Thewlis v Groupama Insurance Co Ltd [2012] EWHC 3 (TCC): costs, costs and more costs

The Court likes it when parties settle; Part 36 of the Civil Procedure Rules sets out a great way for parties to make offers, with swingeing penalties for anyone who does not accept a reasonable solution.

Trouble is Part 36 has spawned plenty of litigation, with even more costs...

You would think it would be simple common sense, but no, when lawyers get involved common sense gets thrown out of the window and it's up to judges to put it back together again.  E.g. stating that you can't accept an offer if your case has been slung out.  Or working out what happens if your offer is exactly right, or you hide a big chunk of claim till the last minute.

In Thewlis the question was whether an offer had been accepted.  If it had, end of case; if not, it continued.  At least the parties had got sufficiently close to work out that an offer to settle had been made in 2008 and someone had tried to accept it in 2011.  Question was whether they could. Under a contractual regime it would have been simple - three years is far too long to wait to accept an offer, nobody would have thought the offer was still out there - but Part 36 is statutory and different rules apply.  Could an offer made in 2008, and expressed to be open for 21 days, still be open in 2011?

The problem was that the offer did not comply fully with the provisions of Part 36 - the offer letter said that it could only be accepted after 22 days or later if either the costs are agreed or the Court gives permission.  The Court had previously held that any ambiguity should be dealt with by reading the letter as according with Part 36 as far as it could, so that little provision - which was kicked out of the Part 36 regime by a revision to Part 36 not long before the offer letter was sent, which meant that costs would be automatic, rather than agreed - should be read accordingly. 

The Court refused to do so, in a tortuous attempt to say that, if a letter says "Part 36" in it and then contradicts Part 36, it cannot be a Part 36 offer.  Essentially saying that the solicitor writing the letter misquoting the provisions of the part had taken it outside the part - even though he was doing his damnedest to get it within the part and the solicitors on the other side had not taken the point.

To my mind this is an extremely tenuous ruling and one that does not help the position at all; a Part 36 offer is an offer subject to Part 36 and the somewhat loose wording can easily be read to mean that it was still a Part 36 offer.  After all, if the parties did not agree on the costs following, because there was a dispute over the amount (say), the Court would rule in accordance with Part 36.

More to the point, and conspicuously absent from the judgment, is Rule 1.  Effectively "justice must be done".  We have a Part 36 offer, never withdrawn, always on the table, that the Court decides, 3 years later, when the offeror is not keen on it, is not a Part 36 offer.  Is that really just?

Weddall v Barchester Healthcare Ltd & anor [2012] EWCA Civ 25: frolicking

When is an employee not an employee?  When they're not at work. Sometimes.  When are they at work?  When they are working.  Or sometimes not working.

Confusing?

It's simple enough, when one works out what the problem is.  Someone gets injured by someone else, they sue; they need deep pockets to pay damages.  The average individual is not going to be able to afford it.  But their employer might, especially as the employer will be insured; the deepest pockets of all are those of the insurance company.

So the injured party will do their damnedest to get the employer on the hook.  And the court often helps them.  Because it's all about justice.  Someone is injured; someone should pay.  Should that someone be the injured party - who is innocent and hurt - or the employer - who MAY be innocent but certainly IS unhurt?  Besides which, shouldn't the employer notice it has idiot employees?

The court has therefore developed various doctrines to put an employer on the hook.  There are generally three categories.  One, the employee was doing something for the employer.  Delivering material, operating a crane, whatever.  That's easy enough; if they do that negligently, then their negligence is their employer's.  Not controversial.

A second is if they're on a 'frolic of their own'.  They're doing something their employer has told them not to; it's nothing to do with work.  They're drunk as a lord and heading for a party in the company van.  The employer will not be liable.

There is the third category.  What if they're frolicking at work?  Some bright spark has the idea of human ten-pin bowling in the factory, for example.

This is where it gets tricky.

And this is where the two cases here come in.  Mr Weddall is the headliner, he was a manager at a care home needing someone to fill a shift; he rang a chap called Marsh to suggest he come in for a bit of overtime.  Marsh did come in, basically to punch Mr Weddall's lights out and announce he was quitting.  A large amount of drink was involved.

The second case heard with it involved another manager, Mr Wallbank, who ran his own firm and ended up suing it (remember the insurer would pick up the tab).  One of his employees = Brown - bodged a manufacture load and Mr Wallbank had a go at him, and started to help.  Brown's reaction was to shove Mr Wallbank through a table, chipping a vertebra.

