Cain v Francis; McKay v Hamlani

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLady Justice Smith,Lord Justice Maurice Kay,The Chancellor
Judgment Date18 Dec 2008
Neutral Citation[2008] EWCA Civ 1451
Docket Number(1) Case No: B3/2008/0125

[2008] EWCA Civ 1451

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

(1) ON APPEAL FROM OLDHAM COUNTY COURT

HH JUDGE ARMITAGE QC

7SK03863

(2) ON APPEAL FROM NEWCASTLE UPON TYNE COUNTY COURT

HH JUDGE FAULKS

7SR00566

Before:

The Chancellor of the High Court

Lady Justice Smith

Lord Justice Maurice Kay

(1) Case No: B3/2008/0125

(2) Case No: B3/2008/0328

Between:
(1)stephen Cain
Appellant/Claimant
and
Bernice Francis
Respondent/defendant
and
(2)Shona Mckay
Respondent/claimant
and
Stephen Hamlani
1st Defendant
and
Direct Line Insurance Plc
Appellant/2nd Defendant

(1) Mrr Richard Methuen QC (instructed by Messrs Beardsells) for the Appellant/Claimant

Mr Frank Burton QC (instructed by Messrs Cogent) for the Respondent/Defendant

(2) Mr Joseph O'Brien (instructed by Messrs Browell Smith) for the Respondent/Claimant

Mr Frank Burton QC & Mr Anesh Pema ( instructed by Messrs Cogent) for the 1 st Defendant and Appellant/2 nd Defendant

Hearing date: 18 November 2008

Judgement

Lady Justice Smith
1

Section 33 of the Limitation Act 1980 permits a judge to exercise discretion as to whether the three year primary limitation period applicable in personal injury actions should be disapplied in the particular circumstances of the case. As the judge's discretion is unfettered, the exercise of that discretion should not, as a rule, be the subject of appeal to this Court. However, in the two cases presently before the Court, the judges had reached quite different conclusions on similar facts and for that reason I thought it necessary to give permission to appeal.

2

The facts of the two appeals are similar in important respects. Both arose from a claim for damages for personal injuries sustained in road traffic accidents. In each case, the claimant intimated a claim to the defendant's insurers very promptly. In each case, the insurer accepted liability, recognised that early settlement would not be possible because of the uncertain medical prognosis and made voluntary interim payments. In each case, although in a slightly different way, the claims became time-barred under section 11 of the Limitation Act and, when proceedings began, the claimant had to seek a direction under section 33. In the case of McKay, where the delay in commencement was just under a year, the judge exercised his discretion in favour of the claimant. The defendant/insurer appeals. In Cain, where the delay was of only one day, the judge refused to extend time and the claim was dismissed. The claimant appeals.

3

Because of the factual similarities and the different results, the two appeals have been heard together and are now the subject of combined judgments. On the appeals, Mr Frank Burton QC appeared for both insurance companies. In the McKay appeal, Mr Anesh Pema appeared with him for the appellant, Direct Line Insurance PLC (Direct Line), and Mr Joseph O'Brien appeared for the respondent, Mrs McKay. In the Cain appeal, Mr Richard Methuen QC appeared for the appellant, Mr Cain, and Mr Burton for the respondent, instructed by his insurer. Because the appellant is the defendant in one appeal and the claimant in the other, I shall try to avoid confusion by referring to the parties as the claimant and defendant rather than appellant and respondent.

The statutory provisions

4

Section 11 of the Limitation Act 1980 provides a special time limit for actions in respect of personal injuries. So far as relevant to these appeals, section 11(3) and (4) provide that an action shall not be brought after the expiration of a period of three years after the date on which the cause of action accrued. The period of three years is the primary limitation period.

5

Section 33 provides for an exception to the operation of section 11. So far as relevant and, as adapted to post CPR terminology, it provides:

(1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which –

(a) the provisions of section 11… of this Act prejudice the claimant….

(b) any decision of the court under this subsection would prejudice the defendant….

the court may direct that those provisions shall not apply to the action… .

