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Substantial Injustice and Fundamental Dishonesty: Will courts know it when they see it?

Kirsty Williams-Henry v Associated British Ports Holdings Ltd [2024] EWHC 806 (KB) - <a href="https://www.bailii.org/ew/cases/EWHC/KB/2024/806.pdf">https://www.bailii.org/ew/cases/EWHC/KB/2024/806.pdf</a>   Introduction   <ul> <li>In this case, the claimant brought a claim for injuries and losses she suffered after falling from the defendant’s pier in July 2018. Liability was agreed at 2/3 in the claimant’s favour. The trial on quantum and fundamental dishonesty lasted 11 days. The judgment of Ritchie J was handed down on 10 April 2024.</li> </ul>   <ul> <li>Late evidence concerning substantial injustice was admitted near the end of the trial.</li> </ul>   <ul> <li>The claimant’s schedule was £2,352,261 and the defendant’s counter schedule was between £259,174 and £367,857.  The Judge assessed quantum in the net sum of £596,704.</li> </ul>   <ul> <li>The claimant was found to be fundamentally dishonest and her claim was dismissed under s57 of the Criminal Justice & Courts Act 2015. </li> </ul>   <ul> <li>The Judge carried out a detailed analysis of the way courts should consider the claimant’s ‘shield’ of substantial injustice under s57(2) of the Act; in this case finding that the claimant would not suffer substantial injustice if the claim was dismissed.</li> </ul>   Law   <ul> <li>S57 of the Act provides:</li> </ul>   (1) This section applies where, in proceedings on a claim for damages in respect of personal injury (“the primary claim”) —   (a) the court finds that the claimant is entitled to damages in respect of the claim, but   (b) on an application by the defendant for the dismissal of the claim under this section, the court is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary claim or a related claim.   (2) The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed.   (3) The duty under subsection (2) includes the dismissal of any element of the primary claim in respect of which the claimant has not been dishonest.   <ul> <li>Substantial injustice has been considered by the High Court before; notably:</li> </ul>   <ul> <li>In London Organising Committee of the Olympic and Paralympic Games v Sinfield [2018] EWHC 51 where Julian Knowles J stated at [65]:</li> </ul>   ‘Given the infinite variety of circumstances which might arise, I prefer not to try and be prescriptive as to what sort of facts might satisfy the test of substantial injustice. However, it seems to me plain that substantial injustice must mean more than the mere fact that the claimant will lose his damages for those heads of claim that are not tainted with dishonesty. That must be so because of s.57(3). Parliament plainly intended that sub-section to be punitive and to operate as a deterrent. It was enacted so that claimants who are tempted to dishonestly exaggerate their claims know that if they do, and they are discovered, the default position is that they will lose their entire damages. It seems to me that it would effectively neuter the effect of s.57(3) if dishonest claimants were able to retain their 'honest' damages by pleading substantial injustice on the basis of the loss of those damages per se. What will generally be required is some substantial injustice arising as a consequence of the loss of those damages.’   <ul> <li>In Iddon v Warner [2021] His Honour Judge Sephton QC (sitting as a High Court judge) agreed with Julian Knowles J in LOCOG at [98]; both found that the claimants in their cases had not suffered substantial injustice and dismissed the claims.</li> </ul>   <ul> <li>In Woodger v Hallas [2022] PIQR P18 Julian Knowles also found that there was no proper basis for a finding of substantial injustice and dismissed the claim. He stated at [47&48]:</li> </ul>   ‘In Iddon, [103] the judge approached the question of substantial injustice by balancing on the one hand, the nature and extent Mrs Iddon’s dishonesty, and on the other the injustice to her of dismissing her whole claim, and came down in favour of dismissal on the basis that the former outweighed the latter. Mr Sasse commended this approach and commented that the judge had not undertaken any balancing exercise. Taking the same approach to this appeal, even on the assumption that there was some injustice to this Claimant (which I have found there was not), the same conclusion follows. The sustained nature of his dishonesty; the length of time for which it was sustained; and his involvement of others all make his dishonesty so serious that it would have outweighed any injustice to him.’   <ul> <li>Julian Knowles J expressed no surprise when he was told by counsel there was no case which had defined the meaning of ‘substantial injustice’, stating instead that county court judges would generally ‘know it when they see it’.</li> </ul>   The claim   <ul> <li>In Williams-HenryRitchie J summarised his assessment of the credibility of the claimant (and her mother) at [118]:</li> </ul>   ‘I have come to the conclusion that both the Claimant and her mother have been thoroughly dishonest in their presentation of the Claimant’s symptoms and disabilities and have sought to mislead clinicians, medicolegal experts and this Court about the Claimant’s health, functioning, activities of daily living and her work abilities. I have considered the subjective elements above but looking at the Claimant’s statements which I have identified as lies above and below, objectively, taking into account what a reasonable member of the public would consider to be honest, knowing all of the relevant facts, I have come to the conclusion that the Claimant and her mother have been objectively dishonest. I will set out the law in relation to findings of dishonesty below.’   <ul> <li>He described the claimant’s injuries in these terms at [158]:</li> </ul>   ‘I find that in the fall the Claimant suffered skull fractures and a moderately severe TBI. This involved substantial frontal and temporal lobe damage. She has been fortunate and has achieved a very good recovery since the fall. Her intellect and cognition are retained intact. Her symptoms from the TBI are mainly mild to moderate fatigue, irritability, anxiety, some disinhibition, some emotional dysregulation and some mild reduction in short term memory when tired. I do not consider that the Claimant has suffered organic cognitive decline or substantial loss of the function of her memory. I do not consider that the Claimant has lost the ability to multi-task or her special awareness.’   <ul> <li>The Judge also identified the following injuries: fractured ankle; fractured pelvis; sequestrated lumbar disc; and low mood. Also, finding that the claimant’s depression was not the cause of the claimant’s dishonesty at [165].</li> </ul>   Fundamental Dishonesty   <ul> <li>Ritchie J reviewed the law relating to s57 CJCA generally at [171&172]; and made a series of specific findings of the claimant’s dishonesty and its affect upon the claim at [173]:</li> </ul>   ‘The burden of proof lay on the Defendant and I consider that it has been satisfied by the Defendant in relation to the specific findings of the lies I have set out above. Those covered conscious gross exaggeration and fabrication of the true duration and/or extent inter alia of: (1) her left sided hearing loss, (2) her disability when walking, (3) her noise intolerance, (4) her dizziness and balance issues, (5) her fatigue, (6) her lack of spatial awareness, (7) her ankle pain and range of movement, (8) her left sided hand grip and alleged weakness, (9) her cognitive disability, (10) her memory and cognitive functioning, (11) her light intolerance, (12) her back of head pain, (13) her ability to shower alone, (14) her foreign travel, (16) her ability to socialise and her consumption of alcohol, (17) her ability to drive long distances, (18) her need for help with ADL, (19) her headaches.   Overall, I find that the Claimant has presented her function and disabilities to clinicians, medico-legal experts and the Court dishonestly. The effects of this dishonesty on the claim have been substantial and fundamental. It has led to the experts instructed on her behalf making recommendations for care and case management in the past and in future which were and are far in excess of her actual needs caused by the accident. The claim for care was pitched at around £1 million. Some experts recommended care and therapies for life. The dishonesty has led to the cost of surveillance, multiple supplementary medical reports, disclosure applications and the need for a 2-week trial. It has substantially affected the presentation and preparation of both the claim and the defence. I consider that in law these matters are fundamental to the claim.’   <ul> <li>The Judge was not satisfied that the claimant’s repeated lies to the DWP (when applying for benefits) or to L&G Insurance (for life insurance) were fundamental to the claim [174].</li> </ul>   Substantial Injustice   <ul> <li>Concerning ‘substantial injustice’ Ritchie J reviewed the decisions of LOCOG and Woodger v Hallas [175&176] and stated at [177]:</li> </ul>   ‘The principle to be applied is that fundamental dishonesty will result in the Claimant losing her genuine damages. This penalty is intended by Parliament. So, the starting point is that a dishonest claimant is not suffering an injustice per se by being deprived of his/her genuine damages. Once fundamental dishonesty has been found by the Judge then the Court must consider whether the dismissal will cause SI. However, trying to identify whether dismissing a claim for damages with a properly assessed genuine quantum of say £600,000 would cause any or even a substantial injustice to a claimant, whilst ignoring the very dismissal which is the only operative cause of any potential injustice, is imposing a blindfold on the Judge which the Act itself does not impose. I do not understand how a Judge will know injustice when she/he sees it, with the blindfold put on. If that is what Knowles J. was saying then I respectfully do not agree with his ruling on the interpretation of SI. The plain words of the Act tie the responsibility to assess any resulting SI to the dismissal of the claim. In my judgment it is the dismissal of the claim for damages that is the trigger for the analysis of whether a substantial injustice will occur if no damages are awarded. One cannot ignore the very thing which S.57(3) takes away when considering the injustice of the taking away. I accept, of course, that the aim of the section is to punish dishonesty by the dismissal of the claim. But this is tempered by Parliament’s inclusion of S.57(2). This section gives the Judge discretion which, is to be exercised fairly and only if a threshold with two parts is reached. Part one is a finding of injustice to the Claimant. Part two is a finding that the injustice is substantial.’   <ul> <li>At [78] Ritchie J identified the approach to be used by Courts when deciding whether the claimant can use the ‘shield ‘of substantial injustice:</li> </ul>   I consider that the correct approach when deciding whether a substantial injustice arises is to balance all of the facts, factors and circumstances of the case to reach a conclusion about SI. The relevant factors in my judgment are all of the circumstances and include:   (1) The amount claimed when compared with the amount awarded. If the dishonest damages claimed were small or moderate compared to the size of the assessed genuine damages which were substantial or very substantial this will weigh more heavily in favour of an SI ruling.   (2) The scope and depth of that dishonesty found to have been deployed by the claimant. Widespread and gross dishonesty being more weighty against SI than moderate or minor dishonesty.   (3) The effect of the dishonesty on the construction of the claim by the claimant and the destruction/defence of the claim by the defendant. This would be measured by considering all matters including the costs consequences of the work done in relation to the dishonesty compared with the work done had there been no dishonesty.   (4) The scope and level of the claimant’s assessed genuine disability caused by the defendant. If the claimant is very seriously brain injured or spinally injured, then depriving the claimant of damages would transfer the cost of care to the NHS, social services and the taxpayer generally and that would be more unjust than if the claimant had, for instance, a mild or moderate whiplash injury. The insurer of the defendant (if there is one) has taken a premium for the cover provided. Why should the taxpayer carry the cost?   (5) The nature and culpability of the defendant’s tort. Brutal long term sexual abuse, intentional assault or drug fuelled, dangerous driving being more culpable than mere momentary inadvertence.   (6) The Court should consider what the Court would do in relation to costs if the claim is not dismissed. The Judge should ask: will the Court award most of the trial and/or pre-trial costs to the defendant in any event because fundamental dishonesty has been proven? Also, will the claimant have to pay some or all of his/her own lawyers’ costs out of damages if the claim is not dismissed? These both aim towards answering the question: “what damages will be left for the claimant after costs awards, costs liabilities and adverse costs insurance premiums are satisfied?” If the genuine damages to be received by the claimant will be substantially reduced or eradicated by the adverse costs awards, then it is less likely that SI will be caused by the dismissal.   (7) Has the defendant made interim payments, how large are these and will the claimant be able to afford to pay them back?   (8) Finally, what effect will dismissing the claim have on the claimant’s life. Will she lose her house? Will she have to live on benefits, being unable to work?   <ul> <li>Somewhat unusually, the claimant had admitted specific evidence to persuade the Court that she would suffer substantial injustice if the claim was dismissed. This included evidence from herself, her mother and her treating psychiatrist (all of whom provided sworn statements). The evidence was to the effect that the claimant would commit suicide if the claim was dismissed.  However, Ritchie J stated at [204]:</li> </ul>   ‘I consider that I cannot take into account the threat of or the risk of suicide when making the decision on fundamental dishonesty.’   <ul> <li>At [205] the Judge identified the matters which were relevant to the issue of substantial injustice:</li> </ul>   ‘For the decision on SI I shall take each relevant factor in turn. (1) The amount claimed when compared with the amount awarded. The Claimant sought £2.5 million and recovered just under £600,000. The difference is not outside the usual bounds of claims and awards in personal injury claims, however the dishonest parts of the claim inflated the damages sought by over £1 million. (2) The scope and depth of the dishonesty found to have been deployed by the Claimant. The scope of the Claimant’s untruths was wide. They related to her asserted pain, her ADL, her social life, her physical disabilities and her mental disabilities. The level of dishonesty was high in my judgment and was for financial gain. The Claimant told ancillary untruths to the DWP and the life insurer L&G for financial gain alongside her many fundamental untruths to this Court, her treating clinicians and the experts. (3) The effect of the dishonesty on the construction of the claim by the Claimant and the destruction/defence of the claim by the Defendant. I consider that the Claimant’s dishonesty had a very substantial effect on the trial, on the preparation for the trial and on the evidence relating to the claims for case management, care, therapies, loss of earnings and the figure for pain and suffering and loss of amenity. It also led to many more experts’ reports. (4) The scope and level of the Claimant’s assessed genuine disability caused by the Defendant. The Claimant is moderately severely brain injured but has made a very good physical and cognitive recovery. Depriving the Claimant of damages will not transfer much, if any, cost of care to the NHS, social services and the taxpayer generally. In my judgment she can work and live independently. (5) The nature and culpability of the Defendant’s tort. The Defendant’s tort was at the lower end of the culpability scale. The pier had stood in the state it was in for years with no previous accidents. (6) The Court should consider what the Court would do in relation to costs if the claim is not dismissed. If I were to find SI, I would almost certainly award the trial and pre-trial costs to the Defendant in any event because fundamental dishonesty has been proven. These costs may be very substantial considering the size of the Defendant’s costs budget. I have, of course, not seen any Part 36 offers, but the fundamental dishonesty will have an overarching effect on the costs orders which usually flow from Part 36 offers. The Claimant would most likely have to pay some of her own lawyers’ base costs and success fees out of damages if the claim is not dismissed because of my probable adverse costs orders against her. What damages will be left for the Claimant after adverse costs awards, her own lawyers’ costs and insurance premiums are satisfied? Will her adverse costs insurance cover fundamental dishonesty? I doubt it, but have not been shown any policy. In my estimation the genuine damages to be received by the Claimant will be reduced (or potentially eradicated) by the adverse costs orders and the standard terms of her own CFA (which I have not seen but which usually entitle the lawyers to recover their costs on recovery of any sum in damages). It would have assisted the Court if I had been shown the CFA and the adverse costs insurance policy for the SI issue. (7) Finally, what effect will dismissing the claim have on the Claimant’s life. I am unsure what the effect will be on the Claimant’s life. I consider that she is capable of work, physically and mentally, from the perspective of the injuries caused by the Defendant. I take into account the evidence of the Claimant’s suicidal ideation. I consider that the Claimant’s current unstable state of mental health has been caused by her own dishonesty. The advice she received to take a sabbatical and later, to give up work, was likewise so caused. The Claimant was in work until October 2022. In my judgment her stopping work was not caused by the tort. I am unclear whether the dismissal of the claim will lead to the Claimant being unable to repay her mortgage. She paid part of it off out of the £108,000 she received from an insurance policy after the fall. She should be able to afford the reduced mortgage repayments if she gets back to work. She has minimal savings.’   <ul> <li>Noting that no application had been made by the defendant for repayment of a £75,000 interim payment under CPR25, and accepting that to repay the sum the claimant would lose her home which combined with the dismissal of the claim could be descried as a ‘substantial injustice’ because she would be ‘homeless, jobless, depressed and suicidal’ the Judge balancing the remaining factors before reaching a decision at [206]:</li> </ul>   ‘This Claimant maintained before trial, in open Court and in her last served witness statement, that she had never lied during this claim. I take into account the wide scope and considerable depth of the Claimant’s fundamental dishonesty in the claim, compared to the low level of culpability of the Defendant (the Defendant company was also only 2/3rds to blame on liability). I take into account the large sums which would be taken out of the Claimant’s damages by adverse costs orders if damages are awarded. I further take into account the excellent recovery which the Claimant made from the injuries with high quality NHS treatment both at hospital and for years afterwards. On balance, I do not find that it would be a substantial injustice to dismiss the claim. I know it looks like a large sum of money to deprive a genuinely injured person of, but by drafting and passing S.57 Parliament sought to stamp out dishonesty which is fundamental in personal injury claims and the Claimant has breached this law. Finally, I take into account that the Claimant was wholly unrepentant when she gave evidence and had sought, in parallel, to defraud the DWP and L&G insurance about her disabilities.’   <ul> <li>The claim was dismissed.</li> </ul>   Takeaway   <ul> <li>Ritchie J conducted a detailed analysis of the relevant factors a court should identify when considering whether a claimant can prove substantial injustice and avoid the draconian dismissal of a claim under s57 CJCA.  This is a significantly more nuanced approach than used by the courts is cases such as LOCOG, Iddon and Woodger v Hallas.   I expect that in future other courts will shape their determination of substantial injustice by reference to the criteria identified by Ritchie J in Williams-Henry.   </li>   <li>Defendants can take comfort in the robustness of the decision against the evidential background of widespread and destructive dishonesty.  It is another success for a defendant; I am unaware of any reported decision where a claimant has successfully used the ‘shield ‘of substantial injustice.</li>   <li>There is however some comfort for claimants.  Courts should not ignore the fact of the dismissal of the claim and conduct their assessment ‘blindfold.’  In cases where the dishonesty is less extensive and the affect upon the conduct of the claim by the defendant more limited, claimants may now use the evidential framework used by Ritchie J to protect themselves against the punitive operation of s57.</li>   <li>Will courts know substantial injustice when they see it? I think its more likely to be identified now than before.  </li> </ul>   <a href="https://parklaneplowden.co.uk/Corin_Furness">Corin Furness</a> is a member of the PLP Serious Injuries Team and Head of the Civil Fraud & Credit Hire Team.

