Thursday, 22 December 2011

Woodland v The Swimming Teachers’ Association & others [2011] EWHC 2631 (QB): deep end

Another sad personal injury case; the crumb of comfort in this one was that damages were definitely going to be paid to the claimant, it was “just” a demarcation dispute as to which defendant would pay up.

There were five of them; the STA, a lifeguard, a swimming teacher, Essex County Council and Basildon District Council.  The scene was a school swimming lesson in Basildon; the lessons were put on by the swimming teacher, she employed a lifeguard, Basildon owned the pool and Essex ran the school.

Annie Woodland was a good swimmer and had been put in the top group, but something went wrong.  She was spotted in the pool unconscious and underwater.  She suffered serious brain injuries.

Damages are to be determined, and will be paid by an insurance company; but which insurer?   Everyone involved may have had some contribution to the accident.  This particular case saw Essex trying to get the case against it thrown out.

And it did.  It did not involve any development in law – indeed this was the point Essex made; the law on this was well-established, Essex did not owe a stringent duty of care to each and every individual pupil.  Like any parent, it could arrange school visits and suchlike and expect those in charge of those visits to look after the children.

The interesting aspect of the case was the attempt to widen this duty by Annie’s QC.  He argued that the nature of the duty had changed over time, and that other jurisdictions – he cited a Queensland case – had said that the local authority could not delegate the duty of looking after a schoolchild while at school.

The law on duty has changed over the years; back in Victorian times the courts, staffed by the gentlemanly or noble classes, were quite keen to protect factory or landowners, who also came from the gentlemanly or noble classes.  Duty was extremely narrow.  The gate to the garden of compensation was flung open when Mrs Donoghue suffered a toxic shock from thinking she may have ingested an involuntary gastropod; they were widened further over the years until Junior Books v Veitchi practically demolished the fence.  Which has been re-constructed over the years to get back to where we were in about 1971.

But the “who is your neighbour?” test is flexible – it is perhaps unsurprising that Annie’s QC tried to extend it once more to the local authority.  After all, that would forestall any risk of winning against a defendant who could not pay and whose insurers declined to step in.  It did not work in this case, as the Court stood on its existing principles rather than budge them.  Sound reasons, too, such an extension of liability would have an effect on insurance, and would open up the floodgates to other claims – babysitters are one thing, but imagine a school football coach’s liability for a foul by one of his pupils, and extending that to the local authority employer – but nobody can say that that will never be opened in future.

Wednesday, 7 December 2011

Shah & anor v HSBC Private Bank (UK) Ltd [2011] EWCA Civ 1154: the silent whistle

Mr Shah banked with a private arm of HSBC.  In September 2006 he wanted to transfer out $30m; in February 2007 he wanted to transfer out another $9m.  They were to go out in four tranches.  The smallest tranche (by far) of $7k was to go to an ex-employee.  HSBC however smelt a rat.  Was this money laundering?  The money had only come into his account in July 2006.  HSBC therefore put a stop on things; none of the transactions went through.
The ex-employee, stiffed out of his small payment, was extremely disgruntled.  He grassed Mr Shah up to the Zimbabwean authorities as a suspected money launderer.  Zimbabwe therefore froze Mr Shah’s assets; Mr Shah in turn sued HSBC for mucking him around.  For $300,000,000.
HSBC relied on defences in the Proceeds Of Crime Act 2002 that let it hold on to the money while it reported matters to the authorities.  The problem was HSBC had to swear that its staff had suspicions, and HSBC was extremely keen to keep the members involved anonymous.  Just in case.  So HSBC brought out the various documents that had been pinging internally, and blanked out the names of the lowlier employees.  Mr Shah said that they had to be disclosed; standard disclosure, after all, dictates the whole of any relevant documents be shown to him.  Maybe some of the staff bore him grudges?  They had acted maliciously?  He needed to cross-examine to check.  He even identified a couple of employees that might have reasons to dislike him.  HSBC still refused to un-cross out the names; Mr Shah applied to court to force HSBC to do so.
The court was not impressed.  The judges thought Mr Shah was fishing.  Under the Civil Procedure Rules there was no need to disclose the employees’ names.  Mr Shah had identified no pressing need and even if an employee had acted out of malice the decision to hold up his money had been taken by someone else - the money laundering officer.
This was in some ways an unfortunate decision.  Because HSBC had a back-up argument – that public interest overrode the interests of Mr Shah.  Redacting documents for such a reason would have been a most interesting spat to have decided; but because the Court had already found for HSBC on the main issue, it refused to paddle in such dangerous waters.
But the decision emphasized that the whistleblowers themselves are not so important as for establishing the mind of a corporate entity.  The money laundering officer (more properly, the money laundering PREVENTING officer) was able to swear to the corporate mind.  No need for anything more forensic.

Wednesday, 16 November 2011

Sutton v Syston Rugby Football Club Limited [2011] EWCA Civ 1182: home disadvantage

I’ve written before that judges are moving against personal injury claims; too many people trying it on, like Mr Tomlinson, who ignored a “No Diving” sign put up by Congleton Borough Council and then blamed the council when he broke his neck whilst, er, diving.  He got short shrift.  So did a student at Nottingham Trent, injured in a rugby match, but this time with a lot more judicial regret.
It was one of those common rugby incidents – a player dives for a try and gets pushed over the touchline – but Mr Sutton was doubly unlucky.  Not only did he miss the try, but his knee hit something half-buried in the turf.  He did recover to the extent that he re-started his rugger career, but was in pain for some months.  The parties didn't agree on the responsibility, but they did agree that the damages, should they be awarded, would be £54k.  So quite serious.  It also cut down on the costs of the trial; no need to prove that.
The issue to be proved was whether the home rugby club was responsible for the half-buried thing.  It was an occupier for the purposes of the Occupiers’ Liability Act 1957, it therefore had to make sure everyone was reasonably safe.  The pitch and environs had to be free of harmful stuff.  Especially to lawful visitors like rugby players.  Had the rugby club done its duty?
The club had not helped itself; it had not checked the pitch, or its environs, pre-match.  Bad.  The problem for Mr Sutton was to prove that a reasonable inspection would have discovered the half-buried thing.  Had it been very difficult to spot, the club could not be liable – the club would only be liable if a competent inspection would have noticed the thing, rather than a 100% perfect archaeological scrutiny.
The half-buried thing was a bit of plastic that had marked a cricket boundary.  Someone had broken the top part away, leaving a jagged stump smothered in the turf.  The problem was that Mr Sutton himself said that he had not seen it; a team-mate who had helped Mr Sutton in the aftermath could not see what had caused the knee injury.  it would therefore have been next to impossible for even a careful inspector to have seen it.
Therefore the club was not liable, said a 3-0 Court of Appeal.  Somewhat reluctantly, but the Court felt it impossible to impose such a strict duty on an occupier.  The real blame lay with the chap or chapess who broke the boundary marker away without warning anyone, leaving such an obvious danger; however such a chap or chapess might not be easy to trace...

