CM AGAINST AVIVA INSURANCE UK LIMITED
SHERIFFDOM OF LOTHIAN AND BORDERS AT EDINBURGH
[2016] SC EDIN 81
PD2/16
NOTE BY SHERIFF KATHERINE EC MACKIE
In causa
CM
Pursuer
Against
AVIVA INSURANCE UK LIMITED
Defender
Pursuer: Bell; Irwin Mitchell Scotland LLP, Glasgow
Defender: Fraser; Clyde & Co, Edinburgh
Edinburgh December 2016
The Sheriff, having resumed consideration of the pursuer’s motion, made at the bar, for decree by default, grants same, grants decree against the defenders for payment to the pursuer of the sum of Two Hundred and Twenty Thousand Pounds (£220,000) Sterling, finds the defenders liable to the pursuer in the expenses, as taxed, allows an account thereof to be given in and when lodged remits same to the Auditor of Court to tax and report.
NOTE
Introduction
[1] This is an action for damages for personal injury arising from a road traffic accident on 18th January 2013, which is proceeding under Chapter 36 of the Ordinary Cause Rules. A diet of proof was assigned to take place on 1st November 2016 and the three ensuing days.
Defenders’ Motion to Vary Timetable
[2] The case called before me on 31st October 2016, By Order, following the lodging of an unopposed motion on behalf of the defenders, number 7/9 of process. The terms of the motion lack specification but, in short, the defenders moved to vary the timetable in relation to the date by which their statement of valuation of claim was to be lodged from 2nd June 2016 to 1st November 2016.
[3] In terms of the timetable issued following the lodging of defences the defenders were to lodge a statement of valuation of claim not later than 12th May 2016. By interlocutor dated 4th May 2016, on the pursuer’s unopposed motion, the timetable was varied inter alia so that the defenders’ statement of valuation of claim was to be lodged not later than 2nd June 2016. The defenders failed to lodge their statement by said date. On about 13th June 2016 the defenders attempted to enrol a motion to vary the timetable on the ground that as a result of oversight they had failed to lodge their statement of valuation of claim timeously. The defenders were advised that they would require to provide more specification to show cause for any variation before the motion could be enrolled. They failed to do so and accordingly their motion was dropped.
[4] According to the information provided to me at the hearing, the defenders’ agent decided not to enrol a further motion to vary the timetable or to seek to lodge a statement of valuation of claim at that time. Rather the defenders’ agent proceeded to obtain reports from their medical and surveillance witnesses. On two occasions, the defenders moved for, and were granted by interlocutors dated 30th August 2016 and 4th October 2016, variations of the timetable in relation to the date by which parties were to lodge their lists of witnesses and productions. No attempt was made at these times to address the failure to lodge a statement of valuation of claim. Following the latter variation lists of witnesses and productions, and the pre-trial minute, were due to be lodged not later than 18th October 2016. On that date the defenders lodged an Inventory of Productions comprising a number of medical reports, a surveillance report and a DVD. Later, by chance, a list of witnesses for the defenders was found within their Inventory of Productions. This had not been brought to the attention of the court and was not lodged in process.
[5] A pre-trial meeting which had been arranged between the parties to take place on about 17th October 2016 was cancelled following intimation by the defenders’ agents to the pursuer’s agent that they were about to intimate and lodge a substantial volume of reports. In these circumstances no meaningful discussion could take place until the pursuer had had an opportunity to consider the reports.
[6] The defenders’ failure was not due to oversight or inadvertence for which provision was made in rule 36.H1. On the contrary it was a deliberate, conscious and intentional decision to ignore the timetable. They were aware that they had failed to comply with the timetable, had made a half-hearted attempt to rectify their failure, but when advised that more information would be required decided not to provide same, if any, or make any further attempt to rectify their failure. In these circumstances I was unable to find that cause had been shown for the proposed variation and refused their motion to vary the timetable.
Pursuer’s Motion for Decree
[7] Thereafter the pursuer moved, in terms of rule 36.J1.(5)(b) for decree against the defenders for payment to the pursuer of a sum not exceeding the sum in the pursuer’s statement of valuation of claim. The pursuer’s valuation stated a sum of £488,784.45, but this was noted to be arithmetically incorrect and should be £438,784.45. The motion was opposed. The defenders’ agent made preliminary submissions and then, due to the lateness of the hour, the case was adjourned until the following day. It was agreed that the pursuer’s witnesses should not travel to be in attendance at court notwithstanding that the following day would be the first day of the assigned diet of proof.
