DR Current Awareness - 5 April 2012

Attention: open in a new window. PrintE-mail

All the latest news including CFAs - House of Lords approves amendments to LASPO Bill.

HMRC to claim fixed costs in county court from April 2012.
  On 22.03.12, HMRC announced that, from April 2012, if it successfully pursues a debt claim against a taxpayer in the county court in England and Wales, it will claim its fixed costs of claiming and obtaining judgment from the taxpayer. The level of costs will depend on the amount of debt to be recovered: the maximum charge will be £200 but HMRC expects the average to be around £87. The 'sliding scale' is set out in Title VIII of Part 45 (Fixed costs) of the Ministry of Justice's (MoJ) Civil Procedure Rules (CPR). View HMRC: Fixed Costs in County Court Proceedings here.
Commercial Court judges remind practitioners about time estimates and PD on Citation of Authorities.  On 12.03.12, at a meeting of Commercial Court judges, procedural concerns were raised and the judges sought to remind practitioners about the following:
• The adequacy of time estimates, particularly in relation to without notice applications. The judges commented that it would be easier to accommodate parties seeking injunctions if the accuracy of practitioners' time estimates improved.
• On 23.03.12, the Practice Direction, Citation of Authorities (2012) was released by the Lord Chief Justice. The judges highlighted paragraph 6 of the PD, which states that where a judgment is reported in the Official Law Reports, that report must be cited.
• When demonstrating a point of law in a particular authority, identify the specific passages in the judgment.
Source: Judiciary of England and Wales (24.03.12).  See Practice Direction, Citation of Authorities 2012.
Update on implementation of Third Parties (Rights Against Insurers) Act 2010.  The Lord Chancellor has reported to parliament on the progress made towards implementation of the Third Parties (Rights against Insurers) Act 2010 (2010 Act).  It is now unlikely to be implemented until 2013.  When implemented, the new Act will allow a person with a claim against an insolvent person to proceed against the insolvent's insurer directly, without first establishing the liability of the insolvent person. 
See MoJ Report on the implementation of Law Commission proposals (22.03.12).


 2.1 Arbitration 2.6 Evidence 2.11 Personal Injury
 2.2 Commercial 2.7 Family 2.12 Procedure
 2.3 Companies 2.8 Insolvency 2.13 Property
 2.4 Construction 2.9 Jurisdiction and cross-border 2.14 Torts
 2.5 Costs 2.10 Limitation 2.15 Will & Trust Disputes

Pre-existing proceedings defeat attempt to obtain declaration as to seat of arbitration.  (1) Enercon GMBH (2) Wobben Properties GMBH v Enercon (India) Ltd [2012] EWHC 689 (Comm) (QBD) (Judgment 23.03.12).  The English court declined to determine whether the seat of an arbitration would be in England for the purposes of service out of the jurisdiction under CPR r.62.5(1)(c)(ii) when that issue had been raised and remained to be determined in proceedings between the parties in India.
See BAILII judgment.
E-mail chain can create an enforceable guarantee.  Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd & Anor [2012] EWCA Civ 265 (CA) (Judgment 09.03.12).  The Court of Appeal confirmed the High Court's ruling that an enforceable guarantee can be created by a series of e-mails authenticated by the online signature of the guarantor. The judgment should make practitioners aware that surprisingly informal documentation and signatures can create enforceable guarantees. Source: PLC (15.03.12). See BAILII judgment.  Refer also to previous Bulletin on 10.02.11.
High Court distinguishes previous authorities to uphold exclusion of implied terms under Sale of Goods Act 1979.  Air Transworld Ltd v Bombardier Inc [2012] EWHC 243 (QBD) (Judgment 20.02.12).  The High Court has distinguished well established authorities to rule that an exclusion clause that did not expressly refer to the word 'conditions' was nevertheless successful to exclude the conditions implied into a sale of goods under the Sale of Goods Act 1979. Here, in a dispute over an aircraft, the High Court ruled that the first part of the exclusion clause was clear that all the seller's obligations and liabilities were to be found exclusively in the contract, and that general wording excluding obligations implied by law was sufficient to exclude the conditions implied by the SGA. The express reference in the second part of the exclusion clause to 'warranties of merchantibility and fitness for purpose' was merely an example of terms implied by law which had been excluded by the first part. The buyer's argument that UCTA applied to subject the exclusion clause to the test of reasonableness was rejected, as the court found that it was an international supply contract and therefore not subject to UCTA. Despite this decision, given its departure from well established authorities, a seller wishing to exclude the implied conditions of the SGA should still continue to expressly refer to 'conditions' in an exclusion clause.
