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England and Wales High Court (Commercial Court) Decisions
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Cite as:  EWHC 2550 (Comm)
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B e f o r e :
On appeal from Deputy District Judge Harris
| GREATER MANCHESTER FIRE AND RESCUE SERVICE
|- and -
SUSAN ANN VEEVERS
Mr NICHOLAS BACON QC (instructed by THOMPSONS SOLICITORS LLP) for the Respondent/Claimant
Hearing date: 26th August 2020
Crown Copyright ©
I direct that, pursuant to CPR PD 39A para 6.1, no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
This judgment was handed down by the judge remotely by circulation to the parties' representatives and release to Bailii. The date and time for hand-down is deemed to be 12.30pm on 25th September 2020.
The Relevant History
"2. Extensive investigations were undertaken, witnesses contacted and statements taken when possible and there was correspondence entered into with the (Appellant), the coroner, the health and safety executive and the police in order to try and establish a case and obtain details of the events leading to Mr Hunt's death and reasons for his death.
3. As information was obtained it was discovered that there may be a criminal prosecution against two females as it was alleged that they had started the fire and in addition there was to be an inquest into the death of Mr Hunt. Both sets of proceedings were, it is pointed out it to me, of vital importance to the Claimant and the dependents' case as the outcome of each would have a bearing on the identity of the potential Defendants and also on establishing liability against the Defendants. Whilst criminal proceedings were commenced in January 2015 against the two young women they were later dropped and only the inquest remained for the conducting solicitor to obtain the information needed in order to bring a claim for the family. The coroner provided disclosure in advance of the inquest which included a schedule of witnesses and DVDs of CCTV footage. The inquest was prepared and commenced. Extensive witness evidence was heard during the inquest and representatives for the (Respondent) attended in order to obtain information for the civil claim and to establish that there was a case for the (Appellant) to answer."
"We act on behalf of Greater Manchester Fire and Rescue Service ("GMFRS") and their Insurers Travelers in respect of the incident on 13 July 2013.
We are sure that you will be aware that the investigation by the Health and Safety Executive, the Police and the Fire Brigades Union have been conducted in an open and collaborative fashion from immediately following the tragic death of Stephen Hunt at Paul's Hair World on Oldham Street in Manchester.
As the inquest approaches we have, like you, been supplied with a large number of reports and witness statements which in various way challenge in minute detail the events which unfolded that day. GMFRS in consultation with their insurers Travelers are acutely aware of the stress and strain which will be placed upon the family members of Stephen Hunt up to and including the inquest itself. GMFRS family liaison officers have been in touch with the bereaved family and will continue to support them.
Our clients have made no assessment of the potential for liability to the estate and dependants of Stephen Hunt but they have instructed us to set out their position in relation to any potential claim which may be brought for the family of the deceased.
Our clients are not in a position to consider an admission of liability and we have not undertaken a detailed forensic analysis of the potential for liability in any civil claim on their behalf.
The purpose and objective in making the comments which we make directly below is to attempt to remove any additional stress from the family during and immediately after the inquest.
As you are aware from previous comments and undoubtedly aware generally our clients take their responsibilities very seriously where tragic incidents such as this occur. Our clients are meeting simultaneously with the handing over of this letter to you to inform the family of Stephen Hunt that any claims that will be pursued by you on behalf of their deceased family members will be met in full.
We set out below in formal legal terms the basis on which our clients are prepared to meet any claim should one be pursued.
We act on behalf of Greater Manchester Fire and Rescue Service and their insurers Travelers.
We write in open correspondence in order to advise that our clients are willing to compensate the estate and dependents of Stephen Hunt pursuant to the Fatal Accidents Act 1976 and Law Reform (Miscellaneous Provisions) Act 1934, for any loss which they may prove to be attributable to the incident on 13 July 2013 together with payment of their reasonable costs.
It is not our client's intention to allege contributory negligence or to seek any reduction of damages in this regard. We confirm that our clients will deal with the claims on a full basis."
"Thank you for your letter of 4 February 2016.
I have discussed your comments with my clients, and they understand the sentiments with which they were made.
In light of your letter it will take instructions from my clients with a view to making a claim within 28 days, based upon the current evidence that has been provided as part of the coroner's disclosure, and subject to any evidence that may come out at the inquest. A schedule of loss will be provided.