Thursday, 3 November 2011

Sofia City Court, Bulgaria v Atanasova-Kalaidzhieva [2011] EWHC 2335: avoiding the arrest warrant

Being a prosecutor general in Bulgaria is not a bad job.  You’re in charge of criminal prosecutions; you can choose whom to prosecute, whom not to, what evidence is deployed and so on.  What’s more, you yourself are immune from prosecution, unless you give yourself permission to prosecute you.
It might be said that such an office is open to abuse.  You could blackmail people and plant evidence on them.  You could facilitate crime on an unimaginable scale by not investigating.  If any of your prosecutors under you tries to investigate, you can transfer them from Sofia to Plovdiv.
One former prosecutor seems to have been neck deep in such activities.  The accusations against Mr Filchev are legion.  Fraud, blackmailing magistrates, blackmailing politicians, blackmailing journalists, taking bribes, prosecuting business and political opponents, breaching UN sanctions.  All laid at his feet.  Two of his deputies started gathering evidence against him.  The day after a press conference given by the deputies, one of them was assassinated.  The other was dismissed, arrested, eventually murdered.  Not the only deaths involved in the Bulgarian prosecution office.  Another had been suicided.  An assistant, Ms Georgieva, confided to a colleague that she had been taping Filchev’s unlawful instructions, which he only gave orally; shortly after such confidence the assistant was murdered.  Her confidee fled to the UK because of death threats from the prosecutor.   The confidee’s husband was arrested and kept in custody for a year and a half in Filchev’s special detention centre; his trial was called off when the judge recused himself rather than find in the deputy’s favour.  A second trial appears still to be proceeding.
All somewhat nasty.  Still, Mr Filchev was evidently determined to get to the bottom of things.  He issued a European Arrest Warrant alleging that Mrs Atanasova-Kalaidzhieva had murdered Ms Georgieva.  Thing is, Mrs Atanasova-Kalaidzhieva was the assistant who had fled to Britain...
The European Arrest Warrant would deliver her right into the hands of the person who had threatened to kill her.  Mrs Atanasova-Kalaidzhieva launched a writ of habeas corpus to avoid such a fate.  The Bulgarian response was simple.  It was now a member of the EU, each member of the EU had to trust the other members of the EU to look after criminal proceedings properly, and there was no right to look behind the Bulgarian prosecution structure...
The warrant was stayed in 2009 on the basis that it was launched in bad faith.  A technicality, and one which may not apply given the wondrous European Framework Directive and Extradition Act 2003 that permit the European Arrest Warrant.  But the English Court thankfully ignored it – essentially determining that an arrest warrant that was launched in bad faith was not actually an arrest warrant.  It was re-issued in December 2010 and Mrs Atanasova-Kalaidzhieva again resisted.
The Court stayed the second attempt as an abuse of process – it was the same as the first, no new information had been provided and although Mr Filchev had resigned his post he still seemed to exert some influence – and on appeal the Court upheld the stay.  The Framework depends on mutual respect; the Bulgarian court had afforded the English court none of that by refusing to address the issues raised in 2009.  What’s more, the evidence was that the procedures in Bulgaria were patently unfair and downright dangerous.  A fair trial of Mrs Atanasova-Kalaidzhieva was impossible.
This is an extreme case and a marginal one; worryingly the Court said that had the Bulgarians addressed some of the concerns raised it may have considered extradition.  Even though it may have been tantamount to a death sentence – simply because Parliament, in a moment of delusion, had passed the toxic Extradition Act 2003.  Hopefully these obiter dicta were window-dressing to prevent any appeal to the European Court by the Bulgarians for Britain’s ostensible non-compliance with Treaty obligations – because the idea of returning Mrs Atanasova-Kalaidzhieva to Mr Filchev is, based on the unchallenged facts of the case, repugnant in the extreme.

Thursday, 27 October 2011

AXA General Insurance Ltd & others v Lord Advocate & others [2011] UKSC 46: part of the union

There is an age old debate whether the Court can strike down an act of Parliament.  Such an action would be a bold step.  It would overturn democracy in favour of a kritarchy.  On the other hand, can the democracy deny itself rights without the protection of an independent judiciary?  Can Parliament legislate away the right to vote?
No such case has yet come forward.  At least not for the UK.  But the point has been raised with regard to Scottish Acts.
Pleural plaques are spots that can grow on people’s lungs if exposed to asbestos.  They are not “damage”.  They do not cause harm or injury and in the Rothwell v Chemical & Insulating case the House of Lords ruled there was no claim for pleural plaque infliction.  The Scottish Parliament thought this was unfair; it passed a law (the Damages (Asbestos-related Conditions) (Scotland) Act 2009) opening up an avenue for insurers to be forced to pay those with pleural plaques.  The insurers thought this unfair in turn and went to the Supreme Court to overturn the Act.
There were a number of attacks.  One was that the Scottish Parliament could not legislate on such an issue; it was ultra vires.  The Scottish Parliament can only pass laws that Westminster allows it to pass.  The test of that was compatibility with the Human Rights Act and, in particular, the right to property.  The insurance companies said they were losing property, i.e. money, and that Scotland had no right to take it from them.  The Supreme Court had to look therefore to see whether that interference was for a legit aim and was a reasonably proportionate way to do so.
The Supreme Court held that it was.  Lots of Scots have pleural plaques, the Clydeside shipping industry being particularly prone to exposure to asbestos, the Scottish Parliament wanted to legislate to cover this, and it had done so in a human right compatible manner.  So the Act was within the competence of Holyrood.  far so good.
But then there was another step; the constitutional question of striking down Acts.  The insurance companies said there was an argument that Holyrood had used its power capriciously.  And if it had, it was subject to judicial review.  Like every government decision.  Was Holyrood indeed subject to judicial review?  Could the Court look at an Act of the Scottish Parliament and deem it unfair?

The Supreme Court held that, although Scottish Acts were as much law as anyone else’s, they were subject to powers delegated by the Crown.  Its own establishing documents say that it cannot go outside its powers – any act that tries to do that is not really an act after all.  Someone has to decide whether an act DOES stay within Holyrood’s boundaries; that someone surely has to be the Court.
So the principle is there.  How far CAN a Court interfere with what is an expression of democracy?  Is there a fundamental right for justice to overrule democracy that democracy cannot challenge, or does the Court derive its power from the people and therefore must always step back from challenging?  Eminent judges like Bingham, Neuberger, Steyn and Hailsham had come to different conclusions over this...and the Supreme Court preferred not to resolve that debate.  Instead they said that there is a statutory limit on Holyrood’s competence, and that’s all there was to it.  An irrational decision would surely step over the Human Rights Act obligations, which would take an act outside of being an Act.
The odd thing about the judgment is that it confirms there is no limit to Holyrood’s power, as delegated to it; there is nothing that says “all your laws must be in relation to Scotland”.  Presumably Scotland passing a law that would impact the English would be squished by the Human Rights Act compatibility – no taxation without representation sort of thing – but otherwise the Scottish Parliament can be as irrational as it likes.  Scots law could diverge very far from English unless Westminster shackles Holyrood.  Which it can – so would it?  That would impact the very nature of the Union; ever closer or ever separate?

