Christopher Brits Against Kilcoyne & Co

JurisdictionScotland
JudgeLady Stacey
Neutral Citation[2017] CSOH 24
CourtCourt of Session
Date16 February 2017
Published date16 February 2017
Docket NumberA61/14
Year2017

Web Blue CoS

OUTER HOUSE, COURT OF SESSION

[2017] CSOH 24

A61/14

OPINION OF LADY STACEY

In the cause

CHRISTOPHER BRITS

Pursuer

against

KILCOYNE & CO

Defenders

Pursuer: Grahame QC, McGregor; Digby Brown LLP

Defenders: Paterson; Clyde & Co

16 February 2017

[1] I heard a procedure roll discussion in which Ms Grahame QC for the pursuer moved her first plea in law, that the defenders’ pleadings relating to waiver are irrelevant and should not be remitted to probation. Mr Paterson for the defenders opposed that motion and sought a proof before answer.

[2] The background to the case is that the pursuer suffered an accident at work on 9 April 2009. He instructed the defenders, a firm of solicitors, to raise an action for damages. They failed to raise any such action by 9 April 2012, thereby missing the triennium. Shortly afterwards the pursuer instructed a new firm, Digby Brown. The present action is by the pursuer against his former solicitors for loss caused to him by their failure to raise an action in time.

[3] The averments to which the pursuer’s first plea in law are directed are found in answer 3. In that answer, the defenders admit that they were instructed to pursue a personal injury claim against the pursuer’s former employers. They admit that when an action was raised, after the triennium, by the pursuer’s new solicitors, the employers took a plea of time bar. They admit that that having been done, a telephone discussion took place between a representative of Digby Brown and a representative of the defenders’ insurers. They admit that during that conversation there was a discussion about the merits of a plea under section 19A of the Prescription and Limitation (Scotland) Act 1973 which had been made by the pursuer. They admit that it was agreed that its prospects of success were poor. The defenders then make averments that they do not know nor admit the precise circumstances of the pursuer’s accident. They go on to make positive averments that on 26 April 2012, Mr Hotson, representative of the insurers of the employers sent an email to Digby Brown. He stated in that email that his client would “not be taking the time bar defence”. The defenders aver that ex facie that email is an unequivocal waiver of the employers’ right to plead a limitation defence, upon which the pursuer was entitled to found in the pursuit of his claim. The defenders aver that the pursuer did not do so and instead pled a case under section 19A of the Prescription and Limitation (Scotland) Act 1973. No reference was made by the pursuer to Mr Hotson’s email. The defenders aver that the pursuer failed to plead that the email constituted a waiver of the employers’ right to plead a limitation defence. They aver that that failure was unreasonable. They state that it broke any causal connection that existed between the defenders’ failure to raise proceedings prior to 9 April 2012 and any loss sustained by the pursuer. They aver that esto the causal chain was not so broken, by not pleading waiver the pursuer failed to mitigate his loss. The defenders aver that Digby Brown did not tell their insurers about the terms of Mr Hotson’s email. In those circumstances, they aver that the insurers agreed that if the pursuer settled his claim with his former employers, the defenders would not argue that he had failed to mitigate his loss by not insisting on his section 19A plea.

[4] The pursuer’s pleadings in response to the pleadings from the defender admit the existence of the email and its terms. The pursuer argues that the email does not amount to an unequivocal and irrevocable waiver of the employer’s right to plead a limitation defence.

[5] Counsel for the pursuer submitted that the defenders’ averments were not sufficient to allow them a proof on the existence of an unequivocal and irrevocable waiver. She noted that their averments did not include the word irrevocable and she argued that that was necessary. She turned firstly to the case of Gordon v East Kilbride Development Corporation 1995 SLT 62 in which Lord Caplan sitting in the Outer House stated as follows:

“Prior to the commencement of the action there was an exchange of correspondence between the pursuer’s solicitors and the defenders’ insurers. The discussion before me on procedure roll centred on the effect of this correspondence (which is admitted by both parties). On 17 August 1988 the pursuer’s solicitors wrote to the defenders intimating that the pursuers had a claim. Although the amount of the claim was not specified some features of the pursuer’s loss were set out. It was recommended that the letter be passed on to the defenders’ insurers. The letter was apparently passed on to these insurers and on 22 September 1988 they wrote to the pursuer’s solicitors enquiring ‘entirely without prejudice’ when the pursuer returned to his employment. …They said that they were investigating the matter and were unable to comment on liability at that time. …On 3 February 1989 the insurers’ claim manager wrote to the pursuer’s solicitors… as follows: ‘In the interim we confirm we have no objections for you carrying out the inspection. However we would point out to you that liability in this case is not in dispute.’”

The reply from the pursuer’s solicitor was in the following terms:

“Thank you for your letter of 3 February. We are pleased to note that liability in this case is not in dispute. In the circumstances we see little point in proceeding with our inspection of the machine at this time.”

[6] In June 1989 the insurers made a payment of interim damages and correspondence between the solicitors and the insurers continued in 1990 with the solicitors seeking further interim payments and reminding the defenders’ insurers that they had admitted liability.

[7] The pursuer gave details of the correspondence in his pleadings. He argued that the letter of February 1989 constituted a unilateral obligation by the defenders which removed their entitlement to dispute liability. He averred that he had desisted from making certain enquiries including inspecting a machine and precognoscing witnesses because of the admission of liability.

[8] The defenders pled that the letter was written in the course of discussions carried out with a view to settling the claim. As settlement did not happen, the defenders wished to proceed with the court action and they pled in the case that the pursuer’s averments relating to unilateral obligation and personal bar should be excluded from probation as irrelevant.

[9] The argument for the defenders was that any admission of liability was plainly made in the course of negotiation for settlement and should accordingly be excluded from probation. Counsel for the pursuer argued that the statements were not part of any negotiation proposals but rather preceded any entry into negotiations. He argued that the admission of liability was binding on the defenders. He argued that it could be regarded as a unilateral contract or a waiver of the right to dispute liability. In any event it was a representation which could give rise to personal bar.

[10] His Lordship decided that our law accords a measure of confidentiality to admissions or concessions that may be made by parties in the course of abortive negotiations preceding litigation. Such material cannot generally be referred to or founded on in the subsequent litigation. He decided that the theory is that these admissions are not meant to be absolute in their terms but must be taken as qualified. There is a public interest in giving parties an opportunity to negotiate freely without fear that their representations could later be used against them to their prejudice. He noted that if a party wants a written communication to be regarded as part of a negotiation process this can be signified by the use of the phrase “without prejudice” or some other formula.

[11] His Lordship decided that the admission was offered gratuitously and was not tendered as being conditional on any particular response by the pursuer. He therefore did not regard the admission of liability as attracting the protection available to communications which are part of a negotiation process. However, his Lordship went on to state as follows:

“However my view on that matter leaves open the question of just what effect the admission had. I do not think that in admitting liability the insurers were intending to bind their clients to an irrevocable contractual commitment. One has to look at the whole background circumstances. The pursuer had not even quantified his claim nor was any information on the prognosis for the pursuer’s injuries available. It was conceded by pursuer’s counsel that if the defenders had admitted liability in their pleadings after litigation had begun they could have withdrawn such admission by way of adjustment before the record closed. If the pursuer is correct in suggesting that the admission is equivalent to an irrevocable contractual commitment, then even if the pursuer’s injuries had proved more serious than anyone could have anticipated… the defenders could not have modified their stance on the question of liability. If a new witness had become available then...

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