Source: PLC (15.03.12).  See BAILII judgment.
Powers of chairmen and directors.  Philip John Smith v James Carl Butler [2012] EWCA Civ 314 (CA) (Judgment 15.03.12).  In the absence of an express delegation of powers by the board of a company to its managing director, he did not have implied power to suspend the company's executive chairman and exclude him from the company's premises.
See BAILII judgment.
Legal professional privilege does not attach to claims consultant's documents. Walter Lilly & Company Ltd v Mackay & Anor [2012] EWHC 649 (TCC) (QBD) (Judgment 15.03.12).  See Evidence.
Dishonesty of party does not automatically displace presumption of costs in favour of successful party.  (1) Peter Hutchinson (2) Susan Penning v (1) Michael Neale (2) Ann Neale [2012] EWCA Civ 345 (CA) (Judgment 20.03.12).  The starting point of an order for costs was that costs should follow the event. There was no general rule that a finding of dishonest conduct by the successful party would replace the usual starting point. An evaluation of the nature and degree of the misconduct and its effect on the issues in the trial was required. See BAILII judgment.
CFAs – House of Lords approves amendments to LASPO Bill and MoJ confirms LASPO not retrospective.  Part 2 of the Bill proposes to abolish the recoverability of CFA success fees from a losing party in any proceedings.
The amendments would exempt the two types of claimant from the Bill's proposals:
• Those with respiratory diseases arising from industrial exposure to a harmful substance.
• Those with industrial diseases in relation to employers' liability cases.
These claimants would be allowed to keep 100% of their damages, while defendants would pay their ATE insurance premium and lawyer's success fee.
The Ministry of Justice has also confirmed that CFAs will continue to be valid if taken out before the reforms enter into force on 1 April 2013.
Source: The Law Society Gazette article entitled 'Industrial disease wins exemption from CFA cut' (14.03.12).
Legal professional privilege does not attach to claims consultant's documents. Walter Lilly & Company Ltd v Mackay & Anor [2012] EWHC 649 (TCC) (QBD) (Judgment 15.03.12).  The TCC has held that legal professional or legal advice privilege does not attach to documents generated by a claims consultant. The judgment expressly did not consider whether litigation privilege could apply to these documents, nor whether a claims consultant's documents in connection with adjudication proceedings are privileged. These were outstanding issues for another day.
This judgment is however, essential reading for all those involved in the construction industry and not just those involved in disputes, where it is common to find a party represented by a claims consultant, especially in adjudication proceedings. Some parties may have thought that because a claims consultant was providing them with advice, their documents were privileged. In light of the judgment, if the claims consultant does not engage a practising solicitor or barrister to provide legal advice to a party, those documents will have to be disclosed. In future, parties need to be clear about the services they expect to receive from a claims consultant; claims consultants need to be clear about the services they are providing and the qualifications of the individuals providing them. Otherwise, both may be surprised by the scope of their disclosure obligations if the dispute they are involved in subsequently proceeds to litigation. Source:  PLC (21.03.12).  See BAILII judgment.
Article: Mother knows best.  S (a Child) [2012] UKSC 10.  Supreme Court recognises ‘defence’ to child abduction. The Supreme Court has unanimously upheld the appeal of a mother who brought her two-year-old child from Australia to the UK against the father’s wishes. Source:  New Law Journal (22.03.12).  See BAILII judgment.
Article:  Splitting Up.  Noting the complexities that surround the severance of joint tenancy.  Source:  New Law Journal (23.03.12).
Family Costs order.  Timothy Francis Lage Hayes v Carol Linda Hayes (2012) (ChD) (Judgment 23.03.12).  The discretion to release a discharged bankrupt from a debt arising from a family costs order under the Insolvency Act 1986 s.281(5) was unfettered and was to be exercised according to the relevant circumstances as at the date of the discharge. In the circumstances, a registrar had not erred in refusing to release an already discharged bankrupt from a debt arising from a family costs order that had arisen many years earlier.
Internet publication.
