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Allegation of Fundamental Dishonesty? No Interim Payment Permitted.

<!-- wp:paragraph --> <p><strong>Qaiser Mehmood (by LF Asma Islam) v Harry Mayor [2024] EWHC 1057 (KB)</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>Decision of Master Fontaine (SIR)</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>8 May 2024</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><a href="https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/KB/2024/1057.html&amp;query=(Mehmood)+AND+((by)+AND+(his)+AND+(litigation)+AND+(friend)+AND+(Mrs)+AND+(Asma)+AND+(Islam))+AND+(v)+AND+(Mayor)">https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/KB/2024/1057.html&amp;query=(Mehmood)+AND+((by)+AND+(his)+AND+(litigation)+AND+(friend)+AND+(Mrs)+AND+(Asma)+AND+(Islam))+AND+(v)+AND+(Mayor)</a></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><span style="text-decoration: underline;">Introduction</span></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>In this case, the claimant brought a claim for serious injuries arising from a RTA in January 2019. As a consequence, the claimant suffered severe brain injury which he alleged caused a lack of capacity.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The defendant admitted primary liability, but alleged contributory negligence and disputed the extent of the claimant’s alleged injuries. </li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The defendant disputed the issue of capacity, and this was to be determined at trial.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>Further, relying on medical and surveillance evidence and by an Amended Defence, the defendant alleged the Claimant was fundamentally dishonest and that the claim should be dismissed under s57 Criminal Justice and Courts Act 2015.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The claimant sought retrospective approval of an interim payment of £10,000 made in August 2019 and applied for a further interim payment of £75,000.  The further payment was to be used to fund rehabilitation recommended by the experts instructed by the claimant and defendant.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The application was refused.   Even though primary liability had been admitted, the defendant’s allegation of fundamental dishonesty meant that the threshold criteria contained in CPR 25.7(1)(a) and CPR 25.7(1)(c) had not been met.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><span style="text-decoration: underline;">Law</span></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>CPR 57 provides:<br><br>25.7(1) The court may only make an order for an interim payment where any of the following conditions are satisfied—<br><br>(a) the defendant against whom the order is sought has admitted liability to pay damages or some other sum of money to the claimant;<br><br>(b) the claimant has obtained judgment against that defendant for damages to be assessed or for a sum of money (other than costs) to be assessed;<br><br>(c) it is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money (other than costs) against the defendant from whom he is seeking an order for an interim payment whether or not that defendant is the only defendant or one of a number of defendants to the claim…<br><br>(4) The court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment.<br><br>(5) The court must take into account—<br><br>(a) contributory negligence; and<br><br>(b) any relevant set-off or counterclaim.<br><br></li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>S57 of the Act provides:<br><br>(1) This section applies where, in proceedings on a claim for damages in respect of personal injury (“the primary claim”)—<br><br>(a) the court finds that the claimant is entitled to damages in respect of the claim, but<br><br>(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.<br><br>(2) The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed.<br><br>(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.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><span style="text-decoration: underline;">The claim</span></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The Judge reviewed and summarised the evidence of the medical experts instructed by the claimant and the defendant; and in particular identified the experts’ evidence relevant to the allegation of fundamental dishonesty.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>At paragraph 25 she stated:<br><br>‘The issue as to whether the Claimant is exaggerating the effect of his injuries, and if so, whether he is being fundamentally dishonest in so doing, can only be resolved at trial when the oral evidence of the medical experts and of the witnesses of fact is heard. That is not an issue that can be resolved on a summary basis with only documentary evidence.’<br><br></li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>She continued at paragraph 26:<br><br>‘Even if the trial judge considers that the conditions of s. 57(1) are satisfied, they will have different options as to what the consequence of such finding should be. It may be dismissal of the primary claim, but if the court finds that the Claimant would thereby suffer substantial injustice that is not obligatory. If the court found that there had not been substantial dishonesty, but, for example, found there had been exaggeration of the Claimant’s symptoms and/or the effects of the injuries suffered which were not fundamentally dishonest, the damages claimed may be reduced to a greater or lesser degree depending upon the judge’s findings. Alternatively, the judge may consider that there is no merit to the application for a finding of fundamental dishonesty and that the submissions made on the Claimant’s behalf as to his inability to carry out the work he previously did are correct. But this is not a case similar to the position in <em>Salwin</em>, and indeed in many applications for interim payments in personal injury claims. The range of what the Claimant may expect to recover is from nothing to the full amount he is seeking. There is no “irreducible minimum” as referred to in <em>Chiron Corporation &amp; ors v Murex Diagnostics Limited (No 13) </em>[1996] FSR 578 and <em>Trebor Bassett Holdings limited v ADT Fire &amp; Security plc </em>[2012] EWHC 3365 (TCC) per Coulson J. at [13]. Thus, it is not possible for the court to conclude, in accordance with CPR 25.7(4), what would be “<em>a reasonable proportion of the likely amount of the final judgment</em>”.<br><br></li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The Judge rejected the application; at paragraph 27 she stated:<br><br>‘In any event, the Defendant is correct that the requirements of CPR 25.7(1)(a) are not satisfied in this claim, namely that “<em>the Defendant against whom the order is sought has admitted liability to pay damages or some other sum of money to the Claimant.</em>” By virtue of the plea of fundamental dishonesty the Defendant has denied liability to “<em>pay damages</em>” to the Claimant, and at paragraph 29 of the Amended Defence seeks dismissal of the claim under either s. 57 or under the jurisdiction outlined in <em>Summers v Fairclough </em>[2012] UKSC 26. That is the short answer to the application.’<br><br></li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The Judge also rejected the claimant’s submission that the court also had power to make an order under CPR 27(1)(c) and stated at paragraph 29:<br><br>‘Exactly the same considerations apply in respect of CPR 25.7(1) (c) as apply to CPR 25.7(1) (a). For the reasons given, the court cannot be so satisfied.’<br><br></li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The Judge acknowledged that the refusal to make an interim payment may cause injustice to the claimant should the defendant’s allegation of fundamental dishonesty be rejected as he would not have received the funds needed for the recommended rehabilitation.   However, the requirements for an interim payment were not met and the Judge was bound to refuse the application.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><span style="text-decoration: underline;">Takeaway</span></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The Judge’s refusal to allow the application was not dependent upon an assessment of the evidential value of the medical evidence or surveillance evidence.  An allegation of fundamental dishonesty (which as here had been pleaded and was supported by evidence) was without more an absolute bar to an interim award of damages.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>A bare allegation of fundamental dishonesty (especially if not pleaded) will not by itself prevent a court making an interim award. Even though there is a wealth of authority which permits a defendant to raise fundamental dishonesty at trial even when not pleaded (providing the claimant has been given adequate warning and a proper opportunity to meet the allegation per paragraph 31 of Howlett v Davies [2017] EWCA Civ 1696), this case is a salutary reminder for defendants that in many cases it essential for the allegation to be pleaded  fully and properly.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>If the interim payment has already been made before the allegation of fundamental dishonesty is pleaded, an application for repayment of the interim payment is likely to be permitted under CPR 25.8 if fundamental dishonesty is proven.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The court has power to retrospectively validate any step taken in proceedings under CPR 21.3(4).  Here, the Judge refused to do so for the same reasons she rejected the application for a further interim payment.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><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 &amp; Credit Hire Team.</p> <!-- /wp:paragraph -->

