Charlotte Swift v Malcolm Carpenter

Hearing date: 6 February 2020

REASONS FOR RULING

Sir Terence Etherton Mr, Lord Justice Irwin and

Introduction

This judgment concerns an application by the appellant for a protective costs order (“PCO”) in an appeal against part of the decision of Mrs Justice Lambert DBE of 2 August 2018 on the trial of a personal injury claim by the appellant against the respondent. The appeal turns on a narrow but difficult issue, namely the decision by the Judge to make no award in respect of the additional capital cost which she found to be required by the appellant so as to fund the special accommodation costs arising from her disability. The reason for that decision of the Judge was that she considered she was bound by the approach set down in Roberts v Johnstone [1989] QB 878. The underlying cause of that outcome was the then current negative discount rate. The appeal proceeds on this issue with the permission of the Judge herself.

On 31 October 2013 the appellant was a front seat passenger in a motor car driven by the respondent. She was badly injured in a collision for which the respondent was responsible. At the time of the accident the appellant and respondent were partners and they have since married and have a child.

The appellant sustained serious injuries in the collision. She had to undergo an amputation of her left lower leg and had significant disruption of the right foot. She was a very active and sports-oriented individual and has made sustained efforts at rehabilitation. She has had continuing difficulties which it is not necessary to set out in detail, but they include severe continuing “phantom pain” in the amputated foot and continuing complications from the disruption of the structure of the right foot.

The Judge made a lump sum order in the sum of £4,098,051. She found that the additional capital cost of the required special accommodation would be £900,000 more than the value of the appellant's existing home. She concluded, however, that she was bound by the approach approved in Roberts v Johnstone and so, by the application of that approach in light of the then negative discount rate of -0.75%, she felt compelled to decline to make any award in respect of the additional capital cost which she found would arise.

On 6 February 2020 we ruled against the application by the appellant for a PCO and said that we would give our reasons in a written judgment. This is that judgment. In order to provide the context for our reasons we first set out the procedural history to date.

Intervention by the Personal Injuries Bar Association (“the PIBA”) in this appeal

On 9 May 2019 the PIBA applied to intervene in the appeal. Underhill LJ ordered that application to come before the full court. Written submissions from the PIBA on the appeal were filed and served on 4 July 2019, subject to the outcome of that application. At the opening of the hearing of the appeal on 23 July 2019 Underhill and Nicola Davies LJJ ruled that the PIBA should be permitted to intervene.

The appellant's applications to adjourn and to admit further evidence

At the hearing of the appeal on 23 July 2019 the appellant repeated the submission she made below that there is no requirement for expert evidence as to generic longer-term interest rates. She was “prepared to limit her claim to a figure which is lower than an unadjusted interest-rate-based lump sum award”. The appellant did apply, however, to introduce evidence of a particular mortgage package backed by a periodical payment order (“PPO”), so as to assist consideration of that alternative submission. The evidence was said to be helpful since it might assist this court in considering whether a PPO-based award was appropriate as an alternative to the Roberts v Johnstone approach.

In oral submissions on the opening of the appeal on 23 July 2019 Mr Derek Sweeting QC, for the appellant, emphasised that there was a difficult problem for this appellant (and others in a similar position) in seeking permission to call extensive expert and other factual evidence at trial. The likely response of a trial judge was to decline to admit such evidence, because the court below was bound to follow Roberts v Johnstone, and the evidence was unnecessary for that purpose. For this reason, he said, it was highly problematic to introduce below the proper evidential platform, so that other approaches to the problem could be considered on appeal.

On that basis, following some discussion before the court, the appellant sought an adjournment of the appeal.

The respondent opposed the admission of further evidence. The preamble to the respondent's opposition included the following factual points. The appellant had confirmed by way of communications between the parties that the first attempt to obtain any such evidence began only after the trial in the court below in August 2018, although the relevant attendance note disclosed indicates that earlier attempts had been made to obtain such evidence from a different financial institution. The respondent further noted that the only step taken by the appellant prior to trial in this regard was to obtain evidence as to mortgage products and rates by means of a basic internet search, the results of which were not disclosed or sought to be introduced at trial. The appellant therefore took no steps to obtain evidence as to the availability of a PPO-mortgage-backed product prior to trial.

The respondent noted the principles laid down in the well-known case of Ladd v Marshall [1954] 1 WLR 1489 and the provisions of the Civil Procedure Rules (“CPR”) 52.21(2)(b). The respondent also relied on the observation of Mummery LJ in Transview Properties Ltd v City Site Properties Ltd [2009] EWCA Civ 1255 at paragraph 23, that, if the reception of fresh evidence by the Court of Appeal would lead to a retrial, then its admission should only be allowed “if imperative in the interests of justice”.

The respondent, therefore, opposed an adjournment on the ground that the relevant evidence could have been obtained before trial.

The court (Underhill, Irwin and Nicola Davies LJJ) considered these arguments on the first day on which this appeal was originally listed. The court concluded that it was a proper course in this case, in the interests of the parties, and in the wider public interest, to adjourn the case, and to exercise the court's powers under CPR 52.21(2) to admit evidence which was not before the lower court, including oral evidence. It was made plain to the parties that, whilst of course it was for them to decide what evidence should be adduced, the court desired to reach a properly informed conclusion as to the underlying problem and the solution, in the contemporary conditions. On that basis, the appeal was adjourned to be re-listed.

Case management directions were given (by Irwin LJ) on 24 July 2019, the second day of the original appeal listing.

Subsequent Procedural Developments

Expert evidence was exchanged between the parties in late 2019. The Intervener reviewed the evidence and concluded that they should seek to serve evidence from one further expert, Mr Watson, whom the Intervener had already approached. The Intervener had indicated in July 2019 that they reserved their position as to making such an application. Mr Watson is an actuary who conducts a business in auctioning and valuing reversionary interests. Following consideration of this application the court (Irwin and Nicola Davies LJJ) ruled in favour of admission of the evidence, as part of extensive directions given following the decision on the PCO application in respect of which these reasons are given. It is not necessary to repeat the directions given or the reasons expressed orally on 6 February 2020.

The application for a PCO

On 26 November 2019 the appellant issued an application for a PCO in the form of an order that, if the appellant is unsuccessful in her appeal, she shall not be responsible for the respondent's costs incurred on or after 24 July 2019. The application was supported by a witness statement from the appellant's solicitor Grant Incles.

The application has throughout been opposed by the respondent. The respondent's solicitor David Cottam made a witness statement, and the respondent filed a skeleton argument at the same time. Both parties filed and served further skeleton arguments, and both parties made oral submissions to us on 6 February 2020.

Discussion

The general purpose of a PCO is to allow a claimant of limited means access to the court in order to advance their case without the fear of an order for substantial costs being made against them, a fear which would inhibit them from continuing with the case: R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, [2005] 1 WLR 2600, at [6]. A PCO can take a number of different forms, including that sought by the appellant in the present case: Corner House at [75].

It is common ground that the appellant has the benefit on her appeal, as she had at first instance, of qualified one-way costs shifting (“QOCS”)...