Delay justified? Surveillance and expenses

AB v Inverurie Skip Hire Ltd

Background

The pursuer brought a substantial claim, arising from a workplace accident in 2015, which he valued in excess of £2.5 million. The pursuer suffered a head injury which, he alleged, had far ranging physical and psychological effects and affected his future earning potential. Liability was not disputed but contributory negligence remained in contention.

The pursuer raised proceedings in 2017 and in June 2018 the defender made an offer of settlement, in a minute of tender, in the sum of £225,500 which was substantially lower than the amount claimed.

The pursuer, keen to narrow the issues in dispute, made requests for cooperation from the defender in a matter were the expert medical evidence was complex and extensive. The defender, by contrast, sought several postponements of pre-trial meetings and also delayed disclosing their own medical reports.

It transpired, when the defender made their expert medical evidence available in March 2019, that they had been conducting surveillance on the pursuer and had asked the experts to comment on the footage. The surveillance evidence was damaging to the pursuer’s claim and, on 2 April 2019, he accepted the defender’s tender.

The issue that came before the court was that of the parties’ expenses.

The law - Expenses

The court has an ultimate discretion in relation to expenses after acceptance of tenders. However, the court will utilise certain general principles in respect of expenses so that:

  • a pursuer who beats a tender will be awarded their full expenses;
  • a pursuer who does not beat the tender and is then awarded less (or no more than) the value of the tender will be awarded expenses up to the date of the tender. It is then open to the defender to seek their expenses from the date of tender;
  • a pursuer who submits a late acceptance of tender will be entitled to their expenses to the date of tender and the defender can seek their expenses from the date of tender.

In this case the defender sought their expenses from the date of tender. The pursuer opposed this and invited the court to exercise its discretion to deny the defender’s expenses on the ground that the defender had disregarded the terms of an established practice note encouraging the parties to make early disclosure of expert evidence. The pursuer also alleged a disregard for the rules and the spirit of the rules of court.  

In reality the defender had delayed disclosure of expert evidence in order to complete surveillance and to have the medical experts comment on the resulting footage. The defender could not inform the pursuer of the surveillance, disclose the footage or the contingent expert evidence piecemeal. To do so, as the court acknowledged, would have deprived the defender of their defence.

The court also noted that failure to complete early disclosure without “reasonable excuse” could lead to consequences in terms of expenses for defenders. However, the court found that, in this instance, the defender did have a reasonable excuse.

The court confirmed its approach, in respect of liability to pay expenses, would be based on which party had prolonged the litigation. In this case it found that the responsibility for this lay with the pursuer for late acceptance of the tender. The knowledge of the surveillance did not, after all, prevent the pursuer from considering the tender and whether it was a fair offer for his injuries.  

Comment

The court made it clear, in this case, that it would not exercise its discretion in respect of expenses in favour of the pursuer. The pursuer’s case was not helped by the fact that surveillance and expert evidence introduced by the defender was extremely damaging to his claim. In the circumstances it would seem unlikely that the court would have exercised its discretion in the pursuer’s favour where it appeared that his claim was grossly exaggerated.

This ruling is a relief for insurers dealing with high value personal injury matters. Surveillance can provide valuable evidence but often needs to be complimented with robust expert evidence. The obtaining of this evidence takes time and it is reassuring that the court found that this was a reasonable excuse for delays in disclosure and would not necessarily lead to a penalty in respect of expenses.

Qualified one way costs shifting (“QOCS”)

The coming introduction of QOCS to Scots litigation via the Civil Litigation (Expense and Group Proceedings) (Scotland) Act (“the Act”) inevitably makes all interested insurers and lawyers wonder if the door to a defender’s recovery of expenses will be closed in the near future.

Ostensibly QOCS will allow the unsuccessful personal injury pursuer to walk away from his claim with no liability to the defenders in respect of expenses. There are, of course, exceptions to the rule in cases where there is either fraudulent representation, manifestly unreasonable behaviour or abuse of process. There is case law where the above concepts have been tested before the court and it will be interesting to see how these will be carried into the new costs environment. However, it seems probable that the court will exercise its discretion to impose costs orders on pursuers sparingly in order to avoid undermining the new regime.

One wonders what the position will be in respect of tenders. The Act is unclear on what the effect will be, but it should be noted that Sheriff Principal Taylor in his 2013 review of expenses and funding recommended that if a pursuer fails to beat a tender, then the pursuer should have his expenses liability limited to 75% of his damages. The rules implementing that recommendation have still to be further considered by the Personal Injury and Costs and Funding Committee. At a Committee meeting earlier this year, the Committee agreed to instruct draft rules allowing the provision for the disapplication of QOCs where a pursuer unreasonably delays in accepting a tender. We understand that the proposed rules on QOCS will be discussed at the full council meeting of the Scottish Civil Justice Council during September 2019. The Scottish Government had indicated that the enabling legislation for QOCS would be passed in July / August 2019. It is however, now anticipated that it will be earlier next year before QOCS come into effect in Scotland.

For any further information regarding any aspect of the issues raised in this case, please contact Pamela Stevenson, Partner on 0141 375 0867 or email pamela.stevenson@weightmans.com

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