DALE McFARLANE (AP) v. BARRY THAIN+JAMES CAMPBELL+THE MOTOR INSURERS' BUREAU
| OUTER HOUSE, COURT OF SESSION [2005] CSOH 22 |
| | OPINION OF LADY PATON in the cause DALE McFARLANE (AP) Pursuer; against (FIRST) BARRY THAIN and (SECOND) JAMES CAMPBELL Defenders; and THE MOTOR INSURERS' BUREAU Minuters: ________________ |
Pursuer: Clancy, Q.C., Gardiner, Advocate; Drummond Miller, W.S.
First defender: No appearance
Second Defender: F. Lake, Advocate; H.B.M. Sayers
Minuters: R.W. Dunlop, Advocate; Simpson & Marwick, W.S.
9 February 2005
Proof or jury trial: involvement of Motor Insurers' Bureau
[1]On 17 July 1999 the pursuer was badly injured. He was a pillion passenger on a motor-cycle driven by the first defender, which collided with a car driven by the second defender. The pursuer seeks damages from both defenders. As the first defender was uninsured, the Motor Insurers' Bureau (MIB) became involved.
[2]The first defender is said to have been driving too fast, while unlicensed, uninsured, and under the influence of drink. The second defender is said to have failed to keep a proper look-out as he emerged onto the carriageway in an attempt to turn right.
[3]The MIB carried out investigations. Their researches suggested that the pursuer accepted a lift knowing that the first defender was unlicensed, uninsured, and under the influence of drink.
[4]Clause 6(1)(e) of the Motor Insurers' Bureau (Compensation of Victims of Uninsured Drivers) Agreement 1988 between the Secretary of State for Transport and the MIB provides:
"The MIB shall not incur any liability under clause 2 of this Agreement in a case where:
...(e) at the time of the use which gave rise to the liability the person suffering death or bodily injury ... was allowing himself to be carried in or upon the vehicle and either before the commencement of his journey in the vehicle or after such commencement if he could reasonably be expected to have alighted from the vehicle he ...
(ii) knew or ought to have known that the vehicle was being used without there being in force in relation to its use such a contract of insurance as would comply with Part VI of the Road Traffic Act 1972".
[5]The MIB seek a ruling on the applicability of that exception. They have not therefore followed their normal practice of obtaining the first defender's signature to a "consent and indemnity" form and thereafter directing his defence without their having to enter appearance. Instead the MIB have sisted themselves as party minuters. They have lodged answers focusing on Clause 6(1)(e), and alleging fault on the part of the second defender and contributory negligence on the part of the pursuer.
[6]The second defender has entered appearance and lodged defences. The first defender has not.
[7]On 2 December 2004, the pursuer, second defender and MIB debated whether the case should go to proof or jury trial. Unusually, counsel for the pursuer agreed with counsel for the MIB that special cause existed such that the case should not go to jury trial. However counsel for the second defender disagreed and argued that issues should be allowed.
[8]Counsel for the MIB also contended that proof on liability should be heard separately from proof on quantum in terms of rule of court 36.1.
Submissions on behalf of the pursuer
[9]Senior counsel for the pursuer submitted that the case was too complex and difficult for a jury, for several reasons:
[10]Multiplicity of parties and disputes: The jury would have to consider the following matters: (i) Whether the first defender was at fault. (ii) Whether the second defender was at fault. The second defender had been in a difficult position emerging from a side road across a carriageway while turning right. His vision had been obscured by a parked car. The question of fault on his part would raise difficult issues. (iii) Whether there was any contributory negligence on the part of the pursuer. The MIB alleged three aspects of contributory negligence: the pursuer should not have accepted a lift knowing that the driver was uninsured; he should not have accepted a lift knowing that the driver was intoxicated; and thirdly (a contention adopted by the second defender) the pursuer failed to fasten the straps of his helmet, resulting in his head being unprotected during the accident. The question of contributory negligence therefore raised difficult issues.