Defenders’ Motion for Relief
[8] When the case called on 1st November 2016 the defenders’ agent moved in terms of rule 2.1 of the Ordinary Cause Rules for the defenders to be relieved from their failure to lodge a statement of valuation of claim by 2nd June 2016 and to be allowed to lodge the statement of valuation that they attempted to lodge on about 13th June. Their failure was said to be due to an oversight, namely a failure to insert the relevant date in a diary. It was submitted that it would be in the interests of justice to allow the statement of valuation that had been prepared in June to be lodged. This would allow the action to “get back on track”.
[9] I was referred to Macphail on Sheriff Court Practice 3rd Edition at paragraph 5.94 and to Thompson v Sayegh & anr 2015 SCEDIN 10.
[10] The defenders’ motion was opposed. Mr Bell submitted that relief for oversight or inadvertence was to be found within the framework of Chapter 36. The relief provided for in rule 2.1 was therefore redundant. The approach adopted by the defenders was contrary to the spirit of the rules as set out in the decision of Lord Jones in Smith v Greater Glasgow & Clyde NHS Health Board 2014 SLT 137. They were trying to lodge a document they had no intention of relying upon. Mr Bell also referred to paragraph 17 of my decision in Thompson.
Decision on Motion for Relief
[11] It appeared to me that the attempt by the defenders to lodge a statement of valuation of the pursuer’s claim which they had clearly stated they did not intend to rely upon was entirely misconceived and contrary to the spirit of the rules and the approach to be adopted in actions such as this. It was also an attempt to circumvent my decision to refuse their motion to vary the timetable to allow a statement of valuation of claim to be lodged.
[12] The philosophy underlying Chapter 43 in the Court of Session, and by analogy Chapter 36 in the Sheriff Court, was ably set out by Lord Jones in Smith. As his Lordship explained at paragraph 6 the Working Party on Court of Session Procedure which reported in 1998 made three positive recommendations with the aim of reducing the number of late settlements of actions for personal injury. These included “that both (or all) parties should be obliged to lodge in process justified (my emphasis) valuations of the claim at an early stage in the proceedings”. The intention behind the introduction of Chapters 43 and 36 was to discourage the “culture of a casual approach to timetabling” which had been found to exist. It may be suggested that the present defenders’ agent’s approach to compliance with the timetable was a return to that culture. As I said in Thompson, while the dispensing power is not disapplied in Chapter 36 “the terms of Lord Jones’ decision, in particular, and the Practice Note 2 of 2014 imply that where there has been a failure to adhere to the timetable application for relief in the form of variation of the timetable should be made and may be granted only on cause shown.” Practice Note 3 of 2016 has adopted similar provisions in personal injury actions within the Sheriffdom of Lothian and Borders. The observations in MacPhail given that they were made prior to the introduction of Chapter 36 are of limited, if any, assistance. The considerations which would be given to an application for relief in terms of rule 2.1 are similar to those which would be given to an application for relief in terms of rule 36.H1.
[13] I remain of the view expressed in Thompson that it was intended that all matters relating to the procedure of an action for personal injury would be dealt with within the provisions of Chapter 36. A motion on behalf of the defenders for relief by varying the timetable to allow a statement of valuation of claim to be lodged has already been refused. Accordingly the defenders’ motion in terms of rule 2.1 was refused.
Defenders’ Submissions in relation to motion for decree
[14] Miss Fraser then resumed her submissions in opposition to the pursuer’s motion for decree. Firstly she sought to distinguish the present case from the decision of Lord Boyd in Moran-v-Freyssinet Limited [2014] CSOH 173. Secondly she submitted that it would not be in the interests of justice to grant decree in the sum moved for.
[15] In Moran the conduct of the defenders was described as poor. Defences were skeletal. By the time of proof there were no lists of witnesses or any productions. The defenders had failed to communicate with the pursuer’s agents and a pre-trial meeting had not been properly conducted. Miss Fraser submitted that in the present case the defenders had complied with the timetable to lodge lists of witnesses and productions. Amongst their productions was a report which suggested that the pursuer was fabricating his injury. In these circumstances it would not be in the interests of justice for the pursuer to receive a windfall.
[16] In response to my enquiry Miss Fraser provided the following chronology:-
1. The road traffic accident which was the subject matter of the action occurred on 18th January 2013.
2. The pursuer’s claim was intimated to the defenders’ insurers shortly thereafter.
3. The insurers made payment of an interim sum of £5,000.
4. The insurers arranged an appointment for the pursuer to be examined by Dr Alan Carson, Consultant Neuropsychiatrist, in December 2015. The pursuer failed to attend the appointment.