Setting up a bare trust to manage a child’s interim payments: an analysis of GWS (A Minor by their Litigation Friend FWH) and others v St Thomas Becket Catholic Primary School

Background   The Claimant was a seven-year-old boy who had suffered life threatening full thickness burns covering 45% of his body surface area. He had received interim payments totalling £430,000, of which £290,000 had been spent. The issue was what should happen to the remaining £140,000 which was left in the solicitors’ client account for the Claimant.   The application   The Claimant proposed that a trust should be set up to administer and manage the interim payments (the trust option). The Trust would be managed by two trustees: the litigation friend and a professional trustee who would work alongside the Claimant’s solicitors.   The decision   Master Brown refused the application for the following reasons:     <ol> <li>The other option for managing the funds was payment into the special account which was managed by the Court Funds Office (CFO). It was argued by the Claimant that there were significant processing delays by the CFO and that this would cause ‘serious problems’ with the administration of therapies etc. Master Brown did not find this a compelling argument, commenting that requests for payments often took a few weeks and the process could be expediated if necessary. Furthermore, it was possible to arrange for regular payments to be made.</li> </ol>   <ul> <li>The Claimant argued that the trust option provided greater investment opportunities; Master Brown however noted that the current Special Account rate was 6% which was as favourable as other investment returns. In any event, it was likely that further professional advice regarding investment would be required if the trust option was approved, which would lead to further costs.</li> </ul>   <ul> <li>Master Brown applied significant weight to the costs of the trust option. The costs of the CFO would be ‘substantially less’ than the costs of setting up and managing a trust. Master Brown was not satisfied that the costs of setting up and administering the trust were recoverable from the Defendant and therefore these costs would be paid out of the First Claimant’s damages. He commented that ‘even if the trust option had greater advantages to it than I consider it to have, I would be uneasy about an arrangement that committed the Claimant to the level of charges associated with the proposed trust without the reasonable level of certainty that it would be recovered from the Defendant’.</li> </ul>   <ul> <li>The Claimant argued that one advantage of the trust option was that it might protect entitlement to benefits which would otherwise be lost. Master Brown noted however that the Claimant was not expected to receive benefits as a minor and therefore this was not a relevant issue now.</li> </ul>   <ul> <li>Although it was possible that the First Claimant may want to hold his damages in trust on turning 18, this was not the only option available to him. Master Brown was not satisfied that there was an obvious saving to the Claimant if the trust was set up now. </li> </ul>   Master Brown therefore found that it was in the Claimant’s best interests for the monies to be paid into the special account in the CFO.   Discussion   As with any best interests decision, it is a balancing act of various factors. The compelling points were that the Claimant was likely to have capacity upon reaching the age of 18 and therefore would have the right to access and manage his own award (which would not necessarily require a trust) and the costs of the trust.   Master Brown has placed significant weight on the costs of the investment options. In the absence of any compelling basis for the setting up and maintaining of a trust, investment in the CFO where the costs were very modest was clearly in the Claimant’s best interests.   In this case, Master Brown commented on the lack of evidence regarding the actual (as opposed to the estimated) costs of setting up and managing the trust and the realistic difficulties in managing payments through the CFO. Those making applications to invest money elsewhere will require cogent evidence as to how the advantages outweigh the costs of managing the investment.

The King (on the application of) Mr Gary Parkin v His Majesty’s Assistant Coroner for Inner London (East) [2024] EWHC 744 (Admin)