G v de Visser, Case C292/10 (Judgment 15.03.12). In a reference from the German court, the ECJ has ruled on the interpretation of the Brussels Regulation (44/2001/EC) and the E-Commerce Directive (2000/31/EC) in a case of an alleged infringement of personality rights by content placed online on a website, brought against a defendant who was an EU citizen but whose whereabouts were unknown. The ECJ ruled that the application of Article 5(3) of the Regulation was not precluded by Article 4(1) and the defendant could be sued where the harmful event occurred. The court also ruled that the provision for regulation of information society services (ISS) on a country-of-origin basis in Article 3 of the E-Commerce Directive did not apply where the place of establishment of the ISS provider was unknown, since application of that provision was subject to identification of the member state in whose territory the ISS provider in question was actually established. The court has adopted a common sense approach in a case where a website operator could not be traced, and did not allow a restrictive interpretation of EU legislation to bar the claimant's remedy. (G v de Visser, Case C292/10, 15 March 2012.)
Source: PLC (15.03.12).  View judgment here.
Limitation 1950's claims are time-barred for limitation purposes.  Ministry of Defence v AB & Ors [2012] UKSC 9 (Judgment 14.03.12).  The Supreme Court has considered whether claims in a group action relating to injuries allegedly caused by nuclear tests in the 1950s were statute barred and, if so, whether it should exercise its discretion under section 33 of the Limitation Act 1980 to disapply the time limits. In addition to its limitation submissions, the defendant argued that none of the nine (originally ten) lead cases could satisfy the relevant causation test because there were a number of possible causes of the illnesses alleged, and it could not be proved which of them was the most probable cause. If the cases stood no reasonable prospect of success, the court should strike them out. The defendant submitted that a further exception to the Fairchild exception (to the general rule that the claimant must be able to demonstrate causation before damages can be awarded) could not apply in these cases.
At first instance it was held that all of the ten lead cases could proceed. The decision was reversed by the Court of Appeal, and by a 4-3 majority the Supreme Court has upheld its decision. It concluded, by reference to section 14(1)(b) of the Limitation Act 1980, that a claimant is likely to have the requisite knowledge of the facts when he first came to reasonably believe them. The test is an objective one and a distinction is to be drawn between knowledge of the essence of the claim, and the evidence necessary to prove it to the requisite legal standard.
Source: PLC (21.03.12).  See BAILII judgment.
E/L insurers at time of exposure to asbestos liable for mesothelioma.  BAI (Run Off) Ltd (In Scheme of Arrangement) (Appellant) v Durham (Respondent) : BAI (Run Off) LTD (Appellant) v Thomas Bates & Son Ltd (Respondent) : Excess Insurance Co Ltd (Respondent) v AKZO Nobel UK Ltd (Appellant) : Excess Insurance Co Ltd (Respondent) v AMEC Plc (Appellant) : Excess Insurance Co Ltd (Respondent) v Edwards (Appellant) : Independent Insurance Co Ltd (Appellant) v Fleming & Anor (Respondents) : Municipal Mutual Insurance Co (Appellant) v Zurich Insurance Co & Ors (Respondents) : Municipal Mutual Insurance Ltd (Respondent) v Zurich Insurance Co (Appellant) : Municipal Mutual Insurance Ltd (Respondent) v Zurich Insurance Co & Adur District Council & Ors (Appellants) [2012] UKSC 14 (Supreme Court) (Judgment 28.03.12).  The Supreme Court has ruled that the insurers indemnifying employers at the time when employees were exposed to asbestos – the ‘trigger period’ – are liable for subsequent damages claims, not the insurer responding when the disease manifested itself.  See BAILII judgment.
Responsibility for injuries at indoor climbing centre.  Pinchbeck v Craggy Island Ltd (2012) (QBD) (Judgment 15.03.12).  A company that operated an indoor rock-climbing centre was liable for injury sustained by a person who jumped down from a wall and injured her ankle as she had not been given appropriate instructions on how to descend the wall.
TCC holds firm to trial timetable and penalises attempt to delay in indemnity costs.  Cases: Phaestos Ltd & Anor v Ho [2012] EWHC 635 (TCC) (QBD) (Judgment 05.03.12) (see also Bulletin on (08.03.12), Phaestos Ltd & Anor v Ho [2012] EWHC 653 (TCC) (QBD) (Judgment 14.03.12) and Phaestos Ltd & Anor v Ho [2012] EWHC 668 (TCC) QBD) (16.03.12).  The Technology and Construction Court has refused three applications by claimants (C) which would have delayed the procedural timetable, and ordered indemnity costs.