5. Service of the Initial Writ was accepted on 14th January 2016. A notice of intention to defend was lodged. Defences were lodged and a timetable issued on 18th February 2016.
6. Following variation of the timetable the pursuer’s statement of valuation of claim was lodged on 5th May 2016.
7. On 4th April 2016 the defenders instructed Mr Angus McLean, Consultant Orthopaedic Surgeon, to examine the pursuer. An appointment was arranged for 25th July 2016. The pursuer failed to attend due to an error, for which he was not responsible, and the appointment was rearranged to take place on 30th August 2016.
8. On 13th June 2016 the defenders reinstructed Dr Carson. The pursuer was examined by him on 3rd July 2016. His report was received on 6th July 2016.
9. On 15th August 2016 the defenders instructed Dr M Basler, Consultant in Anaesthesia and Pain Management.
10. On 30th August 2016 the pursuer was examined by Mr McLean and Dr M Basler.
11. The defenders instructed surveillance of the pursuer which was arranged to coincide with his attendance with Mr McLean and Dr Basler. They operate an online portal with the firm instructed to carry out surveillance, by which it is understood there is immediate direct communication. A report dated 15th September 2016 was prepared and was available to the defenders and their agents to view via the online portal.
12. On 7th October 2016 the defenders forwarded a copy of the surveillance report to their medical witnesses for comment. They responded on 10th October 2016.
13. The case was discussed with the defenders and instructions received to lodge the various reports which had been obtained. These were intimated and lodged on 17th and 18th October 2016 respectively.
14. A statement of valuation of claim was prepared in a sum which was a fraction of the pursuer’s valuation.
[17] Miss Fraser explained that the report from Dr Carson, received on about 6th July 2016, had precipitated the surveillance of the pursuer. After the surveillance report was received the observations of the medical witnesses were required. The activities of the pursuer were described as not being “blatant”. It was accepted that on two occasions motions had been enrolled on behalf of the defenders to vary the timetable but not in respect of the lodging of a statement of valuation of claim. It was also accepted that only Mr McLean had been instructed prior to the end of the adjustment period and the initial date for his examination of the pursuer was over 11 weeks after its expiry. There was no explanation for the delay in carrying out investigations between the raising of proceedings and instructing Mr McLean. The defenders had intended that the pursuer be examined by Dr Carson in December 2015. There was no explanation for the delay until mid-June 2016 in him being reinstructed.
[18] The defenders’ agent referred to a Minute of Amendment which had been allowed to be received on their behalf by interlocutor of 7th October 2016 and forms number 12 of process. In that Minute the defenders admit liability. It was accepted that there were no averments in the Minute about the pursuer’s alleged fabrication of his injuries.
[19] Miss Fraser also referred to paragraph 47 of the decision of the Inner House in Moran-v-Freyssinet Limited [2015] CSIH 76 and submitted that the defenders’ only failure had been not to lodge the statement of valuation of claim timeously.
Pursuer’s Response
[20] In reply Mr Bell explained that the pursuer’s failure to attend the examination in December 2015 had been due to oversight. There had also been an error in his office in relation to the appointment with Mr McLean arranged to take place in July 2016.
[21] However, he advised that the claim on behalf of the pursuer had been intimated to the defenders shortly after the accident in 2013. The pursuer’s claim had been clearly set out with his heads of claim supported by medical reports and other vouching prior to the raising of proceedings. The defenders had been invited repeatedly to make progress and to obtain any medical evidence.
[22] Mr Bell had contacted the defenders on about 7th June 2016 to point out their failure to lodge a statement of valuation of claim. He repeatedly called upon the defenders to produce their valuation so that he could have some indication of their position. He had pointed out to the defenders that their motions for variation did not address their failure to lodge a statement of valuation of claim. He delayed arranging a pre-trial meeting and continued to press for production of the defenders’ valuation. On the eve of the pre-trial meeting he was advised that a volume of evidence was to be produced.
[23] He submitted that the situation was wholly unsatisfactory. A diet of proof had been allowed to be reached without a statement of valuation of claim from the defenders and no pre-trial meeting had been able to take place. The defenders’ pleadings on record were skeletal. While a Minute of Amendment had been lodged it did not appear to reflect the defenders’ declared position. The defenders had chosen to put the pursuer in an invidious and difficult position. The defenders had been pressed for an indication of their position. The diet of proof had been reached with essential elements missing. Information was received from the defenders at a very late stage to the prejudice of the pursuer.
