Should there be a trial of limitation as a preliminary issue?

This article discusses whether to list a case for trial of ‘limitation’ as a preliminary issue.  This can be a matter of conflict between parties but, in the ‘age of QOCS’, can have significant benefits or repercussions for the litigants depending on the Court’s approach.  Local Practice:  It is not possible to state with certainty the approach each court or judge within each court centre will adopt to the application for trial by way of preliminary issue. Few local practice directions or protocols exist, at least in a formal sense. [application should of course be made formally Bokova v Associated Newspapers EWHC 320].  For those who practise on the CDN cluster of courts, the current view is that a trial of the issue separately is desirable. This approach, anecdotally, has been driven by adverse local experience in not so ordering. Local experience of the merits and de-merits will play just as much of a role as do the CPR or case-law.  The Issue  Limitation, or the Claimant’s date of knowledge of his cause of action, is a distinct plea which operates in bar of the substantive claim. In other words, subject to section 33 of the 1980 Act, a complete defence to an action, which will stop proceedings in their tracks.  Contrary to the actions taken unadvisedly by some, the plea in bar is not available by way of summary judgment application.  However, it occupies a discrete dimension within litigation and, need not be bound up with questions of breach, causation or loss.  The CPR  Part 3.1(2)(i), provides:  General Powers of Case Management 

“..the Court May- 

(i)         Direct a separate trial of any issue

(m)      Take any other step…for the purpose of furthering the overriding objective” 

Plainly the power exists. It lies within the Court’s general powers of case management and, falls to be exercised at any time when the Court is looking in isolation, or holistically, at the future progression of the case.  The guiding principles, (therefore amongst the matters about which the Court will wish to hear), will be those set out at CPR Part 1 

• Proportionality
• Efficiency
• Fairness
• Allocation of resources correctly. 

Those factors will always play a part but to differing degree and extent in each case or ‘species’ of litigation. It is inevitably the situation, where the facts favour it, that some species or types of litigation are more suited to determination by preliminary issue than others. NIHL claims may well, depending on the facts, be an area of litigation ripe for this treatment due to their low value and often historic nature.  In order to service the objectives of Part 1, it is clear that the issue must be:

• “potentially decisive” of the entire case; and
• concern “only issues of clear law”. 

The issue of knowledge fulfils only the former. But, the concerns of Part 1 CPR are more broadly obedient to efficient resolution of matters, provided there is no enormous factual complexity or investigation required.  The factual enquiry on questions of ‘knowledge’ should be typically brief. In Spargo v North Essex DHA [1997] PIQR, Brooke LJ, (to paraphrase) made clear all that was required was a short enquiry as to the facts, to which the Court would then apply the largely uncontroversial and well-understood legal principles.  Case Law?  Where matters of case management are concerned, we know that reasonable exercise of the wide discretion afforded to the Court offers little hope of successful appeal to an aggrieved party. [Royal & Sun Alliance Insurance Plc -v- T&N Ltd [2002] EWCA Civ 1964]  By that same token previously decided cases, resolving matters of case management by reference to their own specific facts, are likely to be of little assistance. There is some useful judicial pronouncement nonetheless, which may be relevant on any application concerning the preliminary issue of limitation.  KR [and others] v Bryn Alyn Community (Holdings) Limited & R&SA Plc [2003] EWCA Civ 85  The court considered the question of date of knowledge more broadly in the context of an historic sexual abuse claim. Having wrestled with questions relating to interpretation of sections 11 & 14 of the 1980 Act, the Court gave guidance as to the management of the question of knowledge in the course of litigation.  At paragraph 74 Auld LJ set out:

“Wherever the judge considers it feasible to do so, he should decide the limitation point by a preliminary hearing by reference to the pleadings and written witness statements and, importantly, the extent and content of discovery. In Stubbings v. Webb, for example, the matter was dealt with by the master and the judge as a preliminary issue on affidavit evidence, without cross-examination but with the benefit of discovery. As Bingham LJ commented when the matter was before the Court of Appeal, at 202H- 203A:

“This produces an unusual situation, since the facts pleaded by the plaintiff cannot for purposes of this proceeding be assumed to be true, and they are not common ground. In particular, and this must be emphasised, the Webbs deny the allegations against them. We must, it would seem, like the judge, draw such provisional inferences from the evidence before us as appear to be fair.”