So the question in these cases was whether the employer was responsible for the actions of their employee.  The court of appeal found Mr Weddell's case easier to deal with.  Marsh was not at work when he was called; he was not at work when he turned up.  He had never said he would work the extra shift.  Indeed the last thing he wanted to do was work it.  His punching of Mr Weddell was entirely his own decision, it just happened to be that it took place at their place of work.  Mr Weddell's claim was against Marsh alone - there was no employer liability.

The other case was trickier.  It looked similar, an unprovoked battery, but there were some crucial differences.  Brown was still at work, and, what's more, was undertaking a task of work at the time; Mr Wallbank was lifting the load of stuff that had to be put into an oven.  Brown's attack was in a work environment.  The attack, it was found, was because he objected to Mr Wallbank's orders to him; the attack was directly caused by something arising from work.  That was a close enough connexion to work to make his employer - Mr Wallbank's company, remember - liable.  Had it been a "mere" random battery, perhaps Mr Wallbank used a football taunt, for example, then perhaps the employer would not have been liable; in the circumstances, the Court of Appeal decided it was just about close enough to employment to count.

The moral of the story?  Try to get injured at work by someone working.  (NB: not legal advice.)

Glatt v Sinclair [2011] EWCA Civ 1317: flogged senseless

Bankruptcy.  A status that is sadly increasingly common in these increasingly straitened times.  You lose control over what you have.  Someone else comes in and takes control, and does their best to pay off your creditors.  Without sentimentality.
 
You are reliant on them making sure that they get as much in as possible.  You don’t want to see the precious heirlooms sold for a song and stopping you from keeping hold  of some other stuff once the creditors are satisfied.  Question is, what can you do if you think the trustee in bankruptcy is short-changing you?
 
You sue for breach of duty.   That’s what Mr Glatt did in similar circumstances – the taxman had put in a receiver over his property, and the receiver started flogging everything off.  One of the things Mr Glatt had was some property in Hendon.  Swish.  The receiver got a valuation of the property from proper valuers.  They reckoned a third of a million.  The receiver had an offer for that and duly sold it.  The purchaser, that very same day, put it up for re-sale.  At nearly half a million.  Within four months the purchaser flogged it off for a sweet £125k profit.
 
Mr Glatt was seriously dischuffed at this; the receiver, he said, had done him out of a six figure.  The receiver pointed to the valuation it had received.  The test was behaving in good faith, and taking reasonable steps to receive a proper price – one that was the best price reasonably obtainable.  The receiver had done so; he had gone to a building society rather than some hand-in-glove-with-developer cowboy and pitched the price appropriately.  Indeed he had turned down a couple of offers for well below.  The purchaser just got lucky.  The third of a mil was the best price reasonably obtainable.
 
Mr Glatt duly sued, almost on a res ipsa loquitur basis; the property sold for over four hundred k, so selling it for three hundred was self-evidently rubbish.  The receiver asked the court to kick out the claim on a summary judgment basis, i.e. it had no chance of success and there was no reason to wait for trial.  The application succeeded.   The receiver had done everything a competent receiver should have done; get a proper valuation, put it up for sale through a proper estate agent and got the market price.  Mr Glatt appealed.
 
Mr Glatt had an advantage on appeal.  As it was from summary judgment, evidence had not been heard; the judge was content to consider that the legal case was so strong, no evidence was necessary.  As soon as you bring evidence into summary judgment applications, the court is going to think a trial is necessary so a trial judge can look at the witnesses.  So would not allow the application.  Mr Glatt therefore could win by showing that witness evidence would make a difference.
 
So the Court of Appeal looked at the legal case being put forward and sought to see whether there were any areas where witness evidence may have been useful.  Choosing a bona fide agent?  That was taken for granted, no need there.  Reliance on valuation?  Seemingly OK.
 
The area on which the court alighted was the marketing.  What was done to sell it?  An advert in a local rag that generated three offers.  The last of which was then increased pretty sharpish.  Suggests that the property was in some serious demand.  Yet the receiver accepted the last, increased, offer.  OK, it matched the valuation; but maybe that valuation was now out of date?
 
The court wanted therefore to look at the advert.  How much was the property on offer for?  What had the estate agent done to bump up the price?  With three offers from one advert, did they wait for a second advert to generate more offers?  Had anyone gone back to the lower offerors and told them that they were well short?  The court did not know any of these details.  The advert had not been offered in evidence.  These were all questions the court thought needed answering before the receiver’s actions could be judged pukka.  For which witnesses would be needed. Ergo, the matter should go to trial.  The appeal succeeded.
 
Mr Glatt’s claim may well fail.  There may be very good reasons why the property went up by a third in four months.  But the court’s message is that that has to be tested out.  Summary judgment is a difficult thing to nail, you’re saying  no amount of persuasion will turn a bad case into a runner.  This one is not a bad case legally – there is something there in law, a full trial is needed to see if there’s the scaffold of evidence to support it.