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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 >> Raleys Solicitors v Barnaby  EWCA Civ 686 (21 May 2014)
Cite as:  EWCA Civ 686
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ON APPEAL FROM LEEDS COUNTY COURT
HIS HONOUR JUDGE GOSNELL
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE DAVIS
LORD JUSTICE FLOYD
| Raleys Solicitors
|- and -
|Ronald Alan Barnaby
Jonathan Watt-Pringle QC and Crispin Winser (instructed by Mellor Hargreaves Solicitors) for the Respondent
Hearing dates : 1 May 2014
Crown Copyright ©
Lord Justice Maurice Kay: :
"4. The Scheme was administered for the DTI by IRISC Claims Management ("IRISC") in accordance with the terms of a Claims Handling Arrangement ("CHA") dated 22nd January 1999 as amended from time to time. The CHA was an agreement between IRISC and firms of Solicitors who belonged to the VWF Litigation Solicitors Group ("VWFLSG"). After the agreement was executed there were continuing negotiations between VWFLSG and the DTI and other mining contractors like SMS in relation to the claims as a whole and services claims in particular. Where disputes arose they were either resolved by agreement or determined by the Court. The Defendants and other members of the VWFLSG were kept informed of developments by bulletins from the VWFLSG steering committee. In addition to the CHA there was a Services Agreement of 9th May 2000 which governed the management of services claims.
5. Claims were initially categorised according to whether or not proceedings had been issued and whether or not a medical report had been served. The Claimant's case was a category C claim as neither of the above milestones had been reached. A claimant would first have to submit a questionnaire to IRISC about his occupation and he would be assessed into an occupational group depending on his likely exposure. If he was accepted into a relevant occupational group by IRISC arrangements would then be made for a medical examination in accordance with the Medical Assessment Process in the CHA. The medical report produced by this process became known as MAP1. The report was intended to ascertain whether the Claimant was suffering from VWF and if so his staging on the Stockholm Workshop scale. IRISC was then obliged to make an offer of compensation or to reject the claim with reasons. A claimant could challenge the findings of the MAP1 report but there was no provision in the CHA for IRISC to do so. The CHA agreement provided for compensation for general damages, handicap on the labour market and special damages.
6. The CHA made provision for interim payments where payments were for some reason delayed and initially amounted to 50% of IRISC's valuation of British Coal's liability to the Claimant. By February 2001 this had increased to 92.5% and by 20th November 2002 100% although this latter increase was not put into effect until 2003. The CHA also provided for apportionment of claims between British Coal and other employers with IRISC agreeing to attempt get other employers to agree to the Scheme and if not making payments reflecting their own apportioned responsibility.
7. A further agreement was entered into on 9th May 2000 ("the Services Agreement") which set out the agreed approach where services were claimed. The onus was initially on a claimant to establish as a matter of fact that prior to his injury he actually undertook the tasks for which services were claimed and that he no longer undertook those tasks due to his condition. He did this by completing a standard form questionnaire supported by those helpers who provided the services who themselves completed a different standard form questionnaire. It was agreed that once a claim reached a certain level it should be presumed that a claimant could no longer carry out certain tasks but the tasks to which this presumption applied varied according to his staging as determined in the MAP1 report. IRISC were not bound to accept the claim and did conduct telephone interviews with helpers to ensure that services were actually required and being provided. Dubious claims could be referred to the Securities Investigation Department. A further medical examination known as MAP2 would then be arranged which was purely to consider whether the claimant had any co-morbid conditions which would have affected his ability to do the required tasks in any event, and if so, what effect those conditions would have had. A tariff based approach would then be used to calculate the value of the claimant's services claim, depending on the claimant's stagings and any deduction to reflect co-morbid conditions after the MAP2 examination. Services claims were initially subject to a pilot scheme but offers of settlement began to be made after the pilot scheme ended from mid 2003 onwards. Many of the claims were not however resolved until 2005 or 2006."
Mr Barnaby's claim
"9.The Services Questionnaire contained a spreadsheet entitled "Give details of what tasks, if any, you require assistance with because of your VWF". There were six tasks listed on the left of the form with seven cells for providing information about those tasks. The six tasks were: gardening; window cleaning; DIY; decorating; car washing; and car maintenance. To the question "did you do this task prior to developing VWF Yes/No" the Claimant entered "yes" to gardening, decorating and car maintenance. He entered details in the other cells in respect of each of these three tasks but made no entries at all in relation to the remaining three tasks. He indicated in each respect that he had needed assistance for the last five years. Mrs Barnaby completed her questionnaire referring only to gardening, decorating and car washing giving similar details to her husband. She was also provided with the same six tasks on the first page of the questionnaire and ticked only three tasks corresponding with those she gave details about. It would appear from a file note that these questionnaires were handed to a lawyer employed by the Defendants on 8th August 2000. A services claim based on the information in these questionnaires was subsequently submitted to IRISC on 22nd February 2002 but the Claimant was advised that his staging did not justify a presumption that he required assistance with decorating and so this aspect of the claim could not be successfully pursued.
