Volume 4, Issue 2: December 2010
PERSONAL INJURY BRIEFING
Case Update:
Indemnity Costs and CICA Claims
“By far the best proof is experience”
Francis Bacon, 1561-1626
In this issue:
•
Paying the Consequences: Clarke v
Maltby [2010] All ER (D) 283 (May)
By Ben Hicks
•
VL v Oxfordshire County Council: Case
Summary [2010] EWHC 2091
By Andrew Warnock
Paying the Consequences: Clarke v Maltby
The situation in which a Defendant admits liability, but takes
significant issue with the nature and extent of the damage
and loss alleged is not an unusual one. Such a Defendant is
of course entitled to put the Claimant to proof of the losses
alleged. The question arises as to how far he can go in doing so without exposing himself to the risk of not only bearing the costs if his objections are not upheld, but of being
ordered to pay those costs on an indemnity basis. The recent decision in Clarke v Maltby has identified a number of
features of the conduct of such a defence which, if ultimately unsuccessful, may give rise to a costs order on the
indemnity basis in the Claimant’s favour.
Clarke was a case in which the Claimant had suffered significant injury when a passenger in a vehicle which collided
head-on with another whilst overtaking. Unsurprisingly, liability was admitted early in the proceedings.
In what appears to have been a frankly horrific accident,
Miss Clarke suffered a significant number of orthopaedic
injuries, requiring a substantial period to achieve a substantial recovery. Whilst she was left with some seemingly permanent effects of her orthopaedic injuries, these were not
however the focus of attention at trial.
Miss Clarke’s case was that in the course of her recovery
from her physical symptoms, she had since the accident
gradually become aware of a significant number of cognitive
deficiencies, these still troubling her at trial. Among others,
these included: impairment to her linguistic ability, diminished recall and ability to concentrate and impaired processing function. Some of these complaints were potentially attributable to psychiatric conditions arising from the accident,
although these had largely resolved by trial, meaning that
the ongoing complaints must, on Miss Clarke’s case, have
been physiological in nature by that point in time.
Given that Miss Clarke was a solicitor, the fact that her
cognitive difficulties had given rise to issues as to her likely
future earning capacity is unsurprising, particularly given
that she had shortly before trial reduced her working hours
on the advice of a clinical psychologist. This was not sufficient to avoid subsequently being signed off work in January 2010. Save for the question of general damages, the
question of Miss Clarke’s past and future loss of earnings
claim was in fact the only head of loss outstanding at trial.
The Defendant raised a number of issues in response to
this. The counter schedule contained the assertion that
Miss Clarke had, at most, suffered only a mild brain injury.
It was ultimately described in the judgment as implying that
she was deliberately exaggerating her injury. In addition, it
was said to be capable of being read as inferring that the
Claimant’s decision to work reduced hours had in fact
been motivated, or at least influenced by encouragement
from her solicitors to inflate the value of her claim. However, the pleadings did not contain any explicit allegation
of deliberate exaggeration.
Despite the absence of any such allegation in the pleadings, the Defendant’s cross-examination was conducted
on the basis that Miss Clarke was deliberately exaggerating her symptoms. Further, it was accepted on behalf of
the Defendant that his case was that Miss Clarke was deliberately exaggerating her symptoms.
In his judgment, Owen J emphatically rejected the suggestion that there had been any exaggeration of Miss Clarke’s
symptoms, whether deliberately or otherwiseSubsequently, he found that the ongoing difficulties reported
were attributable to the accident and that Miss Clarke’s
career was unlikely to progress as it would otherwise have
done. She was awarded substantial damages as a result.
In the circumstances, it is unsurprising that the Defendant
subsequently conceded that Miss Clarke was entitled to
her costs. The only issue remaining was whether those
costs should be on the standard or indemnity basis.
In considering this question, Owen J first noted the contents of CPR 44.3(5), which provides that in deciding what
costs order to make, questions involving consideration of
the conduct of the parties include “the manner in which the
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party has pursued or defended his case or a particular allegation or issue”.
Subsequently, his judgement turned to the Court of Appeal
decision in Excelsior Commercial and Industrial Holdings Limited v Salisbury Hammer Aspden and Johnson and Others
[2002] EWCA Civ 879. Per Lord Woolf CJ: “before an indemnity order can be made, there must be some conduct or some
circumstance which takes the case out of the norm. That is the
critical requirement”.