Judicial review of a coroner’s decision on the scope of an inquest - Article 2 ECHR  - High Court considering the existence of the positive operational duty in relation to the death of a 74 year old following a domestic fire caused by the unsafe use or disposal of smoking materials   Background   <ul> <li>Mrs Rosslyn Wolff, age 74, was found dead in her home on 11 January 2022 following a domestic fire.</li>   <li>A fire investigation concluded that the most probable cause of the fire was unsafe use or disposal of smoking materials.</li>   <li>Mrs Wolff lived on her own.  She was a hoarder.</li>   <li>As well as being a smoker, she was diabetic.</li>   <li>She had been detained briefly under the Mental Health Act 1983 on two occasions in September 2021, but her symptoms of confusion were then diagnosed as not proceeding from mental ill health but from hyperglycaemia.</li>   <li>The fire brigade had received multiple referrals for home safety visits over the years.  It had tried to visit Mrs Wolff on 8 or 9 occasions and each time Mrs Wolff had either refused the visit or been uncontactable.</li>   <li>There had been one successful visit by the fire brigade a little over two years prior to Mrs Wolff’s death and smoke alarms were fitted.</li>   <li>Mrs Wolff had come to the attention of her local authority social services in November 2019 after her son, Mr Parkin, had raised concerns about his mother’s self-neglect, poor living conditions and abusive treatment at the hands of another family member.</li>   <li>An initial multidisciplinary assessment was carried out.  No mental health concerns were identified in relation to Mrs Wolff but ‘after much persuasion’ she agreed to a care package to support personal hygiene and medication compliance.</li>   <li>Health and social care professionals noted ‘ongoing risk presented by her unwise decision making’, including her refusal to engage in conversations about her ‘environmental circumstances’.  The plan was to continue to offer follow-up and engagement with her social worker and a fire assessment was to be made of her home by the fire brigade.</li>   <li>There followed multiple visits by the social worker on which occasions Mrs Wolff either refused to answer the door or declined offers of help (including with getting her house cleaned and her garden cleared).</li>   <li>It was unclear from the evidence whether the fire assessment ever took place.</li> </ul>   The legal framework   <ul> <li>The presenting question raised by Mr Parkin’s challenge was whether the Assistant Coroner had an Art. 2 investigative duty in relation to Mrs Wolff’s death pursuant to section 5(2) of the Coroners and Justice Act 2009 (‘Where necessary in order to avoid a breach of any Convention rights…the purpose mentioned in subsection 1(b) is to be read as including the purpose of ascertaining in what circumstances the deceased came by his or her death’).</li>   <li>The test of necessity is passed if it is arguable that a public authority is in breach of a substantive duty under Art.2 ECHR.</li>   <li>The leading authority on the positive operational duty is the decision of the Supreme Court in Rabone v Pennine Care NHS Trust [2012] 2 AC 72, a case about an NHS voluntary psychiatric inpatient, known to be suicidal, who died by suicide on a visit home.</li>   <li>Rabone identified the threshold test of ‘real and immediate risk to life’ as a necessary but not sufficient condition for the existence of the duty ([21]).</li>   <li>The threshold test of ‘real and immediate risk to life’ was further considered by the Supreme Court in R (Maguire) v Blackpool and Fylde Senior Coroner [2023] 3 WLR 103 at [241]: ‘A real risk is one that is objectively verified and an immediate risk is one that is present and continuing’.  The risk must be a risk specifically of death, not just of harm, even of serious harm ([38]).</li>   <li>In addition to the threshold test of ‘real and immediate risk to life’, the following principles emerged in Rabone: (1) ‘[T]he operational duty will be held to exist where there has been an assumption of responsibility by the state for the individual’s welfare and safety (including by the exercise of control)’ ([22]); (2) ‘[T]he vulnerability of the victim is a relevant consideration’ and ‘[i]n circumstances of sufficient vulnerability, the ECtHR has been prepared to find a breach of the operational duty even where there has been no assumption of control by the state’ ([23]); (3) The nature of the risk to life is relevant (‘Is it an ‘ordinary’ risk of the kind that individuals in the relevant category should reasonably be expected to take or is it an exceptional risk?’ ([24])).</li>   <li>As to the scope of the positive obligation, ‘this will depend upon whether the authorities should have foreseen a real and immediate risk and what more they could be expected to do’ (Rabone, [101]). </li> </ul>   The Assistant Coroner’s decision   <ul> <li>The Assistant Coroner found that Art. 2 was not engaged.</li>   <li>What was referred to as a ‘brief ruling’ concluded that the bare fact that a public body may have interacted with the citizen in question “does not thereby determine whether Article 2 is engaged”; that the evidence did not show that there was a real and immediate risk to Mrs Wolff’s life; and that in circumstances where Mrs Wolff was deemed to have capacity, she had the right to make unwise or inappropriate decisions and “[t]he state does not take on added duties or responsibilities in such circumstances”.</li>   <li>The Assistant Coroner considered that “[a]ny shortcomings or failings which might be established [could] be investigated within a Jamieson inquiry and scrutinised as necessary within a Report to Prevent Future Deaths, or even a finding of neglect if the evidence proved as much”.</li> </ul>   The outcome of the judicial review   <ul> <li>Real and immediate risk to life: Mrs Wolff was ‘certainly, up until the time of her death, a present and continuing risk to herself in many ways’ ([39]).  The authorities ought to have been aware of a real and present risk of a house fire at Mrs Wolff’s home, which risk was a multifactorial one presented by a number of known factors, including Mrs Wolff’s poor smoking habits indoors, hoarding, recent history of carelessness with her diabetes medication (producing spells of confusion and debility, which was relevant to her ability to deal with any fire risk or actual fire) and her known unwillingness to be advised or take action on some or all of these issues ([44]).  The risk of death was inherent in the risk of a house fire.  The real and present risk of a house fire was, in all the circumstances, a real and present risk to Mrs Wolff’s life, objectively evidenced ([45]). Despite the ‘real and immediate risk of death’ threshold being a high one, it was passed in Mrs Wolff’s case.</li>   <li>The Article 2 operational duty: It is not every risk to life – even in the case of a social services client or an NHS patient – which gives rise to an operational duty on the state to prevent it ([49]). Mrs Wolff’s circumstances were not the ‘paradigm’ for the operational duty arising since she was not a person over whom the state exercised control and she was not in the custody of the state.  However, being subject to state control is only the paradigm case and the authorities do not say that being under state control is necessary for the duty to arise ([49]).  The deceased in Rabone was not herself under formal state control at the time of her death.  That being said, her circumstances were somewhat special in that had she insisted on leaving the hospital, the authorities could and should have exercised their powers under the Mental Health Act to prevent her from doing so (Rabone, [34]). Mrs Wolff’s circumstances were very different from these.  The state had ‘no verifiable power to control or detain her’ and ‘no apparent basis in law for exercising control over her’ ([50]). She was not willing to cooperate with the authorities and they could not compel her to do so.  Counsel for Mr Parkin argued that the state had nevertheless assumed responsibility for Mrs Wolff, even if not by the exercise of control, citing the fact that the multidisciplinary team had addressed itself to the relevant risk to life and put together a plan for her welfare and safety in that very context.  This argument was rejected for the following reasons: (1) ‘Helping and supporting an individual, even in the discharge of legal duties, does not routinely give rise to the operational duty’ – ‘Something more is needed’ ([52]); (2) The care plan that was devised for Mrs Wolff was addressed to the mitigation of the risks, not their elimination, and was necessarily dependent on overcoming Mrs Wolff’s resistance to state interference.  Whilst in cases of sufficient vulnerability the ECtHR has been prepared to find a breach of the operational duty even where there has been no assumption of control by the state, this point has two important limitations: (1) The example given in Rabone of ‘sufficient vulnerability’ is that of a local authority failing to exercise its powers to protect a child at known risk of abuse.  Unlike Mrs Wolff, the child ultimately lacks autonomy in the matter; (2) the qualifier of ‘sufficient’ vulnerability indicates that not every degree of vulnerability will be relevant.  Mrs Wolff was an adult of confirmed competence and psychiatrically sound mind and was fully informed of the risks she was running ([57]). As to whether the risk was an exceptional one giving rise to the Art. 2 duty, it was observed that the risk of a house fire is one we all run, and in some circumstances that risk is heightened (for example due to the nature or state of the house or because of factors particular to the individual (such as age or disability)).  Mrs Wolff’s risks, even in combination, were ‘[still] of the kind that individuals, rather than the state, are reasonably expected to deal with’ ([61]).</li>   <li>Arguable breach: If the Court was wrong in its determination that the section 5(2) necessity test was not passed, the next step would be to consider whether it was arguable that the duty had been breached.  As to the scope of the duty and standard of what state authorities are expected to do faced with a real and present risk to life, the touchstone is reasonableness.  In Mrs Wolff’s case, the authorities’ strategy was ‘necessarily long term, patient and opportunistic, based on nudging Mrs Wolff towards wiser choices, and making the most of such chances as she permitted for intervention’ ([69]).  Even if the authorities were under an Art. 2 duty, its scope was a limited one and necessarily included respect for Mrs Wolff’s autonomy.  Having regard to this, the Court did not consider it arguable that the duty was breached on the facts of Mrs Wolff’s case.  The Court observed that whilst the threshold of arguability is a low one, ‘to be credible it must have some evidence base’ ([70]).  The argument that the authorities could and should have done more in the months leading up to Mrs Wolff’s death ‘[did] not advance beyond the speculative to the credible’ ([70]).</li> </ul>

Pregnancy and Maternity Discrimination in the Workplace – Changes in 2024

2024 has already brought some significant changes to pregnancy and maternity discrimination law.   But what are they? A re-hash of what was already there? A step too far? Or a great rebirth of maternity protection?   This article seeks to reflect those key developments, and what they might mean for women, employers, and practitioners alike.   (1) An Extension of Redundancy Protections   Until 6th April 2024, Regulation 10 of the Maternity and Parental Leave Regulations 1999 (“MPL”) offered some women positive discrimination, rarely seen outside disability discrimination law.   If it was not practicable by reason of redundancy, to continue to employ someone during their maternity leave, that person obtained priority status for any suitable alternative employment. If a role was suitable, they had to get it. Otherwise, it is Automatic Unfair Dismissal.   From 6th April 2024, it has been substantially widened. That priority now also extends to:   <ul> <li>‘The Protected Period’, being from when the employer is informed of a pregnancy, until either Statutory Maternity Leave (“SML”) starts, or 2 weeks after the pregnancy (if there is no SML);</li> </ul>   <ul> <li>‘The Additional Protected Period’. This starts after SML, and ends 18 months after the expected week of childbirth (see exact wording for the specific day);</li> </ul>   This could triple the protection women have. It extends this positive discrimination from not only the period of maternity leave, but to potentially around nine months beforehand, and potentially nine months or so afterwards.   Employers must be aware of this when conducting any redundancy exercise. No longer must they only consider those women on maternity leave for any suitable alternative role. Now, they must consider anyone whom they have been told is pregnant, or whom has recently returned from maternity leave. This will likely encapsulate many more persons.   (2) Widening of Section 18 EQA 2010   Section 18 EQA 2010 offers protection from unfavourable treatment because of the protected characteristic of pregnancy and maternity. However, it has had its drawbacks.   Before this year, it only applied during the ‘protected period’, which was the duration of any pregnancy and maternity leave. This was the specific impact of S.18(5) EQA 2010. Perhaps that sounds sensible?   However, what about the woman returning from maternity leave, whom finds their role has been changed, their office occupied, and themselves isolated in the workplace, all because she had been pregnant?   That is unfavourable treatment due to maternity, but they seemingly had no claim under S.18. They would have had to rely on S.13 EQA 2010, and (potentially) the difficult comparative exercise which that can entail. Even then though, would a man returning after one year have been treated any differently? Perhaps not.   From 1st January 2024, the position is different. The EQA 2010 (Amendment) Regulations 2023 have amended S.18(2) EQA 2010, and removed S.18(5) EQA 2010. This means that if treatment was due to pregnancy, but occurred after the protected period, S.18 claim still exists. This seeks to reflect the ECJ decision in Brown v Rentokil [1998 ICR 790]. S.18 also offers protection if a person has ‘exercised’ the right to maternity leave.   This is a further protection for women, particularly when no indirect discrimination or harassment claims can be brought on the grounds of pregnancy/maternity (See S.19 and S.26). It is arguable that EU Law may well have offered this protection in any event through Brown, but having it codified in S.18 is certainly helpful, particularly post-Brexit.   (3) Direct Discrimination   Again, until this year, S.13(7) EQA 2010 prevented women claiming that less favourable treatment due to breastfeeding, was direct sex discrimination in the workplace. Again, this was in conflict with EU Law, such as the ECJ decision in Otero Ramos v Servicio Galego de Saude [2018 ICR 965].   This caused an issue. If you were dismissed due to breastfeeding in the workplace, (unless you could rely on EU Law) the statute prevented a S.13 Direct Discrimination Claim ‘because of sex’. A S.18 EQA 2010 claim might have been closed too, for the reasons above. This was unsatisfactory.   From 1st January 2024, Section 13(7) is no more. This means that less favourable treatment due to breastfeeding can now be direct sex discrimination.   Recent case law has assisted in this area too. Cases such as Commissioner of the City of London Police v Geldart [2021 ICR 1329], suggest that a woman who has been treated unfavourably on the ground of pregnancy or maternity, would not need to compare herself to a man to establish direct sex discrimination. If the ‘reason why’ question suggests pregnancy/maternity was the reason for the treatment, a direct sex discrimination claim will likely succeed.   What is gained by this, is a good question.   Section 18(7) prevents a S.13 direct sex discrimination claim being brought, if a S.18 claim can be brought on the same facts. Given the widening of S.18, as described above, this could arguably make some of the benefits of the widening of S.13 redundant. In reality, the key benefit is likely to concern less favourable treatment due to breastfeeding, which will now certainly succeed as a S.13 Direct Sex Discrimination claim, if not under the new widened S.18.   A final option might be a Section 13 EQA 2010 claim, for direct discrimination ‘because of pregnancy or maternity’. It is again questionable what the benefit in it might be. Such a person has S.18, which does not need a comparator. However, given the specific wording of S.18(7) EQA 2010, it seems that S.18 does not prevent such a claim of S.13 direct pregnancy/maternity discrimination, even if a S.18 claim could succeed on the same facts.   (4) The Paternity Leave (Amendment) Regulations 2024   And to close, one for the fathers. If the expected week of childbirth is after 6th April 2024, there is now greater flexibility in when paternity leave can be taken. It can now be taken any time within the first year of birth, and can be taken in 2 x 1-week blocks, rather than only in 2-week blocks.   Conclusion   Some of these changes are codification of ECJ caselaw. Yet, their codification in the EQA 2010 is of real assistance for litigants, employers and practitioners alike.   The impact of the changes to the EQA 2010 are notable. Unfavourable Treatment by an employer because of pregnancy/maternity is now more likely to lead to a successful claim, either under S.13 or S.18. Employers may now lose the technical arguments about ‘protected periods’, which may have allowed them to defend many a claim.   But some changes have far more weight. The impact of the changes to the MPL regarding redundancy is clear, and employers must be alive to them. They offer a significant widening of the protection to women, potentially giving them priority treatment in redundancy situations for over two years of their working life. It is the making of reasonable adjustments on a vast scale indeed.

