National Westminster Bank Plc v Luke Lucas and Another (3) PI and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Patten,Lady Justice Gloster,Lord Justice Bean |
| Judgment Date | 16 December 2014 |
| Neutral Citation | [2014] EWCA Civ 1632 |
| Docket Number | Case No: A3/2014/1279 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 December 2014 |
[2014] EWCA Civ 1632
Lord Justice Patten
Lady Justice Gloster
and
Lord Justice Bean
Case No: A3/2014/1279
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Sales J
IN THE MATTER of the ESTATE of SIR JAMES WILSON SAVILE deceased
Royal Courts of Justice
Strand, London, WC2A 2LL
Mark Cunningham QC (instructed by Osborne Clarke) for the Claimant (National Westminster Bank plc)
Robert Ham QC and Teresa Rosen Peacocke (instructed by PWT Advice LLP) for the Trust
Keith Rowley QC, Piers Feltham and Justin Levinson (instructed by Slater & Gordon (UK) LLP) for the 3rd and 4th Defendants
Neil Block QC (instructed by Capsticks LLP) for the 6th Defendant
Andrew Warnock QC (instructed by DAC Beachcroft LLP) for the 7th Defendant
Hearing dates: 4 and 5 November 2014
Introduction
Sir James Savile, better known as Jimmy Savile, died on 29 October 2011. Under his will dated 24 July 2006 he made a number of small gifts and pecuniary legacies and gave lifetime interests to eight named beneficiaries in a fund of £600,000. The residue of his estate (including the interest in remainder in the settled fund) was given to the Jimmy Savile Charitable Trust ("the Trust") which had been set up in 1984 to benefit a wide range of charitable objects. His estate was sworn for probate at a value of £4,366,178 gross (£4,298,160 net). National Westminster Bank plc ("the Bank") was named as the executor of the will and obtained a grant of probate on 8 March 2012.
For many years Jimmy Savile enjoyed a successful career as a television presenter and personality for the BBC and during this time became associated with a number of NHS hospital trusts and other charities such as Barnardo's and Mind. But on 4 October 2012 ITV broadcast a programme entitled " Exposure: The Other Side to Jimmy Savile" which accused him of having been a serial child abuser and sex offender. As a result of this programme, the Bank began to receive letters from a number of potential claimants seeking compensation from the estate.
On 5 January 2012 the Bank had placed the usual form of advertisement for claims in accordance with s.27 of the Trustee Act 1925 which would have left it free in due course to complete the administration of the estate and to transfer the net assets (after payment of expenses and any creditors) to the various beneficiaries including the Trust. But the receipt of claims for compensation based on alleged assaults by Jimmy Savile created particular complications. It was impossible as of late 2012 for the Bank to know what was likely to be the number, scale and value of the claims or how many of them were likely to be substantiated. What it did appreciate was that if the claims were numerous, significant in value, and genuine then there was a serious possibility (even a probability) that, together with legal costs, they would, if successfully pursued to judgment, exhaust the assets and render the estate insolvent. With this in mind, the Bank instructed counsel to advise on the estate's potential liability for the claims and on 24 January 2013 it applied ex parte to Sales J. under CPR Part 64 for various forms of relief including an order pursuant to s.284(1) of the Insolvency Act 1986 (as modified by the Administration of Insolvent Estates of Deceased Persons Order 1986) ratifying its past expenditure in respect of the administration of the estate.
In the application notice the Bank also sought permission pursuant to CPR Part 8.2A to issue a claim form without naming the defendants. The claim form was framed in broad terms and seeks the determination of "all questions that arise for determination arising out of the administration of the estate". Paragraphs 2 and 3 of the claim form ask for the Court to give all necessary directions for that purpose and, if and so far as necessary, for the administration to be carried out under the directions of the Court.
In the application notice the Bank also sought an order that if permission were granted for the issue of the claim form then the Court should determine who should be the defendants to the proceedings.