The Mechanics of a Partnership Claim

<!-- wp:paragraph --> <p>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; There are two types of partnership claim. Where there is a partnership agreement which contains an option to purchase the interest of the departing partner, the claim will involve the determination of whether that option has been exercised validly and (if so) what sum is payable to the departing partner. Normal contractual principles apply to such a claim. In particular, the sum to be paid to the outgoing partner (and when this sum is payable) is determined under unusual principles of construction without consideration of what that departing partner would receive on winding-up (see <em>Drake v Harvey </em>[2011] EWCA Civ 838; <em>Liddle v Liddle </em>[2019] EWCA Civ 346). The other type of partnership claim involves winding-up with the assistance of the Court. This seminar deals with the mechanics of the latter type of claim.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>2.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Disputes in partnership actions can conveniently be divided into six areas, being as follows:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Issues relating to the period to dissolution, that is to say fundamental disputes as to the identity of the partners, the terms of the partnership and the identification of partnership assets</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Death, retirement and expulsion from joint lives partnerships and the consequences of the same. The winding-up of joint lives partnerships by the Court.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; How the assets are to be sold or otherwise distributed following dissolution</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The determination of who is to manage the business of the partnership until it can be sold</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 42 accounts</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Litigation issues.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong><u>1) ISSUES RELATING TO THE PERIOD TO DISSOLUTION</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>3.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Court will not interfere in the operation of a partnership save with a view to its dissolution. In this context, “dissolution” is a full dissolution involving the termination of the partnership and the sale of assets rather than a technical dissolution which occurs on any change in the membership of a partnership. A partnership claim necessarily involves the taking of at least a dissolution account following the determination of all issues which are required before that account can be directed. If not agreed, the Court will need to determine:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Whether there is a partnership at all and (if so) whether any written partnership agreement applies.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Profit shares</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Ownership of partnership assets</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Normal accounting issues</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional accounts</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>1) Terms of the partnership</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>4.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Where there is a written partnership agreement between the current partners, this will determine the terms of the partnership. However, this is rarely the case. Usually, any partnership agreement will have been made many years ago between the original partners. The Court will need to determine whether new partners have adopted the partnership agreement. If not, there will be a partnership at will. A partnership agreement cannot operate between some but not all of the partners. This issue is of particular importance if the partnership agreement contains an option to purchase.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>2) Profit shares</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>5.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This is only likely to be an issue in relation to a period not covered by agreed accounts.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>3) Ownership of partnership assets</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>6.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It is difficult to dissociate the ownership of land and other assets used by a partnership from the way in which the capital accounts of the partners have been treated.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>7. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the context of partnership law, “capital” is a sum of money which is invested by a partner in the business of the partnership on the basis that the same is not to be returned until dissolution (or ceasing to be a partner in a joint lives partnership). An “advance” is a sum of money which is loaned to the partnership which is expected to be repaid. At least as a matter of law the two are different and such difference is accepted by the order of priority of payments set out in section 44 of the Act.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>8.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital profits arise from the sale of a partnership asset. Capital profits follow income profits save where the contrary is agreed expressly (which would be rare) The value of any asset in the accounts of the partnership is merely an estimate. The value crystalizes on sale. On sale, the value in the accounts is replaced by the sale price and the capital profit which arises is divided between the partners in the capital profit sharing ratios over the period involved. Where there has been a change in profit shares over a number of years, the allocation of capital profits will be difficult.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>9.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A capital account in its strict sense is merely a statement of the amount of capital introduced by the partners. A current account in its strict sense is an account of what has happened since the partnership has commenced in terms of:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Undrawn profits</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Advances made to the partnership</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expenditure incurred by the partnership for individual partners.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In practice, it is rare to find accounts for a partnership which distinguish between capital accounts and current accounts in any way. The only general exception would be farming partnerships. The usual capital account is a combined capital and current account where the total of the capital accounts of the partners equates to the net assets of the partnership. “Capital&nbsp; account” is normally used to refer to this combined account. Accordingly, it is possible (and indeed quite common) to have a negative balance on a partner’s capital account.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>10.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Section 20(1) of the Partnership Act 1890 (“the Act”) provides as follows:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><em>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; “All property and rights and interests in property originally brought into the partnership stock or acquired, whether by purchase or otherwise, on account of the firm, or for the purposes and in the course of the partnership business, are called in this Act partnership property, and must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement.”</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>11.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Accordingly, partnership property is something distinct from property held:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By one partner beneficially</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By some or all of the partners as beneficial joint tenants</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By some or all&nbsp; of the partners as beneficial tenants in common</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Under some other specific trust arrangement.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Partnership property is to be applied for the business of the partnership while trading and, following dissolution, it is available to meet the demands of creditors with the ultimate surplus to be distributed between the partners in accordance with the partnership agreement. No partner has any interest in specie in any partnership property (see <em>Popat v Shonchhatra </em>[1997] CA, 1 WLR 1367).</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>12.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; The transfer of land into a partnership necessarily requires the agreement of all partners because the partner who transfers the land into the partnership will require credit for the value of the same as an addition to his capital account. Without such credit, the accounts will not balance in any event. While this agreement can be express or implied (see<em> Miles v Easter </em>[1953] 1 WLR 581, Harman J), an implied agreement is unlikely to arise in the case of land as land can be made available to the partnership in a variety of ways. Section 20(1) of the Act is in effect a conveyancing section (see <em>Wild v Wild </em>[2018] EWHC 2197 (Ch) HHJ Eyre, KC). There needs to be an agreement to bring the land into the partnership and section 20(1) of the Act avoids the need to comply with section 2 of the Law of Property (Miscellaneous Provisions) 1989.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The fact that the interest of a partner is reflected in his capital account means that a&nbsp; partner’s capital account can be considered to be an interest in property in its own right. Thus, capital accounts can be held as joint tenants and can pass by survivorship. This principle was accepted by the Court of Appeal in <em>Hopper v Hopper </em>[2008] EWCA Civ 1417 where the only issue between the parties was as to whether there was a joint capital account between father and mother, with children having separate capital accounts or whether there was a single joint capital account. A joint capital account obviates the need for a dissolution account. The Court might not be prepared to accept that a joint capital account has been created by agreement without the evidence of the partnership accountant.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>14.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; In determining whether an asset is partnership property, the fundamental questions to be addressed are:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Whether there is any declaration of trust</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; When it was purchased.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>15.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Where there is an express declaration of the trusts on which land is to be held then this will generally determine the beneficial interest of the parties (see <em>Pettitt v Pettitt </em>[1970] AC 777). This principle applies to land used by a partnership. A transfer of land to a partnership ought to contain an express declaration of trust that the land is held by the transferees as partners or as a partnership asset or upon the trusts of the partnership. An express declaration of trust that land is to be held by persons who are partners as tenants in common is not inconsistent with its being partnership property&nbsp; (see Megarry &amp; Wade, The Law of Real Property, 8<sup>th</sup> Edition, paragraph 13-029).&nbsp; However, an express declaration of trust that land is to be held them as joint tenants is inconsistent with its being held as partnership property (see <em>Barton v Morris</em>). The treatment of land held by partners as joint tenants as partnership property in the accounts of a partnership will not amount to severance.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>16.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Section 21of the Act provides as follows:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>“Unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of the firm”</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>The effect of this provision is that where it is possible to show that an asset was bought during the partnership it will be a partnership asset unless there has been a conscious effort to ensure that funds were taken out as drawings and then applied in the purchase.