A reminder from the EAT that Employment Tribunals must have regard to disabilities of litigants in person during case management stages

Mr B King v Gemalto Thales UK Ltd 2024 EAT 34 (8 March 2024)   The Background   Mr King (“the Claimant”) started working for Thales (“the Respondent”) in December 1999. The Claimant is vulnerable with mental health conditions. He brought an unfair dismissal claim to the Employment Tribunal which was dismissed due to it being submitted out of time. The Claimant brought a further separate claim alleging sex discrimination. A Preliminary Hearing was held to consider whether the second claim also included a claim of disability discrimination and whether the claim of sex discrimination was an abuse of process.   At first instance an Employment Judge concluded that the first claim did not include a claim of disability discrimination. Nonetheless, they upheld the Respondent’s abuse of process argument which resulted in the dismissal of the sex discrimination claim and refusal of the application to amend the second claim to add disability discrimination.   The Law   The EAT, presided by His Honour Judge James Tayler, considered several legal principles as part of the appeal. For the purposes of this article, it is pertinent to note paragraph 58 of the Judgment as follows:   “58. An Employment Tribunal may have to take account of learning difficulties and mental health issues that make a witness vulnerable in two principle ways:   58.1.  the Employment Tribunal may have to adjust its procedures to permit a witness to give his or her best evidence. A failure to make an adjustment could possibly be so serious as to render the hearing unfair   58.2.  it may be necessary for the Employment Tribunal to take vulnerability into account when assessing the evidence of a witness. A failure to do so could possibly:   58.2.1.  be so serious that the hearing is unfair   58.2.2. involve a failure of the Employment Tribunal to direct itself to the relevant law   58.2.3. undermine the Employment Tribunal’s analysis of the evidence to such an extent that a decision might be perverse, even taking account of the high threshold of showing perversity – this might be in connection with any other errors of analysis of the evidence or application of the appropriate legal tests”   Furthermore, the EAT recorded:    “Although the legal duty to make reasonable adjustments pursuant to the Equality Act 2010 does not apply to the employment tribunal, it is well established that the tribunal should make such adjustments as are necessary to ensure a fair hearing: Heal v University of Oxford [2020] ICR 1294, at paragraph 18.”   Finding   The EAT found that in undertaking the broad, merits-based assessment, including the analysis of the Claimant’s evidence, the first instance Judge was required to take account of The Claimant’s vulnerability. Emphasising that “proper allowance should have been given to Mr King’s vulnerability when assessing his evidence” at paragraph 87. The EAT remitted the matter to a new tribunal for a fresh assessment, tasking it with considering all relevant factors, including the precise nature of the Claimant’s claims, the reasons for not bringing those claims earlier, the impact of his mental health conditions, and the possible prejudice to the Respondent.   Comment   This case acts as a helpful reminder of the importance in having regard to disabilities of litigants in person during case management stages.   Employment Tribunals are obliged to ensure substantive fairness, allowing parties to effectively participate throughout all stages of the process. In utilising judicial discretion, the Tribunals must weigh in the balance of fairness and access to justice for all parties including vulnerabilities of individuals. It follows that at a final hearing witnesses should also be afforded the opportunity to provide reliable evidence.   Helpful resources for Tribunal users:   <ul> <li><a href="https://www.judiciary.uk/wp-content/uploads/2013/08/ET-Presidential-Guidance-on-Vulnerable-Parties-and-Witnesses-22-April-2020.pdf" target="_blank" rel="noreferrer noopener">Presidential Guidance: Vulnerable parties and witnesses in Employment Tribunal proceedings.</a></li>   <li><a href="https://www.theadvocatesgateway.org/toolkits-1-1-1" target="_blank" rel="noreferrer noopener">The Advocate’s Gateway Toolkits</a></li>   <li><a href="https://www.judiciary.uk/about-the-judiciary/diversity/equal-treatment-bench-book/" target="_blank" rel="noreferrer noopener">Equal Treatment Bench Book</a></li> </ul>