10. On 16th March 2001 IRISC sent a cheque for £6418.68 to the Defendants which at the time represented approximately 97% of the value of British Coal's total liability towards general damages. On 10th July 2001 Norwich Union confirmed that they would contribute to the Claimant's claim on behalf of SMS under the terms of the CHA. On 19th June 2002 IRISC accepted the Claimant's claim for handicap on the labour market which was presumed to be valid if evidence of current employment could be produced. On 20th August 2002 Norwich Union sent the Defendants a cheque for £983.83 representing SMS's proportion of the Claimant's claims for general damages and handicap on the labour market. On 30th October 2002 IRISC wrote to the Defendants offering the sum of £9838.18 plus interest in full and final settlement of the Claimants claims arising from his employment. The offer included £3,692 for handicap on the labour market. When the cheque from Norwich Union was included it represented a total offer of £10,822.01 for the two heads of claim but in full and final settlement of all claims.
11. The Defendants wrote to the Claimant informing him of the offer and on 6th December 2002 a telephone conversation took place between the Claimant and Mr Swift of the Defendants. Shortly after this conversation the Claimant agreed to accept the offer and filled in a form to confirm this. He was aware that he could not pursue a services claim in the future if he accepted this offer but his claim is based on the fact that he did not receive competent and adequate advice before making the decision.
The Judge's approach
"The correct approach would therefore appear to be to firstly determine whether there has in fact been a breach of duty. Secondly, if there has, the Court must then ask whether the breach caused or materially contributed to the Claimant's alleged loss. Thirdly, the Court must decide if the Claimant has lost something of value in the sense that his prospects of success are more than negligible. Fourthly, if the Court decides that the claimant has lost a claim with more than negligible prospects of success it must make a realistic assessment of what those prospects of success were. Finally, the Court will need to make an assessment of what the likely value of the claim was having taken account of the prospects of success."
On behalf of Raleys, Mr Michael Pooles QC (who did not appear below) and Ms Catherine Foster accept that that exposition is correct. Their complaint is that thereafter the Judge erred in his consideration of the second stage.
"There is no requirement in such a loss of a chance case to fight out a trial within a trial, indeed the authorities show as a whole that that is what should be avoided. It is the prospects and not the hypothetical decision in the lost trial that has to be investigated….The test is not to find out what the original decision of the underlying mitigation would have been as if that litigation had been fought out, but to assess what prospects were."
The authorities to which Rix LJ was referring include, in particular, Mount v Barker Austin  PNLR 493 and Sharif v Garrett & Co  EWCA Civ 1269, in both of which Simon Brown LJ expounded the principles. Mr Pooles submits that, in all those cases, the context was an action against negligent solicitors where the claimant's previous claim had been struck out as a result of the negligence of their solicitors. There, he submits, that approach is necessary because, by definition, it is no longer possible for there to be a fair trial of the original cause of action against the original tortfeasor. In the present case, by contrast, it remained possible and necessary for the Judge to find the facts relating to Mr Barnaby's condition and, in particular, the causal link, if any, between that condition and the alleged need for services. It is submitted that the Judge failed to take into account aspects of the evidence which were inconsistent with Dr Ryan's MAP 1 assessment and thereby disabled himself from making appropriate findings. For example, emphasis is placed on this passage in the judgment (paragraph 25):
"My overall conclusion of the Claimant was that he did not appear to me to be putting forward a fraudulent claim but he was a very poor historian whose evidence had to be treated with caution. He was clearly exposed to vibration during the course of his work and I think it is likely he had some form of VWF. I would hesitate to rule on what the appropriate staging should be in the light of his conflicting history but I am not convinced that is a finding I need to make. This claim is not a rerun of the original claim although it appears the Defendants would like it to be. "
This, submits Mr Pooles, demonstrates the misapplication of the approach in Dickson v Clement Jones away from its intended context. Mr Pooles further submits that, having failed to take into account important evidence, thereby disabling himself from making sustainable findings of fact, the necessary if unfortunate consequence is that the Judge's order must set aside and for there to be a re-trial. On the face of it, it seems surprising that this claim for £5,925 is attracting the talents of leading counsel on both sides and the risk of an expensive re-trial. However, Mr Pooles refers to other pending appeals which, together with this case, demonstrate extensive litigation against Claimants' solicitors for this kind of negligence in relation to the administration of the Scheme. It is said that not all first instance judges are taking the same approach to such negligence claims. To put his submission in context, he informs us that Raleys alone advised over 12,000 coal miners on VWF claims against the Scheme.
