission for the Claimant to serve an up-to-date Schedule of Loss. Unsurprisingly, the Claimant filed Proposed Directions which sought permission to file an Updated Schedule of Loss, service of which was timetabled for just prior to the date for filing Pre-Trial Checklists.
On 13 June 2016, the matter was listed for a Costs Case Management Hearing in the County Court at Exeter on 14 July 2016.
On 29 June 2016, we wrote to the Claimant’s Solicitors not agreeing to the Claimant’s Proposed Directions, specifically in respect of an up-to-date Schedule of Loss. The Claimant then agreed the First Defendant’s Proposed Directions (which had included permission to file an up-to-date Schedule of Loss). On 5 July 2016, we wrote to the other parties’ Solicitors not agreeing to the First Defendant’s Proposed Directions as well.
On 11 July 2016, the Claimant served an Updated Schedule of Loss (verified by a Statement of Truth signed by the Claimant personally) claiming Special Damages and particularised losses of £129,058.03, which represented a near 39-fold increase on the Special Damages originally particularised.
Just after 3:00pm on the very eve of the Costs Case Management Hearing, the Claimant filed and served an Application seeking permission to increase the value of his claim to £150,000.00 and, in an accompanying Witness Statement by his Solicitor, sought relief from sanction in respect of the Updated Schedule of Loss. The Witness Statement conceded that it had been noted on receipt of medical evidence dated 24 August 2015 that the Claimant was earning less than his pre-accident wage and that the need for evidence of that loss had been identified at a conference with Counsel on 13 November 2015 (and that this was not followed up because of an error on the part of the Claimant's Solicitors).
We instructed Counsel to represent the Second Defendant at the Costs Case Management Hearing; Mr Andrew McLaughlin (who represented one of the parties in the seminal matter of Denton & Ors v TH White Ltd – see below). The matter came before Deputy District Judge Cornford and neither Defendant objected to the Court hearing the Claimant’s Application, which was opposed by the Second Defendant only.
Counsel for the Claimant conceded that relief from sanction was required. The Deputy District Judge accepted that the Claimant required relief from sanction and that the 3-stage approach set out in Denton & Ors v TH White Ltd & Ors applied. The Deputy District Judge agreed that the breach was serious and significant (stage 1 of Denton) without good reason (stage 2 of Denton) and that there had been delay in resolving those issues that had wasted Court time (for the purposes of Stage 3 of Denton), but he then granted relief on the sole ground that no Trial date had been set. The Deputy District Judge gave the permission to the Claimant to rely on his Updated Schedule of Loss and to increase the value of his claim to £150,000.00. However, because all of the available time had been taken up dealing with the Claimant’s Application and because the Defendants both required permission to file Amended Defences and updated Costs Budgets, the Costs Case Management Hearing was adjourned to a later date.
Following consideration of detailed advice from ourselves and Counsel, the Second Defendant appealed on the grounds that the Deputy District Judge had given no particular weight to the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules. The Deputy District Judge did not appear to identify any relevant circumstances, other than the fact that a Trial date had not been set which, whilst relevant, was not a something that should be given particular weight.
The Second Defendant was, once again, represented by Mr McLaughlin at the Appeal Hearing before HHJ Cotter QC on 3 October 2016. Initially, the Judge was sceptical that CPR Part 3.9 applied, but, ultimately, he was persuaded to agree that there was an implied sanction, after being taken through the relevant case law. Following further submissions, in particular, reference to Oak v British Gas Trading [2016] EWCA Civ 153 against the background of the lateness of the Application and the fact that it had “hijacked” the Costs Case Management Hearing, which, it was submitted was not properly addressed by the Deputy District Judge, the Judge resolved to allow the Appeal; the Deputy District Judge had not given any or any adequate weight to the fact that the Costs Case Management Hearing needed to be adjourned.
Comment
This decision, albeit first instance (effectively – despite being an Appeal from a Deputy District Judge) appears to be the first application of Denton to Schedules of Special Damages. There is a tendency by the Courts to routinely give permission to Claimants to serve Updated Schedules of Loss in circumstances where the particulars of Special Damage ought to have been set out in the Schedule served with the Particulars of Claim. There are, of course, some circumstances where permission for Updated Schedules of Loss is perfectly appropriate.
The Justice Department’s own guidance on Statements of Case is "[i]n a claim for damages (compensation), the Claimant will have set out in a schedule, in his Particulars of Claim or attached to it, the financial losses he says he has had. As the case progresses, if the loss is continuing, he must bring his figures up-to-date" (emphasis added).
Our approach to the failure on the part of the Claimant in this case to address his mind (properly) to these requirements, obviously, led to a significant saving on reserves in the claim as a whole. As with any CPR 3.9 situation (in light of Denton), careful consideration is required to taking a point on relief from sanction (particularly as far as an Appeal), but, this case illustrates the financial benefits which can be derived for Defendants/Insurers in such circumstances. Moreover, this kind of approach is an encouragement to Claimants’ representatives to ensure that proper particulars (to aid in reserving accurately) are provided at the outset of the litigated claim.
Judges should, where appropriate, be reminded of the mandatory requirement to serve details of any past and future expenses and losses with the Particulars of Claim and of the requirement for the Claimant to apply for relief from sanction where that was not done. Care should be taken to ensure, where permission for an Updated Schedule of Loss is appropriate, that such permission is limited to those heads of Special Damage that are continuing.
A copy of the Transcript of the Judgment of HHJ Cotter QC has been applied for and will be made available on request once obtained.