[11](iv) The jury would also have to deal with the concept of joint and several liability. (v) The jury might have to deal with apportionment of liability between defenders. (vi) Quantification of damages would not be straightforward. The pursuer suffered multiple injuries, including a head injury. He had almost completed an apprenticeship as a roof tiler, but was unemployed at the date of the accident. There was thus no clear employment history to assist in calculating loss of earnings. Moreover the picture was complicated by the MIB's answers, which averred that the pursuer had a history of fighting, drug and alcohol abuse, and trouble with the law. The jury would be faced with complex evidence and a series of difficult decisions.
[12]Senior counsel submitted that those six features, taken together, gave rise to a significant risk that the jury would be confused by the evidence, or would fail to follow directions which were bound to be fairly complex. Standing that risk, the case was too complex and difficult for a jury.
[13]Involvement of the MIB: The MIB sought to avoid liability in terms of clause 6(1)(e) of the Agreement. That clause contained the concept "knew or ought to have known". In White v White [2001] 1 W.L.R. 481, the majority of their Lordships in the House of Lords ruled that the concept did not include negligence. Lord Nicholls in paragraph 24 expressly reserved his view as to the true scope of the concept. Accordingly the "knew or ought to have known" test in the MIB Agreement was intrinsically complex and subtle. The jury would have to understand the proper context in which they should apply the test (i.e. if they concluded that the first defender was negligent). They would have to determine the pursuer's actual state of knowledge about insurance at the relevant time. Having arrived at a conclusion on the facts, they would have to apply the "knew or ought to have known" test, discriminating between actual knowledge, wilful disregard of suspicion, and mere carelessness or thoughtlessness. Consideration of clause 6(1)(e) in itself rendered the cause too complex and difficult for a jury. Furthermore, Lord Nicholls' reservation in paragraph 24 of White resulted in a material degree of uncertainty about the law on the topic. Standing that reservation, the trial judge would not be able to give precise directions about the concept "knew or ought to have known". As the jury could not be asked for the reasons underlying their verdict, the present case could not lead to a referral to the European Court of Justice or to any other court for clarification of the test to be applied. Decisions subsequent to White, such as Akers v Motor Insurers' Bureau [2003] EWCA Civ 18 and Mair v Payne, 2004 S.L.T. 787, did not assist in that they did not discuss the scope or definition of the concept "knew or ought to have known".
[14]So far as counsel was aware, there was no Scottish case discussing the involvement of the MIB as a factor which might, or might not, amount to special cause preventing a case going to a jury. The case of Winchester v Ramsay, 1966 S.C. 41 concerned third party procedure, but might be regarded as analogous. Reference was made to the obiter dicta of Lord Kissen at page 46.
[15]Shifting onus: Counsel pointed out that in the course of evidence the onus of proof might shift from the pursuer to the MIB, in that the onus of proving the application of the exception in clause 6(1)(e) would fall on the MIB. The trial judge would have to give careful directions. Reference was made to Crawford v Peter McAinsh Limited, 1962 S.L.T. (Notes) 26.
[16]Insurance: It was a well-recognised rule that any question of indemnity insurance should not be discussed in the presence of the jury: Stewart v Duncan, 1921 S.C. 482. However in the present case, where the MIB were sisted as minuters and the question of one party's insurance was to be explored in evidence, it was inevitable that the question of indemnity insurance would play a major part in proceedings.
[17]For all those reasons, senior counsel for the pursuer invited the court to hold that there was special cause precluding a jury trial.
Submissions on behalf of the MIB (minuters)
[18]Counsel for the MIB adopted the pursuer's arguments and invited the court to sustain the MIB's second plea-in-law (added by amendment on 25 June 2004), and to allow a proof before answer restricted meantime to liability, contributory negligence, apportionment, and the involvement of the MIB, leaving quantum for a second diet.
