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Gareth Price considers Multiple tortfeasors and compromise

Multiple tortfeasors and compromise

  1.  What principles apply where a Claimant pursues damages against more than one tortfeasor and might compromise her claim against one of them?
  2.  What follows is a brief summary of some of the important and guiding authorities in this area. It is not exhaustive.
  3.  As a starting point, it has long been held that where the same damage is caused by joint tortfeasors, release of one joint tortfeasor by agreement or compromise releases all the others; see Duck v. Mayeu[1892] 2 Q.B. 511and Cutler v McPhail [1962] 2 Q.B. 292. More recently, the High Court has reiterated this position; see Vanden Recycling Ltd v Bevin Tumulty [2015] EWHC 3616 (QB).
  4.  Further, it has long been held that an abuse of process may occur where a Claimant fails litigate against all relevant tortfeasors; see Henderson v Henderson (1843) 3 Hare 100.
  5.  The combination of these principles seems to be that:
    1. Compromising a single cause of action against one defendant releases all other potential defendants arising under that same cause of action;
    2. A Claimant may be struck out for an abuse of process if they could/should have included a defendant in an earlier action.
  6.  Parliament’s key involvement in this area of the law was the introduction of the Civil Liability (Contribution) Act 1978 (‘the Act’).
  7.  Section 3 of the Act provides:“Judgment recovered against any person liable in respect of any debt or damage shall not be a bar to an action, or to the continuance of an action, against any other person who is (apart from any such bar) jointly liable with him in respect of the same debt or damage.”
  8.  Therefore, contribution from a joint tortfeasor where judgment is obtained, does not, of itself, extinguish an action against a fellow tortfeasor.
  9.  Despite the apparent scope of that provision, the Court of Appeal stated in Morris v Wentworth-Stanley [1999] Q.B. 1004                                                                                                                                                                                                                                                                          “…[i]t does not seem to me… that the provisions of section 3… were intended to detract from the general proposition that it is plainly desirable that all persons who are to be sued should, as a general rule, be sued at the same time and in the same proceedings where such a course is reasonably practicable and that, whenever such a course is practicable but is not taken, then, in an appropriate case, the rule in Henderson v. Henderson, 3 Hare 100, 115 may be invoked, so as to render a second action an abuse of process.”
  10.  Shortly after Morris came Jameson v. CEGB [2000] 1 AC 455.
  11.  In Jameson, the Claimant brought a claim against his former employer for personal injuries due to exposure to asbestos. He reached a settlement “in full and final settlement and satisfaction of all the causes of action”. The Claimant died. After his death, his executors brought an action under the Fatal Accidents Act 1976 on behalf of his widow. The basis of the claim for damages was the same exposure of the Claimant to asbestos.
  12.  The House of Lords held that the compromise could have the effect of extinguishing the cause of action just as a judgment might. The question was not whether the Claimant had recovered the full value of his claim but whether the sum which he has received in settlement of it was intended to be in full satisfaction of the tort.
  13.  Although the two defendants in Jameson were concurrent, not joint, tortfeasors, nevertheless, the compromise, read in full, had the effect of extinguishing all other causes of action. The Claimant had settled his entire cause(s) of action in full.
  14.  In Heaton and others v. AXA Equity and Law Life Assurance Society plc and another [2002] 2 AC 329, the House of Lords considered and interpreted Jameson. Lord Bingham stated that:“While it is just that [a Claimant] should be precluded from recovering substantial damages against [Defendant A] in a case where he has accepted [from Defendant B] a sum representing the full measure of his estimated loss, it is unjust that [a Claimant] should be so precluded where he has not.”
  15.  In Wright v. Barts Health NHS Trust [2016] EWHC 1834 (QB), Mr. Justice Edis considered an application to strike out the claim for abuse of process. Briefly, a roofer had suffered injuries whilst at work. He subsequently underwent allegedly negligent medical treatment to treat those injuries. He compromised his claim against the roofing company, incorporating an element of contributory negligence into the compromise. He brought proceedings against the Hospital. The Hospital applied to strike the claim out on the basis that the Claimant:  “has already accepted settlement in another claim for the injuries which form the subject matter of this action. Alternatively, it is submitted that the settlement operates to extinguish the loss and therefore as a defence to the claim.”
  16.   Considering the earlier case law (discussed above), Mr. Justice Edis noted that“…the primary focus of attention should be the construction of the agreement in its appropriate factual context…. the absence of a reservation of a right by A to sue C is of lesser and perhaps no significance since there is no need for A to reserve a right to do that which he is entitled to do without any such reservation.…Heaton is clear that the rule which provides that the release of one joint tortfeasor (parties jointly and severally liable for the same tortious act) operates as a release for all does not apply to concurrent tortfeasors…. that is parties who commit separate tortious acts which cause or contribute to the same damage.”
  17.  Mr. Justice Edis refused the Hospitals application. There was neither an abuse of process in proceeding against the Hospital nor did the compromise operate as a defence. In summary, the Claimant had not been fully compensated for his loss.

Principles

  1.  The following principles/points seem to follow:
    1. Compromise of a claim against one of several joint tortfeasors will release the remaining tortfeasors.
    2.  Despite s.3 of the Civil Liability (Contribution) Act 1978, it remains possible that a failure to pursue all relevant Defendants gives rise to an abuse of process argument.
    3.  Heaton and Jameson, as authorities, are aimed at avoiding the injustice of double-recovery.
    4.  Jameson is strong authority that Claimants should be advised when accepting a settlement expressly to reserve their rights to maintain an action against any other concurrent tortfeasors.
    5.  The terms of the compromise are critical to any further/subsequent claims.
    6.  A settlement with one concurrent tortfeasor does not release the others unless it is clear that it was intended to have that effect, or unless the payment clearly satisfies the whole claim:
      1. Did the compromise truly reflects full compensation for all the Claimant’s loss?
      2. What are the terms of compromise?

Gareth Price

Parklane Plowden

15 November 2016

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