[24] In these circumstances the pursuer’s agent submitted that there was no real distinction between this case and the case of Moran. A close analysis of the position suggested that this case was, in fact, very similar to Moran. The same sanction should be applied. In Moran decree was granted for payment of 50% of the pursuer’s valuation which happened to be the sum sued for. Mr Bell suggested that that approach would be satisfactory. In relation to the defenders’ submission that it was not in the interests of justice that someone allegedly fabricating injuries should receive a windfall he drew attention to the fact that in Moran there had been an argument that the claim was timebarred but that did not prevent the sanction being applied.
Reasons for Decision
[25] In considering the pursuer’s motion for decree I had regard to the pertinent observations by Lord Boyd in Moran, where he required to consider a similar motion in similar circumstances, and to the decision of the court in the reclaiming motion from Lord Boyd’s decision. I agree with his Lordship’s careful analysis and the need for sanction, particularly where a fundamental element or, as his Lordship put it, cornerstone of the procedure has not been complied with. I also agree with his observation that “the granting of decree is of course the ultimate sanction and one that should be rarely used. However it is one that is provided for in the rules of court. It is difficult to see a more serious breach of the requirement to lodge a statement of valuation than to get to a diet of proof without one being lodged.”
[26] Miss Fraser sought to distinguish the circumstances of this case from those of Moran but it seems to me that the failure of the defenders is, if anything, greater in this case than it was in Moran. In reaching his decision Lord Boyd had regard to the whole conduct of the defenders including their pleadings. He was also aware that notwithstanding the absence of a statement of valuation the pre-trial meeting and some discussion on quantum had taken place. As in Moran the pleadings in this case are essentially skeletal. They offer the reader no indication of the defenders’ position on liability or quantum, save that the sum sued for is excessive. A Minute of Amendment on behalf of the defenders was allowed to be received, in which liability was to be admitted and averments on quantum added. As at the eve of proof no attempt had been made by the defenders to have the amendment of their pleadings allowed, the time for lodging Answers having expired on 28th October 2016. In any event, those proposed averments did not include any averments to suggest that the pursuer was fabricating his claim, which was said to be the defenders’ primary position and the reason for their surveillance of him. I would observe that Dr Carson’s report and the surveillance report had been available to the defenders for some time prior to the lodging of their Minute of Amendment. Accordingly, even if the defenders moved and were permitted to have their pleadings amended in terms of their Minute of Amendment, and the outcome of such a motion could not be guaranteed because of its lateness, it would not introduce averments giving notice of any argument about fabrication by the pursuer of his claim.
[27] This was not a claim of which the defenders were unaware until the raising of proceedings. The claim was intimated shortly after the accident on 18th February 2013. There was no explanation why it had taken until December 2015 before the defenders arranged for the pursuer to be seen by Dr Carson. While it may have been unfortunate that the pursuer failed to attend that appointment there was no explanation for a delay of some 6 months before he was re-instructed. Further there was no explanation for the defenders’ investigations into the pursuer’s medical conditions only being conducted after the end of the adjustment period. With the exception of instructions being sent to Mr McLean no investigations appeared to be carried out until about 6 months after the proceedings were raised.
[28] Despite efforts to do so the pursuer’s agent was unable to make any substantial progress to elucidate the defenders’ position. Had the defenders lodged a justified statement of valuation at that stage they would also have had to produce the documents upon which they intended to rely to support their valuation. That would have allowed the pursuer’s agent an opportunity to consider fully the defenders’ approach and at the pre-trial meeting to have a meaningful discussion with a view to attempting to narrow the issues in dispute. Of course at the time when the defenders’ statement of valuation was due to be lodged the defenders had not obtained any medical evidence other than that which the pursuer had produced. Miss Fraser placed considerable emphasis on the fact that the defenders had complied with the timetable in the lodging of their list of witnesses and productions. Given that their list of witnesses was found by chance within the body of their Inventory of Productions it may be that a question arises as to whether it has in fact been lodged. However, while the date by which productions were to be lodged was varied on the defenders’ motion, on two occasions, and their productions lodged on the last day so allowed, it is in my view significant that in seeking to vary that date the defenders apparently had no regard to the consequences of varying the date by which the pre-trial minute was to be lodged to the same date as productions. Thus by not producing the documents upon which they intended to rely until the last date for lodging same and having varied the date by which the pre-trial minute was to be lodged to the same date they denied the pursuer any opportunity to consider their position and to conduct any meaningful pre-trial meeting. It was inevitable in these circumstances that the pre-trial meeting would have to be cancelled.