I would be grateful if you confirm in writing whether there will be any claim by GMFRS for apportionment in respect of any potential liability of other parties, for example Paul's Hair World.
I will be inviting the (Appellant) to admit liability upon receipt of the letter of claim because as you are aware the intention to pay compensation to the estate and dependents could be withdrawn at any time.
We confirm that we will continue to prepare for the inquest as part of our liability investigations until such time as liability is admitted or my clients' claims are settled…."
The letter goes on to deal with issues of disclosure relating to the quantification of the claim.
"In terms of your letter there is no need to prepare a letter of claim on behalf of the estate or dependents. If there are any other claimants however then please let me know and I will consider the position. Obviously our earlier correspondence makes it plain that the claims by the dependents and estate will be met without reduction. I also confirm I am increasing the focus of my enquiries in respect of Paul's Hair World and that they will be pursued separately by GMFRS."
"I am happy not to send a letter of claim based on your offer to deal with any claim for compensation without reduction for contributory negligence."
"(1) One of the main issues was whether the deceased had followed his brief or gone off on a frolic of his own. In the letter of 4.2.16 (I have no record of the one dated 8.10.15) (the Appellant's solicitors) wrote '…our clients are not in a position to consider an admission of liability and we have not undertaken a detailed forensic analysis of the potential for liability for any civil claim on their behalf…' There was therefore some equivocation and (the Respondent) could not solely rely on the admission. (The Appellant) might have resiled from it in light of the evidence given to the inquest and the Senior Coroner's conclusions, particularly on the issue of contributory negligence.
(2) The particulars of negligence could not have been pleaded without the family's attendance at and participation in the inquest which caused questions to be asked which elicited the relevant evidence…
(3) After many months of preparation and attendance at pre-inquest hearings the inquest was just about to begin when (the Appellant's) letter of 4.2.16 was received. Our team could not properly pull out and leave the bereaved family without representation at the inquest.
(4) The deceased's family was throughout the inquest considering the possibility of also suing Paul's Hair World, for sealing off one of the fire exits and blocking another and thereby creating a hazardous environment with such a heavy fireload. It was reasonable to explore this possibility at the inquest which might have reduced or extinguished the liability of GMFRS."
The Relevant Law
"51. Costs in civil division of Court of Appeal, High Court and county courts.
(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in—
(a) the civil division of the Court of Appeal;
(b) the High Court; and
(c) the county court,
shall be in the discretion of the court."
(a) That incurring the costs proved of use and service in the action;
(b) That the costs incurred were of relevance to an issue; and
(c) That the costs were attributable to the Defendant's conduct.
"Our respective clients, namely the Owners of the "MARCHIONESS" and the Owners of the "BOWBELLE" jointly and severally agree by way of concession that, in respect of any claims for loss of life or personal injury caused by the collision between the two vessels on 20th August 1989, although they do not make any admissions whatsoever as to liability, they are prepared to deal with the Claimants (as hereinafter defined) without requiring them to prove negligence on the part of either or both vessels…"
There were various caveats to the concession, which was stated to be "made entirely without prejudice to our clients' rights against the other whether in respect of apportionment of liability for the collision on 20th August 1989 or otherwise."
"While I can understand that the Claimants were anxious that a full enquiry should take place into the disaster, I do not think that by the spring of 1990 all the costs of attending a full inquest could fairly be regarded as costs of or incidental to the contemplated proceedings against the shipowners. By that time negligence had been conceded … in so far as the claimants wished to investigate the cause of the casualty with a view to the institution of criminal proceedings, the costs of such an investigation could not fairly be regarded as the costs of or incidental to contemplated proceedings against the shipowners…"
(a) Stewart v Medway NHS Trust  EWHC 9013. Master O'Hare held that it had been reasonable for the Claimant to cross examine witnesses and to make submission to the inquest, in a case where liability was not admitted and the facts investigated at the inquest were relevant to establishing liability in the subsequent civil claim.
(b) King v Milton Keynes General NHS Trust  EWHC 9007. In a case where liability had not been admitted, Master Gordon-Saker held that the reasonable and proportionate costs of attendance at an inquest were recoverable if a material purpose of the attendance was to obtain information or evidence for use in a subsequent civil claim.