New Chief Coroners Guidance on Obtaining Information Regarding Social Media Use

On 2 April 2024, the Chief Coroner introduced new guidance (No. 46) surrounding the obtaining of evidence regarding social media use. This intersects with the Online Safety Act 2023 coming into force on 1 April 2024.   As background, Schedule 5 of the Coroners and Justice Act 2009 gives a coroner the power to require the production of evidence or documents that relate to an investigation. Such notices can be sent directly to social media providers, or to the Office of Communications (Ofcom), and can be issued in connection with the death. However, Ofcom can only provide information that it holds or controls, so its information is limited.   Coroners may face difficulty in establishing to whom Schedule 5 notices should be sent to in order to obtain information about social media use. They may also struggle to frame notices in a way that elicits the most useful information, unless they are advised by someone with knowledge of social media and its evolving trends.   To assist coroners accessing social media information that is relevant to an investigation into the death of a child, the Online Safety Act (OSA) 2023 includes new provisions extending the information that can be obtained and disclosed by Ofcom to coroners.   Section 101   Section 101 grants Ofcom the power to obtain the relevant information from service providers in respect of a living person’s use of a regulated service that is linked to an investigation into a child’s death (e.g. someone’s social media account that demonstrates bullying of a deceased child), or the use of a regulated service by the child whose death is under investigation (e.g. where a child has been exposed to harmful content via a social media platform’s algorithms).   Examples of information Ofcom can obtain from regulated services include:   <ul> <li>Content encountered by the child by means of the service;</li>   <li>How the content came to be encountered by the child (including the role of algorithms or particular functionalities);</li>   <li>How the child interacted with the content (for example, by viewing, sharing, or storing it or enlarging or pausing on it); and</li>   <li>Content generated, uploaded, or shared by the child.</li> </ul>   Section 163   Under this provision, Ofcom may prepare a report for use by the coroner following the receipt of a Schedule 5 notice and can do so using its s101 powers to require regulated services to provide information that may assist with Ofcom’s report.   Practical considerations   Coroners have previously been advised (Guidance No. 44) that they should only use Schedule 5 notices to compel disclosure where the disclosure is necessary and, unless there are exceptional circumstances, should attempt to obtain the disclosure by agreement before issuing a notice. To facilitate Ofcom exercising their s101 OSA powers, coroners will have to issue a formal Schedule 5 notice.   The new guidelines advise informal engagement with Ofcom beforehand to discuss the reasonableness of the request, the coroner’s proposed timeframe, and how to structure the request so the coroner can obtain relevant, sufficient, and proportionate information, based on Ofcom’s knowledge and experience of the sector. Ofcom can contact multiple providers on a coroner’s behalf, which increases administrative efficiency, and can advise the coroner on how to frame the request so the information can be understood without the need for specialist analysis. For example, instead of requesting the code for a social media company’s recommender system, it might be preferable in a particular case to seek a description of how the recommender system operates.   Coroners will need a adopt a case-by-case approach as to whether they choose to seek information from services directly or to approach Ofcom, weighing the benefits of each. Some investigations may already have contact with a regulated service through Interested Persons, making it possible to obtain information directly without difficulty, for instance, or Ofcom’s information gathering powers may be limited by barriers such as foreign law.   The new guidance also advises coroners to be mindful that social media companies are likely to hold extensive material about any relevant individual and that requests could return large volumes of information. In order to be effective, Schedule 5 notices should therefore:   <ol style="list-style-type:lower-alpha"> <li>Identify the child in connection with whose death a notice relates;</li>   <li>Identify a particular service or various services of interest (this information is likely to be available to coroners through discussions with the family and/or other Interested Persons);</li>   <li>Describe the information sought, including what personal information is needed. If there is personal information that is likely to be returned in the context of the request that is not relevant, confirm that such information can be omitted or redacted;</li>   <li>Describe the timeframe within which the information is sought to enable a proportionate search to be conducted and to prevent the coroner from being overwhelmed with irrelevant information; and,</li>   <li>Set a reasonable deadline for Ofcom to respond, which takes into account the time it will take for Ofcom to provide their own notice to the relevant services and obtain the information.</li> </ol>   Commentary   The new guidance is a big step forward in a world of growing technology where social media may play a part in the investigation into a death. There is a concern, however, in limiting Ofcom’s s101 powers to investigations into the death of a child, rather than any death. Although coroners can still contact social media providers directly for information about an adult’s social media use, the efficiency of an investigation into the death of an adult may be limited in lacking the ability to delegate this to Ofcom under the OSA. Whether this is extended in the future is yet to be seen, but until then, the guidelines are a welcome improvement to the inquest landscape that recognises the prevalence of social media in the lives and deaths of young people.

Case note on LZL v HYC

Facts   <ol> <li>The claimant and first defendant are partners. Together, they have five children between the ages of six and 23.</li>   <li>The claimant was a passenger whilst being driven by the first defendant. The first defendant crashed the car.</li>   <li>The claimant suffered a traumatic brain injury.</li>   <li>The claimant filed a claim against the first defendant on 25 October 2023.</li>   <li>The claimant lacks capacity to conduct proceedings. The claimant’s litigation friend is the first defendant’s mother, HXS. The claimant has lived with HXS since she was 14 years old. HXS has acted as the litigation friend since 3 September 2023.</li>   <li>On 6 June 2023, the second defendant, an insurer, made a voluntary interim payment of £100,000 to the claimant.</li>   <li>On 20 December 2023, HHJ Siddique approved the interim payment in order that the payment may be used for rehabilitation or injury related purposes. He further ordered that the claimant apply to the Court for the appointment of a Professional Deputy by 12 January 2024.</li>   <li>At the date of the hearing, on 11 March 2024, an application had still not been made. HXS failed to provide the relevant documents to the claimant’s solicitors to enable an application to be made. HXS did, however, bring the required documentation to the hearing.</li>   <li>Because a deputy had not been appointed, the claimant had been unable to utilise the interim payment to acquire a suitable property to live in.</li>   <li>The claimant was opposed to the making of an application of a deputy because she was distrustful of those outside the family.</li> </ol>   Issue   11. Whether the Court should appoint an alternative litigation friend. Absent suitable alternatives, the only appropriate candidate was the Official Solicitor.   Law   <ol start="12"> <li>Farbey J considered the legal framework.</li>   <li>CPR 21.2(1) stipulates that a litigation friend may act as litigation friend if they can fairly and competently conduct proceedings on behalf of the protected party and have no interest adverse to that of the protected party.</li>   <li>The White Book commentary indicates at 21.4.1, that a (prospective) litigation friend having an interest in the litigation is not fatal to their acting as such so long as their interest is not adverse to the interests of the protected party.</li>   <li>CPR 21.7 stipulates that the court may terminate and appoint litigation friends.</li> </ol>   Decision   <ol start="16"> <li>Farbey J considered that the following factors weighed in favour of appointing an alternative litigation friend to HXS: <ul> <li>HXS lacked insight into the need for a professional deputy; and</li>   <li>HHJ Siddique’s order had been breached in part because HXS failed to supply relevant This suggests HXS may not be able to competently conduct the litigation.</li> </ul> </li> </ol>   <ol start="17"> <li>Farbey J considered that the following factors weighed in favour of permitting HXS to remain litigation friend: <ul> <li>HXS had now supplied the relevant documentation so that the claimant’s solicitors could apply for the appointment of a professional deputy;</li>   <li>There was no evidence HXS could not safeguard the claimant’s interests despite being the defendant’s mother;</li>   <li>HXS would likely be better able to facilitate the claimant’s engagement with the litigation process than an Official Solicitor.</li> </ul> </li> </ol>   <ol start="18"> <li>On balance, Farbey J concluded that HXS should be given one final chance to remain litigation friend. If an application for a professional deputy was not made within 14 days (or some other reasonable period as agreed by counsel), then the Official Solicitor was to replace HXS as the litigation friend.</li> </ol>   Comment   <ol start="19"> <li>For those considering whether a given individual would make for a suitable litigation friend, the analysis should focus on the specific circumstances of the case and not merely the existence of a connection between litigation friend and defendant. Here, even in the face of the ongoing breach of a Court Order, Farbey J took a pragmatic approach and allowed for the litigation friend to continue to act.</li> </ol>

CCC v Shefﬁeld Teaching Hospitals NHS Foundation Trust – Case Note

Citation: [2024] 1 WLR   High Court of Justice, King’s Bench Division   Judge: Ritchie J   Background:   This was a clinical negligence claim where the claimant made a single Part 36 offer comprising a lump sum and a periodical payments order (PPO), which the defendant did not accept. Following a trial on quantum, the judge awarded the claimant a lower lump sum, but a higher PPO than her offer. The claimant then sought an order for indemnity costs, the additional award and interest on costs and damages under Part 36.17.  She contended that her judgment was at least as advantageous as her offer.   The Claimant’s case:   The claimant contended that the judgment obtained was at least as advantageous as her Part 36 offer, arguing that the total value of the award (if capitalised, using the agreed life multiplier) was better in money terms than the total value of her offer (if capitalised, using the agreed life multiplier).   Judgment:   The court ruled that the judgment obtained was not at least as advantageous as the claimant's Part 36 offer, as the lump sum part of the judgment was not better in money terms than the lump sum part of the offer.   The court found that there was no unfairness to the Claimant, as she could have made Part 36 offers as to each part, as individual offers.  It was up to the Claimant as to how the offer was made.  In this case she would have beaten her PPO offer and the Part 36 consequences would follow, as to that element.   The system for determining the value of a Part 36 offer should be ‘kept simple and clear’ in order to encourage good practice by using a series of sanctions and rewards.   In short, it was found (paragraph 18):   “For an offeror to beat her Part 36 combined offer, she has to beat both parts.  If she wishes protection for each part then individual offers can be made.”   Conclusion   This is a useful case, which clarifies a point for which there was previously no authority. It may lead to more offers being made comprising of the individual elements in the future.