It may not always be feasible or produce savings in time and cost for the parties to deal with the matter by way of preliminary hearing, but a judge should strain to do so wherever possible. Where a judge determines the section 33 issue along with the substantive issues in the case, he should take care not to determine the substantive issues, including liability, causation and quantum, before determining the issue of limitation and, in particular, the effect of delay on the cogency of the evidence. Much of such evidence, by reason of the lapse of time, may have been incapable of being adequately tested or contradicted before him. To rely on his findings on those issues to assess the cogency of the evidence for the purpose of the limitation exercise would put the cart before the horse. Put another way, it would effectively require a defendant to prove a negative, namely, that the judge could not have found against him on one or more of the substantive issues if he had tried the matter earlier and without the evidential disadvantages resulting from delay. “ [emphasis added]  The section indicates that: 

• There is a presumption but, no immutable principle, that limitation be tried as a preliminary issue;
• Matters of costs savings and efficiency will dictate the management of the trial; however
• Whilst considerations will extend to matters such as the need to avoid calling witnesses twice, specific care is required to ensure separate issues, such as breach, are not polluted or conflated with the discrete questions of knowledge. 

The real risks of the Court thinking about the case in the round, as opposed to focusing on the question of knowledge and the discrete defence it offers, are magnified if all issues are tried together.  The opposite view was taken in another historic abuse case in 2008.  In J.(1) K.(2) P.(3) -v- Archbishop of Birmingham and others [25/7/08], Master Fontaine declined to make such an order, holding the following matters determinative in that case: 

• There were a large number of overlapping issues and evidence concerning the allegations of abuse and those affecting knowledge;
• There would be very particular stress on the Claimant, in so far as he was called upon to give evidence more than once;
• It would be very difficult in this case to exercise the discretion under section 33 without looking broadly at the merits of the claim. [Forbes v Wandsworth (1997) QB 402 applied]
• There was far too much evidence to master and read to justify treating the question of knowledge separately;
• There were different causes of action within the same piece of litigation and for which knowledge and s. 33 would have to be treated differently and separately considered. 

Whilst some matters of general application emerged, particularly the costs savings, or lack thereof, (should there be a need for two hearings with more than one claimant), the case seems very much more allied to its own facts than KR  Litigants should have in mind that the robust approach to questions of knowledge now generally applied but, with the more generous approach to the questions of relevant period of delay and section 33, may have turned the tide towards limitation being incorporated within the entire trial.  Arguably that generosity exercised under section 33 compels the Court to think more broadly about the available evidence in the round and its cogency. In turn the mortal blow of early knowledge is not quite as compelling and thus less suitable for separate determination.  More recently in Hutson v Tata Steel UK Ltd [2019] EWHC 1608 (QB) Mr Justice Turner refused the defendant’s application for a split trial on limitation, again in a group action.  The matter is essentially one of case management for the Court and there is no “burden” on any party to satisfy an evidential test. Further these matters are extremely fact sensitive, the citing of appellate decisions on these issues received measured scorn from Turner J “I have been provided with a generously-filled bundle of authorities which cover a wide variety of cases in which the courts have considered the relative advantages and disadvantages of the hearing of preliminary issues. Paradoxically, if one overarching conclusion can be drawn from them, it is that no overarching conclusion can be drawn from them.” “The temptation to extract, and rely upon, broadly stated judicial pronouncements from earlier decisions has, in this case, predictably resulted in a superfluity of reference to authority. One only has, for example, to compare and contrast the observations of the Court of Appeal in two of the cases cited before me to appreciate the wealth of scripture from which the Devil may freely quote” “Put shortly, there are so many possible permutations of fact which lie behind the cases in which the suitability of ordering the hearing of a preliminary issue falls to be determined that, there are particular dangers in seeking to elevate judicial observations in the context of any particular factual matrix to a status akin to one bearing statutory force. One must not lose sight of the fact that these are, in essence, all case management decisions which are, necessarily, very fact-sensitive.” The Judge gave the examples:

 “Wherever the judge considers it feasible to do so, he should decide the limitation point by a preliminary hearing by reference to the pleadings and written witness statements and, importantly, the extent and content of discovery.”