C sought:
• A split trial of liability and quantum.
• An extension of time for compliance with a final order for further information.
• An adjournment of rulings on e-disclosure.
The court held it could not decide on a split trial unless and until C provided proper particulars of loss. C's failure to give proper particulars of the quantum claimed;  to comply and to organise e-disclosure because new solicitors had only just been instructed and leading counsel was on holiday, lead to the conclusion that C were seeking to delay and disrupt the procedural timetable and this was therefore a case for indemnity costs.
Copy claim form validly served where method used valid under local law.  Weston v Bates & Anor [2012] EWHC 590 (QBD) (Judgment 15.03.12).  A defendant was properly served with the claim form in Monaco where he was validly served under local law under CPR 6.40(3)(c). The fact that the claim form used was not an original, sealed copy, but a photocopy of the original, did not invalidate service.
The decision and exposition in this case are both helpful, dealing as they do with a question that often crops up in practice, and pulling together the various rules, provisions and statements that have an impact on that issue. However, the message for practitioners to take away is a clear one - other than when serving by fax, keep serving an original, sealed, copy of the claim form on each defendant.  Source: PLC (21.03.12).  See BAILII judgment.
Construction of grants of rights of way.  Oliver & Anor v Symons & Anor [2012] EWCA Civ 267 (CA) (Judgment 15.03.12).  In the absence of evidence to the contrary, a judge had been entitled to construe a right of way as extending only to the width of a track passing across two neighbouring farmland properties.  See BAILII judgment.
Commercial Property Dilapidations Protocol.  As you will be aware, the Commercial Property Dilapidations Protocol has been in force since 12 January 2012 (see Bulletin on 12.01.12).  It formally became part of the CPR as part of the 58th update, most of which comes into force on 19 March or 6 April 2012, and will shortly be accessible on the CPR web page, under the pre-action protocols link.
Article:  That old can of worms.  Laying out the issues surrounding the resurrection of a landlord & tenant riddle.  The recent decision of the Upper Tribunal (Lands Chamber) in OM Property Management Ltd v Burr [2012] UKUT 2 (LC) (Judgment 26.01.12) appears to re-open the vexed question of when costs are ‘incurred’ for the purposes of the time limit on recovery of expenditure through service charges set out in s 20B of the Landlord and Tenant Act 1985, which appeared to have been laid to rest in a decision handed down last year. 
Source: New Law Journal (23.03.12).
2.14 TORTS
Nuisance:  Relationship between environmental regulatory compliance and private nuisance clarified.  Barr & Ors v Biffa Waste Services Ltd [2012] EWCA Civ 312 (CA) (Judgment 19.03.12).  On 19 March 2012, the Court of Appeal:
• Decided that it is not a defence to a claim for common law private nuisance to show that waste disposal activities giving rise to a nuisance were carried out in accordance with a landfill permit and without negligence.
• Considered the case was governed by well-settled conventional principles of the law of nuisance.
• Rejected the approach of the Technology and Construction Court, which in particular had sought to take a "flexible" approach to the concept of reasonable user.
Carnwath LJ, an experienced environmental law judge, delivered the leading judgment. The decision leaves operators exposed to nuisance claims, including group litigation, despite complying with their environmental permits. It provides limited guidance of what constitutes a private nuisance. Source: PLC (20.03.12).  See BAILII judgment.
Vicarious liability.  XVW and YZA v Gravesend Grammar Schools for Girls & Anor [2012] EWHC 575 (QBD) [2012] (Judgment 13.03.12).  It was established law that the question to be considered, on the facts, was whether the person’s torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable. As the doctrine of vicarious liability imposed strict liability without proof of fault there was high authority for the proposition that, although it could apply to relationships other than that of employment or ‘servant or agent’, where it was classically and most commonly found, it was a principle which had to be kept within bounds and was not ‘infinitely extendable’.  Source: New Law Journal (23.03.12).  See BAILII judgment.
Protection of vulnerable adults outside the scope of the Mental Capacity Act 2005.  DL v A Local Authority & Ors [2012] EWCA Civ 253 (CA) (Judgment 28.03.12).  The Mental Capacity Act 2005 had not ousted the High Court's inherent jurisdiction to deal with cases which fell outside the Act, and protect vulnerable adults who were under constraint, subject to coercion or undue influence, or deprived of capacity for some other reason.  See BAILII judgment.

Follow this link to contact our disputes experts