Wednesday, 12 October 2011

Ferdinand v MGN Limited [2011] EWHC 2454 (QB): caught offside

Can an England captain keep the media shtum when they find he’s playing away?  No.  His right to privacy is trumped by the public’s right to know.
Does this contradict past privacy cases?  Naomi Campbell seeking treatment or Max Mosley seeking other sorts of treatment?  No.  They never made a big deal of their afflictions.  Mosley never held himself out as a paragon of marital virtue; Campbell never held herself out as a paragon of private sobriety.  The media knew this.  Hence the News Of The World trying to tie a Nazi angle into the Mosley story.  The public need to know if the head of an organization that represents them has political views that would cause his impartiality into doubt.  Mosley is not a Nazi; the removal of that angle removed the public interest.
So why does the public have a right to know that Rio Ferdinand had had an on-off affair for a dozen years?  Because his private life had a bearing on his position.  Fabio Capello (England boss) said that he appointed Ferdinand as England captain because he was a good example.  Unlike his predecessor – dismissed due to an alleged affair.  Ferdinand wrote in his autobiography (or at least had had written for him) that he had given up the party lifestyle some years before when he settled down with his fiancĂ©e.  He had said to a newspaper that he was now quite the family man.
All of these factors calculated to lead people to believe that Rio Ferdinand was an upstanding member of society; that he was someone who could be trusted.  That’s one thing, but as part of it his name was valuable.  The family man was paid to advertise things because he was a family man.
So when the Mirror published a kiss & tell story, and Ferdinand sued for the obvious breach of his privacy, the Mirror dragged this past history up.  Privacy is not an absolute right.  Sometimes the public’s need to know overrides someone’s privacy; it’s in the public interest to find a politician is a crook.  This is more at the minor end.  It is also, says the Court, in the public interest to correct a false image.  The Mirror claimed that this is exactly what it was doing.  Ferdinand was not the chillaxed role model; he was still conducting an affair at the moment he was made England captain.
Therefore the Court allowed the publication.  There was a limited right to privacy – the Mirror could not be too intrusive – but the Mirror was on the right side of that.
It could have been very different.  Had Ferdinand been a Paul Scholes, for example, a player who famously keeps his private life out of the public eye, there would surely have been no public interest; only if it had affected his performances, for example.  But there would be no false public image to correct so no justification.  Had Ferdinand not “written” a book or sought to correct a negative image in the media, he might have been fine...

Wednesday, 28 September 2011

G.F. & 88 others v Denmark [2011] ECHR 1331: Greece is the word

This one slipped under the radar a bit.  The case itself is not extensive.  Half-a-dozen paragraphs.   Indeed it’s not really a case; it’s the government of Denmark withdrawing from the case, because it is going to adopt a judgment that came earlier in the year – and which got ignored.
The earlier judgment is the case of M.S.S. v Belgium and Greece.  Application number 30696/09.  Decided in January.  Which, potentially, drives a coach and horses right through EU law on conflict of laws.
I’ve mentioned the Italian Missile on here before.  The argument that has not, as yet, been applied in the English courts is whether it is contrary to human rights legislation for a matter in the Italian courts being left for the Italian courts to decide, on the basis that the Sun might become a white dwarf before the matter gets decided.  After all, the Convention on Human Rights grants access to justice.  And justice delayed is justice denied.
The problem is that the EU orders all domestic courts to treat all court systems equally; a fiction that is convenient for Eurocrats but dreadful for those who have to deal with said courts.  Where is the incentive for improvement?  After all, the Court of Exchequer worked out a quick and accurate system for contract claims because the Common Law courts were achingly slow – and the court fees were appealing.  Which ultimately led to reform of the Common Law courts.  Took a few hundred years, admittedly, but still quicker than the average Italian case...
But does this EU fiction contravene human rights laws?  One other well-established principle is that asylum seekers should seek asylum in the first safe country they get to.  Unfortunately for one Afghan asylum seeker (an interpreter the Taliban were trying to kill for that supposed apostasy) that country was Greece.  The lot of an asylum seeker in Greece is fairly dreadful; locked up 20 to a room, no toilet access, no bed.  So he legged it to Belgium and sought asylum there.
The Belgians decided that the asylum seeker should have sought asylum in Athens and sent him back.  Where he was detained in a room with 19 others, no toilet access, no bed.  All pretty dreadful and all in breach of Greece’s international obligations.
So, the asylum seeker sued the Belgian and Greek governments for breaches of human rights.  The Belgian government was somewhat aggrieved by this; the Belgians had complied with their international law duties, there was no obligation on the Belgian taxpayer to support someone who had arrived in Europe via Greece, after all.  The problem was that the various conventions and treaties to which Belgium (and Greece) had signed up provided that asylum seekers should not be treated in a degrading manner – Greece certainly breached that – and that a seeker should not be deported to a country where such degrading treatment would be applied.  Belgium had done that, albeit under international law...
So, a conflict of international laws.  How to resolve?  Fairly easily.  The point of the legislation was to protect asylum seekers from adverse treatment.  Administrative convenience of dumping everyone in the first safe country they reach is overridden by the requirement to treat properly.  Belgium knew Greece treated asylum seekers shoddily; Belgium facilitated this treatment by delivering an asylum seeker right into Greek hands.  Belgium was therefore in breach.  It should have ignored international law giving Greece priority.
One dissenting judgment came from the British representative – Sir Nicholas Bratza – who pointed out that the decision in M.S.S. went against the court’s decision a few months before allowing repatriation to Greece.  Then again, precedent (one might argue principle) has never borne weightily on the minds of European judges.  As it is, however, perhaps the various articles giving power to decide civil cases to a court first seised may contradict human rights law; if a contract is in English, has English law provisions, an English jurisdiction clause and all damages are in England, why wait years for an Italian court?  Your human right to justice may demand an English court take it back...

Thursday, 15 September 2011

Shovelar & others v Lane & others [2011] EWCA Civ 802: costs, costs and more costs