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>17.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; An agreement to transfer partnership land has to comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. This is particularly important for dissolution agreements.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>4) Normal accounting issues</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>18.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Partnership claims are usually allocated to the Business and Property Court as this has BPC District Judges who have experience of directing the accounts. In practice, it makes little difference whether the claim is heard in the Property, Trusts and Probate List or the Business List. The Court does not produce accounts. Its role is limited to:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Directing a party to produce accounts;</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Directing how the other party is to object to (falsify) the same.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Directing how the issues are to be determined.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Determining issues</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Directing the production of adjusted accounts based on those determinations.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>19.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Normal issues on accounts would include whether particular expenditure was properly incurred or reasonable or whether a partner had a right of reimbursement. The accounts must be full. A partner cannot ask the Court to deal with one part of the account and leave the rest unresolved (see <em>Green v Hertzog </em>[1954] 1 WLR 1309 as approved in <em>Hurst v Bryk </em>[2002] 1 AC 185). The accounting process normally starts from the last set of agreed accounts and ends at dissolution. Particular issues arise when a partner seeks to challenge previously agreed accounts. This can only be done if there is fraud or manifest error.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>5) Additional accounts</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>20.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Although a full account is required, there is no reason why the claim should be limited to this. The claim could include debts owed by one partner to another outside the partnership and debts owed to the partnership by third parties. Third party debts are joint and so all partners need to be before the Court. However, there is no rule that all partners have to agree to pursue a claim against a third party (see <em>Banks v Turner </em>20<sup>th</sup> February 2018, HHJ Klein)</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>21.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Claims between partners may lead to the taking of non-standard accounts. If one partner claims that the other has misappropriated customers, then there can be an account in relation to this issue. It is not part of normal accounting and it will be necessary to determine whether this additional account should be taken first.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong><u>2) JOINT LIVES PARTNERSHIPS</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>22.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; A partnership at will can be dissolved on notice. There is no need for this period to be reasonable. As regards the outgoing partner, a joint lives partnership will end on death, notice or expulsion. The Court also has power to dissolve if there is no other alternative.&nbsp;</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>23.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; An expulsion clause is never implied (see section 25 of the Act). A joint lives partnership agreement should contain an express expulsion clause because it will otherwise be impossible to remove a partner who is in flagrant breach of the agreement otherwise than by asking the Court to dissolve the partnership. A repudiatory breach of the partnership agreement by a member does not enable the other members to treat the partnership as being at an end (see <em>Hurst v Bryk</em>).</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>24.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; In order to expel a partner, there must be strict compliance with the terms of the expulsion clause. In addition, the power to expel must be exercised bona fide and not for an ulterior purpose. In contrast with club law, no term that there should be compliance with the rules of natural justice is implied. The most that is implied is that the partner receiving the notice of expulsion should be able to give an explanation for his behavior. Even as regards the implication of such a term, there attitude of the Court has been mixed. Certainly, it would be wise for the partners making use of the power to expel to allow the partner to be expelled an opportunity to explain himself because this will assist in showing that they are acting in good faith.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>25.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Under section 35 of the Act, the Court has power to order the dissolution of any partnership (including a joint lives partnership) in the following circumstances:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; When a partner, other than the partner suing, becomes in any way permanently incapable of performing his part of the partnership contract (sub-section (b))</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; When a partner, other than the partner suing, has been guilty of such conduct as, in the opinion of the court, regard being had to the nature of the business, is calculated to prejudicially affect the carrying on of the business (sub-section (c))</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; When a partner, other than the partner suing, willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable for the other partners or partner to carry on business in partnership with him (sub-section (d))</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; When the business of the partnership can only be carried on at a loss (sub-section (e) and</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Whenever in any case circumstances have arisen which, in the opinion of the court, render it just and equitable that the partnership be dissolved (sub-section (f).</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>26.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Of these grounds, that provided by section 35(f) arises most frequently. Although the Court may refuse to grant dissolution where the applicant for the order is the partner who is responsible for the breakdown in mutual trust and confidence, the difficulty faced by the Court in refusing to make an order is that it cannot force people to work together.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong><u>3) HOW THE ASSETS ARE TO BE SOLD FOLLOWING DISSOLUTION</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>27.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Following dissolution the Court has the power to order the sale of all of the assets of the partnership (including land) and will usually do so because to do otherwise would or might deprive the former partners from realizing the maximum return from the assets of the partnership. The practice is only departed from in two situations, namely (i) when a<em> Syers v Syers </em>Order is made and (ii) where the sale of the partnership assets would offend statute or would otherwise be difficult to achieve</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>28.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; It follows that in many cases it will be obvious that there will need to be a sale of the assets of the partnership and that the winding-up of the partnership cannot commence in proper without such sale. Unless there is some good reason why a sale would not be ordered at the trial of the claim, there is no good reason to delay a sale until such time. For example, if the issue between the partners is whether the profits are to be shared equally or one third two thirds, there is no good reason why the sale should be delayed until the trial. Obviously, of there is an issue as to whether a particular asset is a partnership asset, the sale will not be ordered until this issue has been determined.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>29.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; In principle, there is little difference between the conduct of the sale of partnership assets and a sale of co-owned assets. Any partner will be allowed to bid and the likelihood that a particular partner may bid will affect which who has conduct of the sale. A partner cannot bid and have conduct of the sale. The only concern of the Court is that the assets of the partnership should be sold at the best price reasonably obtainable in the circumstances. It is common for one partner to be given conduct of the sale on the basis that he will sell at or above a particular price provided that his agent considers that the price is the best price reasonably obtainable in the circumstances (which is a deliberately vague expression).</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>30.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; It would be normal practice to allow a purchasing partner P effectively set off his share in the partnership against the price which he has to pay for a particular asset. P would agree to pay the purchase price and this would be included in the accounts as the value of the asset concerned.&nbsp; P’s capital account would be adjusted accordingly and would be set off against the purchase price.&nbsp; P would normally be expected to pay a deposit pending the calculation of the set-off.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>31.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; The majority of partners (either in number or by partnership share) may apply to the Court for an Order that they be entitled to buy out the minority usually at the date of dissolution at a price to be determined by the Court. As remarked by Hoffmann LJ in <em>Hammond v Brearley Syers v Syers </em>is more often cited than applied. It is an unusual order because it deprives the minority of the ability to test the market so as to ensure that the assets of the partnership are sold at the best price obtainable.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>32.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; The Court is reluctant to order a sale of the assets of a NHS funded medical practice because this may involve indirectly the sale of goodwill which is made illegal by statute. The Court ordered physical partition instead in <em>Rodway v Landy </em>[2001] Ch 703.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>33.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; If a partnership business has a goodwill, then the same ought to be sold as part of its winding-up. The difficulty is that the goodwill is only likely to have substantial value if the business can be continued until the sale takes place. Under section 38 of the Act each partner is required to complete any unfinished business, but is generally not entitled to take on any new business involving long term contracts because this would necessarily involve the continuation of the business of the partnership after dissolution. Such businesses as shops pose no real difficulty because there are no long term contracts which need to be entered into. The problem arises mainly in relation to professional partnerships. In<em> Browell v Goodyear</em>, 14<sup>th</sup> March 2000 (unreported) the Court rejected the submission that a dissolved firm of solicitors could be required to take on new business. If such a business is to be continued so that the goodwill can be maintained, the new business has to be taken on by one or other of the partners in their own right on the basis that if and insofar as they acquire some or all of the goodwill through their taking on of new business they will need to account for the same.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>34.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; In <em>Boghani v Nathoo </em>[2011] 2 BCLC 704, the partnership business involved property development on a prodigious scale. The partnership was dissolved mid way through the development and the applicant sought orders requiring the respondent to assist in completing the contracts required for such development. The Chancellor held that it was not necessary to complete the contacts as the development could be sold at the stage which had been reached and the application was refused. The case provides little guidance as to when partners can be obliged to complete partnership contacts in order to facilitate the most profitable winding-up possible as most of the considerations raised were practical ones.