[29] Although abbreviated pleadings are appropriate in actions proceeding under Chapter 36, as has been said repeatedly now, fair notice requires to be given of the party’s case. The defenders’ pleadings being only skeletal, and not much different even if their Minute of Amendment were allowed, there would be little that the defenders could do to put forward a competing account of the pursuer’s claim. In particular they could not put any case which was to the effect that he was fabricating his claim. While they have lodged productions, and may have lodged a list of witnesses, many of them are likely to be irrelevant.
[30] The purpose of the statement of valuation is discussed fully in the Inner House’s decision in Moran by reference to the report by Lord Coulsfield’s Working Party on Court of Session Procedure 2000 (the Coulsfield Report), the same report referred to by Lord Jones in Smith. As is stated in the opinion of the court delivered by Lady Paton “The timeous lodging of a valuation of claim was singled out at pages 29 to 31 of the Coulsfield Report as especially important for the success of the procedure.” Lady Paton also referred to the statement of valuation as one of the cornerstones, and possibly the cornerstone, of the procedure. The circumstances in Moran were said to be an example of the type of failure to comply with the rules “which could, if widely adopted, lead to the unworkability of the rules”. Her Ladyship continued “All defenders, on receipt of a chapter 43 summons, should carry out such investigations as are considered necessary, including researching the pursuer’s employment history, having the pursuer medically examined, estimating (on the assumption that the defenders might be found liable to some extent) heads of damages (such as, in this case, solatium, loss of employability, and services). They should assess the merits and value of the claim. Even with abbreviated pleadings any major point such as time-bar should be clearly stated with supporting facts. Any intention to prove that the pursuer’s estimate of quantum is overstated should be made plain by the lodging of a meaningful statement of valuation of claim and the intimation and lodging of the documents listed in the valuation…..defenders should therefore work towards at least three target dates: the date of lodging of their statement of valuation of claim; the date of the pre-trial meeting and the date of proof”. I would respectfully add that the defenders should also work towards the end of the adjustment period.
[31] As in Moran the defenders, by their failure to lodge a justified statement of valuation in compliance with the timetable, have frustrated the aim of bringing forward the time when meaningful discussions might take place with a view to, at least, narrowing issues in dispute and restricting the number of witnesses and the scope of the evidence and thus the time required of the court. I do not accept Miss Fraser’s submission that the failure to lodge the statement of valuation was their only failure to comply with the timetable. Her submission demonstrated, in my opinion, a lack of understanding of the procedure as a whole and the purpose of it. There were in effect repeated failures by the defenders. They failed to conduct investigations timeously, they failed to set out in their pleadings the factual basis of their case, they failed to give proper notice to the court and to the pursuer of that case, they persisted in their failure to lodge a justified statement of valuation with supporting documents over a period of almost 5 months, they failed to comply with the underlying principles of the timetable namely early, full and open disclosure, they failed to allow the pursuer an opportunity to consider their position and to conduct meaningful discussions at a pre-trial meeting, if not earlier. As in Moran the defenders’ conduct in this case undermined the proper functioning of chapter 36 and suggested a casual approach to the rules.
[32] As I have already referred to herein, in Moran Lord Boyd said “It is difficult to see a more serious breach of the requirement to lodge a statement of valuation than to get to a diet of proof without one being lodged.” That is what has happened in this case. It is appropriate to mark the court’s disapproval of the defenders’ persistent and sustained failure to comply with the rules by imposing the sanction provided for in rule 36.J1.(5)(b), namely decree for payment of an amount not exceeding the amount of the pursuer’s statement of valuation.
[33] It is important to bear in mind that what the court is doing is imposing a sanction for failure to comply with the rules. In these circumstances it appeared to me that Miss Fraser’s submission that the court should somehow do justice between the parties and the pursuer should not receive a windfall particularly where the defenders argued that he was fabricating his claim was misconceived. In any event, there are no pleadings averring that the pursuer is fabricating his claim.
[34] The approach adopted by Lord Boyd, which was approved by the Inner House, was to grant decree for payment of the sum sued for which was about 50% of the pursuer’s valuation. If the same approach were adopted in this case the amount would be more than £100,000 less than the sum craved. Mr Bell indicated that he would be content with such an approach.
[35] In all the circumstances of this case it appears to me that the sanction of decree restricted to £220,000 would be appropriate.