(3) In acting under this section the court shall have regard to all the circumstances of the case and in particular to –

(a) the length of and the reasons for the delay on the part of the claimant;

(b) The extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the claimant or the defendant is, or is likely to be, less cogent than if the action had been brought within the time allowed by section 11;

(c) The conduct of the defendant after the cause of action arose, including the extent, (if any) to which he responded to requests reasonably made by the claimant for information or inspection for the purpose of ascertaining facts which were or might be relevant to the claimant's cause of action against the defendant;

(d) the duration of any disability of the claimant arising after the date of the accrual of the cause of action;

(e) the extent to which the claimant acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages;

(f) the steps if any taken by the claimant to obtain medical legal or other expert advice and the nature of any such advice he may have received.

6

Thus section 33 gives the court a wide discretion to disapply the primary limitation period if it is equitable to do so.

Factual background – McKay v Hamlani and Direct Line Insurance Co

7

On 23 March 2003, Mrs McKay was driving her car with her two young children as passengers when it was in collision with a car driven by Stephen Hamlani. He had stolen that car and was uninsured. The owner of the car was insured with Direct Line. Mrs McKay had legal insurance and, when she wished to make a claim for her injuries and those of her children, she was assigned to solicitors Ewart Price and Primhak (Ewart Price). They intimated a claim to Direct Line and liability was accepted. Ewart Price obtained medical reports from time to time and these were disclosed to Direct Line. Mrs McKay needed rehabilitation treatment and Direct Line paid for this directly and also made some interim payments to Mrs McKay.

8

As expiry of the limitation period approached, Direct Line made it plain that the claimant's solicitors should issue proceedings. On 21 March 2006, a claim form was issued; it was in time. However, Ewart Price failed to serve the proceedings within 4 months of issue and they lapsed. It appears that Ewart Price did not realise that they had lapsed until so advised by Direct Line. It was not until 30 January 2007 that Ewart Price advised Mrs McKay of the position. She then promptly instructed the firm of solicitors which now represents her. The present proceedings were issued in the Sunderland County Court on 6 March 2007. Section 33 was put in issue and both parties pleaded their cases on prejudice.

9

The preliminary issue of section 33 was heard on 22 January 2008 by HH Judge Faulks. In his judgment, the judge first recited the factors he was required to consider under section 33(3). The reason for the 12 month delay was the incompetence of the Mrs McKay's first solicitor and he did not think any blame could be attached to her. He also considered that there was no loss of cogency in the evidence by reason of the delay because liability had been admitted. It is now accepted on both sides that that was not quite right because there could have been loss of cogency in relation to quantum issues; however in fact there was not. He also said that the conduct of the defendant after the cause of action arose was irrelevant on the facts. It might have been more accurate (and fairer to the defendant) to say that no criticism could be made of the defendant's conduct. The judge rightly observed that section 33(3)(e) and (f) were irrelevant in this case.

10

The judge did not think that the section 33 factors were of much assistance in making a decision. He said that his decision would turn on the balance of prejudice. He rehearsed the main arguments on prejudice raised by each side. For the claimant it was said that she would be prejudiced if no direction were made even though she could recover damages from her former solicitor. There would be some prejudice to her in that she would have to sue her former solicitor and would also have to continue to sue the defendant on behalf of her children, whose claims were not time-barred because they were minors. She would have two actions going at once. Also, she would be at a disadvantage because her claim against her former solicitors was only for the loss of a chance. Of course, she would have a cast-iron case to recover some damages against her former solicitors but they had been privy to all the weaknesses of her case and although she was not vulnerable on liability, she could be on quantum issues. Finally, she would have to repay the interim payments she had received. However, the defendant had indicated that it would not require her to do so until put in funds by the former solicitor's insurer. The judge thought that all this amounted to 'some prejudice'.

11

The defendant's arguments were first that it might be prejudiced by an obligation to pay more interest than would have been the case if the claim had not been delayed; the longer the delay, the greater the interest on damages. The judge was not impressed by that argument as, he said, it would be open to the defendant...

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