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>4<strong><u>) MANAGEMENT OF THE PARTNERSHIP BUSINESS UNTIL SALE</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>35.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; The general rule remains that the Court will not interfere in the management of a partnership&nbsp; save where dissolution is sought. It will then only do so for the purposes of assisting in the orderly winding-up of the affairs of the partnership.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>36&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Following dissolution, each partner is under a duty to assist in the conduct of the business of the partnership until winding-up. No partner has any better right to do so than another. If the former partners cannot co-operate in this regard, in most cases it will be obvious which partners should manage the business pending winding-up. If necessary, application can be made to the Court for the following</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; An Order precluding other partners from interfering with the management of the business</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The appointment of a receiver</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The appointment of a receiver and manager.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In practice, the number of such applications has decreased markedly in recent years.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong><u>5) SECTION 42 ACCOUNTS</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>37.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Where a partnership is dissolved and the continuing partner or partners conduct the business pending winding-up, the outgoing partner is entitled to seek an account under section 42 of the Act in respect of the period between dissolution and winding-up. He can elect to claim a account of such share of the trading profits made since the dissolution as the court may find to be attributable to the use of<em> “his share of the partnership assets”</em> or interest at a rate of five per cent per annum on<em> “the amount of his share of the partnership assets”</em>. As stated above, the section 42 account needs to be taken after the assets of the partnership have been sold because there is no cut off point until such time.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>38. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital profits (such as the profits generated upon the sale of partnership land on winding-up) are not covered by section 42. Unless otherwise agreed, the partners will share capital profits as they share trading profits. The draft accounts prepared on dissolution will be adjusted to take into account subsequent sales and the partners credited with the capital profit produced.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>39.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; In practice, the outgoing partner will often opt for interest under section 42 because of the costs involved in calculating the trading profit generated after dissolution and the difficulty in establishing the proportion of such trading profit which was generated from the use of partnership assets as opposed to the efforts of the continuing partner or partners.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong><u>6) LITIGATION ISSUES</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>40.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Specific dispute resolution issues will involve the following:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; County Court Jurisdiction</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Protocol compliance</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial disclosure</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Limitation</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Statements of case</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6)&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Costs</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>1) County Court Jurisdiction</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>41.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; The winding-up jurisdiction of the Court is determined by the net assets of the partnership.&nbsp; When the equity jurisdiction limit was £30,000 this meant that nearly any partnership dispute worth litigating had to be brought in the High Court. As the equity jurisdiction is now £350,000 many partnership claims can be brought in the County Court albeit as Business and Property Work. Given the need for accounts at some stage, this would need to be in a County Court which has BPC District Judges available.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>2) Protocol compliance</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>42.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; No specific Pre-Action Protocol applies to partnership claims. However, the parties are expected to comply with the Protocol Practice Direction. The most important part if the exercise which is required is in determining what is actually in issue between the parties. Before a claim is commenced, the Court would expect draft accounts to dissolution to be prepared from which the value of the issues between the parties can be assessed.&nbsp;&nbsp;</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>3) Initial disclosure</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>43.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; The better view is that initial disclosure in the BPC is limited to what are likely to be the main issues to be tried by the Judge and not issues relating to the taking of accounts. This makes initial disclosure quite limited.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>4) Limitation</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>44.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Section 43 of the Act provides that the amount due to from surviving or continuing partners to an outgoing partner in respect of the share of the latter is a debt accruing at the date of dissolution. Accordingly, the claim by the outgoing partner for an account can only be commenced on dissolution and will become statute barred when the debt relied upon becomes extinguished. This will be 6 years after dissolution unless the partnership was by deed in which case the limitation period will be 12 years from dissolution. The date when the debts of the partnership are actually paid by one partner is not relevant (see<em> Marshall v Bullock</em>, 27<sup>th</sup> March 1998, CA).</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>45.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; However, limitation will only be relevant where all that is being considered is the payment of partnership debts by some but not all of the partners. If the partnership owns property, then the issue between the parties will be the extent to which each is entitled to share in the proceeds of sale of the property taking into account the respective capital accounts of the partners. This is a claim to recover from a trustee trust property or the proceeds of trust property in the possession of the trustee or previously received by the trustee and converted to his use to which section 21(1)(b) of the Act applies. There is no limitation period.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>4) Statements of case</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>46.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Before the CPR it was common to see statements of case in a partnership claim which did nothing more than recite the terms of the partnership and the fact of its dissolution and ask the Court to wind-up the partnership and ask for “all appropriate accounts, inquiries and directions”. What would often happen was that the issues of the case would only be revealed at a late stage of the claim after considerable legal costs had been incurred. Statements of case ought to identify partnership property.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>47.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; A partnership claim is unusual in that there is no natural claimant. The claimant is the partner who issues first. Leaving this point aside, it is really incumbent upon the claimant to identify the issues of the claim and (if possible) to put forward a set of accounts to dissolution which he contends for.&nbsp;</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><u>5) Costs</u></strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>48.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Before the CPR, it was the long established practice that all the costs of proceedings consequent on a dissolution (as opposed to costs relating to issues as to the existence of the partnership or as to the existence of a binding dissolution agreement) should be paid out of the partnership assets unless there was some good reason for making another order (see <em>Hamer v Giles </em>(1879) 11 Ch D 942, CA). One exception to the practice was where one partner assumed an obligation to prepare accounts and costs were incurred because of his failure to do so. Of necessity, the practice of awarding costs out of the partnership assets involves two sets of assessment of costs because one partner can apply for the assessment of the costs incurred by his other partner or partners. A simple way of achieving the same result is for there to be no order as to costs.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>49.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Over time, the general practice of the Court has been eroded by the (otherwise helpful) practice of isolating particular issues with regard to the taking of an account and trying them separately. If the issue between the parties is as to the value of goodwill (on the assumption that one has agreed to purchase the same at a value to be determined by the Court) the Court will usually award costs in relation to that issue in isolation at least where the production of accounts following the finding is merely a matter of arithmetic.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>50.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; It is clear that a <em>Calderbank</em> offer can be made in an action for an account. A more difficult issue is whether a Part 36 offer can be made. Lindley suggests that it can albeit that it would have to be formulated by reference to individual issues on the taking of the account (paragraph 23-120 of the current edition). However, the problem with a Part 36 offer is that the same carries with it the offer of costs if and insofar as the other party accepts it. This is not helpful in a partnership claim. Also, it achieves little in a partnership claim if some but not all of the issues between the partners are resolved. As stated above, all issues have to be resolved so that dissolution accounts can be produced. It is submitted that the <em>Calderbank</em> route is the preferable one to take.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>51.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; A partnership claim normally involves the determination of fundamental property or other issues between the partners and thereafter the taking of accounts. In dealing with the fundamental issues the Court will usually make a contentious costs order dealing with all costs to that point. It is always good practice to ensure that the assessment of costs will be immediate because CPR Part 47.1 provides that the assessment of costs is usually to be undertaken at the end of the whole claim. Even without such a direction, the better view is that costs can be assessed immediately because of a partnership claim is a classic two stage claim. In <em>Molnlycke AB v Proctor &amp; Gamble </em>[1993] FSR 154 Morrit J held that there would normally be such an immediate assessment of costs in a patent interference claim because that was a classic two stage action.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>52.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; As regards cost budgeting, the Court will normally order this up to the trial. Thereafter, it will usually be dispensed with not least because there is no provision for post trial costs.</p> <!-- /wp:paragraph -->