Six claimants, seven defendants.  You just know when you see that that costs will be a problem.  Throw in it’s a will dispute and you’ve got emotion as well.
Facts are, as so often, simple.  In 1996 a widower married a widow.  In 1999 they made mutual wills.  Half to the widow’s sons, the other half split between all the other descendants.  In 2001 the widow died.  And then in 2003 the twice-widower changed his will; he cut out the widow’s children and grandchildren entirely.  Needless to say the widow’s children and grandchildren – the Shovelars – sued the executors and widower’s descendants.
Mutual wills work like this.  A marries B, they have children, and they build up a portfolio of assets.  A worries that if he dies B will re-marry, have more children (or worse, step-children), and A’s children will be disinherited in favour of B’s new family (I cite the precedent of Cinderella).  B has the same fear if she dies first.   So they make mutual wills.  A’s will says the same as B’s.  There is a mutuality of interest there.  What it means is that when one dies, it is unconscionable for the other to change their will.  It would mean that the pre-deceased’s dying wish would not be fulfilled.
And this is pretty much the scenario here; the survivor changed his will, and the court decided that he could not do that.  There were mutual wills, therefore the executors had to follow the previous will.  The 2003 change was nugatory.  (The executors, being smart, had not paid out the estate.)
The claimants won.  They asked for their costs.  The judge therefore went through the procedural history.
The starting point was easy enough; the claimants had won.  The defendants should pay.  The executors took a fairly limited part in the action, so they got their limited costs out of the estate first.
As for the rest, the judge looked at the usual factors to see whether she should be swayed from the initial starting point.  And those all worked in the claimants’ favour.  They had been open to mediation from the start.  They suggested a stay in the case for alternative dispute resolution.  They offered a without prejudice meeting when their costs were £25k.  The defendants batted it off throughout.  The only time they agreed to a mediation, they said it couldn’t take place because one of them was in the Caribbean.
There were, eventually, offers of settlement.  The claimants offered to take £98k plus costs (later reduced to £84k).  The defendants offered a split between the wills, which would have left the defendants receiving nearly £70k with the claimants paying £25k.  Only right at the end, just before trial, when the claimants had gone to considerable expense to proving their claim, did the defendants offer a split – and that was subject to each side paying their own costs.  The defendants came up with 1 witness statement at trial; they hardly had any costs...
So in terms of fighting the case the claimants had done everything the court likes – made offers, suggested settlement meetings, kept the other side informed of their costs.  The defendants had done sweet nothing.
And at trial the claimants had done even more.  They had beaten their offers.
So the costs should have been easy.  The claimants get costs – with punitive interest/indemnity rates being paid.  Because they had beaten their offers.
The problem that stuck in the judge’s throat was that they were HUGE.  £160k costs for a £132k estate.
And that’s just the base costs.  The claimants were working under a conditional fee.  So take those costs and double them.  Ouchie.
So the judge looked around for ways in which she could somehow lessen the blow.  Firstly, those offers.  They came too soon, she said.  Before exchange of evidence.  Defendants could not suss out how good those offers were.  So unfair to award the indemnity costs and punitive interest.
Secondly, the defendants argued that the costs should come out of the estate.  It wasn’t their fault that they were brought into the action; it was as a result of the change of wills.  Really this was the estate’s fault.  Ergo the costs should come out of the estate.
You can see the problem with this.  The successful claimants would get nothing.  It would cost them the thick end of two hundred grand to be proved right.  Whereas the defendants would walk away being responsible for their own, nugatory, costs.  There would be no incentive for early settlement.  After all, the defendants could have said “OK, you win, we won’t make our claim” on day one.  Not doing so would have meant the estate went to lawyers rather than the Shovelars.
So the judge ordered that the defendants bear the costs.  Other than the executors – their fees would come out of the estate.  As to the level of costs?  The judge said that was a matter for assessment.  Not for her.  But she gave a strong indication by ordering only £30k to be paid on account – normally you’d get maybe half of what you’d expect to get on assessment.
Everyone appealed.  The Court of Appeal took the opportunity to make a few statements.
1.       This wasn’t a question over will validity per se; it was old-fashioned litigation.  The claimants took up one position, the defendants another.  In these circumstances loser pays.  That had to be the result here.

2.      Just how limited WAS the executors’ part in the action?  They filed a defence and they cross-examined the claimants.  They took an active part in the litigation and did not seek an indemnity BEFORE taking action, which is what any decent trustee should do.  Therefore they were a party like any other.  They do NOT get an indemnity from the estate; they are just as liable for costs as the other defendants.

3.      The judge should not have ruled against the claimants’ offers.  They were reasonable, done at reasonable times, and the claimants had behaved reasonably throughout.  They were the poster children for reasonable litigants.  OK, the offers were pretty early, but every litigation has to have parties taking a view at some stage, and the defendants made no move to accept when they saw the claimants’ case in full.  If these claimants did not get the full indemnity consequences, who would?

So the appeal was disastrous for the defendants.  Indemnity costs, interest (at 3.5% above base), executors just as liable.  Even the amount on account was bumped up to £50k.
The Court of Appeal finished with a stark warning. Ward LJ said:

“Making those orders gives no pleasure. If the claimants are right in their assessment of their costs, then, even without a success fee, the costs incurred by them exceed the sum over which battle has been joined. The great British public must think that something has gone wrong somewhere if litigation is conducted in that way. I share that sense of horror. One answer has to be to engage in mediation constructively and at the very earliest stage. ... A thousand pities that that was not done but the awful costs consequences which have followed do lie at the defendants' door.”
Make love, not war.

Saturday, 3 September 2011

Relational LLC v Hodges [2011] EWCA Civ 774: bridge across the Atlantic

There is a deep mutual suspicion between the English and American legal systems.  The English courts cannot abide the punitive nature of American litigation.  English damages are compensatory alone.  There is no “reward” for insisting on your legal rights by way of doubling or trebling your dosh.   The Americans find English law on libel unduly restrictive of free speech; the deplorably named Libel Terrorism Acts (“tourism” would have been better, but there is a breed of American that sees the two things as identical) that are finding their way through various states have the effect of barring English libel claims in the States.
The upshot is that there is no automatic recognition of judgments.  I.e. you sue an American in England and win, you can’t automatically seize their American assets.  You need to start again in the States, albeit with a judgment on your side as pretty powerful evidence.  Similarly an American has the same problem in reverse with an English defendant.
This is what happened in the instant case.  Fairly simple.  Relational had a guarantee from a Florida resident, Mr Hodges, which was signed off under Illinois law.  Mr Hodges seemingly legged it to Birmingham (West Midlands, not Alabama) when Relational sought to enforce the guarantee.  He took a bit of tracing, and indeed claimed that he was in the boozer when the process server said they’d served him at home.  The upshot was Relational scampered through to a default judgment in its favour in Illinois.  Easily enforceable in the States, but Mr Hodges had no assets there.  They were all in the UK.
So Relational sued in England based on their American judgment.  Mr Hodges raised various defences – that he hadn’t fought the thing in Illinois (although, crucially, he did appeal), that a Florida judgment extinguished liability and so on – but the really important thing was that he sought security for costs.  Given the US judgment was not enforceable in the UK, an English judgment in his favour – which would be for his costs – would not be enforceable in the US.  A Mexican stand-off, to utilize a safe third country.
Relational offered to bung £25k into the English court, but the sting in the tail was that it would ask to have that set off against the amounts owed to it by Mr Hodges under the Illinois judgment.  So essentially Mr Hodges could win the case, not owe the judgment in America, but would not get any benefit from winning; his legal costs would be swallowed up.  Relational would just say “well, OK, we can’t enforce in England, so we’ll take it out of what we owe you.”
There’s a logic there but there’s also the point that Relational had won a legit case in a legit court.  And the Court of Appeal was conscious of that.  Was it really fair to make a party that had already won pay security?  Wasn’t it more to protect English parties against oppressive suits, not ones that, on the face of it, had a very very good chance indeed of winning?
The Court of Appeal therefore dismissed Mr Hodges’ appeal against refusal, and made some more general comments.  Longmore LJ said that it would not normally be appropriate to order security from a claimant suing to enforce a pukka foreign judgment.  Because it’s up to the defendant to prove the overseas judgment was wrong; the burden of proof was reversed, and the defendant was really the claimant in those circumstances.  Same would apply in cases like Mr Hodges’ case; although the Illinois court had granted a judgment without Mr Hodges’ case being considered, Mr Hodges did submit to jurisdiction by appealing.  So the English courts ought not interfere too much with it.
It looks as if Mr Hodges’ best case would have been to leave the Illinois judgment untouched and not appeal at all.  At least then he could deny Illinois had considered the full facts and he had never agreed to its scrutiny.  But given the comments of Longmore LJ it looks to be a difficult argument – he still would have had the burden of showing the judgment was wrong, or fraudulent, or unfair.  Difficult one.

