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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> McDonnell & Anor v Walker & Anor  EWCA Civ 1257 (24 November 2009)
Cite as:  PIQR P5,  EWCA Civ 1257,  CP Rep 14
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE MANCHESTER COUNTY COURT
Deputy Circuit Judge Morgan
Strand, London, WC2A 2LL
B e f o r e :
Vice-President of the Court of Appeal, Civil Division
LORD JUSTICE RIMER
SIR PAUL KENNEDY
|McDonnell & Anr
|- and -
|David Walker (Executor of the Estate of Richard Walker, deceased)
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7404 1424
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Frank Burton QC and Paul Russell (instructed by Messrs Cogent) for the Appellant
Hearing dates : 19th October 2009
Crown Copyright ©
Lord Justice Waller :
i) On 24th April 2001 the first claimant was the driver of a car, with the second claimant as a passenger, which was in collision with a car being driven by Richard Walker. Richard Walker was killed in the accident.
ii) The claimants instructed Anthony Hodari & Co (Hodari), solicitors, and on 31st July 2001 that firm wrote a letter of claim to Richard Walker's family which was forwarded to Richard Walker's insurers, Direct Line.
iii) On 7th September 2001 Direct Line wrote two letters to Hodari, the first relating to the first claimant and the second the second claimant. In both they stated they could not confirm their stance on liability pending the inquest; in both they requested a list of 3 consultants in the hope of agreeing a joint instruction. In the letter relating to the first claimant they noted "the severity of your client's injuries".
iv) The inquest was held on 11th October 2001 and on 29th October 2001 Hodari asked Direct Line to confirm liability was not in issue. On 23rd November Hodari sent details of an orthopaedic surgeon, Mr Swain, to Direct Line and again asked for confirmation that liability was accepted.
v) On 24th November 2001 Direct Line accepted liability and offered £900 for the claim in respect of the first claimant's car. The offer for the car was accepted on 6th December 2001.
vi) In early 2002 the claimants returned from Northern Ireland to University in England and Hodari sought to find medical experts in England. By April 2002 experts had been agreed between Direct Line and Hodari but both claimants failed to attend appointments in that month "in the light of the fact that both claimants were at University and were on working placements".
vii) In her statement Emma Swainbank of Hodari says she received details of an orthopaedic surgeon in Belfast on 14th May 2002. Ultimately a letter of instruction to Mr Christopher Andrews in Belfast was sent but only on 14th October 2003. From logs produced by Direct Line it seems they were being informed by Hodari in December 2003 of difficulties getting touch with the claimants. They were also being informed that "it would seem" that there would be no loss of earnings claim, that Hodari were looking at "generals", and "specials" were minimal.
viii) In February 2004 the Direct Line log records again that Hodari were saying they had difficulties getting instructions from the claimants but that loss of earnings would not be applicable since the first claimant was a student; and that they had no particulars of injuries "but would suggest he has recovered well as he is not pushing them at all". The log records that Hodari had instructed a medical expert and that they were saying they will return with news as soon as possible.
ix) Eventually appointments were made for both claimants to see Mr Andrews on 29th March 2004 now nearly three years after the accident.
x) On 8th April 2004 Hodari wrote to confirm they were issuing proceedings to protect the limitation position and asked for the correct name and address for the defendant.
xi) On 20th April 2004 the claim form was issued limiting damages to £15,000. The claim handler within Hodari diarised the date for service as 26th August 2004 which was an error.
xii) Hodari received medical reports on 24th April 2004. They were served on Direct Line on 5th July 2004. Particulars of claim were filed on 23rd August 2004 with particulars of injury as follows: - "the first claimant sustained a broken knee cap, broken pelvis and several cuts and bruises. As a result of the accident the claimant will be at a handicap on the open labour market. Full details are set out in the medical reports of Mr Andrews dated 13th April and 16th April 2004. Further medical evidence to be adduced." [Mr Andrews' medical reports made clear that the first claimant's injuries were serious indeed] . . ." "As a result of the collision the second claimant sustained facial cuts, bruising and psychological injuries. Full details are set out in the medical reports of Mr Andrews dated 13th April and 16th April 2004." [Mr Andrews' reports showed the second claimant's physical injuries were not insignificant but there was no medical report to support the allegation of psychological injury]
xiii) Ultimately the proceedings were served on 23rd August 2004, one day late. Schedules relating to special damages were served on 27th August 2004, in each case claiming £50 but indicating other matters were to be advised.
xiv) On 6th September 2004 the defence took the point as to late service and on 21st October 2004 Hodari applied retrospectively for an extension of time for service. That application was refused on 12th January 2005.