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

<!-- wp:paragraph --> <p><strong>Kirsty Williams-Henry v Associated British Ports Holdings Ltd [2024] EWHC 806 (KB)</strong> - <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></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Introduction</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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 <strong>Ritchie J </strong>was handed down on 10 April 2024.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>Late evidence concerning substantial injustice was admitted near the end of the trial.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The claimant’s schedule was £2,352,261 and the defendant’s counter schedule was between £259,174 and £367,857.&nbsp; The Judge assessed quantum in the net sum of £596,704.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The claimant was found to be fundamentally dishonest and her claim was dismissed under s57 of the Criminal Justice &amp; Courts Act 2015.&nbsp;</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <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> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>Law</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>S57 of the Act provides:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>(1) This section applies where, in proceedings on a claim for damages in respect of personal injury (“the primary claim”) —</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(a) the court finds that the claimant is entitled to damages in respect of the claim, but</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(2) The court must dismiss the primary claim, <strong>unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed</strong>.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(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.</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>Substantial injustice has been considered by the High Court before; notably:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>In <em>London Organising Committee of the Olympic and Paralympic Games v Sinfield </em>[2018] EWHC 51 where Julian Knowles J stated at [65]:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>‘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.’</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>In <em>Iddon v Warner</em> [2021] His Honour Judge Sephton QC (sitting as a High Court judge) agreed with Julian Knowles J in <em>LOCOG</em> at [98]; both found that the claimants in their cases had not suffered substantial injustice and dismissed the claims.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>In <em>Woodger v Hallas</em> [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&amp;48]:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>‘In <em>Iddon</em>, [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.’</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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 ‘<strong>know it when they see it</strong>’.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>The claim</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>In <em>Williams-Henry</em>Ritchie J summarised his assessment of the credibility of the claimant (and her mother) at [118]:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>‘<strong>I have come to the conclusion that both the Claimant and her mother have been thoroughly dishonest in their presentation of the </strong><strong>Claimant’s </strong><strong>symptoms and disabilities and have sought to mislead clinicians, medicolegal experts and this Court about the </strong><strong>Claimant’s </strong><strong>health, functioning, activities of daily living and her work abilities</strong>. 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.’</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>He described the claimant’s injuries in these terms at [158]:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>‘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.’</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>Fundamental Dishonesty</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>Ritchie J reviewed the law relating to s57 CJCA generally at [171&amp;172]; and made a series of specific findings of the claimant’s dishonesty and its affect upon the claim at [173]:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>‘<strong>The burden of proof lay on the Defendant and I consider that it has been satisfied by the</strong> <strong>Defendant in relation to the specific findings of the lies I have set out above. Those</strong> <strong>covered conscious gross exaggeration and fabrication of the true duration and/or extent</strong> <strong>inter alia of</strong>: (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. </p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Overall, I find that the Claimant has presented her function and</strong> <strong>disabilities to clinicians, medico-legal experts and the Court dishonestly</strong>. <strong>The effects of</strong> <strong>this dishonesty on the claim have been substantial and fundamental. It has led to the</strong> <strong>experts instructed on her behalf making recommendations for care and case</strong> <strong>management in the past and in future which were and are far in excess of her actual</strong> <strong>needs caused by the accident. The claim for care was pitched at around £1 million.</strong> <strong>Some experts recommended care and therapies for life. The dishonesty has led to the</strong> <strong>cost of surveillance, multiple supplementary medical reports, disclosure applications</strong> <strong>and the need for a 2-week trial. It has substantially affected the presentation and</strong> <strong>preparation of both the claim and the defence. I consider that in law these matters are</strong> <strong>fundamental to the claim</strong>.’</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The Judge was not satisfied that the claimant’s repeated lies to the DWP (when applying for benefits) or to L&amp;G Insurance (for life insurance) were fundamental to the claim [174].</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>Substantial Injustice</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>Concerning ‘substantial injustice’ Ritchie J reviewed the decisions of <em>LOCOG</em> and <em>Woodger v Hallas</em> [175&amp;176] and stated at [177]:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>‘<strong>The principle to be applied is that fundamental dishonesty will result in the Claimant</strong> <strong>losing her genuine damages. This penalty is intended by Parliament. So, the starting</strong> <strong>point is that a dishonest claimant is not suffering an injustice per se by being deprived</strong> <strong>of his/her genuine damages. Once fundamental dishonesty has been found by the Judge</strong> <strong>then the Court must consider whether the dismissal will cause SI.</strong> 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. <strong>I</strong> <strong>do not understand how a Judge will know injustice when she/he sees it, with the</strong> <strong>blindfold put on. If that is what Knowles J. was saying then I respectfully do not agree</strong> <strong>with his ruling on the interpretation of SI.</strong> The plain words of the Act tie the responsibility to assess any resulting SI to the dismissal of the claim. <strong>In my judgment</strong> <strong>it is the dismissal of the claim for damages that is the trigger for the analysis of whether</strong> <strong>a substantial injustice will occur if no damages are awarded. One cannot ignore the very</strong> <strong>thing which S.57(3) takes away when considering the injustice of the taking away</strong>. 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). <strong>This section gives</strong> <strong>the Judge discretion which, is to be exercised fairly and only if a threshold with two</strong> <strong>parts is reached. Part one is a finding of injustice to the Claimant. Part two is a finding</strong> <strong>that the injustice is substantial</strong>.’