[19]Liability: Counsel argued that there were complexities relating to onus. The pursuer had to establish fault on the part of the first defender and/or the second defender. The MIB had to establish apportionment of fault as against the second defender. The second defender had to prove his averments of blame directed against the first defender, and apportionment. The MIB had to establish contributory negligence comprising the three elements outlined in paragraph [10] above, one element having been adopted by the second defender (with a resulting onus on the second defender). There were potential complications arising from the assessment of contributory negligence and apportionment, with resulting percentages of percentages. The MIB had to establish that the exception in clause 6(1)(e) of the MIB Agreement applied, but depending on the evidence, the onus might shift to the pursuer to explain, for example, how he knew that the first defender was unlicensed, and yet did not know that he was uninsured: cf. dicta at paragraph 15 of White, cit. sup. Accordingly the case raised many onuses, some of which might shift in the course of evidence. Such a case was not suitable for jury trial: cf. Galbraith v Scottish Stamping and Engineering Co. Ltd., 1958 S.L.T. (Notes) 7; Crawford v Peter McAinsh Limited, cit. sup. The case would produce multiple issues: the pursuer's issue, counter-issues for the second defender in relation to contributory negligence and apportionment, and counter-issues for the MIB in relation to contributory negligence, apportionment, and the applicability of the exception in clause 6(1)(e) of the MIB Agreement.
[20]Further there were complexities arising from clause 6(1)(e). In a dissenting judgement, Lord Scott in White cit. sup. at paragraph 55 expressed concerns that the concept "knew or ought to have known" (a standard formulation in the context of negligence) was to be regarded as excluding negligence in the context of the MIB Agreement. If matters were difficult for lawyers, they were a fortiori difficult for a jury. Also the pursuer's preliminary plea directed to the relevancy of clause 6(1)(e) could not be repelled by the court ex proprio motu. The unavoidable consequence of a preliminary plea remaining standing was that the case could not be sent to jury trial.
[21]Insurance: Counsel for the MIB adopted the arguments presented by counsel for the pursuer.
[22]Quantification of loss: A variety of complexities arose in relation to quantum. The pursuer's previous criminal involvement, and his admission on record that he had served prison sentences, could lead to questions about previous convictions. Such convictions might reflect on the credibility and employability of the pursuer. Complications could arise if convictions were spent, and questions might lead to objections. Reference was made to section 4(1) and section 7 of the Rehabilitation of Offenders Act 1974.
[23]Complexities might also arise from the pursuer's abuse of alcohol and drugs; his history of violence; the fact that he had not completed his apprenticeship; the fact that he was unemployed at the date of the accident; and the pursuer's averment that he was unfit to work at heights (which did not suggest total unfitness for work). Furthermore the pursuer made claims for loss of wages and loss of employability without indicating the relationship between the two. That constituted special cause such that the case should not go to a jury: cf. O'Malley v Multiflex (UK) Inc., 1997 S.L.T. 362; McInnes v Kirkforthar Brick Co. Ltd., 1998 S.L.T. 568.
[24]Procedure: Counsel invited the court to order a divided proof in terms of rule 36.1, and to ordain that all questions except quantum be resolved first. The reason for such a motion was two-fold. First, a proof or jury trial on liability and quantum involving several parties might take two or three weeks, whereas if quantum were left until later, liability could be determined in about one week. Secondly, a proof before answer on the question of liability would result in either the second defender or the MIB being released. Counsel illustrated the various permutations underlying that proposition. In the particular circumstances of the present case, a divided proof would avoid the unnecessary involvement of one party throughout the entire proof (an important consideration, bearing in mind that the pursuer was legally-aided, and expenses would not be recoverable from him).
[25]As a jury trial could not be heard in two parts, but a proof before answer could (rule 36.1: cf. Mair v Payne, cit. sup.) that was a further factor favouring a proof before answer rather than a jury trial.
Submissions on behalf of the second defender
[26]Counsel submitted that the second defender was statutorily entitled to a jury trial in terms of sections 9 and 11 of the Court of Session Act 1988. No special cause had been demonstrated to deprive him of that right.