Wednesday, 17 August 2011

Jayashankar v Lloyds TSB plc [2011] EW Misc 9 (CC): sticking the head back on

The problem with execution is that once it’s done it cannot be undone.  This applies to property as well as people.  Once a bank has re-possessed your house, it’s difficult to put you back.  After all, the bank might have sold it.
This is the problem at the root of this case.  Mr Jayashankar faced an application for possession from Lloyds when he went seriously into the red on his mortgage.  He tried to have it set aside but failed; Lloyds therefore took possession.  Later that day.  They don’t hang about.
21 days later he appealed the decision.  Pointless?  Now he was out?  Or would the appeal put him back?  A real quandary for Lloyds, who would not be able to do anything with re-possessed properties if it feared an appeal.  And a dilemma for the Court, which may face dozens of such applications on a regular, recurring basis…
Section 36 of the Administration of Justice Act 1970 is, astonishingly for an Act, clear.  Ish.  The Court can stay or suspend possession proceedings when making the order for possession, or before the order is executed.   Mr Jayashankar was seeking a stay at his appeal post-execution.  It was too late for Mr Jayashankar to apply for a stay; he should have done so when applying for the order to be set aside. 
It doesn’t mention anything about appeals, though.  Could the Court deal with an appeal post-execution?  It would have the effect of overturning the Act, because the Court could end up ordering the possession to be stayed after execution.  And there was an unreported case in the White Book (the bible for court practice) that suggested a court could do that.
However, the Court decided, ultimately, it couldn’t.  It would be too difficult.  Once someone has an order, they can execute it.  The idea of them having to wait 21 days for an appeal that might never take place would be wrong – it is interfering with someone’s right to justice.  The disappointed party, like Mr Jayashankar, has the opportunity to seek a stay at the hearing date whilst he appealed the order itself; that is sufficient for the defaulter’s human rights to be considered in balance with those owed money.
Nevertheless, we may hear more on this.  The County Court judge dealing with the matter pretty much begged the Court of Appeal to look at the case – he himself could not grant permission, it was already an appeal from a deputy District Judge’s order – as he could see a flood of such cases advancing.  It may well be that the Court of Appeal comes to the same decision, but at least it would provide binding clarity for the DJs dealing with such things on a daily basis.

Wednesday, 10 August 2011

Wright v Cambridge Medical Group [2011] EWCA Civ 669: splitting two causes

Causation is the bugbear of tort.  It sounds simple enough.  You live your life normally, someone does something wrong, you get injured, you sue, you win.  But getting between the something wrong and the injury is awkward.  Someone throws a rock at you when you’re driving, you swerve off the road; the throwing is close enough to cause your injury.  But if you’re a bystander at the end of the street struck by a lamp-post that’s knocked over by a lorry driver who sees the aftermath of the accident and forgets to look at the road…is the throwing the cause of THAT one?

Even worse is when there are two causes.  You get run over, you get taken to hospital, your injury gets worse.  Does the original driver pay for the hospital’s exacerbation?  Tricky.

Even trickier if one of the parties isn’t present.  This is what happened in the Wright case.  Distressingly simple facts; Clarissa, an eleven month old girl caught chickenpox, ended up with a hospital bug, and her mother called the doctor.  The doctor was negligent; he didn’t bother going to see the girl, and it was agreed that, had he done so, she would have been taken to hospital. 

Because the condition did not improve Clarissa’s mother took her to another doctor, who referred her at once to the hospital.  That’s when things got even worse.  Clarissa was already suffering, but the hospital made it worse – the antibiotics applied inflamed the bacterial strain.  Clarissa is left with long term damage to her hip.

Naturally, Clarissa brought a claim against the initial doctor’s practice.  For some reason she didn’t sue the hospital; nor did the doctor sue for a contribution.  So this was the problem.  At first instance the court couldn’t find that the doctor’s negligence caused the hip injury.  That was due to the hospital’s treatment, which would have happened regardless of when Clarissa was taken there.  Even though the doctor was negligent, he hadn’t caused the loss.

Clarissa’s mother brought the case to appeal.  Surely Clarissa suffered at least SOME harm when the original doctor failed to make the referral?  And the hospital made it worse?  On normal legal principles the initial negligence would carry though.  It’s rare when a second bout of negligence completely destroys the initial bout from a causation perspective.  The case of Rahman v Arearose suggests that, in circumstances where two bits of negligence reinforce each other, both those negligent caused the greater damage.

And so the Court of Appeal found in favour of Clarissa.  The hospital lost a couple of days of analysis and treatment because the doctor failed to refer in time.  It’s not outrageously unforeseeable that a hospital, in circumstances where they have little time, might get the treatment wrong, even more so when that already limited time is truncated by 48 hours.  The two actions were close enough to make sure the doctor was still on the hook.  And that’s without even considering whether an on-time referral might have meant a different doctor – one who would not have made the same mistake – would have dealt with matters at the hospital.  Especially given that by the time Clarissa went to the hospital it was a weekend – when there were fewer paediatric consultants to hand.

The difficulty in causation is shown though by the Court of Appeal coming to a 2-1 decision – and Smith LJ had subtly different reasons to Neuberger LJ in allowing the appeal.  Perhaps the situation would have been made clearer had the hospital been involved in the case; there is no indication as to why it was not…

Thursday, 4 August 2011

G v The Head Teacher & Governors of St Gregory's Catholic Science College [2011] EWHC 1452 (Admin): political correctness gone mad

I’ve read this decision three times and it still doesn’t make any sense.  It’s long established that schools cannot discriminate on religious grounds through imposing offensive uniform requirements.  So demanding boys have short hair is discriminatory against Sikhs or Rastafarians, for example.  School dress codes will therefore have an exclusion for properly, genuinely held religious beliefs.


St Gregory’s Catholic Science College in Harrow has a strict dress code.  It bans cornrows.  Concerned about gang influence in the area.  Fair enough?  According to Mr Justice Collins, no.  A blanket ban on them is unfair, the school should consider each case on an individual basis.  Because it does so when Sikh boys start attending.  It allows them to have longer hair than normal.  By considering them on a case by case basis.


As far as I can find out there is no religion that demands its adherents wear cornrows.  And when SG was thrown out before he started attending, because he had cornrows, he could not say that there was a religious reason for wearing them.  The best he could say was that he liked them and his family had worn them for years.

Rather bizarrely, the artists formerly known as the Department for Education have given guidance to schools that talks about indirect discrimination.  That’s not the bizarre thing; that's sensible.  The bizarre thing is that banning cornrows can amount to indirect discrimination, on the basis that the style is adopted by certain races more than others.  Leaving aside that in time that might become questionable, there’s nothing inherently “racial” about that particular hairstyle.  Besides which there may be valid grounds for banning cornrows.  Such as gang culture.

The school was fairly clear in its dress policy that hair should be small-c conservative.  Braids, for boys, were out.  The school was quite insistent with regard to its uniform policy; indeed the government recommends uniforms.   Nevertheless, an 11 year old boy was so disgusted about being made to have a different haircut, he complained about sexual and racial discrimination.

The sexual discrimination claim was dealt with sharpish, the racial one less so.  Cornrows are, according to a report in the case, a sign of freedom from slavery; a shaved head was a slave’s uniform, so freed slaves would wear long hair, carefully groomed into cornrows, or twisted into dreadlocks.  To this extent, cornrows are no different from a Rastafarian hairstyle and therefore should be permitted.  But cornrows are a lifestyle choice, rather than a religious obligation. Otherwise, how come every other boy who had cornrows was quite prepared to change hairstyle to match the uniform?