(c) Lynch v Chief Constable of Warwickshire Police, SCCO, 14.11.14, unreported. Master Rowley considered the substantial costs claimed for attendance at an inquest on behalf of the Claimant, the mother of the deceased, in circumstance where the deceased had been killed by her former partner, for which death it was alleged the Defendant was liable. The Defendant had not admitted liability before the inquest. The Claimant was represented by a substantial legal team and in all the costs of preparation and attendance were put at £750,000, around 40%-50% of the total bill which was being assessed by the Costs Judge. In a careful judgment applying the judgment of Davis J in Roach v Home Office, Master Rowley considered which aspects of the inquest proceedings could be said to be incidental to the civil claim and what were the reasonable costs for those aspects.
(d) Douglas v Ministry of Justice, SCCO reference CL1607001,  Inquest LR 71. The Defendant in this case had, on the Costs Judge's findings, admitted liability for both negligence and breaches of the Human Rights Act leading to the death of a young man, who had committed suicide whilst in custody. The admissions were made prior to the inquest and hence by the time of the inquest, the only remaining issue in the potential civil claim was the quantum of damages. Nevertheless the Judge, Master Leonard, found that the costs involved in participating in the securing of disclosure from the Defendants and of obtaining witness evidence from them was recoverable, given that the extent and gravity of Article 2 breaches was relevant to the quantification of the claim.
"Admissions made before commencement of proceedings
(1) A person may, by giving notice in writing, admit the truth of the whole or any part of another party's case before commencement of proceedings (a 'pre-action admission').
(2) Paragraphs (3) to (5) of this rule apply to a pre-action admission made in the types of proceedings listed at paragraph 1.1(2) of Practice Direction 14 if one of the following conditions is met –(a) it is made after the party making it has received a letter before claim in accordance with the Practice Direction (Pre-Action Conduct) or any relevant pre-action protocol; or(b) it is made before such letter before claim has been received, but it is stated to be made under Part 14.
(3) A person may, by giving notice in writing, withdraw a pre-action admission –(a) before commencement of proceedings, if the person to whom the admission was made agrees;(b) after commencement of proceedings, if all parties to the proceedings consent or with the permission of the court.
(4) After commencement of proceedings–(a) any party may apply for judgment on the pre-action admission; and(b) the party who made the pre-action admission may apply to withdraw it.
(5) An application to withdraw a pre-action admission or to enter judgment on such an admission –(a) must be made in accordance with Part 23;(b) may be made as a cross-application.
"(1) every appeal will be limited to a review of the decision of the lower court, unless …(b) the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a re-hearing…
(3) the appeal court will allow an appeal where the decision of the lower court was –
(a) wrong; or
(b) unjust because of a serious procedural or other irregularity in the lower court."
The Judgment of Judge Harris
The Appellant's Case
(a) There is no general entitlement on the part of a claimant to the costs of preparing for and attending an inquest merely because it deals with facts related to a civil claim;
(b) The costs are only recoverable if they are (i) of and incidental to the civil claim and (ii) reasonable and proportionate;
(c) In considering whether the costs satisfy these tests, the court should have regard to the nature of the civil claim and what the claimant is or is likely to be seeking in such a civil claim;
(d) If what is sought in the civil claim is damages, an admission by the proposed defendant that it will pay such damages is likely to be highly material and possibly determinative of the question of whether the attendance at and preparation for the inquest remains a recoverable cost;
(e) If there are additional factors to be addressed in the civil proceedings, such as whether a breach of Article 2 of the ECHR occurred or the extent of such a breach, this may justify the recovery of such costs even if they would not otherwise be recoverable;
(f) Even if the costs of the inquest are found to be of and incidental to the civil claim such as to justify an order in principle for their recovery, the court should closely scrutinise them to determine whether the costs claimed were reasonable and proportionate.
(a) The Letters contained open acceptance of a liability to pay damages in full, a matter accepted by the judge at paragraph 29 of his judgment;
(b) The letters were sent at a time when the Respondent could not particularise her claim, so the Appellant had no specific allegations of breach to which it could respond;
(c) The Respondent accepted that this was an admission in the passage apparently drafted by Mr Seaward and cited at sub-paragraph (1) in the passage quoted at paragraph 15 above.