[27]Complexity: The test for complexity was set out by Lord Osborne in Shanks v BBC, 1993 S.L.T. 326, at page 337, namely the likelihood of the jury becoming confused, and the degree of difficulty which might be experienced by the trial judge in providing directions. That test had been applied in Englert v Stakis plc, 5 July 1996 (Temporary Judge A.B. Wilkinson Q.C., unreported).
[28]In the present case, the question whether the pursuer knew or ought to have known that the first defender was uninsured was a straightforward question of fact, suitable for determination by a jury. The authoritative House of Lords decision White v White, cit. sup. ruled that the exception did not embrace carelessness or negligence, but did include actual knowledge, and circumstances in which a passenger deliberately refrained from asking questions. That was the current state of the law. That law had been applied in Mair v Payne, and Akers v Motor Insurers' Bureau, cit. sup. A clear direction could be given to the jury, to the effect that the concept did not include negligence or carelessness.
[29]Multiplicity of parties and disputes: Only three parties were involved. That was not unusual, and did not in itself constitute special cause. The road traffic accident was a real-life situation, easy for jurors to understand. They would comprehend joint and several liability, and apportionment of blame. There was no risk that they would be confused. Winchester v Ramsay, 1966 S.C. 41 could be distinguished in that it dealt with third party procedure and different rules of court.
[30]Quantification of loss: The pursuer's involvement with drugs might mean that any employment which he obtained would be intermittent, but a jury was as well placed as a judge to assess an element of damages which "defied precise quantification": Stark v Ford (No.2), 1996 S.L.T. 1329; Currie v Strathclyde R.C. Fire Brigade, 1999 S.L.T. 62.
[31]The pursuer had a preliminary plea to the relevancy of the MIB's averments. But parties should not be permitted to manipulate their pleadings in order to deprive another party of a right to jury trial: cf. Graham v AEI Limited, 1968 S.L.T. 81; Higgins v Burton, 1968 S.L.T. 14. Preliminary pleas should not be inserted in order to block a jury trial. They should be repelled, and issues allowed.
[32]The case of O'Malley v Multiflex (UK) Inc., cit. sup. could be distinguished. In that case, there had been a problem in quantification arising from the possibility of redundancy and the failure to aver the interrelationship between future loss of earnings and loss of employability.
[33]In relation to the pursuer's previous convictions, it was not appropriate for counsel for the MIB to raise the question of previous convictions in the pleadings, and then to use such convictions as an argument against jury trial.
[34]Onus of proof: An onus lay on the pursuer to prove that the defenders had been negligent. An onus lay on the MIB to prove that the pursuer had been contributorily negligent, and to establish the exception in terms of clause 6(1)(e) of the MIB Agreement. A jury could understand that situation. Juries were well used to dealing with a shifting onus. Shifts in onus occurred in criminal trials involving diminished responsibility and insanity. A judge could charge a jury appropriately, and a jury would be able to follow the directions.
[35]Insurance: The case of Stewart v Duncan, 1921 S.C. 482, which suggested that it was improper to make any allusion to indemnity insurance in the presence of a jury, was now over eighty years old. Counsel contended that the rationale for the decision no longer existed, as in road traffic cases juries were well aware of the requirement for drivers to be insured.
[36]Separation of parts of the proof: Counsel suggested that a proof before answer on liability would take two or three days, while a jury trial on liability and quantum would take only four or five days. Accordingly a jury trial would result in only two or three extra days in court. The fact that one party might be released after a proof on liability was of little importance, bearing in mind that only two or three days were in issue. However if the court was minded not to allow issues, counsel for the second defender agreed with the MIB's motion for a divided proof in terms of rule 36.1.
[37]The court was invited to repel the pursuer's first two pleas-in-law; to repel the MIB's first two pleas-in-law; to repel the second defender's first two pleas-in-law; and to allow issues.
Reply on behalf of the pursuer in relation to the motion for a divided proof
[38]Senior counsel for the pursuer opposed the motion for a divided proof.