Conflict and “The Tendency To Be Swayed By Human Nature Rather Than Duty”

Irwin Mitchell Trust Corporation v PW (By Her Litigation Friend The Official Solicitor) and The Public Guardian [2024] EWOP 16   Marisa Lloyd and Lucy Evanson summarise and comment on the judgment on Irwin Mitchell Trust Corporation v PW (By Her Litigation Friend The Official Solicitor) and The Public Guardian [2024] EWOP 16 in which Marisa represented the Public Guardian   Full Judgment here - <a href="https://www.bailii.org/ew/cases/EWCOP/2024/16.html" target="_blank" rel="noreferrer noopener">https://www.bailii.org/ew/cases/EWCOP/2024/16.html</a>   The court considered self-dealing and conflict in circumstances where Irwin Mitchell Trust Corporation (‘IMTC’) acting as deputy for PW, appointed Irwin Mitchell Asset Management (‘IMAM’) to manage the investment of PW’s funds.     Factual background   PW suffered global cognitive impairment which resulted in a loss of capacity. After a successful claim against the treating healthcare trust, she received significant damages. IMTC was appointed as her property and affairs deputy and subsequently held a ‘beauty parade’ after which the deputy appointed IMAM as investment manager for PW.   In 2019, IMTC made an application to the Court of Protection for authority to execute a statutory will for PW. Concerns were raised by the Official Solicitor (‘OS’) about the appointment of IMAM as investment manager. IMTC was directed to make an application to seek retrospective authority to instruct IMAM. The Public Guardian was joined as a party.   Legal background   Section 19(6) of the Mental Capacity Act 2005 (‘the MCA’) provides that, ‘A deputy is to be treated as P’s agent in relation to anything done or decided by him within the scope of his appointment’. HHJ Hilder noted that “the relationship between a deputy and the person for whom the deputy is appointed is a fiduciary one”.   The basic proposition about the position of a fiduciary in a position of conflict was set out by Lord Herschell in the House of Lords decision of Bray v Ford [1896] AC 44 at 51-52, ‘It is an inflexible rule of a Court of equity that a person in a fiduciary position… is not, unless otherwise expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict. It does not appear to me that this rule is, as has been said, founded upon principles of morality. I regard it rather as based on the consideration that, human nature being what it is, there is danger, in such circumstances, of the person holding a fiduciary position being swayed by interest rather than by duty, and thus prejudicing those whom he was bound to protect.’   The general principle was restated in Boardman v Phipps [1967] 2 AC 46 which also referred to Aberdeen Railway v Blaikie (1854) UKHL 1 Macq. 461 at 136 per Lord Cranworth LC who said  ‘and it is a rule of universal application, that no one, having such duties to discharge, shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict with the interests of those whom he is bound to protect.’   HHJ Hilder considered the law of agency stating: ‘Conversely, the law of agency generally provides that an act of the agent may rank as the act of the principal if the principal ratifies it … Where the principal lacks capacity to make decisions about their property and affairs, only the Court of Protection may grant such ratification. Its jurisdiction for doing so … is found in the conjunction of sections 15(c) and 19(4) of the Mental Capacity Act 2005.’   The Question   There were several questions agreed between the parties but the predominant question for HHJ Hilder to determine was whether the rule relating to conflict of interest was applicable to the appointment of IMAM by IMTC.   Decision   There is no English authority that directly deals with the question of whether the engagement by a fiduciary of a related investment company presents ‘a real possibility of conflict of interest.’ IMTC accepted that its engagement of IMAM gave rise to the ‘theoretical potential’ for a conflict of interest, but contended that there was “no real, sensible possibility” of conflict because it had adopted procedures by holding a beauty parade etc. which eliminated that potential. Counsel for the OS and PG disagreed contending that there was an actual conflict that was not mitigated by the processes followed by IMTC.   Having reviewed the evidence, HHJ Hilder held that :   61. The Court of Protection is no stranger to conflicts of interest…   62. The conflict of interest in question in this matter comes down to IMTC being financially better off if IMAM is appointed. IMTC accepts this as a “theoretical potential”. IMTC’s argument is that such potential is extinguished to the point of no “real sensible possibility” because of procedures it has adopted. Yet nowhere in the development of those processes or in these proceedings has IMTC ever denied either that the decision to appoint IMAM is made by IMTC in its fiduciary role… or that, even with full implementation of those processes, IMTC is better off if IMAM is appointed. At a most basic level, those two concessions amount to recognition of the existence of a conflict of interest: one plus one makes two.   63. The processes which IMTC has adopted when considering the appointment of IMAM do not target the substance of the self-dealing rule: that is, they do not remove the financial gain to IMTC. Such processes could have been adopted, for example by agreeing to waive any fee to IMAM where the instruction comes from IMTC as deputy. Then there would be no financial advantage to IMTC in the instruction of IMAM, no interest to be in conflict with the interests of the person for whom IMTC acts. Of course, I recognise that the Irwin Mitchell group would be likely to reject this approach as lacking commercial sense but that merely reinforces the existence of IMTC’s interest in the appointment of IMAM.   After further discussion of the processes adopted by IMTC, and the involvement of a family member in a beauty parade in ratifying or reducing the ‘theoretical potential’ of conflict of interest, HHJ Hilder concluded that there was a ‘very clear, not remotely fanciful, actual conflict of interest in IMTC appointing IMAM to manage PW’s funds,’ [67] This breached the self-dealing rule. She concluded that  ‘The processes adopted by IMTC do not and could not extinguish that conflict. In my view, that these proceedings have been necessary at all is a paradigm example of Lord Herschell’s wise recognition of the tendency of human nature to be swayed by interest rather than duty.” [93]   Commentary   The judgment confirms that there is a conflict of interest in a trust corporation instructing a connected company to act as an investment manager. The issue of conflict cannot be mitigated by conducting a beauty parade which includes the connected company. Further, the appointment cannot be ratified by a family member.  Ratification must be carried out by the Court.   The Public Guardian has already changed her guidance in the wake of Re ACC [2020] EWCOP. This reflects the view of the PG that, if financial advice is provided by a member of the deputy’s firm, potential conflicts of interest must be considered in the context of adhering to fiduciary duties,  and where the deputies own interest and the interest of P are linked there must be an application to court for authorisation to instruct your own firm.   There was insufficient evidence before the court to determine whether the appointment of IMAM was in PW’s best interests and should be ratified or whether it should be set aside. This will need to be determined in the future.   However, there are many other cases where IMTC and other trust corporations have instructed connected companies. These cases will need to be reviewed and consideration given to the way forward. Given the need for court ratification of existing cases and prospective approval in respect of future new instructions, it may be viewed as highly unlikely that the ongoing instruction of connected companies can be justified as being in P’s best interests. In my view, it follows that  in the absence of a successful appeal, this judgment is likely to signify the end of instructions of an asset manager from connected companies to the deputy.   Further, the judgment may also be viewed as relevant to the question of whether professional pension scheme trustees associated with firms providing other professional services can properly appoint their own firms to provide services.