</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>I consider that the correct approach when deciding whether a substantial injustice arises</strong> <strong>is to balance all of the facts, factors and circumstances of the case to reach a conclusion</strong> <strong>about SI. The relevant factors in my judgment are all of the circumstances and include</strong>:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(1) <strong>The amount claimed when compared with the amount awarded</strong>. 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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(2) <strong>The scope and depth of that dishonesty found to have been deployed by the</strong> <strong>claimant</strong>. Widespread and gross dishonesty being more weighty against SI than moderate or minor dishonesty.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(3) <strong>The effect of the dishonesty on the construction of the claim by the claimant and</strong> <strong>the destruction/defence of the claim by the defendant</strong>. 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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(4) <strong>The scope and level of the claimant’s assessed genuine disability caused by the</strong> <strong>defendant</strong>. 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?</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(5) <strong>The nature and culpability of the defendant’s tort</strong>. Brutal long term sexual abuse, intentional assault or drug fuelled, dangerous driving being more culpable than mere momentary inadvertence.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(6) <strong>The Court should consider what the Court would do in relation to costs if the claim</strong> <strong>is not dismissed</strong>. 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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(7) <strong>Has the defendant made interim payments, how large are these and will the claimant</strong> <strong>be able to afford to pay them back?</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>(8) <strong>Finally, what effect will dismissing the claim have on the claimant’s life</strong>. Will she lose her house? Will she have to live on benefits, being unable to work?</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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. &nbsp;However, Ritchie J stated at [204]:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>‘I consider that I cannot take into account the threat of or the risk of suicide when making the decision on fundamental dishonesty.’</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>At [205] the Judge identified the matters which were relevant to the issue of substantial injustice:</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>‘For the decision on SI I shall take each relevant factor in turn. (1) <strong>The amount claimed when compared with the amount awarded.</strong> 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) <strong>The scope and depth of the dishonesty found to have been deployed by the Claimant</strong>. 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&amp;G for financial gain alongside her many fundamental untruths to this Court, her treating clinicians and the experts. (3) <strong>The effect of the dishonesty on the construction of the claim by the Claimant and the destruction/defence of the claim by the Defendant</strong>. 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) <strong>The scope and level of the Claimant’s assessed genuine disability caused by the Defendant.</strong> 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) <strong>The nature and culpability of the Defendant’s tort. The Defendant’s tort was at the lower end of the culpability scale</strong>. The pier had stood in the state it was in for years with no previous accidents. (6) <strong>The Court should consider what the Court would do in relation to costs if the claim is not dismissed</strong>. 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) <strong>Finally, what effect will dismissing the claim</strong> <strong>have on the Claimant’s life</strong>. 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.’</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>‘<strong>This Claimant maintained before trial, in open Court and in her last served witness statement, that she had never lied during this claim.</strong> <strong>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</strong> <strong>Claimant’s damages by adverse costs orders if damages are awarded. I further take into</strong> <strong>account the excellent recovery which the Claimant made from the injuries with high</strong> <strong>quality NHS treatment both at hospital and for years afterwards. On balance, I do not</strong> <strong>find that it would be a substantial injustice to dismiss the claim</strong>. 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. <strong>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&amp;G insurance about her disabilities</strong>.’</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The claim was dismissed.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>Takeaway</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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.&nbsp; This is a significantly more nuanced approach than used by the courts is cases such as <em>LOCOG</em>, <em>Iddon </em>and <em>Woodger v Hallas.</em> &nbsp;&nbsp;I expect that in future other courts will shape their determination of substantial injustice by reference to the criteria identified by Ritchie J in <em>Williams-Henry</em>.&nbsp; &nbsp;</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>Defendants can take comfort in the robustness of the decision against the evidential background of widespread and destructive dishonesty.&nbsp; 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> <!-- /wp:list-item --> <!-- wp:list-item --> <li>There is however some comfort for claimants.&nbsp; Courts should not ignore the fact of the dismissal of the claim and conduct their assessment ‘blindfold.’ &nbsp;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> <!-- /wp:list-item --> <!-- wp:list-item --> <li>Will courts know substantial injustice when they see it? I think its more likely to be identified now than before. &nbsp;</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><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 &amp; Credit Hire Team.</p> <!-- /wp:paragraph -->

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

<!-- wp:paragraph --> <p><strong>Background</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>The application</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>The decision</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>Master Brown refused the application for the following reasons: &nbsp;</p> <!-- /wp:paragraph --> <!-- wp:list {"ordered":true} --> <ol><!-- wp:list-item --> <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 ‘<em>serious problems’</em> 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> <!-- /wp:list-item --></ol> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <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> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>Master Brown applied significant weight to the costs of the trust option. The costs of the CFO would be ‘<em>substantially less’</em> 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 ‘<em>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’.</em></li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <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> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <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.&nbsp;</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Discussion</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph -->