[39]First, such a course of action would result in considerable delay which would be prejudicial both to the pursuer and to the expeditious processing of court cases. Although there was in theory a possibility of an interim payment of damages following upon the conclusion of proof on liability, there might be difficulties recovering interim damages from the MIB.
[40]Secondly, it was unlikely that two or three weeks would be required for evidence relating to liability and quantum. There would be little dispute about the pursuer's injuries and their consequences. As for the pursuer's employment history and previous convictions, those matters would simply be explored in cross-examination of the pursuer.
[41]Thirdly, the fact that one party might be released after proof on liability simply reflected a situation often found in reparation cases, namely that there was a likelihood that one or more of the parties would be released. Such a consideration should not be regarded as a decisive factor.
[42]Finally, it had to be borne in mind that the pursuer was legally-aided. If the proof was heard in two parts, there was a potential for additional days in court. There might be some duplication of evidence. It was more efficient to deal with the case at one inquiry.
The MIB's final response on the question of a divided proof
[43]Counsel for the MIB stated that while there was Outer House authority to the effect that an interim award of damages could not competently be made against the MIB, the MIB had decided as a matter of policy not to take that point. A full inquiry into liability and quantum would be likely to take at least two weeks. The pursuer had suffered a head injury. Each party would wish to have their own experts. Thus there would be three neurologists; three neuropsychologists; three employment experts; and other witnesses in addition. It was a certainty that one party would be released following upon a proof on liability. If the MIB failed on the question of the applicability of clause 6(1)(e), they intended (barring any reclaiming motion) to offer a settlement.
Opinion
[44]In my view, the involvement of the MIB in these proceedings makes the action unsuitable for a jury trial, for several reasons:
[45]First, in the particular circumstances of this case, it will be impossible to avoid bringing up the question of insurance in the jury's presence. I do not accept that the authority Stewart v Duncan, cit. sup., no longer has force. The current well-established practice prohibits mention or discussion of a party's indemnity insurance in the presence of the jury. That factor alone makes the case unsuitable for jury trial.
[46]Secondly, one contentious issue is whether the exception in clause 6(1)(e)(ii) of the MIB Agreement applies. That question involves the proper construction and application of the concept whether the pursuer "knew or ought to have known" that the first defender was uninsured. The decision of the House of Lords in White v White [2001] 1 W.L.R. 481 demonstrates not only that the concept may not be easy to define, but also that a final definition may yet be awaited: cf. Lord Nicholls at paragraph 24. Whether viewed as a possible source of confusion for the jury, or as a difficult question of mixed fact and law, I consider that the question of any exception from liability arising from clause 6(1)(e)(ii) cannot safely go to a jury.
[47]Thirdly, while I accept that a reparation action involving several parties would not necessarily result in such complexity and difficulty as to make the case unsuitable for a jury, the fact that one of the parties is the MIB, together with the combination of difficulties outlined by counsel in paragraphs [10] to [11] (factors (i) to (v)), [15], and [19] above, persuaded me that this particular case is too complex for a jury.
[48]In all the circumstances I am of the view that the above factors, taken individually or cumulatively, constitute special cause such that issues should not be allowed. It is unnecessary that I consider the arguments presented in respect of difficulties in quantifying loss. Obiter, I did not consider quantification to present insuperable difficulties for a jury.
[49]In relation to the MIB's motion for a divided proof, I agree that it would be appropriate to make an order in terms of rule 36.1, for all the reasons advanced by counsel for the MIB.
Conclusion
[50]I sustain the pursuer's and the minuters' second pleas-in-law (each added by amendment, and each directed to excluding the case from jury trial). I repel the second defender's second plea-in-law, and allow a proof before answer.
[51]In terms of rule 36.1, I order proof on liability to be heard separately from, and prior to, proof on quantum. Proof on liability should include questions of contributory negligence, apportionment of liability, the involvement of the MIB and the applicability of clause 6(1)(e) of the MIB Agreement.
[52]I reserve the question of expenses.