It is important to stress that at this stage in the history of the matter no legal proceedings had been issued against the estate, let alone pursued to judgment. Moreover most, if not all, of the claims were or were likely to be out of time having regard to the three year limitation period applicable to tortious personal injury claims under s.11 of the Limitation Act 1980 ("the 1980 Act"). The problem, however, for the Bank and the estate was that the decision of the House of Lords in A v Hoare [2008] 1 AC 844 that claims for personal injuries resulting from sexual assaults fell within s.11 rather than s.2 of the 1980 Act meant that the three year period specified by s.11(4) could be disapplied by the Court under s.33(1) of the 1980 Act having regard to the degree to which the application of the limitation period would prejudice the claimant in question. Although the exercise of the Court's discretion to allow the action to proceed involves a consideration not only of the position of the claimant but also of the effect which an order under s.33(1) would have on the defendant, the Bank was understandably advised that in the case of meritorious claims made by vulnerable claimants who had been unable to come to terms with the abuse they had suffered, it was not unlikely that the Court would be persuaded to exercise its discretion in their favour. The Bank had therefore to proceed on the assumption that s.11 of the 1980 Act was not necessarily a complete answer to the claims and it is common ground on this appeal that they were right to do so.
On 1 April 2014 Sales J. made an order in the Bank's Part 8 proceedings, following a three-day hearing in February, under which he approved the entry by the Bank into a scheme ("the Scheme") negotiated between solicitors and counsel acting for those to whom I will refer as the PI claimants, for the Bank, and for bodies alleged to be vicariously liable in respect of the claims, including the BBC and Secretary of State for Health. The purpose of the Scheme is to provide a mechanism under which a PI claimant may submit his or her claim to the Bank so that the Bank, on a consideration of the supporting evidence, can decide whether to admit or reject the claim. It also contains provisions for resolving claims for contribution by other would-be defendants such as the BBC, the Secretary of State for Health (representing the NHS Trusts in whose hospitals many of the assaults are alleged to have occurred) and Barnardo's. I will come to some of the detail of the Scheme later in this judgment but, in broad terms, the PI claimant must fill in a claim form containing details of the alleged assault, particulars of any corroborating evidence relied upon, in the case of larger claims based on the more serious types of alleged assault a psychiatrist's report, a brief statement of the reasons relied upon to disapply the limitation period, and particulars of any special damages claimed.
The Scheme contains a list of eight categories of assault, ranging from rape to indecent assault involving touching over clothing, and provides a tariff rate of damages for each category. The evidence is that the rates agreed represent a discount from the amount of damages which could be awarded by the Court in such cases and that the figures represent the product of negotiation between the Bank, the PI claimants, the BBC and the Secretary of State for Health. The tariffs are not, however, discounted to reflect the risk to a PI claimant of failing (in court proceedings) to obtain an order under s.33 of the 1980 Act. The likelihood of the limitation period being disapplied is a matter for the Bank to consider in deciding whether or not to admit the claim for payment under the Scheme. Importantly, the Scheme also provides for existing PI claimants whose claims are agreed to receive £10,000 for their costs up to the approval of the Scheme and for further costs (for all agreed claims) to be paid in fixed amounts varying from £6,000 to £3,500 depending on whether a psychiatric report was obtained and by whom. The costs to the executor of operating the Scheme are to be paid out of the estate on an indemnity basis.
Although the Scheme as drafted and approved does not specify the method by which the Bank will scrutinise the PI claims, the judge had evidence in the form of a note from Mr Henry Witcomb of counsel who has been instructed by the Bank to review the claims submitted under the Scheme. He says in that note that counsel of an appropriate level would be instructed to assess the merits of the claim and to advise on whether the Court would be likely to disapply the limitation period. Counsel would then advise whether the Bank should reject the claim and, if necessary, defend it in any subsequent proceedings; should settle the claim but at a level of compensation below the tariff rates; or should settle the claim within the Scheme. In the latter two categories of case the Bank would also receive advice on the likely value of the claim.
As at 31 October 2014 the Bank has processed 68 claims under the Scheme and a further 131...
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