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

<!-- wp:paragraph --> <p><em>Judicial review of a coroner’s decision on the scope of an inquest - Article 2 ECHR&nbsp; - 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</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Background</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>Mrs Rosslyn Wolff, age 74, was found dead in her home on 11 January 2022 following a domestic fire.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>A fire investigation concluded that the most probable cause of the fire was unsafe use or disposal of smoking materials.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>Mrs Wolff lived on her own.&nbsp; She was a hoarder.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>As well as being a smoker, she was diabetic.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The fire brigade had received multiple referrals for home safety visits over the years.&nbsp; 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> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <li>An initial multidisciplinary assessment was carried out.&nbsp; 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> <!-- /wp:list-item --> <!-- wp:list-item --> <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’.&nbsp; 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> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <li>It was unclear from the evidence whether the fire assessment ever took place.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>The legal framework</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <li><strong>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</strong>.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The leading authority on the <strong>positive operational duty</strong> is the decision of the Supreme Court in <em><u>Rabone v Pennine Care NHS Trust [2012] 2 AC 72</u></em>, a case about an NHS voluntary psychiatric inpatient, known to be suicidal, who died by suicide on a visit home.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li><em><u>Rabone</u></em> identified the threshold test of <em>‘real and immediate risk to life’</em> as a necessary but not sufficient condition for the existence of the duty ([21]).</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The threshold test of ‘real and immediate risk to life’ was further considered by the Supreme Court in <em><u>R (Maguire) v Blackpool and Fylde Senior Coroner [2023] 3 WLR 103</u></em> at [241]: <em>‘A real risk is one that is objectively verified and an immediate risk is one that is present and continuing’</em>.&nbsp; The risk must be a risk specifically of death, not just of harm, even of serious harm ([38]).</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>In addition to the threshold test of ‘real and immediate risk to life’, the following principles emerged in <em><u>Rabone</u></em>: (1) <em>‘[T]he operational duty will be held to exist where there has been an <strong>assumption of responsibility</strong> by the state for the individual’s welfare and safety (including by the exercise of control)</em>’ ([22]); (2) <em>‘[T]he <strong>vulnerability of the victim</strong> is a relevant consideration’</em> and <em>‘[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’</em> ([23]); (3) The <strong>nature of the risk</strong> to life is relevant (<em>‘Is it an ‘ordinary’ risk of the kind that individuals in the relevant category should reasonably be expected to take or is it an <strong>exceptional risk</strong>?’</em> ([24])).</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>As to the scope of the positive obligation, <em>‘this will depend upon whether the authorities should have foreseen a real and immediate risk and what more they could be expected to do’ </em>(<em><u>Rabone</u></em>, [101]).&nbsp;</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>The Assistant Coroner’s decision</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>The Assistant Coroner found that Art. 2 was not engaged.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <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 <em>“does not thereby determine whether Article 2 is engaged”</em>; 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 <em>“[t]he state does not take on added duties or responsibilities in such circumstances”</em>.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The Assistant Coroner considered that <em>“[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”</em>.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>The outcome of the judicial review</strong></p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li><strong>Real and immediate risk to life</strong>: Mrs Wolff was <em>‘certainly, up until the time of her death, a present and continuing risk to herself in many ways’</em> ([39]).&nbsp; 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]).&nbsp; The risk of death was inherent in the risk of a house fire.&nbsp; 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> <!-- /wp:list-item --> <!-- wp:list-item --> <li><strong>The Article 2 operational duty</strong>: 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.&nbsp; 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]).&nbsp; The deceased in <em><u>Rabone</u></em> was not herself under formal state control at the time of her death.&nbsp; 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 (<em><u>Rabone</u></em>, [34]). Mrs Wolff’s circumstances were very different from these.&nbsp; The state had <em>‘no verifiable power to control or detain her’</em> and <em>‘no apparent basis in law for exercising control over her’</em> ([50]). She was not willing to cooperate with the authorities and they could not compel her to do so. &nbsp;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.&nbsp; This argument was rejected for the following reasons: (1) <em>‘Helping and supporting an individual, even in the discharge of legal duties, does not routinely give rise to the operational duty’</em> – <em>‘Something more is needed’</em> ([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.&nbsp; 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 <em><u>Rabone</u></em> of ‘sufficient vulnerability’ is that of a local authority failing to exercise its powers to protect a child at known risk of abuse.&nbsp; 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.&nbsp; 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)).&nbsp; Mrs Wolff’s risks, even in combination, were <em>‘[still] of the kind that individuals, rather than the state, are reasonably expected to deal with’</em> ([61]).</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li><strong>Arguable breach</strong>: 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.&nbsp; 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.&nbsp; In Mrs Wolff’s case, the authorities’ strategy was <em>‘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’</em> ([69]).&nbsp; 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.&nbsp; Having regard to this, the Court did not consider it arguable that the duty was breached on the facts of Mrs Wolff’s case.&nbsp; The Court observed that whilst the threshold of arguability is a low one, <em>‘to be credible it must have some evidence base’</em> ([70]). &nbsp;The argument that the authorities could and should have done more in the months leading up to Mrs Wolff’s death <em>‘[did] not advance beyond the speculative to the credible’</em> ([70]).</li> <!-- /wp:list-item --></ul> <!-- /wp:list -->

Pregnancy and Maternity Discrimination in the Workplace &#8211; Changes in 2024

<!-- wp:paragraph --> <p>2024 has already brought some significant changes to pregnancy and maternity discrimination law.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>But what are they? A re-hash of what was already there? A step too far? Or a great rebirth of maternity protection?</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>This article seeks to reflect those key developments, and what they might mean for women, employers, and practitioners alike.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>(1) An Extension of Redundancy Protections</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>Until 6<sup>th</sup> April 2024, Regulation 10 of the Maternity and Parental Leave Regulations 1999 (“MPL”) offered some women positive discrimination, rarely seen outside disability discrimination law.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>From 6<sup>th</sup> April 2024</strong>, it has been substantially widened. That priority now also extends to:</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:list --> <ul><!-- wp:list-item --> <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> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>(2) Widening of Section 18 EQA 2010</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>Section 18 EQA 2010 offers protection from unfavourable treatment because of the protected characteristic of pregnancy and maternity. However, it has had its drawbacks.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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?</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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?</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>From 1<sup>st</sup> January 2024</strong>, 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 <strong>Brown v Rentokil [1998 ICR 790]</strong>. S.18 also offers protection if a person has ‘exercised’ the right to maternity leave.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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 <strong>Brown</strong>, but having it codified in S.18 is certainly helpful, particularly post-Brexit.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>(3) Direct Discrimination</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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 <strong>Otero Ramos v Servicio Galego de Saude [2018 ICR 965].</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>From 1<sup>st</sup> January 2024</strong>, Section 13(7) is no more. This means that less favourable treatment due to breastfeeding can now be direct sex discrimination.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>Recent case law has assisted in this area too. Cases such as <strong>Commissioner of the City of London Police v Geldart [2021 ICR 1329]</strong>, 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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>What is gained by this, is a good question.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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 <em>pregnancy/maternity discrimination, </em>even if a S.18 claim could succeed on the same facts.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>(4) The Paternity Leave (Amendment) Regulations 2024</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>And to close, one for the fathers. If the expected week of childbirth is after <strong>6<sup>th</sup> April 2024</strong>, 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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Conclusion</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph -->