There were a number of reasons why it was accepted that in
this case, the critical requirement for an award of costs on the
indemnity basis had been met.
The Defendant’s case had in closing submissions been that
this was a case in which “the reality of the symptoms is often
less than how she is describing them”. This was felt to be different from the basis upon which the claim had been conducted. Despite the lack of any pleading of fraud, the claim
had been conducted, and Miss Clarke and her witnesses
cross-examined, on the basis that she was deliberately exaggerating her symptoms.
This was despite the fact that the medical evidence “critically”
provided no support for such allegations. Moreover, these
were allegations made in response to a solicitor’s claim. Not
only was this felt to be a distressing allegation, but it was one
which would, if substantiated, have had profound consequences for her career.
Also of significance was the fact that the Defendant’s counter
schedule had implied “serious professional impropriety” on the
part of Miss Clarke’s solicitors. Although the suggestion that
any such wrongdoing had occurred had been “unreservedly”
withdrawn in response to the opening of counsel for Miss
Clarke, it was said that this clarification should have been provided immediately upon Miss Clarke’s concerns in this respect
being set out in written opening submissions.
MacKay J rejected her claim. He held that whilst the
Council undoubtedly had a power to make a claim for
criminal injuries compensation on behalf of the claimant, it did not owe a duty of care in tort to do so. The
child care team’s primary focus was on the physical
welfare and safety of the claimant and trying to rebuild
her family unit, the Council’s child care plan being to
rehabilitate the claimant with her parents. The fact that
the council saw itself as being under a duty to make
criminal injury compensation claims on behalf of children in its care was a factor but was not determinative
of the legal position. Imposing a duty to promote the
claimant’s financial interests would not be fair just or
reasonable given the delicacy of the relationship between the Council and the claimant’s mother, who herself was having difficulty accepting the responsibility of
the claimant’s father for the injuries and resented the
involvement of social services. The judge also concluded that even if a duty had been owed, it had not
been breached as judged by the Bolam standard: on
the evidence there had been little publicity concerning
the impact of the new scheme at the time it was introduced and a solicitor acting in a local authority child
care team could reasonably not have known that the
new scheme would adversely affect claims for injuries
which had been suffered before it was introduced.
Where then does this leave Defendants who harbour con-
This decision is not being appealed. There have been
cerns about the genuineness of symptoms reported by Claimants? The author would suggest that in circumstances where
support for an allegation of deliberate exaggeration is not present in any of the medical evidence, Defendants should be
cautious about making such allegations. Clarke reminds us
that there is a significant and material distinction between putting a Claimant to proof and alleging deliberate exaggeration.
a number of claims threatened against local authorities
in recent years for not making applications for criminal
injuries compensation timeously or at all and the case
will be of particular interest to those involved in them.
Whilst in some respects the decision is fact specific, it
is clear that the courts will be wary of imposing a duty
which would promote the economic interests of a child
over child welfare plans or cut across delicate social
work decisions. Moreover, child care solicitors in a local authority’s legal department are not to be judged by
the same standard as personal injury solicitors in private practice.
VL v Oxfordshire County Council
This case raised the interesting and important question of the
extent to which a local authority’s child care team (social workers and lawyers) owe a duty to a child in care to make an application on the child’s behalf for criminal injuries compensation. The claimant had suffered catastrophic injuries at the
hand of her father as an infant. She was made the subject of a
care order in 1994. In 1997 the Council made an application
for compensation for her under the new Criminal Injuries Compensation Authority (“CICA”) scheme which was introduced on
1 April 1996. The claimant, represented by the Official Solicitor, alleged that her claim should have been made before 1
April 1996 under the old Criminal Injuries Compensation Board
(“CICB”) scheme which the CICA scheme replaced. She
would have received substantially higher compensation under
the old CICB scheme (potentially millions of pounds higher).
Lord Faulks QC and Andrew Warnock appeared for
the Defendant Council.
Editors:
Jack Harding,
Frances McClenaghan, Thomas Crockett
1 Chancery Lane, London, WC2A 1LF
T: 0845 634 66 66 F: 0845 634 66 67
www.1chancerylane.com
[email protected]
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