"I cannot see how he could reasonably make the decision [whether to accept the settlement offer] without knowing what he was giving up by abandoning the services claim. He needed to know roughly what it was worth and what his prospects of success were in very general terms. In my view it was negligent of the solicitor to fail to provide this information when he was capable of doing so with a little thought. If he had done so the client could then make a valued judgment about whether it was worth abandoning the services claim to obtain immediate full payment of the other two claims. It was also a clear breach of duty to advise the claimant that he was not entitled to a further interim payment when in fact he was entitled to an interim payment of at least £3,000 on any view."
The finding on causation
"The defendants put their case very strongly on this issue. The defendant says that the claimant is not suffering from VWF and has never done so. If the court makes a factual finding to that effect then the court will find it easier to make a factual finding that the claimant abandoned his claim for services because he knew he had no real need for services not because he was negligently advised. The defendants rely on the fact that the original MAP1 medical assessment is not as robust as a normal medical legal assessment and cannot be relied on. The defendants also rely on the fact that the claimant at various times to various bodies (his own solicitors, Benefits Agency, doctors assessing his condition) has given conflicting information as to the commencement of his symptoms and the nature of his symptoms such that his claim is not believable."
We have been referred to numerous passages in the transcript of the cross-examination of Mr Barnaby at trial. There is no doubt that it was being put to him that he had been pursuing a fraudulent claim.
"One piece of evidence that did emerge clearly was the Claimant's need for cash. He explained how his 25th wedding anniversary was due to take place in June 2003 and he had planned a surprise holiday for him and his wife. This was not in his witness statement and ordinarily I would have regarded its emergence at trial with considerable suspicion. It was however recorded by one of the Defendant's lawyers in the file note on 15 August 2002. When asked why he decided to accept the offer in his evidence the Claimant replied because he needed the cash to pay for this holiday. He was unable to provide any other reason. The question is whether he would have accepted the offer if he was told that he could reject it, obtain an interim payment of £3,000 and then continue to pursue a claim that might be worth up to £7,900 although there were some potential problems which might reduce or extinguish this claim. Faced with an unsophisticated client who had already disclosed a need for ready cash, the solicitors advice should have been that he had very little to lose by rejecting the offer pursuing the services claim bearing in mind he would still receive £3,000 or so shortly. Faced with these figures no sensible person would have accepted the offer. It is not easy from the Claimant's evidence to reconstruct what he might have done but on balance, if properly advised, I find as a fact that he would probably have rejected the offer and pursued the services claim. As I have not found that at this time the Claimant was not suffering from VWF and knew it I do not need to consider this alternative."
The other evidence relied upon by Raleys
"…the new changed history is not realistic. VWF does not follow this pattern. The original history of 1999 is more acceptable and I prefer his original description. He gave no history of blanching this time. "
Accordingly, the doctor accepted blanching only to the distal phalanges and the claim for the state benefit was again dismissed.
i) If as a matter of fact the Court found that Mr Barnaby had never had blanching, then there would be no basis for a diagnosis of the vascular component of HAVS;
ii) If the extent of the blanching was to the distal joint only, then the grading would be 1V and not 2V, thereby disqualifying the services claim.
"because these were the only tasks with which he needed help that he did before and could no longer do".
For this reason the Judge accepted the claim in relation to the ticked categories but rejected Mr Barnaby's evidence that he also needed help with window cleaning and car maintenance because it was inconsistent with "very compelling contemporaneous evidence of his instructions to his solicitors at the time". He added:
"I therefore find as a fact that if he had pursued his services claim he would have done so solely in relation to gardening and car washing."
The Judge also attached importance to the fact that (1) the account of needing money in order to finance the holiday was corroborated by Raleys' attendance note of August 2002 and (2) Mr Barnaby would have had very little to lose by rejecting the settlement offer and pursuing the services claim, bearing in mind that he would still have been able to receive a further interim payment, if he had been properly advised. As the Judge said:
"Faced with these figures no sensible person would have accepted the offer."
Accordingly, Mr Barnaby would "probably have rejected the offer and pursued the services claim".
Lord Justice Davies
Lord Justice Floyd