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

<!-- wp:paragraph --> <p><em>Mr B King v Gemalto Thales UK Ltd 2024 EAT 34 (8 March 2024)</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>The Background</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>The Law</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><em>“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:</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><em>58.1. &nbsp;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</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><em>58.2. &nbsp;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:</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><em>58.2.1. &nbsp;be so serious that the hearing is unfair</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><em>58.2.2.  involve a failure of the Employment Tribunal to direct itself to the relevant</em> <em>law</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><em>58.2.3.  undermine the Employment Tribunal’s analysis of the evidence to such an</em> <em>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”</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>Furthermore, the EAT recorded:</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><em>&nbsp;“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.”</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Finding</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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 “<em>proper allowance should have been given to Mr King’s vulnerability when assessing his evidence</em>” 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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Comment</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>This case acts as a helpful reminder of the importance in having regard to disabilities of litigants in person during case management stages.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>Helpful resources for Tribunal users:</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <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"><strong>Presidential Guidance: Vulnerable parties and witnesses in Employment Tribunal proceedings.</strong></a></li> <!-- /wp:list-item --> <!-- wp:list-item --> <li><a href="https://www.theadvocatesgateway.org/toolkits-1-1-1" target="_blank" rel="noreferrer noopener"><strong>The Advocate’s Gateway Toolkits</strong></a></li> <!-- /wp:list-item --> <!-- wp:list-item --> <li><a href="https://www.judiciary.uk/about-the-judiciary/diversity/equal-treatment-bench-book/" target="_blank" rel="noreferrer noopener"><strong>Equal Treatment Bench Book</strong></a></li> <!-- /wp:list-item --></ul> <!-- /wp:list -->

New Chief Coroners Guidance on Obtaining Information Regarding Social Media Use

<!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Section 101</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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).</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>Examples of information Ofcom can obtain from regulated services include:</p> <!-- /wp:paragraph --> <!-- wp:list --> <ul><!-- wp:list-item --> <li>Content encountered by the child by means of the service;</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>How the content came to be encountered by the child (including the role of algorithms or particular functionalities);</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>How the child interacted with the content (for example, by viewing, sharing, or storing it or enlarging or pausing on it); and</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>Content generated, uploaded, or shared by the child.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>Section 163</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Practical considerations</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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:</p> <!-- /wp:paragraph --> <!-- wp:list {"ordered":true,"type":"lower-alpha"} --> <ol style="list-style-type:lower-alpha"><!-- wp:list-item --> <li>Identify the child in connection with whose death a notice relates;</li> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --></ol> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>Commentary</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph -->

Case note on LZL v HYC

<!-- wp:paragraph --> <p><strong>Facts</strong></p> <!-- /wp:paragraph --> <!-- wp:list {"ordered":true} --> <ol><!-- wp:list-item --> <li>The claimant and first defendant are partners. Together, they have five children between the ages of six and 23.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The claimant was a passenger whilst being driven by the first defendant. The first defendant crashed the car.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The claimant suffered a traumatic brain injury.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The claimant filed a claim against the first defendant on 25 October 2023.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <li>On 6 June 2023, the second defendant, an insurer, made a voluntary interim payment of £100,000 to the claimant.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <li>The claimant was opposed to the making of an application of a deputy because she was distrustful of those outside the family.</li> <!-- /wp:list-item --></ol> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>Issue</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>11. Whether the Court should appoint an alternative litigation friend. Absent suitable alternatives, the only appropriate candidate was the Official Solicitor. </p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Law</strong></p> <!-- /wp:paragraph --> <!-- wp:list {"ordered":true,"start":12} --> <ol start="12"><!-- wp:list-item --> <li>Farbey J considered the legal framework.</li> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --> <!-- wp:list-item --> <li>CPR 21.7 stipulates that the court may terminate and appoint litigation friends.</li> <!-- /wp:list-item --></ol> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>Decision</strong></p> <!-- /wp:paragraph --> <!-- wp:list {"ordered":true,"start":16} --> <ol start="16"><!-- wp:list-item --> <li>Farbey J considered that the following factors weighed in favour of appointing an alternative litigation friend to HXS:<!-- wp:list --> <ul><!-- wp:list-item --> <li>HXS lacked insight into the need for a professional deputy; and</li> <!-- /wp:list-item --> <!-- wp:list-item --> <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> <!-- /wp:list-item --></ul> <!-- /wp:list --></li> <!-- /wp:list-item --></ol> <!-- /wp:list --> <!-- wp:list {"ordered":true,"start":17} --> <ol start="17"><!-- wp:list-item --> <li>Farbey J considered that the following factors weighed in favour of permitting HXS to remain litigation friend:<!-- wp:list --> <ul><!-- wp:list-item --> <li>HXS had now supplied the relevant documentation so that the claimant’s solicitors could apply for the appointment of a professional deputy;</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>There was no evidence HXS could not safeguard the claimant’s interests despite being the defendant’s mother;</li> <!-- /wp:list-item --> <!-- wp:list-item --> <li>HXS would likely be better able to facilitate the claimant’s engagement with the litigation process than an Official Solicitor.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --></li> <!-- /wp:list-item --></ol> <!-- /wp:list --> <!-- wp:list {"ordered":true,"start":18} --> <ol start="18"><!-- wp:list-item --> <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> <!-- /wp:list-item --></ol> <!-- /wp:list --> <!-- wp:paragraph --> <p><strong>Comment</strong></p> <!-- /wp:paragraph --> <!-- wp:list {"ordered":true,"start":19} --> <ol start="19"><!-- wp:list-item --> <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> <!-- /wp:list-item --></ol> <!-- /wp:list -->

CCC v Sheffield Teaching Hospitals NHS Foundation Trust – Case Note

<!-- wp:paragraph --> <p>Citation: [2024] 1 WLR</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>High Court of Justice, King’s Bench Division</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>Judge: Ritchie J</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Background:</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.&nbsp; She contended that her judgment was at least as advantageous as her offer.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>The Claimant’s case:</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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).</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Judgment:</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.&nbsp; It was up to the Claimant as to how the offer was made.&nbsp; In this case she would have beaten her PPO offer and the Part 36 consequences would follow, as to that element.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>In short, it was found (paragraph 18):</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><em>“For an offeror to beat her Part 36 combined offer, she has to beat both parts.&nbsp; If she wishes protection for each part then individual offers can be made.”</em></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p><strong>Conclusion</strong></p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>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.</p> <!-- /wp:paragraph -->