(3) If the claimant applies for an order to extend the time for compliance after the end of the period specified by rule 7.5 or by an order made under this rule, the court may make such an order only if
(a) the court has failed to serve the claim form; or
(b) the claimant has taken all reasonable steps to comply with rule 7.5 but has been unable to do so; and
(c) in either case, the claimant has acted promptly in making the application.
"11. Special time limit for actions in respect of personal injuries
(1) This section applies to any action for damages for negligence, nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision) where the damages claimed by the plaintiff for the negligence, nuisance or breach of duty consist of or include damages in respect of personal injuries to the plaintiff or any other person.
(2) None of the time limits given in the preceding provisions of this Act shall apply to an action to which this section applies.
(3) An action to which this section applies shall not be brought after the expiration of the period applicable in accordance with subsection (4) or (5) below.
(4) Except where subsection (5) below applies, the period applicable is three years from
(a) the date on which the cause of action accrued; or(b) the date of knowledge (if later) of the person injured . . .
"33. Discretionary exclusion of time limit for actions in respect of personal injuries or death
(1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which
(a) the provisions of section 11 or 12 of this Act prejudice the plaintiff or any person whom he represents; and(b) any decision of the court under this subsection would prejudice the defendant or any person whom he represents;(c) the court may direct that those provisions shall not apply to the action, or shall not apply to any specified cause of action to which the action relates.
(2) The court shall not under this section disapply section 12(1) except where the reason why the person injured could no longer maintain an action was because of the time limit in section 11.
If, for example, the person injured could at his death no longer maintain an action under the Fatal Accidents Act 1976 because of the time limit in Article 29 in Schedule 1 to the Carriage by Air Act 1961, the court has no power to direct that section 12(1) shall not apply.
(3) In acting under this section the court shall have regard to all the circumstances of the case and in particular to
(a) the length of, and the reasons for, the delay on the part of the plaintiff;(b) the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the plaintiff or the defendant is or is likely to be less cogent than if the action had been brought within the time allowed by section 11 or (as the case may be) by section 12;(c) the conduct of the defendant after the cause of action arose, including the extent (if any) to which he responded to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were or might be relevant to the plaintiff's cause of action against the defendant;(d) the duration of any disability of the plaintiff arising after the date of the accrual of the cause of action;(e) the extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages;(f) the steps, if any, taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received.
(4) In a case where the person injured died when, because of section 11, he could no longer maintain an action and recover damages in respect of the injury, the court shall have regard in particular to the length of, and the reasons for, the delay on the part of the deceased.
(5) In a case under subsection (4) above, or any other case where the time limit, or one of the time limits, depends on the date of knowledge of a person other than the plaintiff, subsection (3) above shall have effect with appropriate modifications, and shall have effect in particular as if references to the plaintiff included references to any person whose date of knowledge is or was relevant in determining a time limit.
(6) A direction by the court disapplying the provisions of section 12(1) shall operate to disapply the provisions to the same effect in section 1(1) of the Fatal Accidents Act 1976.
(7) In this section "the court" means the court in which the action has been brought.
(8) References in this section to section 11 include references to that section as extended by any of the preceding provisions of this Part of this Act or by any provision of Part III of this Act."
"In the course of his speech, Lord Diplock considered the meaning of delay in what was then, section 2D(3)(a)(b) of the Limitation Act 1939, as inserted by the Act of 1975 and which is now s.33(3)(a)(b) of the Limitation Act 1980. He said  1 WLR 744, 751:
"Subsection (3) requires the court to have regard to 'all the circumstances of the case' but singles out six matters for particular mention. These six present a curious hotchpotch. 'The delay' referred to in paragraph (a) must be the same delay as in paragraph (b); so it means the delay after the primary limitation period expired. It is the length of this delay (in the instant case 37 days) and the reasons for it that matter under paragraph (a)."
There was some debate before your Lordships, for which I was primarily responsible, as to whether delay in subsection (3)(a) was referring to delay from the accrual of the cause of action rather than delay after the expiry of the primary limitation period. There can, however, be no doubt that the delay referred to in subsection (3)(b) is delay subsequent to the expiry of the primary limitation period and I am persuaded that Lord Diplock's construction is correct and it is to this same period of delay that the court is to have regard under paragraph (a) and also in subsection (4).