KR v Bryn Alyn Community (Holdings) Ltd [2003] 3 WLR 107

“While they have their value, it is notorious that preliminary issues often turn out to be misconceived, in that, while they are intended to short-circuit the proceedings, they actually increase the time and cost of resolving the underlying dispute.”

Bond v Dunster Properties Limited [2011] EWCA Civ 455 This does not mean that no assistance is to be derived from consideration of the decided cases. They are particularly helpful in identifying and articulating the types of factors which may fall to be considered in any given case.

“It does, however, mean that I reject the defendant’s contention to the effect that any party opposing an application for the hearing of a preliminary issue in a case such as the present bears a burden of persuasion. The balancing act is one which should be approached from the outset with an open mind.”

Of particular note to the judge were:  the strength and scope of the limitation defence There was strong indication of evidential prejudice in “a significant proportion” of the claims, but not all. But: “Other salient considerations fall to be taken in to account” costs

“I readily accept that questions of costs are, potentially, of considerable importance in the context of the determination of the merits of embarking on the hearing of a preliminary issue in any given case. Care must be taken, however, to identify whether the hoped-for savings may be more apparent than real.”

It was plain that Turner J did not think “determination of the limitation issue in selected lead cases would be likely to catalyse the early resolution of a high proportion of other claims”, even those where limitation was also an issue. This was plainly because there would have been no resolution of questions of law determinative of those cases, where each case would be largely dependent on its own facts. “Moreover, the costs of hearing preliminary limitation issues are likely to be out of proportion to the perceived benefits. Even on the defendant’s estimate, the determination of such issues will take many days and I accept the claimants’ contention that it would probably be necessary to hear live evidence in any given case from: claimants, family members, union officials and/or, potentially, from legal or medical advisers. I am also persuaded that there is likely to be a significant overlap between the evidence which would have to be explored on the limitation issues and that which would have to be considered in the context of substantive liability. delay “A further adverse consequence of ordering the hearing of preliminary issues in this case is the likelihood of delay. ..The defendant concedes that a delay of at least six months is likely. That may well be an unduly optimistic prediction….The length of any hearing of preliminary limitation issues would, in itself, be measured in weeks” There was a likelihood some claimants would not live to see the outcome of their cases proper if limitation were tried. fairness to the defendant The defendant also identified the conflicting tactical difficulties, both for itself and for the court in trying all issues together. Its objectives being

• To maximise the extent of the evidential prejudice it has suffered in order to win on the limitation issue; or
• To minimise the extent of the evidential prejudice it has suffered in order to win on the substantive defence.

Turner J identified that

“The contrary argument is that a court adjudicating upon the issue of limitation will be in the best position to strike the requisite balance between the respective positions of the parties if it has available to it all the evidence which would otherwise be necessary upon which to make a substantive determination. So long as the court rigorously follows the proper sequence of analysis, the result will be fair to both sides”

Naturally, in tribunals less familiar with the questions under ss11-14 & 33, that meticulous approach is arguably less likely in reality and, more a theoretical ideal. This will be a difficult matter to convey diplomatically but a point of some validity. In B v Nugent Care Society [2010] 1 WLR 516, Lord Clarke MR, who gave the judgment of the court, observed at paragraphs 21-22 that the judge who has to determine the issue as to whether the primary limitation period should be disapplied:

“…may well conclude that it is desirable that such oral evidence as is available should be heard because the strength of the claimant’s evidence seems to us to be relevant to the way in which the discretion should be exercised. We entirely agree with the point made at vii) that, where a judge determines the section 33 application along with the substantive issues in the case he or she should take care not to determine the substantive issues, including liability, causation and quantum before determining the issue of limitation and, in particular, the effect of delay on the cogency of the evidence. “

proportionality The defendant urges me to have regard to the fact that the individual claims are likely to be of relatively low value and thus the value of hearing limitation as a preliminary issue is greater. However, as I observed in Pearce v The Secretary of State for Business, Energy and Industrial Strategy [2018] EWHC 2009 at para 69: “The defendant raises the additional argument that the potential value of Mrs Nicholls’ claim is disproportionately low when compared to the costs involved in litigating it. I am not impressed by this contention. As the claimants rightly point out, the Court, when deciding whether to make a GLO, had to consider the issue of proportionality. A key purpose of a GLO, as recognised by the Final Access to Justice Report (July 1996), quoted in the White Book at 19.10.0 (p.657) is to “provide access to justice where large numbers of people have been affected by another’s conduct, but individual loss is so small that it makes an individual action economically unviable.”” Again that would not mean in a case with a single claimant, such a consideration would not be otherwise decided or emphasised differently. disclosure Whilst Turner J did not accept any benefit accrued in the instant case in terms of savings on disclosure, limiting disclosure to matters relevant to limitation in a single claimant / single issue case with historic allegations, may offer dividends. The overriding objective was not, in his judgment, satisfied.  It is implicit in his approach that, whilst the factors to be considered were set out, that approach or outcome was not determinative or of binding type.  Other Guidance?  Jackson LJ in the 2017 “Review of Civil Litigation Costs: FRC”  Indicated Interim applications and preliminary issues. The costs of any applications properly made (e.g. because the other party is in default) should be recovered separately. There are fixed costs for such applications under CPR rule 45.29H. I propose that in NIHL and Band 4 cases, the provision in CPR rule 45.29H(1) “one half of the applicable Type A and Type B costs” should be amended to “two thirds of the applicable Type A and Type B costs”. The fixed recoverable fee for an interim injunction application should be £750. Preliminary issues. The costs of any preliminary issue trials should be recovered separately. Having said that, absent special circumstances, I strongly discourage the ordering of preliminary issue trials in the fast track. In some parts of the country, apparently, it is the practice to try limitation as a preliminary issue in ELD claims. This is generally unwise for four reasons: (i)  There is much overlap of evidence between limitation and liability. (ii)  The litigation will get hopelessly bogged down if the limitation decision goes on appeal. (iii)  To have two trials of a fast track case drives up costs and is disproportionate. (iv)  If the claimant wins on limitation and then loses on liability, the first trial has been a waste of time.  The review was concerned with management of fast track trials. Plainly within that, disease cases were regarded separately and within that, equally NIHL claims treated differently due to their often-modest value. However, the position remains: 

• The CPR and FCR does treat and ‘reward’ disease claims differently;
• The review was linked to whether costs of the preliminary issue should form part of the FCR. They did not but;
• The review suggested that if preliminary trials were to be allowed, then the same fees as for post-litigation costs should be allowed;
• Many of the proposals were simply not implemented, most notably what would have been an increase on advocacy  fees!
• Multi-track matters are excluded. Value is but one factor in determining whether a case is FT or MT [CPR 26.8(1)(a)-(i)]
• It is not the fault of litigants in NIHL cases that damages are exceptionally modest. Little prevents the court from managing costs against the backdrop of its general wide discretion where the FCR does not apply. 

Conclusion  Despite Turner J’s inclination to see a battle of precedent as nothing more than zealots citing selectively from scripture, the decision in KR v Bryn Alyn amounts to Court of Appeal authority. Setting aside differing factual matrices, a point of principle does emerge from the case that: It may not always be feasible or produce savings in time and cost for the parties to deal with the matter by way of preliminary hearing, but a judge should strain to do so wherever possible. ‘Wherever’ means that, whilst the principle will not apply universally, it represents a reasonable starting point for discussion. The court will always be more attracted by reference to Part 1 CPR and the pillars of efficiency and cost saving.