(d) The letters were something of value that were at least equivalent to an admission if not actually amounting to an assertion that could be relied on to enter judgment. Had the Appellant wished to resile from them, it would have had to apply pursuant to CPR Part 14,
(e) If there was any doubt arising from the letter of 4 February 2016, that was laid to rest by the letter of 4 March which made clear that no letter of claim was required, a position accepted by the Respondent in the reply to that letter dated 9 March 2016.
(f) The Appellant states that letters were "open statements to pay compensation in full." If the Respondent did not accept them as statements on which reliance could be placed, the onus lay on her to raise those concerns. In fact, she did accept them as statements on which reliance could be placed, as demonstrated by the letter of 9 March 2016.
(1) The Judge was wrong to construe the letters as only constituting an "offer" to satisfy the claim, rather than an open statement by a public body that any claim would be satisfied without any dispute (at least as to liability).
(2) The Judge was wrong to conclude that, absent an admission of liability, the letters were irrelevant to the question of costs.
(3) The Judge erred in failing to treat the letters as an admission of liability to compensate, given that he referred to the letter of 4th February 2016 as containing the "irrefutable fact" that any claims would be met in full.
(4) The Judge's conclusions were inconsistent with the position taken by the Respondent in the points of dispute that the letters amounted to an admission that could be withdrawn.
(5) The Judge was wrong it conclude that no or no material weight could be put upon the letters because there was a risk that the Appellant might resile from the statement that compensation would be paid in full.
(6) The Judge was wrong to attach weight to the email of 4 March 2016 and the reply to that document.
(7) The Judge failed to give any or any proper weight to the fact that, if any doubt remained about the position of the Appellant after the Respondent's email of 9 March 2016, the onus lay on the Respondent to raise those doubts, whereas in fact she agreed not to send a letter of claim, which is inconsistent with any such doubts
(8) The Judge was wrong to attach any weight to the description of the letters as a "costs game." The making of an admission was a legitimate effort to minimise the stress on the deceased's family as well as to keep costs down. Both are proper reasons for the Appellant's conduct.
The Respondent's case
(a) The letter of 4th February 2016 cannot be properly described as having admitted liability. This is clear from its fifth paragraph which expressly states that the Appellant is " not in a position to consider an admission of liability."
(b) An open offer to compensate the estate for "any loss which they may prove to be attributable to the incident" raises but leaves open the issue as to whether the Appellant was in fact liable for any loss caused in the incident.
(c) The Letters did not deal with questions of causation and/or contribution to the losses.
(d) When the Respondent replied that she would continue to prepare for the inquest until an admission was received, it was open to the Appellant to confirm that liability was admitted yet it declined to do so.
(e) The later letter of 4 March 2016 was no more an admission of liability than was the letter of 4 February 2016. Having been invited to make an admission of liability, the Appellant responded in terms that were not an admission of liability.
(a) Inquest costs may be recoverable in so far as reasonable and proportionate, so long as they can properly be said to be incidental to the civil claim;
(b) Such costs will not be recoverable if liability is no longer in issue between the parties, since the costs are simply not incidental to something in issue in the civil claim;
(c) In determining whether liability is in issue, the court must look at all the circumstances of the case, but the central issue is likely to be whether the prospective defendant has admitted liability or otherwise indicated a willingness to satisfy the claim;
(d) Liability will not be in issue if it has been admitted since such an admission is binding unless the court subsequently permits it to be withdrawn pursuant to CPR 14.1A.
(e) However, the Costs Judge is entitled to look with care at anything less than an unqualified admission to see whether the prospective defendant's position is one from which it may resile or which leaves matter in issue between the parties.
(f) In particular, if the defendant's position is not one of unqualified admission in circumstances where such an admission could have been made, the Costs Judge may be entitled to find that the failure to make an unqualified admission justified the conclusion that the defendant might exercise its right to resile from the admission and that therefore the costs of the inquest could properly be said to be incidental to the civil claim.
(g) If the costs can be justified upon these principles, the mere fact that there are other reasons why the family of the deceased should wish to be represented at an inquest, most obviously to avoid the inequality of arms between unrepresented family members and a represented public body does not mean that the costs are not recoverable. It is enough that the attendance to secure relevant evidence in relation to matters in issues was a material purpose for the attendance.
(a) It is clear from the judgment of Clarke J that he interpreted the communications as amounting to an admission at the very least of breach of duty if not of liability. As he said in the passage cited at paragraph 23 above, by Spring 1990 "negligence had been conceded."