It does not, however, follow that, in weighing the prejudice to the defendant, the court is not entitled to take into account the date upon which the claim is first made against the defendant. Compare the facts in Thompson v Brown with the facts of this case. In Thompson v Brown the claim had been made within a few weeks of the accident and liability and damage had been fully considered by the defendants' insurers at an early stage. At the time the limitation period expired, the defendants' insurers were in a position to settle the claim on its true merits. The fact that the plaintiff's solicitors slipped up so that the writ was issued 37 days late was a totally unexpected windfall benefit for the defendant's insurers. The primary purpose of the limitation period is not so to protect a defendant from the injustice of having to face a stale claim, that is, a claim with which he never expected to have to deal. The defendants' insurers never suffered from that disadvantage in Thompson v Brown and thus the degree of prejudice they suffered was slight. By contrast in the present case, the defendants are faced with a truly stale claim first made upon them five years after the event. The degree of prejudice they suffer is manifestly incomparably greater than the degree of prejudice suffered by the defendants in Thompson v Brown and it would be absurd if this could not be taken into account by a judge in the exercise of his discretion. I agree entirely with the following passage form the judgment of Stuart-Smith LJ:-
"The time of the notification of the claim is not one of the particular matters to which the court is required to have regard under s.33(3); although it may come in under paragraph (e). But to my mind it is an extremely important consideration, and is always so regarded by the judges who have to consider these questions. I cannot accept Mr Tillyard's contention that it is irrelevant, presumably because it is not specifically referred to in s.33(3)"
"My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Griffiths. I entirely agree with it and add a few words of my own only because a contrary view was taken by the majority of the Court of Appeal
The argument in favour of the proposition that dilatoriness on the part of the plaintiff in issuing his writ is irrelevant until the period of limitation has expired rests upon the proposition that, since a defendant has no legal ground for complaint if the plaintiff issues his writ one day before the expiry of the period, it follows that he suffers no prejudice if the writ is not issued until two days later, save to the extent that, if the section is disapplied, he is deprived of his vested right to defeat the plaintiff's claim on that point alone. In my opinion, this is a false point. A defendant is always likely to be prejudiced by the dilatoriness of a plaintiff in pursuing his claim. Witnesses' memories may fade, records may be lost or destroyed, opportunities for inspection and report may be lost. The fact that the law permits a plaintiff within prescribed limits to disadvantage a defendant in this way does not mean that the defendant is not prejudiced. It merely means that he is not in a position to complain of whatever prejudice he suffers. Once a plaintiff allows the permitted time to elapse, the defendant is no longer subject to that disability, and in a situation in which the court is directed to consider all the circumstances of the case and to balance the prejudice to the parties, the fact that the claim has, as a result of the plaintiff's failure to use the time allowed to him, become a thoroughly stale claim, cannot, in my judgment, be irrelevant. It is clear from the judge's judgment that, because sub-paragraphs (a) and (b) of s.33(3) of the Act of 1980 focus particular attention on the time elapsing after the expiry of the limitation period, he felt constrained to regard the time which had been allowed to pass prior to that date as something which had to be left wholly out of account. In my judgment, he was wrong to do so and that necessarily vitiated the exercise of his discretion. I, too, would allow the appeal."
"73. It seems to me that, in the exercise of the discretion, the basic question to be asked is whether it is fair and just in all the circumstances to expect the defendant to meet this claim on the merits, notwithstanding the delay in commencement. The length of the delay will be important, not so much for itself as to the effect it has had. To what extent has the defendant been disadvantaged in his investigation of the claim and/or the assembly of evidence, in respect of the issues of both liability and quantum? But it will also be important to consider the reasons for the delay. Thus, there may be some unfairness to the defendant due to the delay in issue but the delay may have arisen for so excusable a reason, that, looking at the matter in the round, on balance, it is fair and just that the action should proceed. On the other hand, the balance may go in the opposite direction, partly because the delay has caused procedural disadvantage and unfairness to the defendant and partly because the reasons for the delay (or its length) are not good ones.
74. Although the delay referred to in s.33(3) is the delay after the expiry of the primary limitation period, it will always be relevant to consider when the defendant knew that a claim was to be made against him and also the opportunities he has had to investigate the claim and collect evidence: see Donovan v Gwentoys Ltd  1 WLR 472. If, as here, a defendant has had early notification of a claim and every possible opportunity to investigate and to collect evidence, some delay after the expiry of three years will have had no prejudicial effect."
"79. In cases to which s.11 Limitation Act 1980 applies an action may not be brought after the expiration of the periods prescribed by subsections (3) and (4). In any such case there will be no trial on the merits. The purpose of s.33 is to enable the court to review the position in the light of the facts of individual cases. The object of the exercise is to consider the circumstances of individual cases in order to determine whether the action should proceed to trial. That this is the purpose is confirmed by the material words in subsection (1) which pose the indirect question whether "...it would be equitable to allow the action to proceed...".
80. The action can only proceed in cases to which s.11 applies if the provisions of that section are disapplied by a direction to that effect made by the court under s.33. By subsection (1)(b) the court is required to have "regard to the degree to which [such a decision]...would prejudice the defendant...". Thus the prejudice is to be ascertained on the assumption that the provisions of s.11 have been disapplied by an order made under s.33. The subsection does not direct the court to have regard to the prejudice the defendant would suffer from the very act of disapplication.