So how can it be racial?  The Equality Commission weighed in but its evidence was thrown out by the judge as being worse than useless, it had to pay costs to the school.  More good use of taxpayers' money there.

Yet despite this the judge decided that it could be indirect discrimination to ban cornrows.  A group of people took them seriously, therefore they could be disadvantaged, and as they largely come from one ethnic group – although the court did not seem to go into the differences between west and east African styles, between races of people that are, genetically, more different than Caucasians are from Maori – there could be indirect discrimination.

The judge went further.  He went back to a 1983 case about Sikhism and decided that “family and social customs can be a 'part of ethnicity' within the meaning of the [Race Discrimination] Act.”  This is surely going too far.  Sikhism is not a family tradition but a religion with hundreds of years of proud history.  If a family tradition is a part of ethnicity, does that allow a die-hard football fan to wear his club’s shirt to school?  Because his dad, granddad and great-granddad were all supporters?

The decision to me makes next to no sense.  It seems the court has just given way to a pre-teen who had a tantrum over his do.  Whether the school was right or wrong to take such a strict line is irrelevant – that is the school’s choice and the choice of the parents who send their children there.  Why should that be overturned for reasons of fashion?

Saturday, 23 July 2011

Scullion v Bank of Scotland PLC [2011] EWCA Civ 693: a wunch of bankers

You want to buy a house.  You go to the bank for a mortgage.  The bank wants to make sure there’s enough equity in the property to lend you the money.  The bank gets a surveyor to have a shufti.   Surveyor says, yes, it’s worth the money.  You borrow and buy.  Turns out the surveyor missed something big.  You’ve overpaid.  The surveyor admits he’s breached his duty to the bank, and is happy to pay the bank compensation.  But the bank doesn’t care, it’s not suffered a loss.  It’s made a profit, indeed, as you’re paying way more in interest than would otherwise have been due.  And rising property prices will mean no negative equity.  Can you sue the surveyor?

It’s well established that you can; Smith v Eric Bush.  The court knows most housebuyers will rely on the surveyor’s report when making an offer, and surveyors know this.  For non-mansions, anyway.

But there’s a recent case that switches that.  Mr Scullion was a former builder who wanted to invest some money into a buy-to-let.  At a seminar he met a couple of rum fellows, one behind a property development company, the other a property finder.  They said they could get him a million quids’ worth of property for the small honorarium of £25k; the remainder would be covered by mortgages, which would in turn be covered by rents.

So he started in a small way.  Colleys, a surveying division of Bank of Scotland, gave a report to the development company valuing one flat at £353k with a rental value of £2,000 per month.  The company passed the details on to Mr Scullion, and Mr Scullion signed an agreement with the company, with some unusual, barely legible small print, with a view to buying the flat.  He decided to go for it.  Even better; he got a bargain.  The purchase price was under £300k.

Except it wasn’t such a bargain.  The whole thing was a small appendix to a larger mortgage fraud.  The upshot of it all was that Mr Scullion had a flat that he was only able to rent for a year, for £1,000 per month, and in the end sold it for £270k.  Needless to say, both figures well under that advised as being market value by Colleys.

Mr Scullion ended up suing Colleys and at first instance won around £70k, representing the lost rental income.  Colleys appealed.  Rather churlishly, given the iffiness of its valuation.  Even more churlishly, Colleys won.  Much to the disquiet of the Court of Appeal.

How could Colleys have won?  According to the Court of Appeal, because it was a buy to let.  Not a house purchase.  Therefore the Smith v Eric Bush rule couldn’t apply.  A buyer to let is a bit more sophisticated than a house purchaser and would be expected to get their own individual valuation.  And it was a commercial transaction.  One of many a business might undertake.  Not the personal dwelling of a desperate purchaser.  Over half of buyers to let have more than one let property; the Court held it was hardly a near certainty that a buyer to let would rely on a lender’s survey.  If Mr Scullion could afford to pay £25k in commission, why not spend the extra grand or so on his own survey?

So Mr Scullion lost.  With a powerful, if regretful, judgment from Neuberger LJ to boot.  I yield to no-one in my admiration of the Lord Justice, but I cannot help but think he got this one wrong.  The evidence that buyers to let don’t get their own valuations looks fairly slender.  With the Smith decision surveyors know they’re often on the purchaser’s hook and must factor that into their fees.  And Colleys got the valuation spectacularly wrong.  Given that they mentioned rental value, Colleys must have known SOMEone may be buying to let; and with a capital value of £350k their rental value was well over any likely mortgage figure.  All these factors play in favour of Mr Scullion.  There’s not much that plays in favour of Colleys.  They valued badly and got away with it.

It may yet go to the Supreme; even though it was a 3-0 decision, expressions of regret are often a signal to take it further.  Is there sufficient public interest in such a case?  Perhaps – if the buy to let market collapses further people would be interested in seeing whether they can sue anyone.  That would cause difficulties for surveyors, which might be another reason why the decision went the way it did…

Tuesday, 12 July 2011

Fox v Foundation Piling Ltd [2011] EWCA Civ 790: Fox kills Woolf

One of the advantages in being a judge in charge of an investigation is that you can effectively implement your own investigation in your own court.   So Lord Justice Jackson, tasked with sorting out the court service and expense of litigation, could then give common law guidance in his judgments.

Although given one of his first judgments I’m not sure that’s totally a good idea.  Nemo iudex and all that.

The case of Fox is a typical personal injury claim where the claimant basically lies about their injury.  To any doctor, “oh, it hurts, I’m dying”; when nobody’s looking, star midfielder in a Sunday league team.  Insurers are wise to this and often send out surveillance teams to take sub rosa footage.  As they did with Mr Fox.

Mr Fox fell over while carrying something heavy.  Hurt his back.  Naturally he sued his employer.  Whose insurer took video footage.  Which showed that Mr Fox was walking sans problem towards the hospital for an examination, until he got within sight of the spinal clinic, whereupon he produced a walking stick and started limping.

Mr Fox was suing for the hundreds of thousands; the insurer took a view and had thrown a little over sixty grand into court.   Once the insurer appreciated the surveillance evidence it cut that in half.  Mr Fox took it – and sought his costs.  The insurer said, hang on, we’re entitled to the costs between our initial payment and your accepting.  We really won over that period.  The court agreed with the insurer, and said that even had the payment not been reduced, Mr Fox’ mendacity – be it conscious or subconscious – should preclude him from getting costs.

Now, judges have a wide discretion over costs.  The Court of Appeal has often stated that it will not interfere with a judge’s general appreciation of the whole thing; it takes a special case to get in the way.  Yet on appeal Jackson LJ decided that he would interfere.

Jackson looked at previous cases where judges had deviated from the loser pays principle.  Usually on the basis of misconduct of the party, or a massive exaggeration of a claim.  Not dissimilar to the Fox case.  The problem was that the insurer had sat on video evidence for a number of years.  Why was it not disclosed sooner?  Mr Fox would have conceded the lower payment a lot earlier.

Regardless, Jackson has re-booted the costs position.  He says that departing from loser pays has gone on far too much.  It involves significant additional cost litigating the litigation itself.  Whereas that may do justice for an individual case, he said, it causes problems for other court users.  Therefore it is better to take a strict line for the benefit, and certainty, of all.  Mr Fox therefore got his costs.