(b) In contrast, in this case, it cannot be said that either negligence narrowly (if that means breach of duty) or liability broadly (if that incorporates both breach of duty and causation) had been conceded. The Appellant's position here was that, in response to a letter inviting an admission of liability, it declined to do so.
(1) Whilst the description of the letters as constituting an "offer" may not strictly be accurate within the technical meaning of that term, there is nothing to suggest that the Judge did not treat them exactly as the Appellant says they should have been treated, namely as an open statement by a public body that the claim would be satisfied without dispute (at least as to liability for or causation of Mr Hunt's death).
(2) The Judge did not treat the Letters as decisive of the issue before him. It is not however correct to say that he considered that they were irrelevant to the question of costs. Rather, he found that, absent an admission of liability, the Respondent was entitled to treat the open statement as capable of withdrawal. This is consistent with authority (and indeed procedural law) and shows no error of law.
(3) Whilst the Judge referred to the letter of 4 February 2016 as containing the "irrefutable fact" that the claim would be met in full, the Appellant's interpretation of that finding is misguided. The "irrefutable fact" to which he was referring was that the letter said that, not that compensation would be made. Any other interpretation is unsustainable since: (i) the statement that compensation will be paid is not a statement of "fact" at all, but rather one of intention; and (ii) his acknowledgement that the statement could be withdrawn is any event inconsistent with him finding that payment of compensation itself was an "irrefutable fact" in the sense that the Appellant was unconditionally bound to compensate the Respondent.
(4) It is correct that Mr Seaward appears to have described the letter of 4 February 2016, either alone or together with the Letters generally, as an "admission" in his first point in response to the Appellant's "General Point 1" in the Points of Reply. However, that is not a description repeated by those instructing him, who say in response to "General Point 2" that they dispute that the Appellant had admitted liability. In any event, in my judgment, the Appellant's position cannot be properly be described as an Admission of Liability – as the Appellant itself expressly made clear, it was not admitting liability.
(5) It is incorrect to say that the Judge gave no weight to the letters. However he treated them as less weighty and was entitled to do because they did not contain an admission.
(6) As I have indicated above, I do not consider it correct to say that the Judge failed to attach any weight to the email of 4 March 2016. However, the weight attached was limited because it did not contain an admission, whether taken on its own or together with the letter of 4 February 2016 This is not only a conclusion that he was entitled to reach, but one that is clearly correct.
(7) The Respondent's email of 9 March 2016 was a relevant part of the history. It is not referred to in the judgement below, but equally the skeleton argument for the Appellant in the lower court itself does not refer to this email, the emphasis instead being placed on the letter of 4 February 2016. It has never been suggested, whether at first instance or on appeal (assuming that such a point could have been taken on appeal when not taken below) that the Appellant relied on the position taken in the email of 9 March 2016 and in consequence failed to make a formal admission. I see no reason to conclude from this that the Judge failed to have adequate regard to the email.
(8) I am not satisfied that the Judge did in truth attach any weight to the description of the letters as a "costs game" or it formed any meaningful part of his reasoning. The simple fact is that a defendant in the position of this Appellant is entitled to admit liability and thereby avoid liability for the costs of attending an inquest in so far as those costs relate to investigating liability issues. The Judge acknowledged this to be so Whether one calls that a "game", rather than, for example, a sensible strategy in litigation may be a matter of taste, but at no point did the Judge depart from this line of reasoning.
(a) If the public body is ultimately going to admit liability in the litigation or at least consent to judgment being entered against it, there is no reason not to make such an admission at early stage. An appropriately worded admission would put the Appellant in no different position to that which it is when judgment is entered against it (whether on admission or otherwise). The benefit to the Appellant in not admitting liability in general terms at an early stage is that it can subsequently resile from its position without having to apply under CPR 14.1A;
(b) CPR 14.1A sets out a clear procedure for making a formal admission. It would be undesirable if uncertainty were created by giving equal effect to other communications that do not satisfy that description. If the defendant chooses to make a communication which is not a admission within the meaning of the CPR, that document will be one factor in the case, but the availability of a route to making a formal admission that puts liability beyond argument will mean that the court is entitled to place less weight on it in the overall conclusion.