81. The consequence of the disapplication of s.11 will be that there may be a trial of the claimant's claim on its merits notwithstanding the delay in commencing the proceedings. Has that delay caused prejudice to the defendant in its defence? If so, does it outweigh the prejudice to the claimant of being denied a trial at all? In addition the court will need to consider all the circumstances of the case and in particular the other aspects of the case enumerated in subsection (3).
82. In that context it does not appear to me that the loss of a limitation defence is regarded as a head of prejudice to the defendant at all; it is merely the obverse of the disapplication of s.11 which is assumed. It is this consideration which, in my view, accounts for and justifies the marked reluctance of the courts, as demonstrated by the judgments to which Smith LJ has referred in detail, to have regard to the loss of a limitation defence.
83. I am grateful to Smith LJ for setting out the facts of the two appeals and the relevant details of the previous decisions on this matter. I have nothing to add in either respect. I agree with her conclusion in paragraph 73 and the application of the rationale to which she refers to the facts of the two appeals. I have added these few words of my own by way of exegesis from the wording of s.33 in its wider context."
"13. Finally in the other 2008 case cited to me, also tried by Cox J, Khairule v North West Strategic Health Authority (4th July 2008) she again reviewed the authorities and said at paragraph 113:-
"In my view the crucial question in cases such as these, when considering the effects of the passage of time generally and the Section 33 discretion, is whether it is still possible to have a fair trial of the issues on the available evidence. Of relevance to this question will be when the Defendants first had knowledge of the claim and the opportunity they have had to investigate it and secure relevant evidence, and can prepare to meet it at trial.
14. In this case the Defendants had knowledge of the claim and admitted liability within 7 months of the accident and they had ample opportunity, which they chose not to take, to investigate it and to secure any relevant evidence on the issue of quantum of damage. In my judgment the Defendant has signally failed to demonstrate forensic prejudice stemming from the delay. Whilst the period of delay is much longer than the period in the cited cases, the test remains the same in relation to any prejudice suffered by the Defendant as a result of that delay. Notwithstanding the Defendant's solicitor Simon Frith's mammoth 87 paragraph statement of 24th October 2008, I am not persuaded that he has demonstrated significant prejudice to the Defendant resulting from the delay. I am satisfied that the evidence pertaining to the quantum of damages of these two Claimants is still available and has not been detrimentally affected by the passage of time. So I am satisfied that the significant delay in this case, perhaps unusually, has not caused prejudice to the Defendant sufficient to persuade me that the Claim should be struck out."
i) The judge has regarded the period of 22 months following the decision in Horton as the relevant period of delay. That was not technically the correct approach, even in relation to subsections (a) and (b) which refer to delay since the expiry of the limitation period, but more importantly the whole period of delay was relevant in considering whether the defendant was prejudiced. Indeed, submitted Mr Burton, it is the period of delay prior to the defendant having details of a claim so that he can investigate the same which is the most significant period. Although the deputy judge quotes passages from Cox J's judgment where she looks at the whole period of delay, and the deputy judge says that he is accepting Cox J's judgment as indicating the correct approach, Mr Burton submitted that the sentence in his final paragraph quoted above (paragraph 14), referring to the period of delay being much longer than the period in the cited cases was once again a reference to 22 months as opposed to the six months of Cox J's decision.
ii) The judge's reference to there being correspondence between the solicitors prior to the issue of the first proceedings was simply inaccurate, and certainly inaccurate insofar as it might give the impression that full information as to the claims being made by the claimants was being provided.
iii) Insofar as the deputy judge was suggesting that the defendant could at any time have investigated the quantum claim prior to the service of the first proceedings and that it was their fault if it did not do so that was inaccurate and unfair. No investigation of general damages was possible until the receipt of medical reports and those, so far as physical injuries were concerned, were not provided until shortly before service of the proceedings. No psychological report was served at this time and no details of any claim for loss or earnings past or future was provided. The defendant's insurers were co-operating in trying to persuade the claimants' solicitors to instruct experts from an early stage but, possibly through the claimants' own attitude to the litigation or a failure on the part of their solicitors, no reports were forthcoming until just before the proceedings were served.
iv) Ultimately what the Defendant's insurers have received in the second action are claims of a different magnitude from those notified during the first action. The claims as now notified raise questions not only in relation to the seriousness of the injuries which the defendant's insurers have never had an opportunity to investigate, but points on loss of earnings which, in the first proceedings, had not been notified at all. The deputy judge said that any lack of knowledge of the claim and the fact that the claim now had to be met from "a standing start" was relevant to the defendant's conduct under s.33(3)(c). This, submits Mr Burton, is to misunderstand what s.33(3)(c) covers. There is obvious forensic prejudice in a defendant being placed in a situation in which he is notified of claims years after the event and has to deal with them from what is called "a standing start".
Lord Justice Rimer
Sir Paul Kennedy