Which basically destroys the whole point of the Woolf reforms of doing justice between the parties, of encouraging a proportionate approach to litigation.  Why should a judge bespoke a costs order now?  Given Jackson’s dicta, it seems the ends do justify the means.  Jackson’s insistence on certainty may have a wholly deleterious effect.  Party A can get its expensive lawyers to go to town on Party B, grinding it into oblivion, knowing it won’t have to pay the penalty so long as it gets the slightest win.  Party A sues for £100m, Party B offers £10k to go away, case goes to court for three months and Party A gets £11k – yet per Jackson B would pay all of A’s costs…
It seems particularly egregious given the Court of Appeal’s decision in Medway Primary Care Trust v Marcus [2011] EWCA Civ 750.   In that one the Court took a far more robust view against a claimant that recovered a minute proportion of a claim.  Mr Marcus had a leg amputated and his damages were agreed at around half a million quid; the question was whether the amputation was the hospital’s fault or just one of the vicissitudes of life.    The court found that it was the latter, and the only claim was for the pain and suffering Mr Marcus suffered for a couple of days whilst the hospital faffed around with investigating what Mr Marcus’ problem was.  He got two grand for that.

Mr Marcus claimed he had won, albeit just a quarter of a per cent of his claim, and therefore he should get his costs; if the hospital thought the claim was OTT it should have made an offer.  The hospital said it was stymied.  Had it offered the right amount of claim (£2,000) using the Part 36 mechanism, and Mr Marcus accepted the offer, as a consequence of the rules the hospital would have been on the hook for his costs, including success fee uplift; costs that were estimated at £100k – for what was pretty much a small claim.  Fair?

Court of Appeal decided it wasn’t.  The hospital had won the case.  The tiny claim they’d lost on was not the major focus of the case – indeed it was thrown in almost at trial as an afterthought – and the starting point should have been that Mr Marcus pay the hospital’s costs.  The Court of Appeal applied a 25% discount on those costs because of some questionable case strategy (late admissions, that sort of thing) but even though Mr Marcus “won” he ended up losing.

There was a dissent.  Which was that Mr Marcus had won, albeit only technically, ergo he should get his costs.  Forget Woolf and the whole issue by issue thing.    If the hospital had bunged the right amount into court, rather than zero, it would have had an argument that the £100,000 in costs it was facing was disproportionate.  And therefore get it decimated on costs assessment.  As the hospital didn't pay into court, it should bear the consequences of losing the case.   I.e. paying Mr Marcus’ costs.   To be fair, “just” 50% of them as a penalty to Mr Marcus for an unwitting exaggeration.  A gigantic costs liability for a tiny claim.  The dissent of course does not bind.  The dissenting judge?  Jackson LJ.

It seems to me that these two cases are difficult to reconcile.  One demands certainty even when it causes injustice to the instant parties, the other demands a finger-in-the-air exercise to do overall justice to the merits.  Perhaps one will go to the Supreme Court.  If so, which will the Supremes prefer?  Woolf’s reforms or Jackson’s?

Tuesday, 28 June 2011

Nottinghamshire & City Of Nottingham Fire Authority v Gladman Commercial Properties & anor [2011] EWHC 1918 (Ch): late, late evidence

So.  You know the score for a trial.  You get your documents, then you get your witnesses, then you get your experts.  All the things you have are exchanged, piecemeal, but simultaneously.  There is no trial by ambush beloved of TV movies of a last-minute flourishing of the surprise witness.

At least in theory.

Not the practice in this case.  Gladman bought an old fire station to turn into student flats.  The fire service and the local council told Gladman that the station could provide 600 flats minimum.  Time for payment came, and Gladman refused.  Not enough room.  We are rejecting the contract, we are not bound to complete.  The fire service claimed that Gladman was obliged to pay; Gladman counterclaimed (and brought the council in for good measure).

The case revolves almost solely around whether the council’s reps got the number of flats so wrong that it amounted to fraud.  For that you would expect there to be serious witness evidence from the council.  Except there was not.  The number one witness not only did not turn up, he had not even provided a witness statement.

So when the fire service’s witnesses finished, Gladman thought it had an open goal.  All its witnesses needed to do was state that they relied on the misrepresentation.  Not much room for controversy there. 

Then came the TV movie twist.  The council provided a statement from its number one witness.  Gladman was quite understandably outraged.  This was trial by ambush.  Its submissions were ready – the council didn’t have anyone denying that the statement was made fraudulently – and suddenly it would have to change.  Or would it?  Why should the council be allowed to bring in this new witness?  Gladman therefore opposed the council’s application to add new evidence.

The judge reluctantly allowed the council’s application.  Reluctantly, because he had to give Gladman time to prepare for this new witness, which meant, given the court’s chock-a-blockness, the trial would have to be kicked over a couple of months.  However the judge weighed up his options.  What if he turned the evidence down?  You’d have a witness with valid things to say, hanging around at court, unable to say them.  And if the judge found that the would-be witness HAD behaved fraudulently, he would be making a finding of fact that would be disastrous for the witness.  “It  would be a gross injustice if having ruled that [the witness’] evidence could not be relied upon then to go on and decide the case against [the council] and the Fire Service by criticising their failure to call [him] despite the fact that he has been at all material times from 11th April 2011 available as a witness. I cannot conceive of a greater and justified complaint about a decision that would have been made that way.

The big penalty for the council is in costs.  The judge warned at the end that there would be serious consequences.  The hint is that if the witness’ evidence proves conclusive, the council might end up winning the case, but paying all of Gladman’s costs – on the basis that the trial may have been unnecessary had the evidence been made available.  We won’t know until the end of the case, if indeed it doesn’t settle, but the card has been marked.

So it is possible to get very late evidence in.  The court will consider it an injustice if valid evidence is kept out just because it is late.  The best way to do justice in these circumstances is to make the “guilty” party cough up all the wasted costs of the innocent.  That could well be such a serious penalty it might dissuade a party from chancing its arm.

Thursday, 9 June 2011

Araci v Fallon [2011] EWCA Civ 668: derby disaster

The biggest horse race on the flat was held over the weekend; a tight finish saw 19 year old Mickael Barzalona claim a thrilling victory, just ahead of Her Majesty’s Carlton House and comparative outsider Treasure House.

One jockey who was not involved in the finish was Kieran Fallon, six time Champion Jockey and three time Derby winner.  Definitely one to have on one of your horses, which is what the Araci family thought when they had a likely nag.  They accordingly paid Fallon ten grand to be the chosen rider for Native Khan, entered in the Derby on the back of three wins in five races.  Fallon rode it to two of those wins; he evidently knew the horse.

Trouble is, Fallon then agreed to ride a different horse, Recital.  The Aracis were not pleased; not only would they lose the services of a top rider, they would see him riding in opposition.  If it came to a head to head between Recital and Native Khan, Fallon’s knowledge might have been the difference maker.

So the Aracis sought an injunction to stop Fallon riding.  It was pretty much conceded that they could not force Fallon to ride Native Khan, indeed they probably wouldn’t want that – the trust had gone – but they could stop him taking advantage.

It’s a difficult thing to get.  The Court does not like a party stopping someone else from making a living, even if that living is a breach of contract.  Normally the Court would say that damages would be enough.  Indeed this is what the court decided first time of asking; Fallon was free to ride Recital.