Non-party costs order (“NPCO”) against credit hire company

Kindertons Limited v (1) Georgina Murtagh (2) Esure Services Limited [2024] EWHC 471 (KB)   Introduction   <ul> <li>This case concerns a non-party costs order made against a  credit hire company, Kindertons Limited (“Kindertons”), in favour of an insurer, Esure Services Limited (“Esure”) and is a High Court decision by Turner J, handed down on 5 March 2024.</li> </ul>   Background   <ul> <li>On 20 February 2019, a minor collision occurred when Georgina Murtagh carelessly drove her Volkswagen Polo into gentle contact with the rear of Serhat Ibrahim’s Audi A5.</li>   <li>Mr Ibrahim’s claim for the costs of repairs was in the sum of £2,543.80.</li>   <li>Two days after the accident, a representative by the name of Rachel telephoned Mr Ibrahim to discuss providing him with a replacement vehicle.  During the telephone conversation, Mr Ibrahim described the damage to his vehicle as: “…not a lot of damage.  It’s just the back bumper.  It looks a bit out of line…”.</li>   <li>Notwithstanding his modest description of the damage, Mr Ibrahim was readily persuaded that he should not be driving the car and that he ought to hire an alternative from Kindertons.</li>   <li>A report later provided by JP Morris assessors on behalf of Kindertons concluded that Mr Ibrahim’s Audi had suffered no damage in the accident that would have rendered it unroadworthy. </li>   <li>Rachel told Mr Ibrahim that if the other driver’s insurer, Esure, should offer to provide him with a less expensive alternative hire car he should “just tell them Kindertons are dealing with the claim and end the call from there”. </li>   <li>On 23 February 2019, Mr Ibrahim entered into a credit hire agreement with Kindertons for the hire of a Jaguar XF (later replaced with a Mercedes Benz C250 on the same terms) at a rate of £345.08 per day.  The period of hire was 33 days.</li>   <li>Also on 23 February 2019, Mr Ibrahim entered onto a credit hire agreement with Kindertons in respect of repair, recovery and storage facilities.</li>   <li>On 25 February (two days after the initial hire period commenced and before Mr Ibrahim entered into the second hire agreement) Esure sent him a letter offering an alternative replacement vehicle at no cost at all to him but at a cost to Esure of £63.45 per day. </li> </ul>   The claim   <ul> <li>Proceedings were brought by Mr Ibrahim and his wife, Sylvia, against Miss Murtagh limited to £20,000.</li>   <li>All but £50 of Mr Ibrahim’s special damages claim arose under the credit agreements. </li>   <li>In addition, both Mr and Mrs Ibrahim claimed general damages in respect of personal injury, the combined value of which could not have exceeded £3,192.25 having regard to the value of Mr Ibrahim’s special damages claim and the overall claim limit.</li>   <li>Miss Murtagh denied liability and the matter proceeded to a fast track trial.</li> </ul>   The trial   <ul> <li>The matter came before Mr Recorder Berkley KC, who found that whilst he was satisfied that a collision had occurred, (i) the damages claimed in respect of the repairs and hire charges had not been caused in the accident; (ii) Mrs Ibrahim was not in the vehicle at the time; (iii) both Mrs Ibrahim and her husband had been fundamentally dishonest in saying that she had been.</li>   <li>Mr Ibrahim did not take up the offer.</li>   <li>Mr and Mrs Ibrahim were ordered to pay Miss Murtagh’s costs in the sum of £12,000.</li>   <li>Mr Ibrahim promptly disappeared, leaving the costs bill unpaid.</li> </ul>   The non-party costs claim   <ul> <li>Esure applied for a non-party costs order (“NPCO”) against Kindertons.</li>   <li>The application ought to have been heard by Mr Recorder Berkley KC but instead came before Mr Recorder Gallagher.</li>   <li>Para. [29]: “It is regrettable that the trial judge did not hear the costs application and that neither side took the issue below.  Particular care should be taken not to list NPCO applications to be heard by a judge who did not sit on the trial without a compelling reason.”</li> </ul>   The decision below   <ul> <li>The parties agreed that the Recorder had the power to make a NPCO.  The issue was whether he should have exercised his discretion to exercise that power in the circumstances of the case (para. [30]).</li>   <li>The statutory foundation of this power is to be found in section 51(3) of the Senior Courts Act 1981 which provides as follows: “(3) The court shall have full power to determine by whom and to what extent costs are to be paid”.</li>   <li>The Recorder correctly referred to CPR 44.16(2) as identifying the circumstances in which an NPCO can be made in the context of Qualified One-way Costs Shifting [QOCS]. </li>   <li>In addition, CPR 44 PD 12 was noted to provide that “[e]xamples of claims made for the financial benefit of a person other than the claimant…within the meaning of rule 44.16(2) are subrogated claims and claims for credit hire…” and to state at para. 12.5(b) that “the court may, as it thinks fair and just, determine the costs attributable to the claims for the financial benefit of persons other than the claimant”. </li>   <li>Noting that Mr and Mrs Ibrahim were found to have no viable residual claims which might have been sustained if not for the finding of fundamental dishonesty, the Recorder found that the claim included a claim which was made for the financial benefit of Kindertons and awarded Esure 80% of their costs against Kindertons.</li> </ul>   Dismissing the appeal on all grounds…   <ul> <li>The whole purpose of Kindertons providing credit hire facilities is to make a commercial profit out of the client’s legal claim (para. [39]).</li>   <li>Kindertons stood to gain substantially from the claim brought in Mr Ibrahim’s name and the price of the services they provided under the contracts with Mr Ibrahim very significantly exceeded the value of the personal injury and “undocumented miscellaneous expenses” claims brought by him and his wife (para. [42]).</li>   <li>It followed that Kindertons had a very strong financial stake in the litigation and that “any benefit to Mr Ibrahim in pursuing the claim for hire charges was all but illusory” (para. [43]).</li>   <li>In relation to the contention that there was no proper basis for the judge’s finding that the appellant controlled the litigation, the court stated: “There is a danger that the concept of “control” is wrongly treated as if it were a traffic light, governing the exercise of the court’s discretion to make a non-party costs order, which is showing either red or green.  Control is almost invariably a matter of degree.  As a concept, it is relevant to the extent that, in any given case, the greater the level of control exercised by the non-party the more likely it will be that the court will exercise its discretion in favour of making a NPCO” (para. [44]).  </li>   <li>The court quoted, with approval, Deutsche Bank AG v Sebastian Holdings [2016] 4 W.L.R. at para. 62: “We think it important to emphasise that the only immutable principle is that the discretion must be exercised justly.  It should also be recognised that, since the decision involves an exercise of discretion, limited assistance is likely to be gained from the citation of other decisions at first instance in which judges have or have not granted an order of this kind” (para. [45]).</li>   <li>On the facts of the case, there was a high degree of control: “The contractual terms identified above tied Mr Ibrahim into bringing a claim and continuing it at the risk of incurring serious financial consequences in the event that he were to fail to comply. It matters little, if anything, that such consequences were not, in the event, visited upon Mr Ibrahim. It is the threat and not the execution of repercussions which forms the usual basis for control” (para. [46]).   Furthermore, by reference to the phone call between Mr Ibrahim and Rachel, the court was satisfied that Kindertons “wished to choreograph the progress of the litigation to preclude [Esure compromising the interests of Kindertons]” (para. [47]).</li>   <li>In respect of Kindertons’ contention that Esure needed to have established that Kindertons’ involvement resulted in them incurring more costs in the litigation than they would have done in any event (the “but for” test), the court held that there is no generally applicable guidance on causation applicable to all NPCO applications and that Lord Briggs in XYZ v Travelers Insurance Co Ltd [2019] 1 W.L.R. 6075 was not intending to lay down any such guidance (paras. [51-52]). </li>   <li>The position of Kindertons was different to liability insurers.  It “involved itself voluntarily and enthusiastically in the claims after the accident giving rise to it”.  Its involvement was “a matter of choice in the expectation of profit specifically related to the legal proceedings to follow” (para. [54]).</li>   <li>The intermeddler cases to which Lord Briggs referred in Travelers fell to be distinguished: “It could not be said that it was none of Kindertons’ business to involve itself in the progress of the litigation.  On the contrary, it was very much its business both in a literal and metaphorical sense” (para. [56]).</li>   <li>On the circumstances of the case (“and without seeking to lay down any general rule relating to the appropriateness of NPCOs against credit hire companies”), the Recorder was right to conclude that it was just to make the order and he was not obliged to make any specific finding in respect of "but for" causation before so doing. It was neither fair nor just that it should be permitted to exercise a degree of control over the most valuable aspect of Mr Ibrahim's claims on the basis of instructions from Rachel the specific intention of which was to neuter any attempts by Esure to limit its exposure to the hire claim, without exposing itself to the potential consequences of a NPCO (para. [57]).</li>   <li>By ordering Kindertons to pay 80% of the costs, “the Recorder was exercising his discretion appropriately to reflect the proportionate benefit which it stood to obtain if the claim for hire charges had succeeded. An attempt mathematically to calculate on a "but for" basis of causation would simply not have reflected the unfairness of allowing Kindertons a free ride on the coat tails of Mr Ibrahim's claim” (para. [58]).</li>   <li>Regarding Kindertons’ contention that Esure should have given notice that it would or might pursue a non-party costs order against it, the court held that “Kindertons would or should have known only too well that the nature of its business put it at risk of a NPCO application. The wording of CPR 44 PD 12.2, insofar as it relates to claims for credit hire, provided express warning of this; if any such were needed. I can discern no prejudice to Kindertons in the timing of Esure's application” (para. [61]).</li>   <li>Regarding the argument that the finding of dishonesty made it unjust to make a NPCO against Kindertons, the court held as follows: “Kindertons voluntarily assumed the risk that Mr and Mrs Ibrahim would turn out to be dishonest….The level of scrutiny which would be applied to any aspect of the claim which it was seeking to adopt was a matter for Kindertons…it may well be that the cost of exercising higher levels of scrutiny would be disproportionate to the money thereby saved but this is a commercial decision the consequences of which must be borne by Kindertons” (para. [63]).</li>   <li>Under the subheading ‘Discretion’: “On the facts of this case, I too would have made a NPCO against Kindertons had the matter come before me at first instance for the reasons I have given. But even if I had not been minded to make such an order, I would still have concluded on appeal that the approach taken by the Recorder to the exercise of his discretion fell comfortably within the generous parameters afforded to him. Appellate courts will not lightly interfere with such decisions” (para. [65]).</li> </ul>

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