But the law can’t half shift when it wants to.  An appeal was lodged, heard the same day and the result given the next morning.  The reason?  That morning happened to be Derby day.  And the Court of Appeal awarded an injunction.

The Court looked at the factors afresh.  The case was finely balanced, but there were a couple of key considerations.  Firstly, would damages be appropriate?  Even ignoring the kudos in owning a Derby winner, damages would be fiendishly difficult to calculate.  If Recital won, with Native Khan third, would Fallon’s breach of contract have caused NK to finish third rather than first?  Or would third have been the best it could have done even had I been riding Recital?  Secondly, let’s assume that the Aracis missed out on the huge stud fees a Derby winner could command.  Maybe millions of pounds.  Could Fallon afford it?  There was no evidence.

So the Court took the unusual step of awarding an injunction.  Only an interim one – stopping Fallon from riding in the Derby, the rest will be sussed out at a full trial – but the Court was pretty scathing of Fallon’s evidence, giving a pointer to an end result.  The injunction may yet be made permanent insofar as major races go, and damages will also, presumably, be awarded.  As best as can be assessed, at any rate.

Ironically, Native Khan came fifth – just ahead of Recital.  Maybe Fallon made the wrong choice anyway…

Thursday, 19 May 2011

West Tankers Inc v Allianz SpA & anor [2011] EWHC 829 (Comm): thwarting Europe

You may remember earlier I referred to the Italian Missile.  To stop a claim against you, just issue in Italy.  The legal system there is so chaotic it takes years before they suss out it’s nothing to do with them.  And thanks to our European masters you can’t get an anti-suit to stop the Italian proceedings – you have to let the Italians sort it out first.

Well, this is what Allianz did in the above case.  A ship hit a pier and an insurance claim was made.  The insurance contract had a term saying disputes would be considered via arbitration in England; this is what West therefore did.  The response?  Allianz sued in Italy.

Now, let’s see just how quick the Italian court system is.  Once Allianz sued in Italy, West sought an anti-suit injunction, got it, had it kicked up to Europe, lost it, won the arbitration and won this case.  This has taken nearly six years.  What progress has been made in Italy?  Apparently, none.

The anti-suit injunction would have stopped Allianz continuing with its claim in Italy.  The English court was pretty clear – it should stand, because the Italian proceedings were a breach of contract, therefore European law would not allow the breacher to get a benefit.  The geniuses in the European court decided that the breacher should get a benefit.  The grounds for finding this are obscure, as they usually are with the EU.

So, West had to get around it somehow.  Easiest way – turn the arbitration result into a court document.  You can’t enforce an arbitration award as of right, you have to have the Court’s permission to do so; this is literally the oldest rule in the book (the Distress Act 1267).  But what a neat manoeuvre!  By getting an English judgment stating that the arbitration award was binding, the Italian court would be forced to accept it.  Judgments from one EU court are enforceable as of right in other EU courts.

And this is what West did.  The Court was happy to award such a judgment; Allianz’s appeal was slung out.

This is pure genius.  And shows the folly, and paucity of reasoning, of the European Court judgment.  The EU decided an anti-suit injunction was in some way a breach of an EU treaty.  So now we have the prospect of Italian proceedings, which the EU considers valid, rendered pointless by an English judgment, which the Italian Court must consider valid.  The speed of the English court has defused the Italian Missile.

Doubtless it won’t stop there; doubtless there will be an appeal.  And it is very possible it’ll go back to Europe, as this judgment kicks forum-leaping where there’s an arbitration clause into the boondocks.   The EU won’t like that.  But how can the EU say that a slow Italian court trumps a fast, accurate, honest English one?  Under the EU’s own rules, Italy here must cede to England…

Thursday, 21 April 2011

Bowker & Bowker v Royal Society for the Protection of Birds [2011] EWHC 737 (QB): scientific grousing

Fun little case, this one, although not for the parties concerned, obviously.  But an early example of the Court following the principles laid down in the British Chiropractic Association claim against Simon Singh, which collapsed amidst much chiropractic angst and scientific rejoicing.

One of the playing-to-the-gallery points in that case was that scientific method was not something suitable for libel law.  Which is fair enough insofar as it goes; scientists will disagree on things and that doesn’t mean one is dissing the other.  Nevertheless that was something of a side-point, in that it wasn’t the dissing that the BCA complained about, it was the imputation that the BCA knew its members were pushing bogus treatments and was content to let that happen.

The Bowker case was slightly different.  In that it pitched scientist against scientist – and this time the allegations included a direct criticism of scientific method.  Calling a scientist’s methods incompetent and almost criminal would obviously be defamatory; impugning someone’s profession.  In this case, the husband-and-wife ptarmigan consultancy firm run studied the population of black grouse in an RSPB reserve and concluded that something was going very wrong, the grouse were dying off.  They had a paper on the subject published in a scientific journal.  The RSPB had to defend its own conservation techniques, and three of its staff compiled a critique of the article, sent it to those inside the RSPB who might have had to deal with the fall-out, and also to the journal itself.  Essentially the RSPB seemed to think it wasn’t the RSPB that was killing off its grouse, but the Bowkers…

Apparently the black grouse is a somewhat sensitive species – not surprising, given the be-tweeded Scots blasting seven shades out of them every August – and does not respond well to being tagged, or handled as a chick.  Which is what the Bowkers had been doing.  The RSPB’s people thought that this may – their emphasis – have had a deleterious affect on numbers and was an untried, untested method of census-ing black grouse.  The RSPB had evidently done its legal homework; the email was marked not for external circulation.

Nevertheless the Bowkers got a copy of the rebuttal via a co-author of the article.  Stung at being accused of following untested methods, they sued the RSPB.  The RSPB countered with a powerful defence; leaving aside the truth, the RSPB said its critique was covered by qualified privilege.  I.e. the RSPB had a right to defend itself, and those who read the RSPB’s grouse paper were those who had an interest in knowing the other side of the story.  If it could nail this, the Bowkers could only win if they showed the RSPB was being malicious.

In the end the RSPB issued a summary judgment application.  Why wait for trial?  There was an obvious win here.  The judge agreed.  The Bowkers claimed the RSPB’s criticisms had been circulated more widely, but couldn’t provide any evidence; those who told them they had seen the paper would not give evidence, for fear of the avian mafia.  Besides which, the Court considered that the RSPB was pitting science against science.  Accusing a technique of being untried was hardly defamatory, every technique that has ever been used was untried once.  That in itself is enough for a win, but the judge went further.  The Bowkers could not show malice; although that’s normally a matter for trial, the judge thought about what evidence could be available, and concluded that, realistically, there wasn’t any and could never be any.  The words themselves were measured and precise, they were based on true facts, the Bowkers had to show the malice and in the three years since the dispute got under way they had not found any evidence of it themselves.

So a quick strike-out from the judge.  Although the real fun in the case isn’t so much the facts, the in-depth investigation of grouse handling, the searches on email archive that the RSPB undertook or anything else.  It was the choice of solicitors for the RSPB.  I don’t know whether it was influenced by the firm’s excellent reputation, or whether there was a client relationship existing, or it picked the name out of the list like a granny choosing her Grand National horse; whatever the reason, it’s surely fitting that the RSPB was represented by Bird & Bird.